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Letter to Shareholders From Newly-Appointed Chief Executive Officer Justin Braune

CHATSWORTH, CA--(Marketwired - Dec 18, 2015) -  VAPE Holdings, Inc. ( OTCQB : VAPE )

For the shareholders of VAPE Holdings, Inc. below is a letter to the shareholders from newly-appointed CEO Justin Braune.

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Dear Shareholders,

I wanted to take the time to further introduce myself now that I have been appointed as Chief Executive Officer of VAPE as well as provide more details on my plans for moving the company forward as we approach the New Year.

First off, Shareholders should expect a high level of communication from management on the company's activities, product developments and business engagements. Through regular press releases and increased availability of our investor relations staff, we at VAPE intend on increasing the level of transparency and flow of information from us to you. Keep in mind that certain undisclosed financial information and material non-public information cannot be freely disclosed as is the case with all public companies but we intend to be as transparent as possible moving forward.

There are many exciting business initiatives that are coming in the near future that we are confident will reflect positively on our financials. I'm pleased to report this confidence is matched by one of our financing partners, who recently made a direct equity investment into the Company. This investment, combined with former CEO Kyle Tracey's contribution of additional capital, is allowing us to complete the launch of numerous new products under the HIVE brand as well as the creation and launch of a new brand under VAPE with a portable vaporizer for disposable herbal concentrate cartridges. This new vaporizer contains cutting edge technology that we feel will change the course of development in the disposable cartridge market. It is revolutionary in size, and designed to appeal to a gap in the marketplace. More details will be forthcoming soon.

A well-trained and equipped sales force is the heart and soul of a company. We have made it a top priority to begin building a sales force, equipped with leading technology and CRM software. VAPE will be drastically increasing our focus on developing and growing our sales personnel, as well as creating a unified sales model amongst direct and distribution models to increase sales and maximize profit. Much of our new focus will also be applied to growing our international business, which will significantly increase potential market size and bring developing global recognition for our brands.

Having touched on our consumer product lines, I now want to mention the focus and direction of the Company as a whole. It is my goal to help the company create innovative and leading brands in the cannabis and vaporization consumer markets. By focusing our resources on creating well-known and well-respected brands that embody quality and cutting-edge technology across a wide array of herbal and nicotine based consumer products, we can continue the company's upward trajectory. As an example, we plan on creating full lines of herbal and terpene infused vaping e-liquid starting in 2016. These products help broaden our reach within the medicinal and vaping markets. The company is being reorganized for speed and innovation, shedding all activities that will deter our focus from continuing to create, innovate and brand.

Finally, as I am sure you are all aware, I arrive at VAPE at a time when there has been a massive influx of note conversions from past financings. As the 8-K filings over the past 90-120 days have indicated, in excess of $1 million of convertible debt has come off of our books by virtue of our noteholders converting their debt into equity and selling into the market. Our Annual Report on Form 10-K which is coming out within the next month will have specific numbers on convertible debt outstanding and related financials, but my hope is that we are through the worst of those conversions ready to start 2016 on solid ground.

In closing, I appreciate the trust of Kyle Tracey, the Board of Directors and most importantly the Shareholders. I'm excited to be here and eager to see all of the positive things ahead come to fruition.

Best regards,

Justin Braune
Chief Executive Officer
VAPE Holdings, Inc.

About VAPE Holdings, Inc.

VAPE Holdings, Inc. focuses on designing, marketing, and distributing various vaporization products. The company offers medical and food grade ceramic products primarily under the HIVE Ceramics brand throughout North America, Europe and South America. HIVE offers a nonporous, non-corrosive, chemically inert ceramic vaporization element, which can be used for a range of applications, including stand-alone vaporization products and electronic cigarettes. The company is based in Chatsworth, California.

For more information on HIVE Ceramics and to visit our e-commerce site, please visit: http://www.hiveceramics.com.

From time to time, VAPE Holdings will provide market updates and news via its website http://www.vapeholdings.com/ or the Company's Facebook page at http://on.fb.me/1d5c7iO.

Cautionary Language Concerning Forward-Looking Statements

This release contains "forward-looking statements" that include information relating to future events and future financial and operating performance. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential" and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for VAPE Holdings' products, the introduction of new products, the Company's ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company's liquidity and financial strength to support its growth, and other information that may be detailed from time-to-time in VAPE Holdings' filings with the United States Securities and Exchange Commission. Examples of such forward-looking statements in this release include statements regarding future sales, costs and market acceptance of products as well as regulatory actions at the State or Federal level. For a more detailed description of the risk factors and uncertainties affecting VAPE Holdings please refer to the Company's Securities and Exchange Commission filings, which are available at www.sec.gov. VAPE Holdings undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.