First Half of Fiscal Year 2015 Revenue of $800,000 Strengthened Executive Team, Board and Corporate Governance Launched and Expanded Several Key Initiatives
CHATSWORTH, CA / ACCESSWIRE / May 15, 2015 / Vape Holdings, Inc. (VAPE) (the "Company" or "Vape"), a holding company focused on providing healthy, efficient, and sustainable vaporization products and management, consulting, branding, real estate and compliant packaging solutions to lawfully operating participants in the legal cannabis industry, is pleased to announce the filing of its 10Q quarterly report and record quarterly results for its second quarter ended March 31, 2015. The full 10Q filing is available in its entirety on the SEC's website at http://edgar.sec.gov. As of May 15, 2015, there were approximately 11.4 million shares issued and outstanding.
For its fiscal second quarter ended March 31, 2015, Vape generated quarterly revenues of $415,259. Gross margins of 28.3% generated gross profit of $117,617. Net income and EPS was $85,145 and $0.01 per share, and included non-cash items of derivative warrant liability and gain on settlement totaling $782,185. These results have no true year-over-year comparison, as Vape had just commenced its business operations in early 2014, having generated $30,759 in revenue for the quarter ended March 31, 2014. The Company's cash balance at quarter-end March 31, 2015 was $241,691.
For the six months ended March 31, 2015, Vape generated revenues of $801,902. Net income and EPS was $668,055 and $0.07 per share, and included non-cash items of derivative warrant liability and gain on settlement totaling $2,449,940.
- Recently launched HIVE Glass
- Operating three HIVE Supply locations; Southern California, Spokane, Washington and Portland, Oregon
- Opened 'THE HIVE' retail store and gallery in Los Angeles
- the "Mothership" collaboration expected by end of June
- the "Omni Nail" collaboration expected by the end of September
- Launched Offset and NOUVEAU to expand sales of branding, marketing, and merchandising and web design services
- Strengthened Executive Team, Board and Corporate Governance
- Executives, employees and consultants surrender 440,625 shares and 990,000 options in aggregate
"We are very pleased with our business progress to-date, as we have launched several new business lines that represent excellent opportunities to diversify and grow our business," stated Kyle Tracey, Chief Executive Officer of VAPE Holdings. "Our exciting initiatives are progressing as expected as we leverage our collective experience and knowledge in the legal cannabis sector."
Corporate Governance Measures; Officers and Director Appointments
The Company expanded its management team and its commitment to good corporate governance practices with a group of related actions in early May 2015. The management team was strengthened with the hire of Dr. Mark Scialdone to the newly-created officer position of Chief Science Officer. Dr. Scialdone will lead the expansion of VAPE Holding's intellectual property portfolio into fundamental and licensable interests in plant extracts and other related products. He holds a Doctor of Philosophy degree in Chemistry from Wayne State University and was a Postdoctoral Research Fellow at Colorado State University. Dr. Scialdone brings over two decades of world class experience in product development and fundamental science research at E.I. duPont de Nemours (DD) and his consulting company BetterChem Consulting LLC. Mark is an inventor or co-inventor of 25 issued US patents and author of 15 publications in scientific literature. He is a recognized expert in plant oil extraction, natural product chemistry, characterization, organic synthesis and catalysis.
On May 11, 2015, the Board of Directors reaffirmed its commitment to good corporate governance and the related disciplines of organizational excellence and enhanced transparency by commencing several new organizational initiatives. The Board of Directors of the Company expanded its membership charter to seven (7) members and chartered new Board level Committees for Audit and Compensation, and committed to adding three (3) independent directors in the near future. The Board adopted a Company Code of Ethics and an Insider Trading Policy. In addition, the Company formally appointed current CFO Allan Viernes and newly-appointed COO Benjamin Beaulieu as new members of the Board of Directors. Messrs. Viernes and Beaulieu have contributed substantially to the existing operations of VAPE as well as the successful launch and day-to-day oversight of new business segments.
The Company intends to further support its existing management team with the establishment of an Advisory Board, which will consist of a wide array of outside industry experts presenting different viewpoints and areas of expertise to support the growth of existing management and the Companies expansion of new and existing business segments. Appointments to the Advisory Board will be announced when available.
"We believe VAPE is now at the proper stage in its development to begin expanding its organization structure and corporate governance measures to facilitate more independent oversight and transparency into our management practices," stated Mr. Tracey. "We have spent the last year establishing our premier HIVE Ceramics product line, launching new business lines, and securing funding which collectively acts to form a strong foundation with which to grow VAPE. The strength of our foundation has allowed us the ability to begin bringing in industry experts and independent thinkers poised to accelerate the growth of VAPE. We are very excited about the potential current and future members of the VAPE team will bring to the table."
HIVE Ceramics ("HIVE") is the premier brand under the VAPE umbrella. HIVE manufactures and distributes a proprietarily blended ceramic vaporization element for torched, electronic and portable vaporizers with countless design and product crossover capabilities in existing and emerging markets. HIVE is dedicated to bringing the healthiest and cleanest vaporization experience possible to the market. The HIVE product line currently consists of over 15 distinct ceramic elements, including the 2 piece domeless, domeless direct inject, and HIVE's signature domeless elements covering 10mm, 14mm and 18mm applications as well as regular elements, the HIVE Flower Cup, the HIVE Carb Cap, HIVE Stinger Dabber, the 14mm HIVE x Quave - Club Banger, and the HIVE x D-Nail 16mm and 20mm attachments.
The Company has recently launched 'HIVE Glass.' HIVE Glass is VAPE's newest line of products under the HIVE brand name. The HIVE Glass line is precision made using state of the art manufacturing processes and techniques, and exclusively uses German Schott glass caliber and fittings through all production phases. The aim with HIVE Glass is to create an affordable, high quality glass product that is both aesthetically pleasing and a highly functional vaporization product. VAPE's existing customer base and distribution network will be the catalyst for expansion of this new HIVE product line.
VAPE has also recently launched 'HIVE Supply'. HIVE Supply is a packaging and sourcing division of VAPE designed to serve as a competitively priced, comprehensive "one-stop shop" for all medical and recreational marijuana packaging needs. As with all of VAPE's products, HIVE Supply will operate in full compliance with all federal laws and the laws of each individual state in which it does business. HIVE Supply will focus on providing much-needed support to legal cannabis businesses in regards to sourcing consumer products, brand management and marketing services. HIVE Supply is currently operated out of three (3) locations: HIVE Supply in Southern California, HIVE Supply Washington in Spokane and HIVE Supply Oregon in Portland.
In connection with its launch of HIVE Supply and HIVE Glass, the Company opened 'THE HIVE' retail store and gallery in Los Angeles, an end-user experience to showcase the complete line of HIVE Ceramics and HIVE Glass products, while introducing HIVE Supply and all the new products being tested and developed through each vertical.
The Company intends to rely on a combination of trademark, copyright, trade secret and patent laws in the United States as well as confidentiality procedures and contractual provisions to protect future proprietary technology and its brands, as they are developed. The Company has created or acquired and continues in the process of creating and/or acquiring proprietary vaporizers and e-cigarettes, and various trademarks, patents and copyrights for brands which are developed or in development. The Company is actively engaged in improving and expanding lines of branded products through business alliances and acquisitions, as well as developing its branded retail business expansion. VAPE and its business units are organized and directed to operate strictly in accordance with all applicable state and federal laws.
Offset and NOUVEAU
The Company created new wholly-owned subsidiaries, Offset, LLC ("Offset") and Nouveau, LLC ("Nouveau") to engage in the business of branding, marketing, and web design services, respectively formed to begin operations on January 22, 2015 and April 6, 2015. Offset will serve as VAPE's creative marketing, branding and merchandising vehicle working synergistically with VAPE's existing product lines, sales and distribution channels. Nouveau will service similar functions with an emphasis on web design and social media.
About Vape Holdings, Inc.
Vape Holdings, Inc. focuses on designing, marketing, and distributing various vaporization products and provides management, consulting, branding, real estate and compliant packaging solutions to lawfully operating participants in the legal cannabis industry. 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
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.
SOURCE: Vape Holdings, Inc.