ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Agreement and Plan of Reorganization
On January 22, 2014, AvWorks Aviation Corp., a Florida corporation (the "Company" or the “Registrant”) entered into an Agreement of Merger and Plan of Reorganization ("Merger Agreement") by and among the Company and the Vapor Group, Inc., a Florida corporation ("Vapor Group") and the shareholders of Vapor Group (the “Vapor Group Shareholders”), pursuant to which the Company will acquire 100% of the issued and outstanding shares of Vapor Group from the Vapor Group Shareholders. The Merger Agreement shall become effective as soon as practicable.
In accordance with the terms and provisions of the Merger Agreement: (i) the Company will acquire from the Vapor Group Shareholders an aggregate 350,000,000 shares of common stock of Vapor Group representing 100% of the issued and outstanding shares of Vapor Group; (ii) in exchange thereof, the Company will issue to the Vapor Group Shareholders an aggregate 750,000,000 shares of its common stock, to be issued following a 30 to 1 reverse split to occur within thirty (30) days of Closing (the “Reverse” below); (iii) Vapor Group will transfer and assign to the Company all existing material contracts including those related to distribution, licensing and marketing and those dealing with the grant of rights for the use of any and all intellectual property; (iv) the Company will assume all other assets of Vapor Group, including licenses, equipment, product designs, marketing and sale materials, logos, trademarks, copyrights and websites; and (v) the Company further will assume all liabilities of Vapor Group, including all trade and debt obligations. The proposed acquisition will be accomplished by the merger of Vapor Group with and into AvWorks Aviation Corp., with AvWorks Aviation Corp. being the surviving corporation (the "Merger").
In preparation of and prior to the Closing of the Merger Agreement, the Company is required to increase its authorized shares of Common Stock to 2,000,000,000 from 500,000,000 (the “Increase in Authorized Shares”).
Within five (5) business days subsequent to Closing, the Company is required to file an “Information Statement” specific to the filing of a 30 to 1 reverse split of its issued and outstanding common stock, to occur not later than thirty (30) days after the date of Closing (the “Reverse”).
At the Closing, the Company's existing sole director shall nominate and appoint persons designated by Vapor Group to the Company's Board of Directors and the sole officer and director of the Company, Joe Eccles, immediately subsequent to the new appointees’ acceptance will resign. The Company's majority shareholders of its common stock and preferred stock have approved the Merger Agreement and the Increase in Authorized Shares.
Immediately subsequent to Closing, the Company shall change its name to “Vapor Group, Inc.” from AvWorks Aviation Corp.
The Merger Agreement has been included to provide information regarding its terms. It is not intended to modify or supplement any factual disclosures about the Company or Vapor Group in any public reports filed by the Company with the U.S. Securities and Exchange Commission. In particular, the assertions embodied in the representations, warranties, and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement and as of specified dates, were solely for the benefit of the parties to the Merger Agreement, and are subject to limitations agreed upon by the parties to the Merger Agreement, including being qualified by confidential disclosure schedules provided by the Company and Vapor Group in connection with the execution of the Merger Agreement. These disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement have been made for the purposes of allocating risk between the parties to the Merger Agreement instead of establishing matters of fact. Accordingly, the representations and warranties in the Merger Agreement may not constitute the actual state of facts about the Company, or Vapor Group. The representations and warranties set forth in the Merger Agreement may also be subject to a contractual standard of materiality different from the actual state of facts or the actual condition of the Company or Vapor Group, or any of their respective affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures.
The foregoing is a summary of the material terms of the Merger Agreement. Investors are encouraged to carefully review the full text of the Merger Agreement, a copy of which is filed as Exhibit 1.01 to this Current Report on Form 8-K and is incorporated herein by reference.
, is in the business
of designing, developing, manufacturing and marketing high quality, e-cigarette brands which use state-of-the-art electronic technology and specially formulated, “Made in the USA” e-liquids, which may or may not contain nicotine. It offers a range of products with unique e-liquid flavors that is unmatched in our industry. Its products are marketed under the Vapor Group, Total Vapor, Vapor 123, and Vapor Products brands Which it sells nationwide through distributors, wholesalers and directly to consumers through its own websites and direct response advertising. Total Vapor Inc., Vapor 123 Inc. and Vapor Products, Inc., each a Florida corporation, are each a wholly-owned subsidiary of Vapor Group, Inc.
All of its E-cigarettes consist of a long-life battery, a heating element, a cartridge filled with an “e-liquid” and an atomizer which when heated, vaporizes the e-liquid. Because E-cigarettes are not “lit” like regular cigarettes, they don’t create flame, smoke from burning, ash, tar, noxious fumes or leftover “cigarette butts”. As a result, they may be used virtually anywhere.
Vapor Group is committed to providing E-cigarettes that are convenient and economical to use, safer and healthier than traditional smoking, and which provide a flavorful, enjoyable smoking experience.
Vapor Group, Inc. is managed by a highly experienced team of executives committed to responsible business policies and practices, including the marketing of our products only to those eighteen years of age or older, not making or avoiding claims about our product health benefits, and fulfilling the requirements of all applicable laws and regulations.