Vapor Corp. (VPCO) Commences Exchange Offer

Vapor Corp. (NASDAQ: VPCO), a leading U.S.-based distributor and retailer of vaporizers, e-liquids, e-cigarettes and e-hookahs, announced today that it is commencing an offer to issue shares of its common stock (the "Exchange Shares") and warrants (the "Exchange Warrants") in exchange for the outstanding Units sold in the July 2015 offering (NASDAQ: VPCOU). In exchange for each Unit, a holder of a Unit will receive 128 shares of Vapor common stock and an Exchange Warrant to acquire 64 shares of Vapor common stock. The Exchange Offer is conditioned on at least 90% of the Units being tendered and not withdrawn.

"We believe that the Exchange Offer is mutually beneficial for the Unit holders, Vapor Corp. and our shareholders," said Jeffrey Holman, Chief Executive Officer of Vapor. "This exchange offer provides an opportunity for Vapor to (1) preserve its working capital through the elimination of the potential cash payments related to the Series A warrants included in the Units and (2) avoid uncertainty regarding the Company's capital structure due to potential volatility in the market price of Vapor common stock resulting from the Series A warrants. Under the Exchange Offer, we would eliminate significant payment obligations to the Unit holders and give the Unit holders the opportunity to receive additional common stock of the Company."

The Exchange Warrants will: (1) be exercisable at an exercise price per share equal to 120% of the closing market price of Vapor's common stock on the expiration date of the Exchange Offer; and (2) be exercisable for a period of five years. The terms of the Exchange Warrants will be similar to the Series A warrants included in the Units, except for the elimination of a "cashless exercise" feature based on a Black Scholes valuation model. The Exchange Warrants will become exercisable following approval of the Vapor stockholders (including those stockholders participating in the Exchange Offer) of an increase in the authorized common stock of Vapor to allow full exercise of all the Exchange Warrants. Vapor will seek this stockholder approval promptly following the closing of the Exchange Offer. After the exercise period commences, Vapor is obligated to register the shares of common stock to be received upon exercise of the Exchange Warrants.

Vapor has filed with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4 to register the Exchange Shares and Exchange Warrants. The registration statement on Form S-4 is available on the SEC's EDGAR system. The registration statement has not yet been declared effective and the information contained in the filing is subject to change.

All registered holders of outstanding Units as of the date of the commencement of the Exchange Offer may participate in the Exchange Offer. The Exchange Offer will expire on the Expiration Date at 5:00 p.m., New York City time, on January 13, 2016 unless the Exchange Offer is extended at Vapor's sole discretion. Tenders of the Units must be made prior to the expiration of the Exchange Offer and may be withdrawn at any time prior to the expiration of the Exchange Offer. In addition to being subject to certain customary conditions, the closing of the Exchange Offer is conditioned upon effectiveness with the SEC of Vapor's registration statement on Form S-4 registering the Exchange Shares and Exchange Warrants. Requests for assistance in connection with the tender of the Units pursuant to the Exchange Offer may be directed to the Exchange Agent for the Exchange Offer, Okapi Partners, LLC, 1212 Avenue of the Americas, New York, New York 10036; phone: (212) 297-0720 or (877) 629-6355.

Each Unit consists of (1) 1/4th of a share of the Company's Series A convertible preferred stock (convertible into 10 shares of common stock) and (2) 20 Series A warrants (each Series A Warrant is exercisable into one share of common stock). The Units will automatically separate into the Series A preferred stock and Series A warrants on January 23, 2016, provided that the Units will separate earlier if at any time prior to January 23, 2016, the closing price of Vapor's common stock is greater than $2.48 per share for 10 consecutive trading days, the Units are delisted, or the Series A warrants are exercised for cash (solely with respect to the Units that included the exercised Series A warrants). The Units began trading on The NASDAQ Capital Market under the ticker symbol "VPCOU" on July 30, 2015.

None of Vapor, its board of directors, officers or employees makes any recommendations to Unit holders as to whether to tender or refrain from tendering their Units pursuant to the Exchange Offer. Unit holders must decide how many Units they will tender, if any.

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