ORGANIZATION AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2011

ORGANIZATION AND BASIS OF PRESENTATION [Abstract]

ORGANIZATION AND BASIS OF PRESENTATION

Note 1. ORGANIZATION AND BASIS OF PRESENTATION

Business description

Vapor Corp. F/K/A Miller Diversified Corporation (the "Company") is the holding company for its wholly owned subsidiary Smoke Anywhere U.S.A., Inc. ("Smoke Anywhere") All intercompany accounts and transactions have been eliminated in consolidation. The Company markets and distributes electronic cigarettes and accessories under the Fifty-One^®, Krave^®, EZ Smoker^®, Green Puffer^®, Smoke Star^®, Americig^® and VaporX^® brands to customers primarily located throughout the United States. The Company's corporate headquarters and distribution center are located in the state of Florida.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the condensed consolidated financial statements not misleading have been included. The condensed consolidated balance sheet at December 31, 2010 has been derived from the Company's restated audited consolidated financial statements at that date.

The unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2010 were previously restated and included in the Company's Quarterly Report on Form 10-Q/A (Amendment No. 1) for the quarterly period ended September 30, 2010 to reflect the effects of accounting and reporting errors to include stock-based compensation expense for employee and non-employee stock options issued on October 1, 2009 and January 1, 2010, and to correct the weighted average number of common shares outstanding. These accounting and reporting errors and the related adjustments resulted in an understatement of net loss of $892,996 and $297,665 for the three months and nine months ended September 30, 2010, respectively, and an understatement of additional paid-in capital of $1,182,121 as of September 30, 2010 and an overstatement of retained earnings of $1,182,121 as of September 30, 2010.

These unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2011 and 2010 should be read in conjunction with the restated audited consolidated financial statements and related notes thereto as of and for the year ended December 31, 2010 included in the Company's Annual Report on Form 10-K/A (Amendment No. 1) for such year as filed with the SEC on August 24, 2011. Operating results for the three and nine months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2011.