Item 1.01 Entry Into a Material Definitive Agreement
Mast Hill
On April 18, 2022, we received the funds consummating a Securities Purchase
Agreement with Mast Hill Fund, L. P. ("Mast Hill"), whereby in consideration of
$247,500 we issued to Mast Hill a senior secured convertible promissory note
("Note") in the principal amount of $275,000 and common stock purchase warrants
to purchase 75,000,000 shares of our common stock (the "First Warrant") and
105,000,000 shares of our common stock (the "Second Warrant"), respectively. The
principal amount of the Note and all interest accrued thereon is payable on
April 11, 2023. The Note provides for interest at the rate of 12% per annum,
payable at maturity, and is convertible into shares of our common stock at a
price of $0.002 per share, subject to anti-dilution adjustments in the event of
certain corporate events as set forth in the Note. In addition, subject to
certain limited exceptions, if at any time while the Note remains outstanding,
we grant any option to purchase, sell or grant any right to reprice, or
otherwise dispose of, issue or sell any shares of our common stock or securities
or rights convertible into or exercisable for shares of our common stock, at a
price below the then conversion price of the Note, the holder of the Note shall
have the right to reduce the conversion price to such lower price. Further, if
we or one of our subsidiaries issues any security or amends any security
outstanding upon issuance of the Note and Mast Hill reasonably believes that
such security contains a term in favor of the holder thereof which is more
favorable than the terms contained in the Note, such as provisions relating to
prepayment, original issue discounts and interest rates, then upon request of
Mast Hill, such term shall become part of the transaction documents exchanged
with Mast Hill in connection with the sale of the Note.
In addition to the obligation to repay the Note at maturity, the Note provides
that if at any time prior to repayment or full conversion of the Note we receive
cash proceeds from various sources, including payments from customers, Mast Hill
has the right to demand that up to 50% of the amount received be applied to the
payment of amounts due under the Note. The Note also grants to Mast Hill a right
of first refusal to provide financing to us on such terms as might be offered by
a third party.
Payment of all amounts due under the Note is secured by a lien on substantially
all of our assets and those of our subsidiaries in accordance with the terms of
the Security Agreement entered into concurrently with the Note.
The First Warrant is exercisable until April 11, 2027, at a price of $0.004 per
share, subject to customary anti-dilution adjustments. In addition, subject to
certain limited exceptions, if at any time while the First Warrant remains
outstanding, we grant any option to purchase, sell or grant any right to
reprice, or otherwise dispose of, issue or sell any shares of our common stock
or securities or rights convertible into or exercisable for shares of our common
stock, at a price below the then exercise price of the First Warrant, the holder
of the First Warrant shall have the right to reduce the exercise price to such
lower price. The First Warrant may also be exercised by means of a "cashless
exercise" in accordance with the formula provided in the Warrant.
The Second Warrant only becomes exercisable upon the occurrence of an Event of
Default (as defined in the Note) and, upon such occurrence, remains exercisable
for a period of five years and will be cancelled if the Note is satisfied by its
maturity date and prior to an Event of Default. The price payable upon exercise
of the Second Warrant is $0.002 per share, subject to customary anti-dilution
adjustments. The Second Warrant may also be exercised by means of a "cashless
exercise" in accordance with the formula provided in the Warrant.
Each of the Note, the First Warrant and the Second Warrant contains a "blocker"
limiting the number of shares which may be acquired at any time to such amount
as would not cause the holder of the Note and Warrants, and its affiliates as
defined in the Note, to be deemed to hold more than 4.99% of the number of
shares of common stock outstanding as of the date of the proposed acquisition.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Securities Purchase Agreement dated April 11, 2022, between Touchpoint
Group Holdings, Inc. and Mast Hill Fund, L. P.
10.2 Senior Secured Promissory Note dated April 11, 2022, issued to Mast
Hill Fund, L. P.
10.3 Security Agreement dated April 11, 2022, in favor of Mast Hill Fund,
L. P.
10.4 Common Stock Purchase Warrant to Purchase 75,000,000 shares of common
stock dated April 11, 2022.
10.5 Common Stock Purchase Warrant to Purchase 105,000,000 shares of common
stock dated April 11, 2022.
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