LFAP LGBTQ Loyalty Holdings Inc (CE)

Item 1.01. Entry into a Material Definitive Agreement.

On September 29, 2021, we entered into a Securities Purchase Agreement (the “SPA”) with GHS Investments, LLC (the “Purchaser”), a Nevada limited liability company, pursuant to which the Company will have the right in its sole discretion for a period of the twenty-four month period from the date of the SPA, to sell up to $10 million of Common Stock (subject to certain limitations) to GHS Investments, which has no right to require the Company to sell any shares, following the effectiveness of a registration statement with the Securities and Exchange Commission registering the Common Stock issuable pursuant to the SPA and other customary closing conditions, as detailed in the SPA. The purchase price for the Common Stock is a fixed price per share equal to eighty percent (80%) of the lowest volume weighted average price (VWAP) during the twenty (20) trading day period immediately preceding, but not including, the date the registration statement is filed, subject to a trading price floor. Each Closing shall be for at least $10,000 of Common Stock, and shall not exceed the lesser of (1) $500,000 of Common Stock, (2) 250% of the average daily trading volume for the Common Stock during the ten (10) Trading Days preceding such Closing date and (3) 4.99% of the then total outstanding number of shares of Common Stock of the Company.

The Purchaser irrevocably agrees to purchase the common stock, subject to an event of default. Pursuant to the SPA, an event of default means any of the following events: (i) the suspension, cessation from trading or delisting of the Company’s Common Stock on the Principal Market for a period of two (2) consecutive trading days or more; (ii) the failure by the Company to timely comply with the reporting requirements of the Exchange Act (including applicable extension periods); (iii) the failure for any reason by the Company to issue Commitment Shares or Common Stock to the Purchaser within the required time periods; (iv) the Company breaches any representation, warranty, covenant or other term of condition contained in the definitive agreements between the parties; (v) the Company files or threatens to file for Bankruptcy or receivership or any money judgment writ, liquidation or a similar process is entered by or filed against the Company for more than $50,000 and remains unvacated, unbonded or unstayed for a period of twenty (20) calendar days; (vi) any cessation of operations by the Company or failure by the Company to maintain any assets, intellectual, personal or real property or other assets which are necessary to conduct its business (vii) the Company shall lose the “bid” price for its Common stock on the Principal Market; (viii) if at any time the Common Stock is no longer DWAC eligible; or (ix) the Registration Statement registering the resale of the Registrable Securities ceases to be effective for any reason.

From the date of the SPA until the date when the Purchaser no longer holds any Securities, upon any issuance by the Company or any of its subsidiaries of Common Stock, Common Stock Equivalents for cash consideration, indebtedness or a combination of units hereof (a “Subsequent Financing”), Purchaser may elect, in its sole discretion, to exchange (in lieu of conversion), if applicable, all or some of the Securities then held for any securities or units issued in a Subsequent Financing on a $1.00 for $1.00 basis.

From the date hereof until the date that is the 12 month anniversary of the Closing Date, upon a Subsequent Financing, Purchaser shall have the right to participate up to an amount of the Subsequent Financing equal to 100% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing

The foregoing description of the SPA does not purport to be complete and is qualified in its entirety by reference to the full text of the document as filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.