AND EXCHANGE COMMISSION
to Section 13 or 15(d) of the Securities Exchange Act of 1934
of Report (Date of earliest event reported):
January 25, 2019
name of registrant as specified in its charter)
or Other Jurisdiction
Wilton, FL 33305
of principal executive offices, including zip code)
telephone number, including area code)
name or former address, if changed since last report)
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
growth company ☒
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
into a Material Definitive Agreement.
January 25, 2019, we entered into and closed a securities exchange under a Securities Exchange Agreement (the “Securities
Exchange Agreement”) with LGBT Loyalty LLC, a New York limited liability company (“LGBT Loyalty”), and Maxim
Partners, LLC, a New York limited liability company (“Maxim”), pursuant to which we acquired all of the membership
interests of LGBT Loyalty, making LGBT Loyalty a wholly owned subsidiary of ours, in exchange for 120,959,996 shares (the “Shares”)
of our restricted common stock and one share of our newly created Series A Convertible Preferred Stock (the “Series A Preferred
Stock”). The Shares issued to Maxim represented, upon issuance, 49.99% of our then issued and outstanding shares of common
stock. Through LGBT Loyalty, we intend to create, establish, develop, manage and fund a LGBT Preference Index, LGBT Exchange Traded
Fund and/or LGBT Loyalty Sponsor Fund.
LGBT Loyalty (ETF) Index Fund is expected to be the first “preference” index fund to survey a representative group
of the LGBT community to determine which companies within the S&P 500 best support and are supported by the LGBT community.
We are also in development of a LGBT Advertising Agency and a LGBT Media Distribution Network to assist businesses and brands
in the creation and distribution of specific content targeting the highly desired spending power of the LGBT consumer. The LGBT
demographic is proven itself to be a fiercely loyal consumer group to supporting companies and their brands. In addition, the
company is in the development of a LGBT Approved business model designed for businesses to promote and showcase their support
for the LGBT community.
Series A Preferred Stock has no voting, liquidation or other rights other than the right to convert into common stock. The Series
A Preferred Stock will automatically convert into additional shares of our restricted common stock immediately after such time
that (i) the number of shares of our authorized common stock is increased from 500,000,000 to 1,000,000,000 shares (the “Share
Increase”); and (ii) the January 25, 2019 warrants issued to Brian Neal, our President, and Robert Gayman, our Executive
Management Consultant, at the closing of the securities exchange transaction (the “Management Warrants”) are automatically
exercised for shares of our restricted common stock. The Management Warrants represent common stock purchase warrants that were
issuable to Robert Blair, our Chief Executive Officer, Brian Neal and Robert Gayman, and/or their designees or assignees (collectively,
the “Management Holders”) in exchange for the cancellation of all amounts due to the Management Holders by us as of,
but not including, January 1, 2019, which amounts consisted solely of accrued salaries and/or consulting fees earned by the Management
Holders through December 31, 2018, plus interest due thereon. These amounts consisted of $161,629 due to Robert Blair, representing
$154,600 of compensation and $7,029 of interest, $25,054 due to Brian Neal, representing $24,000 of compensation and $1,054 of
interest and $161,629 due to Robert Gayman, representing $154,600 of compensation and $7,029 of interest. Prior to their issuance,
Robert Blair gifted his right to receive Management Warrants to Brian Neal. The Management Warrants are automatically exercisable
for shares of our restricted common stock following the Share Increase at an exercise price equal to a 10% discount to the volume
weighted average price (“VWAP”) for our common stock during the three trading days ending on the seventh trading day
following the date on which this Current Report is filed with the Securities and Exchange Commission. Except as otherwise provided
below, the share of Series A Preferred Stock is automatically convertible into 99.98% of the number of shares issued upon the
automatic exercise of the Management Warrants. However, upon the conversion of the Series A Preferred Stock, Maxim may not own
more than 49.99% of our then issued and outstanding common stock. In the event that the full conversion of the Series A Preferred
Stock would result in Maxim owning more than 49.99% of our then issued and outstanding common stock, the conversion will be limited
to such number of shares that will result in Maxim owning 49.99% of our then issued and outstanding common stock and the issuance
of the remaining shares issuable upon conversion will be deferred until such time that their issuance will not increase Maxim’s
ownership of our common stock to more than 49.99%.
purposes of the foregoing, VWAP means, for any date, the price determined by the first of the following clauses that applies:
(a) if our common stock is then listed or quoted on a national securities exchange, the daily volume weighted average price for
our common stock on such date (or the nearest preceding date) on the Trading Market on which our common stock is then listed or
quoted as reported by Bloomberg L.P. (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)),
(b) if our common stock is then listed on the OTCQB or OTCQX, the volume weighted average price of our common stock for such date
(or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if our common stock is not then listed or quoted for trading
on OTCQB or OTCQX and if prices for our common stock are then reported in the “Pink Sheets” published by OTC Markets
Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per
share of our common stock so reported, or (d) in all other cases, the fair market value of a share of our common stock as
determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Management Warrants
then outstanding and reasonably acceptable to us, the fees and expenses of which shall be paid by us, and “Trading Market”
means any of the following markets or exchanges on which our common stock is listed, quoted for trading or reported on the date
in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange, OTCQB or OTCQX, the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization
or agency succeeding to its functions of reporting prices).
connection with the Securities Exchange Agreement and the closing thereunder, no changes were made to the composition of our Board
of Directors (the “Board”) or executive officers. Accordingly, our Board continues to be comprised of Robert Blair
and Lawrence Roan, and our executive officers continue to be comprised of Robert Blair (Chief Executive Officer and Chief Financial
Officer) and Brian Neal (President). Pursuant to the Securities Exchange Agreement, we are entitled to appoint one additional
member to the Board and Maxim is entitled to appoint two additional members to the Board. At such time that Maxim designates and
we appoint its two Board appointees, we intend to appoint Robert Gayman as our Board appointee.
Securities Exchange Agreement also provides that during the six month period following the January 25, 2019 closing under the
Securities Exchange Agreement (i) we cannot enter into any financing transactions without the prior written consent of Maxim,
which consent cannot be unreasonably withheld, and (ii) we cannot issue any equity or debt securities without the prior written
consent of Maxim, which consent cannot be unreasonably withheld. As further provided in the Securities Exchange Agreement, since
its formation, LGBT Loyalty has had no material operations, assets or liabilities.
foregoing description of the Securities Exchange Agreement is qualified in its entirety by reference to the full text of the Securities
Exchange Agreement, a copy of which is filed herewith as Exhibit 10.1, and is incorporated by reference herein.
foregoing description of the Series A Preferred Stock is qualified in its entirety by reference to the full text of the Certificate
of Designations, Preferences and Rights of Series A Convertible Preferred Stock which we filed with the Delaware Secretary of
State on January 24,2019, a copy of which is filed herewith as Exhibit 3.1, and is incorporated by reference herein.
foregoing description of the Management Warrants is qualified in its entirety by reference to the full text of the Management
Warrants, copies of which are filed herewith as Exhibits 10.2, 10.3, and 10.4, and are incorporated by reference herein.
of Acquisition or Disposition of Assets.
information required by this Item 2.01 is set forth under Item 1.01 above and is hereby incorporated by reference in response
to this Item 2.01.
Sales of Equity Securities.
information required by this Item 3.02 is set forth under Item 1.01 above and is hereby incorporated by reference in response
to this Item 3.02. The Shares and the share of Series A Preferred Stock issued to Maxim pursuant to the Securities Exchange Agreement
were issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), based on the
exemption from registration afforded by Section 4(a)(2) of the Securities Act.
Statements and Exhibits.
following exhibits are filed with this Current Report on Form 8-K:
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
LifeApps Brands Inc.
January 31, 2019
/s/ Robert A. Blair
Robert A. Blair
Chief Executive Officer