Item
1.01 Entry into a Material Definitive Agreement.
On
July 19, 2022 (the “Issue Date”), Home Bistro, Inc., a Nevada corporation (the “Company”), entered
into a certain Securities Purchase Agreements dated as of July 19, 2022 (the “SPA”), by and between the Company and
1800 Diagonal Lending LLC, a Virginia limited liability company (the “Investor”). Pursuant to the SPA, among other
things, the Company agreed to issue to the Investor a convertible note in the original principal amount of $154,250.00
(the “Note,” and together with the SPA, the “Agreements”). Upon closing, the Company received
$154,250.00 in gross proceeds from the Investor.
The
Note accrues interest at an annual interest rate of 8% and a default interest rate of 22%, and matures on January 19, 2024 (the “Maturity
Date”). The Investor may convert the Note into shares of the Company’s common stock, par value $0.001 per share (the
“Common Stock”), 180 days after the Issue Date until the later of (i) the Maturity Date and (ii) the date the Company
pays any amounts owed in connection with an event of default. The per share conversion price into which the Note is convertible into
shares of Common Stock (the “Conversion Price”) is 65% multiplied by the average of the lowest two closing bid prices
for the Common Stock during the ten trading days ending on the last trading day prior to the conversion date.
The
Company has the right to prepay the outstanding principal amount of the Note, plus any accrued interest on the outstanding principal
(including any default interest) at a rate of (x) 120% during the period ending 120 days after the Issue Date and (y) 125% during the
period between 121 days and 180 days after the Issue Date. The Company does not have a prepayment right following the expiration of the
180 day period.
Upon
the occurrence and during the continuation of any event of default under the Note, the Note becomes immediately due and payable and the
Company is obligated to pay the Investor in full satisfaction of its obligations thereunder an amount equal to the greater of (i) the
principal amount then outstanding plus accrued interest (including any default interest) through the date of full repayment multiplied
by 150% and (ii)(a) the highest number of shares of Common Stock issuable upon conversion of the default sum at the Conversion Price,
multiplied by (b) the highest closing price for the Common Stock during the period beginning on the date of first occurrence of the event
of default and ending one day prior to the mandatory prepayment date.
The
obligations under the Note are not secured by any assets of the Company.
The
Agreements contain other provisions, covenants and restrictions common with this type of debt transaction. Furthermore, the Company is
subject to negative covenants under the Agreements, which the Company also believes are also customary for transactions of this type.
The
preceding summaries of the SPA and the Note do not purport to be complete and are qualified in their entirety by reference to the full
text of the SPA and the Note, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated
herein by reference.
The
Agreements have been included as exhibits to this Current Report on Form 8-K to provide investors and securityholders with information
regarding certain of its terms. This information is not intended to provide any financial or other information about the parties to the
Agreements or their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Agreements
are made only for purposes of the Agreements and as of the date of the Agreements, are solely for the benefit of the parties to the Agreements,
may be subject to limitations agreed upon by the parties, and may be subject to standards of materiality applicable to the parties that
differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description
thereof as characterizations of the actual state of facts or condition of the parties to the Agreements or any of their respective subsidiaries
or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after
the date of the Agreements, and such subsequent information may not be fully reflected in public disclosures by the parties to the Agreements.
The information in the Agreements should be considered in conjunction with the entirety of the factual disclosure about the Company in
the Company’s public reports filed with the Securities and Exchange Commission (the “SEC”).