Item 1.01. Entry into a Material Definitive Agreement.
Sixth Street Lending LLC - November 17, 2021 and November 26, 2021 Financings
On November 17, 2021, LGBTQ Loyalty Holdings, Inc. (the "Company") entered into
a securities purchase agreement (the "11-17-21 Purchase Agreement") with Sixth
Street Lending LLC ("Sixth Street"), pursuant to which Sixth Street purchased a
convertible promissory note (the "11-17-21 Note") from the Company for a
purchase price of $153,750.00 in the aggregate principal amount of $169,125.00,
such principal and the interest thereon convertible into shares of the Company's
common stock, $0.001 par value per share (the "Common Stock" at the option of
Sixth Street. The Company intends to use the net proceeds from the 11-17-21 Note
for general working capital purposes.
The maturity date of the 11-17-21 Note is November 17, 2022 (the "Maturity
Date"). The 11-17-21 Note shall bear interest at a rate of 10% per annum, which
interest may be paid by the Company to Sixth Street in shares of common stock,
but shall not be payable until the 11-17-21 Note becomes payable, whether at the
Maturity Date or upon acceleration or by prepayment. Any amount of principal or
interest on the 11-17-21 Note which is not paid when due shall bear default
interest at the rate of twenty two percent (22%) per annum from the due date
thereof until the same is paid (the "Default Interest"). Interest shall be
computed on the basis of a 365 day year and the actual number of days elapsed.
Sixth Street has the option to convert at any time during the period beginning
on the date which is one hundred eighty (180) days following the issue date of
the 11-17-21 Note and ending on the later of: (i) the Maturity Date and (ii) the
date of payment of the Default Amount (as defined within the 11-17-21 Note), all
or any part of the outstanding and unpaid principal amount of the 11-17-21 Note
into fully paid and non-assessable shares of Common Stock, as such Common Stock
exists on the issue date of the 11-17-21 Note, or any shares of capital stock or
other securities of the Borrower into which such Common Stock shall hereafter be
changed or reclassified at the conversion price (the "Conversion Price");
provided, however, that in no event shall Sixth Street be entitled to convert
any portion of the 11-17-21 Note in excess of that portion of the 11-17-21 Note
upon conversion of which the sum of (1) the number of shares of Common Stock
beneficially owned by Sixth Street and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the 11-17-21 Note or the unexercised or unconverted
portion of any other security of the Borrower subject to a limitation on
conversion or exercise analogous to the limitations contained in the 11-17-21
Note) and (2) the number of shares of Common Stock issuable upon the conversion
of the portion of the 11-17-21 Note would result in beneficial ownership by
Sixth Street and its affiliates of more than 4.99% of the outstanding shares of
the Company's Common Stock.
The number of shares of Common Stock to be issued upon each conversion of the
11-17-21 Note shall be determined by dividing the Conversion Amount by the
applicable Conversion Price then in effect on the date specified in the notice
of conversion delivered pursuant to the terms of the 11-17-21 Note. The term
"Conversion Amount" means, with respect to any conversion of the 11-17-21 Note,
the sum of (1) the principal amount of the 11-17-21 Note to be converted in such
conversion plus (2) at Sixth Street's option, accrued and unpaid interest, if
any, on such principal amount at the interest rates provided in the 11-17-21
Note to the Conversion Date, plus (3) at the Sixth Street's option, Default
Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2) plus (4) at Sixth Street's option, any amounts owed to
Sixth Street pursuant to the terms of the 11-17-21 Note.
The Conversion Price shall be equal to the Variable Conversion Price (subject to
equitable adjustments for stock splits, stock dividends or rights offerings by
the Company relating to the Company's securities or the securities of any
subsidiary of the Company, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable Conversion Price"
shall mean 60% multiplied by the Market Price (representing a discount rate of
40%). "Market Price" means the average of the lowest three (3) Trading Prices
for the Common Stock during the twenty (20) Trading Day period ending on the
latest complete Trading Day prior to the Conversion Date. "Trading Price" means,
for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink
Sheets electronic quotation system or applicable trading market (the "OTC") as
reported by a reliable reporting service designated by Sixth Street (i.e.
Bloomberg) or, if the OTC is not the principal trading market for such security,
the closing bid price of such security on the principal securities exchange or
trading market where such security is listed or traded or, if no closing bid
price of such security is available in any of the foregoing manners, the average
of the closing bid prices of any market makers for such security that are listed
in the "pink sheets".
The 11-17-21 Note may be prepaid until 180 days from the issuance date. If the
11-17-21 Note is prepaid within 30 days of the issuance date, then the
prepayment premium shall be 110% of the face amount plus any accrued interest,
if prepaid after 31 days from the issuance date, but less than 60 days from the
issuance date, then the prepayment premium shall be 115% of the face amount plus
any accrued interest, if prepaid after 61 days from the issuance date, but less
than 90 days from the issuance date, then the prepayment premium shall be 120%
of the face amount plus any accrued interest, if prepaid after 91 days from the
issuance date, but less than 180 days from the issuance date, then the
prepayment premium shall be 125% of the face amount plus any accrued interest.
So long as the 11-17-21 Note is outstanding, the Company covenants not to,
without prior written consent from Sixth Street, sell, lease or otherwise
dispose of all or substantially all of its assets outside the ordinary course of
business which would render the Company a "shell company" as such term is
defined in Rule 144. Pursuant to the terms of the 11-17-21 Purchase Agreement,
the Company paid Sixth Street's fees and expenses in the aggregate amount of
$3,750.
The 11-17-21 Note contains certain events of default, including but not limited
to (1) failure to pay principal and interest when due, whether at maturity or
upon acceleration and such breach continues for a period of five (5) days after
written notice from Sixth Street; (2) failure by the Company to issue shares of
Common Stock to Sixth Street pursuant to a conversion notice and in accordance
with the terms of the 11-17-21 Note and such breach continues for a period of
three (3) business days after delivery of a notice of conversion from Sixth
Street; (3) breaches of any material covenant or other material term or
condition of the 11-17-21 Note and any collateral documents, including the
. . .
Item 2.03. Creation of Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 above is incorporated herein by this
reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 above is incorporated herein by this
reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Securities Purchase Agreement dated November 17, 2021 between the Company
and Sixth Street Lending LLC .
10.2 Convertible Promissory Note between the Company and Sixth Street Lending
LLC (f/k/a Power Up Lending Group Limited) dated November 17, 2021
10.3 Securities Purchase Agreement dated November 26, 2021 between the Company
and Sixth Street Lending LLC (f/k/a Power Up Lending Group Limited) .
10.4 Convertible Promissory Note between the Company and Sixth Street Lending
LLC (f/k/a Power Up Lending Group Limited) dated November 26, 2021 .
104 Cover Page Interactive Data File (formatted as Inline XBRL)
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LGBTQ LOYALTY HOLDINGS, INC. 
