Item 1.01 Entry Into a Material Definitive Agreement
Secured Note and warrants Purchase
On October 20, 2022, we, Touchpoint Group Holdings Inc. consummated a Securities
Purchase Agreement (dated October 18, 2022) with Mast Hill Fund, L. P. ("Mast
Hill"), whereby in consideration of $63,900, we issued to Mast Hill a senior
secured convertible promissory note ("Note") in the principal amount of $71,000
and common stock purchase warrants to purchase 100,000,000 shares of our common
stock (the "First Warrant") and 100,000,000 shares of our common stock (the
"Second Warrant"), respectively. The principal amount of the Note and all
interest accrued thereon are payable on October 18, 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 $0.0002 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.
Pursuant to the Securities Purchase Agreement we granted Mast Hill "piggy back"
registration rights with respect to the securities issuable upon conversion of
the Note and exercise of the First and Second Warrant.
The First Warrant is exercisable until October 18, 2027, at a price of $0.0006
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 $0.0006 per share, subject to customary anti-dilution
adjustments. In addition, subject to certain limited exceptions, if at any time
while the Second 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 Warrant, the holder of the Second Warrant shall have the right to
reduce the exercise price to such lower price. 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 October 18, 2022, between
Touchpoint Group Holdings Inc. and Mast Hill Fund, L. P.
10.2 Senior Secured Promissory Note dated October 18, 2022, issued to Mast
Hill Fund, L. P.
10.3 Security Agreement dated October 18, 2022, in favor of Mast Hill Fund,
L. P.
10.4 Common Stock Purchase Warrant to Purchase 100,000,000 shares of common
stock dated October 18, 2022.
10.5 Common Stock Purchase Warrant to Purchase 100,000,000 shares of common
stock dated October 18, 2022.
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TOUCHPOINT GROUP HOLDINGS, INC. 
