Item 1.01 Entry into a Material Definitive
Agreement.
Labrys Investment
On December 18, 2020 (the “Issue
Date”), Home Bistro, Inc., a Nevada corporation (the “Company”), entered into, and closed the transactions
contemplated by, that certain Securities Purchase Agreement (the “Labrys SPA”), by and between the Company and
Labrys Fund, LP, a Delaware limited partnership (“Labrys”). Pursuant to the Labrys SPA, among other things,
(i) the Company issued to Labrys a 12% self-amortization promissory note (the “Labrys Note”, and together with
the Labrys SPA, the “Labrys Agreements”) in the aggregate principal amount of $275,000, and (ii) issued to Labrys
a total of 257,412 shares (the “Issued Shares”) of the Company’s common stock, par value $0.001 per share
(the “Common Stock”), of which 183,866 shares (the “Second Commitment Shares”) were issued
as a returnable commitment fee for the Labrys Note.
The Labrys Note bears interest at a rate
of 12% per annum on the unpaid principal amount and matures on December 18, 2021 (the “Maturity Date”) or upon
earlier acceleration or prepayment as provided therein. The default interest rate is the
lesser of 16% per annum and the maximum amount permitted by law. The per share conversion price into which the Labrys Note
shall be convertible into shares of Common Stock (the “Conversion Price”) shall equal the lesser of (i) 105%
multiplied by the closing bid price of the Common Stock on the trading day immediately preceding the Issue Date or (ii) the closing
bid price of the Common Stock on the trading day immediately preceding the date of the respective conversion.
The Labrys Note provides that the Second
Commitment Shares must be returned to the Company’s treasury if the Labrys Note is fully repaid and satisfied on or prior
to the Maturity Date. Upon the occurrence and during the continuation of any Event of Default
(as defined in the Labrys Note), Labrys is no longer required to return the Second Commitment Shares to the Company, the Labrys
Note becomes immediately due and payable and the Company will pay to Labrys in full satisfaction of its obligations thereunder
an amount equal to the principal amount then outstanding plus accrued interest (including any default interest) through the date
of full repayment multiplied by 125%.
The
obligations of the Company under the Labrys Note rank senior with respect to any and all unsecured indebtedness incurred following
the Issue Date except with respect to the Company’s current and future indebtedness with Shopify and any further loans that
may be received pursuant to the CARES Act and the SBA’s Economic Injury Disaster loan program. Further, the Labrys Note contains
standard anti-dilution provisions and price protections provisions in the event that the Company issues securities for a price
per share less than the Conversion Price. Labrys is also entitled to acquire securities in any future offerings conducted by the
Company while the Labrys Note remains outstanding.
Labrys
has the right, upon the occurrence of an Event of Default, to convert all or any portion of the then outstanding and unpaid principal
amount and interest thereon (including any default interest) into fully paid and non-assessable shares of Common Stock, or any
shares of capital stock or other securities of the Company into which such Common Stock shall thereafter be changed or reclassified,
at the Conversion Price determined as provided in the Labrys Note, subject to certain Labrys ownership limitations.
The
Labrys Agreements contain other provisions, covenants and restrictions common with this type of debt transaction. Furthermore,
the Company is subject to certain negative covenants under the Labrys Agreements, which the Company also believes are also customary
for transactions of this type. The Labrys SPA also provides Labrys with certain “piggyback” registration rights,
permitting them to request that the Company include the Issued Shares for sale in certain registration statements filed by the
Company under the Securities Act of 1934, as amended (the “Securities Act”).
The preceding summaries of the Labrys SPA
and the Labrys Note do not purport to be complete and are qualified in their entirety by reference to the full text of the Labrys
SPA and Labrys 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.
FirstFire Investment
On December 28, 2020, the Company entered
into a Stock Purchase Agreement (the “FirstFire SPA”, and together with the Labrys SPA, the “SPAs”)
with FirstFire Global Opportunities Fund, LLC, a Delaware limited liability company (“FirstFire”), and issued
to FirstFire a 12% self-amortization promissory note (the “FirstFire Note”, and together with the Labrys Note,
the “Notes”), in each case on substantially similar terms to those with Labrys; provided, however, that (i)
the FirstFire Note had an aggregate principal amount of $172,000, (ii) FirstFire was issued a total of 160,656 shares of Common
Stock, of which 114,667 were issued as a returnable commitment fee for the FirstFire Note, and (iii) the FirstFire Note matures
on December 28, 2021.
In connection with the FirstFire SPA and
FirstFire Note, the Company and FirstFire also entered into a Registration Rights Agreement (the “Registration
Rights Agreement”, and together with the FirstFire SPA and the FirstFire Note, the “FirstFire Agreements”),
pursuant to which the Company agreed to file a registration statement registering all securities issued or issuable pursuant to
the FirstFire SPA. The preceding summaries of the FirstFire SPA, the FirstFire Note and the Registration Rights Agreement do not
purport to be complete and are qualified in their entirety by reference to the full text of the FirstFire SPA, the FirstFire Note
and the Registration Rights Agreement, which are filed as Exhibits 10.3, 10.4 and 10.5, respectively, to this Current Report on
Form 8-K and incorporated herein by reference.
The Labrys Agreements and the FirstFire
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 Labrys Agreements or the FirstFire Agreements or their respective subsidiaries or affiliates. The representations, warranties
and covenants contained in the Labrys Agreements and the FirstFire Agreements are made only for purposes of the Labrys Agreements
and the FirstFire Agreements, respectively, and as of the date of the Labrys Agreements and the FirstFire Agreements, respectively,
are solely for the benefit of the parties to the Labrys Agreements and the FirstFire Agreements, respectively, 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 Labrys Agreements or the FirstFire 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 Labrys Agreements or the FirstFire Agreements, and such subsequent information
may not be fully reflected in public disclosures by the parties to the Labrys Agreements or the FirstFire Agreements. The information
in the Labrys Agreements and the FirstFire 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”).