XFTB XFIT Brands Inc (CE)

ITEM 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENTS

INVESTMENT AGREEMENT WITH GHS INVESTMENTS, LLC

On August 12, 2016 we entered into an “at the market” Investment Agreement (the “Investment Agreement”) with GHS Investments, LLC (“GHS”). To sell shares under the Investment Agreement, the Investment Agreement gives us the option to sell to GHS up to $5,000,000 worth of our common stock (“Shares”) over the period following effectiveness of a registration statement under the Securities Act of 1933 (the “Effective Date”) and ending thirty-six (36) months after the Effective Date. Under the terms of the Investment Agreement, we have the right to deliver from time to time a Put Notice to GHS stating the dollar amount of Put Shares (up to $500,000 under any individual Put Notice)(the “Put Amount”) that we intend to sell to GHS with the price per share based on the following formula: the lesser of (a) the lowest sale price for the Common Stock on the date of the Put Notice (the “Put Notice Date”); or (b) the arithmetic average of the three (3) lowest trading prices for the Company’s Common Stock during the five trading days following the Put Notice Date. The maximum number of shares that can be put to GHS is two times the average daily trading volume during the ten trading days prior to the closing of a put (the “Closing Date”). If the amount of the tranche exceeds the volume limitation, additional tranches will be delivered until the entire Put Amount is delivered. Each tranche, including the initial tranche, will trigger a new purchase price, and will be priced according to the purchase price definition.

On any Closing Date, we shall deliver to GHS the number of shares of the Common Stock registered in the name of GHS as specified in the Put Notice. In addition, we must deliver the other required documents, instruments and writings required. GHS is not required to purchase the shares unless:

In addition, there is an ownership limit for GHS of 9.99% of the total outstanding shares.

GHS will not engage in any “short-sale” (as defined in Rule 200 of Regulation SHO) of our Common Stock at any time during this Agreement. Pursuant to the Investment Agreement with GHS, we agreed to pay a fee equaling $250,000 or 5% of the Commitment Amount (the “Commitment Fee”) which shall be paid in installments of Fifty Thousand ($50,000) beginning on the earlier of (i) the Effective Date and (ii) January 1, 2017 and, the first Trading Day of each January, April, July and October thereafter until fully paid. Each installment of the Commitment Fee shall be paid either in cash or, at the election of the Company, in shares of Common Stock, which shall be deemed a put under the Investment Agreement. On August 12, 2016, we entered into a Registration Rights Agreement with GHS requiring, among other things that we prepare and file with the SEC a Registration Statement on Form S-1 covering the resale of the shares issuable to GHS under the Investment Agreement. As per the Investment Agreement, GHS’ obligations are not assignable.

We currently have an Equity Purchase Agreement with Kodiak Capital Group, LLC (“Kodiak”) pursuant to which we can put shares to Kodiak. The pricing to us under the IA is better than the Kodiak agreement and we intend to terminate the Kodiak agreement immediately prior to the Effective Date.

The foregoing descriptions of the IA and the Registration Rights Agreement are qualified in its entirety by reference to the provisions of the IA filed as exhibit 10.1 and the Registration Rights Agreement filed as exhibit 10.2 to this Current Report on the Form 8-K which are incorporated herein by reference.