Item 1.01
|
Entry Into A Material
Definitive Agreement
|
On
January 15, 2019, HealthLynked Corp. (the “
Corporation
”) entered into an Agreement and Plan of Merger (the
“
Merger Agreement
”) by and among the Corporation, HLYK Florida, LLC, a Florida limited liability company and
wholly-owned subsidiary of the Corporation (“
HLYK FL
”), Hughes Center for Functional Medicine, P.A. (the “
Target
”),
and Pamela A. Hughes, D.O. (the “
Seller
”).
Pursuant
to the Merger Agreement, subject to the terms and conditions set forth therein, at the closing of the transactions contemplated
by the Merger Agreement (the “
Closing
”), the Target will merge with and into HLYK FL, with HLYK FL as the surviving
entity. The Closing is anticipated to take place on or about April 15, 2019.
Subject
to the terms and conditions set forth in the Merger Agreement, at the Effective Time (as defined in the Merger Agreement): articles
of merger will be filed with the Florida Department of State, Division of Corporations, and all of the equity of the Target issued
and outstanding immediately prior to the Effective Time will be cancelled, HLYK FL will continue as the surviving entity, and
the Corporation will be obligated to pay the Merger Consideration (as defined below). After consummation of the Merger Agreement,
HLYK FL will remain a wholly-owned subsidiary of the Corporation.
At
or prior to the Closing, the aggregate merger consideration (the “
Merger Consideration
”) payable to the Seller
is as follows: (i) $750,000 payable at the Closing; (ii) common shares of the Corporation, par value $0.0001 per share, equal
to an aggregate value of $750,000 based on the average volume weighted average price (VWAP) of the five (5) business days prior
to the Closing; (iii) “earn-out” payments in the aggregate amount of $500,000 to be paid over three (3) years, subject
to certain revenue and profit targets; and (iv) cash, if any, representing any excess over the Minimum Value (as defined in the
Merger Agreement) of $65,000 of the required medical supply inventory of the Target immediately prior to the Closing. If the Minimum
Value is below $65,000 at the Closing, the difference shall be paid by the Seller.
The
Merger Agreement contains customary representations and warranties by each of the Corporation, HLYK FL, the Target, and the Seller.
Additionally, the obligations of the parties to consummate the Merger is subject to various customary Closing conditions, including,
but not limited to: (i) the filing of an amendment to the articles of incorporation of the Target to change its business purpose
to “any and all lawful business,” (ii) the Company applying for, and obtaining, a Health Care Clinic License from
the Florida Agency for Health Care Administration; and (iii) the Company entering into consulting agreements and employment agreements
with certain individuals. In the event that the Seller and/or Target elect to not consummate the transactions contemplated by
the Merger Agreement, such parties shall be obligated to reimburse the Corporation for expenses paid relating to the preparation
of audited financial statements of the Target in the amount of $10,000.
The
foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to
the full text of the Merger Agreement, which is attached as an exhibit to this Current Report on Form 8-K, and is incorporated
herein by reference.