ITEM
1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On
September 5, 2019, OptimizeRx Corp. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with OptimizeRX Digital Therapeutics, Inc., a Delaware corporation and wholly-owned subsidiary of the Company
(“MergerCo”), and RMDY Health, Inc. (“RMDY”), pursuant to which the Company will acquire RMDY for approximately
$16 million (subject to adjustment for net working capital and other customary adjustments, the “Merger Consideration”),
by merging MergerCo with and into RMDY, with RMDY continuing as the surviving entity and wholly owned subsidiary of the Company
(the “Merger”).
Pursuant
to the Merger Agreement, and subject to the terms and conditions set forth therein, at the closing of the Merger (the “Closing”),
each of RMDY’s outstanding shares (including common and preferred shares) and applicable equity awards (including in-the-money
options and warrants) will be converted into the right to receive the applicable portion of the Merger Consideration. Fifty percent
of the Merger Consideration will be paid in cash and the other fifty percent will be paid in shares of the Company’s common
stock, with the actual number of such shares to be issued determined as the quotient obtained by dividing fifty percent of the
Merger Consideration by the volume-weighted average trading price of the Company’s stock as reported by NASDAQ for the thirty
(30) consecutive trading days ending on the day immediately preceding the Closing. A portion of the Merger Consideration will
be held in an escrow fund for the purposes of satisfying certain indemnification obligations of the equity holders.
The
Closing is subject to certain conditions, including, among others, (i) approval of the Merger Agreement by holders of a majority
of the issued and outstanding capital stock issued by RMDY, (ii) dissenting shareholders of RMDY, if any, not constituting more
than 2% of the sum of the aggregate number of shares of RMDY capital stock outstanding immediately prior to Closing or shareholders
holding at least 90% of the sum of the aggregate number of voting shares of RMDY stock outstanding immediately prior to Closing
shall have delivered an executed copy of a written consent approving the Merger, and (iii) the absence of any Material Adverse
Effect (as defined in the Merger Agreement).
The
Merger Agreement contains certain customary termination rights for the Company and RMDY, as the case may be, applicable upon,
among other events, (i) it being apparent that closing will not occur as a result of a failure to meet closing conditions, or
(ii) a material breach of the Merger Agreement by the other party that cannot be cured.
The
Merger Agreement has been included to provide investors with information regarding its terms. The representations, warranties,
and covenants contained in the Merger Agreement were made only for the purposes of the Merger Agreement, were made as of specific
dates, were made solely for the benefit of the parties to the Merger Agreement, and may not have been intended to be statements
of fact, but rather as a method of allocating risk and governing the contractual rights and relationships among the parties to
the Merger Agreement. In addition, such representations, warranties, and covenants may have been qualified by certain disclosures
not reflected in the text of the Merger Agreement and may apply standards of materiality and other qualifications and limitations
in a way that is different from what may be viewed as material by the Company’s shareholders. None of the Company’s
shareholders or any other third party should rely on the representations, warranties, and covenants, or any descriptions thereof,
as characterizations of the actual state of facts or conditions of the Company, the Company, Merger Sub, or any of their respective
subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after
the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public
disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information
regarding the Company that is or will be contained in, or incorporated by reference into, the Forms 10-K, Forms 10-Q, Forms 8-K,
and other documents that the Company files or has filed with the SEC.
The
foregoing descriptions of the Merger Agreement and the Merger are summaries, do not purport to be complete, and are qualified
in their entirety by reference to the full text of the Merger Agreement, and the exhibits attached thereto, a copy of which is
attached as Exhibit 2.1 to this Current Report on Form 8-K and incorporated by reference herein.