Item
1.01 Entry into a Material Definitive Agreement.
On
October 23, 2019 (the “Closing Date”), Bonum Health, LLC, a Delaware limited liability company, and a wholly-owned
subsidiary of Trxade Group, Inc. (the “Company”, “we” and “us”) entered
into an Asset Purchase Agreement with Bonum Health, LLC, a Florida limited liability company (“Seller”) and
Hardikkumar Patel, the sole member of the Seller (the “Member”). Pursuant to the Asset Purchase Agreement,
the Company acquired from the Seller, certain specified assets and certain specified contracts associated with the assets of the
Seller’s operation as a telehealth service provider (the Tele Meds Platform)(the “Assets”). Included
with the acquisition of the Assets, were contracts (relating to the Assets), intellectual property for the Bonum Health Tele
Medicine software & Technology and personal computers. The Company agreed to provide the Seller consideration equal to
250,000 shares of restricted common stock of the Company at the closing (the “Closing Shares”), and that the
Seller had the right to earn up to an additional 650,000 shares of restricted common stock of the Company following the closing
(the “Milestone Shares” and collectively with the Closing Shares, the “APA Shares”), as
follows:
1.
240,000 shares upon the placement, by the Company, of 40 in-store wellness kiosks, utilizing the Tele Meds Platform, on or before
the first anniversary of the Closing Date;
2.
205,000 shares upon placement, by the Company, of 70 in-store wellness kiosks utilizing the Tele Meds Platform, on or before the
first anniversary of the Closing Date; and
3.
205,000 shares upon placement, by the Company, of 100 in-store wellness kiosks utilizing the Tele Meds Platform on or before the
first anniversary of the Closing Date.
The
Asset Purchase Agreement includes a three year non-compete requirement, prohibiting the Seller and the Member from competing against
the Assets, customary representations and indemnification obligations, subject to a $25,000 minimal claim amount and certain limitations
on liability disclosed in the Asset Purchase Agreement.
The
Asset Purchase Agreement also requires the Company to fund up to $600,000 in connection with remote hub installation, marketing
and IT, subject to certain milestones set forth in the Asset Purchase Agreement (the “Funding Obligation”).
Contemporaneously
with the Asset Purchase Agreement, the Company and Seller also entered into a Stock Purchase Agreement, Registration Rights Agreement
and Transition Services Agreement.
Pursuant
to the Stock Purchase Agreement entered into between the Company and the Seller, the Seller made certain representations to the
Company in order for the Company to confirm that an exemption from registration existed for the issuance of the Closing Shares
and will exist for the issuance of the Milestone Shares.
Pursuant
to the Registration Rights Agreement entered into between the Company and the Seller, the Company provided the Seller piggyback
registration rights in connection with the APA Shares. The Registration Rights Agreement contained customary indemnification obligations
of the parties.
The
Transition Services Agreement (“Services Agreement”) entered into between the Seller and the Company, requires
the Seller and Member to provide installation and support and maintenance services for the installation of up to one hundred (100)
remote telemedicine “Kiosks” in locations to be determined by the Company and to be available to answer questions
and provide guidance as reasonably requested by the Company for a period of not more than one year.
The
foregoing description of the Asset Purchase Agreement, Stock Purchase Agreement, Registration Rights Agreement and Transition
Services Agreement do not purport to be complete and are qualified in their entirety by to the full text thereof, filed as Exhibits
2.1, 10.1, 10.2 and 10.3 to this Current Report on Form 8-K and incorporated herein by reference.