Item 1.01
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Entry Into A Material
Definitive Agreement
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On
February 5, 2020, 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”), Cura Health Management LLC, a Florida limited liability
company (the “Target”), and ACO Health Partners, LLC, a Delaware limited liability company, Bradberry Holdings,
LLC, a Florida limited liability company, and FocusOne Holdings, LLC, a Florida limited liability company (each a “Seller,”
and, collectively, the “Sellers”).
Pursuant
to the Merger Agreement, and 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 1, 2020.
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 issued and outstanding
equity of the Target 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 the 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 Sellers
is as follows: (i) $437,500 payable at the Closing; (ii) common shares of the Corporation, par value $0.0001 per share, equal
to an aggregate value of $875,000 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 $437,500 to be paid over four (4) years, subject
to certain revenue and profit targets; and (iv) cash, if any, representing any excess over $25,000 of accounts receivable of the
Target immediately prior to the Closing. If the accounts receivable balance is below $25,000 at the Closing, the difference shall
be paid by the Sellers.
The
Merger Agreement contains customary representations and warranties by each of the Corporation, HLYK FL, the Target, and the Sellers.
Additionally, the obligations of the parties to consummate the Merger is subject to various customary Closing conditions, including,
but not limited to (i) the Target having provided audited financial statements to the Company for the two fiscal years preceding
the closing date, (ii) the Company entering into consulting agreements and employment agreements with certain individuals, and
(iii) the Company having entered into a lease extension for a minimum of three years for the current office of Target. In the
event that the Sellers 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 Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated
herein by reference.