UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported): July 16, 2018
HealthLynked
Corp.
(Exact Name of Registrant as Specified in its Charter)
| Nevada | 47-1634127 | |
| (State of Incorporation) | (I.R.S. Employer Identification No.) | |
| 1726 Medical Blvd., Suite 101, Naples, Florida | 34110 | |
| (Address of Principal Executive Offices) | (ZIP Code) |
(239) 513-1992
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Explanatory Note
This Amendment No. 1 on Form 8-K/A is an amendment to the Current Report on Form 8-K of HealthLynked Corp. (the “Corporation”) filed with the U.S. Securities and Exchange Commission on July 19, 2018. This Current Report is being filed to furnish the disclosure schedules (the “ Disclosure Schedules ”) and the lock-up agreements (the “ Lock-Up Agreements ”) as required by the Securities Purchase Agreement.
| Item 1.01 | Entry into a Material Definitive Agreement |
The Corporation entered into a Securities Purchase Agreement, dated as of July 16, 2018 (the “ Securities Purchase Agreement ”) with certain accredited investors (the “ Investors ”). The Corporation also entered into a Registration Rights Agreement with the Investors dated as of July 16, 2018 (the “ Registration Rights Agreement ”). The Corporation and the Investors consummated the transactions contemplated by the Securities Purchase Agreement on July 17, 2018. This Amendment No. 1 on Form 8-K/A is being filed to furnish the Disclosure Schedules and Lock-Up Agreements.
In connection with the consummation of the transactions contemplated by the Securities Purchase Agreement, and as an inducement to the Investors to enter into the same, the Corporation’s Chief Executive Officer and Chief Financial Officer, Dr. Michael Dent and Mr. George O’Leary, respectively, entered into the Lock-Up Agreements with the Corporation; all capitalized terms used and not defined herein are used as defined in the Lock-Up Agreements. Pursuant to the Lock-Up Agreements, Dr. Dent and Mr. O’Leary are prohibited from, among other things, selling, offering to sell, contracting or agreeing to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of the Corporation’s common stock or Common Stock Equivalents (as defined in the Securities Purchase Agreement). The Lock-Up Agreements are effective until ninety (90) calendar days after the earlier of the date that (i) such time one or more Registration Statement(s) (as defined in the Registration Rights Agreement) covering the resale of all Registrable Securities (as defined in the Registration Rights Agreement) has been effective and available for the re-sale of all such Registrable Securities and (ii) such time as all of the Registrable Securities may be sold without restriction or limitation pursuant to Rule 144.
The foregoing description of the Disclosure Schedules and the Lock-Up Agreements are not complete and are qualified in their entirety by reference to the full text of the Disclosure Schedules and a Form of Lock-Up Agreement, copies of which are filed as Exhibits to this Current Report on Form 8-K and are incorporated by reference herein.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. | Description | |
| 1.1 | Disclosure Schedules to the Securities Purchase Agreement, dated July 16, 2018, by and among the Corporation and the Investors | |
| 1.2 | Form of Lock-Up Agreement |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HealthLynked Corp. | ||
| Dated: August 16, 2018 | By: | /s/ George O’Leary |
| George O’Leary | ||
| Chief Financial Officer | ||
2
Exhibit 1.1
Schedule 3(a) – Subsidiaries
| Name | Jurisdiction of Formation | |
| Naples Women’s Center, LLC (“NWC”) | Florida | |
| HLYK Florida LLC | Florida |
| - 1 - |
Schedule 3(j) SEC Documents
None.
| - 2 - |
Schedule 3(k) – Absence of Certain Changes
Schedule 3(k)(i)
None.
Schedule 3(k)(ii)
None.
| - 3 - |
Schedule 3(p) – Transactions with Affiliates
| A. | HealthLynked’s Chief Executive Officer, Dr. Michael Dent (“DMD”) first provided an up to $175,000 unsecured note payable to HealthLynked with a 0% interest rate. During 2013 the limit on the unsecured Note Payable was increased up to $500,000 and during 2014 it was increased to $750,000 with a maturity date of December 31, 2017. During January 2017, the note was again amended to extend the maturity date until December 31, 2018, to accrue interest on outstanding balances after January 1, 2017 at a rate of 10% per annum, and to fix interest accrued on balances between January 1, 2015 and December 31, 2016 at an amount equal to $22,108 (the “$750k DMD Note”). All principal and interest is due at maturity of the $750k DMD Note. The balance on the “$750k DMD Note was $241,050 as of June 30, 2018. Interest accrued on the $750k DMD Note as of June 30, 2018 and December 31, 2017 was $51,901 and $43,963, respectively. |
| B. | HealthLynked has issued unsecured promissory notes separate from the one described above that are payable to Dr. Michael Dent totaling $436,450 as of June 30, 2018. Interest accrued on the unsecured promissory notes as of June 30, 2018 and December 31, 2017 was $40,256 and $19,350, respectively. |
| C. | On February 12, 2018, HealthLynked issued a warrant to purchase 6,678,462 shares of common stock to DMD as an inducement to (i) extend the maturity dates of up to $439,450 loaned by Dr. Dent to HealthLynked in 2017 and 2018 in the form of unsecured promissory notes, including $75,000 loaned from Dr. Dent to HealthLynked in January 2018 to allow HealthLynked to retire an existing convertible promissory note payable to Power-up Lending Group Ltd. before such convertible promissory note became eligible for conversion, and (ii) provide continued loans to HealthLynked. The warrant is immediately exercisable at an exercise price of $0.065 per share, subject to adjustment, and expires five years after the date of issuance. The fair value of the warrants was calculated using the Black-Scholes pricing model at $337,466, with the following assumptions: risk-free interest rate of 2.56%, expected life of 5 years, volatility of 268.90%, and expected dividend yield of zero. Because the fair value of the warrants was greater than 10% of the present value of the remaining cash flows under the modified promissory notes, the transaction was treated as a debt extinguishment and reissuance of new debt instruments pursuant to the guidance of ASC 470-50 “Debt – Modifications and Extinguishments” (“ASC 470-50”). |
| D. | During 2017, HealthLynked entered into an agreement with MedOffice Direct (“MOD”), a company majority-owned by HealthLynked’s CEO and largest shareholder, Dr. Michael |
Dent, pursuant to which HealthLynked will pay rent to MOD in the amount of $2,040 per month through July 31, 2018. During the six months ended June 30, 2018 and 2017, HealthLynked recognized rent expense to MOD in the amount of $12,240 and $12,240, respectively.
| E. | During 2017, HealthLynked entered into a separate Marketing Agreement with MOD pursuant to which MOD agreed to market the HealthLynked Network to its physician practice clients, in exchange for a semi-annual fee of $25,000. This agreement was terminated on April 15, 2018. |
| - 4 - |
Schedule 3(q) Equity Capitalization
Schedule 3(q)(i)
None.
Schedule 3(q)(ii)
Warrants:
| Issuance | Expiration | Exercise | ||||||||||||
| Holder | Reason for Issuance | Date | Date | Price | Number | |||||||||
| Dr. Michael Dent | Consideration for accrued interest | 01/01/15 | 01/01/25 | $ | 0.050 | 2,000,000 | ||||||||
| Urania Holdings | Warrant coverage for private placement | 07/01/16 | 07/01/21 | $ | 0.100 | 1,250,000 | ||||||||
| Iconic Holdings LLC | Attached to $550k Promissory Note | 07/07/16 | 07/07/21 | $ | 0.090 | 6,111,111 | ||||||||
| Delaney Equity Group | Commission for promissory note | 07/07/16 | 07/07/21 | $ | 0.090 | 277,778 | ||||||||
| Gerald Eicke | Warrant coverage for private placement | 07/18/16 | 07/18/21 | $ | 0.100 | 625,000 | ||||||||
| Bob Gasparini | Warrant coverage for private placement | 07/21/16 | 07/21/21 | $ | 0.100 | 312,500 | ||||||||
| Iconic Holdings LLC | Extension #1 of $550k and $50k Note | 02/10/17 | 02/10/22 | $ | 0.150 | 500,000 | ||||||||
| Iconic Holdings LLC | Investment Agreement Warrants | 03/23/17 | 03/23/22 | $ | 0.250 | 4,000,000 | ||||||||
| Iconic Holdings LLC | Investment Agreement Warrants | 03/23/17 | 03/23/22 | $ | 0.500 | 2,000,000 | ||||||||
| Iconic Holdings LLC | Investment Agreement Warrants | 03/23/17 | 03/23/22 | $ | 1.000 | 1,000,000 | ||||||||
| Iconic Holdings LLC | Attached to $111k Promissory Note | 05/22/17 | 05/22/22 | $ | 0.750 | 133,333 | ||||||||
| Delaney Equity Group | Fee for $111k Promissory Note | 05/22/17 | 05/22/22 | $ | 0.750 | 6,667 | ||||||||
| Delaney Equity Group | Fee for Investment Agreement Warrants | 06/07/17 | 06/07/22 | $ | 0.250 | 200,000 | ||||||||
| Delaney Equity Group | Fee for Investment Agreement Warrants | 06/07/17 | 06/07/22 | $ | 0.500 | 100,000 | ||||||||
| Delaney Equity Group | Fee for Investment Agreement Warrants | 06/07/17 | 06/07/22 | $ | 1.000 | 50,000 | ||||||||
| J Charles Assets | Fee warrants | 08/05/17 | 08/04/20 | $ | 0.400 | 50,000 | ||||||||
| Iconic Holdings LLC | Extension #2 of $550k and $50k Note | 08/08/17 | 08/08/22 | $ | 0.300 | 1,000,000 | ||||||||
| Bob Gasparini | Attached to private placement | 10/05/17 | 10/04/22 | $ | 0.300 | 126,666 | ||||||||
| Leonard Splane | Attached to private placement | 10/18/17 | 10/17/22 | $ | 0.300 | 166,666 | ||||||||
| Duncan Johnson | Attached to private placement | 11/01/17 | 10/31/22 | $ | 0.300 | 666,666 | ||||||||
| BMA Securities | Fee for private placement | 11/01/17 | 10/31/22 | $ | 0.200 | 83,333 | ||||||||
| Michael Dent | Debt Inducement | 02/12/18 | 02/12/23 | $ | 0.065 | 6,678,462 | ||||||||
| Ilan Armati | Attached to private placement | 01/11/18 | 01/11/23 | $ | 0.150 | 588,235 | ||||||||
| Jon Barthelme | Attached to private placement | 02/28/18 | 02/27/23 | $ | 0.150 | 1,176,471 | ||||||||
| Joseph Lerner | Attached to private placement | 02/28/18 | 02/27/23 | $ | 0.150 | 588,235 | ||||||||
| Iconic Holdings LLC | Extension of $111k Note | 03/28/18 | 03/28/23 | $ | 0.050 | 125,000 | ||||||||
| Richard Cavalli | IR Services | 06/06/18 | 06/06/21 | $ | 0.150 | 100,000 | ||||||||
| Howard Isaacs | IR Services | 06/06/18 | 06/06/21 | $ | 0.150 | 500,000 | ||||||||
| Anthony Scoleri | Attached to private placement | 06/14/18 | 06/13/23 | $ | 0.350 | 104,000 | ||||||||
| 30,520,123 | ||||||||||||||
| - 5 - |
Options:
| Vest | Vest | |||||||||||||||
| Issue | Total | Exercise | Start | End | ||||||||||||
| Employee | Date | Grant | Price | Date | Date | Vesting | ||||||||||
| Time Based Vesting | ||||||||||||||||
| George O'Leary | 07/01/16 | 100,000 | $ | 0.08 | 07/01/16 | 07/01/17 | End of first year | |||||||||
| George O'Leary | 07/01/16 | 100,000 | $ | 0.08 | 07/01/17 | 07/01/18 | Ratably over second year | |||||||||
| George O'Leary | 07/01/18 | 150,000 | $ | 0.31 | 07/01/19 | 07/01/19 | End of first year | |||||||||
| George O'Leary | 07/01/18 | 600,000 | $ | 0.31 | 07/01/19 | 07/01/22 | Monthly for 3 years | |||||||||
| Michael Dent | 07/01/16 | 200,000 | $ | 0.08 | 07/01/16 | 07/01/17 | End of first year | |||||||||
| Michael Dent | 07/01/16 | 150,000 | $ | 0.08 | 07/01/17 | 07/01/18 | Ratably over second year | |||||||||
| Michael Dent | 07/01/16 | 100,000 | $ | 0.08 | 07/01/18 | 07/01/19 | Ratably over third year | |||||||||
| Michael Dent | 07/01/16 | 50,000 | $ | 0.08 | 07/01/19 | 07/01/20 | Ratably over fourth year | |||||||||
| Rob Horel | 11/28/16 | 50,000 | $ | 0.20 | 11/28/16 | 11/28/17 | One year anniversary | |||||||||
| Rob Horel | 11/28/16 | 75,000 | $ | 0.20 | 11/28/17 | 11/28/18 | Second year anniversary | |||||||||
| Rob Horel | 11/28/16 | 174,996 | $ | 0.20 | 11/28/18 | 11/28/19 | Ratably over third year | |||||||||
| Howard Isaacs | 04/06/18 | 133,000 | $ | 0.10 | 04/06/18 | 04/06/18 | Fully vested at grant | |||||||||
| Fred Herbst | 05/21/18 | 3,000 | $ | 0.15 | 05/21/18 | 05/21/18 | Fully vested at grant | |||||||||
| Fred Herbst | 05/21/18 | 3,000 | $ | 0.15 | 05/21/19 | 05/21/19 | On first anniversary | |||||||||
| Fred Herbst | 05/21/18 | 3,000 | $ | 0.15 | 05/21/20 | 05/21/20 | On Second anniversary | |||||||||
| Fred Herbst | 05/21/18 | 3,000 | $ | 0.15 | 05/21/21 | 05/21/21 | On third anniversary | |||||||||
| Fred Herbst | 05/21/18 | 3,000 | $ | 0.15 | 05/21/22 | 05/21/22 | On fourth anniversary | |||||||||
| 1,897,996 | ||||||||||||||||
| - 6 - |
| D | Performance Based Vesting |
| George O'Leary | 07/01/16 | 100,000 | $ | 0.08 | E | E | FY16 budgeted earnings | ||||||||||
| F | George O'Leary | 07/01/16 | 100,000 | $ | 0.08 | 12/31/16 | 12/31/16 | FY16 individual goals | |||||||||
| George O'Leary | 07/01/16 | 100,000 | $ | 0.08 | E | E | FY17 budgeted earnings | ||||||||||
| George O'Leary | 07/01/16 | 100,000 | $ | 0.08 | F | F | FY17 individual goals | ||||||||||
| George O'Leary | 07/01/18 | 75,000 | $ | 0.31 | D | D | FY18 budgeted earnings | ||||||||||
| George O'Leary | 07/01/18 | 75,000 | $ | 0.31 | D | D | FY18 individual goals | ||||||||||
| George O'Leary | 07/01/18 | 75,000 | $ | 0.31 | D | D | FY19 budgeted earnings | ||||||||||
| George O'Leary | 07/01/18 | 75,000 | $ | 0.31 | D | D | FY19 individual goals | ||||||||||
| George O'Leary | 07/01/18 | 75,000 | $ | 0.31 | D | D | FY20 budgeted earnings | ||||||||||
| George O'Leary | 07/01/18 | 75,000 | $ | 0.31 | D | D | FY20 individual goals | ||||||||||
| George O'Leary | 07/01/18 | 75,000 | $ | 0.31 | D | D | FY21 budgeted earnings | ||||||||||
| George O'Leary | 07/01/18 | 75,000 | $ | 0.31 | D | D | FY21 individual goals | ||||||||||
| Michael Dent | 07/01/16 | 100,000 | $ | 0.08 | E | E | FY16 revenue | ||||||||||
| Michael Dent | 07/01/16 | 100,000 | $ | 0.08 | F | F | FY16 Adjusted EBITDA | ||||||||||
| Michael Dent | 07/01/16 | 75,000 | $ | 0.08 | E | E | FY17 revenue | ||||||||||
| Michael Dent | 07/01/16 | 75,000 | $ | 0.08 | F | F | FY17 Adjusted EBITDA | ||||||||||
| Michael Dent | 07/01/16 | 50,000 | $ | 0.08 | D | D | FY18 revenue | ||||||||||
| Michael Dent | 07/01/16 | 50,000 | $ | 0.08 | D | D | FY18 Adjusted EBITDA | ||||||||||
| Michael Dent | 07/01/16 | 25,000 | $ | 0.08 | D | D | FY19 revenue | ||||||||||
| Michael Dent | 07/01/16 | 25,000 | $ | 0.08 | D | D | FY19 Adjusted EBITDA | ||||||||||
| Rob Horel | 11/28/16 | 100,000 | $ | 0.20 | E | E | FY17 HLKD Network revenue | ||||||||||
| Rob Horel | 11/28/16 | 50,000 | $ | 0.20 | E | E | FY17 individual goals | ||||||||||
| Rob Horel | 11/28/16 | 100,000 | $ | 0.20 | D | D | FY18 HLKD Network revenue | ||||||||||
| Rob Horel | 11/28/16 | 50,000 | $ | 0.20 | D | D | FY18 individual goals | ||||||||||
| Rob Horel | 11/28/16 | 100,000 | $ | 0.20 | D | D | FY19 HLKD Network revenue | ||||||||||
| Rob Horel | 11/28/16 | 50,000 | $ | 0.20 | D | D | FY19 individual goals | ||||||||||
| Fred Herbst | 05/21/18 | 1,250 | $ | 0.15 | D | D | FY18 revenue | ||||||||||
| Fred Herbst | 05/21/18 | 1,250 | $ | 0.15 | D | D | FY18 income | ||||||||||
| Fred Herbst | 05/21/18 | 1,250 | $ | 0.15 | D | D | FY19 revenue | ||||||||||
| Fred Herbst | 05/21/18 | 1,250 | $ | 0.15 | D | D | FY19 income | ||||||||||
| Fred Herbst | 05/21/18 | 1,250 | $ | 0.15 | D | D | FY20 revenue | ||||||||||
| Fred Herbst | 05/21/18 | 1,250 | $ | 0.15 | D | D | FY20 income | ||||||||||
| Fred Herbst | 05/21/18 | 1,250 | $ | 0.15 | D | D | FY21 revenue | ||||||||||
| Fred Herbst | 05/21/18 | 1,250 | $ | 0.15 | D | D | FY21 income | ||||||||||
| 1,960,000 | |||||||||||||||||
| TOTALS | 3,857,996 |
Notes:
| A | The fair value of options calculated using Black Scholes |
| B | Pursuant to ASC 718, the number of shares granted is reduced by assumed forfeitures. Assume 20% forfeitures from attrition through the 5-year vesting period. |
| C | These option grants are based on service period vesting, meaning that the only requirement for vesting is that the employee remain employed. Accordingly, the total value to be expensed is spread evenly over the vesting period. |
| D | Pursuant to ASC 718, a company should recognize compensation cost for awards with performance conditions if and when the company concludes that it is probable that the performance condition will be achieved, ASC 718’s use of the term probable is consistent with that term’s use in ASC 450, Contingencies, which refers to an event that is likely to occur. A company should reassess the probability of vesting at each reporting period for awards with performance conditions and adjust compensation cost based on its probability assessment. As of December 31, 2016, because HLKD has not launched its product or generated any revenue or earnings, it is not reasonably probable that any of the future revenue and earnings based performance goals will be achieved. |
| E | Performance target was not met |
| F | Performance target was met |
| - 7 - |
Schedule 3(q)(iii)
| Borrowing | Inception | Maturity | Interest | Conversion | Face | |||||||||||
| Lender | Entity | Date | Date | Rate | Rate | Value | ||||||||||
| Convertible Notes Payable | ||||||||||||||||
| Iconic Holdings LLC | HLYK | 07/07/16 | 07/07/19 | 6 | % | $0.08 | 550,000.00 | A | ||||||||
| Iconic Holdings LLC | HLYK | 07/07/16 | 07/11/19 | 10 | % | $0.10 | 50,000.00 | A | ||||||||
| Iconic Holdings LLC | HLYK | 05/22/17 | 07/11/19 | 10 | % | $0.35 | 111,000.00 | A | ||||||||
| Mary Duncan | HLYK | 10/27/17 | 10/26/18 | 10 | % | 35% discount | 171,500.00 | |||||||||
| Morningview Financial LLC | HLYK | 01/02/18 | 01/02/19 | 10 | % | 28% discount | 57,750.00 | |||||||||
| Auctus Fund LLC | HLYK | 02/02/18 | 02/02/19 | 10 | % | 40% discount | 112,750.00 | |||||||||
| EMA Financial LLC | HLYK | 02/13/18 | 02/13/19 | 10 | % | 40% discount | 83,000.00 | |||||||||
| LG Capital Funding LLC | HLYK | 03/05/18 | 03/05/19 | 10 | % | 40% discount | 105,000.00 | |||||||||
| Power Up Lending Group Ltd. | HLYK | 04/02/18 | 01/15/19 | 10 | % | 39% discount | 63,000.00 | |||||||||
| Morningview Financial LLC | HLYK | 04/16/18 | 04/17/18 | 10 | % | 40% discount | 57,750.00 | |||||||||
| ONE44 Capital LLC | HLYK | 04/18/18 | 04/18/19 | 10 | % | 40% discount | 90,000.00 | |||||||||
| Power Up Lending Group Ltd. | HLYK | 04/18/18 | 01/30/19 | 10 | % | 39% discount | 53,000.00 | |||||||||
| LG Capital Funding LLC | HLYK | 05/03/18 | 05/03/19 | 10 | % | 40% discount | 68,250.00 | |||||||||
| Cerberus Finance Group Ltd. | HLYK | 05/07/18 | 05/07/19 | 10 | % | 40% discount | 37,000.00 | |||||||||
| Power Up Lending Group Ltd. | HLYK | 05/09/18 | 02/28/19 | 10 | % | 39% discount | 63,000.00 | |||||||||
| Adar Bays LLC | HLYK | 05/24/18 | 05/24/19 | 10 | % | 40% discount | 78,750.00 | |||||||||
| 1,751,750.00 | ||||||||||||||||
| Notes Payable | ||||||||||||||||
| Power Up Lending Group Ltd. | HLYK | 06/01/18 | 11/23/18 | B | n/a | 81,761.75 | ||||||||||
| 81,761.75 | ||||||||||||||||
| Related Party Notes Payable | ||||||||||||||||
| Dr. Michael Dent | HLYK | 01/12/17 | 01/13/19 | 10 | % | n/a | 35,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 01/18/17 | 01/19/19 | 10 | % | n/a | 20,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 01/24/17 | 01/15/19 | 10 | % | n/a | 50,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 02/09/17 | 02/10/19 | 10 | % | n/a | 30,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 04/20/17 | 04/21/19 | 10 | % | n/a | 10,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 06/15/17 | 06/16/19 | 10 | % | n/a | 32,500.00 | |||||||||
| Dr. Michael Dent | HLYK | 08/17/17 | 08/18/18 | 10 | % | n/a | 20,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 08/24/17 | 08/25/18 | 10 | % | n/a | 37,500.00 | |||||||||
| Dr. Michael Dent | HLYK | 09/07/17 | 09/08/18 | 10 | % | n/a | 35,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 09/21/17 | 09/22/18 | 10 | % | n/a | 26,500.00 | |||||||||
| Dr. Michael Dent | HLYK | 09/29/17 | 09/30/18 | 10 | % | n/a | 12,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 12/21/17 | 12/22/18 | 10 | % | n/a | 14,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 01/08/18 | 01/09/19 | 10 | % | n/a | 75,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 01/11/18 | 01/12/19 | 10 | % | n/a | 9,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 01/26/18 | 01/27/19 | 10 | % | n/a | 17,450.00 | |||||||||
| Dr. Michael Dent | HLYK | 05/03/18 | 05/04/19 | 10 | % | n/a | 12,500.00 | |||||||||
| Dr. Michael Dent | NWC | Var | 12/31/18 | 10 | % | n/a | 241,050.00 | C | ||||||||
| 677,500.00 | ||||||||||||||||
| A | Debt is secured by up to $300,000 of Naples Women's Center receivables and remaining assets of HealthLynked Corp. |
| B | This note does not have stated interest rate, but was instead issued at a discount and is subject to weekly installment payments of $4,047.65 through maturity. |
| C | Prior to August 2014, NWC was owned and controlled by the Company’s Chief Executive Officer, Dr. Michael Dent (“DMD”). DMD first provided an up to $175,000 unsecured note payable to the Company with a 0% interest rate. During 2013 the limit on the unsecured Note Payable was increased up to $500,000 and during 2014 it was increased to $750,000 with a maturity date of December 31, 2017. During January 2017, the note was again amended to extend the maturity date until December 31, 2018, to accrue interest on outstanding balances after January 1, 2017 at a rate of 10% per annum, and to fix interest accrued on balances between January 1, 2015 and December 31, 2016 at an amount equal to $22,108 (the “$750k DMD Note”). All principal and interest is due at maturity of the $750k DMD Note. |
| - 8 - |
Schedule 3(q)(iv)
None.
Schedule 3(q)(v)
| 1. | Registration Rights Agreement by and between the Company and Iconic Holdings LLC, dated July 7, 2016. |
Schedule 3(q)(vi)
None.
Schedule 3(q)(vii)
None.
Schedule 3(q)(viii)
None.
| - 9 - |
Schedule (r) – Indebtedness and Other Contracts
Schedule 3(r)(i)
| Borrowing | Inception | Maturity | Interest | Conversion | Face | |||||||||||||
| Lender | Entity | Date | Date | Rate | Rate | Value | ||||||||||||
| Convertible Notes Payable | ||||||||||||||||||
| Iconic Holdings LLC | HLYK | 07/07/16 | 07/07/19 | 6 | % | $ | 0.08 | 550,000.00 | A | |||||||||
| Iconic Holdings LLC | HLYK | 07/07/16 | 07/11/19 | 10 | % | $ | 0.10 | 50,000.00 | A | |||||||||
| Iconic Holdings LLC | HLYK | 05/22/17 | 07/11/19 | 10 | % | $ | 0.35 | 111,000.00 | A | |||||||||
| Mary Duncan | HLYK | 10/27/17 | 10/26/18 | 10 | % | 35% discount | 171,500.00 | |||||||||||
| Morningview Financial LLC | HLYK | 01/02/18 | 01/02/19 | 10 | % | 28% discount | 57,750.00 | |||||||||||
| Auctus Fund LLC | HLYK | 02/02/18 | 02/02/19 | 10 | % | 40% discount | 112,750.00 | |||||||||||
| EMA Financial LLC | HLYK | 02/13/18 | 02/13/19 | 10 | % | 40% discount | 83,000.00 | |||||||||||
| LG Capital Funding LLC | HLYK | 03/05/18 | 03/05/19 | 10 | % | 40% discount | 105,000.00 | |||||||||||
| Power Up Lending Group Ltd. | HLYK | 04/02/18 | 01/15/19 | 10 | % | 39% discount | 63,000.00 | |||||||||||
| Morningview Financial LLC | HLYK | 04/16/18 | 04/17/18 | 10 | % | 40% discount | 57,750.00 | |||||||||||
| ONE44 Capital LLC | HLYK | 04/18/18 | 04/18/19 | 10 | % | 40% discount | 90,000.00 | |||||||||||
| Power Up Lending Group Ltd. | HLYK | 04/18/18 | 01/30/19 | 10 | % | 39% discount | 53,000.00 | |||||||||||
| LG Capital Funding LLC | HLYK | 05/03/18 | 05/03/19 | 10 | % | 40% discount | 68,250.00 | |||||||||||
| Cerberus Finance Group Ltd. | HLYK | 05/07/18 | 05/07/19 | 10 | % | 40% discount | 37,000.00 | |||||||||||
| Power Up Lending Group Ltd. | HLYK | 05/09/18 | 02/28/19 | 10 | % | 39% discount | 63,000.00 | |||||||||||
| Adar Bays LLC | HLYK | 05/24/18 | 05/24/19 | 10 | % | 40% discount | 78,750.00 | |||||||||||
| 1,751,750.00 | ||||||||||||||||||
| Notes Payable | ||||||||||||||||||
| Power Up Lending Group Ltd. | HLYK | 06/01/18 | 11/23/18 | B | n/a | 81,761.75 | ||||||||||||
| 81,761.75 | ||||||||||||||||||
| - 10 - |
| Related Party Notes Payable | ||||||||||||||||
| Dr. Michael Dent | HLYK | 01/12/17 | 01/13/19 | 10 | % | n/a | 35,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 01/18/17 | 01/19/19 | 10 | % | n/a | 20,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 01/24/17 | 01/15/19 | 10 | % | n/a | 50,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 02/09/17 | 02/10/19 | 10 | % | n/a | 30,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 04/20/17 | 04/21/19 | 10 | % | n/a | 10,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 06/15/17 | 06/16/19 | 10 | % | n/a | 32,500.00 | |||||||||
| Dr. Michael Dent | HLYK | 08/17/17 | 08/18/18 | 10 | % | n/a | 20,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 08/24/17 | 08/25/18 | 10 | % | n/a | 37,500.00 | |||||||||
| Dr. Michael Dent | HLYK | 09/07/17 | 09/08/18 | 10 | % | n/a | 35,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 09/21/17 | 09/22/18 | 10 | % | n/a | 26,500.00 | |||||||||
| Dr. Michael Dent | HLYK | 09/29/17 | 09/30/18 | 10 | % | n/a | 12,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 12/21/17 | 12/22/18 | 10 | % | n/a | 14,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 01/08/18 | 01/09/19 | 10 | % | n/a | 75,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 01/11/18 | 01/12/19 | 10 | % | n/a | 9,000.00 | |||||||||
| Dr. Michael Dent | HLYK | 01/26/18 | 01/27/19 | 10 | % | n/a | 17,450.00 | |||||||||
| Dr. Michael Dent | HLYK | 05/03/18 | 05/04/19 | 10 | % | n/a | 12,500.00 | |||||||||
| Dr. Michael Dent | NWC | Var | 12/31/18 | 10 | % | n/a | 241,050.00 | C | ||||||||
| 677,500.00 |
| A | Debt is secured by up to $300,000 of Naples Women's Center receivables and remaining assets of HealthLynked Corp. |
| B | This note does not have stated interest rate, but was instead issued at a discount and is subject to weekly installment payments of $4,047.65 through maturity. |
| C | Prior to August 2014, NWC was owned and controlled by the Company’s Chief Executive Officer, Dr. Michael Dent (“DMD”). DMD first provided an up to $175,000 unsecured note payable to the Company with a 0% interest rate. During 2013 the limit on the unsecured Note Payable was increased up to $500,000 and during 2014 it was increased to $750,000 with a maturity date of December 31, 2017. During January 2017, the note was again amended to extend the maturity date until December 31, 2018, to accrue interest on outstanding balances after January 1, 2017 at a rate of 10% per annum, and to fix interest accrued on balances between January 1, 2015 and December 31, 2016 at an amount equal to $22,108 (the “$750k DMD Note”). All principal and interest is due at maturity of the $750k |
DMD Note.
Schedule 3(r)(ii)
None.
Schedule 3(r)(iii)
None.
| - 11 - |
Schedule 3(r)(iv)
HealthLynked owes Iconic $711,000, which will require raising debt or equity capital to repay. If HealthLynked is unable to do so, defaulting on these loans would have a material adverse effect on the HealthLynked’s financial position. The Notes are due July 7, 2019.
Detailed Description Of The Material Terms Of Such Outstanding Indebtedness
Convertible notes payable are comprised of the following:
| Borrowing | Inception | Maturity | Interest | Conversion | Face | |||||||||||||
| Lender | Entity | Date | Date | Rate | Rate | Value | ||||||||||||
| Convertible Notes Payable | ||||||||||||||||||
| Iconic Holdings LLC | HLYK | 07/07/16 | 07/07/19 | 6 | % | $ | 0.08 | 550,000.00 | ||||||||||
| Iconic Holdings LLC | HLYK | 07/07/16 | 07/11/19 | 10 | % | $ | 0.10 | 50,000.00 | ||||||||||
| Iconic Holdings LLC | HLYK | 05/22/17 | 07/11/19 | 10 | % | $ | 0.35 | 111,000.00 | ||||||||||
| Mary Duncan | HLYK | 10/27/17 | 10/26/18 | 10 | % | 35% discount | 171,500.00 | |||||||||||
| Morningview Financial LLC | HLYK | 01/02/18 | 01/02/19 | 10 | % | 28% discount | 57,750.00 | |||||||||||
| Auctus Fund LLC | HLYK | 02/02/18 | 02/02/19 | 10 | % | 40% discount | 112,750.00 | |||||||||||
| EMA Financial LLC | HLYK | 02/13/18 | 02/13/19 | 10 | % | 40% discount | 83,000.00 | |||||||||||
| LG Capital Funding LLC | HLYK | 03/05/18 | 03/05/19 | 10 | % | 40% discount | 105,000.00 | |||||||||||
| Power Up Lending Group Ltd. | HLYK | 04/02/18 | 01/15/19 | 10 | % | 39% discount | 63,000.00 | |||||||||||
| Morningview Financial LLC | HLYK | 04/16/18 | 04/17/18 | 10 | % | 40% discount | 57,750.00 | |||||||||||
| ONE44 Capital LLC | HLYK | 04/18/18 | 04/18/19 | 10 | % | 40% discount | 90,000.00 | |||||||||||
| Power Up Lending Group Ltd. | HLYK | 04/18/18 | 01/30/19 | 10 | % | 39% discount | 53,000.00 | |||||||||||
| LG Capital Funding LLC | HLYK | 05/03/18 | 05/03/19 | 10 | % | 40% discount | 68,250.00 | |||||||||||
| Cerberus Finance Group Ltd. | HLYK | 05/07/18 | 05/07/19 | 10 | % | 40% discount | 37,000.00 | |||||||||||
| Power Up Lending Group Ltd. | HLYK | 05/09/18 | 02/28/19 | 10 | % | 39% discount | 63,000.00 | |||||||||||
| Adar Bays LLC | HLYK | 05/24/18 | 05/24/19 | 10 | % | 40% discount | 78,750.00 | |||||||||||
| 1,751,750.00 | ||||||||||||||||||
| - 12 - |
Convertible Notes Payable ($550,000) – July 2016
On July 7, 2016, the Company entered into a 6% fixed convertible secured promissory note with an investor with a face value of $550,000 (the “$550k Note”). The $550k Note is convertible into shares of the Company’s common stock at the discretion of the note holder at a fixed price of $0.08 per share, and is secured by all of the Company’s assets. The $550k Note matures on July 7, 2019 The Company received $500,000 net proceeds from the note after a $50,000 original issue discount.
Convertible Notes Payable ($50,000) – July 2016
On July 7, 2016, the Company entered into a 10% fixed convertible commitment fee promissory note with an investor with a face value of $50,000 maturing on July 11, 2019 (the “$50k Note”). The $50k note was issued as a commitment fee payable to the Investment Agreement investor in exchange for the investor’s commitment to enter into the Investment Agreement, subject to registration of the shares underlying the Investment Agreement. The $50k Note is convertible into shares of the Company’s common stock at the discretion of the note holder at a fixed price of $0.10 per share.
Convertible Notes Payable ($111,000) – May 2017
On May 22, 2017, the Company entered into a 10% fixed convertible secured promissory note with an investor with a face value of $111,000 (the “$111k Note”). The $111k Note is convertible into shares of the Company’s common stock at the discretion of the note holder at a fixed price of $0.35 per share, and is secured by all of the Company’s assets. The $111k Note matures on July 11, 2019. The Company received $100,000 net proceeds from the note after an $11,000 original issue discount. At inception, the investors were also granted a five-year warrant to purchase 133,333 shares of the Company’s common stock at an exercise price of $0.75 per share.
Convertible Notes Payable ($171,500) – October 2017
On October 27, 2017, the Company entered into a securities purchase agreement for the sale of a $171,500 convertible note (the “$171.5k Note”) to an individual lender. The $171.5k Note included a $21,500 original issue discount, for net proceeds of $150,000. The $171.5k Note has an interest rate of 10% and a default interest rate of 22% and matures on October 26, 2018. The $171.5k Note may be converted into common stock of the Company by the holder at any time following 180 days after the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to a 35% discount to the lowest closing bid price during the twenty (20) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the $171.5k Note, 300% of the outstanding principal and any interest due amount shall be immediately due. Upon an event of default caused by the Company’s breach of any other events of default specified in the $171.5k Note, 150% of the outstanding principal and any interest due amount shall be immediately due.
| - 13 - |
Convertible Notes Payable ($57,750) – January 2018
On January 2, 2018, the Company entered into a securities purchase agreement for the sale of a $57,750 convertible note (the “$58k Note”). The transaction closed on January 3, 2018. The $58k Note included a $5,250 original issue discount and $2,500 fee for net proceeds of $50,000. The $58k Note has an interest rate of 10% and a default interest rate of 18% and matures on January 2, 2019. The $58k Note may be converted into common stock of the Company by the holder at any time after the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to 28% discount to the lowest VWAP price of the Company’s common stock during the ten (10) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the Note, 200% of the outstanding principal and any interest due amount shall be immediately due. Upon an event of default caused by the Company’s breach of any other events of default specified in the Note, 150% of the outstanding principal and any interest due amount shall be immediately due.
Convertible Notes Payable ($112,750) – February 2018
On February 2, 2018, the Company entered into a securities purchase agreement for the sale of a $112,750 convertible note (the “$113k Note”). The transaction closed on February 8, 2018. The $113k Note included $12,750 fees for net proceeds of $100,000. The $113k Note has an interest rate of 10% and a default interest rate of 24% and matures on February 2, 2019. The $113k Note may be converted into common stock of the Company by the holder at any time after the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to 40% discount to the lowest bid or trading price of the Company’s common stock during the twenty (20) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the Note, 200% of the outstanding principal and any interest due amount shall be immediately due. Upon an event of default caused by the Company’s breach of any other events of default specified in the Note, 150% of the outstanding principal and any interest due amount shall be immediately due.
Convertible Notes Payable ($83,000) – February 2018
On February 13, 2018, the Company entered into a securities purchase agreement for the sale of a $83,000 convertible note (the “$83k Note”). The transaction closed on February 21, 2018. The $83k Note included $8,000 fees for net proceeds of $75,000. The $83k Note has an interest rate of 10% and a default interest rate of 24% and matures on February 13, 2019. The $113k Note may be converted into common stock of the Company by the holder at any time after the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to 40% discount to the lowest bid or trading price of the Company’s common stock during the twenty (20) trading days prior to the conversion date. Upon an event of default, 200% of the outstanding principal and any interest due amount shall be immediately due.
| - 14 - |
Convertible Notes Payable ($105,000) – March 2018
On March 5, 2018, the Company entered into a securities purchase agreement for the sale of a $105,000 convertible note (the “$105k Note”). The transaction closed on March 12, 2018. The $105k Note included $5,000 fees for net proceeds of $100,000. The $105k Note has an interest rate of 10% and a default interest rate of 24% and matures on March 5, 2019. The $113k Note may be converted into common stock of the Company by the holder at any time after the 6-month anniversary of the issuance date, subject to a 9.9% beneficial ownership limitation, at a conversion price per share equal to 40% discount to the lowest bid or trading price of the Company’s common stock during the twenty (20) trading days prior to the conversion date. Upon an event of default, 110-150% of the outstanding principal and any interest due amount shall be immediately due, depending on the nature of the breach.
Convertible Notes Payable ($63,000) – April 2018
On April 2, 2018, the Company entered into a securities purchase agreement for the sale of a $63,000 convertible note (the “$63k Note”). The transaction closed on April 3, 2018. The $63k Note included $3,000 fees for net proceeds of $60,000. The $63k Note has an interest rate of 10% and a default interest rate of 22% and matures on January 15, 2019. The $63k Note may be converted into common stock of the Company by the holder at any time after the 6-month anniversary of the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to a 39% discount to the lowest bid or trading price of the Company’s common stock during the fifteen (15) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the Note, 300% of the outstanding principal and any interest due amount shall be immediately due. Upon an event of default caused by the Company’s breach of any other events of default specified in the Note, 150% of the outstanding principal and any interest due amount shall be immediately due.
Convertible Notes Payable ($57,750) – April 2018
On April 16, 2018, the Company entered into a securities purchase agreement for the sale of a $57,750 convertible note (the “$57.8k Note II”). The transaction closed on April 17, 2018. The $57.8k Note II Note included $7,750 fees for net proceeds of $50,000. The $57.8k Note II Note has an interest rate of 10% and a default interest rate of 18% and matures on April 16, 2019. The $57.8k Note II Note may be converted into common stock of the Company by the holder at any time after the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to a 40% discount to the lowest bid or trading price of the Company’s common stock during the twenty (20) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the Note, 200% of the outstanding principal and any interest due amount shall be immediately due. Upon an event of default caused by the Company’s breach of any other events of default specified in the Note, 150% of the outstanding principal and any interest due amount shall be immediately due.
| - 15 - |
Convertible Notes Payable ($90,000) – April 2018
On April 18, 2018, the Company entered into a securities purchase agreement for the sale of a $90,000 convertible note (the “$90k Note”). The transaction closed on April 18, 2018. The $90k Note included $4,500 fees for net proceeds of $85,500. The $90k Note has an interest rate of 10% and a default interest rate of 24% and matures on April 18, 2019. The $90k Note may be converted into common stock of the Company by the holder at any time after the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to a 40% discount to the lowest bid or trading price of the Company’s common stock during the twenty (20) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the Note, the Company would incur a penalty of $250 per day beginning on the fourth day after the conversion notice, increasing to $500 per day beginning on the tenth day. Upon an event of default caused by the Company’s breach of any other events of default specified in the Note, 150% of the outstanding principal and any interest due amount shall be immediately
Convertible Notes Payable ($53,000) – April 2018
On April 18, 2018, the Company entered into a securities purchase agreement for the sale of a $53,000 convertible note (the “$53k Note III”). The transaction closed on April 23, 2018. The $53k Note III included $3,000 fees for net proceeds of $50,000. The $53k Note III has an interest rate of 10% and a default interest rate of 22% and matures on January 30, 2019. The $53k Note III may be converted into common stock of the Company by the holder at any time after the 6-month anniversary of the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to a 39% discount to the lowest bid or trading price of the Company’s common stock during the fifteen (15) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the Note, 300% of the outstanding principal and any interest due amount shall be immediately due. Upon an event of default caused by the Company’s breach of any other events of default specified in the Note, 150% of the outstanding principal and any interest due amount shall be immediately due.
Convertible Notes Payable ($68,250) – May 2018
On May 3, 2018, the Company entered into a securities purchase agreement for the sale of a $68,250 convertible note (the “$68.3k Note”). The transaction closed on May 4, 2018. The $68.3k Note included $3,250 fees for net proceeds of $60,000. The $68.3k Note has an interest rate of 10% and a default interest rate of 24% and matures on May 3, 2019. The $68.3k Note may be converted into common stock of the Company by the holder at any time after the 6-month anniversary of the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to a 40% discount to the lowest bid or trading price of the Company’s common stock during the twenty (20) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the Note, the Company would incur a penalty of $250 per day beginning on the fourth day after the conversion notice, increasing to $500 per day beginning on the tenth day. Upon an event of default caused by the Company’s failure to maintain a listing for its common stock, the outstanding principal shall increase by 50%. Upon an event of default caused by the Company’s failure to maintain a bid price for its common stock, the outstanding principal shall increase by 20%.
| - 16 - |
Convertible Notes Payable ($37,000) – May 2018
On May 7, 2018, the Company entered into a securities purchase agreement for the sale of a $37,000 convertible note (the “$37k Note”). The transaction closed on May 9, 2018. The $37k Note included $2,000 fees for net proceeds of $35,000. The $37k Note has an interest rate of 10% and a default interest rate of 24% and matures on May 7, 2019. The $37k Note may be converted into common stock of the Company by the holder at any time after the 6-month anniversary of the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to a 40% discount to the lowest bid or trading price of the Company’s common stock during the twenty (20) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the Note, the Company would incur a penalty of $250 per day beginning on the fourth day after the conversion notice, increasing to $500 per day beginning on the tenth day. Upon an event of default caused by the Company’s failure to maintain a listing for its common stock, the outstanding principal shall increase by 50%. Upon an event of default caused by the Company’s failure to maintain a bid price for its common stock, the outstanding principal shall increase by 20%.
Convertible Notes Payable ($63,000) – May 2018
On May 9, 2018, the Company entered into a securities purchase agreement for the sale of a $63,000 convertible note (the “$63k Note II”). The transaction closed on May 12, 2018. The $63k Note II included $3,000 fees for net proceeds of $60,000. The $63k Note II has an interest rate of 10% and a default interest rate of 22% and matures on May 7, 2019. The $63k Note II may be converted into common stock of the Company by the holder at any time after the 6-month anniversary of the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to a 39% discount to the lowest bid or trading price of the Company’s common stock during the fifteen (15) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the Note, 300% of the outstanding principal and any interest due amount shall be immediately due. Upon an event of default caused by the Company’s breach of any other events of default specified in the Note, 150% of the outstanding principal and any interest due amount shall be immediately due.
Convertible Notes Payable ($78,750) – May 2018
On May 24, 2018, the Company entered into a securities purchase agreement for the sale of a $78,750 convertible note (the “$78.8k Note”). The $78.8k Note included $3,750 fees for net proceeds of $75,000. The $78.8k Note has an interest rate of 10% and a default interest rate of 24% and matures on May 24, 2019. The $78.8k Note may be converted into common stock of the Company by the holder at any time after the 6-month anniversary of the issuance date, subject to a 4.99% beneficial ownership limitation, at a conversion price per share equal to a 40% discount to the lowest bid or trading price of the Company’s common stock during the twenty (20) trading days prior to the conversion date. Upon an event of default caused by the Company’s failure to deliver shares upon a conversion pursuant to the terms of the Note, the Company would incur a penalty of $250 per day beginning on the fourth day after the conversion notice, increasing to $500 per day beginning on the tenth day.
| - 17 - |
Schedule 3(s) – Absence of Litigation
None.
| - 18 - |
Schedule 3(w) – Intellectual Property Rights
Schedule 3(w)(i)
None.
Schedule 3(w)(ii)
None.
| - 19 - |
Schedule 3(aa) – Internal Accounting and Disclosure Controls
None.
| - 20 - |
Exhibit 1.2
EXECUTION COPY
HEALTHLYNKED CORP.
July 16, 2018
HealthLynked Corp.
1726 Medical Blvd., Suite 101
Naples, Florida 34110
| Telephone: | (239) 513-1992 |
| Facsimile: | (239) 513-9022 |
| Attention: | Michael Dent, M.D. |
| E-mail: | mdent@healthlynked.com |
Re: HealthLynked Corp. - Lock-Up Agreement
Dear Sirs:
This Lock-Up Agreement is being delivered to you in connection with the Securities Purchase Agreement (the “ Securities Purchase Agreement ”), dated as of July 16, 2018 by and among HealthLynked Corp. (the “ Company ”) and the investors party thereto (the “ Buyers ”), with respect to the issuance of (i) shares of the Company’s common stock, par value $0.0001 per share (the “ Common Stock ”) and (ii) three series of warrants (the “ Warrants ”) which Warrants will be exercisable to purchase shares of Common Stock. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.
In order to induce the Buyers to enter into the Securities Purchase Agreement, the undersigned agrees that, commencing on the date hereof and ending on the date that is ninety (90) calendar days after the earlier of the date that (i) such time one or more Registration Statement(s) covering the resale of all Registrable Securities has been effective and available for the re-sale of all such Registrable Securities and (ii) such time as all of the Registrable Securities may be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1) (the “ Lock-Up Period ”), the undersigned will not, and will cause all affiliates (as defined in Rule 144 promulgated under the 1933 Act) of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned not to, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of Common Stock or Common Stock Equivalents, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to any shares of Common Stock or Common Stock Equivalents owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the Securities and Exchange Commission (collectively, the “ Undersigned’s Shares ”), or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Undersigned’s Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of Common Stock or other securities, in cash or otherwise, (iii) make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of Common Stock or Common Stock Equivalents or (iv) publicly disclose the intention to do any of the foregoing.
The foregoing restriction is expressly agreed to preclude the undersigned, and any affiliate of the undersigned and any person in privity with the undersigned or any affiliate of the undersigned, from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned’s Shares even if the Undersigned’s Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include, without limitation, any short sale or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any of the Undersigned’s Shares or with respect to any security that includes, relates to, or derives any significant part of its value from the Undersigned’s Shares.
Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein or (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value. For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. The undersigned now has, and, except as contemplated by the immediately preceding sentence, for the duration of this Lock-Up Agreement will have, good and marketable title to the Undersigned’s Shares, free and clear of all liens, encumbrances, and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent (the “ Transfer Agent ”) and registrar against the transfer of the Undersigned’s Shares except in compliance with the foregoing restrictions.
In order to enforce this covenant, the Company shall impose irrevocable stop-transfer instructions preventing the Transfer Agent from effecting any actions in violation of this Lock-Up Agreement.
The undersigned acknowledges that the execution, delivery and performance of this Lock-Up Agreement is a material inducement to each Buyer to complete the transactions contemplated by the Securities Purchase Agreement and that the Company shall be entitled to specific performance of the undersigned’s obligations hereunder. The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and perform this Lock-Up Agreement, that the undersigned has received adequate consideration therefor and that the undersigned will indirectly benefit from the closing of the transactions contemplated by the Securities Purchase Agreement.
The undersigned understands and agrees that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors, and assigns.
This Lock-Up Agreement may be executed in two counterparts, each of which shall be deemed an original but both of which shall be considered one and the same instrument.
This Lock-Up Agreement will be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflicting provision or rule (whether of the State of New York, or any other jurisdiction) that would cause the laws of any jurisdiction other than the State of New York to be applied. In furtherance of the foregoing, the internal laws of the State of New York will control the interpretation and construction of this Lock-Up Agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
[Remainder of page intentionally left blank]
2
| Very truly yours, | |
| Exact Name of Stockholder | |
| Authorized Signature | |
| Title |
| Agreed to and Acknowledged: | ||
| HEALTHLYNKED CORP. | ||
| By: | ||
| Name: | ||
| Title: | ||
3