UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 or 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (date of earliest event reported): February 5, 2020

 

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))

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

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).  ☒

 

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. ☐

 

 

 

 

 

 

Item 1.01 Entry Into A Material Definitive Agreement

 

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.

 

Item 8.01 Other Events

 

On February 11, 2020, the Corporation issued a press release announcing the Corporation’s entrance into the Merger Agreement.

 

A copy of the press release is filed as Exhibit 99.1 to, and incorporated by reference in, this Current Report on Form 8-K. The information in this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act, except as shall be expressly set forth by specific reference in any such filing.

 

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Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
     
10.1   Agreement and Plan of Merger, dated February 5, 2020, by and among HealthLynked Corp., HLYK Florida, LLC, Cura Health Management LLC, ACO Health Partners, LLC, Bradberry Holdings LLC and FocusOne Holdings, LLC.
99.1   Press Release, dated February 11, 2020

 

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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: February 11, 2020 /s/ George O’Leary
  George O’Leary
  Chief Financial Officer

 

 

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Exhibit 10.1

 

AGREEMENT AND PLAN OF MERGER

 

THIS AGREEMENT AND PLAN OF MERGER (the “Agreement”) is made as of February 5, 2020 (the “Effective Date”), by and between HealthLynked Corp., a Nevada corporation (the “Parent”), HLYK Florida, LLC, a Florida limited liability company (the “Company”), Cura Health Management LLC, a Florida limited liability company (the “Target”), ACO Health Partners, LLC, a Delaware limited liability company (“AHP”), and Bradberry Holdings LLC and FocusOne Holdings, LLC, each in their capacity (each, a “Seller” and, collectively, the “Sellers”).

 

RECITALS

 

WHEREAS, Parent is a public company quoted on the OTC:QB;

 

WHEREAS, Company is a wholly owned subsidiary of Parent;

 

WHEREAS, AHP is a wholly owned subsidiary of Target;

 

WHEREAS, Sellers are the owners of all of the issued and outstanding membership interests of Target (the “Interests”);

 

WHEREAS, the parties intend to effect a merger of Target with and into Company (the “Merger”) in accordance with this Agreement, and Florida law.

 

WHEREAS, upon consummation of the Merger, Target will cease to exist and Company will continue as the surviving entity and as a wholly owned subsidiary of Parent; and

 

WHEREAS, the parties desire to make certain representations, warranties, covenants and agreements in connection with the Merger, and also to prescribe various conditions to the Merger, as set forth in, and subject to the provisions of, this Agreement.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the terms and conditions contained herein, intending to be legally bound, the parties agree as follows:

 

  1. Recitals. The recitals to this Agreement, which the parties acknowledge are true and correct, are incorporated into this Agreement by this reference.

 

  2. Effective Time of Merger. Subject to the terms and conditions of this Agreement, upon the satisfaction or waiver of the closing conditions set forth in Section 6.2, the parties shall file Articles of Merger (the “Articles”) with the Florida Department of State Division of Corporations (the “Secretary”) in such form as required under Florida law. The Merger shall become effective upon the acceptance for filing of the Articles by the Secretary or at such later time as agreed to by the parties and specified in the Articles (the “Effective Time”).

 

 

 

 

3. Effect of the Merger.

 

3.1. At the Effective Time, the effect of the Merger will be as provided in the applicable provisions of Florida law, this Agreement, and the Articles. Without limiting the generality of the foregoing, and subject to such applicable provisions, at the Effective Time:

 

3.1.1. the separate existence of Target will cease;
   
3.1.2. Target will be merged with and into Company;
   
3.1.3. all Interests will be cancelled and will cease to exist;
   
3.1.4. Company will continue as the surviving entity;
   
3.1.5. Company shall be obligated to pay the Consideration, as defined below, in accordance with this Agreement;
   
3.1.6. all of the property, rights, privileges, and powers of Target will vest in Company; and
   
3.1.7. all duties and obligations of Target will become the duties and obligations of Company.
   
3.2. The parties intend that the transactions set forth in this Agreement be treated as a “reorganization” within the meaning of Sections 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (”Code”), and as required thereunder, this Agreement be treated as a “plan of reorganization” within the meaning of Section 368 of the Code and the Treasury Regulations promulgated thereunder.

 

4. Organizational Documents. At the Effective Time, the organizational documents of Target will terminate and the organizational documents of Company shall continue in full force and effect, as may be amended in the future from time to time.
   
5. Merger Consideration. The aggregate merger consideration (the “Consideration”) payable to Sellers as owners of the Interests shall be as follows:

 

5.1. $437,500 payable half each to the Sellers at the Closing, as defined below, subject to adjustment in accordance with Sections 5.4 and 10.9 (the “Initial Payment”);
   
5.2. Common shares of Parent with an aggregate value of $875,000 half each to the Sellers based on the average volume weighted average price (“VWAP”) of the five (5) business days prior to Closing, which shall be issued to the Sellers at the Closing;

 

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5.3. Earn-out payments in an aggregate amount of $437,500 half each to the Sellers (the “Earn-out Payments”), payable as follows:

 

5.3.1. $62,500 on the first anniversary of the Closing, 50% of which is subject to the Company’s annual revenue for the immediately preceding year being a least $2,250,000, and 50% of which is subject to the Company’s profits for such period being at least $500,000, and such payment will be prorated if either target is missed;
   
5.3.2. $125,000 on the second anniversary of the Closing, 50% of which is subject to the Company’s annual revenue for the immediately preceding year being a least $2,250,000, and 50% of which is subject to the Company’s profits for such period being at least $500,000, and such payment will be prorated if either target is missed; and
   
5.3.3. $125,000 on the third anniversary of the Closing, 50% of which is subject to the Company’s annual revenue for the immediately preceding year being a least $2,250,000, and 50% of which is subject to the Company’s profits for such period being at least $500,000, and such payment will be prorated if either target is missed; and
   
5.3.4. $125,000 on the fourth anniversary of the Closing, 50% of which is subject to the Company’s annual revenue for the immediately preceding year being a least $2,250,000, and 50% of which is subject to the Company’s profits for such period being at least $500,000, and such payment will be prorated if either target is missed.
   
5.4. If the accounts receivable of the Target on the Closing Date, as defined below, exceeds $25,000, Company shall pay to the Sellers the amount of such excess in cash within thirty (30) days after Closing. If the accounts receivable of the Target on the Closing Date is less than $25,000, the Initial Payment shall be reduced by the amount of such shortfall.
   
5.5 The prepaid expenses of the Target on the Closing Date will be offset against the accounts receivable requirement of the Target, and the Target will only be required to have accounts receivable of $25,000 less the amount of the prepaid expenses.
   
6. Closing.
   
6.1. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place on or about April 1, 2020 at a time and place mutually agreed to by Company and Seller (the “Closing Date”).
   
6.2. The obligations of the parties to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or waiver, at or prior to the Closing, of each of the following conditions:
   
6.2.1. Execution of this Agreement and any other related transaction documents, whether described herein or otherwise (collectively, the “Documents”) by the parties.
   
6.2.2. Each of Company, Target, and Sellers shall have obtained all necessary consents, permits and approvals, both internal and external.

 

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6.2.3. Target has provided to Company audited financial statements for the two fiscal years prior to the Closing Date.
   
6.2.3.1.  Should Sellers and/or Target decide not to complete the transactions contemplated in this Agreement, the Sellers and/or Target shall pay to Parent a fee of $10,000 representing the partial cost of such audited financial statements.
   
6.2.4. Company shall have entered into a consulting agreement with each of the Sellers substantially in the form attached hereto as Exhibits 6.2.4(a) and 6.2.4(b).
   
6.2.5. Company shall have entered into a lease extension for a minimum of three years for the current office of Target upon similar terms and conditions as the existing lease.
   
7. Conduct of Business.
   
7.1. From the Effective Date until the Closing:
   
7.1.1. Sellers shall not dispose of, encumber, or otherwise transfer the Interests or any equity interests in any of the Target’s subsidiaries;
   
7.1.2. Target and AHP shall operate the business in accordance with past practices;
   
7.1.3. Target and AHP shall maintain their respective books, records, and financials in accordance with generally accepted accounting principles;
   
7.1.4. Neither Target nor AHP shall not enter into any transactions outside of the ordinary course of business without the prior written consent of the Company;
   
7.1.5. Target and AHP shall take all steps necessary to preserve its assets and the goodwill and relationships with its partners, patients, customers, suppliers, and employees;
   
7.1.6. Target and AHP shall provide Company and its accountants, legal counsel, and other advisors, representatives, and agents (collectively, the “Representatives”) reasonable access to the properties, books, records, intellectual property, contracts, and other documents and information concerning their respective business, finances, and assets with the exception of any information protected under the Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. §§ 1320d-1329d-8, and the regulations promulgated thereunder, each as amended (collectively, “HIPAA”);
   
7.1.7. Target and AHP shall provide Company and its Representatives with reasonable access during normal business hours and upon reasonable notice to their respective legal, financial, accounting, and other representatives who have knowledge of their businesses, finances, and assets, provided, however, that (a) the Representatives shall not contact any employees or patients of the Target or AHP without Target’s or AHP’s consent, as applicable, and (b) the Representatives shall not access any information protected under HIPAA.

 

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8. Confidentiality.

 

8.1. The terms of this Agreement are confidential and shall not be disclosed by any party except to such party’s accountants, legal counsel, and other advisors, representatives, and agents; provided, however, that Parent and/or Company may disclose the terms of this Agreement as may be required by the Securities and Exchange Commission or any exchange on which its shares may be quoted or listed.

 

9. Sellers’ Representations and Warranties. The Sellers, jointly and severally, represent and warrant as follows:

 

9.1. Ownership of Interests.
   
9.1.1. The Sellers are the sole legal, beneficial, and record owners of the Interests.
   
9.1.2. The Interests represent all of the issued and outstanding securities of the Target and there are no options, warrants, calls, conversion rights, commitments, agreements, restrictions, equity-linked securities, or rights of any character to which Target is a party or by which Target may be bound obligating Target to issue additional securities.
   
9.1.3. The Sellers have (A) good and valid title to the Interests, free and clear of all claims, encumbrances, community property rights, security interests, or other liens, and (B) all voting rights with respect to the Interests.

 

9.1.4. The Interests are validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof.
   
9.2. Authority; Binding Obligation. The Sellers have the full right, power and authority to enter into this Agreement and to consummate the transactions contemplated herein. The Sellers have duly and validly executed and delivered this Agreement and the Documents. This Agreement and the Documents constitute legal, valid, and binding obligations of the Sellers, enforceable against the Sellers in accordance with their respective terms subject to bankruptcy, reorganization, insolvency and other similar laws affecting the enforcement of creditors’ rights in general and to general principles of equity (regardless of whether considered in a proceeding in equity or an action at law).
   
9.3. Broker’s Fees. Sellers have no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.
   
9.4. Compliance with Laws. Target is and has been at all times in compliance with all applicable federal, state, local, and foreign statutes, laws, ordinances, rules, judgments, orders, and regulations of any governmental entity applicable to its business and operations. All permits, licenses, and regulatory approvals required to conduct the business of Target as currently conducted have been obtained, are in full force and effect, and are being complied with.

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10. Target’s Representations and Warranties. Target represents and warrants as follows:

 

10.1. Financial Statements. Target has provided to Company the latest unaudited financial statements of Target dated 12/31/2019 (the “Financial Statements”). The Financial Statements have been prepared in accordance with GAAP, consistently applied, and present fairly the financial condition and results of operations of Target as of the times and for the periods referred to therein, subject to changes resulting from normal recurring year-end adjustments. Target does not have any liabilities other than liabilities which are (i) adequately reflected or reserved against on the Financial Statements, (ii) incurred in the ordinary course of business, or (iii) not, individually or in the aggregate, material in amount. Target will not have any liabilities at Closing except from the work done that day before closing. Parties will prepare a closing reconciliation statement and if net liabilities do not exceed $5,000 as of closing, there will be no final adjustment. If the final reconciliation exceeds $5,000 there will be a final closing adjustment to the cash at closing for any amount that exceeds the $5,000 agreed upon liability range.
   
10.2. Title to Assets. Target owns, and has good and valid title to, all assets owned by Target as of the Closing Date, including all assets reflected on the Financial Statements. All of said assets are owned free and clear of any encumbrances and Target has sufficient title to or rights to use its properties and assets to conduct its businesses as currently conducted.
   
10.3. Tax Matters. Target has timely filed with the appropriate governmental entity all tax returns that are required to be filed by it (taking into account any extensions of time to file that have been duly perfected), and all such tax returns are true, correct and complete in all material respects. All taxes due and payable by Target (whether or not shown or required to be shown on any tax return) have been timely and fully paid to the appropriate governmental entity or properly accrued. Target has not been the subject of any audit or other examination of taxes by any governmental entity.
   
10.4. Material Contracts. Schedule 10.4 sets forth all contracts of the Target material to the operation of the business as conducted on the Closing Date, copies of which have been previously provided to Company (the “Target Material Contracts”). Target has not, in any material respect, violated or breached, or committed any default under, any Target Material Contract. Other than the Target Material Contracts, Target is not a party to any contract which requires or is likely to require payment or consideration in excess of $25,000 per year.
   
10.5. Intellectual Property. All issuances, registrations and applications pertaining to intellectual property rights and domain names owned by or filed in the name of Target as of the Closing Date that are material to the conduct of the business as currently conducted are set forth on Schedule 10.5 (collectively, “Target IP”). All Target IP is valid and enforceable and Target has the right to use all Target IP free and clear of all liens.
   
10.6. Target Subsidiary. Target owns all of the issued and outstanding securities of AHP and there are no options, warrants, calls, conversion rights, commitments, agreements, restrictions, equity-linked securities, or rights of any character to which AHP is a party or by which AHP may be bound obligating AHP to issue additional securities.

 

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10.7. Legal Proceedings. As of the Closing Date, there is no material legal action, suit, arbitration, claim, investigation or proceeding (whether federal, state, local or foreign) pending, at law or in equity, or before or by any governmental entity, or threatened in writing against (a) Target or any of its properties, assets, or businesses, or (b) against any present or former officer, director or employee of Target.
   
10.8. Employees. Target is, and at all times since its formation has been, (A) in compliance with all applicable laws and regulations respecting wages and hours, including, without limitation, with respect to the proper classification of employees for purposes of federal, state and local law, and the proper classification and treatment of any independent contractor who has provided or currently provides service to the Target, and (B) in material compliance with all other applicable laws and regulations respecting labor, employment, fair employment practices, work place safety and health and terms and conditions of employment as well as the Immigration Reform Control Act of 1986 and has a copy of U.S. Citizenship and Immigration Services Form I-9 for each of its current employees.
   
10.9. Cash on Hand. On the Closing Date, Target shall have $50,000 cash in its bank account. An adjustment to the Initial Payment shall be made for any variance therefrom.
   
10.10.  Authority; Binding Obligation. Target has the full right, power, and authority to enter into this Agreement and to consummate the transactions contemplated herein. Target has duly and validly executed and delivered this Agreement and this Agreement constitutes a legal, valid and binding obligation of Target, enforceable against Target in accordance with its terms subject to bankruptcy, reorganization, insolvency, and other similar laws affecting the enforcement of creditors’ rights in general and to general principles of equity (regardless of whether considered in a proceeding in equity or an action at law). The undersigned is a duly authorized representative of Target and all necessary entity action has been taken to authorize the undersigned to enter into this Agreement and to consummate the transactions contemplated herein.
   
10.11.  Broker’s Fees. Target has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.
   
11. AHP’s Representations and Warranties. AHP represents and warrants as follows:
   
11.1. Title to Assets. AHP owns, and has good and valid title to, all assets owned by AHP as of the Closing Date. All of said assets are owned free and clear of any encumbrances and AHP has sufficient title to or rights to use its properties and assets to conduct its businesses as currently conducted.
   
11.2. Tax Matters. AHP has timely filed with the appropriate governmental entity all tax returns that are required to be filed by it (taking into account any extensions of time to file that have been duly perfected), and all such tax returns are true, correct and complete in all material respects. All taxes due and payable by AHP (whether or not shown or required to be shown on any tax return) have been timely and fully paid to the appropriate governmental entity or properly accrued. AHP has not been the subject of any audit or other examination of taxes by any governmental entity.

 

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11.3. Material Contracts. Schedule 11.3 sets forth all contracts of the AHP material to the operation of the business as conducted on the Closing Date, copies of which have been previously provided to Company (the “AHP Material Contracts”). AHP has not, in any material respect, violated or breached, or committed any default under, any AHP Material Contract. Other than the AHP Material Contracts, AHP is not a party to any contract which requires or is likely to require payment or consideration in excess of $25,000 per year.
   
11.4. Intellectual Property. All issuances, registrations and applications pertaining to intellectual property rights and domain names owned by or filed in the name of AHP as of the Closing Date that are material to the conduct of the business as currently conducted are set forth on Schedule 11.4 (collectively, “AHP IP”). All AHP IP is valid and enforceable and AHP has the right to use all AHP IP free and clear of all liens.
   
11.5. Legal Proceedings. As of the Closing Date, there is no material legal action, suit, arbitration, claim, investigation or proceeding (whether federal, state, local or foreign) pending, at law or in equity, or before or by any governmental entity, or threatened in writing against (a) AHP, or any of its properties, assets, or businesses, or (b) against any present or former officer, director or employee of AHP.
   
11.6. Authority; Binding Obligation. AHP has the full right, power, and authority to enter into this Agreement and to consummate the transactions contemplated herein. AHP has duly and validly executed and delivered this Agreement and this Agreement constitutes a legal, valid and binding obligation of AHP, enforceable against AHP in accordance with its terms subject to bankruptcy, reorganization, insolvency, and other similar laws affecting the enforcement of creditors’ rights in general and to general principles of equity (regardless of whether considered in a proceeding in equity or an action at law). The undersigned is a duly authorized representative of AHP and all necessary entity action has been taken to authorize the undersigned to enter into this Agreement and to consummate the transactions contemplated herein.
   
11.7. Broker’s Fees. AHP has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.
   
11.8. Employees. AHP is, and at all times since its formation has been, (A) in compliance with all applicable laws and regulations respecting wages and hours, including, without limitation, with respect to the proper classification of employees for purposes of federal, state and local law, and the proper classification and treatment of any independent contractor who has provided or currently provides service to AHP, and (B) in material compliance with all other applicable laws and regulations respecting labor, employment, fair employment practices, work place safety and health and terms and conditions of employment as well as the Immigration Reform Control Act of 1986 and has a copy of U.S. Citizenship and Immigration Services Form I-9 for each of its current employees.

 

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12. Company’s Representations and Warranties. The Company represents and warrants as follows:

 

12.1. Authority; Binding Obligation. The Company has the full right, power, and authority to enter into this Agreement and to consummate the transactions contemplated herein. The Company has duly and validly executed and delivered this Agreement and this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms subject to bankruptcy, reorganization, insolvency, and other similar laws affecting the enforcement of creditors’ rights in general and to general principles of equity (regardless of whether considered in a proceeding in equity or an action at law). The undersigned is a duly authorized representative of the Company and all necessary entity action has been taken to authorize the undersigned to enter into this Agreement and to consummate the transactions contemplated herein.
   
12.2. Broker’s Fees. Company has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

 

13. Health Care Matters.

 

13.1. Definitions.
   
13.1.1. “Affiliate” means (i) with respect to any Person that is not a natural person, any other Person controlling, controlled by or under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person whether through the ownership of voting securities, as trustee, personal representative or executor, by contract, credit arrangement or otherwise, and, (ii) with respect to any Person who is a natural person, a Family Member of such Person.
   
13.1.2. “Health Care Laws” means all applicable laws pertaining to the health care regulatory matters applicable to the operations of the Target and ACO, including but not limited to: (i) the Medicare statute (Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq.), the Medicaid statute (Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq.), including the Medicare Part D program and the Medicare Advantage program, the federal TRICARE statute (10 U.S.C. § 1071 et seq.) and any other federal, state or local governmental health care programs, including applicable program requirements; (ii) any applicable criminal laws relating to health care, including all criminal false claims statutes (e.g., 18 U.S.C. Sections 287 and 1001); (iii) the Civil Monetary Penalties Law (42 U.S.C. §§ 1320a-7a); (iv) all applicable laws relating to health care fraud and abuse, including but not limited to the civil False Claims Act of 1863 (31 U.S.C. Section § 3729 et seq.), the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)); (v) the Physician Self-Referral Law (42 U.S.C. § 1395nn), all applicable federal and state self-referral prohibitions, state anti-kickback and illegal remuneration laws; (vi) HIPAA, (vii) the Health Information Technology for Economic and Clinical Health Act (42 U.S.C. § 3000 et seq.), (viii) state health information breach notification laws, and (ix) the regulations promulgated under any of the laws set forth above.

 

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13.1.3. “Person” means any individual, partnership, limited liability company, corporation, cooperative, association, joint stock company, trust, joint venture, unincorporated organization or governmental authority, body or entity or any department, agency or political subdivision thereof.
   
13.2. Target and AHP, jointly and severally, represent and warrant as follows:
   
13.2.1. Target, AHP, and each of their respective Affiliates and any other Person who provides services under a contract with the Target, AHP, or any of their respective Affiliates are, and have at all times been, operating in compliance in all material respects with applicable federal, state and local laws, statutes, rules, regulations, ordinances, codes applicable to the Target and the AHP, including but not limited to all Health Care Laws.
   
13.2.2. Target, AHP, and each of their respective Affiliates are and have been at all times operating in compliance in all material respects with all terms of any data use agreement, participation agreement or any other agreement with the Center for Medicare and Medicaid Services under the Medicare Shared Savings Program or any other governmental program.
   
13.2.3. With the exception of items identified on Schedule 13.2.3, neither Target, AHP, nor any of their respective Affiliates have entered into any arrangements with any Person requiring a waiver of any Health Care Laws, and for any arrangements identified on Schedule 13.2.3, Target, AHP, and each of their respective Affiliates have satisfied all regulatory requirements for application of any waiver.
   
13.2.4. Neither Target, AHP, any of their respective Affiliates, employees or contractors nor any Person who provided services to the Target, AHP, or any of their respective Affiliates, has engaged in any activity which would be likely to lead to an investigation by the Office of the Inspector General, any Medicare or Medicaid Fraud Control Unit, or other governmental authority or which would be likely to lead to an action or proceeding under any applicable Health Care Law.

 

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13.2.5. Target, AHP, and each of their respective Affiliates has (i) filed all reports and billings required to be filed with respect to each governmental or third party payor in compliance in all material respects with applicable laws applicable to such governmental or third party payor program requirements, and (ii) paid all known and undisputed refunds, overpayments, discounts and adjustments due with respect to any such report or billing. There are no pending or threatened audits, investigations, appeals, adjustments or legal proceedings relating to such claims.
   
13.2.6. No event has occurred which would provide the basis for termination of any participating provider agreement or similar contract or arrangement between Target, AHP, and any of their respective Affiliates and a governmental or third party payor.

 

14. Parent’s Representations and Warranties. The Parent represents and warrants as follows:

 

14.1. Authority; Binding Obligation. Parent has the full right, power, and authority to enter into this Agreement and to consummate the transactions contemplated herein. The Parent has duly and validly executed and delivered this Agreement and this Agreement constitutes a legal, valid and binding obligation of the Parent, enforceable against the Parent in accordance with its terms subject to bankruptcy, reorganization, insolvency, and other similar laws affecting the enforcement of creditors’ rights in general and to general principles of equity (regardless of whether considered in a proceeding in equity or an action at law). The undersigned is a duly authorized representative of the Parent and all necessary entity action has been taken to authorize the undersigned to enter into this Agreement and to consummate the transactions contemplated herein.
   
14.2. Broker’s Fees. Parent has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

 

15. Indemnification. Each of Target, AHP, and Sellers shall, jointly and severally, indemnify and hold harmless the Company, Parent, and their respective officers, managers, directors, employees, equityholders, members, agents, representatives, successors and permitted assigns (each, an “Indemnified Party”) from and against any losses that an Indemnified Party suffers, sustains or becomes subject to as a result of or in connection with any inaccuracy or breach of any representation or warranty made by the Target, AHP, or any Seller or any failure to perform or breach of any covenant or agreement of Target, AHP, or any Seller.

 

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16. Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; or (ii) three (3) business days after deposit with a recognized overnight delivery service, properly addressed to the party to receive the same, postage prepaid for overnight delivery. The addresses for such communications shall be:

 

If to Company: HLYK Florida, LLC
  ATTN: George O’Leary
1035 Collier Center Way
Suite 3
  Naples, FL 34110
   
With a copy to (which shall not constitute notice):   K&L Gates LLP
  ATTN: Clayton Parker
200 South Biscayne Blvd.
Suite 3900
  Miami, FL 33131
   
If to Parent: HealthLynked Corp.
  ATTN: George O’Leary
  1726 Medical Blvd.
Suite 101
  Naples, FL 34110
   
With a copy to (which shall not constitute notice):  K&L Gates LLP
  ATTN: Clayton Parker
200 South Biscayne Blvd.
Suite 3900
  Miami, FL 33131
   
If to Sellers: Nicole Bradberry
   
  Marsha Boggess
   
If to Target: Cura Health Management, LLC
   
If to AHP: ACO Health Partners, LLC

 

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17. Successors and Assigns; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective permitted assigns, heirs, administrators, executors or personal representatives.

 

18. Counterparts. This Agreement may be executed in any number of counterparts, including counterparts signed electronically, received as a signed confirmed fax, or via email or other electronic signature, including DocuSign, and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

19. Governing Law, Venue. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Florida, without regard to conflict of law principles. Each party hereto irrevocably consents to the non-exclusive jurisdiction of the federal or state courts located in and for Collier County, Florida with respect to any action, suit or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby, and each party hereto hereby unconditionally and irrevocably waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have to the laying of venue in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.

 

20. Modifications and Waivers. No change, modification, or waiver of any provision of this Agreement shall be valid or binding unless it is in writing and signed by the parties intended to be bound. No waiver of any breach, term, or condition of this Agreement by either party shall constitute a subsequent waiver of the same or any other breach, term or condition or a continuing waiver after demand for strict compliance.

 

21. Further Assurances. The parties agree to execute and deliver all such other and additional instruments and documents and do all such other acts and things as may be reasonably requested by the other party to more fully effectuate this Agreement.

 

22. Costs. Each party shall be responsible for all of their respective costs and expenses in connection with the transactions contemplated in this Agreement.

 

23. Entire Agreement. The Documents, including any schedules, exhibits, or appendixes thereto which are hereby incorporated herein, constitute the entire agreement between the parties relating to the subject matter hereof and all previous agreements or arrangements between the parties, written or oral, relating to the subject matter hereof are superseded.

 

24. Severability. If any provision of this Agreement is held to be invalid or unenforceable, in whole or in part, by any court of competent jurisdiction, then the remaining provisions of this Agreement will remain in full force and effect.

 

SIGNATURE PAGE FOLLOWS

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

 

COMPANY:   SELLERS:
       
HLYK FLORIDA, LLC   BRADBERRY HOLDINGS, LLC
       
By: /s/ George O’Leary   /s/ Nicole Bradberry
Name: George O’Leary   Nicole Bradberry, CEO
Title Chief Financial Officer    
       
      FOCUSONE HOLDINGS, LLC
       
      /s/ Marsha Boggess
      Marsha Boggess, CEO

 

PARENT:   TARGET:
         
HEALTHLYNKED CORP.   CURA HEALTH MANAGEMENT, LLC
         
By: /s/ George O’Leary   By: /s/ Nicole Bradberry
Name:  George O’Leary   Name:  Nicole Bradberry
Title Chief Financial Officer   Title Managing Partner   
         
      By: /s/ Marsha Boggess
      Name: Marsha Boggess
      Title Member Manager
         
      ACO HEALTH PARTNERS, LLC
         
      By: /s/ Nicole Bradberry
      Name: Nicole Bradberry
      Title ACO Executive
         
      By: /s/ Marsha Boggess
      Name: Marsha Boggess
      Title Member Manager

 

Signature Page to Agreement and Plan of Merger

 

 

 

 

 

Exhibit 99.1

 

HealthLynked Signs Definitive Agreement to Acquire Cura Health Management, LLC, and ACO Health Partners, LLC Adding Significant Revenue and Profitability from its Newly Formed Accountable Care Organization Division

 

Naples, FL, Feb 11, 2020 HealthLynked Corp (HLYK), a nationwide healthcare network focused on care management of its members and a provider of healthcare technologies that connect doctors, patients and medical data, today announced that it has entered into a definitive agreement to acquire Cura Health Management, LLC (“CHM”) and its wholly owned subsidiary ACO Health Partners, LLC (“AHP”). The acquisition cost of $1.75 million was a combination of cash, HealthLynked common stock, and a four-year performance-based earnout. This structure vests the two founders, Nicole Bradberry and Marsha Boggess, in the success of both the company’s newly formed Accountable Care Organization (“ACO”) Division and HealthLynked at large. The closing is targeted for the beginning of April 2020.

 

According to ResearchandMarkets.com, the Global Healthcare Data Analytics market is expected to grow from $19.6 billion in 2018 to $47.7 billion in 2024, a 16% compounded annual growth rate (CAGR). As opposed to Google’s effort to gain access to millions of patient records from Ascension Medical Group without their patients’ knowledge under “Project Nightingale,” HealthLynked puts patients front and center in obtaining and sharing their medical records, called “personal health records,” for themselves and their families. HealthLynked is building consumer-centric technologies that support portability as well as search and share operations for patients. By starting its ACO Division with this acquisition, HealthLynked is able to acquire large numbers of patients due to the aggregation nature of ACOs as well as provide an underlying structure for clinical integration and data analytics that enables their success.

 

“The acquisitions of CHM and AHP expand HealthLynked into our newly formed ACO Division and will significantly add to our profitability. CHM provides service contracts to ACOs around the country and AHP is a Jacksonville, Florida based ACO with 75 practitioners who use technology, care coordination, and care management to reduce healthcare costs and improve health outcomes for its Medicare patients,” said Michael Dent M.D., HealthLynked’s Chairman and CEO.  “As we continue to expand our network and focus on improving care through our technologies, it was a logical step to embark upon our ACO Division, and we are confident that this will bring significant value to both our patient and physician members.”

 

 

 

 

CHM and AHP Founder and CEO of the Florida Association of ACOs, Nicole Bradberry, stated “HealthLynked’s ability to aggregate clinical patient data and share this data with both the patient and provider in a clinical setting backed by the actionable opportunities driven by ACO analytics and financial claims data is a true game changer to drive better outcomes and reduced medical cost. I am very excited about this partnership and how together we can penetrate the value-based marketplace with a truly differentiated model.”

 

Benefits of the Transaction

 

Revenue and Profit Increase. The acquisition is expected to contribute approximately $2,250,000 of revenue and $500,000 in EBITDA in year one, increasing HealthLynked’s consolidated revenues by 47% and reducing the company’s current annual cash burn by over 50%.

 

Expansion into Accountable Care Organizations. CHM is a well-established national service provider and AHP is a well-established ACO in the Florida Market with a history of managing and supporting ACOs and receiving shared savings from the Centers for Medicare and Medicaid Services (CMS). In addition to Florida, AHP includes provider participants in North Carolina, New Jersey and Indiana. ACOs seek to reduce healthcare costs and improve health outcomes for Medicare patients using technology, care coordination and care management, making it an ideal acquisition for HealthLynked. The acquisition of AHP positions HealthLynked to engage in value-based reimbursement programs offered both by CMS and commercial payers.

 

Expansion of Healthcare Data Analytics. HealthLynked will draw on the best attributes from the acquisition to improve the quality of service for all our patient members, including our new ACO patients. AHP patient members will benefit from HealthLynked’s digital technology that connects and analyzes their healthcare data to monitor care, reduce costs, and improve outcomes. HealthLynked members will benefit from CHP’s and AHP’s extensive experience in quality care management, care coordination and value-based analytics, including programs that enhance access to appropriate care while avoiding unnecessary costs to both the patients and the system, a tenet of the ACO model.

 

Four-year Consultancy Agreements with Nicole Bradberry and Marsha Boggess. The acquisition also includes four-year consultancy agreements with founders Nicole Bradberry and Marsha Boggess to head up our newly formed ACO Division. Ms. Bradberry and Ms. Boggess will also participate with the HealthLynked Board of Directors as Board Observers providing their expertise in ACOs and other value-based healthcare models, including Management Service Organizations (MSOs) and Clinically Integrated Networks (CINs).

 

Advisors
K&L Gates LLP is serving as legal counsel for the acquisition.

 

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George O’Leary, Chief Financial Officer of HealthLynked stated, “This will be the second of numerous acquisitions for HealthLynked, now focused on:

 

● Data Driven Healthcare businesses – ACOs, MSOs and CINs

 

● MSOs – providing both management services and ACO quality care services to multiple physician practices and networks including those aggregated under a single tax ID.

 

● CINs – developing clinical integration for all providers participating in these models.

 

Our acquisition strategy is focused on purchasing high growth, profitable ACO and/or MSO businesses that complement our digital healthcare business growth by paying 4 times adjusted EBITDA, with 25% in cash, 50% in HLYK stock, and 25% in four-year performance-based payouts.”

 

About HealthLynked Corporation HLYK

 

HealthLynked Corp. provides a solution for both patient members and providers to improve healthcare through the efficient exchange of medical information. The HealthLynked Network is a cloud-based platform that allows members to connect with their healthcare providers and take more control of their healthcare. Members enter their medical information, including medications, allergies, past surgeries and personal health records in one convenient online and secure location, free of charge. Participating healthcare providers can connect with their current and future patients through the system. Benefits to in-network providers include the ability to utilize the HealthLynked patent pending patient access hub “PAH” for patient analytics. Other benefits for preferred providers include HLYK marketing tools to connect with their active and inactive patients to improve patient retention, access more accurate and current patient information, provide more efficient online scheduling and to fill last minute cancelations using our “real time appointment scheduling” all within our mobile application. Preferred providers pay a monthly fee to access these HealthLynked services. For additional information about HealthLynked Corp. visit www.healthlynked.com and connect with HealthLynked on Twitter, Facebook, and LinkedIn.

 

About Cura Health Management CHM

 

CHM is a healthcare enablement company that empowers local market provider entrepreneurs to own and operate their own Value Service Organizations in a franchise like model that extends their reach and capabilities to maximize revenue, deliver quality care and improve patient outcomes. CHM’s innovative resources and expert solutions are administered as an extension of providers’ current in-practice resources, expanding care coordination and care management services and value-based analytics. These solutions support financial success within both traditional payment models and expansion to new services, allowing partners to succeed within current and ever emerging value-based payment models.

 

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About ACO Health Partners AHP

 

ACO Health Partners is an Accountable Care Organization (ACO), based out of Jacksonville but with providers all over the country, participating in the Medicare Shared Savings Program. AHP was formed to benefit the patients (Medicare Fee-for-Service Beneficiaries), providers and the communities it serves. AHP is built on a model of coordinated care to ensure that patients, especially the chronically ill and the elderly, receive the right care at the right time, avoiding unnecessary duplication of services and prevention of medical errors.

 

Forward Looking Statements

 

Forward-Looking Statements in this press release, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our actual results, including as a result of any acquisitions, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by our management, and us are inherently uncertain. We caution you not to place undue reliance on any forward-looking statements, which are made as of the date of this press release. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Certain risks and uncertainties applicable to our operations and us are described in the “Risk Factors” section of our most recent Annual Report on Form 10-K and in other filings we have made with the U.S. Securities and Exchange Commission. These reports are available at www.sec.gov.

 

Contacts:

George O’Leary

Chief Financial Officer

goleary@healthlynked.com

(800) 928-7144, ext. 99

 

Investor Relations Contacts:  
Stephanie Prince Jim Hock
PCG Advisory Group Hanover International Inc.
sprince@pcgadvisory.com jh@hanoverintlinc.com
646-762-4518 760-564-7400

 

 

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