ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On
October 17, 2018, OptimizeRx Corp. (the “Company”) entered into, and consummated the transactions contemplated by,
a Stock Purchase Agreement (the “Purchase Agreement”) by and among the Company, CareSpeak Communications, Inc., a
New Jersey corporation (“CareSpeak”) the selling shareholders of CareSpeak (collectively, the “Sellers”),
each of Srdjan Loncar, United Healthcare Services, Inc., Christopher DiCostanzo and Kresimir Nesek as “Seller Indemnitors”
and Srdjan Loncar in his capacity as seller’s representative, which agreement provided for the purchase of all of the equity
of CareSpeak by the Company.
The
consideration for the acquisition consists of $5.5 million in cash, as adjusted for estimated working capital, estimated indebtedness,
escrow amounts and Sellers’ estimated transaction expenses, as well as shares of the Company’s common stock equal
to $500,000 divided by the VWAP for the thirty (30) trading day period ending the day prior to Closing, and earnout payments of
up to $3 million, if any become payable, as a result of achieving certain revenue targets for 2019 and 2020. In addition, the
Company incurred its own expenses for the transaction at approximately $500,000.
On
a standalone basis, CareSpeak is expected to have revenues in excess of $1.0 million in 2018 and be profitable at that level.
Only the portion of that revenue recognized from October 17, 2018 through December 31, 2018 will be reflected in our consolidated
financial statements.
The
Purchase Agreement also contains certain restrictive covenants whereby Sellers are prohibited from (a) competing with the business
of the Company, (b) soliciting employees of the Company and (c) intentionally interfering with the Company’s business relationships,
in each case during the four-year period immediately following the Closing Date.
The
Purchase Agreement contains customary representations and warranties of the parties, including, among others, with respect to
corporate organization, capitalization, corporate authority, financial statements and compliance with applicable laws. The representations
and warranties of each party set forth in the Purchase Agreement were made solely for the benefit of the other parties to the
Purchase Agreement, and investors are not third-party beneficiaries of the Purchase Agreement. In addition, such representations
and warranties (a) are subject to materiality and other qualifications contained in the Purchase Agreement, which may differ from
what may be viewed as material by investors, (b) were made only as of the date of the Purchase Agreement or such other date as
is specified in the Purchase Agreement and (c) may have been included in the Purchase Agreement for the purpose of allocating
risk between the parties rather than establishing matters as facts. Accordingly, the Purchase Agreement is included with this
filing only to provide investors with information regarding the terms of the Purchase Agreement, and not to provide investors
with any other factual information regarding any of the parties or their respective businesses.
The
foregoing description of the Purchase Agreement is not complete and is qualified in its entirety by reference to the text of such
document, which is filed as Exhibit 2.1 hereto and which is incorporated herein by reference.