| Item 1.01. |
Entry into a Material Definitive Agreement |
Merger
Agreement
This
section describes the material provisions of the Merger Agreement (as defined below) but does not purport to describe all of the terms
thereof. The following summary and description of the Merger Agreement is qualified in its entirety by reference to the complete text
of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein
by reference. Stockholders of TRxADE Health, Inc. and other interested parties are urged to read the Merger Agreement in its entirety.
Unless otherwise defined herein, the capitalized terms used below are defined in the Merger Agreement.
The
Merger
On
June 30, 2023, TRxADE Health, Inc., a Delaware corporation (the “Company”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Superlatus Inc., a Delaware
corporation (“Superlatus”), and Foods Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company
(“Merger Sub”). Pursuant to the Merger Agreement, upon consummation of the Merger, Merger Sub will merge with and into Superlatus
(the “Merger”), and the separate existence of Merger Sub shall cease. Superlatus will become a wholly owned subsidiary of
the Company and continue as the surviving corporation in the Merger. The Merger shall become effective at the time of the filing of such
certificate of merger with the Secretary of State of the State of Delaware or at such later time agreed by the Company and Superlatus
(the “Effective Time”).
Merger
Consideration
As
consideration for the Merger, at the Effective Time, shareholders of Superlatus shall be entitled to an aggregate of 173,463 shares
of the Company stock, which will be comprised of (i) 136,436 shares of common stock of the Company, representing 19.9%
of the total issued and outstanding common stock of the Company after the consummation of the Merger (the “Closing”)
and (ii) 37,027 shares of Company’s Series B Preferred Stock, par value $0.00001 per share (the “Series B Preferred Stock”),
with a conversion ratio of 100 to one.
Representations
and Warranties; Covenants
The
Merger Agreement contains customary representations and warranties made by each of the Company and Superlatus as of the date of the Merger
Agreement or other specified dates. Each party has agreed to use its commercially reasonable efforts to affect the Closing and consummate
the transactions contemplated by the Merger Agreement. The Merger Agreement also contains certain customary covenants by each of the
parties during the period between the signing of the Merger Agreement and the earlier to occur of the termination of the Merger Agreement
and the Effective Time.
No
Survival
The
representations and warranties of the parties contained in the Merger Agreement terminate at the Effective Time, and only the covenants
that by their terms survive the Effective Time.
Conditions
to Consummation of the Merger
The
Merger Agreement contains customary conditions to Closing, including the following mutual conditions of the parties (unless waived):
(i) no temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Contemplated
Transactions shall have been issued by any court of competent jurisdiction or other governmental authority of competent jurisdiction
and remain in effect and there shall not be any law which has the effect of making the consummation of the Contemplated Transactions
illegal; (ii) Superlatus shall have obtained the required shareholder vote; (iii) all required filings under the HSR Act shall have been
completed and any waiting period applicable to the consummation of the Merger under the HSR Act shall have expired or been terminated.
In
addition, unless waived by the Company, the obligations of the Company to consummate the Contemplated Transactions are subject to the
satisfaction of the following additional closing conditions, in addition to the delivery by Superlatus of customary certificates and
other closing deliverables: (i) Superlatus shall acquire Sapientia Technology, LLC and Prestige Farms, Inc. (together, the “Combined
Companies”); (ii) subject to certain exceptions, the representations of Superlatus being true and correct as of the date of the
Merger Agreement and as of the Closing Date or a particular date as specified; (iii) Superlatus having performed in all material respects
its obligations and complied in all material respects with its covenants and agreements under the Merger Agreement required to be performed
or complied with by it on or prior to the Effective Time; (iv) absence of any material adverse effect with respect to Superlatus since
the date of the Merger Agreement; (v) Lock-Up Agreements will continue to be in full force and effect as of immediately following the
Effective Time; (vi) Superlatus shareholder written consent executed by the equity holders of Superlatus shall be in full force and effect;
(vii) receiving a fairness opinion from The Mentor Group in a form acceptable to the Company in its sole and absolute discretion within
ten business days of the execution and delivery of this Agreement; (vii) Suren Ajjarapu and Prashant Patel each shall have entered into
a twelve month consulting agreement, in form and substance acceptable to the Company and Superlatus, with the post-closing Superlatus,
to be effective immediately following Closing; and (viii) Superlatus shall provide all requested documentation to the Company, in the
Company’s sole and absolute discretion, related to the financing for the Combined Companies to be closed concurrently with this
Merger.
Finally,
unless waived by Superlatus, the obligations of Superlatus to consummate the Contemplated Transactions are subject to the satisfaction
of the following additional closing conditions, in addition to the delivery by the Company of customary certificates and other closing
deliverables: (i) subject to certain exceptions, the representations of the Company and Merger Sub being true and correct as of the date
of the Merger Agreement and as of the Closing Date or a particular date as specified; (ii) the Company and Merger Sub having performed
in all material respects its obligations and complied in all material respects with its covenants and agreements under the Merger Agreement
required to be performed or complied with by it on or prior to the Effective Time; (iii) absence of any material adverse effect of the
Company and the Merger Sub since the date of the Merger Agreement; (iv) if applicable, Superlatus shall have received a true and correct
copies of each payoff letter addressed to the Company and Superlatus from debtholders of the Company in connection with the repayment
by the Company of any unpaid indebtedness for borrowed money of the Company and related fees to debtholders of the Company and termination
of the relevant debt instruments.
Termination
The
Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, among
others (i) by the mutual written consent of the Company and Superlatus, (ii) by either the Company or Superlatus if the Merger shall
not have been consummated by August 30, 2023, subject to possible extension; (iii) by either the Company or Superlatus if a court of
competent jurisdiction or governmental authority shall have issued a final and nonappealable order; (iv) by the Company if Superlatus
cannot deliver to the Company the valuation certificate that reflects a valuation of Superlatus of at least $225,000,000.00 or the board
of directors of the Company has not received satisfactory fairness opinion that the Merger the other transactions contemplated by the
Merger Agreement are fair to the holders of common stock of the Company; (v) by the Company, in its sole and absolute discretion, by
giving written notice to Superlatus within the 60-day period after the date of the Merger Agreement; (vi) by the Company if the matters
set forth on Section 6.1 of the Company’s Disclosure Schedule in the Merger Agreement have not been resolved within the 60-day
period after the date of the Merger Agreement; (vii) by Superlatus, upon a breach of any representation, warranty, covenant or agreement
in the Merger Agreement by the Company or Merger Sub or if any representation or warranty of the Company or Merger Sub shall have become
inaccurate, and (viii) by the Company, upon a breach of any representation, warranty, covenant or agreement in the Merger Agreement by
Superlatus or if any representation or warranty of Superlatus shall have become inaccurate; and (ix) by the Company and following compliance
with all of the requirements set forth in the proviso to Section 10.1(j) in the Merger Agreement, upon the board of the Company authorizing
the Company to enter into a Permitted Alternative Agreement. If the Merger Agreement
is terminated, all further obligations of the parties under the Merger Agreement will terminate
and will be of no further force and effect (except those certain sections enumerated in the Merger Agreement), and no party will have
any further liability to any other party thereto except for liability for any fraud claims or willful breach of a representation, warranty,
covenant or obligation under the Merger Agreement prior to such termination.
Governing
Law
The
Merger Agreement is governed by the laws of the State of Delaware without regard to the conflict of laws principles thereof.
The
Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of
such agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes
of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in
connection with negotiating the Merger Agreement. The Merger Agreement has been filed with this Current Report on Form 8-K to provide
investors with information regarding its terms. It is not intended to provide any other factual information about the Company, Superlatus,
Merger Sub or any other party to the Merger Agreement. In particular, the representations, warranties, covenants and agreements contained
in the Merger Agreement, which were made only for purposes of such agreement and as of specific dates, were solely for the benefit of
the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified
by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead
of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that differ
from those applicable to investors and reports and documents filed with the SEC. Investors should not rely on the representations, warranties,
covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any party to
the Merger Agreement. In addition, the representations, warranties, covenants and agreements and other terms of the Merger Agreement
may be subject to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations and warranties
and other terms may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in
the Company’s public disclosures.
Stock
Swap Agreement
As
a condition and inducement to Superlatus’s willingness to enter into the Merger Agreement, on June 28, 2023, Suren Ajjarapu and
Prashant Patel (the “Principal Stockholders”) entered into an agreement with the Company (the “Stock Swap Agreement”),
pursuant to which, the Company will transfer all of the shares or membership interest of a variety of operating subsidiaries currently
owned by the Company to Principal Stockholders, in exchange for Suren Ajjarapu to surrender 85,000 shares of the common stock of the
Company and Prashant Patel to surrender 81,666 shares of the common stock of the Company (the “Stock Swap Transaction”).
The closing of the Stock Swap Transaction shall take place simultaneously with the approval by the Company’s stockholders of the
conversion of the Series B preferred Stock into common stock. The closing of the Stock Swap Transaction is subject to the simultaneous
condition that the Merger is successfully closed.
Stock
Swap Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The above description
of the terms of the Stock Swap Agreement is qualified in its entirety by reference to such exhibit. The description of the Stock Swap
Agreement is not intended to provide any other factual information about the Company or to modify or supplement any factual disclosures
about the Company in its public reports filed with the SEC.
Superlatus
Shareholder Support Agreement
Within
ten (10) business days of the execution and delivery of the Merger Agreement and as a condition and inducement to the Company’s
willingness to enter into this Merger Agreement, certain officers, directors and 5% or greater stockholders (together with their Affiliates)
of Superlatus will enter into support agreements in favour of form and substance agreeable to the Company and Superlatus (the “Company
Shareholder Support Agreement”), pursuant to which such persons have, subject to the terms and conditions set forth therein, agreed
to vote all of their Superlatus common shares in favour of the adoption of the Merger Agreement and other transaction documents and thereby
approve the Contemplated Transactions and against any competing proposals.
Lock-Up
Agreement
Within
ten (10) business days of the execution and delivery of the Merger Agreement and as a condition and inducement to the Company’s
willingness to enter into the Merger Agreement, certain equity holders of Superlatus will enter into lock-up agreements.
