Item 1.01.
Entry Into a Material Definitive Agreement
Closing
of Membership Interest Purchase Agreement
On
May 29, 2018 (the “Closing Date”), Immudyne, PR, LLC, a wholly owned subsidiary of Immudyne, Inc. (the “Company”)
entered into that certain Membership Interest Purchase Agreement (the “Purchase Agreement”) by and among nine individuals,
as sellers (together, the “Sellers”), and Immudyne PR, LLC, as buyer (“Buyer”), pursuant to which Buyer
acquired from Sellers all of Sellers’ right, title and interest in and to 51% of the membership interests (the “Membership
Interests”) of LegalSimpli Software, LLC, a Puerto Rico limited liability company (“LSS”), which operates a
marketing-driven software solutions business.
In
consideration for Buyer’s purchase of the Membership Interests the Buyer paid $150,000 (the “Initial
Payment”) to the Sellers upon execution of the Purchase Agreement. Additionally, Buyer may be obligated to pay up to an
additional $200,000 in accordance with the following milestones (the “Milestones”): (i) $100,000 to the Sellers
on the 90-day anniversary of the Purchase Agreement, so long LSS’s gross revenue for the preceding 30-day period is
equal to or greater than $75,000; and (ii) $100,000 to the Sellers on the 180-day anniversary of the Purchase Agreement, so
long as LSS’s gross revenue for the preceding 30-day period is equal to or greater than $150,000, with a minimum net
profit margin of 25% in each instance.
Regardless
of whether LSS achieves either or both of the Milestones, Buyer will retain full ownership of the Membership Interests.
The
Purchase Agreement contains customary representations, warranties and covenants and closing occurred upon satisfaction of customary
closing conditions.
In
connection with the Purchase Agreement, Sellers amended LSS’s operating agreement (the “Amended Operating Agreement”)
to include Buyer accordingly. LSS will have the right to make distributions of cash and property to its members on a pro rata
basis in proportion to the respective percentage interest held by each member; provided, however, notwithstanding the foregoing,
the Amended Operating Agreement establishes a bonus pool equal to 5% of net profits of LSS that may only be distributed to the
four founding members of LSS. For each $10,000,000 in revenue, up to a maximum of $50,000,000 that LSS generates with a net profit
margin equal to or greater than 20%, the founding members of LSS will receive 1% of the pretax profits, for a possible aggregate
total of 5% of the pretax profits.
Line
of Credit
In
connection with the Buyer’s purchase of the Membership Interests, Buyer and LSS entered into that certain revolving line
of credit agreement, (the “Line of Credit Agreement”) with respect to Buyer’s extending advances in the amount
up to $1,000,000 for the benefit of LSS; provided, however, that Buyer is not obligated to advance any funds upon request and
may unilaterally terminate LSS’s privilege to request advances under the Line of Credit.
Any
amounts advanced pursuant to the Line of Credit Agreement will be memorialized with a promissory note, issued at the time of such
advance at a rate of interest to be determined and stated on the face of such note.
The
foregoing descriptions of the Purchase Agreement, Amended Operating Agreement and the Line of Credit Agreement do not purport
to be complete and are qualified in their entirety by the terms and conditions of such documents. Copies of the Form of Purchase
Agreement, Amended Operating Agreement and the Form of Line of Credit Agreement are attached hereto as Exhibits 10.1, 10.2 and
10.3, respectively, and are incorporated herein by reference.