Peachstate Health Management, LLC entered into a non-binding letter of intent to acquire Authentidate Holding Corp. (NasdaqCM:ADAT) in a reverse merger transaction on August 25, 2015. Under the terms, Authentidate will acquire all of the outstanding membership interests of AEON in exchange for shares of a newly created class of Series E preferred stock of Authentidate. AEON members will be issued such number of Series E shares which will be convertible into 19.9% of the outstanding shares of Authentidate on the date of the closing and an additional 5% of the outstanding shares of Authentidate upon approval of the merger transaction by the shareholders of Authentidate. Additional Series E shares will be issued to AEON members in 2016 and 2020 if AEON achieves certain financial results. The additional 2016 Series E shares will be convertible into 24% of the outstanding shares of Authentidate on the date of the closing and will be issued to the AEON members provided AEON achieves $16 million of EBITDA in calendar year 2015. The AEON members will be issued another tranche of Series E shares in 2020 which, including the previously issued Series E shares, will be convertible into 85% of the outstanding shares of Authentidate provided AEON achieves $65.9 million in EBITDA, in the aggregate, in calendar years 2017 and 2018 or $99 million in EBITDA, in the aggregate, for calendar years 2016, 2017 and 2018. The deal also provides for the issuance of Series E shares as bonus shares for the achievement of $117 million in net income for the four fiscal years ending December 31, 2019, convertible into 5% of the outstanding shares of Authentidate.

Peachstate Health Management, LLC entered into a definitive agreement to acquire Authentidate Holding Corp. (NasdaqCM:ADAT) in a reverse merger transaction on November 18, 2015. Pursuant to the terms of the reverse merger agreement, AEON members will receive shares of newly created class of Series E preferred stock of Authentidate, issuable in tranches. At the closing, AEON members will be issued such number of shares of Series E preferred stock as shall be convertible into a total of 19.9% of the issued and outstanding shares of Authentidate's common stock as of the date of the closing. Thereafter, if Authentidate obtains approval of its stockholders for the issuance of additional shares of its common stock in excess of 19.9%, it will issue to the AEON members additional shares of Series E preferred stock, which shall be convertible into an additional 5% of the issued and outstanding shares of Authentidate common stock as of the date of the closing. Further, if AEON achieves at least $16 million EBITDA for 2015, then Authentidate will issue Series E preferred stock which shall be convertible into an additional 24% of Authentidate's issued and outstanding shares of common stock. In event AEON achieves at least $65.9 million in EBITDA, in the aggregate, for the three calendar years ending December 31, 2016, 2017 and 2018, then Authentidate will issue additional shares of the Series E preferred stock which shall be convertible into an additional 36.1% of the issued and outstanding shares of Authentidate's common stock, subject, however, to the limit that the total number of shares of Authentidate's common stock issuable upon conversion of all the shares of Series E preferred stock issued to the AEON members shall equal 85% of Authentidate's common stock on a fully-diluted basis. Additionally, the AEON members would be entitled to receive additional shares of Series E preferred stock in the event AEON achieves at least $100 million in EBITDA, in the aggregate, for the four calendar years ending December 31, 2019, which additional shares will be convertible into an additional 5% of the issued and outstanding shares of Authentidate's common stock on a fully diluted basis. As on January 28, 2016, the terms of the agreement were revised. 8.6 million common shares of Authentidate will be issued as consideration instead of preferred stock earlier. AEON Clinical Laboratories can earn additional shares equaling up to 90% of the outstanding stock of Authentidate based upon earnings of $100 million.

The holders of the Series E shares will have certain preferential rights, including the right to vote separately as a class to nominate and elect one Director for each 10% of the outstanding shares of Authentidate's common stock into which the outstanding Series E shares shall be convertible. Upon completion, Chief Executive Officer of Authentidate will be Richard Hersperger who currently serves as the Chief Executive Officer of AEON. Sonny Roshan, founder and the current Chairman of AEON, will become the Chairman of Authentidate. Prior to closing, the parties will determine the final members of management of AEON and Authentidate. The deal is subject to negotiation and execution of a definitive transaction agreement, approval of Board of Directors and shareholders of Authentidate and AEON, approval of Nasdaq Stock Market and other customary closing conditions. The transaction is also subject to Authentidate stock issuable upon conversion for the Series E preferred stock shall have been approved for listing on the Nasdaq Stock Market, upon completion AEON shall have total net assets of at least $10 million and working capital of $10 million of which $3 million is immediately available cash assets and AEON members shall have executed and delivered the lock-up agreements. The transaction has been approved by the Board of Directors of both companies. The transaction is expected to close by the end of 2015. Victor DiGioia of Becker & Poliakoff LLP acted as legal advisor to Authentidate Holding Corp. Joseph Walsh of Troutman Sanders LLP acted as legal advisor to AEON Clinical.