9.	Earn-Out Merger Consideration

Pursuant to the Amended and Restated Agreement and Plan of Merger dated

January 26, 2016,

as amended on

May

31,

2016

and

December 2016 (

collectively the "The Merger Agreement"), AEON was merged into a newly formed acquisition subsidiary of Aeon Global Health Corp. (the "Aeon Acquisition"). The original Merger Agreement included, among other things, certain earn-out consideration (the “Earn-out”) and the assumption of certain liabilities. The Earn-out required the achievement of certain earnings before interest, taxes, depreciation and amortization (“EBITDA”) levels that were automatically adjusted upon the change of reimbursement rates adopted by the Centers for Medicare and Medicaid Services. Upon achievement of the EBITDA level for the

three

calendar years ending

December 31, 2018 (

“2018

Earn-out”), the Former Members would receive additional shares of the Company’s common stock so that the total number of shares of the Company’s common stock issued to the Former Members pursuant to the Merger Agreement would equal

85%

of the issued and outstanding shares of the Company’s common stock on a post-issuance and fully-diluted (as defined in the Merger Agreement) basis. In addition, the Merger agreement provided that upon achievement of the EBITDA level for the

four

calendar years ending

December

31,2019

(

“2019

Earn-out”), the Former Members would receive additional shares of the Company’s common stock so that the total number of shares of the Company’s common stock issued to them pursuant to the Merger Agreement would equal

90%

of the issued and outstanding shares of the Company’s common stock on a post-issuance and fully-diluted (as defined in the Merger Agreement) basis. The Former Members were also granted certain registration rights pursuant to the Merger Agreement (the “Registration Rights”), which remain outstanding. Achievement of the maximum amount of Earn-Out would have resulted in the issuance of over

70,000,000

shares of the Company’s common stock.

Subsequently, in connection with the Merger, the parties expressed differences of opinion on the interpretation of certain provisions of the Merger Agreement, the calculation of the number of shares of common stock issued pursuant to the initial tranches of the Earn-out under the Merger Agreement, and the assumption of income tax liabilities for undistributed income earned by AEON prior to the Merger. The Company has also incurred negative cash flow for the calendar years

2016

and

2017,

necessitating the loan of approximately

$760,000

by the Company’s Chief Executive Officer in addition to an amount of

$591,613,

including accrued interest, previously loaned by an entity owned by certain Former Members (collectively the “Loans”), which Loans have been extended on multiple occasions. The Loans were due and payable on

March 20, 2019

and are convertible into common stock at

$1.20

per share (currently

1,126,235

shares). In addition, the Chief Executive Officer and certain of the Former Members reduced their cash compensation as employees to

zero

and have been accepting restricted stock units of the Company as sole compensation.

The Company, AEON and the Former Members reached an agreement to resolve these matters and entered into the Settlement Agreement in order to: (i) provide a source of working capital to the Company to sustain operations and reduce the additional dilution which could have been caused by the conversion of the Loans; (ii) remove the uncertainty as to the number of shares which

may

be issued pursuant to the

2018

and

2019

Earn-outs by replacing percentages with fixed share amounts; (iii) agree that all share calculations for the Earn-outs are to be based on actual shares outstanding rather than on a “Fully-diluted” basis to provide additional certainty and reduce the potential issuances on account of the Merger from approximately

70,000,000

shares of common stock to approximately

1,200,000

shares of common stock; (iv) provide clarity as to the relationship between the

2018

Earn-out and

2019

Earn-out; (v) reduce the maximum percentage ownership of the Former Members; (vi) avoid the expense of a demand registration statement; and (vii) otherwise resolve all outstanding disagreements among the parties arising out of the Merger Agreement.

The parties also resolved all interpretative issues relating to the Merger Agreement and clarified the amount and terms of the Earn-outs as described below.

With respect to

2018

Earn-out, the parties agreed that the

2018

Earn-out, as adjusted according to the Merger Agreement, shall be

$21,483,749

of EBITDA for the

three

calendar years ending

December 31, 2018.

If the

2018

Earn-out target is achieved, then on

October 1, 2019,

subject to the completion of the audited financial statements of AEON for the calendar year ending

December 31, 2018,

the Company shall issue the Former Members a fixed amount of

3,000,000

shares of the Company’s common stock; provided, however, that if AEON does

not

achieve the

2018

Earn-out target, but achieves EBITDA for the

three

calendar years ending

December 31, 2018

of at least

75%

of the

2018

Earn-out target, then on

October 1, 2019,

subject to the completion of the audited financial statements of AEON for the calendar year ending

December 31, 2018,

the Company shall issue the Former Members a fixed amount of

2,250,000

shares of the Company’s common stock.

With respect to the

2019

Earn-out, the parties agreed that the

2019

Earn-out, as adjusted according to the Merger Agreement, shall be

$32,600,530

of EBITDA for the

four

calendar years ending

December 31, 2019.

If the

2019

Earn-out target is achieved, then within

three

business days following the completion of the audited financial statements of AEON for the calendar years ending

December

31,2019,

the Company shall issue the Former Members a fixed amount of

4,000,000

shares of the Company’s common stock. If AEON fails to achieve the

2019

Earn-out target, but achieves EBITDA for the calendar years ending

December 31, 2019

of at least

75%

of the

2019

Earn-out target, then within

three

business days following the completion of the audited financial statements of AEON for the calendar year ending

December 31, 2019,

the Company shall issue the Former Members a fixed amount of

3,000,000

shares of the Company’s common stock.

The parties also agreed that if the

2019

Earn-out target is achieved the Former Members would be entitled to an “earn-out credit” equal to the amount by which such target is exceeded. If AEON did

not

achieve the

2018

Earn-out target (or the adjusted

2018

Earn-out Target), the earn-out credit would be applied to its EBITDA for the

2018

Earn-out and then the determination of whether the

2018

Earn-out was achieved (at either the full or the

75%

level) will be recomputed. If the addition of the earn-out credit results in AEON achieving the

2018

Earn-out (at either level) then several additional shares of common stock shall be issued to the Former Members in accordance with the terms of the Settlement Agreement.

The Company also agreed that in consideration of the restructuring of the consideration due to the Former Members under the Merger Agreement, it shall issue an aggregate of

2,500,000

shares of the Company’s common stock to the Former Members. Such additional shares shall be issued to the Former Members

pro rata

based on their respective percentage ownership of AEON prior to the Merger and shall be deemed earned and issued on

February 28, 2019.

As additional consideration to the Company under the Settlement Agreement, the Former Members agreed: (i) to relinquish all demand registration rights; (ii) that the arrangements set forth in the Settlement Agreement fully resolved any and all claims arising out of the Merger Agreement and the transactions contemplated thereby; and (iii) to a general release of claims as against the Company.