UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-35984

MERGEWORTHRX CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		46-1970047
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3123 McDonald Street, Miami, Florida, 33133

(Address of principal executive offices)

305-785-3900

(Issuer’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

As of November 13, 2014, there are 10,200,950 shares of common stock, par value $0.0001 per share, issued and outstanding.

MergeWorthRx Corp.

TABLE OF CONTENTS

	Page
Part I. Financial Information
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk	14
Item 4. Controls and Procedures	14
Part II. Other Information
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 5. Other Information	14
Item 6. Exhibits	15
Signatures	16

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MergeWorthRx Corp.

Consolidated Balance Sheets

	September 30, 2014			December 31, 2013
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	22,330		$	219,160
Prepaid expenses		27,271			48,215
Total Current Assets		49,601			267,375
Other Assets
Investments held in trust		63,452,938			63,452,417
Security deposits		-			5,152
Total Other Assets		63,452,938			63,457,569
Total Assets	$	63,502,539		$	63,724,944

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accrued expenses and accounts payable	$	52,920		$	33,436
Accrued offering costs		179,880			179,880
Related party advance		100,030			-
Total Liabilities		332,830			213,316

Commitments and Contingencies
Common stock subject to possible redemption, 6,958,099 and 6,998,998 shares at conversion value as of September 30, 2014 and December 31, 2013, respectively		58,169,708			58,511,627

STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value; 5,000,000 authorized, none issued and outstanding		-			-
Common stock, $0.0001 par value; 100,000,000 shares authorized; 3,242,851 and 3,201,952 shares issued and outstanding (excluding 6,958,099 and 6,998,998 shares subject to conversion) as of September 30, 2014 and December 31, 2013, respectively		324			320
Additional paid-in capital		5,537,360			5,195,445
Accumulated deficit		(537,683	)		(195,764	)
Total Stockholders' Equity		5,000,001			5,000,001

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	63,502,539		$	63,724,944

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

MergeWorthRx Corp.

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended			For the Period from January 22, 2013 (inception) through
	2014			2013			September 30, 2014			September 30, 2013
Formation and operating costs	$	180,526		$	88,586		$	357,486		$	97,074
Loss from operations		(180,526	)		(88,586	)		(357,486	)		(97,074	)
Other income:
Interest income		2,115			13,324			15,567			13,324
Net Loss	$	(178,411	)	$	(75,262	)	$	(341,919	)	$	(83,750	)

Weighted average shares outstanding, basic and diluted		3,221,510			3,143,835			3,212,286			2,425,900
Basic and diluted net loss per common share	$	(0.06	)	$	(0.02	)	$	(0.11	)	$	(0.03	)

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

MergeWorthRx Acquisition Corp.

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30, 2014			For the Period from January 22, 2013 (inception) through September 30, 2013
Cash Flows from Operating Activities:
Net loss	$	(341,919	)	$	(83,750	)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest reinvested in Trust Account		(15,068	)		(13,324	)
Changes in operating assets and liabilities:					-
Security deposit		5,152			(5,152	)
Prepaid expenses		20,944			(86,990	)
Accrued expenses and accounts payable		119,514			38,982
Net cash used in operating activities		(211,377	)		(150,234	)

Cash Flows from Investing Activities:
Interest disbursed from Trust Account		14,547			-
Principal deposited in Trust Account		-			(63,452,400	)
Net cash provided by (used in) investing activities		14,547			(63,452,400	)

Cash Flows from Financing Activities:
Proceeds from public and private offering		-			66,452,600
Payment of underwriters' discount and offering expenses		-			(2,565,328	)
Proceeds from notes payable to shareholders		-			170,000
Repayment of notes payable to shareholders		-			(170,000	)
Net cash provided by financing activities		-			63,887,272

Net Change in Cash and Cash Equivalents		(196,830	)		284,638
Cash and Cash Equivalents – Beginning		219,160			-
Cash and Cash Equivalents – Ending	$	22,330		$	284,638

Noncash Financing Activities:
Payment of operational costs by an officer pursuant to a related party advance	$	100,030		$	-

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

MergeWorthRx Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2014

(Unaudited)

Note 1 — Organization, Plan of Business Operations and Going Concern

MergeWorthRx Corp. (formerly MedWorth Acquisition Corp.) (the “Company”) was incorporated in Delaware on January 22, 2013 as a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, one or more businesses or entities (a “Business Combination”). The Company is focusing its search on target business based in the United States operating in the healthcare industry, with specific focus on the specialty pharmacy, home infusion pharmacy and/or drug distribution sectors. However, the Company is not limited to a particular geographic region or business industry or sector and it may pursue opportunities in any location or business industry or sector that it believes is attractive. The Company has one wholly-owned subsidiary, Anvil Merger Sub, Inc., which was incorporated in Delaware on September 18, 2014.

On November 27, 2013, the Company filed an amendment to its Amended and Restated Certificate of Incorporation changing the Company's name from MedWorth Acquisition Corp. to MergeWorthRx Corp.

The registration statement for the Company’s initial public offering (“Public Offering”) was declared effective on June 26, 2013. On June 27, 2013, the Company filed a new registration statement to increase the size of the offering by 10%, from 6,000,000 shares of common stock, $0.0001 par value (the “Common Stock”), to 6,600,000 shares of Common Stock (collectively, the “Public Shares”) pursuant to Rule 462(b) under the Securities Act of 1933, as amended. On July 2, 2013, the Company consummated the Public Offering, generating proceeds, net of underwriters’ discount, including other costs of the offering, of $50,333,392. The Company simultaneously raised $5,074,000 through the issuance of 634,250 shares of Common Stock (“Sponsor Shares”), at 8.00 per share, to certain of the Company’s initial stockholders (collectively, the “Sponsors”) in a private placement (“Private Placement”) (See Note 3 - Public Offering and Private Placement).

On July 3, 2013, the underwriters exercised their over-allotment option in full and, on July 8, 2013, the Company completed the sale of an additional 990,000 shares of Common Stock (the “Additional Shares”) and received proceeds, net of underwriters’ discount, of $7,642,800. Simultaneously with the closing of the sale of the Additional Shares, the Company raised, via private placement, an additional $633,600 through the sale of an additional 79,200 Sponsor Shares at $8.00 per share to certain of the Company’s Sponsors.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering and the Sponsor Shares, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to effect a Business Combination successfully. Upon the closing of the Public Offering, including the over-allotment, $63,452,400 ($8.36 per Public Share, including the proceeds of the Private Placement of the Sponsor Shares) was placed in a trust account (“Trust Account”) maintained by Continental Stock Transfer and Trust Company, as trustee, and invested in United States Treasury securities having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, that invest solely in U.S. Treasury securities, until the earlier of the consummation of the Company’s first Business Combination and the Company’s failure to consummate a Business Combination within the prescribed time. Placing funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers, prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. The Company’s officers have agreed that they will be jointly and severally liable under certain circumstances to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or vendors or other entities that are owed money by the Company for services rendered, contracted for, or products sold, to the Company. However, they may not be able to satisfy those obligations should they arise. The remaining net proceeds (proceeds not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Interest income on the funds held in the Trust Account can be released to the Company to pay its (1) income and other tax obligations and (2) interest income on the funds held in the Trust Account can be released to the Company to pay for its working capital requirements in connection with searching for a Business Combination.

The Company’s shares are listed on the NASDAQ Capital Market (“NASDAQ”) under the symbol “MWRX”. Pursuant to the NASDAQ listing rules, the target business or businesses that the Company acquires must collectively have a fair market value equal to at least 80% of the balance of the funds in the Trust Account (net of taxes payable) at the time of the execution of a definitive agreement for its initial Business Combination, although the Company may acquire a target business whose fair market value significantly exceeds 80% of the Trust Account balance.

MergeWorthRx Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2014

(Unaudited)

The Company will seek stockholder approval of any Business Combination at a meeting called for such purpose at which stockholders may seek to convert their Public Shares into their pro rata share of the aggregate amount then on deposit in the Trust Account (net of taxes payable). The Company will proceed with a Business Combination only if it has net tangible assets of at least $5,000,001 upon consummation of the Business Combination and a majority of the outstanding Shares of the Company voted, are voted in favor of the Business Combination. Notwithstanding the foregoing, a Public Stockholder (as defined below), together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d) (3) of the Securities Exchange Act of 1934, as amended) will be restricted from seeking conversion rights with respect to 25% or more of the Public Shares without the Company’s prior written consent. In order to determine whether a stockholder is acting in concert or as a group with another stockholder, each Public Stockholder seeking to exercise conversion rights will be required to certify whether such stockholder is acting in concert or as a group with any other stockholder. These certifications, together with any other information relating to stock ownership available at that time, will be the sole basis on which the above-referenced determination is made. If it is determined that a stockholder is acting in concert or as a group with any other stockholder, the stockholder will be notified of the determination and will be offered an opportunity to dispute the finding. The final determination as to whether a stockholder is acting in concert or as a group with any other stockholder will ultimately be made in good faith by the Company’s board of directors. In connection with any stockholder vote required to approve any Business Combination, the Sponsors agreed (1) to vote any of their respective Founders’ Shares (see Note 5), Sponsors Shares and any Public Shares they may acquire in the aftermarket in favor of the initial Business Combination, and (2) not to convert any of their respective Founders’ Shares, Sponsors Shares and any Public Shares they may acquire in the aftermarket into cash held in the Trust Account.

The Company’s amended and restated Certificate of Incorporation provides that the Company will continue in existence only until December 26, 2014. If the Company is unable to consummate its initial Business Combination by such date, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten (10) business days thereafter, redeem 100% of the outstanding public shares held by the public stockholders of the Company’ (“Public Stockholders”), at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including any interest not previously released to us or otherwise reserved for payment of expenses incurred in connection with seeking a Business Combination or income taxes payable with respect to interest earned on the trust account, divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and its board of directors dissolve and liquidate, subject (in the case of (ii) and (iii) above) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such event, the Public Stockholders will be entitled to receive a full pro rata interest in the Trust Account ($8.36 per share), plus any pro rata interest earned on the Trust Fund not previously released to the Company.

The Company incurred a net loss of $341,919 for the nine months ended September 30, 2014. At September 30, 2014, the Company had $22,330 of cash and a working capital deficit of $283,229. The Company’s accumulated deficit aggregated $537,683 at September 30, 2014. The Company has principally financed its operations from inception using proceeds from sales of its equity securities in the Public Offering (see Note 3) and loans from shareholders. The Company anticipates that in order to fund its working capital requirements, it will need to use all of the remaining funds not held in trust and the interest earned on the funds held in the Trust Account. The Company may need to enter into contingent fee arrangements with its vendors or raise additional capital through loans or additional investments from its Sponsors, officers, directors, or third parties. None of the Sponsors, officers or directors is under any obligation to advance funds to, or invest in, the Company. Accordingly, significant uncertainties include the inability to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and controlling overhead expenses. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recovery of assets or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

As an early stage company, the Company has a limited operating history and is subject to all the risks and uncertainties inherent in the initial organization, expenditures, complications and delays inherent in an early stage company. As of September 30, 2014, the Company had not yet commenced any operations or generated any revenues. All activity through September 30, 2014 relates to the Company’s formation, the Public Offering and searching for a target business with which to complete a Business Combination. There can be no assurance that the Company’s efforts will be successful.

MergeWorthRx Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2014

(Unaudited)

Note 2 - Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion, however, that the accompanying unaudited interim condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the SEC, which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis, for the period from January 22, 2013 (inception) through December 31, 2013. The financial information as of December 31, 2013 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the period from January 22, 2013 (inception) through December 31, 2013. The interim results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or for any future interim periods.

Principals of Consolidation

The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

Investments Held in Trust

The amounts held in the Trust Account represent substantially all of the proceeds of the Public Offering and are classified as restricted assets since such amounts can only be used by the Company in connection with the consummation of a Business Combination. The funds held in the Trust Account are invested primarily in highly liquid Treasury securities.

Loss Per Share

Loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period, excluding common stock subject to forfeiture. The Company has not considered the effect of the option to purchase 660,000 shares of common stock (see Note 5) in the calculation of diluted loss per share, since the option is contingent upon the occurrence of future events.

Use of Estimates

The preparation of unaudited interim condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited interim condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates. Significant estimates include the value of the share purchase options issued to the underwriter in the Public Offering.

MergeWorthRx Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2014

(Unaudited)

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions, which at times may exceed the Federal depositary insurance coverage of $250,000. At September 30, 2014, the Company had not experienced losses on these accounts and management believes the Company was not exposed to significant risks on such accounts.

Common Stock Subject to Possible Redemption

The Company accounts for its shares subject to possible conversion in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable common shares (including shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, shares are classified as stockholders’ equity. The Company’s shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2014 and December 31, 2013, the shares subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of the Company’s condensed consolidated balance sheet.

Income Tax

The Company accounts for income taxes under ASC Topic 740 “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company is required to file income tax returns in the United States (federal) and in various state and local jurisdictions. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material changes to its financial position.

The Company’s policy for recording interest and penalties associated with audits is to record such expense as a component of income tax expense. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

Recent Accounting Pronouncements

In June 2014, the FASB issued Accounting Standards Update 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements (“ASU 2014-10”). ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company adopted ASU 2014-10 during the nine months ended September 30, 2014, thereby no longer presenting or disclosing any information required by Topic 915.

In August 2014, the FASB, issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 provides guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendments in ASU 2014-15 are effective for annual reporting periods ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company will adopt the methodologies prescribed by ASU 2014-15 by the date required, and does not anticipate that the adoption of ASU 2014-15 will have a material effect on its financial position or results of operations.

Subsequent Events

The Company evaluates events that have occurred after the balance sheet date of September 30, 2014, through the date which these financial statements were publically available. Based upon the review, except as discussed in Note 7, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.

MergeWorthRx Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2014

(Unaudited)

Note 3 — Public Offering and Private Placement

On July 2, 2013, the Company consummated the Public Offering of 6,600,000 Public Shares. The Public Shares were sold at an offering price of $8.00 per share, generating gross proceeds of $52,800,000. Net proceeds, after the underwriters’ discount and other costs of the offering deducted at closing, were $50,800,892.

Concurrent with the Public Offering, the Company consummated the private sale to certain of its Sponsors of 634,250 Sponsors Shares at a price of $8.00 per share, generating total gross proceeds of $5,074,000. The Sponsors Shares are identical to the Public Shares except that the purchasers have agreed not to transfer, assign or sell any of the Sponsors Shares (except to certain permitted transferees) until 30 days after the completion of the Company’s initial Business Combination.

In connection with the Public Offering, the Company granted the underwriters a 45-day option to purchase up to 990,000 Additional Shares to cover over-allotments. On July 3, 2013, the underwriters exercised the over-allotment option in full. On July 8, 2013, the Company completed the sale of 990,000 Additional Shares. The Additional Shares were sold at the offering price of $8.00 per share, generating gross proceeds to the Company of $7,920,000, and proceeds net of the underwriters' discount of $7,642,800. Simultaneously with the closing of the sale of the Additional Shares, the Company raised, via private placement, an additional $633,600 through the sale of an additional 79,200 Sponsors Shares at $8.00 per share to certain of its Sponsors.

The Company deposited proceeds from these sales of $63,452,400, into the Trust Account maintained by Continental Stock Transfer & Trust Company acting as the trustee. The funds will not be released from the Trust Account until the earlier of the completion of an Initial Business Combination and the Company’s redemption of the 100% of the outstanding Public Shares upon the failure by the Company to consummate an Initial Business Combination on or before December 26, 2014. The remaining proceeds of $698,892 were released to the Company. As of September 30, 2014, the Company holds a total of $63,452,938 in the Trust Account, or $8.36 per Public Share.

Note 4 — Related Party Advance

On September 3, 2014, the Company’s President and Chief Operating Officer advanced $100,030 for merger transaction-related costs directly to a vendor on the Company’s behalf. The advance is non-interest bearing, unsecured and due upon the successful completion of the Merger.

Note 5 — Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2014, there are no shares of preferred stock issued or outstanding.

Common Stock

The Company is authorized to issue 100,000,000 shares of Common Stock with a par value of $0.0001 per share.

In connection with the organization of the Company, on February 26, 2013, a total of 1,725,000 shares (“Founders’ Shares”) of the Company’s Common Stock were sold to the Sponsors at a price of approximately $0.015 per share for an aggregate of $25,000.

Effective June 26, 2013, the Company’s Board of Directors authorized a stock dividend of 0.1 shares for each outstanding share of Common Stock. All references in the accompanying financial statements to the number of shares of Common Stock have been retroactively restated to reflect this stock dividend. On June 26, 2013, the Founders’ Shares were placed in escrow with Continental Stock Transfer & Trust Company, acting as escrow agent. Subject to certain limited exceptions, 50% of the Founders’ Shares will be released from escrow six months after the closing of the initial Business Combination, and the remaining 50% of the Founders’ shares will be released from escrow one year after the closing of the initial Business Combination.

MergeWorthRx Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2014

(Unaudited)

The Founders’ shares included an aggregate of 247,500 shares, which were subject to forfeiture if the over-allotment option was not exercised by the underwriters such that the Founders would own 20% of the outstanding shares of the Company, excluding the Sponsors’ shares after the consummation of the Public Offering. As a result of EarlyBirdCapital, Inc. (“EBC”), the representative of the underwriters in the Public Offering, exercising the overallotment option in full, such shares are no longer subject to forfeiture.

Share Purchase Options

On July 2, 2013, the Company issued share purchase options (“Options”), for an aggregate of $100, to EBC and its designees to purchase an aggregate of 660,000 common shares at an exercise price of $8.00 per share. The Options are exercisable commencing on consummation of the Company’s initial Business Combination, and will expire on June 26, 2018. The shares issuable upon exercise of these Options are identical to the Public Shares sold in the Public Offering.

The Company accounted for the fair value of the Options, inclusive of the receipt of $100 cash payment, as an expense of the Public Offering resulting in a charge directly to stockholders’ equity. The Company estimated that the fair value of these Options was approximately $1,739,000 (or $2.64 per share) using a Black-Scholes option-pricing model. The fair value of the Options granted to EBC and its designees was estimated as of June 26, 2013 using the following assumptions: (1) expected volatility of 35%, (2) risk- free interest rate of 1.42% and (3) expected life of five years. The Options may be exercised for cash or on a “cashless” basis, at the holders’ option such that the holders may use the appreciated value of the Options (the difference between the exercise price of the shares underlying the Options and the market price of the underlying shares of common stock) to exercise the Options without the payment of any cash. The holders of the Options are entitled to certain demand and piggyback registration rights. The Company will have no obligation to net cash settle the exercise of the Options. The holders of the Options are not entitled to exercise the Options unless a registration statement covering the shares underlying the Options is effective or Options will expire worthless.

Note 6 - Fair Value Measurements

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at September 30, 2014 and December 31, 2013, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level		September 30, 2014		December 31, 2013
Assets:
Investments held in trust		1	$	63,452,938	$	63,452,417

MergeWorthRx Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2014

(Unaudited)

Note 7 – Subsequent Event

On October 14, 2014, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), pursuant to which the Company agreed to an all-stock merger (the “Merger”) between Anvil Merger Sub, Inc., a newly formed wholly-owned subsidiary of the Company (“Merger Sub”), and AeroCare Holdings, Inc. (“AeroCare”), a leading U.S. healthcare services company focused on providing respiratory/home oxygen and sleep therapy services directly to patients.

The aggregate consideration to be paid to AeroCare equity holders will consist of 11,296,079 shares of the Company’s Common Stock and 511,636 options to purchase shares of the Company’s Common Stock, such that AeroCare’s equity holders will own, at a minimum, 53% of the post-merger Company, subject to adjustment in accordance with the terms of the Merger Agreement. In addition, AeroCare’s existing equity holders will be entitled to receive up to an aggregate of 3,588,517 additional shares of the Company’s Common Stock upon the achievement of certain financial targets by the combined company during the three fiscal years following the Merger.

The Merger Agreement provides that of the total shares of the Company’s Common Stock issuable to AeroCare equity holders, 1,016,746 shares will be placed into an escrow account to secure AeroCare equity holders’ indemnification obligations under the Merger Agreement. All Escrow Shares not subject to claims shall be released on the date that is 12 months after the closing of the Merger.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings. References to “we”, “us”, “our” or the “Company” are to MergeWorthRx Corp., except where the context requires otherwise. The following discussion should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this report.

Overview

We are a blank check company, formed on January 22, 2013, for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar Business Combination with one or more businesses or entities. We are focusing our efforts to identify a prospective target business in the healthcare industry, with specific focus on the specialty pharmacy, infusion pharmacy and/or drug distribution sectors based in the United States. However, we are not limited to a particular geographic region or business industry or section and we may pursue opportunities in any location or business sector or industry that we believe is attractive.

On July 2, 2013, we consummated the public offering (the “Public Offering”) of 6,600,000 shares (the “Public Shares”) of common stock, $.0001 par value per share (“Common Stock”). The Public Shares were sold at an offering price of $8.00 per share, generating gross proceeds of $52,800,000.

Simultaneously with the consummation of the Public Offering, we consummated the private placement to certain of our initial stockholders (“Private Placement”) of 634,250 shares of Common Stock (“Sponsors Shares”) at a price of $8.00 per share, generating total gross proceeds of $5,074,000. The Sponsors Shares are identical to the Public Shares. The purchasers have agreed not to transfer, assign or sell any of the Sponsors Shares (except to certain permitted transferees) until 30 days after the completion of our initial Business Combination.

In connection with the Public Offering, we granted the underwriters a 45-day option to purchase up to an additional 990,000 Public Shares to cover over-allotments. On July 3, 2013, the underwriters exercised the over-allotment option in full. On July 8, 2013, we completed the sale of 990,000 Additional Shares at the offering price of $8.00 per share, generating gross proceeds to us of $7,920,000, and proceeds net of the underwriters' discount of $7,642,800. Simultaneously with the closing of the sale of the Additional Shares, we raised, via private placement, an additional $633,600 through the sale of an additional 79,200 shares (at $8.00 per share) to Anthony Minnuto, our Executive Chairman.

We deposited substantially all of the net proceeds of these sales, or $63,452,400, into the trust account at UBS Financial Services, Inc. (the “Trust Account”) maintained by Continental Stock Transfer & Trust Company acting as the trustee. Except as described in final prospectus relating to the Public Offering, these proceeds will not be released until the earlier of the completion of a Business Combination and our redemption of 100% of the outstanding public shares of common stock upon our failure to consummate a Business Combination on or before December 26, 2014. As of September 30, 2014, we hold a total of $63,452,938 in the Trust Account, or $8.36 per share.

The Merger is conditioned upon approval of our shareholders and obtaining customary governmental and regulatory approvals and other standard closing conditions. It is anticipated that the Merger will close as soon as possible after satisfaction of the closing conditions, which is expected to occur by the end of the fourth quarter of 2014. No assurance can be given that the closing conditions will be met or that the Merger will be consummated.

Results of Operations

Our entire activity since inception up to the closing of our initial public offering on July 2, 2013 was in preparation for that event. Since the offering, our activity has been limited to the evaluation of Business Combination candidates and work in connection with seeking to consummate the Merger with AeroCare, and we will not be generating any operating revenues until the closing and completion of the Merger. We expect to generate small amounts of non-operating income in the form of interest income on cash and cash equivalents. Interest income is not expected to be significant in view of current low interest rates on risk-free investments (U.S. Treasury securities). We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after this period.

For the three and nine months ended September 30, 2014, we had net losses of approximately $178,411 and $341,919 respectively, compared to $75,262 and $83,750 during the three months ended September 30, 2013 and the period from January 22, 2013 (inception) through September 30, 2013, respectively. Net loss during the three and nine months ended September 30, 2014 mainly consists of expenses incurred in connection with the evaluation of Business Combination candidates and operating costs. Net loss for the three and nine months ended September 30, 2013 mainly consists of public company expenses, including filing fees, directors and officers insurance, and legal and professional fees.

Liquidity and Capital Resources

We presently have no revenue, have had losses since inception and have no other operations other than the active solicitation of a target business with which to complete a Business Combination. We have relied upon the sale of our securities and loans from our officers and directors to fund our operations.

As of September 30, 2014, we have cash and cash equivalents of $22,330 available for working capital and $63,452,938 of cash held in trust, including interest.

Prior to the consummation of our initial Business Combination, we will have available to us the $22,330 of proceeds held outside the trust account (as of September 30, 2014) and all interest income on the balance of the trust account (less amounts released to us to pay taxes or dissolution expenses) that will be released to us to fund our working capital requirements. Should this amount be insufficient, we may need to raise additional capital through loans or additional investments from our initial shareholders, officers, directors, or third parties. None of the initial shareholders, officers or directors is under any obligation to advance funds to, or invest in, us. We may not have sufficient funds to allow us to operate until December 26, 2014, which is the date we are required to liquidate, assuming that a Business Combination is not consummated during that time. Over this time period, we will be using these funds for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination. We anticipate that we will incur approximately:

	•	$155,000 of expenses for legal, accounting and other third-party expenses attendant to the due diligence related to the AeroCare proposed merger and preparation and filing of proxy materials to obtain shareholder approval of our Business Combination;
	•	$10,000 of reimbursement for out-of-pocket expenses incurred by our officers, directors and sponsors in connection with the completion of our Business Combination;
	•	$12,000 of expenses in legal, accounting and other related fees relating to our SEC reporting obligations; and
	•	$15,000 for general working capital that will be used for corporate administration, filing and other regulatory fees, miscellaneous expenses, liquidation obligations and reserves.

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less amounts released to us for working capital purposes or to pay taxes and deferred underwriting commissions) to consummate our initial business combination. We may use all interest earned on the trust account for purposes of working capital, to pay taxes and dissolution expenses. To the extent that our capital stock or debt is used, in whole or in part, as consideration to consummate our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As stated above, in order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our initial shareholder, officers and directors may, but are not obligated to, loan us funds as may be required. If we consummate an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment, other than the interest income earned on such proceeds.

We may need to raise additional funds in order to meet the expenditures required for operating our business. Due to the costs of undertaking in-depth due diligence, regulatory compliance, and negotiating potential initial business combinations, we may have insufficient funds available to operate our business prior to our initial business combination and borrowing additional funds for working capital from our officers and directors. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with and contemporaneous with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. In the current economic environment, it has become especially difficult to obtain acquisition financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2014.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The net proceeds of our IPO, including amounts in the trust account, have been invested in U.S. government Treasury securities with a maturity of 180 days or less. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2014, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive and principal financial and accounting officers concluded that during the period covered by this report, our disclosure controls and procedures were effective.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities

On July 2, 2013, we consummated the Public Offering of 6,600,000 Public Shares. The Public Shares were sold at an offering price of $8.00 per share, generating gross proceeds of $52,800,000.

Simultaneously with the consummation of the Public Offering, we consummated the Private Placement to our Sponsors of 634,250 Sponsors Shares at a price of $8.00 per share, generating total gross proceeds of $5,074,000. The Sponsors Shares are identical to the Public Shares, except that the purchasers have agreed not to transfer, assign or sell any of the Sponsors Shares (except to certain permitted transferees) until 30 days after the completion of our initial Business Combination.

On July 8, 2013, we completed the sale of 990,000 Additional Shares pursuant to the July 3, 2013 exercise in full of the over-allotment option granted to the underwriters of our Public Offering. The Additional Shares were sold at the offering price of $8.00 per share, generating net of the underwriters' discount proceeds in aggregate in the amount of $7,642,800. Simultaneously with the closing of the sale of the Additional Shares, we raised, via private placement, an additional $633,600 through the sale of an additional 79,200 shares (at $8.00 per share) to certain of our initial stockholders.

For a description of the use of the proceeds generated in our initial public offering, see Part I, Item 2 of this Form 10-Q.

Item 5. Other Information

None.

Item 6. Exhibits.

	31		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.1		Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.1		Certification of Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	101.INS		XBRL Instance Document.
	101.SCH		XBRL Taxonomy Extension Schema Document.
	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
	101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
	101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

SIGNATURES

Pursuant to with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MERGEWORTHRX CORP.

By:	/s/ ANTHONY MINNUTO
Anthony Minnuto
Executive Chairman of the Board
(Principal executive officer)

By:	/s/ CHARLES F. FISTEL
Charles F. Fistel
Chief Executive Officer, Chief Financial Officer and Treasurer
(Principal financial and accounting officer)

Date: November 13, 2014

MergeWorthRx Corp. 10-Q