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ý
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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95-4472349
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Trading Symbol
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Name of Each Exchange on Which Registered
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Common Stock, $0.001 par value per share
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AMEH
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Nasdaq Capital Market
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Large accelerated filer ¨
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Accelerated filer x
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Non-accelerated filer ¨
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Smaller reporting company ¨
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Emerging growth company ¨
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Page
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ITEM
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AIPBP
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All-Inclusive Population-Based Payments
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AMG
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AMG, a Professional Medical Corporation
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AMH
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ApolloMed Hospitalists
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AMM
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Apollo Medical Management, Inc
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APC
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Allied Pacific of California IPA
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BAHA
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Bay Area Hospitalist Associates
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CDSC
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Concourse Diagnostic Surgery Center, LLC
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CQMC
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Critical Quality Management Corp
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CSI
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College Street Investment LP, a California limited partnership
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DMG
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Diagnostic Medical Group
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HSMSO
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Health Source MSO Inc. a California corporation
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ICC
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AHMC International Cancer Center, a Medical Corporation
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LMA
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LaSalle Medical Associates
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MMG
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Maverick Medical Group Inc
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MPP
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Medical Property Partners
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NGACO
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Next Generation Accountable Care Organization
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NMM
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Network Medical Management Inc
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PASC
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Pacific Ambulatory Health Care, LLC
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PMIOC
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Pacific Medical Imaging and Oncology Center Inc
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SCHC
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Southern California Heart Centers
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Tag-2
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Tag-2 Medical Investment Group LLC
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UCAP
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Universal Care Acquisition Partners, LLC
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UCI
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Universal Care, Inc
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Item 1.
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Business
|
•
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IPAs, which contract with physicians and provide care to Medicare, Medicaid, commercial and dual-eligible patients on a risk- and value-based fee basis;
|
•
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MSOs, which provide management, administrative and other support services to our affiliated physician groups such as IPAs;
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•
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APAACO, which participates in the Medicare Shared Savings Program (the “MSSP”) sponsored by CMS and focuses on providing high-quality and cost-efficient care to Medicare fee-for-service (“FFS”) patients;
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•
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Outpatient clinics providing specialty care, including an ambulatory surgery center and a specialty clinic that focuses on cardiac care and diagnostic testing;
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•
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Hospitalists, which include our employed and contracted physicians who focus on the delivery of comprehensive medical care to hospitalized patients; and
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•
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A cloud-based population health management IT platform, which includes digital care plans, a case management module, connectivity with multiple healthcare tracking devices and integrated clinical data.
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•
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Capitation payments, including payments made by CMS from the NGACO Model;
|
•
|
Risk pool settlements and incentives;
|
•
|
Management fees, including stipends from hospitals and percentages of collections; and
|
•
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FFS reimbursements.
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•
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NMM;
|
•
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AMM;
|
•
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APAACO; and
|
•
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Apollo Care Connect.
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•
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Physician recruiting;
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•
|
Physician and health plan contracting;
|
•
|
Medical management, including utilization management and quality assurance;
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•
|
Provider relations;
|
•
|
Member services, including annual wellness evaluations; and
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•
|
Pre-negotiating contracts with specialists, labs, imaging centers, nursing homes and other vendors.
|
•
|
Payment Mechanism #1: Normal FFS.
|
•
|
Payment Mechanism #2: Normal FFS plus Infrastructure payments of $6 Per Beneficiary Per Month (“PBPM”).
|
•
|
Payment Mechanism #3: Population-Based Payments (“PBP”). PBP provide ACOs with a monthly payment to support ongoing ACO activities. ACO participants and preferred providers must agree to percentage payment fee reductions, which are then used to estimate a monthly PBP to be received by the ACO.
|
•
|
Payment Mechanism #4: All-Inclusive Population-Based Payments (“AIPBP”). Under this mechanism, CMS will estimate the total annual expenditures of the ACO’s aligned beneficiaries and pay that projected amount in PBPM payments. ACOs in AIPBP may have alternative compensation arrangements with their providers, including 100% FFS, discounted FFS, capitation or case rates.
|
•
|
AP-AMH may never be able to repay the AP-AMH Loan.
|
•
|
Whether or not AP-AMH pays us, we will be obligated to pay principal and interest on the secured senior credit facility we are entering into in order to make the AP-AMH Loan.
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•
|
The terms of the credit agreement we will need to secure could restrict our operations, particularly our ability to respond to changes in our business or to take specified actions, and an event of default under such credit agreement could harm our business.
|
•
|
In connection with the credit facility, the creditor will have a first priority perfected security interest over all of our assets and those of our subsidiaries, and such creditor would be able to foreclose on our assets if we default on our obligations under the credit facility and security agreement.
|
•
|
AP-AMH will be required to fund APC losses and deficits but may not have the funds to do so.
|
•
|
There may be a timing disconnect between APC achieving net income subject to the Series A Dividend, declaring and paying dividends to AP-AMH and AP-AMH’s payments to the Company, and any failure to pay or late payment of dividends could materially impact our financial results.
|
•
|
The impact of the APC Transactions may prove to be negative in future periods.
|
•
|
If there is a change in accounting principles or the interpretation thereof affecting our anticipated accounting treatment for the APC Transactions, it could impact our earnings per share.
|
•
|
The Series A Dividends payable to AP-AMH must be declared by the APC board, and that board could fail to do so.
|
•
|
APC may be prohibited from paying or unable to pay the Series A Dividends, including under the California Corporations Code, which could cause the APC Transactions structure to collapse.
|
•
|
We may have no recourse against AP-AMH if it is unable to make its payments to the Company and NMM.
|
•
|
The entitlement to receive the Series A Dividend will not necessarily mean that AP-AMH will be distributing all of the net income from APC’s Healthcare Services business and assets.
|
•
|
Regulators could determine that the post-APC Transactions consolidated structure amounts to the Company violating California’s corporate practice of medicine doctrine.
|
•
|
The Company could be subject to the California Finance Lenders Law as a result of the AP-AMH Loan.
|
•
|
We may be deemed an investment company, which could impose on us burdensome compliance requirements and restrict our activities.
|
•
|
We may not be able to successfully identify suitable strategic opportunities, complete desired strategic transactions, or realize their expected benefits. In addition, we compete for strategic transactions with other potential players, some of whom may have greater resources than we do. This competition may intensify due to the ongoing consolidation in the healthcare industry, which may increase our costs to pursue such opportunities.
|
•
|
We may not be able to establish suitable strategic relationships and may fail to integrate them into our business. We cannot be certain of the extent of any unknown, undisclosed or contingent liabilities of any acquired business, including liabilities for failure to comply with applicable laws. We may incur material liabilities for past activities from strategic relationships. Also, depending on the location of the strategic transactions, we may be required to comply with laws and regulations that may differ from those of California, the state in which we currently operate.
|
•
|
We may form strategic relationships with medical practices that operate with lower profit margins as compared with ours or which have a different payor mix than our other practice groups, which would reduce our overall profit margin. Depending upon the nature of the local market, we may not be able to implement our business model in every local market that we enter, which could negatively impact our revenues and financial condition.
|
•
|
We may incur substantial costs to complete strategic transactions, integrate strategic relationships into our business, or expand our operations, including hiring more employees and engaging other personnel, to provide services to additional patients that we are responsible for managing pursuant to the new relationships. If such relationships terminate or diminish before we can realize their expected benefits, any costs that we have already incurred may not be recovered.
|
•
|
If we finance strategic transactions by issuing our equity securities or securities convertible thereto, our existing stockholders could be diluted. If we finance strategic transactions with debt, it could result in higher leverage and interest costs for us.
|
•
|
difficulties in coping with demands on management related to the increased size of our business;
|
•
|
difficulties in not diverting management’s attention from our daily operations;
|
•
|
difficulties in assimilating different corporate cultures and business practices;
|
•
|
difficulties in converting other entities’ books and records and conforming their practices to ours;
|
•
|
difficulties in integrating operating, accounting and information technology systems of other entities with ours and in maintaining uniform procedures, policies and standards, such as internal accounting controls;
|
•
|
difficulties in retaining employees who may be vital to the integration of the acquired entities; and
|
•
|
difficulties in maintaining contracts and relationships with payors of other entities.
|
•
|
the False Claims Act, that provide for penalties against entities and individuals which knowingly or recklessly make claims to Medicare, Medicaid, and other governmental healthcare programs, as well as third-party payors, that contain or are based upon false or fraudulent information;
|
•
|
a provision of the Social Security Act, commonly referred to as the “Anti-Kickback Statute,” that prohibits the knowing and willful offering, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration, in cash or in kind, in return for the referral or recommendation of patients for items and services covered, in or in part, by federal healthcare programs such as Medicare and Medicaid;
|
•
|
a provision of the Social Security Act, commonly referred to as the Stark Law or physician self-referral law, that (subject to limited exceptions) prohibits physicians from referring Medicare patients to an entity for the provision
|
•
|
a provision of the Social Security Act that provides for criminal penalties on healthcare providers who fail to disclose known overpayments;
|
•
|
a provision of the Social Security Act that provides for civil monetary penalties on healthcare providers who fail to repay known overpayments within 60 days of identification or the date any corresponding cost report was due, if applicable, and also allows improper retention of known overpayments to serve as a basis for False Claims Act violations;
|
•
|
provisions of the Social Security Act (emanating from the DRA) that require entities that make or receive annual Medicaid payments of $5 million or more from a single Medicaid program to provide its employees, contractors and agents with written policies and employee handbook materials on federal and state false claims acts and related statutes, that establish a new Medicaid Integrity Program designed to enhance federal and state efforts to detect Medicaid fraud, waste, and abuse, and that increase financial incentives for both states and individuals to bring fraud and abuse claims against healthcare companies;
|
•
|
state law provisions pertaining to anti-kickback, self-referral and false claims issues;
|
•
|
provisions of, and regulations relating to, HIPAA that provide penalties for knowingly and willfully executing a scheme or artifice to defraud a health-care benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services;
|
•
|
provisions of HIPAA and the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) limiting how covered entities, business associates and business associate sub-contractors may use and disclose PHI and the security measures that must be taken in connection with protecting that information and related systems, as well as similar or more stringent state laws;
|
•
|
federal and state laws that provide penalties for providers for billing and receiving payments from a governmental healthcare program for services unless the services are medically necessary and reasonable, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered;
|
•
|
state laws that provide for financial solvency requirements relating to risk-bearing organizations (“RBOs”), plan operations, plan-affiliate operations and transactions, plan-provider contractual relationships and provider-affiliate operations and transactions, such as California Business & Professions Code Section 1375.4 (§ 1375.4; Cal. Code Regs., tit. 28, § 1300.75.4 et seq.);
|
•
|
federal laws that provide for administrative sanctions, including civil monetary penalties for, among other violations, inappropriate billing of services to federal healthcare programs, payments by hospitals to physicians for reducing or limiting services to Medicare or Medicaid patients, or employing or contracting with individuals or entities who/which are excluded from participation in federal healthcare programs;
|
•
|
federal and state laws and policies that require healthcare providers to enroll in the Medicare and Medicaid programs before submitting any claims for services, to promptly report certain changes in its operations to the agencies that administer these programs, and to re-enroll in these programs when changes in direct or indirect ownership occur or in response to revalidation requests from Medicare and Medicaid;
|
•
|
state laws that prohibit general business entities from practicing medicine, controlling physicians’ medical decisions or engaging in certain practices, such as splitting fees with physicians;
|
•
|
state laws that require timely payment of claims, including §1371.38, et al, of the California Health & Safety Code, which imposes time limits for the payment of uncontested covered claims and required health care service plans to pay interest on uncontested claims not paid promptly within the required time period;
|
•
|
laws in some states that prohibit non-domiciled entities from owning and operating medical practices in such states; and
|
•
|
federal and state laws and regulations restricting the techniques that may be used to collect past due accounts from consumers, such as our patients, for services provided to the consumer.
|
•
|
state laws that require healthcare providers that assume professional and institutional risk (i.e., global risk) to either obtain a license under the Knox-Keene Health Care Service Plan Act of 1975 or receive an exemption from the Department of Managed Healthcare ("DMHC") for the contract(s) under which the entity assumes global risk.
|
•
|
Maintain, at all times, a minimum “cash-to-claims ratio” (which means the organization’s cash, marketable securities, and certain qualified receivables, divided by the organization’s total unpaid claims liability) of 0.75; and
|
•
|
Submit periodic reports to the DMHC containing various data and attestations regarding their performance and financial solvency, including IBNR calculations and documentation and attestations as to whether or not the organization (i) was in compliance with the “Knox-Keene Act” requirements related to claims payment timeliness, (ii) had maintained positive tangible net equity (“TNE”), and (iii) had maintained positive working capital.
|
•
|
variations in our operating results, such as actual or anticipated quarterly and annual increases or decreases in revenue, gross margin or earnings;
|
•
|
changes in our business, operations or prospects, including announcements relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments, or other events by us or our competitors;
|
•
|
announcements of acquisitions, dispositions and other corporate transactions as well as financings and other capital raising transactions;
|
•
|
developments, conditions or trends in the healthcare industry;
|
•
|
changes in the economic performance or market valuations of other healthcare-related companies;
|
•
|
general market conditions or domestic or international macroeconomic and geopolitical factors unrelated to our performance or financial condition, including economic or political instability, wars, civil unrest, terrorism, epidemics (including the recent novel coronavirus (COVID-19)) outbreak and natural disasters.
|
•
|
sales of stock by ApolloMed’s stockholders generally and ApolloMed’s larger stockholders, including insiders, in particular, including sale or distributions of large blocks of common stock by our executives and directors;
|
•
|
volatility and limitations in trading volumes of ApolloMed’s common stock and the stock market;
|
•
|
approval, maintenance and withdrawal of our and our affiliates’ certificates, permits, registration, licensure, certification and accreditation by the applicable regulatory or other oversight bodies;
|
•
|
our financing activities, including our ability to obtain financings and prices that we sell our equity securities, including notes convertible to and warrants to purchase shares of ApolloMed’s common stock;
|
•
|
failures to meet external expectations or management guidance;
|
•
|
changes in our capital structure and cash position;
|
•
|
analyst research reports on ApolloMed’s common stock, including analysts’ recommendations and changes in recommendations, price targets, and withdrawals of coverage;
|
•
|
departures and additions of our key personnel, including our officers or directors;
|
•
|
disputes and litigations related to intellectual properties, proprietary rights, and contractual obligations;
|
•
|
changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and
|
•
|
other events or factors, many of which may be out of our control.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
Indexed Returns
|
||||||||||
|
|
Years Ending
|
||||||||||
Company/Index
|
Base Period
12/31/2014 |
12/31/2015
|
12/31/2016
|
12/31/2017
|
12/31/2018
|
12/31/2019
|
||||||
ApolloMed
|
1.00
|
|
0.06
|
|
0.67
|
|
4.33
|
|
3.41
|
|
3.11
|
|
Russell 3000 Index
|
1.00
|
|
—
|
|
0.13
|
|
0.37
|
|
0.30
|
|
0.70
|
|
S&P 500 Healthcare
|
1.00
|
|
0.07
|
|
0.04
|
|
0.27
|
|
0.35
|
|
0.63
|
|
Item 6.
|
Selected Financial Data
|
APOLLO MEDICAL HOLDINGS, INC.
|
|||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Years ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitation, net
|
$
|
454,168,024
|
|
|
$
|
344,307,058
|
|
|
$
|
272,921,240
|
|
|
$
|
247,639,181
|
|
|
$
|
247,244,135
|
|
Risk pool settlements and incentives
|
51,097,661
|
|
|
100,927,841
|
|
|
44,598,373
|
|
|
22,641,884
|
|
|
37,656,242
|
|
|||||
Management fee income
|
34,668,358
|
|
|
49,742,755
|
|
|
26,983,695
|
|
|
24,774,941
|
|
|
20,834,222
|
|
|||||
Fee-for-service, net
|
15,475,264
|
|
|
19,703,999
|
|
|
7,449,249
|
|
|
9,163,970
|
|
|
6,437,354
|
|
|||||
Other income
|
5,208,790
|
|
|
5,226,099
|
|
|
4,403,373
|
|
|
1,714,939
|
|
|
952,752
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
560,618,097
|
|
|
519,907,752
|
|
|
356,355,930
|
|
|
305,934,915
|
|
|
313,124,705
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services
|
467,804,899
|
|
|
361,132,111
|
|
|
273,453,287
|
|
|
255,048,120
|
|
|
238,088,985
|
|
|||||
General and administrative expenses
|
41,482,375
|
|
|
43,353,787
|
|
|
26,249,532
|
|
|
20,759,436
|
|
|
22,277,282
|
|
|||||
Depreciation and amortization
|
18,280,198
|
|
|
19,303,179
|
|
|
19,075,353
|
|
|
18,114,440
|
|
|
9,085,312
|
|
|||||
Provision for doubtful accounts
|
(1,363,363
|
)
|
|
3,887,647
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairment of goodwill and intangible assets
|
1,994,000
|
|
|
3,798,866
|
|
|
2,431,791
|
|
|
324,306
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total expenses
|
528,198,109
|
|
|
431,475,590
|
|
|
321,209,963
|
|
|
294,246,302
|
|
|
269,451,579
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from operations
|
32,419,988
|
|
|
88,432,162
|
|
|
35,145,967
|
|
|
11,688,613
|
|
|
43,673,126
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from equity method investments
|
(6,900,859
|
)
|
|
(8,125,285
|
)
|
|
(1,112,541
|
)
|
|
4,748,542
|
|
|
1,206,654
|
|
|||||
Interest expense
|
(4,733,256
|
)
|
|
(560,515
|
)
|
|
(79,689
|
)
|
|
(61,589
|
)
|
|
(209,929
|
)
|
|||||
Interest income
|
2,023,873
|
|
|
1,258,638
|
|
|
1,015,204
|
|
|
504,696
|
|
|
208,917
|
|
|||||
Change in fair value of derivative instrument
|
—
|
|
|
—
|
|
|
(44,886
|
)
|
|
1,722,221
|
|
|
(833,333
|
)
|
|||||
Gain on settlement of preexisting note receivable from ApolloMed
|
—
|
|
|
—
|
|
|
921,938
|
|
|
—
|
|
|
—
|
|
|||||
Gain from investments – fair value adjustments
|
—
|
|
|
—
|
|
|
13,697,018
|
|
|
—
|
|
|
—
|
|
|||||
Other income
|
3,030,203
|
|
|
1,622,131
|
|
|
168,102
|
|
|
233,726
|
|
|
1,931,635
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total other (expense) income, net
|
(6,580,039
|
)
|
|
(5,805,031
|
)
|
|
14,565,146
|
|
|
7,147,596
|
|
|
2,303,944
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before provision for income taxes
|
25,839,949
|
|
|
82,627,131
|
|
|
49,711,113
|
|
|
18,836,209
|
|
|
45,977,070
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Provision for income taxes
|
8,166,632
|
|
|
22,359,640
|
|
|
3,886,785
|
|
|
8,816,412
|
|
|
19,297,447
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
17,673,317
|
|
|
60,267,491
|
|
|
45,824,328
|
|
|
10,019,797
|
|
|
26,679,623
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) attributable to noncontrolling interests
|
3,556,772
|
|
|
49,432,489
|
|
|
20,022,486
|
|
|
(1,433,730
|
)
|
|
13,862,522
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Apollo Medical Holdings, Inc.
|
$
|
14,116,545
|
|
|
$
|
10,835,002
|
|
|
$
|
25,801,842
|
|
|
$
|
11,453,527
|
|
|
$
|
12,817,101
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share – basic
|
$
|
0.41
|
|
|
$
|
0.33
|
|
|
$
|
1.01
|
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share – diluted
|
$
|
0.39
|
|
|
$
|
0.29
|
|
|
$
|
0.90
|
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares of common stock outstanding – basic
|
34,708,429
|
|
|
32,893,940
|
|
|
25,525,786
|
|
|
360,634,339
|
|
|
256,619,159
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares of common stock outstanding – diluted
|
36,403,279
|
|
|
37,914,886
|
|
|
28,661,735
|
|
|
367,945,833
|
|
|
263,734,916
|
|
CONSOLIDATED BALANCE SHEET DATA
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
103,189,328
|
|
|
$
|
106,891,503
|
|
|
$
|
99,749,199
|
|
|
$
|
54,824,580
|
|
|
$
|
59,014,715
|
|
Working capital
|
223,644,503
|
|
|
100,843,145
|
|
|
34,557,563
|
|
|
30,530,467
|
|
|
32,439,944
|
|
|||||
Total assets
|
728,713,347
|
|
|
512,999,049
|
|
|
490,635,793
|
|
|
349,998,962
|
|
|
362,486,567
|
|
|||||
Long-term debt, net of current portion and deferred financing costs
|
232,172,134
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total shareholders’ equity
|
192,335,148
|
|
|
181,544,152
|
|
|
164,183,426
|
|
|
(391,694
|
)
|
|
8,180,159
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
1.
|
The Company loaned AP-AMH $545.0 million pursuant to a ten-year secured loan agreement. The loan bears interest at a rate of 10% per annum simple interest, is not prepayable (except in certain limited circumstances), requires quarterly payments of interest only in arrears, and is secured by a first priority security interest in all of AP-AMH's assets, including the shares of APC Series A Preferred Stock to be purchased by AP-AMH. To the extent that AP-AMH is unable to make any interest payment when due because it has received dividends on the APC Series A Preferred Stock insufficient to pay in full such interest payment, then the outstanding principal amount of the loan will be increased by the amount of any such accrued but unpaid interest, and any such increased principal amounts will bear interest at the rate of 10.75% per annum simple interest.
|
2.
|
AP-AMH purchased 1,000,000 shares of APC Series A Preferred Stock for an aggregate consideration of $545.0 million in a private placement. Under the terms of the APC Certificate of Determination of Preferences of Series A Preferred Stock (the "Certificate of Determination"), AP-AMH is entitled to receive preferential, cumulative dividends that accrue on a daily basis and that are equal to the sum of (i) APC's net income from Healthcare Services (as defined in the Certificate
|
3.
|
APC purchased 15,015,015 shares of the Company's common stock for total consideration of $300.0 million in private placement. In connection therewith, the Company granted APC certain registration rights with respect to the Company's common stock that APC purchased, and APC agreed that APC votes in excess of 9.99% of the Company's then outstanding shares will be voted by proxy given to the Company's management, and that those proxy holders will cast the excess votes in the same proportion as all other votes cast on any specific proposal coming before the Company's stockholders.
|
4.
|
The Company licensed to AP-AMH the right to use certain tradenames for certain specified purposes for a fee equal to a percentage of the aggregate gross revenues of AP-AMH. The license fee is payable out of any Series A Preferred Stock dividends received by AP-AMH from APC.
|
5.
|
Through its subsidiary, NMM, the Company agreed to provide certain administrative services to AP-AMH for a fee equal to a percentage of the aggregate gross revenues of AP-AMH. The administrative fee also is payable out of any APC Series A Preferred Stock dividends received by AP-AMH from APC.
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Revenue
|
|
|
|
|
|
|
|
|||||||
Capitation, net
|
$
|
454,168,024
|
|
|
$
|
344,307,058
|
|
|
$
|
109,860,966
|
|
|
32
|
%
|
Risk pool settlements and incentives
|
51,097,661
|
|
|
100,927,841
|
|
|
(49,830,180
|
)
|
|
(49
|
)%
|
|||
Management fee income
|
34,668,358
|
|
|
49,742,755
|
|
|
(15,074,397
|
)
|
|
(30
|
)%
|
|||
Fee-for-services, net
|
15,475,264
|
|
|
19,703,999
|
|
|
(4,228,735
|
)
|
|
(21
|
)%
|
|||
Other income
|
5,208,790
|
|
|
5,226,099
|
|
|
(17,309
|
)
|
|
—
|
%
|
|||
Total revenue
|
560,618,097
|
|
|
519,907,752
|
|
|
40,710,345
|
|
|
8
|
%
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|||||||
Cost of services
|
467,804,899
|
|
|
361,132,111
|
|
|
106,672,788
|
|
|
30
|
%
|
|||
General and administrative expenses
|
41,482,375
|
|
|
43,353,787
|
|
|
(1,871,412
|
)
|
|
(4
|
)%
|
|||
Depreciation and amortization
|
18,280,198
|
|
|
19,303,179
|
|
|
(1,022,981
|
)
|
|
(5
|
)%
|
|||
Provision for doubtful accounts
|
(1,363,363
|
)
|
|
3,887,647
|
|
|
(5,251,010
|
)
|
|
(135
|
)%
|
|||
Impairment of goodwill and intangibles assets
|
1,994,000
|
|
|
3,798,866
|
|
|
(1,804,866
|
)
|
|
(48
|
)%
|
|||
Total expenses
|
528,198,109
|
|
|
431,475,590
|
|
|
96,722,519
|
|
|
22
|
%
|
|||
Income from operations
|
32,419,988
|
|
|
88,432,162
|
|
|
(56,012,174
|
)
|
|
(63
|
)%
|
|||
Other (expense) income
|
|
|
|
|
|
|
|
|||||||
Loss from equity method investments
|
(6,900,859
|
)
|
|
(8,125,285
|
)
|
|
1,224,426
|
|
|
(15
|
)%
|
|||
Interest expense
|
(4,733,256
|
)
|
|
(560,515
|
)
|
|
(4,172,741
|
)
|
|
744
|
%
|
|||
Interest income
|
2,023,873
|
|
|
1,258,638
|
|
|
765,235
|
|
|
61
|
%
|
|||
Other income
|
3,030,203
|
|
|
1,622,131
|
|
|
1,408,072
|
|
|
87
|
%
|
|||
Total other expense, net
|
(6,580,039
|
)
|
|
(5,805,031
|
)
|
|
(775,008
|
)
|
|
13
|
%
|
|||
Income before provision for income taxes
|
25,839,949
|
|
|
82,627,131
|
|
|
(56,787,182
|
)
|
|
(69
|
)%
|
|||
Provision for income taxes
|
8,166,632
|
|
|
22,359,640
|
|
|
(14,193,008
|
)
|
|
(63
|
)%
|
|||
Net income
|
$
|
17,673,317
|
|
|
$
|
60,267,491
|
|
|
$
|
(42,594,174
|
)
|
|
(71
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Net income attributable to noncontrolling interests
|
3,556,772
|
|
|
49,432,489
|
|
|
(45,875,717
|
)
|
|
(93
|
)%
|
|||
Net income attributable to Apollo Medical Holdings, Inc.
|
$
|
14,116,545
|
|
|
$
|
10,835,002
|
|
|
$
|
3,281,543
|
|
|
30
|
%
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Revenue
|
|
|
|
|
|
|
|
|||||||
Capitation, net
|
$
|
344,307,058
|
|
|
$
|
272,921,240
|
|
|
$
|
71,385,818
|
|
|
26
|
%
|
Risk pool settlements and incentives
|
100,927,841
|
|
|
44,598,373
|
|
|
56,329,468
|
|
|
126
|
%
|
|||
Management fee income
|
49,742,755
|
|
|
26,983,695
|
|
|
22,759,060
|
|
|
84
|
%
|
|||
Fee-for-services, net
|
19,703,999
|
|
|
7,449,249
|
|
|
12,254,750
|
|
|
165
|
%
|
|||
Other income
|
5,226,099
|
|
|
4,403,373
|
|
|
822,726
|
|
|
19
|
%
|
|||
Total revenue
|
519,907,752
|
|
|
356,355,930
|
|
|
163,551,822
|
|
|
46
|
%
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|||||||
Cost of services
|
361,132,111
|
|
|
273,453,287
|
|
|
87,678,824
|
|
|
32
|
%
|
|||
General and administrative expenses
|
43,353,787
|
|
|
26,249,532
|
|
|
17,104,255
|
|
|
65
|
%
|
|||
Depreciation and amortization
|
19,303,179
|
|
|
19,075,353
|
|
|
227,826
|
|
|
1
|
%
|
|||
Provision for doubtful accounts
|
3,887,647
|
|
|
—
|
|
|
3,887,647
|
|
|
100
|
%
|
|||
Impairment of goodwill and intangibles assets
|
3,798,866
|
|
|
2,431,791
|
|
|
1,367,075
|
|
|
56
|
%
|
|||
Total expenses
|
431,475,590
|
|
|
321,209,963
|
|
|
110,265,627
|
|
|
34
|
%
|
|||
Income from operations
|
88,432,162
|
|
|
35,145,967
|
|
|
53,286,195
|
|
|
152
|
%
|
|||
Other (expense) income
|
|
|
|
|
|
|
|
|||||||
Loss from equity method investments
|
(8,125,285
|
)
|
|
(1,112,541
|
)
|
|
(7,012,744
|
)
|
|
630
|
%
|
|||
Interest expense
|
(560,515
|
)
|
|
(79,689
|
)
|
|
(480,826
|
)
|
|
603
|
%
|
|||
Interest income
|
1,258,638
|
|
|
1,015,204
|
|
|
243,434
|
|
|
24
|
%
|
|||
Change in fair value of derivative instrument
|
—
|
|
|
(44,886
|
)
|
|
44,886
|
|
|
(100
|
)%
|
|||
Gain on settlement of preexisting note receivable from ApolloMed
|
—
|
|
|
921,938
|
|
|
(921,938
|
)
|
|
(100
|
)%
|
|||
Gain from investments - fair value adjustments
|
—
|
|
|
13,697,018
|
|
|
(13,697,018
|
)
|
|
(100
|
)%
|
|||
Other income
|
1,622,131
|
|
|
168,102
|
|
|
1,454,029
|
|
|
865
|
%
|
|||
Total other (expense) income, net
|
(5,805,031
|
)
|
|
14,565,146
|
|
|
(20,370,177
|
)
|
|
(140
|
)%
|
|||
Income before provision for income taxes
|
82,627,131
|
|
|
49,711,113
|
|
|
32,916,018
|
|
|
66
|
%
|
|||
Provision for income taxes
|
22,359,640
|
|
|
3,886,785
|
|
|
18,472,855
|
|
|
475
|
%
|
|||
Net income
|
$
|
60,267,491
|
|
|
$
|
45,824,328
|
|
|
$
|
14,443,163
|
|
|
32
|
%
|
|
|
|
|
|
|
|
|
|||||||
Net income attributable to noncontrolling interests
|
49,432,489
|
|
|
20,022,486
|
|
|
29,410,003
|
|
|
147
|
%
|
|||
Net income attributable to Apollo Medical Holdings, Inc.
|
$
|
10,835,002
|
|
|
$
|
25,801,842
|
|
|
$
|
(14,966,840
|
)
|
|
(58
|
)%
|
|
December 31, 2019
|
||
|
|
||
Term Loan A
|
$
|
187,625,000
|
|
Revolver Loan
|
60,000,000
|
|
|
Total Debt
|
247,625,000
|
|
|
|
|
||
Less: current portion of debt
|
(9,500,000
|
)
|
|
Less: unamortized financing cost
|
(5,952,866
|
)
|
|
|
|
||
Long-term debt
|
$
|
232,172,134
|
|
|
Amount
|
||
2020
|
$
|
9,500,000
|
|
2021
|
10,687,500
|
|
|
2022
|
14,250,000
|
|
|
2023
|
15,437,500
|
|
|
2024
|
197,750,000
|
|
|
|
|
||
Total
|
$
|
247,625,000
|
|
|
|
|
|
|
|
Year Ended December 31, 2019
|
|||||||||||||||||
Entity
|
|
Facility
|
|
Interest rate
per
Annum
|
|
Maximum
Balance
During
Period
|
|
Ending
Balance
|
|
Principal
Paid
During
Period
|
|
Interest Paid
During Period
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AMH
|
|
$
|
10,000,000
|
|
|
10
|
%
|
|
$
|
5,798,674
|
|
|
$
|
5,798,674
|
|
|
$
|
770,000
|
|
|
$
|
—
|
|
ACC
|
|
1,000,000
|
|
|
10
|
%
|
|
1,288,643
|
|
|
1,283,078
|
|
|
5,565
|
|
|
—
|
|
|||||
MMG
|
|
3,000,000
|
|
|
10
|
%
|
|
3,395,588
|
|
|
3,395,588
|
|
|
—
|
|
|
—
|
|
|||||
AKM
|
|
5,000,000
|
|
|
10
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
SCHC
|
|
5,000,000
|
|
|
10
|
%
|
|
4,710,385
|
|
|
4,710,385
|
|
|
—
|
|
|
—
|
|
|||||
BAHA
|
|
250,000
|
|
|
10
|
%
|
|
4,065,992
|
|
|
4,065,992
|
|
|
—
|
|
|
—
|
|
|||||
|
|
$
|
24,250,000
|
|
|
|
|
$
|
19,259,282
|
|
|
$
|
19,253,717
|
|
|
$
|
775,565
|
|
|
$
|
—
|
|
|
Total
|
|
Less than One Year
|
|
One to Three Years
|
|
Three to Five Years
|
|
More than Five Years
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating leases
|
$
|
17,570,789
|
|
|
$
|
3,781,174
|
|
|
$
|
5,087,961
|
|
|
$
|
3,918,273
|
|
|
$
|
4,783,381
|
|
Finance leases
|
554,935
|
|
|
118,920
|
|
|
237,840
|
|
|
198,175
|
|
|
—
|
|
|||||
Debt
|
247,625,000
|
|
|
9,500,000
|
|
|
24,937,500
|
|
|
213,187,500
|
|
|
—
|
|
|||||
Interest on debt
|
60,000,000
|
|
|
12,000,000
|
|
|
24,000,000
|
|
|
24,000,000
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
325,750,724
|
|
|
$
|
25,400,094
|
|
|
$
|
54,263,301
|
|
|
$
|
241,303,948
|
|
|
$
|
4,783,381
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
Index to the Consolidated Financial Statements
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ BDO USA, LLP
|
|
|
|
We have served as the Company’s auditor since 2014.
|
|
|
|
Los Angeles, California
|
|
|
|
March 16, 2020
|
|
APOLLO MEDICAL HOLDINGS, INC.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
|
||||||||
|
|
December 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
103,189,328
|
|
|
$
|
106,891,503
|
|
Restricted cash
|
|
75,000
|
|
|
—
|
|
||
Investment in marketable securities
|
|
116,538,673
|
|
|
1,127,102
|
|
||
Receivables, net
|
|
11,003,563
|
|
|
7,734,631
|
|
||
Receivables, net – related parties
|
|
48,136,313
|
|
|
48,721,325
|
|
||
Other receivables
|
|
16,885,448
|
|
|
1,003,133
|
|
||
Prepaid expenses and other current assets
|
|
10,315,093
|
|
|
7,385,098
|
|
||
Loans receivable
|
|
6,425,000
|
|
|
—
|
|
||
Loans receivable - related parties
|
|
16,500,000
|
|
|
—
|
|
||
|
|
|
|
|
||||
Total current assets
|
|
329,068,418
|
|
|
172,862,792
|
|
||
|
|
|
|
|
||||
Noncurrent assets
|
|
|
|
|
||||
Land, property and equipment, net
|
|
12,129,901
|
|
|
12,721,082
|
|
||
Intangible assets, net
|
|
103,011,849
|
|
|
86,875,883
|
|
||
Goodwill
|
|
238,505,204
|
|
|
185,805,880
|
|
||
Loans receivable – related parties
|
|
—
|
|
|
17,500,000
|
|
||
Investments in other entities – equity method
|
|
28,427,455
|
|
|
34,876,980
|
|
||
Investments in privately held entities
|
|
896,000
|
|
|
405,000
|
|
||
Restricted cash
|
|
746,104
|
|
|
745,470
|
|
||
Operating lease right-of-use assets
|
|
14,247,727
|
|
|
—
|
|
||
Other assets
|
|
1,680,689
|
|
|
1,205,962
|
|
||
|
|
|
|
|
||||
Total noncurrent assets
|
|
399,644,929
|
|
|
340,136,257
|
|
||
|
|
|
|
|
||||
Total assets
|
|
$
|
728,713,347
|
|
|
$
|
512,999,049
|
|
APOLLO MEDICAL HOLDINGS, INC.
|
||||||||
CONSOLIDATED BALANCE SHEETS (Continued)
|
||||||||
|
||||||||
|
|
December 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Liabilities, Mezzanine Equity and Shareholders’ Equity
|
|
|
|
|
||||
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
27,279,579
|
|
|
$
|
25,075,489
|
|
Fiduciary accounts payable
|
|
2,027,081
|
|
|
1,538,598
|
|
||
Medical liabilities
|
|
58,724,682
|
|
|
33,641,701
|
|
||
Income taxes payable
|
|
4,528,867
|
|
|
11,621,861
|
|
||
Bank loan
|
|
—
|
|
|
40,257
|
|
||
Dividend payable
|
|
271,279
|
|
|
—
|
|
||
Finance lease liabilities
|
|
101,741
|
|
|
101,741
|
|
||
Operating lease liabilities
|
|
2,990,686
|
|
|
—
|
|
||
Current portion of long term debt
|
|
9,500,000
|
|
|
—
|
|
||
|
|
|
|
|
||||
Total current liabilities
|
|
105,423,915
|
|
|
72,019,647
|
|
||
|
|
|
|
|
||||
Noncurrent liabilities
|
|
|
|
|
||||
Lines of credit - related party
|
|
—
|
|
|
13,000,000
|
|
||
Deferred tax liability
|
|
18,269,448
|
|
|
19,615,935
|
|
||
Liability for unissued equity shares
|
|
—
|
|
|
1,185,025
|
|
||
Finance lease liabilities, net of current portion
|
|
415,519
|
|
|
517,261
|
|
||
Operating lease liabilities, net of current portion
|
|
11,372,597
|
|
|
—
|
|
||
Long-term debt, net of current portion and deferred financing costs
|
|
232,172,134
|
|
|
—
|
|
||
|
|
|
|
|
||||
Total noncurrent liabilities
|
|
262,229,698
|
|
|
34,318,221
|
|
||
|
|
|
|
|
||||
Total liabilities
|
|
367,653,613
|
|
|
106,337,868
|
|
||
|
|
|
|
|
||||
Commitments and Contingencies (Note 13)
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Mezzanine equity
|
|
|
|
|
||||
Noncontrolling interest in Allied Physicians of California, a Professional Medical Corporation ("APC")
|
|
168,724,586
|
|
|
225,117,029
|
|
||
|
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
|
||||
Series A Preferred stock, par value $0.001; 5,000,000 shares authorized (inclusive of Series B Preferred stock); 1,111,111 issued and zero outstanding
|
|
—
|
|
|
—
|
|
||
Series B Preferred stock, par value $0.001; 5,000,000 shares authorized (inclusive of Series A Preferred stock); 555,555 issued and zero outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, par value $0.001; 100,000,000 shares authorized, 35,908,057 and 34,578,040 shares outstanding, excluding 17,458,810 and 1,850,603 Treasury shares, at December 31, 2019 and 2018, respectively
|
|
35,908
|
|
|
34,578
|
|
||
Additional paid-in capital
|
|
159,608,293
|
|
|
162,723,051
|
|
||
Retained earnings
|
|
31,904,748
|
|
|
17,788,203
|
|
||
|
|
191,548,949
|
|
|
180,545,832
|
|
||
|
|
|
|
|
||||
Noncontrolling interest
|
|
786,199
|
|
|
998,320
|
|
||
|
|
|
|
|
||||
Total shareholders’ equity
|
|
192,335,148
|
|
|
181,544,152
|
|
|
|
|
|
|
||||
Total liabilities, mezzanine equity and shareholders’ equity
|
|
$
|
728,713,347
|
|
|
$
|
512,999,049
|
|
APOLLO MEDICAL HOLDINGS, INC.
|
||||||||||||
CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||
|
||||||||||||
|
|
Years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Revenue
|
|
|
|
|
|
|
||||||
Capitation, net
|
|
$
|
454,168,024
|
|
|
$
|
344,307,058
|
|
|
$
|
272,921,240
|
|
Risk pool settlements and incentives
|
|
51,097,661
|
|
|
100,927,841
|
|
|
44,598,373
|
|
|||
Management fee income
|
|
34,668,358
|
|
|
49,742,755
|
|
|
26,983,695
|
|
|||
Fee-for-service, net
|
|
15,475,264
|
|
|
19,703,999
|
|
|
7,449,249
|
|
|||
Other income
|
|
5,208,790
|
|
|
5,226,099
|
|
|
4,403,373
|
|
|||
|
|
|
|
|
|
|
||||||
Total revenue
|
|
560,618,097
|
|
|
519,907,752
|
|
|
356,355,930
|
|
|||
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
||||||
Cost of services
|
|
467,804,899
|
|
|
361,132,111
|
|
|
273,453,287
|
|
|||
General and administrative expenses
|
|
41,482,375
|
|
|
43,353,787
|
|
|
26,249,532
|
|
|||
Depreciation and amortization
|
|
18,280,198
|
|
|
19,303,179
|
|
|
19,075,353
|
|
|||
Provision for doubtful accounts
|
|
(1,363,363
|
)
|
|
3,887,647
|
|
|
—
|
|
|||
Impairment of goodwill and intangible assets
|
|
1,994,000
|
|
|
3,798,866
|
|
|
2,431,791
|
|
|||
|
|
|
|
|
|
|
||||||
Total expenses
|
|
528,198,109
|
|
|
431,475,590
|
|
|
321,209,963
|
|
|||
|
|
|
|
|
|
|
||||||
Income from operations
|
|
32,419,988
|
|
|
88,432,162
|
|
|
35,145,967
|
|
|||
|
|
|
|
|
|
|
||||||
Other (expense) income
|
|
|
|
|
|
|
||||||
Loss from equity method investments
|
|
(6,900,859
|
)
|
|
(8,125,285
|
)
|
|
(1,112,541
|
)
|
|||
Interest expense
|
|
(4,733,256
|
)
|
|
(560,515
|
)
|
|
(79,689
|
)
|
|||
Interest income
|
|
2,023,873
|
|
|
1,258,638
|
|
|
1,015,204
|
|
|||
Change in fair value of derivative instrument
|
|
—
|
|
|
—
|
|
|
(44,886
|
)
|
|||
Gain on settlement of preexisting note receivable from ApolloMed
|
|
—
|
|
|
—
|
|
|
921,938
|
|
|||
Gain from investments – fair value adjustments
|
|
—
|
|
|
—
|
|
|
13,697,018
|
|
|||
Other income
|
|
3,030,203
|
|
|
1,622,131
|
|
|
168,102
|
|
|||
|
|
|
|
|
|
|
||||||
Total other (expense) income, net
|
|
(6,580,039
|
)
|
|
(5,805,031
|
)
|
|
14,565,146
|
|
|||
|
|
|
|
|
|
|
||||||
Income before provision for income taxes
|
|
25,839,949
|
|
|
82,627,131
|
|
|
49,711,113
|
|
|||
|
|
|
|
|
|
|
||||||
Provision for income taxes
|
|
8,166,632
|
|
|
22,359,640
|
|
|
3,886,785
|
|
|||
|
|
|
|
|
|
|
||||||
Net income
|
|
17,673,317
|
|
|
60,267,491
|
|
|
45,824,328
|
|
|||
|
|
|
|
|
|
|
||||||
Net income attributable to noncontrolling interests
|
|
3,556,772
|
|
|
49,432,489
|
|
|
20,022,486
|
|
|||
|
|
|
|
|
|
|
||||||
Net income attributable to Apollo Medical Holdings, Inc.
|
|
$
|
14,116,545
|
|
|
$
|
10,835,002
|
|
|
$
|
25,801,842
|
|
|
|
|
|
|
|
|
||||||
Earnings per share – basic
|
|
$
|
0.41
|
|
|
$
|
0.33
|
|
|
$
|
1.01
|
|
|
|
|
|
|
|
|
||||||
Earnings per share – diluted
|
|
$
|
0.39
|
|
|
$
|
0.29
|
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
||||||
Weighted average shares of common stock outstanding – basic
|
|
34,708,429
|
|
|
32,893,940
|
|
|
25,525,786
|
|
|||
|
|
|
|
|
|
|
||||||
Weighted average shares of common stock outstanding – diluted
|
|
36,403,279
|
|
|
37,914,886
|
|
|
28,661,735
|
|
APOLLO MEDICAL HOLDINGS, INC.
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF MEZZANINE AND SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||||||||
|
Mezzanine
Equity –
Noncontrolling
Interest in APC
|
|
|
|
|
|
Additional
Paid-in Capital
|
|
Retained
Earnings
(Accumulated
Deficit)
|
|
Noncontrolling
Interest
|
|
Shareholders'
Equity
|
|||||||||||||
|
|
Common Stock Outstanding
|
|
|
|
|
||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2016
|
$
|
162,855,554
|
|
|
25,067,953
|
|
|
$
|
25,068
|
|
|
$
|
87,954,346
|
|
|
$
|
(773,311
|
)
|
|
$
|
381,617
|
|
|
$
|
87,587,720
|
|
Net income
|
18,472,212
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,801,842
|
|
|
1,550,274
|
|
|
27,352,116
|
|
||||||
Shares repurchased
|
(1,523,550
|
)
|
|
(132,752
|
)
|
|
(133
|
)
|
|
(1,652,153
|
)
|
|
—
|
|
|
—
|
|
|
(1,652,286
|
)
|
||||||
Shares issued for cash and exercise of options
|
266,000
|
|
|
232,254
|
|
|
233
|
|
|
2,059,300
|
|
|
—
|
|
|
—
|
|
|
2,059,533
|
|
||||||
Share-based compensation
|
809,528
|
|
|
—
|
|
|
—
|
|
|
1,933,588
|
|
|
—
|
|
|
—
|
|
|
1,933,588
|
|
||||||
Distribution of derivative assets - warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,294,000
|
)
|
|
—
|
|
|
(5,294,000
|
)
|
||||||
Noncontrolling interest capital change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
859,430
|
|
|
859,430
|
|
||||||
Dividends
|
(8,750,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,000,000
|
)
|
|
(1,697,923
|
)
|
|
(19,697,923
|
)
|
||||||
Reclassification of liability for unissued shares to equity
|
—
|
|
|
508,135
|
|
|
508
|
|
|
1,237,142
|
|
|
—
|
|
|
—
|
|
|
1,237,650
|
|
||||||
Effect of share exchange in Merger
|
—
|
|
|
6,109,205
|
|
|
6,109
|
|
|
61,273,274
|
|
|
—
|
|
|
3,142,000
|
|
|
64,421,383
|
|
||||||
Shares issued upon conversion of Alliance Note
|
—
|
|
|
520,081
|
|
|
520
|
|
|
5,375,695
|
|
|
—
|
|
|
—
|
|
|
5,376,215
|
|
||||||
Balance at December 31, 2017
|
172,129,744
|
|
|
32,304,876
|
|
|
32,305
|
|
|
158,181,192
|
|
|
1,734,531
|
|
|
4,235,398
|
|
|
164,183,426
|
|
||||||
ASC 606 Adoption
|
7,351,434
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,002,468
|
|
|
—
|
|
|
1,002,468
|
|
||||||
Net income
|
47,889,877
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,835,002
|
|
|
1,542,612
|
|
|
12,377,614
|
|
||||||
Purchase price adjustment from Merger
|
—
|
|
|
—
|
|
|
—
|
|
|
868,000
|
|
|
—
|
|
|
—
|
|
|
868,000
|
|
||||||
Repurchase of treasury shares
|
(1,263,554
|
)
|
|
(168,493
|
)
|
|
(168
|
)
|
|
(3,783,921
|
)
|
|
4,216,202
|
|
|
—
|
|
|
432,113
|
|
||||||
Shares issued for exercise of options and warrants
|
200,000
|
|
|
884,259
|
|
|
884
|
|
|
3,995,796
|
|
|
—
|
|
|
—
|
|
|
3,996,680
|
|
||||||
Share-based compensation
|
809,528
|
|
|
37,593
|
|
|
37
|
|
|
631,524
|
|
|
—
|
|
|
—
|
|
|
631,561
|
|
||||||
Noncontrolling interest capital change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,500
|
|
|
27,500
|
|
||||||
Dividends
|
(2,000,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,975,010
|
)
|
|
(1,975,010
|
)
|
||||||
Acquisition of additional shares in consolidated entity
|
—
|
|
|
—
|
|
|
—
|
|
|
2,831,980
|
|
|
—
|
|
|
(2,832,180
|
)
|
|
(200
|
)
|
||||||
Release of 50% holdback shares
|
—
|
|
|
1,519,805
|
|
|
1,520
|
|
|
(1,520
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2018
|
225,117,029
|
|
|
34,578,040
|
|
|
34,578
|
|
|
162,723,051
|
|
|
17,788,203
|
|
|
998,320
|
|
|
181,544,152
|
|
||||||
Net income
|
1,807,747
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,116,545
|
|
|
1,749,025
|
|
|
15,865,570
|
|
||||||
Repurchase of treasury shares
|
(283,300
|
)
|
|
(601,581
|
)
|
|
(601
|
)
|
|
(7,285,784
|
)
|
|
—
|
|
|
—
|
|
|
(7,286,385
|
)
|
||||||
Shares issued for exercise of options and warrants
|
—
|
|
|
418,619
|
|
|
418
|
|
|
3,232,824
|
|
|
—
|
|
|
—
|
|
|
3,233,242
|
|
||||||
Share-based compensation
|
607,146
|
|
|
1,599
|
|
|
2
|
|
|
939,713
|
|
|
—
|
|
|
—
|
|
|
939,715
|
|
||||||
Stock subscription
|
754,998
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares issued in connection with business acquisition
|
414,250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cost of equity issuance of preferred shares
|
(878,309
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Noncontrolling interest capital change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,500
|
|
|
27,500
|
|
||||||
Dividends
|
(60,000,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,988,646
|
)
|
|
(1,988,646
|
)
|
||||||
Reclassification of options liability to equity
|
1,185,025
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of 50% holdback shares
|
—
|
|
|
1,511,380
|
|
|
1,511
|
|
|
(1,511
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2019
|
$
|
168,724,586
|
|
|
35,908,057
|
|
|
$
|
35,908
|
|
|
$
|
159,608,293
|
|
|
$
|
31,904,748
|
|
|
$
|
786,199
|
|
|
$
|
192,335,148
|
|
APOLLO MEDICAL HOLDINGS, INC.
|
||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||
|
||||||||||||
|
|
Years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
17,673,317
|
|
|
$
|
60,267,491
|
|
|
$
|
45,824,328
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
18,753,270
|
|
|
19,303,179
|
|
|
19,075,353
|
|
|||
Loss on disposal of property and equipment
|
|
—
|
|
|
41,784
|
|
|
—
|
|
|||
Impairment of goodwill and intangible assets
|
|
1,994,000
|
|
|
3,798,866
|
|
|
2,431,791
|
|
|||
Provision for doubtful accounts
|
|
(1,363,363
|
)
|
|
3,887,647
|
|
|
—
|
|
|||
Share-based compensation
|
|
1,546,861
|
|
|
1,441,089
|
|
|
2,743,116
|
|
|||
Gain on loan assumption
|
|
(2,250,000
|
)
|
|
—
|
|
|
—
|
|
|||
Unrealized (gain) loss from investment in equity securities
|
|
(9,119
|
)
|
|
25,005
|
|
|
(86,005
|
)
|
|||
Gain on settlement of preexisting note receivable from ApolloMed
|
|
—
|
|
|
—
|
|
|
(921,938
|
)
|
|||
Gain from investments – fair value adjustments
|
|
—
|
|
|
—
|
|
|
(13,697,018
|
)
|
|||
Change in fair value of derivative instrument
|
|
—
|
|
|
—
|
|
|
44,886
|
|
|||
Loss from equity method investments
|
|
6,900,859
|
|
|
8,125,285
|
|
|
1,112,541
|
|
|||
Deferred tax
|
|
(6,800,919
|
)
|
|
(8,345,235
|
)
|
|
(20,675,807
|
)
|
|||
Changes in operating assets and liabilities, net of acquisition amounts:
|
|
|
|
|
|
|
||||||
Receivable, net
|
|
10,713,803
|
|
|
(263,191
|
)
|
|
4,108,970
|
|
|||
Receivable, net – related parties
|
|
(1,435,306
|
)
|
|
(28,363,108
|
)
|
|
6,593,783
|
|
|||
Other receivable
|
|
(15,079,346
|
)
|
|
—
|
|
|
—
|
|
|||
Prepaid expenses and other current assets
|
|
(2,755,599
|
)
|
|
(2,813,564
|
)
|
|
1,260,064
|
|
|||
Right-of-use assets
|
|
2,479,862
|
|
|
—
|
|
|
—
|
|
|||
Other assets
|
|
(572,213
|
)
|
|
2,446
|
|
|
(220,925
|
)
|
|||
Accounts payable and accrued expenses
|
|
(4,883,243
|
)
|
|
(22,669,230
|
)
|
|
(3,687,022
|
)
|
|||
Fiduciary accounts payable
|
|
488,483
|
|
|
—
|
|
|
—
|
|
|||
Capitation incentives payable
|
|
—
|
|
|
(21,500,000
|
)
|
|
1,878,355
|
|
|||
Medical liabilities
|
|
(2,391,459
|
)
|
|
4,134,209
|
|
|
5,661,313
|
|
|||
Income taxes payable
|
|
(7,092,994
|
)
|
|
8,423,366
|
|
|
388,138
|
|
|||
Operating lease liabilities
|
|
(2,243,511
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by operating activities
|
|
13,673,383
|
|
|
25,496,039
|
|
|
51,833,923
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
||||||
Cash acquired from Merger
|
|
—
|
|
|
—
|
|
|
37,112,775
|
|
|||
Cash received from consolidation of VIE
|
|
—
|
|
|
—
|
|
|
228,287
|
|
|||
Purchases of marketable securities
|
|
(115,402,452
|
)
|
|
(9,013
|
)
|
|
(5,283
|
)
|
|||
Proceeds from loan receivable
|
|
—
|
|
|
—
|
|
|
200,000
|
|
|||
Advances on loans receivable
|
|
(11,425,000
|
)
|
|
(7,500,000
|
)
|
|
(10,000,000
|
)
|
|||
Dividends received from equity method investments
|
|
240,000
|
|
|
607,411
|
|
|
1,240,000
|
|
|||
Proceeds on sale of investments in a privately held entity
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|||
Payments for business acquisitions, net of cash acquired
|
|
(49,402,514
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of investments in privately held entities
|
|
(491,000
|
)
|
|
(405,000
|
)
|
|
—
|
|
|||
Purchases of investments – equity method
|
|
(3,108,000
|
)
|
|
(16,706,152
|
)
|
|
—
|
|
Purchases of property and equipment
|
|
(1,041,670
|
)
|
|
(1,170,064
|
)
|
|
(2,084,770
|
)
|
|||
Net cash (used in) provided by investing activities
|
|
(180,630,636
|
)
|
|
(25,182,818
|
)
|
|
26,716,009
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
||||||
Dividends paid
|
|
(61,717,367
|
)
|
|
(17,758,808
|
)
|
|
(10,447,923
|
)
|
|||
Change in noncontrolling interest capital
|
|
27,500
|
|
|
27,300
|
|
|
—
|
|
|||
Borrowings on long-term debt
|
|
250,000,000
|
|
|
8,000,000
|
|
|
5,000,000
|
|
|||
Borrowings on line of credit
|
|
39,600,000
|
|
|
—
|
|
|
—
|
|
|||
Advances by NMM to ApolloMed prior to the Merger
|
|
—
|
|
|
—
|
|
|
(9,000,000
|
)
|
|||
Repayments on long-term debt
|
|
(2,375,000
|
)
|
|
—
|
|
|
—
|
|
|||
Repayments on bank loan, and lines of credit
|
|
(52,640,258
|
)
|
|
(495,134
|
)
|
|
—
|
|
|||
Payment of capital lease obligations
|
|
(101,741
|
)
|
|
(98,735
|
)
|
|
(102,348
|
)
|
|||
Proceeds from exercise of stock options included in liabilities
|
|
—
|
|
|
—
|
|
|
425,025
|
|
|||
Proceeds from exercise of stock options and warrants
|
|
3,123,709
|
|
|
3,996,677
|
|
|
164,797
|
|
|||
Proceeds from common stock offering
|
|
754,998
|
|
|
200,000
|
|
|
2,160,736
|
|
|||
Repurchase of common shares
|
|
(7,569,685
|
)
|
|
(5,047,643
|
)
|
|
(3,175,836
|
)
|
|||
Cost of debt and equity issuances
|
|
(5,771,444
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
|
163,330,712
|
|
|
(11,176,343
|
)
|
|
(14,975,549
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
|
(3,626,541
|
)
|
|
(10,863,122
|
)
|
|
63,574,383
|
|
|||
|
|
|
|
|
|
|
||||||
Cash, cash equivalents and restricted cash, beginning of year
|
|
107,636,973
|
|
|
118,500,095
|
|
|
54,925,712
|
|
|||
|
|
|
|
|
|
|
||||||
Cash, cash equivalents and restricted cash, end of year
|
|
$
|
104,010,432
|
|
|
$
|
107,636,973
|
|
|
$
|
118,500,095
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information
|
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
|
$
|
20,200,000
|
|
|
$
|
23,642,662
|
|
|
$
|
24,362,223
|
|
Cash paid for interest
|
|
4,257,536
|
|
|
462,336
|
|
|
51,043
|
|
|||
|
|
|
|
|
|
|
||||||
Supplemental disclosures of non-cash investing and financing activities
|
|
|
|
|
|
|
||||||
Cashless exercise of stock options
|
|
$
|
—
|
|
|
$
|
109
|
|
|
$
|
—
|
|
Dividend declared included in dividend payable
|
|
271,279
|
|
|
—
|
|
|
—
|
|
|||
APC stock issued in exchange for AMG
|
|
414,250
|
|
|
—
|
|
|
—
|
|
|||
Deferred tax liability adjusted to goodwill
|
|
6,334,368
|
|
|
1,110,456
|
|
|
—
|
|
|||
Reclassification of liability for equity shares
|
|
1,185,025
|
|
|
—
|
|
|
—
|
|
|||
Purchase price adjustment for acceleration of vested stock options
|
|
—
|
|
|
868,000
|
|
|
—
|
|
|||
Conversion of loan receivable to investment in Accountable Health Care, IPA
|
|
—
|
|
|
5,000,000
|
|
|
—
|
|
|||
Reclassification of dividends related to share repurchase
|
|
—
|
|
|
4,216,202
|
|
|
—
|
|
|||
Reclassification of APS noncontrolling interest to equity related to purchase of additional shares
|
|
—
|
|
|
2,832,180
|
|
|
—
|
|
|||
Distribution of warrants to former NMM shareholders
|
|
—
|
|
|
—
|
|
|
5,294,000
|
|
|||
Issuance of common stock upon conversion of debt and accrued interest
|
|
—
|
|
|
—
|
|
|
5,376,215
|
|
|||
Reclassification of liability for unissued common shares payable to equity
|
|
—
|
|
|
—
|
|
|
1,237,650
|
|
|||
Non-cash purchase consideration for acquisition – fair value of equity consideration to pre-Merger ApolloMed shareholders
|
|
—
|
|
|
—
|
|
|
61,092,050
|
|
Non-cash purchase consideration for acquisition – fair value of preferred stock held by former NMM shareholders
|
|
—
|
|
|
—
|
|
|
19,118,000
|
|
|||
Non-cash purchase consideration for acquisition – fair value of NMM’s 50% share of APAACO
|
|
—
|
|
|
—
|
|
|
5,129,000
|
|
|||
Non-cash purchase consideration for acquisition – acceleration of unvested stock compensation
|
|
—
|
|
|
—
|
|
|
187,333
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash and cash equivalents
|
$
|
103,189,328
|
|
|
$
|
106,891,503
|
|
|
$
|
99,749,199
|
|
Restricted cash – long-term - letters of credit
|
746,104
|
|
|
745,470
|
|
|
745,235
|
|
|||
Restricted cash – short-term
|
75,000
|
|
|
—
|
|
|
18,005,661
|
|
|||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
$
|
104,010,432
|
|
|
$
|
107,636,973
|
|
|
$
|
118,500,095
|
|
1.
|
Description of Business
|
1.
|
The Company loaned AP-AMH $545.0 million pursuant to a ten-year secured loan agreement. The loan bears interest at a rate of 10% per annum simple interest, is not prepayable (except in certain limited circumstances), requires quarterly payments of interest only in arrears, and is secured by a first priority security interest in all of AP-AMH's assets, including the shares of APC Series A Preferred Stock to be purchased by AP-AMH. To the extent that AP-AMH is unable to make any interest payment when due because it has received dividends on the APC Series A Preferred Stock insufficient to pay in full such interest payment, then the outstanding principal amount of the loan will be increased by the amount of any such accrued but unpaid interest, and any such increased principal amounts will bear interest at the rate of 10.75% per annum simple interest.
|
2.
|
AP-AMH purchased 1,000,000 shares of APC Series A Preferred Stock for aggregate consideration of $545.0 million in a private placement. Under the terms of the APC Certificate of Determination of Preferences of Series A Preferred Stock (the "Certificate of Determination"), AP-AMH is entitled to receive preferential, cumulative dividends that accrue on a daily basis and that are equal to the sum of (i) APC's net income from Healthcare Services (as defined in the Certificate of Determination), plus (ii) any dividends received by APC from certain of APC's affiliated entities, less (iii) any Retained Amounts (as defined in the Certificate of Determination). During the year ended December 31, 2019, APC distributed $8.9 million to ApolloMed as preferred returns.
|
3.
|
APC purchased 15,015,015 shares of the Company's common stock for total consideration of $300.0 million in private placement. In connection therewith, the Company granted APC certain registration rights with respect to the Company's common stock that APC purchased, and APC agreed that APC votes in excess of 9.99% of the Company's then outstanding shares will be voted by proxy given to the Company's management, and that those proxy holders will cast the excess votes in the same proportion as all other votes cast on any specific proposal coming before the Company's stockholders.
|
4.
|
The Company licensed to AP-AMH the right to use certain tradenames for certain specified purposes for a fee equal to a percentage of the aggregate gross revenues of AP-AMH. The license fee is payable out of any Series A Preferred Stock dividends received by AP-AMH from APC.
|
5.
|
Through its subsidiary, NMM, the Company agreed to provide certain administrative services to AP-AMH for a fee equal to a percentage of the aggregate gross revenues of AP-AMH. The administrative fee also is payable out of any APC Series A Preferred Stock dividends received by AP-AMH from APC.
|
2.
|
Basis of Presentation and Summary of Significant Accounting Policies
|
•
|
The entity has a legal structure that has been established to conduct business activities and to hold assets; such entity can be in the form of a partnership, limited liability company, or corporation, among others; and
|
•
|
The Company has a variable interest in the legal entity – i.e., variable interests that are contractual, such as equity ownership, or other financial interests that change with changes in the fair value of the entity’s net assets.
|
•
|
The entity does not have sufficient equity to finance its activities without additional subordinated financial support;
|
•
|
The entity is established with non-substantive voting rights (i.e., where the entity deprives the majority economic interest holder(s) of voting rights); or
|
•
|
The equity holders, as a group, lack the characteristics of a controlling financial interest. Equity holders meet this criterion if they lack any of the following:
|
•
|
The power, through voting rights or similar rights, to direct the activities of the entity that most significantly influence the entity’s economic performance, as evidenced by:
|
•
|
Substantive participating rights in day-to-day management of the entity’s activities; or
|
•
|
Substantive kick-out rights over the party responsible for significant decisions;
|
•
|
The obligation to absorb the entity’s expected losses; or
|
•
|
The right to receive the entity’s expected residual returns.
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Commercial
|
$107,339,950
|
|
$113,000,115
|
|
$116,947,692
|
||||||
Medicare
|
226,001,659
|
|
|
226,353,120
|
|
|
120,448,509
|
|
|||
Medicaid
|
192,595,964
|
|
|
134,904,142
|
|
|
92,590,894
|
|
|||
Other third parties
|
34,680,524
|
|
|
45,650,375
|
|
|
26,368,835
|
|
|||
Revenue
|
$
|
560,618,097
|
|
|
$
|
519,907,752
|
|
|
$
|
356,355,930
|
|
*
|
Less than 10% of total net revenues
|
|
|
As of December 31,
|
||||
|
|
2019
|
|
2018
|
||
Payor G
|
|
30.4
|
%
|
|
34.1
|
%
|
Payor H
|
|
36.0
|
%
|
|
42.2
|
%
|
|
|
Fair Value Measurements
|
|
|
||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Money market accounts*
|
|
$
|
50,731,008
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50,731,008
|
|
Marketable securities – certificates of deposit
|
|
116,468,555
|
|
|
—
|
|
|
—
|
|
|
116,468,555
|
|
||||
Marketable securities – equity securities
|
|
70,118
|
|
|
—
|
|
|
—
|
|
|
70,118
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
167,269,681
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
167,269,681
|
|
|
|
Fair Value Measurements
|
|
|
||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Money market accounts*
|
|
$
|
85,500,745
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85,500,745
|
|
Marketable securities – certificates of deposit
|
|
1,066,103
|
|
|
—
|
|
|
—
|
|
|
1,066,103
|
|
||||
Marketable securities – equity securities
|
|
60,999
|
|
|
—
|
|
|
—
|
|
|
60,999
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
86,627,847
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86,627,847
|
|
*
|
Included in cash and cash equivalents
|
•
|
Recognize incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are recorded within general and administrative expenses.
|
•
|
Recognize revenue in the amount of consideration to which the Company has a right to invoice the customer if that amount corresponds directly with the value to the customer of the Company’s services completed to date.
|
•
|
Exemptions from disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized in the amount of consideration to which the Company has a right to invoice for services performed, and (iii) contracts for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation.
|
•
|
Use a portfolio approach for the fee-for-service (FFS) revenue stream to group contracts with similar characteristics and analyze historical cash collections trends.
|
•
|
No adjustment is made for the effects of a significant financing component as the period between the time of service and time of payment is typically one year or less.
|
a)
|
The number of common shares outstanding from the beginning of that period to the acquisition date was computed on the basis of the weighted-average number of common shares of the legal acquiree (accounting acquirer - NMM) outstanding during the period multiplied by the exchange ratio established in the Merger.
|
b)
|
The number of common shares outstanding from the acquisition date to the end of that period was the actual number of common shares of the legal acquirer (the accounting acquire -ApolloMed) outstanding during that period.
|
3.
|
Business Combination and Goodwill
|
Equity consideration (1)
|
$
|
61,092,050
|
|
Fair value of ApolloMed preferred stock held by NMM (2)
|
19,118,000
|
|
|
Fair value of NMM’s noncontrolling interest in APAACO (3)
|
5,129,000
|
|
|
Fair value of the outstanding ApolloMed stock options (4)
|
1,055,333
|
|
|
Total purchase consideration
|
$
|
86,394,383
|
|
(1)
|
Equity consideration
|
Number of shares of the combined company that would be owned by pre-Merger ApolloMed stockholders (*)
|
6,109,205
|
|
|
Multiplied by the price per share of ApolloMed’s common stock (**)
|
$
|
10.00
|
|
Equity Consideration
|
$
|
61,092,050
|
|
(*)
|
Represents the number of shares of the combined company that pre-Merger ApolloMed stockholders would own at closing of the Merger.
|
(**)
|
Represents the closing price of ApolloMed’s common stock on December 8, 2017.
|
(2)
|
Fair value of ApolloMed’s preferred shares held by NMM
|
(3)
|
Fair value of NMM’s 50% share of APA ACO Inc.
|
(4)
|
Fair value of the ApolloMed outstanding stock options
|
|
Balance Sheet
|
||
Assets acquired
|
|
||
Cash and cash equivalents
|
$
|
36,367,555
|
|
Accounts receivable, net
|
7,261,588
|
|
|
Other receivables
|
3,211,028
|
|
|
Prepaid expenses
|
249,193
|
|
|
Property, plant and equipment, net
|
1,114,332
|
|
|
Restricted cash
|
745,220
|
|
|
Fair value of intangible assets acquired
|
14,984,000
|
|
|
Deferred tax assets
|
2,498,417
|
|
|
Other assets
|
217,241
|
|
|
Goodwill
|
86,197,395
|
|
|
Accounts payable and accrued liabilities
|
(8,632,893
|
)
|
|
Medical liabilities
|
(39,353,540
|
)
|
|
Line of credit
|
(25,000
|
)
|
|
Convertible note payable, net
|
(5,376,215
|
)
|
|
Convertible note payable - related party
|
(9,921,938
|
)
|
|
Noncontrolling interest
|
(3,142,000
|
)
|
|
Net assets acquired
|
$
|
86,394,383
|
|
|
|
||
Total purchase consideration
|
$
|
86,394,383
|
|
|
Year Ended
December 31, 2017 |
||
Net revenues
|
$
|
478,873,780
|
|
Net income attributable to Apollo Medical Holdings, Inc.
|
$
|
9,982,706
|
|
Weighted average common shares outstanding:
|
|
||
Basic
|
25,525,786
|
|
|
Earnings per share:
|
|
||
Basic
|
$
|
0.39
|
|
Weighted average common shares outstanding:
|
|
||
Diluted
|
28,661,735
|
|
|
Earnings per share:
|
|
||
Diluted
|
$
|
0.35
|
|
|
Preliminary
Balance Sheet
|
||
Assets acquired
|
|
||
Cash and cash equivalents
|
$
|
3,568,554
|
|
Accounts receivable, net
|
10,335,664
|
|
|
Other current assets
|
4,360,850
|
|
|
Network relationship intangible assets
|
22,636,000
|
|
|
Goodwill
|
28,585,209
|
|
|
Accounts payable
|
(2,776,631
|
)
|
|
Deferred tax liabilities
|
(6,334,368
|
)
|
|
Medical liabilities
|
(15,319,714
|
)
|
|
Net assets acquired
|
$
|
45,055,564
|
|
|
|
||
Cash paid
|
$
|
45,055,564
|
|
|
Preliminary
Balance Sheet
|
||
Assets acquired
|
|
||
Cash and cash equivalents
|
$
|
581,965
|
|
Accounts receivable, net
|
5,150,060
|
|
|
Other current assets
|
198,056
|
|
|
Network relationship intangible assets
|
11,411,000
|
|
|
Goodwill
|
23,018,675
|
|
|
Accounts payable
|
(3,211,349
|
)
|
|
Medical liabilities
|
(12,154,726
|
)
|
|
Subordinated loan
|
(15,327,013
|
)
|
|
Net assets acquired
|
$
|
9,666,668
|
|
|
|
||
Equity investment contributed
|
$
|
2,416,668
|
|
Cash paid
|
$
|
7,250,000
|
|
|
|
Year Ended
December 31, 2019 (unaudited) |
|
Year Ended
December 31, 2018 (unaudited) |
||||
|
|
|
|
|
||||
Revenue
|
|
$
|
658,010,954
|
|
|
$
|
726,074,752
|
|
Net income
|
|
$
|
10,867,496
|
|
|
$
|
58,879,491
|
|
Net income attributable to Apollo Medical Holdings, Inc.
|
|
$
|
7,310,724
|
|
|
$
|
9,447,002
|
|
EPS - Basic
|
|
$
|
0.21
|
|
|
$
|
0.29
|
|
EPS - Diluted
|
|
$
|
0.20
|
|
|
$
|
0.25
|
|
|
Amount
|
||
|
|
||
Balance at January 1, 2018
|
$
|
189,847,202
|
|
Adjustments
|
(242,456
|
)
|
|
Impairment - (MMG)
|
(3,798,866
|
)
|
|
Balance at December 31, 2018
|
$
|
185,805,880
|
|
Acquisitions
|
52,699,324
|
|
|
|
|
||
Balance at December 31, 2019
|
$
|
238,505,204
|
|
4.
|
Land, Property and Equipment, Net
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
||||
Land
|
$
|
3,300,000
|
|
|
$
|
3,300,000
|
|
Buildings
|
2,357,709
|
|
|
2,326,189
|
|
||
Computer software
|
3,088,508
|
|
|
2,929,317
|
|
||
Furniture and equipment
|
12,584,619
|
|
|
11,786,345
|
|
||
Construction in progress
|
167,248
|
|
|
144,008
|
|
||
Leasehold improvements
|
6,654,993
|
|
|
6,236,189
|
|
||
|
|
|
|
||||
|
28,153,077
|
|
|
26,722,048
|
|
||
|
|
|
|
||||
Less accumulated depreciation and amortization
|
(16,023,176
|
)
|
|
(14,000,966
|
)
|
||
|
|
|
|
||||
Land, property and equipment, net
|
$
|
12,129,901
|
|
|
$
|
12,721,082
|
|
5.
|
Intangible Assets, Net
|
|
Useful
Life
(Years)
|
|
Gross
January 1, 2019 |
|
Additions
|
|
Impairment/
Disposal
|
|
Gross
December 31, 2019 |
|
Accumulated
Amortization
|
|
Net
December 31, 2019 |
||||||||||||
Indefinite Lived Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Medicare license
|
N/A
|
|
$
|
1,994,000
|
|
|
$
|
—
|
|
|
$
|
(1,994,000
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortized Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Network relationships
|
11-15
|
|
109,883,000
|
|
|
34,047,000
|
|
|
—
|
|
|
143,930,000
|
|
|
(60,524,996
|
)
|
|
83,405,004
|
|
||||||
Management contracts
|
15
|
|
22,832,000
|
|
|
—
|
|
|
—
|
|
|
22,832,000
|
|
|
(9,676,381
|
)
|
|
13,155,619
|
|
||||||
Member relationships
|
12
|
|
6,696,000
|
|
|
—
|
|
|
—
|
|
|
6,696,000
|
|
|
(2,352,133
|
)
|
|
4,343,867
|
|
||||||
Patient management platform
|
5
|
|
2,060,000
|
|
|
—
|
|
|
—
|
|
|
2,060,000
|
|
|
(858,329
|
)
|
|
1,201,671
|
|
||||||
Tradename/trademarks
|
20
|
|
1,011,000
|
|
|
—
|
|
|
—
|
|
|
1,011,000
|
|
|
(105,312
|
)
|
|
905,688
|
|
||||||
|
|
|
$
|
144,476,000
|
|
|
$
|
34,047,000
|
|
|
$
|
(1,994,000
|
)
|
|
$
|
176,529,000
|
|
|
$
|
(73,517,151
|
)
|
|
$
|
103,011,849
|
|
|
Useful
Life
(Years)
|
|
Gross
January 1, 2018 |
|
Additions
|
|
Impairment/
Disposal
|
|
Gross
December 31, 2018 |
|
Accumulated
Amortization
|
|
Net
December 31, 2018 |
||||||||||||
Indefinite Lived Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Medicare license
|
N/A
|
|
$
|
1,994,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,994,000
|
|
|
$
|
—
|
|
|
$
|
1,994,000
|
|
Amortized Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Network relationships
|
11-15
|
|
109,883,000
|
|
|
—
|
|
|
—
|
|
|
109,883,000
|
|
|
(48,361,773
|
)
|
|
61,521,227
|
|
||||||
Management contracts
|
15
|
|
22,832,000
|
|
|
—
|
|
|
—
|
|
|
22,832,000
|
|
|
(7,447,581
|
)
|
|
15,384,419
|
|
||||||
Member relationships
|
12
|
|
6,696,000
|
|
|
—
|
|
|
—
|
|
|
6,696,000
|
|
|
(1,289,667
|
)
|
|
5,406,333
|
|
||||||
Patient management platform
|
5
|
|
2,060,000
|
|
|
—
|
|
|
—
|
|
|
2,060,000
|
|
|
(446,333
|
)
|
|
1,613,667
|
|
||||||
Tradename/trademarks
|
20
|
|
1,011,000
|
|
|
—
|
|
|
—
|
|
|
1,011,000
|
|
|
(54,763
|
)
|
|
956,237
|
|
||||||
|
|
|
$
|
144,476,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
144,476,000
|
|
|
$
|
(57,600,117
|
)
|
|
$
|
86,875,883
|
|
|
Amount
|
||
|
|
||
2020
|
$
|
16,026,000
|
|
2021
|
14,542,000
|
|
|
2022
|
12,673,000
|
|
|
2023
|
10,842,000
|
|
|
2024
|
9,830,000
|
|
|
Thereafter
|
39,099,000
|
|
|
|
|
||
|
$
|
103,012,000
|
|
6.
|
Investments in Other Entities
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Universal Care, Inc.
|
|
$
|
1,438,199
|
|
|
$
|
2,635,945
|
|
LaSalle Medical Associates – IPA Line of Business
|
|
6,396,706
|
|
|
7,054,888
|
|
||
Diagnostic Medical Group
|
|
2,334,083
|
|
|
2,257,346
|
|
||
Pacific Medical Imaging & Oncology Center, Inc.
|
|
1,395,878
|
|
|
1,359,494
|
|
||
Pacific Ambulatory Surgery Center, LLC
|
|
—
|
|
|
285,198
|
|
||
Accountable Health Care IPA
|
|
—
|
|
|
4,977,957
|
|
||
531 W. College, LLC
|
|
16,697,898
|
|
|
16,273,152
|
|
||
MWN, LLC
|
|
164,691
|
|
|
33,000
|
|
||
|
|
|
|
|
||||
|
|
$
|
28,427,455
|
|
|
$
|
34,876,980
|
|
|
|
December 31, 2019
(unaudited) |
|
December 31, 2018
(unaudited) |
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
6,345,195
|
|
|
$
|
18,444,702
|
|
Receivables, net
|
|
5,123,228
|
|
|
2,897,337
|
|
||
Other current assets
|
|
3,526,319
|
|
|
5,459,442
|
|
||
Loan receivable
|
|
2,250,000
|
|
|
1,250,000
|
|
||
Restricted cash
|
|
683,358
|
|
|
667,414
|
|
||
|
|
|
|
|
||||
Total assets
|
|
17,928,100
|
|
|
28,718,895
|
|
||
Liabilities and Stockholders’ (Deficit) Equity
|
|
|
|
|
||||
Current liabilities
|
|
$
|
23,529,745
|
|
|
$
|
26,837,814
|
|
Stockholders’ (deficit) equity
|
|
(5,601,645
|
)
|
|
1,881,081
|
|
||
|
|
|
|
|
||||
Total liabilities and stockholders’ (deficit) equity
|
|
$
|
17,928,100
|
|
|
$
|
28,718,895
|
|
|
|
Year Ended
December 31, 2019 (unaudited) |
|
Year Ended
December 31, 2018 (unaudited) |
||||
|
|
|
|
|
||||
Revenues
|
|
$
|
194,020,435
|
|
|
$
|
239,031,485
|
|
Expenses
|
|
205,153,162
|
|
|
251,738,193
|
|
||
|
|
|
|
|
||||
Loss from operations
|
|
(11,132,727
|
)
|
|
(12,706,708
|
)
|
||
|
|
|
|
|
||||
Other Income
|
|
—
|
|
|
173,356
|
|
||
|
|
|
|
|
||||
Loss before income tax benefit
|
|
(11,132,727
|
)
|
|
(12,533,352
|
)
|
||
|
|
|
|
|
||||
Income tax benefit
|
|
—
|
|
|
(3,334,332
|
)
|
||
|
|
|
|
|
||||
Net loss
|
|
$
|
(11,132,727
|
)
|
|
$
|
(9,199,020
|
)
|
|
|
December 31, 2019
(unaudited) |
|
December 31, 2018
(unaudited) |
||||
Assets
|
|
|
|
|
||||
Cash
|
|
$
|
33,889,962
|
|
|
$
|
27,812,520
|
|
Receivables, net
|
|
63,843,009
|
|
|
46,978,703
|
|
||
Other current assets
|
|
38,280,156
|
|
|
18,670,350
|
|
||
Other assets
|
|
882,243
|
|
|
661,621
|
|
||
Property and equipment, net
|
|
4,021,341
|
|
|
2,786,996
|
|
||
|
|
|
|
|
||||
Total assets
|
|
$
|
140,916,711
|
|
|
$
|
96,910,190
|
|
|
|
|
|
|
||||
Liabilities and stockholders’ deficit
|
|
|
|
|
||||
|
|
|
|
|
||||
Current liabilities
|
|
$
|
128,330,389
|
|
|
$
|
89,731,133
|
|
Other liabilities
|
|
33,132,948
|
|
|
25,024,043
|
|
||
Stockholders’ deficit
|
|
(20,546,626
|
)
|
|
(17,844,986
|
)
|
||
|
|
|
|
|
||||
Total liabilities and stockholders’ deficit
|
|
$
|
140,916,711
|
|
|
$
|
96,910,190
|
|
|
|
Year Ended
December 31, 2019 (unaudited) |
|
Year Ended
December 31, 2018 (unaudited) |
||||
Revenues
|
|
$
|
500,374,910
|
|
|
$
|
326,719,634
|
|
Expenses
|
|
502,566,659
|
|
|
335,242,582
|
|
||
|
|
|
|
|
||||
Loss before income tax provision
|
|
(2,191,749
|
)
|
|
(8,522,948
|
)
|
||
Income tax provision
|
|
257,628
|
|
|
3,692,818
|
|
||
|
|
|
|
|
||||
Net loss
|
|
$
|
(2,449,377
|
)
|
|
$
|
(12,215,766
|
)
|
|
|
December 31, 2019
(unaudited) |
|
December 31, 2018
(unaudited) |
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Cash
|
|
$
|
139,436
|
|
|
$
|
158,088
|
|
Other current assets
|
|
16,500
|
|
|
16,137
|
|
||
Other assets
|
|
70,000
|
|
|
70,000
|
|
||
Property and equipment, net
|
|
33,581,438
|
|
|
33,394,792
|
|
||
|
|
|
|
|
||||
Total assets
|
|
$
|
33,807,374
|
|
|
$
|
33,639,017
|
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Current liabilities
|
|
$
|
1,061,577
|
|
|
$
|
1,007,413
|
|
Stockholders’ equity
|
|
32,745,797
|
|
|
32,631,604
|
|
||
|
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
|
$
|
33,807,374
|
|
|
$
|
33,639,017
|
|
|
|
Year Ended
December 31, 2019 (unaudited) |
|
Year Ended
December 31, 2018 (unaudited) |
||||
|
|
|
|
|
||||
Revenues
|
|
$
|
—
|
|
|
$
|
—
|
|
Expenses
|
|
1,010,423
|
|
|
875,771
|
|
||
|
|
|
|
|
||||
Loss from operations
|
|
(1,010,423
|
)
|
|
(875,771
|
)
|
||
|
|
|
|
|
||||
Other income
|
|
474,617
|
|
|
162,451
|
|
||
|
|
|
|
|
||||
Net loss
|
|
$
|
(535,806
|
)
|
|
$
|
(713,320
|
)
|
7.
|
Loans Receivable and Loans Receivable – Related Parties
|
8.
|
Accounts Payable and Accrued Expenses
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Accounts payable
|
|
$
|
6,914,680
|
|
|
$
|
4,481,544
|
|
Capitation payable
|
|
2,812,652
|
|
|
300,000
|
|
||
Subcontractor IPA payable
|
|
3,360,282
|
|
|
2,532,750
|
|
||
Professional fees
|
|
1,837,434
|
|
|
2,251,741
|
|
||
Due to related parties
|
|
225,000
|
|
|
1,488,313
|
|
||
Contract liabilities
|
|
8,891,966
|
|
|
9,024,235
|
|
||
Accrued compensation
|
|
3,237,565
|
|
|
4,996,906
|
|
||
|
|
|
|
|
||||
|
|
$
|
27,279,579
|
|
|
$
|
25,075,489
|
|
9.
|
Medical Liabilities
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Balance, beginning of year
|
|
$
|
33,641,701
|
|
|
$
|
63,972,318
|
|
Acquired (see Note 3)
|
|
27,474,440
|
|
|
—
|
|
||
Claims paid for previous year
|
|
(33,396,932
|
)
|
|
(36,549,348
|
)
|
||
Claims paid on acquired liabilities
|
|
(25,236,286
|
)
|
|
—
|
|
||
Incurred health care costs
|
|
274,670,676
|
|
|
209,002,961
|
|
||
Claims paid for current year
|
|
(218,564,072
|
)
|
|
(167,537,480
|
)
|
||
Payment to CMS
|
|
—
|
|
|
(34,464,826
|
)
|
||
Adjustments
|
|
135,155
|
|
|
(781,924
|
)
|
||
|
|
|
|
|
||||
Balance, end of year
|
|
$
|
58,724,682
|
|
|
$
|
33,641,701
|
|
10.
|
Credit Facility, Bank Loan and Lines of Credit - Related Party
|
|
December 31, 2019
|
||
|
|
||
Term Loan A
|
$
|
187,625,000
|
|
Revolver Loan
|
60,000,000
|
|
|
Total Debt
|
247,625,000
|
|
|
|
|
||
Less: current portion of debt
|
(9,500,000
|
)
|
|
Less: unamortized financing cost
|
(5,952,866
|
)
|
|
|
|
||
Long-term debt
|
$
|
232,172,134
|
|
|
Amount
|
||
2020
|
$
|
9,500,000
|
|
2021
|
10,687,500
|
|
|
2022
|
14,250,000
|
|
|
2023
|
15,437,500
|
|
|
2024
|
197,750,000
|
|
|
|
|
||
Total
|
$
|
247,625,000
|
|
11.
|
Income Taxes
|
|
Years ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
9,034,736
|
|
|
$
|
21,058,703
|
|
|
$
|
19,219,251
|
|
State
|
5,924,933
|
|
|
9,646,172
|
|
|
5,336,885
|
|
|||
|
|
|
|
|
|
||||||
|
14,959,669
|
|
|
30,704,875
|
|
|
24,556,136
|
|
|||
|
|
|
|
|
|
||||||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(3,508,348
|
)
|
|
(5,954,666
|
)
|
|
(18,718,113
|
)
|
|||
State
|
(3,284,689
|
)
|
|
(2,390,569
|
)
|
|
(1,951,238
|
)
|
|||
|
|
|
|
|
|
||||||
|
(6,793,037
|
)
|
|
(8,345,235
|
)
|
|
(20,669,351
|
)
|
|||
|
|
|
|
|
|
||||||
Total provision for income taxes
|
$
|
8,166,632
|
|
|
$
|
22,359,640
|
|
|
$
|
3,886,785
|
|
|
2019
|
|
2018
|
||||
Deferred tax assets (liabilities)
|
|
|
|
||||
State taxes
|
$
|
1,110,659
|
|
|
$
|
1,886,010
|
|
Stock options
|
1,293,164
|
|
|
1,660,664
|
|
||
Accrued payroll and related cost
|
277,682
|
|
|
238,633
|
|
||
Accrued hospital pool deficit
|
188,075
|
|
|
168,413
|
|
||
Allowance for bad debts
|
544,028
|
|
|
1,124,917
|
|
||
Investment in other entities
|
2,977,431
|
|
|
884,922
|
|
||
Net operating loss carryforward
|
13,849,685
|
|
|
6,414,256
|
|
||
Lease liability
|
3,567,302
|
|
|
—
|
|
||
Property and equipment
|
(927,011
|
)
|
|
(1,286,087
|
)
|
||
Acquired intangible assets
|
(29,195,045
|
)
|
|
(24,084,892
|
)
|
||
Right-of-use assets
|
(3,544,315
|
)
|
|
—
|
|
||
Risk Pool Receivable
|
(1,623,049
|
)
|
|
(2,434,573
|
)
|
||
Other
|
1,403,446
|
|
|
(792,781
|
)
|
||
|
|
|
|
||||
Net deferred tax liabilities before valuation allowance
|
(10,077,948
|
)
|
|
(16,220,518
|
)
|
||
|
|
|
|
||||
Valuation allowance
|
(8,191,500
|
)
|
|
(3,395,417
|
)
|
||
Net deferred tax liabilities
|
$
|
(18,269,448
|
)
|
|
$
|
(19,615,935
|
)
|
|
2019
|
|
2018
|
||||
Tax valuation allowance
|
|
|
|
||||
Beginning balance
|
$
|
3,395,417
|
|
|
$
|
3,224,517
|
|
Charged (credited) to tax expense
|
1,085,842
|
|
|
170,900
|
|
||
Charged to goodwill
|
3,710,241
|
|
|
—
|
|
||
Ending balance
|
8,191,500
|
|
|
3,395,417
|
|
|
Years ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
|
|
|
|
|
|||
Tax provision at U.S. Federal statutory rates
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
State income taxes net of federal benefit
|
8.1
|
|
|
6.7
|
|
|
4.4
|
|
Non-deductible permanent items
|
3.3
|
|
|
1.3
|
|
|
(9.7
|
)
|
Non-taxable entities
|
(2.7
|
)
|
|
(0.7
|
)
|
|
(1.9
|
)
|
Stock-based compensation
|
(1.5
|
)
|
|
(1.8
|
)
|
|
0.9
|
|
Change in valuation allowance
|
13.7
|
|
|
—
|
|
|
(2.9
|
)
|
Entity Conversion
|
(10.5
|
)
|
|
0.5
|
|
|
—
|
|
Change in rate
|
—
|
|
|
—
|
|
|
(19.4
|
)
|
Other
|
0.2
|
|
|
0.1
|
|
|
1.4
|
|
|
|
|
|
|
|
|||
Effective income tax rate
|
31.6
|
%
|
|
27.1
|
%
|
|
7.8
|
%
|
•
|
each issued and outstanding share of NMM common stock was converted into the right to receive such number of shares of common stock of ApolloMed that results in the former NMM shareholders who did not dissent from the Merger (“former NMM Shareholders”) having a right to receive an aggregate of 30,397,489 shares of common stock of ApolloMed, subject to the 10% holdback pursuant to the Merger Agreement;
|
•
|
ApolloMed issued to former NMM Shareholders each former NMM Shareholder’s pro rata portion of (i) warrants to purchase an aggregate of 850,000 shares of common stock of ApolloMed, exercisable at $11.00 per share, and (ii) warrants to purchase an aggregate of 900,000 shares of common stock of ApolloMed, exercisable at $10.00 per share; and
|
•
|
ApolloMed held back an aggregate of 3,039,749 shares of common stock issuable to former NMM Shareholders, representing 10% of the total number of shares of ApolloMed common stock issuable to former NMM Shareholders, to secure indemnification rights of AMEH and its affiliates under the Merger Agreement (the “Holdback Shares”). The Holdback Shares were issued and outstanding as of December 31, 2019. The first tranche of 1,519,805 shares were issued in December 2018 and the remaining 1,511,380 were issued in December 2019, net of shares repurchase (see Note 13).
|
|
Shares
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
|
Aggregate
Intrinsic
Value
(in millions)
|
||||||
|
|
|
|
|
|
|
|
||||||
Options outstanding at January 1, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Options assumed in the Merger (see Note 3)
|
1,141,040
|
|
|
3.95
|
|
|
5.85
|
|
|
22.6
|
|
||
Options granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options exercised
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options outstanding at December 31, 2017
|
1,141,040
|
|
|
$
|
3.95
|
|
|
5.79
|
|
|
$
|
22.6
|
|
Options granted
|
155,000
|
|
|
9.85
|
|
|
—
|
|
|
—
|
|
||
Options exercised
|
(639,800
|
)
|
|
4.11
|
|
|
—
|
|
|
9.8
|
|
||
Options forfeited
|
(9,000
|
)
|
|
3.41
|
|
|
—
|
|
|
—
|
|
||
Options outstanding at December 31, 2018
|
647,240
|
|
|
$
|
5.62
|
|
|
4.13
|
|
|
$
|
9.2
|
|
Options granted
|
279,698
|
|
|
17.24
|
|
|
—
|
|
|
—
|
|
||
Options exercised
|
(241,214
|
)
|
|
6.09
|
|
|
—
|
|
|
2.7
|
|
||
Options forfeited
|
(78,378
|
)
|
|
17.62
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
||||||
Options outstanding at December 31, 2019
|
607,346
|
|
|
$
|
9.22
|
|
|
3.42
|
|
|
$
|
5.6
|
|
|
|
|
|
|
|
|
|
||||||
Options exercisable at December 31, 2019
|
439,776
|
|
|
$
|
4.58
|
|
|
2.09
|
|
|
$
|
5.6
|
|
December 31, 2019
|
|
Board Members
|
|
Executives
|
|||
Expected Term
|
|
3.0 years
|
|
|
3.0 years
|
|
|
Expected volatility
|
|
90.50% - 100.27%
|
|
|
84.42
|
%
|
|
Risk-free interest rate
|
|
1.60% - 2.51%
|
|
|
1.65
|
%
|
|
Market value of common stock
|
|
$15.35 - $18.11
|
|
|
$
|
18.91
|
|
Annual dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
Forfeiture rate
|
|
0
|
%
|
|
0
|
%
|
|
Years ended December 31,
|
||
|
2018
|
|
2017
|
|
|
|
|
Expected term
|
0.75 years
|
|
0.93 - 1.75 years
|
Expected volatility
|
38.10% - 41.60%
|
|
38.10% - 41.60%
|
Risk-free interest rate
|
1.64% - 1.86%
|
|
1.64% - 1.86%
|
Market value of common stock
|
$0.52 - $0.76
|
|
$0.52 - $0.76
|
Annual dividend yield
|
2.23% - 3.53%
|
|
2.23% - 3.53%
|
Forfeiture rate
|
0% - 6.8%
|
|
0% - 6.8%
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
|
Aggregate
Intrinsic
Value
|
||||||
|
|
|
|
|
|
|
|
||||||
Options outstanding at January 1, 2017
|
1,910,400
|
|
|
$
|
0.167
|
|
|
2.75
|
|
|
$
|
1.1
|
|
Options granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options exercised
|
(1,056,600
|
)
|
|
0.167
|
|
|
—
|
|
|
(0.6
|
)
|
||
Options forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options outstanding at December 31, 2017
|
853,800
|
|
|
$
|
0.167
|
|
|
1.75
|
|
|
$
|
0.5
|
|
Options granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options exercised
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options outstanding at December 31, 2018
|
853,800
|
|
|
$
|
0.167
|
|
|
0.75
|
|
|
$
|
0.5
|
|
Options granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options exercised
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options forfeited
|
(853,800
|
)
|
|
0.167
|
|
|
—
|
|
|
(0.5
|
)
|
||
|
|
|
|
|
|
|
|
||||||
Options outstanding and exercisable at December 31, 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
Years ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Share-based compensation expense:
|
|
|
|
|
|
||||||
General and administrative
|
$
|
607,146
|
|
|
$
|
809,528
|
|
|
$
|
2,113,116
|
|
|
$
|
607,146
|
|
|
$
|
809,528
|
|
|
$
|
2,113,116
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
|
Aggregate
Intrinsic
Value
(In Millions)
|
||||||
Warrants outstanding at January 1, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Warrants assumed in the Merger
|
1,898,541
|
|
|
9.06
|
|
|
2.69
|
|
|
1.8
|
|
||
Warrants granted (see Note 3)
|
1,750,000
|
|
|
10.49
|
|
|
5.00
|
|
|
—
|
|
||
Warrants outstanding at December 31, 2017
|
3,648,541
|
|
|
$
|
9.75
|
|
|
3.74
|
|
|
$
|
52.0
|
|
Warrants granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Warrants exercised
|
(286,357
|
)
|
|
7.84
|
|
|
—
|
|
|
3.0
|
|
||
Warrants forfeited
|
(30,189
|
)
|
|
4.50
|
|
|
—
|
|
|
—
|
|
||
Warrants outstanding at December 31, 2018
|
3,331,995
|
|
|
$
|
9.93
|
|
|
2.97
|
|
|
$
|
33.1
|
|
Warrants granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Warrants exercised
|
(177,405
|
)
|
|
9.32
|
|
|
—
|
|
|
1.60
|
|
||
Warrants forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
||||||
Warrants outstanding at December 31, 2019
|
3,154,590
|
|
|
$
|
9.96
|
|
|
2.01
|
|
|
$
|
26.7
|
|
Exercise Price Per
Share |
|
Warrants
Outstanding
|
|
Weighted
Average
Remaining
Contractual Life
|
|
Warrants
Exercisable
|
|
Weighted
Average
Exercise Price
Per
Share
|
||||||
|
|
|
|
|
|
|
|
|
||||||
$
|
9.00
|
|
|
948,498
|
|
|
0.79
|
|
948,498
|
|
|
$
|
9.00
|
|
10.00
|
|
|
1,386,083
|
|
|
2.30
|
|
1,386,083
|
|
|
10.00
|
|
||
11.00
|
|
|
820,009
|
|
|
2.94
|
|
820,009
|
|
|
11.00
|
|
||
|
|
|
|
|
|
|
|
|
||||||
$ 9.00 –11.00
|
|
3,154,590
|
|
|
2.01
|
|
3,154,590
|
|
|
$
|
9.96
|
|
13.
|
Commitments and Contingencies
|
14.
|
Related Party Transactions
|
|
Years ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
AHMC – Risk pool revenue
|
$
|
49,300,000
|
|
|
$
|
68,200,000
|
|
HSMSO – Management fees, net
|
(1,700,000
|
)
|
|
(2,600,000
|
)
|
||
Aurion – Management fees
|
(300,000
|
)
|
|
(317,000
|
)
|
||
|
|
|
|
||||
Receipts, Net
|
$
|
47,300,000
|
|
|
$
|
65,283,000
|
|
15.
|
Employee Benefit Plan
|
16.
|
Revenue Recognition
|
17.
|
Earnings Per Share
|
|
|
Years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Earnings per share – basic
|
|
$
|
0.41
|
|
|
$
|
0.33
|
|
|
$
|
1.01
|
|
Earnings per share – diluted
|
|
$
|
0.39
|
|
|
$
|
0.29
|
|
|
$
|
0.90
|
|
Weighted average shares of common stock outstanding – basic
|
|
34,708,429
|
|
|
32,893,940
|
|
|
25,525,786
|
|
|||
Weighted average shares of common stock outstanding – diluted
|
|
36,403,279
|
|
|
37,914,886
|
|
|
28,661,735
|
|
|
|
Years ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
|
|
|
|
|
|
|
|||
Weighted average shares of common stock outstanding – basic
|
|
34,708,429
|
|
|
32,893,940
|
|
|
25,525,786
|
|
10% shares held back pursuant to indemnification clause
|
|
—
|
|
|
2,935,512
|
|
|
3,039,749
|
|
Stock options
|
|
295,672
|
|
|
459,440
|
|
|
44,716
|
|
Warrants
|
|
1,384,078
|
|
|
1,625,994
|
|
|
51,484
|
|
Restricted stock units
|
|
15,100
|
|
|
—
|
|
|
—
|
|
Weighted average shares of common stock outstanding – diluted
|
|
36,403,279
|
|
|
37,914,886
|
|
|
28,661,735
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
87,110,226
|
|
|
$
|
71,726,342
|
|
Restricted cash – short-term
|
|
75,000
|
|
|
—
|
|
||
Investment in marketable securities
|
|
123,948,391
|
|
|
1,066,103
|
|
||
Receivables, net
|
|
9,300,076
|
|
|
4,512,000
|
|
||
Receivables, net – related party
|
|
42,976,262
|
|
|
44,651,502
|
|
||
Other receivables
|
|
743,757
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
|
7,403,057
|
|
|
3,647,654
|
|
||
Loans receivable
|
|
6,425,000
|
|
|
—
|
|
Loans receivable - related parties
|
|
16,500,000
|
|
|
—
|
|
||
|
|
|
|
|
||||
Total current assets
|
|
294,481,769
|
|
|
125,603,601
|
|
||
|
|
|
|
|
||||
Noncurrent assets
|
|
|
|
|
||||
Land, property and equipment, net
|
|
9,546,924
|
|
|
9,602,228
|
|
||
Intangible assets, net
|
|
81,439,224
|
|
|
58,984,420
|
|
||
Goodwill
|
|
108,912,763
|
|
|
56,213,450
|
|
||
Loans receivable – related parties
|
|
—
|
|
|
12,500,000
|
|
||
Investments in other entities – equity method
|
|
28,486,593
|
|
|
26,707,404
|
|
||
Investment in privately held entities
|
|
4,725,000
|
|
|
4,725,000
|
|
||
Restricted cash – long-term
|
|
746,104
|
|
|
745,470
|
|
||
Operating lease right-of-use assets
|
|
4,750,944
|
|
|
—
|
|
||
Other assets
|
|
1,056,828
|
|
|
839,085
|
|
||
|
|
|
|
|
||||
Total noncurrent assets
|
|
239,664,380
|
|
|
170,317,057
|
|
||
|
|
|
|
|
||||
Total assets
|
|
$
|
534,146,149
|
|
|
$
|
295,920,658
|
|
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
11,186,808
|
|
|
$
|
6,378,751
|
|
Fiduciary accounts payable
|
|
2,027,081
|
|
|
1,538,598
|
|
||
Medical liabilities
|
|
49,019,200
|
|
|
24,983,110
|
|
||
Income taxes payable
|
|
4,529,667
|
|
|
11,621,861
|
|
||
Dividend payable
|
|
271,279
|
|
|
—
|
|
||
Amount due to affiliate
|
|
28,057,793
|
|
|
11,505,680
|
|
||
Bank loan, short-term
|
|
—
|
|
|
40,257
|
|
||
Finance lease liabilities
|
|
101,741
|
|
|
101,741
|
|
||
Operating lease liabilities
|
|
1,088,260
|
|
|
—
|
|
||
|
|
|
|
|
||||
Total current liabilities
|
|
96,281,829
|
|
|
56,169,998
|
|
||
|
|
|
|
|
||||
Noncurrent liabilities
|
|
|
|
|
||||
Deferred tax liability
|
|
14,058,528
|
|
|
15,693,159
|
|
||
Liability for unissued equity shares
|
|
—
|
|
|
1,185,025
|
|
||
Finance lease liabilities, net of current portion
|
|
415,519
|
|
|
517,261
|
|
||
Operating lease liabilities, net of current portion
|
|
3,741,811
|
|
|
—
|
|
||
|
|
|
|
|
||||
Total noncurrent liabilities
|
|
18,215,858
|
|
|
17,395,445
|
|
||
|
|
|
|
|
||||
Total liabilities
|
|
$
|
114,497,687
|
|
|
$
|
73,565,443
|
|
19.
|
Leases
|
|
Year Ended December 31, 2019
|
||
|
|
||
Operating lease cost
|
$
|
5,437,078
|
|
|
|
||
Finance lease cost
|
|
||
Amortization of lease expense
|
101,741
|
|
|
Interest on lease liabilities
|
17,179
|
|
|
|
|
||
Sublease income
|
$
|
(414,704
|
)
|
|
|
||
Total lease cost, net
|
$
|
5,141,294
|
|
|
Year Ended December 31, 2019
|
||
|
|
||
Supplemental Cash Flows Information
|
|
||
|
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
5,254,079
|
|
Operating cash flows from finance leases
|
17,179
|
|
|
Financing cash flows from finance leases
|
101,741
|
|
|
|
|
||
Right-of-use assets obtained in exchange for lease liabilities:
|
|
||
Operating leases
|
16,727,589
|
|
|
Finance leases
|
—
|
|
|
|
|
||
|
Year Ended December 31, 2019
|
||
|
|
||
Weighted Average Remaining Lease Term
|
|
||
|
|
||
Operating leases
|
6.48 years
|
|
|
Finance leases
|
4.67 years
|
|
|
|
|
||
Weighted Average Discount Rate
|
|
||
|
|
||
Operating leases
|
6.11
|
%
|
|
Finance leases
|
3.00
|
%
|
Years ending December 31,
|
Operating Leases
|
|
Finance Leases
|
||||
2020
|
$
|
3,781,174
|
|
|
$
|
118,920
|
|
2021
|
2,711,802
|
|
|
118,920
|
|
||
2022
|
2,376,159
|
|
|
118,920
|
|
||
2023
|
2,130,226
|
|
|
118,920
|
|
||
2024
|
1,788,047
|
|
|
79,255
|
|
||
Thereafter
|
4,783,381
|
|
|
—
|
|
||
|
|
|
|
||||
Total future minimum lease payments
|
17,570,789
|
|
|
554,935
|
|
||
Less: imputed interest
|
3,207,506
|
|
|
37,675
|
|
||
Total lease obligations
|
14,363,283
|
|
|
517,260
|
|
||
Less: current portion
|
2,990,686
|
|
|
101,741
|
|
||
Long-term lease obligations
|
$
|
11,372,597
|
|
|
$
|
415,519
|
|
Years ending December 31,
|
Operating Leases
|
|
Finance Leases
|
||||
2019
|
$
|
2,848,000
|
|
|
$
|
119,000
|
|
2020
|
2,267,000
|
|
|
119,000
|
|
||
2021
|
783,000
|
|
|
119,000
|
|
||
2022
|
487,000
|
|
|
119,000
|
|
||
2023
|
489,000
|
|
|
119,000
|
|
||
Thereafter
|
243,000
|
|
|
79,000
|
|
||
|
|
|
|
||||
Total future minimum lease payments
|
7,117,000
|
|
|
674,000
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
/s/ BDO USA, LLP
|
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
(a)
|
The following documents are filed as part of this Annual Report on Form 10-K:
|
1.
|
Consolidated financial statements
|
2.
|
Financial Statement Schedules
|
3.
|
Exhibits required by Item 601 of Regulation S-K.
|
Exhibit No.
|
|
Description
|
|
|
|
2.1†
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.3
|
|
|
|
|
|
2.4
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
3.5
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
3.6
|
|
|
|
|
|
3.7
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
4.10
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
10.4+
|
|
|
|
|
|
10.5+
|
|
|
|
|
|
10.6+
|
|
|
|
|
|
10.7+
|
|
|
|
|
|
10.8+
|
|
|
|
|
|
10.9+
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29*
|
|
|
|
|
|
10.30+
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
10.31+
|
|
|
|
|
|
10.32+
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35*
|
|
|
|
|
|
10.36+
|
|
|
|
|
|
10.37+
|
|
|
|
|
|
10.38+
|
|
|
|
|
|
10.39+
|
|
|
|
|
|
10.40
|
|
|
|
|
|
10.41
|
|
|
|
|
|
10.42
|
|
|
|
|
|
10.43
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
10.44
|
|
|
|
|
|
10.45
|
|
|
|
|
|
10.46
|
|
|
|
|
|
10.47
|
|
|
|
|
|
10.48
|
|
|
|
|
|
10.49
|
|
|
|
|
|
10.50
|
|
|
|
|
|
10.51
|
|
|
|
|
|
10.52
|
|
|
|
|
|
10.53
|
|
|
|
|
|
10.54
|
|
|
|
|
|
10.55
|
|
Exhibit No.
|
|
Description
|
|
|
|
10.56
|
|
|
|
|
|
10.57
|
|
|
|
|
|
10.58
|
|
|
|
|
|
10.59
|
|
|
|
|
|
10.60
|
|
|
|
|
|
10.61
|
|
|
|
|
|
10.62+
|
|
|
|
|
|
14.1*
|
|
|
|
|
|
21.1*
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
24.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
31.3*
|
|
|
|
|
|
32**
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
Exhibit No.
|
|
Description
|
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
|
|
|
|
Item 16.
|
Form 10-K Summary
|
|
APOLLO MEDICAL HOLDINGS, INC.
|
|
|
|
|
Date: March 16, 2020
|
By:
|
/s/ Kenneth Sim, M.D.
|
|
|
Kenneth Sim, M.D.
|
|
|
Executive Chairman and Co-Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
Date: March 16, 2020
|
By:
|
/s/ Thomas Lam, M.D.
|
|
|
Thomas Lam, M.D.
|
|
|
Co-Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
|
|
|
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
|
By:
|
/s/ Kenneth Sim, M.D
|
|
Executive Chairman, Co-Chief Executive Officer (Principal Executive Officer) and Director
|
|
March 16, 2020
|
|
Kenneth Sim, M.D
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Thomas Lam, M.D.
|
|
President, Co-Chief Executive Officer (Principal Executive Officer) and Director
|
|
March 16, 2020
|
|
Thomas Lam, M.D.
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Eric Chin
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
March 16, 2020
|
|
Eric Chin
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ernest Bates, M.D.
|
|
Director
|
|
March 16, 2020
|
|
Ernest Bates, M.D.
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ John Chiang
|
|
Director
|
|
March 16, 2020
|
|
John Chiang
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michael Eng
|
|
Director
|
|
March 16, 2020
|
|
Michael Eng
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Mark Fawcett
|
|
Director
|
|
March 16, 2020
|
|
Mark Fawcett
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Mitchell Kitayama
|
|
Director
|
|
March 16, 2020
|
|
Mitchell Kitayama
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Linda Marsh
|
|
Director
|
|
March 16, 2020
|
|
Linda Marsh
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Matthew Mazdyasni
|
|
Director
|
|
March 16, 2020
|
|
Matthew Mazdyasni
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ David Schmidt
|
|
Director
|
|
March 16, 2020
|
|
David Schmidt
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Li Yu
|
|
Director
|
|
March 16, 2020
|
|
Li Yu
|
|
|
|
|
•
|
our Bylaws prohibit our stockholders from filling board vacancies
|
•
|
our Bylaws require holders of no less than one-then of all shares entitled to vote at a meeting to call a special meeting of stockholders.
|
•
|
our Bylaws provide that our board of directors will establish the authorized number of directors from time to time;
|
•
|
our Certificate of Incorporation does not permit cumulative voting in the election of directors; and
|
•
|
our Certificate of Incorporation permits our board of directors to determine the rights, privileges and preferences of any new series of preferred stock, some of which could impede the ability of a person to acquire control of our company.
|
•
|
Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
|
•
|
Full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission and in other public communications made by the Company;
|
Entity
|
|
Jurisdiction of Incorporation
|
Network Medical Management, Inc.
|
|
California
|
Apollo Medical Management, Inc.
|
|
Delaware
|
APAACO, Inc.
|
|
Delaware
|
Apollo Care Connect, Inc.
|
|
Delaware
|
ApolloMed Accountable Care Organization, Inc.*
|
|
California
|
Allied Pacific Hospice, LLC
|
|
California
|
Allied Physicians ACO, LLC
|
|
California
|
APCN-ACO, Inc.
|
|
California
|
99 Medical Equipment, Healthcare Supplies & Wheelchair Center
|
|
California
|
Apollo Palliative Services, LLC
|
|
California
|
Best Choice Hospice Care, LLC
|
|
California
|
Holistic Care Home Health Agency, Inc.
|
|
California
|
Pulmonary Critical Care Management, Inc.
|
|
California
|
Verdugo Medical Management, Inc.
|
|
California
|
|
*
|
80% ownership
|
1.
|
I have reviewed this annual report on Form 10-K of Apollo Medical Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
DATE:
|
March 16, 2020
|
|
/s/ Kenneth Sim, M.D.
|
|
|
|
|
Kenneth Sim, M.D.
|
|
|
|
|
Executive Chairman and
Co-Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Apollo Medical Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
DATE:
|
March 16, 2020
|
|
/s/ Thomas Lam, M.D.
|
|
|
|
|
Thomas Lam, M.D.
|
|
|
|
|
Co-Chief Executive Officer and President
|
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Apollo Medical Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
DATE:
|
March 16, 2020
|
|
/s/ Eric Chin
|
|
|
|
|
Eric Chin
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Executive Officer)
|
DATE:
|
March 16, 2020
|
|
/s/ Kenneth Sim, M.D.
|
|
|
|
|
|
Kenneth Sim, M.D.
|
|
|
|
|
Executive Chairman and
Co-Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
DATE:
|
March 16, 2020
|
|
/s/ Thomas Lam, M.D.
|
|
|
|
|
|
Thomas Lam, M.D.
|
|
|
|
|
Co-Chief Executive Officer and President
|
|
|
|
|
(Principal Executive Officer)
|
DATE:
|
March 16, 2020
|
|
/s/ Eric Chin
|
|
|
|
|
|
Eric Chin
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|