Item 8.01 Other Events.
On December 8, 2017, Apollo Medical Holdings, Inc. (the "Company") completed a
merger (the "Merger") with Network Medical Management, Inc., a California
corporation ("NMM"). As a result of the Merger, NMM became a wholly owned
subsidiary of the Company and the former NMM shareholders owned more than 80% of
the issued and outstanding shares of ApolloMed's common stock post-merger as
previously disclosed in the Company's filings with the Securities and Exchange
Commission.
As a condition to the closing of the Merger, all of the former NMM shareholders
entered into Lock-Up Agreements with the Company, each dated December 6, 2017
(the "Lock-Up Agreements"). Under the terms of each Lock-Up Agreement, the
former NMM shareholders agreed not to, without the prior written consent of the
Company and except in limited circumstances, (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of Company common stock they received from the Merger (the
"Covered Securities"), or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Covered Securities. The lock-up restrictions terminate with respect to
one-third of the Covered Securities immediately following each of (i) the
18th month anniversary of the effective time of the Merger (the "First Lock Up
Period"), (ii) the 30th month anniversary of the effective time of the Merger
(the "Second Lock Up Period"), and (iii) the 42nd month anniversary of the
effective time of the Merger. Pursuant to certain amendments to the Lock-Up
Agreements, the former NMM shareholders agreed to extend the expiration date on
the First Lock-Up Period from June 7, 2019 to September 30, 2019, and
thereafter, to further extend the expiration date of the First Lock-Up Period
from September 30, 2019 to January 31, 2020. The other terms of the Lock-Up
Agreements remain unchanged.
The Second Lock Up Period ended on June 9, 2020. As a result, the Company
estimates that approximately 9,552,030 shares of the Company's common stock
became eligible for sale on the public market at the open of trading on June 9,
2020, subject to restrictions set forth in the Company's insider trading policy
and under applicable law.
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