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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 26, 2023
APOLLO MEDICAL HOLDINGS, INC.
(Exact Name of Registrant as Specified in its
Charter)
| Delaware |
001-37392 |
95-4472349 |
| (State or Other Jurisdiction |
(Commission |
(I.R.S. Employer |
| of Incorporation) |
File Number) |
Identification No.) |
1668 S. Garfield Avenue, 2nd Floor, Alhambra, California 91801
(Address of Principal Executive Offices) (Zip Code)
(626) 282-0288
Registrant’s Telephone Number, Including
Area Code
(Former Name or Former Address, if Changed Since
Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| |
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
| Common Stock |
AMEH |
The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
On December 26, 2023, Allied Physicians of California, a Professional
Medical Corporation (“APC”), a consolidated affiliate of Apollo Medical Holdings, Inc. (the “Company”), completed
a restructuring transaction to separate APC’s healthcare services business from its real estate management and development business.
To effect the restructuring, APC contributed its real estate management and development business to a wholly-owned subsidiary in exchange
for 100% of the subsidiary’s membership interest units (the “Membership Interests”), which Membership Interests were
then distributed to holders of APC’s outstanding common stock as a dividend, with each such stockholder receiving one Membership
Interest for each share of outstanding APC common stock held. Dr. Thomas Lam, the Company’s Co-Chief Executive Officer and President
and a director, is the Chief Executive Officer and Chief Financial Officer and a director and stockholder of APC; Dr. Kenneth Sim, the
Company’s Executive Chairman, is Chairman and a director and stockholder of APC; and Dr. Albert Young, the Company’s Chief
Administrative Officer, is Senor Executive Vice President and a director and stockholder of APC.
In connection with the restructuring, APC amended certain provisions
of the Certificate of Determination of Preferences of Series A Preferred Stock (the “Amended Certificate of Determination”)
relating to dividend restrictions and liquidation rights. AP-AMH Medical Corporation, a designated shareholder professional corporation
(“AP-AMH”), holds all of APC’s outstanding Series A Preferred Stock. AP-AMH is a consolidated affiliate of the Company,
of which Dr. Lam is the sole stockholder. The foregoing description of the Amended Certificate of Determination does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of the Amended Certificate of Determination, a copy of which
is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
APOLLO MEDICAL HOLDINGS, INC. |
| |
|
| Date: January
2, 2024 |
By: |
/s/ Thomas S. Lam |
| |
Name: |
Thomas S. Lam, M.D., M.P.H. |
| |
Title: |
Co-Chief Executive Officer and President |
Exhibit 10.1
CERTIFICATE OF DETERMINATION
OF PREFERENCES OF
SERIES A PREFERRED STOCK
OF
ALLIED PHYSICIANS OF CALIFORNIA,
A PROFESSIONAL MEDICAL CORPORATION
Pursuant to Section 401 of the
General Corporation Law of the State of
California
The undersigned, Thomas
Lam, M.D., and Paul Liu, M.D., hereby certify that:
A. They
are the duly elected and acting Chief Executive Officer and the duly elected and acting Secretary, respectively, of Allied Physicians
of California, a Professional Medical Corporation, a California corporation (the “Company”).
B. The
authorized number of shares of the Preferred Stock of the Company is 1,000,000, none of which shares have been issued. The authorized
number of shares of the Series A Preferred Stock is 1,000,000, none of which shares have been issued.
C. Pursuant
to the authority given by the Company’s Articles of Incorporation, the Board of Directors of the Company (the “Board”)
has duly adopted the following recitals and resolutions:
WHEREAS, the
Amended and Restated Articles of Incorporation of the Company authorize a class of Preferred Stock comprising 1,000,000 shares
issuable from time to time in one or more series;
WHEREAS, the
Board is authorized to fix or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly
unissued series of Preferred Stock, including but not limited to the dividend rights, dividend rates, conversion rights, voting
rights, liquidation preferences and the number of shares constituting any such series and the designation thereof, or any of them;
and
WHEREAS, the
Company heretofore has not issued or designated any series of Preferred Stock, and it is the desire of the Board, pursuant to its
authority as aforesaid, to fix the rights, preferences, privileges, restrictions and other matters relating to the Series A
Preferred Stock and the number of shares constituting such series.
NOW, THEREFORE,
BE IT RESOLVED, that the Board hereby provides for the issue of the first series of Preferred Stock consisting of 1,000,000
shares designated as “Series A Preferred Stock”; and
RESOLVED FURTHER,
that the Board hereby fixes the rights, privileges, preferences and restrictions and other matters relating to the Series A
Preferred Stock (the “Series A Preferred”) as follows:
“Affiliate”
means, with respect to any Person, any other Person that directly, or indirectly, through one or more intermediaries, Controls,
is Controlled by or is under common Control with such specified Person. For the avoidance of doubt, APC-LSMA Designated Shareholder
Medical Corporation is an Affiliate of the Company.
“Baseline Amount”
means, as of the Effective Date, an amount equal to $54,000,000, which amount shall pro-rated (as reasonably determined by the
Board) in connection with the calculation of the Series A Dividend with respect to less than a full fiscal year of the Company,
subject to adjustment as follows: Commencing on the first anniversary of the Effective Date, and on each succeeding anniversary
of the Effective Date thereafter (each, an “Adjustment Date”), the Baseline Amount shall be increased, if applicable,
by the same percentage increase (the “Percentage Increase”) as the change in the CPI for the period of January 1 through
December 31 of the immediately preceding calendar year, which percentage increase shall be determined by subtracting the CPI
effective as of January 1 of the preceding calendar year (the “Base CPI”) from the CPI effective as of December 31
of the preceding calendar year (the “Target CPI”) to calculate the CPI point change (the “CPI Point Change”),
and then dividing the CPI Point Change by the Base CPI and multiplying the result by 100. For the avoidance of doubt, if the Target
CPI is the same or less than the Base CPI, then, the Baseline Amount will remain the same for the ensuing one (1) year period.
As an illustration only, and not by way of limitation, assume that the Base CPI is 103 and the Target CPI is 106, and that the
Baseline Amount prior to the Adjustment Date is $54,000,000, then, the adjusted Baseline Amount is calculated as follows:
| · | CPI Point Change = 106 [Target CPI] minus 103 [Base CPI] = 3 |
| · | 3 [CPI Point Change] / 103 [Base CPI] = 0.029 |
| · | Adjusted Baseline Amount = $54,000,000 x 1.029 = $55,566,000 |
“Business Day”
means any day other than a Saturday, a Sunday or any other day on which commercial banks in Los Angeles, California are required
or authorized to close.
“Common Stock”
means the shares of common stock, without par value, of the Company.
“Control”
means, as to any Person, the power to direct or cause the direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract or otherwise (the terms “Controlled by,” “Controlling”
and “under common Control with” shall have correlative meanings).
“Cost of Healthcare
Services” means the Company’s actual costs incurred on an accrual basis of providing Healthcare Services pursuant
to the terms and conditions of the Payor Contracts, including the costs of primary care and specialty care providers, ancillary
medical services, including setting aside a reasonable reserve for IBNR, management fees paid to management services organizations,
professional liability and other insurance costs, professional liability claims (to the extent not covered by insurance), the repayment
of indebtedness incurred to fund operating losses with respect to the provision of Healthcare Services, and general and administrative
costs and expenses (including legal and accounting fees) allocated to the provision of such services in accordance with industry
practice, but expressly excluding (i) discretionary bonuses paid by the Company to providers, (ii) non-cash items (e.g., non-cash
allocations from equity method investments, depreciation and amortization expenses), and (iii) costs and expenses relating to or
arising from the Excluded Assets.
“CPI”
means the Consumer Price Index - All Urban Consumers (Los Angeles-Long Beach-Anaheim, CA area, Medical Care Services only: Base
1982-84 = 100) as published by the United States Department of Labor, Bureau of Labor Statistics or the successor index that most
closely approximates such index. If such index is no longer published, the Company and the holders of the Series A Preferred shall
attempt to agree upon a substitute index or formula, but if they are unable to so agree, then an arbitrator shall determine what
substitute index or formula shall be used. The arbitration shall be conducted in accordance with the rules of the American Arbitration
Association then prevailing by a single arbitrator in Los Angeles, California. Any decision or award resulting from such arbitration
shall be final and binding upon the Company and the holders of the Series A Preferred and judgment thereon may be entered in any
court of competent jurisdiction.
“Designated
Entities” means any entity in which the Company presently or hereafter holds an equity interest, directly or beneficially,
and that provides Healthcare Services or that supports the provision of Healthcare Services by the Company, including, without
limitation, (i) APC-LSMA Designated Shareholder Medical Corporation, (ii) Accountable Health Care IPA, (iii) AHMC International
Cancer Center, A Medical Corporation, (iv) Concourse Diagnostic Surgery Center, LLC, (v) David C. P. Chen M.D., Inc., (vi) La Salle
Medical Associates, (vii) Maverick Medical Group, Inc., (viii) MediPortal LLC, (ix) Pacific Medical Imaging & Oncology Center,
Inc., and (x) Pacific Ambulatory Surgery Center, LLC, but excluding any entity the interests of which constitute Excluded Assets.
“Dividend Receivables”
means dividends, distributions and similar amounts paid by the Designated Entities to the Company and/or its Affiliates, in the
Company’s capacity as a direct or beneficial equityholder of the Designated Entities.
“Effective Date”
means the date on which any shares of Series A Preferred are first issued by the Company.
“Excluded Assets”
means (i) assets received from the sale of shares of the Series A Preferred equal to the Series A Purchase Price, (ii) the
assets of the Company that are not Healthcare Services Assets, including the Company’s equity interests in Universal Care,
Inc., Apollo Medical Holdings, Inc., and any entity that is primarily engaged in the business of owning, leasing, developing or
otherwise operating real estate, (iii) any assets acquired with the proceeds of the sale, assignment or other disposition
of any of the assets described in clauses (i) or (ii), and (iv) any proceeds of the assets described in clauses (i), (ii)
and (iii).
“Healthcare
Services” means any medical or other healthcare-related services that the Company delivers or is responsible for delivering
to patients through physicians, professional medical corporations, ancillary service providers, and other contracted providers
engaged by the Company to provide such services, including any medical or other healthcare-related services with respect to which
the Company is entitled to receive capitation payments, fee-for-service payments, risk pool settlements, incentive payments or
other fees.
“Healthcare
Services Assets” means (i) the assets of the Company that consist of or are dedicated exclusively to activities that
generate Net Income from Healthcare Services or Dividend Receivables and (ii) other assets of the Company, to the extent such assets
consist of or are dedicated in part to activities that generate Net Income from Healthcare Services or Dividend Receivables, in
each case as reasonably determined by the Board.
“IBNR”
means estimated claims for Healthcare Services provided by the Company, which claims have been incurred but not reported.
“IBNR Base Amount”
means the Company’s estimated IBNR, as reported on the Company’s most recent financial survey report preceding the
Effective Date filed by the Company with the California Department of Managed Health Care.
“IBNR Reconciliation
Amount” means an amount equal to the IBNR Base Amount, less the actual amount paid after the Effective Date with respect
to IBNR liabilities incurred by the Company on or prior to the Effective Date (based on actual claims paid after the Effective
Date for Healthcare Services provided on or prior to the Effective Date), as reasonably determined by the Company as of the 12-month
anniversary of the Effective Date.
“Incentive Agreements”
means agreements and other arrangements between the Company and Payors providing for incentive, bonus or other payments to the
Company based on, among other things, the quality of care or other performance criteria, HEDIS adjustments, enrollment incentives
or kick payments.
“Liquidation
Event” means any of the following: (i) a liquidation, dissolution or winding up of the affairs of the Company, either
voluntary or involuntary, (ii) a Sale of the Company or (iii) the bankruptcy or insolvency of the Company.
“Net Income
from Healthcare Services” means, with respect to any period of determination, and subject to Section 2(b), the
Payor Contract Receivables for such period, less the corresponding Cost of Healthcare Services incurred, which amount shall be
determined net of any taxes applicable to or based on the Payor Contract Receivables, and without the application of any tax benefits
generated by or in connection with the Excluded Assets.
“Non-Affiliate”
means any Person other than an Affiliate of the Company or of any holder of the Series A Preferred that owns, individually or together
with its Affiliates, more than 25% of the issued and outstanding shares of the Series A Preferred.
“Payor Contracts”
means agreements, including (i) capitation agreements, (ii) risk pool agreements, risk pool settlements and other shared risk arrangements,
(iii) Incentive Agreements and (iv) other agreements and arrangements entered into between the Company and Payors, in each case
pursuant to which the Company receives payments in exchange for or in connection with providing or arranging the delivery of Healthcare
Services to patients, as specified in such agreements or arrangements.
“Payor Contract
Receivables” means the net payments and other amounts received on an accrual basis by the Company for Healthcare Services
provided after the Effective Date pursuant to the terms and conditions of the Payor Contracts.
“Payors”
means health maintenance organizations, insurance companies, health plan sponsors, governmental programs, licensed health care
service plans, hospitals and other providers, entities and organizations that provide payments and/or reimbursements to healthcare
providers in connection with the provision of healthcare services to patients.
“Person”
means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization and a government or any branch, department, agency, political subdivision or official
thereof.
“Retained Amounts”
means, with respect to the calculation of the amount of the Series A Dividend payable in connection with any fiscal year of the
Company, fifty percent (50%) of the aggregate amount of Net Income from Healthcare Services (but excluding Dividend Receivables)
that exceeds the then-current Baseline Amount.
“Sale of the
Company” means (a) the sale of all, or substantially all, of the Company’s consolidated assets to a Non-Affiliate
in any single transaction or series of related transactions; (b) the sale of at least a majority of the outstanding Common Stock
to a Non-Affiliate in any single transaction or series of related transactions; (c) any merger or consolidation of the Company
with or into a Non-Affiliate, or (d) any reorganization, recapitalization or other similar transaction (including a stock sale)
involving the Company, on the one hand, and a Non-Affiliate, on the other hand, unless, immediately after the completion of such
transaction described in clause (c) or (d), Control of the Company is substantially unaffected or remains, directly or indirectly,
in the same shareholders (or their Affiliates) that Controlled the Company immediately prior to such transaction.
“Series A Dividend
Payment Date” means the last day of the Company’s first full fiscal quarter after the Effective Date, and the last
day of each subsequent fiscal quarter in which any shares of the Series A Preferred are outstanding (unless such day is not a Business
Day, in which event such dividends shall be payable on the next succeeding Business Day).
“Series A Purchase
Price” means an amount equal to $545,000,000.
“Series A Shareholders
Agreement” means any agreement entered into at any time or from time to time between the Company and any of the holders
of the shares of Series A Preferred in connection with the shares of Series A Preferred and the respective rights of the parties
thereunder.
(a) Cumulative
Dividend Calculation. Holders of Series A Preferred shall be entitled to receive preferential, cumulative dividends, which
dividends shall accumulate and accrue on a daily basis from and after the date of issuance of any particular share of Series A
Preferred, in an amount equal to, with respect to any period of determination, (i) the sum of (A) Net Income from Healthcare
Services and (B) Dividend Receivables, less (ii) the sum of any Retained Amounts (the “Series A Dividend”). For the
avoidance of doubt, the amount of Net Income from Healthcare Services and the amount of Dividend Receivables, as each shall have
been determined as provided herein with respect to any specified fiscal year of the Company, shall be payable in full to the holders
of the Series A Preferred until such time as such holders have received an aggregate amount equal to the Baseline Amount, and for
the balance of such fiscal year, the Series A Dividend amount determined pursuant to clause (i) of this Section 2(a) shall
be reduced by the Retained Amount. Notwithstanding anything to the contrary set forth herein, all calculations hereunder relating
to the Series A Preferred shall be made on an accrual basis in accordance with U.S. generally accepted accounting principles (GAAP),
including, without limitation, the calculation of the Cost of Healthcare Services, Dividend Receivables, IBNR, IBNR Reconciliation
Amount, Net Income from Healthcare Services, Payor Contract Receivables, Retained Amounts, and the Series A Dividend.
(b) Adjustments
to Net Income from Healthcare Services. Notwithstanding anything to the contrary herein, Net Income from Healthcare Services
shall be subject to the following adjustments:
(i) If
a capitation payment under a Payor Contract is adjusted after the Effective Date with respect to Healthcare Services provided before
the Effective Date, (A) any additional amounts received by the Company with respect to such adjustment shall be excluded from the
calculation of Net Income from Healthcare Services for the period in which amount was received, and (B) any payment the Company
is required to make with respect to such adjustment shall not be deemed to constitute a Cost of Healthcare Services or otherwise
reduce the amount of Net Income from Healthcare Services for the period in which such amount was paid.
(ii) If,
after the Effective Date, the Company receives a payment under an Incentive Agreement, which payment has been calculated in whole
or in part with respect to Healthcare Services provided before the Effective Date, such payment, to the extent based on Healthcare
Services provided before the Effective Date, shall be excluded from the calculation of Net Income from Healthcare Services.
(iii) If
the IBNR Reconciliation Amount is a positive number, such amount shall be excluded from the calculation of Net Income from Healthcare
Services for the period in which such amount was determined, and if the IBNR Reconciliation Amount is a negative number, such amount
shall not be deemed to constitute a Cost of Healthcare Services or otherwise reduce the amount of Net Income from Healthcare Services
for the period in which such amount was determined.
(c) Dividend
Payment Dates. The accrued and unpaid portion of the Series A Dividend shall be payable in cash, out of funds legally available
for the payment of dividends and whether or not declared by the Board, quarterly in arrears on each Series A Dividend Payment Date.
If the full amount of the dividend for a particular period, as computed pursuant to Section 2(a), is not paid on the applicable
payment date, then any such unpaid amount shall accrue and be paid as promptly as is legally permissible.
(d) Restriction
on Other Dividends. The Company shall not declare, pay or set aside any dividends on shares of any other class or series of
capital stock of the Company (other than dividends on shares of common stock payable in shares of common stock) unless the holders
of Series A Preferred shall have received, immediately prior to or simultaneously with the payment of such other dividend, an amount
equal to the aggregate Series A Dividend then accrued and unpaid.
(a) General
Limitation. Except to the extent otherwise provided by law and/or in any Series A Shareholders Agreement, the shares of Series
A Preferred shall have the right to vote only with respect to the matters expressly set forth herein. The shares of Series A Preferred
shall not be entitled to vote for the election of directors.
(b) Manner
of Voting. Solely in connection with the matters upon which the shares of Series A Preferred are entitled to vote, the holders
thereof shall be entitled to one vote per each share held immediately after the close of business on the record date fixed for
a meeting or the effective date of a written consent, and such holders shall have voting rights and powers equal to the voting
rights and powers of the Common Stock and shall be entitled to notice of any shareholders’ meeting in accordance with the
Bylaws of the Company. Except as otherwise provided herein or in any Series A Shareholders Agreement or as required by law, the
Series A Preferred shall vote together with the Common Stock at any annual or special meeting of the shareholders and not as a
separate class, and may act by written consent together with and in the same manner as the Common Stock.
(c) Separate
Vote of Series A Preferred. For so long as any shares of Series A Preferred remain outstanding, in addition to any other vote
or consent required herein or in any Series A Shareholders Agreement or by law, the vote or written consent of the holders of at
least a majority of the outstanding shares of Series A Preferred, voting as a separate class, shall be necessary for effecting
or validating the following actions:
(i) Any
action that alters or changes the voting powers or other special rights, preferences, privileges, qualifications, limitations or
restrictions of the Series A Preferred;
(ii) Any
increase or decrease (other than by conversion) in the authorized number of shares of the Series A Preferred;
(iii) Any
Liquidation Event; and
(iv) Any
authorization or any designation, whether by reclassification or otherwise, of any new class or series of capital stock or any
other securities convertible into equity securities of the Company ranking on a parity with or senior to the Series A Preferred
in rights of redemption, liquidation preference, voting or dividends, or any increase in the authorized or designated number of
any such new class or series.
(a) Series
A Liquidation Preference. Upon any Liquidation Event, whether voluntary or involuntary, before any other distribution or payment
shall be made to the holders of any shares of capital stock of the Company, the holders of the Series A Preferred shall be entitled
to be paid, out of the assets or surplus funds of the Company legally available for distribution, their pro rata share of an amount
equal to (i) all accrued and unpaid amounts of the Series A Dividend and (ii) the Series A Purchase Price (the “Series A
Liquidation Preference”).
(b) Additional
Series A Preference Distributions. After the payment in full of the Series A Liquidation Preference, the remaining assets or
surplus funds of the Company legally available for distribution, if any, in amount equal to the positive difference between the
then-current fair value of the Healthcare Services Assets, as reasonably determined by the Board, and the Series A Liquidation
Preference, shall be distributed ratably 90% to the holders of the Series A Preferred and 10% to the holders of the Common Stock
(the “Additional Series A Preference Distribution”).
(c) Common
Preference Distributions. After the payment in full of the Additional Series A Preference Distribution, the remaining assets
or surplus funds of the Company legally available for distribution, if any, shall be distributed ratably 90% to the holders of
the Common Stock and 10% to the holders of the Series A Preferred, until the holders of the Series A Preferred shall have received
under this Section 4(c) an aggregate amount equal to the amount received by the holders of the Common Stock under Section
4(b) (the “Common Preference Distribution”).
(d) Residual
Distributions. After the payment in full of the Series A Liquidation Preference, the Additional Series A Preference Distribution
and the Common Preference Distribution, the remaining assets or surplus funds of the Company legally available for distribution,
if any, shall be distributed ratably to the holders of the Common Stock.
(e) Pro
Rata Distributions. If, upon any Liquidation Event, the assets or surplus funds of the Company shall be insufficient to make
payment in full of any of the liquidation preferences set forth in Sections 4(a)-4(d) above, then such assets or surplus
funds as are available shall be distributed ratably, in partial satisfaction of the applicable liquidation preference, among the
holders of the shares of Series A Preferred and/or the shares of Common Stock, as the case may be, then outstanding, in proportion
to the full amounts to which they would be otherwise respectively entitled.
(a) Notices
of Record Date. Upon (i) any taking by the Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or other distribution, or (ii) any Liquidation Event or
other capital reorganization of the Company or any reclassification or recapitalization of the capital stock of the Company, the
Company shall mail to each holder of Series A Preferred at least ten days prior to the record date specified therein (or such shorter
period approved by a the holders of a majority of the outstanding Series A Preferred) a notice specifying (A) the date on which
any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution,
(B) the date on which any such Liquidation Event or other capital reorganization of the Company or any reclassification or recapitalization
of the capital stock of the Company is expected to become effective, and (C) the date, if any, that is to be fixed as to when the
holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such Liquidation Event or other capital reorganization of the Company or any
reclassification or recapitalization of the capital stock of the Company.
(b) Delivery
of Notices. Any notice required by the provisions of this Certificate of Determination shall be in writing and shall be deemed
effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail, (iii) when
sent by facsimile during normal business hours of the recipient (and on the next business day if sent by facsimile outside of such
normal business hours), (iv) seven days after having been sent by registered or certified mail, return receipt requested, postage
prepaid, or (v) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written
verification of receipt. All notices shall be addressed to each holder of record at the address of such holder appearing on the
books of the Company.
(c) No
Dilution or Impairment. The Company will not, by amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek
to avoid the observance or performance of any of the terms of the Series A Preferred set forth herein, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
in order to protect the rights of the holders of the Series A Preferred against dilution or other impairment.
(d) No
Reissuance of Series A Preferred. No share or shares of Series A Preferred acquired by the Company by reason of redemption,
purchase or otherwise shall be reissued.
RESOLVED FURTHER,
that the President and Chief Executive Officer and the Secretary of the Company are hereby authorized and directed to execute,
acknowledge, file and record a Certificate of Determination of Preferences of Series A Preferred Stock in accordance with
the foregoing resolutions and provisions of the General Corporation Law of California.
* * *
IN WITNESS WHEREOF,
the undersigned President and Chief Executive Officer of the Company and Secretary of the Company each declares under penalty of
perjury under the laws of the State of California that the matters set out in the foregoing Certificate are true and correct of
his own knowledge.
Dated: September 11,
2019.
| |
/s/ Thomas Lam |
| |
Thomas Lam, M.D., |
| |
Chief Executive Officer |
| |
|
| |
/s/ Paul Liu, M.D. |
| |
Paul Liu, M.D., |
| |
Secretary |
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF DETERMINATION OF PREFERENCES OF
SERIES A PREFERRED STOCK OF
ALLIED PHYSICIANS OF CALIFORNIA,
A PROFESSIONAL MEDICAL CORPORATION
The undersigned, Thomas Lam,
M.D., and Paul Liu, M.D., hereby certify that:
1. They
are the duly elected and acting Chief Executive Officer and Secretary, respectively, of ALLIED PHYSICIANS OF CALIFORNIA, A PROFESSIONAL
MEDICAL CORPORATION, a California corporation (the “Company”), with California Entity Number 1711310.
2. The
Company’s Certificate of Determination of Preferences of Series A Preferred Stock (the “Certificate of Determination”)
is hereby amended as follows:
A. Section 2(d) (Restriction
on Other Dividends) of the Certificate of Determination is hereby stricken and deleted in its entirety and replaced with the following:
“(d) Restriction
on Other Dividends. The Company shall not declare, pay or set aside any dividends on shares of any other class or series of
capital stock of the Company (other than dividends on shares of common stock payable in shares of common stock and/or dividends or distribution
comprised of all or any part of the Excluded Assets) unless the holders of Series A Preferred shall have received, immediately prior
to or simultaneously with the payment of such other dividend, an amount equal to the aggregate Series A Dividend then accrued and
unpaid.”
B. Section 4
(Liquidation Rights) of the Certificate of Determination is hereby stricken and deleted in its entirety and replaced with the following:
“4. LIQUIDATION
RIGHTS.
“(a) Series A
Liquidation Preference. Upon any Liquidation Event, whether voluntary or involuntary, before any other distribution or payment
shall be made to the holders of any shares of capital stock of the Company, the holders of the Series A Preferred shall be entitled
to be paid, out of the assets or surplus funds of the Company legally available for distribution, their pro rata share of an amount equal
to (i) all accrued and unpaid amounts of the Series A Dividend and (ii) the Series A Purchase Price (the “Series A
Liquidation Preference”) provided that the Series A Liquidation Preference shall first be paid out of Healthcare Services Assets,
and then, to the extent the Healthcare Services Assets are less than the Series A Liquidation Preference, out of the Excluded Assets.
“(b) Additional
Series A Preference Distributions. After the payment in full of the Series A Liquidation Preference, the remaining
assets or surplus funds of the Company legally available for distribution (including, without limitation, any and all assets and the proceeds
thereof that are not classified as Healthcare Services Assets or Excluded Assets), if any, minus the then-current fair value
of the Excluded Assets, as reasonably determined by the Board, shall be distributed on a pro rata basis to the holders of the Series A
Preferred (the “Additional Series A Preference Distribution”).
“(c) Common
Distributions. After the payment in full of the Additional Series A Preference Distribution, the remaining assets or surplus
funds of the Company legally available for distribution, if any, in an amount equal to and not to exceed the then-current fair value of
the Excluded Assets, as reasonably determined by the Board, shall be distributed on a pro rata basis to the holders of the Common Stock
(the “Common Distribution”).”
3. The
foregoing amendment of the Certificate of Determination has been duly approved by the Board of Directors of the Company.
4. The
foregoing amendment of the Certificate of Determination has been duly approved by the required vote of the shareholders of each class
of stock of the Company in accordance with Sections 902 and 903 of the California Corporations Code. The total number of outstanding shares
of each class of stock of the Company entitled to vote with respect to such amendment is 1,000,000 shares of Series A Preferred Stock
and 391,422,751 shares of Common Stock. The number of shares voting in favor of such amendment equaled or exceeded the vote required.
The percentage vote required was more than 50% of the shares of Series A Preferred Stock and more than 50% of the shares of Common
Stock.
5. Pursuant
to Section 110(c) of the California Corporations Code, this certificate is to be filed immediately with the California Secretary
of State with a future effective date of December 26, 2023.
[Remainder of page is intentionally blank]
We further declare under penalty
of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.
| Date: December 21, 2023 |
/s/ Thomas Lam, M.D. |
| |
Thomas Lam, M.D., |
| |
Chief Executive Officer |
| |
|
| |
/s/ Paul Liu |
| |
Paul Liu, M.D., Secretary |
Signature
Page to Certificate of Amendment to Certificate of Determination
v3.23.4
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