Business Context and Reporting Period
This Form 8-K was filed by Medical Transcription Billing, Corp. (MTBC) on May 4, 2018. The report details the entry into a Material Definitive Agreement to acquire assets from Orion Healthcorp Inc. and its affiliates.
Key Financial Metrics and Transaction Terms
- Purchase Price: Approximately $10 million to $12 million, potentially exceeding $12 million.
- Payment Structure: Cash and assumption of specified liabilities.
- Escrow Deposit: $1 million deposited by MTBC, credited at closing or returned if terminated without MTBC breach.
- Break-up Fee: $400,000 payable by Orion if the agreement is terminated.
- Expense Reimbursement: Up to $200,000 payable by Orion to MTBC upon termination.
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity metrics for MTBC or Orion.
Material Changes and Transaction Status
MTBC executed an Asset Purchase Agreement (APA) to acquire revenue cycle, practice management, and group purchasing organization assets. The target, Orion, is currently under Chapter 11 bankruptcy protection in the Eastern District of New York. The transaction is structured as a "stalking horse" bid subject to a Section 363 bankruptcy auction process, meaning higher or better bids may be accepted.
Outlook, Risks, and Contingencies
- Closing Conditions: The transaction requires Bankruptcy Court approval and the absence of material adverse events.
- Uncertainty: No assurance is given that the transaction will be consummated or on the terms set forth in the APA.
- Competitive Bidding: The deal is subject to potentially higher bids from other parties during the auction process.
Key Facts for Investor Verification
- Confirm the final purchase price and whether it exceeds the $12 million threshold.
- Verify the outcome of the Section 363 bankruptcy auction and whether a higher bid was received.
- Monitor the status of Bankruptcy Court approval for the asset sale.
- Review the specific liabilities MTBC is assuming as part of the deal.