Business Context and Reporting Period
This Form 8-K was filed by MTBC, Inc. (also referred to as Carecloud, Inc. in metadata) on March 27, 2019. The registrant is an emerging growth company incorporated in Delaware. The report details a material definitive agreement entered into by MTBC-Med, Inc., a wholly-owned subsidiary of the registrant.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, or debt levels for the reporting period. The primary financial data point disclosed is the transaction value of the new agreement.
- Transaction Purchase Price: $1.5 million
- Payment Method: Cash at closing
- Indemnification Cap: Capped at the purchase price ($1.5 million), except for pre-closing liabilities which are uncapped.
Material Changes
The material change reported is the entry into an Asset Purchase Agreement (APA) with Etransmedia Technology, Inc. ("ETI"), its subsidiaries, and Formativ Health Management, Inc. The Company agreed to acquire certain client contracts and other assets from the Sellers. The Sellers provide medical billing, practice management, credentialing, transcription, and related services to hospitals and physician practices.
Outlook, Risks, and Management Commentary
Closing Conditions: The transaction is scheduled to close on April 1, 2019, subject to customary closing conditions. Management states that no assurance can be given that the transaction will be consummated or on the terms set forth.
Restrictive Covenants: For three years following closing, the Sellers and Formativ are prohibited from competing with the Company or soliciting acquired clients and transitioned employees.
Transitional Support: Sellers will make certain employees available for a post-closing transitional period, with the Company paying for their services.
Risks: The filing notes limited rights for either party to terminate the transaction if closing conditions are not met.
Investor Verification Checklist
- Verify the successful consummation of the transaction on or before April 1, 2019.
- Confirm the specific scope of "certain client contracts and other assets" acquired from ETI.
- Monitor for any uncapped pre-closing liabilities that may arise post-closing.
- Review the attached Asset Purchase Agreement (Exhibit 10.1) for detailed terms not summarized in this report.