___________, 2019

On May 10, 2019, ApolloMed,consolidated variable interest entity of the Company, Allied Physicians of California, a Professional Medical Corporation (“APC”), held approximately 10,895,193 shares of our common stock as of the Record Date, representing a controlling interest in our Company. Pursuant to a Voting and a newly-created professional medical corporation, AP-AMH Medical Corporation (“AP-AMH”),Registration Rights Agreement that APC and the Company entered into on September 11, 2019 in connection with the consummation of a series of interrelated transactions that we refer to as the “APC Transactions.” Pursuant to the APC Transactions, ApolloMed has agreed to loan $545,000,000 to AP-AMH (the “AP-AMH Loan”), which AP-AMH will use to purchase 1,000,000 shares of Series A Preferred Stock of APC. ApolloMed will acquire the AP-AMH Loan funds by (i) entering into a $250,000,000 senior secured credit facility from a commercial bank and immediately drawing down $245,000,000 in cash and (ii) by selling $300,000,000 shares of ApolloMed common stock to APC in a separate, but interrelated, purchase that will be offset against $300,000,000 of AP-AMH’s purchase price for its APC Preferred Stock. The $245,000,000 in cash from the credit facility that ApolloMed will pay to APC on behalf of AP-AMH is the only cash that will flow among the parties at the concurrent closings of the APC Transactions. Thereafter, the APC Preferred Stock will pay a quarterly mandatory cumulative preferred dividend based upon APC’s healthcare services business following the concurrent closings. AP-AMH will use the quarterly distributions from the APC Series A dividend to pay us interest on the loan, the quarterly license fee and the management fee.

Why is ApolloMed participating in the APC Transactions? As discussed in greater detail in the accompanying proxy statement, the APC Transactions have been structured primarily for ApolloMed’s benefit in an effort to enhance stockholder value. Since the merger of ApolloMed and Network Medical Management, Inc (“NMM”) in December 2017, top-line revenue and net income on our consolidated statements of income have included revenue and net income of APC because APC is our variable interest entity. However, because ApolloMed does not own any shares of APC, the operating results of APC are considered “noncontrolling interests” of ApolloMed; therefore, we back out APC’s net income before calculating earnings and earnings per share. This exclusion has had a material impact on our bottom-line results as it relates to net income attributable to ApolloMed. The APC Transactions will result in a fundamental change in the character of APC’s healthcare services net income and how it is ultimately reflected on ApolloMed’s consolidated statements of income. We believe that that this change will be in the best interests of our company and our stockholders over time.

ApolloMed is holding the Special Meeting in order to obtain the stockholder approvals necessary to complete the APC Transactions. At the Special Meeting, we will ask our stockholders to approve (i) making the loan to AP-AMH; (ii) the issuance of ApolloMed common stock to APC; and (iii) adjourning the Special Meeting, if necessary, to solicit additional votes in favor of either or both of the substantive proposals. There are many conditions that must be satisfied in order for the APC Transactions to close, but without your approval of the two substantive proposals coming before the Special Meeting, the APC Transactions will not close.

After considering the recommendations of a special committee of independent directors established by the ApolloMed Board of Directors for the purpose of negotiating and evaluating the APC Transactions, ApolloMed’s Board has approved the APC Transactions as a whole and the proposals referred to above and has determined that they are in the best interests of ApolloMed’s stockholders. Accordingly, ApolloMed’s Board of Directors recommends that our stockholders vote FOR each of the proposals.

Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend the Special Meeting in person, please vote your shares, either on the Internet, by telephone or by dating, signing and promptly returning the accompanying physical proxy card in the enclosed postage paid envelope to ensure that your shares will be represented and voted at the Special Meeting. More specific instructions are included on the proxy card andfurther described in the proxy statement.

More information about ApolloMed and the APC“Related Person Transactions is contained in this proxy statement. ApolloMed urges you to read the accompanying proxy statement carefully and in its entirety.IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 64.

ApolloMed thanks you for your consideration and continued support.

1668 South Garfield Avenue, 2nd Floor

Alhambra, CA 91801

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On _____________, 2019

To the Stockholders of Apollo Medical Holdings, Inc.:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “Special Meeting”) of Apollo Medical Holdings, Inc. (“ApolloMed,” the “Company,” “we,” “our,” or “us”) will be held in the Ballroom at the Company’s corporate headquarters located at 1668 South Garfield Avenue, Third Floor, Alhambra, CA 91801, at ____ _.m., Pacific Daylight Time, on _________, __, 2019. At the Special Meeting, we will ask you to consider the following proposals:

Proposal No.1 – To consider and vote upon a proposal to approve the Company making a loan of $545,000,000 to AP-AMH Medical Corporation, a Professional Medical Corporation (“AP-AMH”), pursuant to that certain Loan Agreement dated May 10, 2019, the proceeds of which AP-AMH will use to purchase 1,000,000 shares of Series A Preferred Stock of APC. We refer to this proposal as the “AP-AMH Loan Proposal.”

Proposal No. 2 – To consider and vote upon a proposal to approve the issuance of 15,015,015 shares of the Company’s common stock to Allied Physicians of California, a California Professional Medical Corporation (“APC”), pursuant to that certain Stock Purchase Agreement dated May 10, 2019, for the purposes of complying with Nasdaq Marketplace Rule 5635(b) pertaining to a change in control. We refer to this proposal as the “APC Stock Issuance Proposal.”

Proposal No. 3 – To consider and vote upon a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit the solicitation of additional proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the APC Stock Issuance Proposal and the AP-AMH Loan Proposal. We refer to this proposal as the “Adjournment Proposal.”

The substance of these matters and related information are more fully described in the proxy statement accompanying this Notice.

No other business may be conducted at the Special Meeting except as required by law.

Any action on the business described above may be considered at the time and on the date specified above or at any other time and date to which the Special Meeting may be properly adjourned or postponed.

Holders of record of the Company’s common stock at the close of business on _________, 2019 (the “Record Date”), other than APC, its officers, directors and other affiliates who own the Company’s common stock, are entitled to notice of, and to vote at, the Special Meeting or any adjournment thereof. In accordance with Delaware law, if necessary to obtain a quorum or to obtain additional votes needed to win approval for either the AP-AMH Loan Proposal or the APC Stock Issuance Proposal, the Company will adjourn the Special Meeting. At the adjourned meeting, the Company will be permitted to transact any business that might have been transacted at the original meeting. A new notice will not be required if the adjourned meeting is convened within 30 days of the initial meeting date. If the adjournment is for more than 30 days, the Company will give notice of the adjourned meeting to each stockholder of record entitled to vote at the reconvened meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors will fix a new record date for notice of such adjourned meeting and will give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.

The Board of Directors recommends that all stockholders consent to Proposal Nos. 1 and 2 (and Proposal No. 3, if needed), and submit your proxy card by one of the methods set forth in the proxy card that accompanies the proxy statement. If you sign and send in the proxy card but do not indicate how you want to vote as to the proposals, your proxy will be treated as consent “FOR” the AP-AMH Loan Proposal, the APC Stock Issuance Proposal and the Adjournment Proposal.

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE SUBMIT A PROXY TO VOTE YOUR SHARES OVER THE INTERNET OR BY TELEPHONE PURSUANT TO THE INSTRUCTIONS CONTAINED IN THESE MATERIALS OR COMPLETE, DATE, SIGN AND RETURN A PROXY CARD AS PROMPTLY AS POSSIBLE. IF YOU RECEIVE MORE THAN ONE PROXY BECAUSE YOU OWN SHARES REGISTERED IN DIFFERENT NAMES OR DIFFERENT ADDRESSES, EACH PROXY CARD SHOULD BE SUBMITTED IN ORDER FOR ALL OF YOUR VOTES TO BE CAST.

No postage is required if the envelope is mailed in the United States. The proxy is revocable and will not affect your right to vote in person if you are a stockholder of record and attend the Special Meeting. If your shares are held through an intermediary such as a broker, bank or other nominee, you will be required to present proof of your ownership as of the record date, such as a recent account statement reflecting your holdings as of the record date, a copy of the voting instruction card provided by your broker, bank or nominee, or other similar evidence of ownership.

A list of stockholders entitled to vote will be available at the Special Meeting and during ordinary business hours for 10 days prior to the Special Meeting at our corporate offices, 1668 South Garfield Avenue, Second Floor, Alhambra, California, for examination by any stockholder who is a stockholder as of the Record Date for any legally valid purpose related to the Special Meeting.

The Company encourages you to take an active role in the affairs of your Company by either attending the Special Meeting in person and/or by executing and returning the enclosed proxy card.

To ensure your representation at the Special Meeting, please fill in, sign, date and return the attached proxy using the enclosed addressed envelope. By returning the enclosed proxy, you will not affect your right to revoke doing so in writing or to cast your vote in person should you later decide to attend the Special Meeting.

PROXY STATEMENT
FOR THE 2019 SPECIAL MEETING
OF STOCKHOLDERS OF APOLLO MEDICAL HOLDINGS, INC.

At the Special Meeting, we are seeking stockholder approval for (i) our proposed loan of $545,000,000 (the “AP-AMH Loan”) to AP-AMH Medical Corporation, a Professional Medical Corporation (“AP-AMH”), to enable AP-AMH to purchase 1,000,000 shares of Series A Preferred Stock of Allied Physicians of California, a Professional Medical Corporation dba Allied Pacific of California IPA (“APC”) (the “APC Preferred Stock”);(ii) the issuance of 15,015,015 shares of our common stock (the “ApolloMed Shares”) to APC pursuant to that certain Stock Purchase Agreement between us and APC dated May 10, 2019; (iii) adjournment of the Special Meeting, if deemed necessary. This proxy statement provides extensive information regarding a series of interrelated transactions among us, APC and AP-AMH, of which the loan to AP-AMH and the issuance of the ApolloMed Shares to APC are integral parts and must be understood in the context of the entire series of transactions (the “APC Transactions” or the “Transactions”). However, we are not seeking stockholder approval for any portion of the APC Transactions other than the AP-AMH Loan and the issuance of the ApolloMed Shares to APC. As more fully discussed in this proxy statement, our Board of Directors believes that the APC Transactions, when fully consummated, will benefit our Company and our stockholders by allowing ApolloMed to more fully integrate the financial results of APC into the consolidated financial results of ApolloMed, with the ultimate goal of enhancing the value of your Company. It is important to note that both Proposals No. 1 and No. 2 must be approved or we will not be able to consummate the APC Transactions. Therefore, if you vote against either proposal, you are, in effect, voting against both proposals and the APC Transactions as a whole.

TABLE OF CONTENTS

INTRODUCTION

This proxy statement is furnished to the holders of common stock of Apollo Medical Holdings, Inc., a Delaware corporation, in connection with the solicitation of proxies by ApolloMed management to be voted at a special meeting of stockholders on ___________, _________, 2019, at _____ _.m. Pacific Daylight Time, in the Ballroom on the third floor of our corporate headquarters located at 1668 South Garfield Avenue, Alhambra, California and any adjournments or postponements thereof (the “Special Meeting”). We are providing you with this proxy statement and related materials in connection with the solicitation of proxies by the Board of Directors. This proxy statement and the accompanying proxy card are expected to be mailed to the stockholders of record as of ___________, 2019, commencing on or about __________, 2019.

In this document, the words “ApolloMed, “Apollo,” the “Company,” “we,” “us,” “our” and “ours” refer only to Apollo Medical Holdings, Inc. and not to any other person or entity, unless the context otherwise provides.

Our stockholders will be asked at the Special Meeting to consider and vote upon two substantive resolutions (in the forms attached as Schedule I to this proxy statement) approving (i) the AP-AMH Loan to AP-AMH pursuant to the Loan Agreement (the “AP-AMH Loan Proposal” or “Proposal No. 1”); and (ii) the issuance of the ApolloMed Shares to APC pursuant to the ApolloMed Stock Purchase Agreement (the “APC Stock Issuance Proposal” or “Proposal No. 2”).Because each of the separate APC Transactions is contingent upon all of the APC Transactions closing simultaneously, if either the AP-AMH Loan Proposal or the APC Stock Issuance Proposal is not approved at the Special Meeting, none of the APC Transactions will be consummated. Moreover, a vote against either Proposal No. 1 or Proposal No. 2 is, in effect, a vote against both proposals and the APC Transactions as a whole.

We plan to make the AP-AMH Loan to enable AP-AMH to purchase the APC Preferred Stock. We intend to secure a $250,000,000 senior secured credit facility, the net proceeds of which will be used to fund approximately 45% of the loan to AP-AMH. Concurrently, we will obtain the remaining $300,000,000 of the AP-AMH Loan by selling 15,015,015 shares of our common stock to APC at $19.98 per share. We discuss the APC Transactions in greater detail later in this proxy statement to give full context to the AP-AMH Loan and the APC Stock Issuance. However, under applicable Nasdaq marketplace rules and state corporate laws and regulations, we are not required to obtain, and are not seeking, approval of any aspect of the APC Transactions other than the loan to AP-AMH and the issuance of the Shares to APC. We are seeking stockholder approval of both proposals because they are express conditions to closing the APC Transactions. In addition, we require stockholder approval of the APC Stock Issuance (i.e., the ApolloMed Private Placement) in order to comply with Nasdaq Marketplace Rule 5635(b) that requires stockholder approval when any issuance or potential issuance of securities will result or could result in a change of control.

We know of no specific matter to be brought before the Special Meeting that is not referred to in the Notice of Special Meeting of Stockholders dated ______, 2019. If any such matter properly comes before the Special Meeting, the proxy holders will vote proxies in accordance with their judgment.

Only holders of common stock at the closing of business on _______, 2019 are entitled to receive the Notice of Special Meeting and to vote their shares at the Special Meeting. As of that date, there were [35,898,184] shares of common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote on each matter to be voted on at the Special Meeting. As more fully explained below, APC its directors, officers and other affiliates, who collectively hold approximately 45% of our outstanding common stock, are entitled to notice and to vote at the Special Meeting. However, pursuant to an agreement between ApolloMed and APC, APC and certain APC directors and officers who are also directors or officers of ApolloMed, who collectively hold approximately 18% of the outstanding common stock entitled to vote, will give their proxies to the proxy holders to vote their respective shares proportionately based on all other votes cast by the non-affiliate stockholders. This will allow the decision on these proposals to be made by our non-affiliate stockholders. We also have issued shares of our Series A and Series B preferred stock, all of which are held by NMM, our wholly-owned subsidiary. Those shares of preferred stock are not considered outstanding under Delaware law and therefore will not be voted at the Special Meeting.

If we are unable to obtain the stockholder approval we seek for either the AP-AMH Loan Proposal or the APC Stock Issuance Proposal, the APC Transactions will not close. This will mean that the status quo will prevail. As such, we will be unable to realize the benefit (or, possibly, in some periods, the detriment) of full consolidation of APC’s Healthcare Services Business on our consolidated results of operations.

An independent committee of the ApolloMed Board of Directors recommended to the full Board of Directors that we undertake the APC Transactions by committing to loan AP-AMH the funds it requires to purchase the APC Preferred Stock and by partially funding that loan by selling the ApolloMed Shares to APC. Our Board of Directors thereafter unanimously approved ApolloMed’s participation in the APC Transactions as contemplated and directed management to obtain the approval of our stockholders.

The ApolloMed Board unanimously recommends that you vote “FOR” the AP-AMH Loan Proposal, “FOR” the APC Stock Issuance Proposal and “FOR” the Adjournment Proposal, in the event it is needed.

All properly executed written proxies and all properly completed proxies submitted by mail, telephone or via the Internet, which are delivered pursuant to, and which appoint Hing Ang and Eric Chin as proxy holders in accordance with, this solicitation will be voted at the Special Meeting in accordance with the directions given in the proxy, unless the proxy is revoked prior to completion of voting at the Special Meeting. If no direction is provided in otherwise properly dated and signed proxies that are timely delivered, the proxy holders will vote the applicable shares “FOR” the AP-AMH Loan Proposal, “FOR” the APC Stock Issuance Proposal and “FOR” the Adjournment Proposal, in the event it is needed.

Your vote is very important. Whether or not you plan to attend the Special Meeting, please take time to vote by voting online or by telephone, by completing and mailing your proxy card or by following the voting instructions provided to you if you own your shares through a broker, bank or other nominee or intermediary. If you do not receive instructions, you may request them from that broker, bank or other nominee or intermediary.

SOURCES OF ADDITIONAL INFORMATION

This proxy statement incorporates important business and financial information about ApolloMed that is not included in or delivered with this document. Additional information about ApolloMed is available to you without charge upon your request. You can obtain any of the documents filed with or furnished to the Securities and Exchange Commission, or the “SEC,” by ApolloMed at no cost from the SEC’s website at http://www.sec.gov. You may also request copies of these documents at no cost by requesting them in writing or by telephone at the following address and telephone number:

Apollo Medical Holdings, Inc.

1668 South Garfield Avenue, Second Floor

Alhambra, CA 91801

Attn: Corporate Secretary

Telephone: (626) 282-0288

Email: Eric.Chin@nmm.cc

You should rely only on the information contained in this document. No one has been authorized to provide you with information that is different from that contained in this document. This document is dated _____, 2019, and you should assume that the information in this document is accurate only as of such date. Neither the mailing nor delivery of this document to ApolloMed stockholders nor the consummation of the APC Transactions described in this proxy statement will create any implication to the contrary.

If you have any questions about completing, signing, dating or delivering your proxy card or require assistance, please contact us at the address, telephone number or email address above. Please vote by telephone, over the Internet or complete, sign, date and return your proxy card today.

SUMMARY OF THE APC TRANSACTIONS

The following is a summary of information contained elsewhere in this proxy statement. The summary is provided for convenience only and should be read in conjunction with, and is qualified in its entirety by, the more detailed information appearing or referred to elsewhere in this proxy statement.

Overview

Although ApolloMed is not a party to every aspect of the APC Transactions, the parties have negotiated this series of transactions primarily for the benefit of ApolloMed. The various agreements that constitute the APC Transactions will be described in detail throughout this proxy statement.

ApolloMed will not own APC’s business nor any of its stock, and, in fact, is legally prohibited from doing so. However, the APC Transactions will have the effect of having a mandatory cumulative preferred stock dividend be payable to AP-AMH, the proceeds of which AP-AMH will be obligated to pay ApolloMed to the extent of its receipt of the dividends it receives, in the form of interest payments pursuant to the Loan Agreement, license fee payments pursuant to the Tradename License Agreement and management fees pursuant to the Administrative Services Agreement, each of which is described below. Those transactions will be eliminated upon consolidation; however, the noncontrolling interest portion will reflect only the operating results from APC’s “Excluded Assets” (see page 31) and not its operating results from its Healthcare Services Business from the closing date of the APC Transactions.

The following events will close concurrently upon satisfaction or waiver of all of the conditions in the various agreements: ApolloMed will secure a $250,000,000 senior secured credit facility, $245,000,000 of which will be used to partially fund the $545,000,000 loan to AP-AMH. We will obtain the remaining $300,000,000 for the AP-AMH Loan by selling 15,015,015 shares of our common stock to APC for $19.98 per share in a purchase that will be offset against $300,000,000 of AP-AMH’s purchase price for its APC Preferred Stock. The net effect of these concurrent Transactions is that the $245,000,000 in cash from the credit facility that ApolloMed will pay to APC on behalf of AP-AMH is the only cash that will flow among the parties at the concurrent closings of the APC Transactions. No cash will be exchanged in the purchase of the ApolloMed Shares or the APC Preferred Stock, and no cash will, in fact, flow to AP-AMH in connection with the AP-AMH Loan. As such, if any individual transaction does not close, none of the APC Transactions will close.

The concurrent closings of the APC Transactions are collectively referred to herein as the “Closing,” and the date on which the Closing occurs as the “Closing Date.”

The Parties (see page 58)

ApolloMed Credit Facility with a Commercial Financial Institution (page 38)

Transactions between ApolloMed and APC(page 42)

Transactions between ApolloMed and AP-AMH(page 40)

Transactions between APC and AP-AMH (page 47)

Other Information Regarding the APC Transactions

QUESTIONS AND ANSWERS

The following are answers to some questions that you, as an ApolloMed stockholder, may have regarding the APC Stock Issuance Proposal, the AP-AMH Loan Proposal and the entire series of transactions of which the transactions to which those proposals are integral parts. We urge you to carefully read this entire proxy statement, including the annexes, because the information in this section does not provide all the information that might be important to you.

Questions and Answers about the APC Transactions

Who are the parties to the APC Transactions and what is their relationship to one another? ApolloMed, APC and AP-AMH are the principal parties to the APC Transactions. In addition, NMM, ApolloMed’s primary wholly-owned subsidiary, as well as Dr. Lam, who is an executive officer, director and stockholder of ApolloMed, NMM, APC and AP-AMH, have entered or will enter into certain agreements in connection with the APC Transactions. APC is a professional medical corporation operating as an independent practice association that provides healthcare services through its medical networks and ancillary healthcare operations held through various entities (the “Healthcare Services Business”). AP-AMH is a professional medical corporation, incorporated in May 2019 for the purpose of entering into the APC Transactions. NMM is a management services organization (“MSO”) that is in the business of providing management and administrative services to physician practices under long-term management and/or administrative services agreements (“MSAs”), pursuant to which it provides and/or manages non-medical services for physician practices and has exclusive authority over all non-medical decision making related to ongoing business operations. In July 1999, APC entered into a long-term MSA with NMM that expires in July 2029. In May 2019, AP-AMH entered into an MSA with NMM that will be effective on the Closing Date of the APC Transactions. In accordance with relevant accounting guidance, APC and AP-AMH are determined to be variable interest entities (“VIEs”) of NMM. This determination has a material impact on ApolloMed’s consolidated results of operations, as discussed in greater detail beginning on page 37, and it is this impact that is the primary driver underlying the APC Transactions. As of _______, 2019, APC had an ownership interest of approximately 5% in ApolloMed. Upon completion of the APC Transactions, APC will own approximately 33% of the outstanding shares of ApolloMed but will contractually be permitted to vote only 9.99%. APC will grant a proxy to ApolloMed’s management to vote any excess shares in the identical proportion to all other votes cast on each matter. Upon completion of the APC Transactions, AP-AMH will own 100% of the Series A Preferred Stock of APC. Dr. Lam is the sole shareholder of AP-AMH and is a minority shareholder of ApolloMed and APC. He is the Chief Executive Officer and a director of ApolloMed, the Chief Executive Officer, Chief Financial Officer and a director of APC and the Chief Executive Officer and a director of NMM. See page 58 for a more detailed discussion of the relationship of the parties before and after the APC Transactions.

What are the component transactions that, together, constitute the APC Transactions?The APC Transactions consist of the following transactions, each of which is conditioned upon the closing of each of the other transactions and other important conditions: (i) ApolloMed has agreed to loan AP-AMH $545,000,000, secured by all of AP-AMH’s assets, including the APC Preferred; (ii) APC has agreed to purchase $300,000,000 shares of ApolloMed common stock in a private placement; and (iii) AP-AMH has agreed to use the AP-AMH Loan to purchase $545,000,000 of APC Preferred Stock in a private placement, which Preferred Stock will bear a dividend that tracks APC’s Healthcare Services Business (the “Series A Dividend”). Funding for the AP-AMH Loan will come from two sources: (i) $245,000,000 from the senior secured credit facility; and (ii) the remaining $300,000,000 from the sale of ApolloMed Shares to APC, which will be offset against $300,000,000 of the purchase price of the APC Preferred Stock by AP-AMH. Because of the interrelated nature of these transactions, the various payments for the AP-AMH Loan, the sale of our common stock to APC and APC’s sale of its preferred stock to AP-AMH will be offset against one another, with the result that the only cash that will flow among the parties will be the payment by us of $245,000,000 to APC on behalf of AP-AMH, which we will take down from a credit facility. Following the concurrent Closings, the proceeds from the Series A Dividend, and only those dividend distributions, will be used by AP-AMH to pay ApolloMed interest on the AP-AMH Loan and a licensing fee under the Tradename Licensing Agreement, as well as a management fee to NMM for the provision of administrative and management services to AP-AMH’s Healthcare Services Business. There are various ancillary agreements associated with each of the above-transactions that are key components of the APC Transactions, which are more fully described elsewhere in this proxy statement beginning on page 41.

Why are ApolloMed, APC and AP-AMH undertaking the APC Transactions? From ApolloMed’s perspective, the primary objective of the APC Transactions is to create a structure among the parties, consistent with applicable federal and state laws and regulations, that will enable ApolloMed to recognize and fully consolidate APC’s Healthcare Services Business net income in calculating net income attributable to ApolloMed on its consolidated statements of income. Under applicable current accounting treatment, as presented in accordance with U.S. GAAP, APC revenue is consolidated with NMM revenue because it is considered a VIE of NMM. However, its net income is excluded from ApolloMed’s net income for purposes of calculating ApolloMed’s earnings and earnings per share on its consolidated statements of income. This, in turn, results in a price/earnings ratio (“P/E Ratio”) that we believe does not reflect the full value of the consolidated net income reflected in our statements of income. Depending on the results in APC’s Healthcare Services Business, which we cannot predict for any future period, the effect of the APC Transactions could have a positive impact on ApolloMed’s revenue, earnings and P/E Ratio, as well as its cash flows, which could inure to the benefit of our stockholders. However, as occurred in the first quarter of 2019, APC could experience a net loss from its Healthcare Services Business, which would impact its ability to pay the Series A Dividend to AP-AMH, and that, in turn, could negatively impact the amount of our revenue and net income in any future period. As for APC, by increasing its ownership in ApolloMed from approximately 5% to approximately 33% of our outstanding shares of common stock following the APC Transactions, it could benefit from this new structure by enabling it to monetize the revenue from its Healthcare Services Business at a higher valuation and in the form of a more liquid security than is possible in its own private professional medical corporation. Its ApolloMed Shares will be granted registration rights that will enable APC to sell its shares in the public market, which could materially benefit APC in the future, depending on how our stock performs. AP-AMH was formed in May 2019 to facilitate the overall structure but neither AP-AMH nor Dr. Lam, its sole shareholder, will directly benefit from AP-AMH’s role in the APC Transactions.

Why has ApolloMed structured the APC Transactions instead of simply acquiring APC’s Healthcare Services Business if the ultimate goal is to be able to more fully consolidate APC’s financial results with those of ApolloMed? Some states, including California where ApolloMed operates, have laws that prohibit business entities with non-physician owners, such as ApolloMed, from practicing medicine. These laws are generally referred to as the corporate practice of medicine doctrine. States that have corporate practice of medicine laws require that only licensed physicians may practice medicine, exercise control over medical decisions or engage in certain arrangements with other physicians, such as fee-splitting. As such, only licensed physicians may own a medical practice, including a professional medical corporation. Therefore, under the corporate practice of medicine doctrine, ApolloMed is prohibited from owning APC, which, as an IPA, arranges for delivery of healthcare services by contracting with doctors and professional medical corporations for primary and specialty care services. Consequently, ApolloMed cannot acquire APC’s business or its stock. The APC Transactions have been designed to recast certain APC revenue into revenue and other income sources that can be fully consolidated on ApolloMed’s statements of income. We believe that by recharacterizing the revenue from APC’s Healthcare Services Business, which will drive specific changes to our consolidated statements of income, we may be able to enhance ApolloMed’s revenue, earnings, earnings per share and cash flows, although these outcomes will vary from quarter to quarter, and positive results cannot be assured for any period.

Where is ApolloMed going to obtain $545,000,000 to loan to AP-AMH? ApolloMed will acquire the $545,000,000 needed to loan to AP-AMH from two sources: (i) $245,000,000 from the senior secured credit facility; and (ii) the remaining $300,000,000 from the sale of ApolloMed Shares to APC in the ApolloMed Private Placement, although the purchase price for the ApolloMed Shares will be treated as an offset against other APC Transactions. This means that the only cash that will flow among the parties will be the $245,000,000 we will draw down from the credit facility and pay to APC on AP-AMH’s behalf for the purchase of the APC Preferred Stock. Accordingly, the closing of such a credit facility is a material condition to the closing of all of the APC Transactions. ApolloMed has been in negotiations with a commercial financial institution with respect to securing the requisite credit facility. However, there is no assurance that the negotiations will result in a definitive agreement and a successful completion of the credit facility transaction with that financial institution or any other bank. Failure to close on the credit facility with a commercial financial institution will mean that none of the APC Transactions will close.

Why are we asking you to approve the AP-AMH Loan Transaction? We are seeking stockholder approval of the AP-AMH Loan because we are contractually required to do so as a condition to closing the AP-AMH Loan Transaction and therefore, the APC Transactions as a whole. Assuming stockholder approval were not a condition to closing, our Board of Directors could proceed to make the AP-AMH Loan without stockholder consent because it is neither required under Delaware law nor by Nasdaq’s Marketplace Rules. However, our Board of Directors believes it reflects good corporate governance to advise our stockholders of the details of the AP-AMH Loan, including its purpose, the role it plays within the entire series of APC Transactions and the very real risks inherent in this substantial transaction, and to seek the approval of the non-affiliated stockholders before we proceed to close this significant series of Transactions, including the AP-AMH Loan. Accordingly, if our stockholders do not approve the AP-AMH Loan Proposal, we will not close the APC Transactions.

Why are we asking you to approve the APC Stock Issuance Proposal?Stockholder approval is required by Nasdaq Marketplace Rule 5635(b) if an issuance of securities will result in a change in control of the Company. This rule does not specifically define when a change in control of an issuer may be deemed to occur. However, Nasdaq suggests in its guidance that a change of control would occur, subject to certain limited exceptions, if after a transaction, a person or entity would hold 20% or more of any issuer’s then outstanding capital stock. The issuance of 15,015,015 shares of our common stock to APC will increase the number of outstanding shares to approximately 50,913,199 shares, which is an increase of approximately 42%, all to a single stockholder (APC), who will own approximately 33% of the outstanding shares of common stock after the Closing. However, pursuant to the Voting and Registration Rights Agreement, APC will only be permitted to vote up to 9.99% of the outstanding shares of our common stock at any time a vote is taken. APCtaken and will grant a proxy to ApolloMed’sthe Company’s management to vote any excess shares in the identicalsame proportion toas all other votes cast on each matter. Prior to the consummation of the sale of the ApolloMed Shares, APC owns approximately 5% of our outstanding voting securities and as a result of the contractual limitation on its voting power, it is increasing its voting percentage by less than 5%. Nevertheless, Nasdaq has taken the position that the issuance of the ApolloMed Shares to APC constitutes a change of control or the possibility of a change of control, and therefore, we are required to obtain stockholder approval. Moreover, receipt of stockholder approval is a condition to the closing of the ApolloMed Private Placement, pursuant to which the shares of common stock will be sold to APC.

Why will a vote against oneany proposal effectively be a vote against both proposals and the APC Transactions as a whole? Pursuant to the various APC Transactions Agreements, all of the APC Transactions must close, and they must close concurrently. This means that if the parties are not prepared to close on even one segment of the overall APC Transactions on the Closing Date, no part of the APC Transactions will close. We are giving our stockholders the opportunity to vote on two separate proposals, but if one proposal is approved and the other is voted down, there will be no APC Transactions Closing.

Questions and Answers About the Special Meeting

What is this proxy statement? The Board of Directors has provided you with these proxy materials in connection with its solicitation of proxies by the Company to be voted at the Special Meeting. Please note that throughout these proxy materials we may refer to Apollo Medical Holdings, Inc. as “ApolloMed,” “Apollo,” the “Company,” “we,” “us” or “our.” These proxy materials are first being mailed to stockholders entitled to vote at the Special Meeting on or about _________, 2019.

What is the purpose of the Special Meeting? At the Special Meeting, our stockholders will act upon the two substantive proposals described in these proxy materials: That is, you are being asked to consider a proposal to approve ApolloMed making a loan of $545,000,000 to AP-AMH (Proposal No. 1) and to approve the sale and issuance to APC of 15,015,015 shares ofcoming before the Company’s common stock at $19.98 per share for total consideration of $300,000,000 in the ApolloMed Private Placement (Proposal No. 2). If we do not have sufficient votes present in person or by proxy to approve both Proposals No. 1 and No. 2, Proposal No. 3, the Adjournment Proposal, will allow us to adjourn the Special Meeting to a later date or dates to provide additional time to secure additional votes.

Who May Vote?Only holders of record of our common stock on ________, 2019 (the “Record Date”) will be entitled to attend and vote at the Special Meeting or any adjournment thereof. stockholders.

Proxies If your broker holds your shares in its name and you do not instruct your broker how to vote, your broker will only have discretion to vote your shares on “routine” matters.

What is the voting requirement to approve the AP-AMH Loan Proposal and the APC Stock Issuance Proposal, and how does the Board of Directors recommend that you vote? The affirmative vote of a majority of the votes cast is required to approve both the AP-AMH Loan Proposal and the APC Stock Issuance Proposal. Because broker non-votes and abstentions are not voted affirmatively or negatively, if you vote to abstain, or if you fail to vote or fail to instruct your broker, bank or other nominee or intermediary how to vote, it will have no effect on the voting outcome of these proposals. You may vote either “FOR,” “AGAINST” or “ABSTAIN.” The Board of Directors unanimously recommends that you vote your shares of common stock “FOR” the AP-AMH Loan Proposal, “FOR” the APC Stock Issuance Proposal and “FOR” the Adjournment Proposal, in the event it is needed. The Related Party Votes will be casttabulated by the proxy holders in proportion to all other votes cast on each proposal.Note that a vote against either Proposal No. 1 or Proposal No. 2 will, in effect, be a vote against both proposals and the APC Transactions as a whole.

What constitutes a quorum? A quorum is the presence, in person or by proxy, of the holders of a majority of the outstanding shares entitled to vote (as calculated on __________, 2019). Our issued shares of Series A preferred stock and Series B preferred stock are not considered outstanding and are not entitled to vote at the Special Meeting, nor are they considered in determining the presence of a quorum. Therefore, only holders of our common stock will be eligible to vote. On the Record Date, there were [35,898,184] shares of common stock outstanding, and accordingly, at least [17,949,092] shares of common stock must be present at the Special Meeting in person or by proxy in order to constitute a quorum and enable us to conduct the Special Meeting. If you return valid proxy instructions or attend the Special Meeting in person, your shares of common stock will be counted for the purpose of determining whether there is a quorum, even if you wish to abstain from voting on some or all matters at the Special Meeting.

How will we handle the shares of APC and our officers and directors who are also officers and/or directors of APC? In order to ensure that the outcome of the voting on the proposals coming before the Special Meeting is decided by our stockholders who do not have interests in both ApolloMed and APC, we have designated the shares of common stock directly or indirectly held by the persons who serve as officers and directors of both entities, as well as the shares owned by APC itself, as “Related Party Votes.” The shares of APC and the overlapping affiliates will be counted as present for purposes of determining the presence of a quorum; however, these stockholders will instruct the proxy holders to cast their votes in the same percentages as all other votes cast on each proposal. As a result, the Related Party Votes will have no impact on the ultimate outcome of the voting on each proposal. All other officers or directors of either entity who are ApolloMed stockholders will be entitled to cast their votes in accordance with their own judgment.

Who will count the votes? A representative from Broadridge Financial Solutions will act as inspector of elections and will tabulateappointed for the votes. The inspector2021 Annual Meeting, who will separately tabulate “FOR”affirmative and “AGAINST”negative votes, withheld votes, abstentions and broker non-votes, for the APC Stock Issuance Proposal, the AP-AMH Loan Proposal, the Adjournment Proposal, if it is needed, and any other matter than may properly come before the Special Meeting.

What is an abstention and how is it treated?An abstention represents a stockholder’s affirmative choice to decline to vote on a proposal. Abstained shares are considered to be “present” and “entitled to vote” at the Special Meeting and therefore are included in determining whether or not a quorum is present at the Special Meeting. If you abstain, since no vote will have been cast, this will have no effect on the outcome of the AP-AMH Proposal, the Stock Issuance Proposal or the Adjournment Proposal.

What is a broker non-vote and how is it treated?If your shares of common stock are held in “street name” in an account at your broker, bank or another nominee, you must instruct the broker, bank or such other nominee as to how to vote your shares by following the instructions they provide to you. If you do not provide these voting instructions, your shares will not be voted on any proposal on which your broker or other nominee does not have discretionary authority to vote. This is called a “broker non-vote.” For this Special Meeting, brokers will not have discretionary authority to vote on any of the proposals being submitted to a vote of the stockholders. Because no vote will have been cast, this will have no effect on the outcome of the Stock Issuance Proposal, AP-AMH Proposal or the Adjournment Proposal.

Is your vote confidential? Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within the Company or to third parties, except:

How can you learn the results of the vote?We intend to announce preliminary voting results at the Special Meeting and will publish final results on a Current Report on Form 8-K within four business days following the Special Meeting.

Are any of our officers and directors interested in the matters to be acted upon? None of our officers or directors are directly interested in the matters to be considered at the Special Meeting. However, Drs. Sim, Lam and Young, our Executive Chairman, our Chief Executive Officer and a director, and our Co-Chief Medical Officer, respectively, each hold positions at APC. Dr. Sim is the Chairman of the Board, Dr. Lam is the Chief Executive Officer and Chief Financial Officer of APC, and Dr. Young is the Senior Executive Vice President of APC. All three officers are also shareholders of APC. Linda Marsh, a member of our Board of Directors, holds the ceremonial positions as Co-Chief Executive Officer of APC and NMM; however, she has no ability to exercise control or influence over either entity nor the management thereof in her capacity as an officer. She is a stockholder of ApolloMed but owns no APC shares. In these various capacities, none of our affiliated directors and officers has a direct interest in the stock purchase by APC, the loan to AP-AMH or any other aspect of the APC Transactions. In particular, although Dr. Lam is the Chief Executive Officer, director and sole shareholder of AP-AMH, he will derive no benefit from the APC Transactions in any of those capacities. However, along with all other ApolloMed stockholders, each of the ApolloMed officers and directors named above could potentially benefit from the APC Transactions from time to time if the purposes for which we are undertaking the APC Transactions are realized. There is no assurance that those benefits will accrue to them and other ApolloMed stockholders in any particular period or at all. In addition, Drs. Sim, Lam and Young, as shareholders of APC, could benefit indirectly from APC’s opportunity to monetize its revenue from its Healthcare Services Business at a higher valuation and in the form of a more liquid security than is possible within APC, a privately-held professional medical corporation. In addition, at any time after six months following the Closing Date, APC has the right to distribute all or a portion of the ApolloMed Shares to its shareholders, which would include Drs. Sim, Lam and Young. There currently is no agreement, plan or understanding with respect to any future distribution to APC shareholders.

Who is soliciting votes and who will bear the cost for this proxy solicitation? The ApolloMed Board of Directors is soliciting proxies from our stockholders for the Special Meeting. The entire cost of soliciting proxies will be borne by the Company. These costs will include, among other items, the expense of preparing, assembling, printing and mailing the proxy materials or notices of Internet availability to our stockholders of record and beneficial owners. Proxies will be solicited principally through the use of the mails, but, if deemed desirable, may be solicited personally or by telephone or letters by our officers and regular employees for no additional compensation. We may also solicit proxies by email from stockholders who are our employees or who previously requested to receive proxy materials electronically. Arrangements may be made with brokerage houses and other custodians, nominees and fiduciaries to send proxies and proxy materials or notices of Internet availability to beneficial owners of our stock and obtain their voting instructions, and such persons may be reimbursed for their expenses.

What is “householding”? To reduce the expense of delivering duplicate materials to stockholders sharing the same address, we have adopted a procedure approved by SEC called “householding.” Under this procedure, certain stockholders of record who have the same address and last name and do not participate in electronic delivery of proxy materials will receive only one copy of the Notice of Internet Availability (if we use this procedure, which we have not done in connection with the Special Meeting), Annual Report on Form 10-K in connection with annual stockholder meetings and proxy materials, as applicable, until such time as one or more of these stockholders notifies us that they wish to receive individual copies. Householding reduces duplicate mailings and saves printing costs and postage fees, as well as natural resources. If your shares are held in street name, your broker, bank or other nominee similarly may deliver only one copy of a Notice of Internet Availability, Annual Report on Form 10-K and proxy materials, as applicable, to multiple stockholders who share an address.

If you received a “householded” mailing, and you would like to have additional copies of the proxy materials for this Special Meeting mailed to you, please submit your request to Apollo Medical Holdings, Inc., 1668 South Garfield Avenue, Second Floor, Alhambra, California 91801, Attention: Corporate Secretary, or call (626) 282-0288, and we will deliver these materials to you promptly. If you would like to opt out of  “householding” for future mailings, please notify us or your broker, bank or other nominee or intermediary. You may also call (866) 540-7095 or write to: Householding Department, Broadridge, 51 Mercedes Way, Edgewood, New York 11717, and include your name, the name of your broker or other nominee, and your account number(s).

What should you do if you receive more than one copy of proxy materials?If you received more than one copy of proxy materials, your shares are registered in more than one name or brokerage account. This is not a duplication. Please follow the voting instructions on each voting instruction card that you receive to ensure that all of your shares are voted and counted.

May the Special Meeting be adjourned or postponed? Under Delaware law, we are not required to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement of the date, time and place at the meeting at which the adjournment is taken, unless the board fixes a new record date for the adjourned meeting or the meeting date is adjourned to a date more than 30 days later than the date set for the original meeting, in which case a new notice is required. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, a notice of the adjourned meeting and new record date will be given to each stockholder of record entitled to vote at the adjourned meeting. Therefore, if we do not have sufficient votes for a quorum or to approve both the APC Stock Issuance Proposal and the AP-AMH Loan Proposal, it our intention to make an announcement at the Special Meeting of a new date and time for an adjourned or postponed meeting that is within the 30-day period permitted under Delaware law. Thereafter, if required, the ApolloMed Board will fix a new record date and a new meeting date and will deliver a notice of the new meeting date to stockholders entitled to vote at the rescheduled meeting.

What is the mailing address for ApolloMed’s principal executive offices?Our principal executive offices and our mailing address is 1668 South Garfield Avenue, Second Floor, Alhambra, CA 91801. Any written requests for additional information or copies of these proxy materials or any other communications should be sent to this address.

Will ApolloMed’s auditors be at the Special Meeting? Our auditors are BDO USA, LLP. Representatives of BDO are not expected to be present at the Special Meeting and accordingly, will not make any statement nor will there be an opportunity to ask questions of a representative of BDO.

How can you get assistance in connection with the Special Meeting?If you need assistance in completing your proxy card or have questions regarding the various voting options with respect to the ApolloMed Special Meeting, please contact:

Apollo Medical Holdings, Inc.

1668 South Garfield Avenue, Second Floor

Alhambra, CA 91801

Attn: Corporate Secretary

Telephone: (626) 282-0288

Email: Eric.Chin@nmm.cc

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This proxy statement contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any statements about our business, financial condition, operating results, plans, objectives, expectations and intentions, any projections of earnings, revenue or other financial items, such as our projected net income following the APC Transactions and our future liquidity; any statements of any plans, strategies and objectives of management for future operations such as the material opportunities that we believe exist for our company; any statements regarding management’s view of future expectations and prospects for us; any statements about prospective adoption of new accounting standards or effects of changes in accounting standards or regulations; any statements regarding future economic conditions or performance; any statements of belief; any statements of assumptions underlying any of the foregoing; and other statements that are not historical facts. Forward-looking statements may be identified by the use of forward-looking terms such as “anticipate,” “could,” “can,” “may,” “might,” “potential,” “predict,” “should,” “estimate,” “expect,” “project,” “believe,” “think,” “plan,” “envision,” “intend,” “continue,” “target,” “seek,” “contemplate,” “budgeted,” “will,” “would,” and the negative of such terms, other variations on such terms or other similar or comparable words, phrases or terminology. These forward-looking statements present our estimates and assumptions only as of the date of this proxy statement and are subject to change.

Forward-looking statements involve risks and uncertainties and are based on the current beliefs, expectations and certain assumptions of management. Some or all of such beliefs, expectations and assumptions may not materialize or may vary significantly from actual results. Such statements are qualified by important economic, competitive, governmental and technological factors that could cause our business, strategy, or actual results or events to differ materially from those in our forward-looking statements. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and significant risks and uncertainties that could cause actual condition, outcomes and results to differ materially from those indicated by such statements. Some of the key factors impacting these risks and uncertainties include, but are not limited to:

For a detailed description of the factors that could cause our actual results to differ materially from those expressed in any forward-looking statement, please see “Risk Factors” beginning on page 64 in this proxy statement and Item 1A entitled “Risk Factors,” of our 2018 10-K. Except as required by law, we do not intend, and undertake no obligation, to update any statement, whether as a result of the receipt of new information, the occurrence of future events, the change of circumstances or otherwise. We further do not accept any responsibility for any projections or reports published by analysts, investors or other third parties.

EXPLANATORY NOTE

We are seeking stockholder approval for two substantive proposals – a $545,000,000 loan to AP-AMH and the issuance of 15,015,015 shares of common stock to APC at a price of $300,000,000. However, those two transactions must be understood in the context of all of the interrelated and interdependent components of the APC Transactions as a whole. The ultimate goal of the APC Transactions is to enhance stockholder value in ApolloMed by being able to more fully realize the benefit (and perhaps the detriment) of consolidating the revenue and net income (or net loss) of APC’s Healthcare Services Business on our consolidated statements of income. Although there is no guarantee that there will be a positive impact on our earnings in every future period, management believes that over time, the recharacterization of APC’s net income as it impacts our consolidated results will be in the best interests of our Company and our stockholders.

In this proxy statement we provide extensive details about the each of the individual transactions that, together, constitute the APC Transactions. This includes transactions to which ApolloMed is not a party, but which are critical to achieving the purposes for which the APC Transactions were devised.

No separate approval of the APC Transactions as a whole by our stockholders is necessary; our stockholders are not being asked to vote upon any portion of the APC Transactions other than the AP-AMH Loan and the ApolloMed Private Placement. If either Proposal No. 1 or Proposal No. 2 are voted down, the APC Transactions will not be completed. A vote in favor of the AP-AMH Loan and the APC Stock Issuance (i.e., the ApolloMed Private Placement) will be deemed an approval of by our stockholders of the APC Transactions as a whole.

THE BUSINESS OF APOLLO MEDICAL HOLDINGS, INC.

The following summary is not comprehensive. We have limited it to those aspects of our business that may, to some extent, be relevant to the APC Transactions. For a complete description of the business of ApolloMed, our subsidiaries and other affiliated entities, please refer to “Item 1 – Business” in our 2018 Form 10-K.

Overview

We, together with our affiliated physician groups and consolidated entities, are a physician-centric integrated population health management company providing coordinated, outcomes-based medical care in a cost-effective manner and serving patients in California, the majority of whom are covered by private or public insurance provided through Medicare, Medicaid and health maintenance organizations (“HMOs”), with a small portion of our revenue coming from non-insured patients. We provide care coordination services to each major constituent of the healthcare delivery system, including patients, families, primary care physicians, specialists, acute care hospitals, alternative sites of inpatient care, physician groups and health plans. Our physician network consists of primary care physicians, specialist physicians and hospitalists. We operate primarily through Apollo Medical Holdings, Inc. (“ApolloMed”) and the following subsidiaries: Network Medical Management (“NMM”), Apollo Medical Management, Inc. (“AMM”), APAACO and Apollo Care Connect, Inc. (“Apollo Care Connect”), and their consolidated entities, including consolidated VIEs.

Led by a management team with several decades of experience, we have built a company and culture that is focused on physicians providing high-quality medical care, population health management and care coordination for patients. We believe we are well-positioned to take advantage of the growing trends in the U.S. healthcare industry towards value-based and results-oriented healthcare focusing on the triple aim of patient satisfaction, high-quality care and cost efficiency.

Through our NGACO model and a network of independent practice associations (“IPAs”) with more than 6,000 contracted physicians, which physician groups have agreements with various health plans, hospitals and other HMOs, we are currently responsible for coordinating the care for over 970,000 patients in California. These covered patients are comprised of managed care members whose health coverage is provided through their employers or who have acquired health coverage directly from a health plan or as a result of their eligibility for Medicaid or Medicare benefits. Our managed patients benefit from an integrated approach that places physicians at the center of patient care and utilizes sophisticated risk management techniques and clinical protocols to provide high-quality, cost effective care. To implement a patient-centered, physician-centric experience, we also have other integrated and synergistic operations, including (i) management service organizations (“MSOs”) that provide management and other services to our affiliated IPAs, (ii) outpatient clinics and (iii) hospitalists that coordinate the care of patients in hospitals.

In December 2017, we completed a reverse merger with NMM, a California corporation formed in 1994 (the “Merger”). As a result of the Merger, NMM became a wholly owned subsidiary of ApolloMed and the former NMM shareholders owned more than 80% of the issued and outstanding shares of ApolloMed’s common stock post-merger. The combined company operates under the Apollo Medical Holdings name. NMM is the larger entity in terms of assets, revenues and earnings. In addition, as of the closing of the Merger, the majority of the board of directors of the combined company was comprised of former NMM directors and directors nominated for election by NMM. Accordingly, ApolloMed was considered to be the legal acquirer (and accounting acquiree), whereas NMM was considered to be the accounting acquirer (and legal acquiree).

Our affiliated medical groups provide hospitalist services at multiple acute-care hospitals, long-term acute care facilities and outpatient clinics. ApolloMed and its subsidiaries, including consolidated VIEs, generate revenue by providing administrative, medical management and clinical services to affiliated IPAs and medical groups. The administrative services cover primarily billing, collection, accounting, administrative, quality assurance, marketing, compliance and education. In addition, our NGACO, which served over 30,000 beneficiaries through 2018, is eligible to receive periodic advance payments from CMS for managing care for aligned beneficiaries.

We implement and operate different innovative healthcare models, primarily including the following integrated operations:

We operate under one reportable segment, the healthcare delivery segment. Our revenue streams are diversified among our various operations and contract types, and include:

There will be no change to our business structure or operations as a result of the successful completion of the APC Transactions.

Organization

Subsidiaries

We operate through our subsidiaries, primarily including:

Each of NMM and AMM operates as a MSO and is in the business of providing management services to physician practice corporations under long-term management and/or administrative services agreements (“MSAs”), pursuant to which NMM or AMM, as applicable, manages certain non-medical services for the physician group and has exclusive authority over all non-medical decision making related to ongoing business operations. The MSAs generally provide for management fees that are recognized as earned based on a percentage of revenue or cash collections generated by the physician practices.

APAACO, jointly owned by NMM and AMM, participates in the NGACO Model of CMS as of January 2017. The NGACO Model is a CMS program that allows provider groups to assume higher levels of financial risk and potentially achieve a higher reward from participating in this new attribution-based risk sharing model.

We operated three legacy ACOs that participated in the MSSP to serve the Medicare FFS population: ApolloMed Accountable Care Organization, Inc. (“Apollo-ACO”), majority owned by ApolloMed, as well as APCN-ACO, Inc. (“APCN-ACO”) and Allied Physicians ACO, LLC (“AP-ACO”), wholly owned by NMM. In 2017, we transitioned patients and physicians from the three legacy ACO’s into APAACO, which was established in May 2016 to operate under the NGACO Model.

Apollo Care Connect provides a cloud and mobile-based population health management platform, with an emphasis on chronic care management and high-risk patient management in addition to a comprehensive platform for total patient engagement. Features include a personal health assistant that allows patients to view their health data and interact with their physician and care managers, and evidence-based digital care plans that leverage our expertise in clinical care, care coordination and medical risk management to deliver value-based care.

Variable Interest Entities, Particularly APC

Our financial statements are consolidated and include the accounts of our majority-owned subsidiaries and various non-owned affiliated physician groups that are variable interest entities (“VIEs”), which consolidation is effectuated in accordance with applicable accounting rules promulgated by the Financial Accounting Standards Board (“FASB”). Such accounting rules require that, under some circumstances, the VIE consolidation model be applied when a reporting enterprise holds a variable interest (e.g., equity interests, debt obligations, certain management and service contracts) in a legal entity. Under this model, an enterprise must assess the entity in which it holds a variable interest to determine whether it meets the criteria to be consolidated as a VIE. If the entity is a VIE, the consolidation framework next identifies the party, if one exists, that possesses a controlling financial interest in the VIE, and then requires that party to consolidate as the primary beneficiary. An enterprise’s determination of whether it has a controlling financial interest in a VIE requires that a qualitative determination be made and is not solely based on voting rights.

The primary beneficiary analysis is a qualitative analysis based on power and benefits. We consolidate a VIE if we have both power and benefits – that is, (i) we have the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power), and (ii) we have the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE (benefits). As we discuss below, we have determined that APC is a VIE of NMM.

If we have a variable interest in a VIE but are not the primary beneficiary, we may account for our investment using the equity method of accounting.

As a consequence of California being a corporate practice of medicine state, as we discuss below, in addition to our subsidiaries, we mainly operate by maintaining long-term management services agreements with our affiliated IPAs, which are owned and operated by a network of independent primary care physicians and specialists, and which employ or contract with additional physicians to provide medical services. Under such agreements, we provide and perform non-medical management and administrative services, including financial management, information systems, marketing, risk management and administrative support.

NMM has entered into MSAs with several affiliated IPAs, including APC. APC contracts with various HMOs or licensed healthcare service plans, each of which pays a fixed capitation payment to APC. In return, APC arranges for the delivery of healthcare services by contracting with physicians or professional medical corporations for primary care and specialty care services. APC assumes the financial risk of the cost of delivering healthcare services in excess of the fixed amounts received. The risk is subject to stop-loss provisions in contracts with HMOs. Some risk is transferred to the contracted physicians or professional corporations. The physicians in the IPA are exclusively in control of, and responsible for, all aspects of the practice of medicine for enrolled patients. In accordance with relevant accounting guidance, APC is determined to be a VIE of NMM, as NMM is the primary beneficiary of APC with the ability, through majority representation on the APC Joint Planning Board, to direct the activities (excluding clinical decisions) that most significantly affect APC’s economic performance.

APC itself also consolidates the results of certain entities they have been determined to be VIEs of APC, and APC has been determined to be the primary beneficiary of these entities. We also have VIEs through AMM.

Investments

We invested in several entities in the healthcare industry through APC, our VIE. You can find more information about this aspect of our business in our 2018 10-K. We have omitted a detailed description in this proxy statement because we determined that it would not add to our stockholders’ understanding of the APC Transactions.

Our Business Operations

IPAs

Each of our affiliated IPAs is comprised of a network of independent primary care physicians and specialists who collectively care for patients and contracts with HMOs to provide physician services to their enrollees typically under capitated arrangements. Under the capitated model, a HMO pays the IPA a capitation payment and assigns it the responsibility for providing physician services required by patients. The IPA physicians are exclusively in control of, and responsible for, all aspects of the practice of medicine for enrolled patients. Most of the HMO agreements have an initial term of two years renewing automatically for successive one-year terms. The HMO agreements generally allow either party to terminate the HMO agreements without cause typically with a four to six-month advance notice and provide for a termination for cause by the HMO at any time.

MSOs

Our MSOs generally provide services to our affiliated IPAs or ACOs under long-term MSAs, pursuant to which they manage certain non-medical services for the physician groups and have exclusive authority over all non-medical decision making related to ongoing business operations. These services include but are not limited to:

NGACO

On January 18, 2017, CMS announced that APAACO had been approved to participate in the NGACO Model and began operations under this new model. We have devoted, and expect to continue to devote, significant effort and resources, financial and otherwise, to the NGACO Model. You can find a detailed explanation of the NGACO Model and our participation in this CMS program in our 2018 10-K. We have omitted a detailed description in this proxy statement because we determined that it would not add to our stockholders’ understanding of the APC Transactions.

Our Revenue Streams

Our revenue reflected in our consolidated financial statements includes revenue generated by our subsidiaries and consolidated entities. Revenue generated by consolidated entities, however, does not necessarily result in available or distributable cash for ApolloMed. Our revenue streams flow from various multi-year renewable contractual arrangements that vary by types of our business operations in the following manners:

Capitation Revenue

Our capitation revenue consists primarily of capitated fees for medical services provided by us under a capitated arrangement directly made with various managed care providers including HMOs. Capitation revenues are typically prepaid monthly to us based on the number of enrollees selecting us as their healthcare provider. Capitation is a fixed amount of money per patient per unit of time paid in advance for the delivery of healthcare services, whereby the service providers are generally liable for excess medical costs. The actual amount paid is determined by the ranges of services provided, the number of patients enrolled and the period of time during which the services are provided. Capitation rates are generally based on local costs and average utilization of services. Because Medicare pays capitation using a “risk adjustment model,” which compensates managed care providers based on the health status (acuity) of each individual enrollee, managed care providers with higher acuity enrollees receive more, and those with lower acuity enrollees receive less, capitation that can be allocated to service providers. Under the risk adjustment model, capitation is paid on an interim basis based on enrollee data submitted for the preceding year and is adjusted in subsequent periods after the final data is compiled.

Per member per month (“PMPM”) managed care contracts generally have a term of one year or longer. All managed care contracts have a single performance obligation that constitutes a series for the provision of managed healthcare services for a population of enrolled members for the duration of the contract. The transaction price for PMPM contracts is variable as it primarily includes PMPM fees associated with unspecified membership that fluctuates throughout the contract. In certain contracts, PMPM fees also include adjustments for items such as performance incentives, performance guarantees and risk shares. The majority of our net PMPM transaction price relates specifically to our efforts to transfer the service for a distinct increment of the series (e.g., day or month) and is recognized as revenue in the month in which members are entitled to service.

Risk Pool Settlements and Incentives

Capitation arrangements are supplemented by risk sharing arrangements. We have two different types of capitation risk sharing arrangements: full risk and shared risk arrangements. A detailed explanation of these risk sharing arrangements can be found in our 2018 Form 10-K. In addition to risk-sharing revenues, we also receive incentives under “pay-for-performance” programs for quality medical care, based on various criteria, which we explain in greater detail in our 2018 Form 10-K.

Management Fee Income

Management fee income encompasses fees paid for management, physician advisory, healthcare staffing, administrative and other non-medical services provided by us to IPAs, hospitals and other healthcare providers. Such fees may be in the form of billings at agreed-upon hourly rates, percentages of revenue or fee collections, or amounts fixed on a monthly, quarterly or annual basis. The revenue may include variable arrangements measuring factors such as hours staffed, patient visits or collections per visit against benchmarks, and, in certain cases, may be subject to achieving quality metrics or fee collections.

NGACO Revenue

Through APA ACO, we participate in the AIPBP track of the NGACO Model sponsored by CMS. Through the NGACO model, we receive monthly payments and annually, on an all or nothing basis, may receive a payment based on the shared savings APA ACO is able to generate in the prior performance year. A detailed explanation of how we earn NGACO revenue and the risks and rewards of our participation in this program are discussed in our 2018 Form 10-K.

Fee-For-Service Revenue

FFS revenue represents revenue earned under contracts in which we bill and collect the professional component of charges for medical services rendered by our contracted physicians and employed physicians. Under the FFS arrangements, we bill the hospitals and third-party payors for the physician staffing and further bill patients or their third-party payors for patient care services provided and receive payments.

Our Strengths and Advantages

The following are some of the material opportunities that we believe exist for our company.

Combination of Clinical, Administrative and Technology Capabilities

We believe our key strength lies in our combined clinical, administrative and technology capabilities. While many companies separately provide clinical, MSO or technology support services, to our knowledge there are currently very few organizations like us that provide all three types of services to over 970,000 patients.

Diversification

Through our subsidiaries, consolidated affiliates and invested entities, we have been able to reduce our business risk and increase revenue opportunities by diversifying our service offerings and expanding our ability to manage patient care across a horizontally integrated care network. Our revenue is spread across our operations. Additionally, with our ability to monitor and manage care within our wide network, we are an attractive business partner to health plans, hospitals, IPAs and other medical groups seeking to provide better care at lower costs.

Strong Management Team

Our management team has, collectively, several decades of experience managing physician practices, risk-based organizations, health plans, hospitals and health systems, a deep understanding of the healthcare marketplace and emerging trends, and a vision for the future of healthcare delivery led by physician-driven healthcare networks.

A Robust Physician Network

As of March 31, 2019, our physician network consisted of over 6,000 contracted physicians, including primary care physicians, specialist physicians and hospitalists, through our affiliated physician groups and ACOs.

Cultural Affinities with Patients

In addition to delivering premium healthcare, we believe in the importance of providing services that are sensitive to the needs of local communities, including their cultural affinities, which are shared by physicians within our affiliated IPAs and medical groups, and thus promoting patients’ comfort in communicating with care providers. Our network of providers is diverse and serves various diverse cultural communities, including Asian, Hispanic and others, with many of our providers speaking multiple languages.

Long-Standing Relationships with Partners

We have developed long-standing relationships with and have earned trust from multiple health plans, hospitals, IPAs and other medical groups that have helped to generate recurring contractual revenue for us.

Comprehensive and Effective Healthcare Management Programs

We offer comprehensive and effective healthcare management programs to patients. We have developed expertise in population health management and care coordination, in proper medical coding, which results in improved Risk Adjustment Factor (“RAF”) scores and higher payments from health plans, and in improving quality metrics in both inpatient and outpatient settings and thus patient satisfaction and CMS scores. Using our own proprietary risk assessment scoring tool, we have also developed our own protocol for identifying high-risk patients.

Competition

The healthcare industry is highly competitive and fragmented. We compete for customers across all of our services with other healthcare management companies including MSOs and healthcare providers such as local, regional and national networks of physicians, medical groups and hospitals, many of which are substantially larger than us and have significantly greater financial and other resources, including personnel, than what we have.

IPAs

Our affiliated IPAs compete with other IPAs, medical groups and hospitals, many of which have greater financial, personnel and other resources available to them. In the greater Los Angeles area, examples of such competitors include Regal Medical Group and Lakeside Medical group, which are part of Heritage Provider Network (“Heritage”), as well as HealthCare Partners, which is owned by DaVita Medical Group which was recently bought by UnitedHealth Group.

ACOs

Our NGACO competes with sophisticated provider groups in the creation, administration, and management of ACOs, including MSSP ACOs and NGACOs, many of which have greater financial, personnel and other resources available to them. For example, in the greater Los Angeles area, major competitors of APAACO include Heritage California ACO and DaVita Medical ACO California.

Outpatient Clinics

Our outpatient clinics compete with large ambulatory surgery centers and/or diagnostic centers such as Foothill Cardiology (California Heart Medical Group), RadNet and Envision Healthcare, many of which have greater financial, personnel and other resources available to them, as well as smaller clinics that have ties to local communities. HealthCare Partners also has its own urgent care centers, clinics and diagnostic centers.

Hospitalists

Because individual physicians may provide hospitalist services if they have necessary credentials and privileges and thus the markets for hospitalist services are highly fragmented, our affiliated hospitalist groups face competition primarily from numerous small inpatient practices in existing and expanding markets but also compete with large physician groups, many of which have greater financial, personnel and other resources available to them. Some of such competitors operate on a national level, including EmCare, Team Health and Sound Physicians.

Corporate Practice of Medicine

Our consolidated financial statements include our subsidiaries and VIEs. Some states have laws that prohibit business entities with non-physician owners, such as ApolloMed and its subsidiaries, from practicing medicine, employing physicians to practice medicine, exercising control over medical decisions by physicians; which are generally referred to as corporate practice of medicine. States that have corporate practice of medicine laws require only physicians to practice medicine, exercise control over medical decisions or engage in certain arrangements such as fee-splitting, with physicians. In these states, a violation of the corporate practice of medicine prohibition constitutes the unlawful practice of medicine, which is a public offense punishable by fines and other criminal penalties. In addition, any physician who participates in a scheme that violates the state’s corporate practice of medicine prohibition may be punished for aiding and abetting a lay entity in the unlawful practice of medicine.

California is a corporate practice of medicine state. Therefore, we operate by maintaining long-term MSAs with our affiliated IPAs and medical groups, each of which is owned and operated by physicians only and employs or contracts with additional physicians to provide medical services. Under such MSAs, our wholly-owned MSOs are contracted to provide non-medical management and administrative services such as financial and risk management as well as information systems, marketing and administrative support to the IPAs and medical groups. The MSAs typically have an initial term of 3-30 years and are generally not terminable by our affiliated IPAs and medical groups except in the case of bankruptcy, gross negligence, fraud, or other illegal acts by the contracting MSO.

Through the MSAs and the relationship with the physician owners of our medical affiliates, we have exclusive authority over all non-medical decisions related to the ongoing business operations of those affiliates. Consequently, ApolloMed consolidates the revenue and expenses of such affiliates as their primary beneficiary from the date of execution of the applicable MSA. When necessary, Dr. Thomas Lam, our Chief Executive Officer, including through entities in which he is the sole shareholder, serves as a nominee shareholder, on ApolloMed’s behalf, of affiliated medical practices, in order to comply with corporate practice of medicine laws and certain accounting rules applicable to consolidated financial reporting by our affiliates as VIEs.

While under these arrangements our MSOs perform only non-medical functions, do not represent to offer medical services and do not exercise influence or control over the practice of medicine by physicians. The California Medical Board, as well as other state’s regulatory bodies, has taken the position that MSAs that confer too much control over a physician practice to MSOs may violate the prohibition against corporate practice of medicine. Some of the relevant laws, regulations and agency interpretations in California and other states that have corporate practice prohibitions have been subject to limited judicial and regulatory interpretation. Moreover, state laws are subject to change and regulatory authorities. Other parties, including our affiliated physicians, may assert that, despite these arrangements, ApolloMed and its subsidiaries are engaged in the prohibited corporate practice of medicine or that such arrangements constitute unlawful fee-splitting between physicians and non-physicians. If this occurred, we could be subject to civil or criminal penalties, our MSAs could be found legally invalid and unenforceable in whole or in part, and we could be required to restructure arrangements with our affiliated IPAs and medical groups. If we were required to change our operating structures due to determination that a corporate practice of medicine violation existed, such a restructuring might require revising our MSOs’ management fees.

Although we have relationships with many physician-related entities, including APC, we have always been careful to seek to ensure that our operations comply with California’s corporate practice of medicine doctrine. The corporate practice of medicine doctrine, as defined in California and applicable to our operations, is a principal reason that the APC Transactions are structured in the manner they are structured. Even if the parties were inclined, ApolloMed is prohibited from owning an interest in APC because APC is professional medical corporation that operates as an IPA, so an acquisition is not a feasible option. The corporate practice of medicine doctrine further prohibits ApolloMed from participating in any fee splitting arrangement with APC or any other IPA or medical group, which could make certain payments from APC to ApolloMed subject to close scrutiny. The APC Transactions have been structured with a view towards complying with California’s corporate practice of medicine doctrine, with AP-AMH, a professional medical corporation, which is wholly-owned by Dr. Lam, as a facilitating entity. ApolloMed will continue to own no equity or other interest in APC, nor will it own or be permitted to own an equity or other interest in AP-AMH.

Other Regulatory Matters

In addition to the corporate practice of medicine doctrine discussed above, as a healthcare company, our operations and relationships with healthcare providers such as hospitals, other healthcare facilities, and healthcare professionals are subject to extensive and increasing regulation by numerous federal, state, and local government agencies including the Office of Inspector General (“OIG”), the Department of Justice, CMS and various state authorities. These laws and regulations often are interpreted broadly and enforced aggressively. Imposition of liabilities associated with a violation of any of these healthcare laws and regulations could have a material adverse effect on our business, financial condition and results of operations. We cannot guarantee that our practices will not be subject to government scrutiny or be found to violate certain healthcare laws. Government investigations and prosecutions, even if we are ultimately found to be without fault, can be costly and disruptive to our business. Moreover, changes in healthcare legislation or government regulation may restrict our existing operations, limit our expansion or impose additional compliance requirements and costs, any of which could have a material adverse effect on our business, financial condition and results of operations.

Our 2018 Form 10-K includes a detailed summary of some of the most significant laws and regulations that affect our business operations.

Impact of the Pending APC Transactions

We do not anticipate that the consummation of the APC Transactions will materially change our business strategy, plans or operations.

APC AND THE IMPACT OF THE APC TRANSACTIONS

APC is a privately-held California professional medical corporation that is overseen by a board of directors consisting of 26 board members. The APC board has appointed officers of the corporation who are responsible for managing the day-to-day operations of the corporation. ApolloMed is not a shareholder and, under California’s corporate practice of medicine doctrine, it is prohibited from owning an interest in APC. Moreover, it has no right, by contract or otherwise, to suggest, nominate or appoint persons to serve on the APC board of directors.

APC was incorporated on August 17, 1992 for the purpose of arranging healthcare services as an independent physician association. APC has contracts with various health maintenance organizations (“HMOs”) and licensed healthcare service plans as defined in the Knox-Keene Healthcare Service Plan Act of 1975. Each HMO negotiates a fixed amount per member per month that is to be paid to APC. In return, APC arranges for the delivery of healthcare services by contracting with physicians or professional medical corporations for primary care and specialty care services. APC assumes the financial risk of the cost of delivering healthcare services in excess of the fixed amounts received. Some of the risk is transferred to the contracted physicians or professional corporations. The risk is also minimized by stop-loss provisions in contracts with HMOs. APC has a controlling financial interest in other entities, including entities that are consolidated VIEs, in which APC is the primary beneficiary, and other entities that are APC subsidiaries or in which the interests are held in one of APC’s VIEs. Not all of these entities are considered part of APC’s Healthcare Services Business. Following the closing of the APC Transactions, APC will continue to operate its business in the manner and to the extent it has historically operated.

As discussed more fully throughout this proxy statement, the primary purpose of the APC Transactions is to recharacterize certain APC-derived revenue that is currently consolidated on ApolloMed’s statements of income but is not taken into account in “net income attributable to Apollo Medical Holdings, Inc.” or earnings per share derived therefrom. The principal mechanism to achieve this purpose will be the Series A Dividend payable on the APC Preferred Stock and the use of the dividend proceeds as they are paid.

Following the closing of the APC Transactions, AP-AMH will own 1,000,000 shares of APC Preferred Stock that will carry a mandatory cumulative preferred dividend that is based on APC’s net income from its Healthcare Services Business, as set forth in APC’s Certificate of Determination of Preferences that will create its Series A Preferred Stock. Under the Certificate of Determination, AP-AMH will be entitled to receive Series A Dividends that are preferential, cumulative, accrue on a daily basis from the date of purchase of the APC Preferred Stock and are equal for any determination period 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 in such period from certain affiliated entities, minus (iii) any Retained Amounts (as defined in the Certificate of Determination). The Retained Amounts allow APC to retain 50% of the Net Income from Healthcare Services in excess of a baseline amount (which baseline amount is subject to annual adjustments based on Consumer Price Index increases, but not decreases), with the other 50% paid to AP-AMH as a part of the Series A Dividends. As a result, APC will retain 50% of increases after the closing of the APC Transactions in the amounts of the Net Income from Healthcare Services, with the remainder paid to AP-AMH. The Retained Amounts will not apply to any APC affiliated entities, including any future-acquired APC affiliated entities. The Series A Dividends are intended to be paid quarterly and will be based on the financial results of APC as of the quarter prior to the quarter in which any payment is made. Although it is contemplated that the Series A Dividends will be paid quarterly, in fact, the APC board of directors will be required to declare the dividend before it can be paid. To the extent it is not declared and paid, the Series A Dividend will cumulate.

The net effect of the APC Transactions generally, and the Series A Dividend formula, in particular, is that the Series A Dividend will not be based on 100% of APC’s assets. The “Excluded Assets” that will remain solely for the benefit of APC and its shareholders currently include (i) a 48.9% ownership in Universal Care Inc., (ii) a 50% ownership of 531 W. College LLC, (iii) certain land owned by APC in El Monte and Monterey Park, California; (iv) (iv) its 5% ownership of ApolloMed shares of common stock; and (v) the proceeds derived from the APC Transactions. Certain of these Excluded Assets support, but do not directly provide, services that are encompassed under the term Healthcare Services Business.

Over time, the assets constituting Excluded Assets could change as APC exercises its independent judgment to purchase or sell assets that do not fall under the definition of Healthcare Services Assets. If and to the extent there is a gain on the sale of any such Excluded Assets, that gain will have no impact on the Series A Dividend and will remain in APC exclusively for the benefit of APC and its shareholders. As such, neither AP-AMH nor ApolloMed will derive any benefit from any upside realized in the APC Excluded Assets.

Historically, certain of APC’s Excluded Assets have suffered losses, but those losses have been offset by APC’s Healthcare Services Business and Healthcare Services Assets. After the closing of the APC Transactions, a substantial portion, if not all (depending on the period), of the Healthcare Services Assets will be unavailable to offset losses in APC’s Excluded Assets portion of its business. Although APC and ApolloMed are distinct corporations, with their own boards of directors elected by their own shareholders, the APC Transactions have the potential to create risk in ApolloMed that would be entirely due to the performance of APC’s Excluded Assets. Specifically, if APC’s Excluded Assets are incurring losses that cannot be offset by its profitable Healthcare Services Business, it could be deemed insolvent or might force APC into bankruptcy. In either scenario, ApolloMed’s financial condition could be materially negatively impacted.

California Corporations Code sections 500 et seq. govern when a California corporation such as APC is permitted to make cash and property distributions to its shareholders. Section 500 allows a corporation to make distributions (including dividends) if: (i) the amount of the corporation’s retained earnings prior to the distribution equals or exceeds the sum of the distribution and the amount of cumulative dividends in arrears on series of preferred stock that are senior in dividend preference to the class or series to which the applicable distribution is being made, or (ii) after giving effect to the distribution, the value of the corporation’s assets equals or exceeds the sum of its liabilities and the amount of preferential rights upon dissolution, including accrued but unpaid dividends, of shareholders with rights upon dissolution superior to those of the shareholders receiving the distributions. However, Corporations Code section 501 prohibits any distributions if the corporation is, or as a result of the distribution would be, likely to be unable to meet its liabilities as such liabilities mature. In essence, Sections 500 et seq. require a solvency threshold determination as to whether or not a corporation can make a distribution of any kind, and if that threshold is met, the corporation must pass either a retained earnings test or a balance sheet test.

Following the closing of the APC Transactions, APC’s Excluded Assets could suffer substantial losses that will not be offset by its Healthcare Services Business. These losses could cause APC to be deemed insolvent, and therefore APC would be prohibited from declaring and paying the Series A Dividend. If APC is prohibited or simply unwilling to pay the Series A Dividend to AP-AMH, AP-AMH will be unable to pay to ApolloMed and NMM the interest pursuant to the Loan Agreement, the licensing fees pursuant to the Tradename Licensing Agreement and the management fees pursuant to the Administrative Services Agreement. Without those expected payments from AP-AMH, ApolloMed’s financial condition, cash flows and results of operations could be severely impaired. Moreover, if APC were forced into bankruptcy as a result of continuing losses in the Excluded Assets portion of its business, the entire structure underlying the APC Transactions would fail.

Prior to the closing of the APC Transactions, the parties anticipate entering into various amendments to the APC Transactions Agreements. (see page 57) Among the amendments contemplated is a provision that would require APC to retain a sufficient amount of assets it receives in the APC Transactions to enable it to fund losses or deficits in that portion of its business that is not considered its Healthcare Services Business, and thereby not be prohibited from paying the Series A Dividends pursuant to California Corporations Code sections 500 et seq. on the basis of insolvency. That provision would provide some measure of protection to AP-AMH and ApolloMed. However, there is no assurance that future losses or deficits might not exceed that reserve.

In addition, as part of the APC Transactions Agreements executed on May 10, 2019, APC and AP-AMH entered into the Special Purpose Shareholder Agreement. Pursuant to that agreement, in the event of any losses or deficits incurred at any time or from time to time by APC pertaining to its Healthcare Services Assets, upon written request of APC, AP-AMH is obligated to make one or more capital contributions to APC in an amount sufficient to cover any such losses or deficits. In the event AP-AMH receives notice of a capital call, it is likely that it will not have sufficient resources to cover its obligation. While ApolloMed is not a party to this agreement and has no obligation thereunder, it is possible that the ApolloMed Board of Directors could determine that it is in the best interests of ApolloMed and our stockholders to fund AP-AMH’s obligation under the Special Purchase Shareholder Agreement in order to protect the economic interests of ApolloMed and our stockholders. There is no cap on the dollar amount of the potential liability. Losses or deficits arising from the Excluded Assets are expressly carved out. However, this agreement also poses risks for ApolloMed.

SELECTED UNAUDITED CONSOLIDATED
CONDENSED STATEMENT OF INCOME DATA

The selected unaudited historical consolidated condensed statement of income data presented below for the fiscal years ended December 31, 2018 and 2017 and for the three months ended March 31, 2019 has been derived from ApolloMed’s audited financial statements for the fiscal years ended December 31, 2018 and 2017, and from our unaudited financial statements for the three months ended March 31, 2019, respectively. These financial statements are not included in this proxy statement, but you may review them in their entirety, including the related notes thereto, in our 2018 Form 10-K, which we filed with SEC on March 18, 2019, and our Quarterly Report on Form 10-Q for the period ended March 31, 2019, which we filed with SEC on May 10, 2019. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results of operations for the full year or any other interim period, and our historical results generally are not necessarily indicative of results to be expected in any future period. ApolloMed’s management prepared the unaudited financial statements as of and for the three months ended March 31, 2019 on the same basis as it prepared our audited consolidated financial statements. In the opinion of ApolloMed management, this information reflects all adjustments consisting of only normal recurring adjustments necessary for a fair presentation of this data for that period.

The following consolidated condensed statement of income data of ApolloMed and its consolidated subsidiaries and VIEs for the periods presented illustrates the extent to which APC’s consolidated operating results has impacted our bottom-line results. See “Modified Selected Unaudited Consolidated Condensed Statement of Income Data” on page 35 for an illustration of the impact the APC Transactions would have had on our historical results.

Regulators could determine that the post-APC Transactions consolidated structure amounts to ApolloMed violating California’s corporate practice of medicine doctrine.

Subject to certain limited exceptions, the corporate practice of medicine doctrine has historically prevented a corporation from practicing medicine, which includes the employment of physicians, and from fee-splitting arrangements between physicians and non-physicians. The doctrine is enshrined in law to prevent the persons (including entities) who are not medically trained and licensed from exercising control over medical decisions and care. California is a corporate practice of medicine state, and we continually monitor the management of our business and operations to avoid running afoul of the prohibition. The parties to the APC Transactions have endeavored to structure the agreements among the parties and resulting outcomes of the APC Transactions as a whole such that we believe ApolloMed’s operations do not violate California’s corporate practice of medicine doctrine, including the prohibition against fee splitting arrangements. However, we cannot guarantee that third parties, including the California Medical Board, other state regulatory bodies or physicians affiliated with APC, may take a contrary position and assert that ApolloMed and its subsidiaries are engaged in the prohibited corporate practice of medicine or that such arrangements constitute unlawful fee-splitting as a result of the APC Transactions or otherwise. If this were to occur, we could be subject to civil or criminal penalties, our MSAs could be found legally invalid and unenforceable in whole or in part, and we could be required to restructure arrangements with our affiliated IPAs and medical groups. If we were required to change our operating structures due to determination that a corporate practice of medicine violation existed, such a restructuring might require revising our MSOs’ management fees and otherwise materially impact our operations and financial results.

The purchase price for the ApolloMed Private Placement is not adjustable based on the market price of our stock at the time of the closing, so the Shares issuable upon the completion of the APC Share Issuance may have a greater or lesser value than at the time the Stock Purchase Agreement was signed.

The Apollo Stock Purchase Agreement contemplates a fixed price at which APC will purchase our Shares. Any changes in the market price of our common stock before the completion of the APC Transactions will not affect the price at which APC will purchase the Shares pursuant to the Stock Purchase Agreement. Therefore, if before the completion of the APC Transactions the market price of our common stock increases from the market price calculated as of the date of the Stock Purchase Agreement, then APC could receive ApolloMed common stock with a higher value than the purchase price. On the other hand, if the trading price of our common stock falls too far below the $19.98 per share purchase price before the APC conducts its shareholders meeting, the APC shareholders could decline to approve the proposal seeking approval for the purchase of the ApolloMed Shares.

ApolloMed’s stockholders will experience immediate and substantial per share dilution upon the completion of the ApolloMed Private Placement.

Following the closing of the sale of Shares to APC, the number of shares of common stock outstanding will increase from [35,898,184] shares to [50,913,199] shares. As a consequence thereof, the shares owned by our existing stockholders, individually and as a group (excluding APC, which is an existing stockholder) will immediately represent a materially smaller percentage ownership in our company following the closing of the ApolloMed Private Placement. As a group, the non-APC affiliated stock ownership will decrease from approximately [26]% to approximately [18]%. Although APC itself will be restricted from voting more than 9.99% of the shares entitled to vote, the non-APC affiliated shares will nevertheless represent only a small percentage of the total votes entitled to be cast. The interests of APC and APC-affiliated stockholders could differ from those of our unaffiliated stockholders, and such stockholders alone will not have significant voting power to be able to successfully vote against matters that are perceived to be favorable to APC but perhaps not advantageous to non-affiliated stockholders.

ApolloMed could be subject to the California Finance Lenders Law as a result of the AP-AMH Loan.

Prior to the APC Transactions, we and certain of our subsidiaries and affiliates have entered into an Intercompany Loan Agreement under which we have agreed to provide a revolving loan commitment to each such affiliated entities in amounts specified in the Intercompany Loan Agreement. As of December 31, 2018, we have committed to providing revolving loans aggregating $24,250,000. The AP-AMH Loan of $545,000,000 will be in addition to the loans we are committed to make under the Intercompany Loan Agreement. The California Finance Lenders Law (the “CFLL”), Division 9, Sections 22000-22780 of the California Financial Code, could be applied to us as a result of our various affiliate and subsidiary loans and similar arrangements, and the AP-AMH Loan. The CFLL imposes licensing requirements on all entities seeking to make or broker consumer or commercial loans in the State of California unless an exemption therefrom is applicable. Pursuant to an exemption under the CFLL, a person may make five or fewer commercial loans in a 12-month period without a CFLL licensure if the loans are “incidental” to the business of the person. This exemption, however, creates some uncertainty as to which loans could be deemed as incidental to our business. In addition, a person without a CFLL licensure may also make a single commercial loan in a 12-month period without the loan being “incidental” to such person’s business but this single-loan exemption is currently set to expire on January 1, 2022. If the California Department of Business Oversight were to take the position that the loans we have made do not fall within an available exemption from the finance lenders licensing requirement, we could be subject to regulatory action that could impair our ability to continue to operate and may have a material adverse effect on our profitability and business as we currently do not hold a CFLL license.

We may be deemed an investment company, which could impose on us burdensome compliance requirements and restrict our activities.

Under the Investment Company Act of 1940, as amended (the “1940 Act”), and absent an applicable exemption, a company will generally be deemed an investment company under section 3(a)(1)(C) of the 1940 Act if the value of its investment securities is more than 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis. It is anticipated that the AP-AMH Loan will comprise a significant portion of ApolloMed’s total unconsolidated assets. Accordingly, a determination that the AP-AMH Loan is an investment security could result in our being an investment company under the 1940 Act and becoming subject to the registration and other requirements of the 1940 Act, unless we qualify for an applicable exemption.

The rules and interpretations of the SEC and the courts relating to the definition of “investment company,” “investment securities,” and potential applicable exemptions are complex. Following the closing of the APC Transactions, we intend to continue to conduct our business activities to ensure that we do not fall within the 1940 Act’s definitions of “investment company” under applicable SEC and court interpretations or in a manner that we qualify under one of the exemptions or exclusions provided by the 1940 Act. However, we can provide no assurance that the SEC or a court would not take the position that ApolloMed would be required to register under the 1940 Act and comply with the 1940 Act’s registration and reporting requirements, capital structure requirements, affiliate transaction restrictions, conflict of interest rules, requirements for disinterested directors and other substantive provisions. If we were to become an “investment company” and be subject to the restrictions of the 1940 Act, those restrictions would likely require changes in the way we do business and add significant administrative burdens to our operations. To ensure that we do not fall within the 1940 Act, we may need to take various actions which we might otherwise not pursue. These actions may include restructuring the Company and/or modifying our mixture of assets and income.

The ApolloMed Common Stock could be delisted from The Nasdaq Capital Market if ApolloMed does not comply with Nasdaq’s listing standards.

The APC Transactions, taken as a whole, are complex. We have attempted to obtain guidance from Nasdaq regarding all marketplace rules that may be implicated in bringing the APC Transactions to fruition. However, if we have over-looked one or more issues and therefore have not brought them to Nasdaq’s attention, it is possible that we may inadvertently violate one or more marketplace rules that the APC Transactions implicate. While we do not believe that will occur, if we fail to get appropriate stockholder approval or to follow other marketplace rules, Nasdaq could determine to delist the ApolloMed common stock from The Nasdaq Capital Market. If our common stock were delisted for any reason, it could reduce the value of the ApolloMed common stock and the liquidity of those shares. Delisting could also adversely affect our ability to obtain financing for the continuation of our operations, or to use our common stock in future transactions, such as acquisitions or strategic alliances.

THE SPECIAL MEETING

This proxy statement is being provided to our stockholders in connection with the solicitation of proxies by the management of ApolloMed to be voted at the Special Meeting, including any adjournment or postponement thereof.

Date, Time, Place and Purpose

The Special Meeting will be held at ____ _.m. Pacific Daylight Time, on ________, 2019, in the third floor Ballroom at our corporate headquarters located at 1668 South Garfield Avenue, Alhambra, California. Stockholders are being asked to consider and vote upon the APC Stock Issuance Proposal, the AP-AMH Loan Proposal and the Adjournment Proposal, if it is needed.

We know of no specific matter to be brought before the Special Meeting that is not referred to in the Notice of Special Meeting of Stockholders dated _________, 2019. If any such matter properly comes before the Special Meeting, the proxy holders will vote proxies in accordance with their judgment.

Record Date; Issued and Outstanding Shares; and Shares Entitled to Vote

The Board of Directors selected __________, 2019 as the record date (the “Record Date”) for stockholders entitled to notice of and to vote at the Special Meeting. As of the Record Date, we had [35,898,184] shares of common stock issued and outstanding, according to the records maintained by our transfer agent. Each share of common stock is entitled to one vote on each matter that will come before the Special Meeting. As of the Record Date, 1,111,111 shares of our Series A preferred stock and 555,555 shares of our Series B preferred stock are held by NMM. As a result of a reverse merger between ApolloMed and NMM completed in December 2017, NMM became and remains a wholly-owned subsidiary of the Company, and their shares of Series A and B preferred stock are no longer considered to be outstanding shares. Pursuant to the Delaware General Corporation Law, such shares of preferred stock will neither be entitled to vote, nor be counted for quorum purposes, at the Special Meeting.

APC and certain ApolloMed/APC affiliates will instruct the proxy holders to allocate the Related Party Votes (representing approximately 18% of the shares entitled to vote at the Special Meeting) in the same proportion as all other votes cast by non-affiliated stockholders. Therefore, while the Related Party Votes will be treated as votes cast on each proposal, the ultimate outcome of each proposal will be decided by our non-affiliated stockholders.

Quorum

A quorum is the presence in person or by proxy of the holders of a majority of the outstanding capital stock entitled to vote as of the Record Date __________, 2019. Based on [35,898,184] shares of common stock outstanding, we need at least [17,949,092] shares present in person or by proxy in order to hold the Special Meeting.

Delivery of Proxy Materials

In accordance with rules adopted by the SEC, we have elected to deliver our proxy materials for the Special Meeting, including this Proxy Statement and a proxy card for the Special Meeting, to our stockholders by mail or, if a stockholder has previously agreed, by e-mail. Accordingly, we expect to mail or, to stockholders who have agreed, e-mail this Proxy Statement and proxy card to our stockholders on or about ________, 2019. If you would like to receive our proxy materials for future meetings of our stockholders by e-mail rather than by mail, you may submit such consent to electronic delivery by writing to the attention of our Corporate Secretary at the address of our principal executive offices.

In addition, we are also making all of our proxy materials for the Special Meeting available on the Internet. Applicable SECrulesrequire us to notify our stockholders of the availability of our proxy materials on the Internet with the following notice:

Attending the Special Meeting in Person

Only registered holders of our common stock and holders of a valid legal proxy for the Special Meeting at the close of business on _____, 2019 are entitled to attend the Special Meeting, subject to the expectation that our executive officers and directors who are also APC affiliates may be in attendance, even though they are not entitled to vote. Each stockholder must be prepared to present a government-issued photo identification, such as a driver’s license or passport, for admission. If you are not a stockholder of record but hold shares in the name of a broker, bank or other holder of record, you must be prepared to provide proof of beneficial ownership as of ________, 2019, such as a brokerage or bank statement, copy of voting instructions form provided by your broker, bank, trustee or nominee or other similar evidence of ownership.

Voting Procedures

The voting process is different depending on whether you are a record (registered) or non-record (beneficial) stockholder:

Beneficial Owners (Street Name Holders)

If you are a non-record (beneficial) stockholder, your intermediary will send you a voting instruction form or proxy form with this proxy statement. This form will instruct your intermediary how to vote your shares at the Special Meeting on your behalf. You should carefully follow the instructions provided by your intermediary and contact your intermediary promptly if you need help.

If you do not intend to attend the Special Meeting and vote in person, mark your voting instructions on the voting instruction form or proxy form, sign it, and return it as instructed by your intermediary. Your intermediary may have also provided you with the option of voting by telephone or fax or through the Internet. Make sure you do so by the time deadline stated in the instructions to ensure that your votes are counted.

If you wish to vote in person at the Special Meeting, follow the instructions provided by your intermediary. Your intermediary may have also provided you with the option of appointing yourself or someone else to attend and vote on your behalf at the Special Meeting. When you arrive at the Special Meeting, please register with the inspector of elections.

Your intermediary must receive your voting instructions in sufficient time for your intermediary to act on them prior to the deadline for the deposit of proxies of 11:59 p.m. (Eastern Daylight Time) on ________, 2019.

Record (registered) stockholders

If you are a record (registered) stockholder, a proxy card is enclosed with this proxy statement to enableholder, you tocan vote by attending the 2021 Annual Meeting and voting in person, or to appoint a proxy holder toyou can vote on your behalf, at the Special Meeting.

Whether or not you plan to attend the Special Meeting, you may vote your shares by proxy by any one of the following methods:

in three ways:

Vote Required

Approval of both the AP-AMH Loan Proposalyour shares.

Because certain officers and directors of APC are ApolloMed stockholders, as well as ApolloMed officers and directors, and APC itself is our largest stockholder and a party to the APC Transactions, we have made special arrangements regarding voting of the ApolloMed shares held by APC and those officers and directors: The ApolloMed shares of common stock held by APC and its officers and directors who are also officers and/or directors of ApolloMed, which we refer to in this proxy statement as the Related Party Votes, may be counted towards establishing the presence of a quorum and voted at the Special Meeting. However, the holders of the Related Party Votes, totaling 6,522,305 shares and representing approximately 18% of the outstanding shares entitled to vote at the Special Meeting, will instruct the proxy holders to cast their respective votes on each proposal in the same proportion as all other votes cast. All other directors, officers or other affiliates of APC who are also ApolloMed stockholders, totaling [9,777,945] shares and representing approximately [27]% of the outstanding shares of common stock entitled to vote at the Special Meeting, will be entitled to vote their shares of common stock in accordance with their own judgment. There are no agreements or understandings among any of these APC affiliates as to how they will vote on the proposals coming before the stockholders at the Special Meeting. Therefore, while the Related Party Votes will be treated as votes cast on each proposal, the ultimate outcome on each proposal will be decided by our non-affiliated stockholders.

The proxy card gives discretionary authority to proxy holders to vote as the proxy holders see fit with respect to amendments or variations to the proposal identified in the Notice of Special Meeting or other matters that may come before the Special Meeting whether or not the amendment, variation or other matter that comes before the Special Meeting is or is not routine and whether or not the amendment, variation or other matter that comes before the Special Meeting is contested.

As of the date of this proxy statement, the ApolloMed Board is not aware of any such amendments, variations or other matters to come before the Special Meeting. However, if any such changes that are not currently known to the Board should properly come before the Special Meeting, the shares of common stock