17. SUBSEQUENT EVENT

On October 3, 2016, MAC, a wholly-owned subsidiary of MTBC, acquired substantially all the medical billing business and assets of MediGain, LLC, a Texas limited liability company (“MediGain”), and its subsidiary Millennium Practice Management Associates, LLC, a New Jersey limited liability company (“Millennium”). The assets were acquired through a strict foreclosure process whereby MAC acquired senior secured notes secured by the assets of MediGain and Millennium, and immediately thereafter foreclosed on the assets in satisfaction of the senior secured notes. The total purchase price for the acquisition was $7,000,000 and will be funded by MTBC. As part of the agreement, MAC acquired the assets as well as certain liabilities expressly assumed. Cash and certain causes of action relating to pre-closing matters were excluded from the acquired assets and retained by MediGain and Millennium.

The senior secured notes were purchased from Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company pursuant to an assignment agreement dated October 3, 2016. MTBC paid $2,000,000 of the purchase price at closing and is obligated to pay the remaining $5,000,000 within 90 days thereafter, although there is no formal promissory note and the obligation is unsecured in the assignment agreement. The Company is planning an additional sale of its preferred stock to raise funds to pay the remaining $5,000,000 purchase price.

As a result of the acquisition, the Company will have additional locations throughout the United States and facilities in India and Sri Lanka. Similar to the facilities in Pakistan and Poland, the facilities in India and Sri Lanka will also do back office processing.