15. SUBSEQUENT EVENTS

During April 2018, the Company completed a $10.5 million offering of its Preferred Stock and received net proceeds of approximately $9.4 million.

On May 3, 2018, the Company executed an asset purchase agreement (“APA”) to acquire substantially all of the revenue cycle, practice management, and group purchasing organization assets of Orion Healthcorp Inc., and 13 of its subsidiaries, (together “Orion”). The purchase price is based on an evaluation of the assets acquired and is currently estimated to be between approximately $10-12 million. The actual purchase price will be determined prior to closing and can exceed $12 million based on the final evaluation. The Company will deposit $1 million into escrow, which will be credited towards the purchase price at closing or returned to the Company if the transaction is terminated for reasons other than a breach by the Company. The $1 million deposit will be funded from the cash on hand. The purchase price will be paid in cash and the assumption of certain specified liabilities.

Orion has pending cases under Chapter 11 of the United States Bankruptcy Code in the bankruptcy court. The sale of Orion’s medical billing business assets will be conducted under the auction process of Section 363 of the Bankruptcy Code, and the APA will serve as a stalking horse bid that will be subject to potentially higher and otherwise better bids from other bidders at the proposed auction. Subject to certain conditions, if the APA is terminated, Orion must pay a break-up fee to MTBC equal to $400,000 and reimburse MTBC’s expenses up to $200,000.

The APA also remains subject to the satisfaction of certain closing conditions, including bankruptcy court approval and the absence of certain material adverse events. No assurance can be given that the proposed transaction with Orion will be consummated at all or, if consummated, will be consummated on the terms and conditions set forth in the APA.