10q10k10q10k.net

What changed in CareCloud, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of CareCloud, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+332 added−317 removedSource: 10-K (2026-03-12) vs 10-K (2025-03-13)

Top changes in CareCloud, Inc.'s 2025 10-K

332 paragraphs added · 317 removed · 267 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

34 edited+9 added−2 removed52 unchanged
Biggest changeOur technology-enabled business solutions can be categorized as follows: ● Technology-enabled revenue cycle management: ○ Revenue Cycle Management (“RCM”) services including end-to-end medical billing, eligibility, analytics, and related services, all of which can be provided utilizing our technology platform and robotic process automation tools or leveraging a third-party system; ○ Medical coding and credentialing services to improve provider collections, back-end cost containment, and drive total revenue realization for our healthcare clients; and ○ Healthcare claims clearinghouse which enables our clients to electronically scrub and submit claims and process payments from insurance companies. ● Cloud-based software : ○ Electronic Health Records, which are easy to use and sometimes integrated with our business services, and enable our healthcare provider clients to deliver better patient care, streamline their clinical workflows, decrease documentation errors, and potentially qualify for government incentives; ○ Practice Management (“PM”) software and related capabilities, which support our clients’ day-to-day business operations and financial workflows, including automated insurance eligibility software, a robust billing and claims rules engine, and other automated tools designed to maximize reimbursement; ○ Artificial intelligence (“AI”): ● CareCloud cirrusAI is designed to serve as a digital healthcare assistant, helping to enhance clinical decision-making, streamline workflows, reduce administrative burdens, optimize revenue management, and promote patient-centered care.
Biggest changeOur technology-enabled business solutions can be categorized as follows: ● Technology-enabled revenue cycle management: ○ Revenue Cycle Management (“RCM”) services including end-to-end medical billing, eligibility, analytics, and related services, all of which can be provided utilizing our technology platform and robotic process automation tools or leveraging a third-party system; ○ Medical coding and credentialing services to improve provider collections, back-end cost containment, and drive total revenue realization for our healthcare clients; and ○ Healthcare claims clearinghouse which enables our clients to electronically scrub and submit claims and process payments from insurance companies. ● Cloud-based software : ○ Electronic Health Records (“EHR”), which are easy to use and sometimes integrated with our business services, and enable our healthcare provider clients to deliver better patient care, streamline their clinical workflows, decrease documentation errors, and potentially qualify for government incentives for both inpatient and outpatient services; ○ Practice Management (“PM”) software and related capabilities, which support our clients’ day-to-day business operations within the enterprise-level facilities outpatient service areas and financial workflows, including automated insurance eligibility software, a robust billing and claims rules engine, and other automated tools designed to maximize reimbursement; ○ RCM Cloud, a highly configurable inpatient revenue cycle management software solution that focuses on up front financial accountability, real-time insurance eligibility checking, robust billing, integrated claims resolution, denial management, collection management, and dynamic work queues designed to maximize timely reimbursement; ○ HealthLine, which is a medical supply chain and inventory management system built for healthcare settings that enables real-time tracking of supplies, equipment and consumables across multiple locations such as exam rooms, ambulances and storage closets; ○ Marketware offers a comprehensive physician strategy suite designed to support healthcare organizations in optimizing physician relationship management, streamlines recruitment and onboarding processes, and leverages performance analytics.
We expect to have increased software capabilities and offer additional complementary business services that will address the needs of the ever-changing, dynamic market conditions of the U.S. healthcare space. To achieve our objective and mission, we employ the following strategies: Providing comprehensive next generation RCM solutions to medical practices and hospitals.
We expect to have increased software capabilities and offer additional complementary business services that will address the needs of the ever-changing, dynamic market conditions of the U.S. healthcare space. 10 To achieve our objective and mission, we employ the following strategies: Providing comprehensive next generation RCM solutions to medical practices and hospitals.
We intend to continue to enhance our solutions with new functionality and features leveraging our own teams, partnerships, and acquisitions. We will continue to dedicate resources to research and development to bolster our existing applications and drive new opportunities for innovation on behalf of our clients. 11 Expanding into new categories/specialties/markets.
We intend to continue to enhance our solutions with new functionality and features leveraging our own teams, partnerships, and acquisitions. We will continue to dedicate resources to research and development to bolster our existing applications and drive new opportunities for innovation on behalf of our clients. Expanding into new categories/specialties/markets.
This innovation can lead to enhanced diagnosis accuracy and treatment planning. 8 ● AI-Powered Virtual Support Assistant: CareCloud cirrusAI Chat facilitates natural language conversations with practice staff members, offering valuable assistance in navigating CareCloud Electronic Health Records (“EHR”) workflows.
This innovation can lead to enhanced diagnosis accuracy and treatment planning. ● AI-Powered Virtual Support Assistant: CareCloud cirrusAI Chat facilitates natural language conversations with practice staff members, offering valuable assistance in navigating CareCloud electronic health records (“EHR”) workflows.
The interconnectivity of our solutions will continue driving a consolidation of brands within our product architecture, aimed at improving the awareness and alignment of our products to targeted industry segments. 12 Our robust product and service portfolio allows us to be both methodical and nimble across the healthcare organizations and market segments we serve while providing a framework to create solution sets for the market today and more importantly, for what our clients will need tomorrow.
The interconnectivity of our solutions will continue driving a consolidation of brands within our product architecture, aimed at improving the awareness and alignment of our products to targeted industry segments. 11 Our robust product and service portfolio allows us to be both methodical and nimble across the healthcare organizations and market segments we serve while providing a framework to create solution sets for the market today and more importantly, for what our clients will need tomorrow.
In addition, we served approximately 150 clients that are not medical practices, but are primarily service organizations who serve the healthcare community. The foregoing numbers include clients leveraging any of our products or services and are based in part upon estimates where the precise number of practices or providers is unknown.
In addition, we served approximately 80 clients that are not medical practices, but are primarily service organizations who serve the healthcare community. The foregoing numbers include clients leveraging any of our products or services and are based in part upon estimates where the precise number of practices or providers is unknown.
Also, the SEC’s website (www.sec.gov) contains reports, proxy and information statements, and other information that we file electronically with the SEC. 16
Also, the SEC’s website (www.sec.gov) contains reports, proxy and information statements, and other information that we file electronically with the SEC.
Item 1. Business Overview CareCloud, Inc., (together with its consolidated subsidiaries, “CareCloud”, the “Company,” “we,” “us” and/or “our”) is a leading provider of technology-enabled services and generative AI solutions that redefine the healthcare revenue cycle management process.
Item 1. Business Overview CareCloud, Inc., (together with its consolidated subsidiaries, “CareCloud,” the “Company,” “we,” “us” and/or “our”) is a leading provider of technology-enabled services and generative AI solutions that redefine the healthcare revenue cycle management process.
Our unique business model has allowed us to become a leading consolidator in our industry sector, gaining us a reputation for acquiring and positively transforming distressed competitors into an accretive acquisition. Employees Including the employees of our subsidiaries, as of December 2024, the Company employed approximately 3,650 people worldwide on a full-time basis.
Our unique business model has allowed us to become a leading consolidator in our industry sector, gaining us a reputation for acquiring and positively transforming distressed competitors into an accretive acquisition. Employees Including the employees of our subsidiaries, as of December 31, 2025, the Company employed approximately 3,650 people worldwide on a full-time basis.
These experts are supported by our highly educated and specialized offshore workforce of approximately 3,300 team members at labor costs that we believe are approximately 15% the cost of comparable U.S. employees.
These experts are supported by our highly educated and specialized offshore workforce of approximately 3,300 team members at labor costs that we believe are approximately 17% the cost of comparable U.S. employees.
We provide technology-enabled revenue cycle management and a full suite of proprietary cloud-based solutions to healthcare providers, from small practices to enterprise medical groups, hospitals, and health systems throughout the United States. Healthcare organizations today operate in highly complex and regulated environments.
We provide technology-enabled revenue cycle management and a full suite of proprietary cloud-based solutions to healthcare providers, from small practices to enterprise medical groups, hospitals, and health systems throughout the United States and certain other locations. Healthcare organizations today operate in highly complex and regulated environments.
Therefore, they have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors, as well as the overall management and direction of our Company.
Therefore, they have the ability to influence the outcome of matters submitted to our stockholders for approval, including the election of our directors, as well as the overall management and direction of our Company.
We service clients ranging from small practices to large groups and health systems. Our clients span from the single doctor independent medical practices to large medical groups, including an enterprise specialty-specific healthcare organization with more than 3,000 providers located across multiple states.
We service clients ranging from small practices to large groups and health systems. Our clients span from the single doctor independent medical practices to large medical groups, including an enterprise specialty-specific healthcare organization with more than 4,600 providers located across multiple states.
During 2025, we anticipate further reducing our employee count. Voting Rights of Our Directors, Executive Officers, and Principal Stockholders As of December 31, 2024, approximately 38% of both the shares of our common stock and voting power of our common stock are held by our directors and executive officers.
During 2026, we anticipate further reducing our employee count. Voting Rights of Our Directors, Executive Officers, and Principal Stockholders As of December 31, 2025, approximately 15% of both the shares of our common stock and voting power of our common stock are held by our directors and executive officers.
Additionally, given the nature of our large data repository, which is ever-growing as each patient encounter is captured, opportunities exist to potentially monetize this data in an identified manner to help improve clinical outcomes and other financial metrics.
Additionally, given the nature of our large data repository, which is ever-growing as each patient encounter is captured, opportunities exist to potentially monetize this data in an identified manner in compliance with applicable privacy and data protection laws to help improve clinical outcomes and other financial metrics.
Our medical practice management solutions include: ● Medical practice management: ○ Medical practice management services are provided to medical practices. In this service model, we provide the medical practice with appropriate facilities, equipment, supplies, support services, nurses and administrative support staff.
Our medical practice management solutions include: ● Medical practice management: ○ Medical practice management services are provided to medical practices. In this service model, we provide the medical practice with appropriate facilities, equipment, supplies, support services, nurses and administrative support staff. We also provide management, bill-paying and financial advisory services.
Approximately 75% of our employees are focused on service and client delivery functions, approximately 9% are assigned to research and development, and approximately 1% are engaged in sales and marketing.
Approximately 72% of our employees are focused on service and client delivery functions, approximately 12% are assigned to research and development, and approximately 1% are engaged in sales and marketing.
Market Overview In June 2024, Centers for Medicare & Medicaid Services (“CMS”) 1 reported that over 2023-2032, the average National Health Expenditures (“NHE”) growth (5.6%) is projected to outpace that of average Gross Domestic Product (“GDP”) growth (4.3%) resulting in an increase in the health spending share of GDP from 17.3% in 2022 to 19.7% in 2032.
Market Overview In June 2025, Centers for Medicare & Medicaid Services 1 reported that over 2024-2033, the average National Health Expenditures growth of 5.8% is projected to outpace that of average Gross Domestic Product (“GDP”) growth of 4.3% resulting in an increase in the health spending share of GDP from 17.6% in 2023 to 20.3% in 2033.
In addition, our competitive edge could be diminished or completely lost if our competition develops similar offshore operations in Pakistan or other countries, such as India and the Philippines, where labor costs are lower than those in the U.S. (although higher than in Pakistan).
In addition, our competitive edge could be diminished or completely lost if our competition develops similar offshore operations in Pakistan or other countries, such as India and the Philippines, where labor costs are lower than those in the U.S. (although higher than in Pakistan). Pricing pressures could negatively impact our margins, growth rate and market share.
We also provide management, bill-paying and financial advisory services. 9 The modernization of the healthcare industry, along with the increased adoption of value-based care models, is transforming nearly every aspect of a healthcare organization from policy to providers; clinical care to member services, devices to data, and ultimately the quality of the patient’s experience as a healthcare consumer.
The modernization of the healthcare industry, along with the increased adoption of value-based care models, is transforming nearly every aspect of a healthcare organization from policy to providers; clinical care to member services, devices to data, and ultimately the quality of the patient’s experience as a healthcare consumer.
We continue to leverage and optimize various digital channels to present our solutions, identify national events to demonstrate our integrated capabilities and expand our participation in thought leadership and social communications to connect with the healthcare community. 14 Our Growth Levers We believe that we are in a good position to grow through organic growth and partnerships.
We continue to leverage and optimize various digital channels to present our solutions, identify national events to demonstrate our integrated capabilities and expand our participation in thought leadership and social communications to connect with the healthcare community. 13 Our Growth Levers We believe that we are in a good position to grow by leveraging a multi-faceted growth strategy.
EHR market was estimated to be valued at $11.4 billion in 2023 and expected to grow at a CAGR of 2.24% from 2024 to 2030. 4 The Telehealth market is estimated to be approximately $42.54 billion in 2024 with a CAGR of 23.8% from 2025 to 2030. 5 Our Market Opportunity Considering the evolving needs of our clients and the market, we believe we continue to be uniquely positioned to provide tremendous value and support for our clients.
EHR market was estimated to be valued at $12.9 billion in 2024 and expected to grow at a CAGR of 2.55% from 2025 to 2030. 4 The Telehealth market is estimated to be approximately $42.61 billion in 2024 and expected to grow to $358.96 billion by 2034 with a CAGR of 23.84%. 5 Our Market Opportunity Considering the evolving needs of our clients and the market, we believe we continue to be uniquely positioned to provide tremendous value and support for our clients.
Pricing pressures could negatively impact our margins, growth rate and market share. 15 We believe we have a competitive advantage, as we are able to deliver our industry-leading solutions at competitive prices because we leverage a combination of our proprietary software, which automates our workflows and increases efficiency, together with a global team that includes more than 250 experienced health industry experts onshore.
We believe we have a competitive advantage, as we are able to deliver our industry-leading solutions at competitive prices because we leverage a combination of our proprietary software, which automates our workflows and increases efficiency, together with a global team that includes more than 300 experienced health industry experts onshore.
Medical practices and health systems alike are transitioning to increasingly complex reimbursement delivery models. As an example, the industry has been gradually shifting from fee-for-service payments to value-based/clinical outcomes-based care payments.
Electronic Health Records Market | Industry Report 2030 5 U.S. Telehealth Market Size & Share | Industry Report, 2030 9 Medical practices and health systems alike are transitioning to increasingly complex reimbursement delivery models. As an example, the industry has been gradually shifting from fee-for-service payments to value-based/clinical outcomes-based care payments.
Our unique business model includes our cloud-based software and a cost-effective offshore workforce located in our Offshore Offices. We believe this operating model provides us with significant cost advantages compared to other revenue cycle management companies and it allows us to significantly reduce the operational costs of the companies we acquire. Developing our partner ecosystem.
We believe this operating model provides us with significant cost advantages compared to other revenue cycle management companies and it allows us to significantly reduce the operational costs of the companies we acquire. Developing our partner ecosystem.
We also employ product management, user experience, and product marketing personnel who work continually on improvements to our products and services design. 13 Clients We estimate that as of December 31, 2024, we provided software and services to approximately 40,000 providers (which we define as physicians, nurses, nurse practitioners, therapists, physician assistants and other clinicians that render bills for their services) practicing in approximately 2,600 independent medical practices and hospitals, representing 80 specialties and subspecialties in 50 states allowing for low revenue concentration risk.
Clients We estimate that as of December 31, 2025, we provided software and services to approximately 45,000 providers (which we define as physicians, nurses, nurse practitioners, therapists, physician assistants and other clinicians that render bills for their services) practicing in approximately 2,900 independent medical practices and hospitals, representing 80 specialties and subspecialties in 50 states allowing for low revenue concentration risk.
This functionality supports CareCloud’s RCM teams in optimizing providers’ RCM and securing proper reimbursement. ● CareCloud cirrusAI integrates with CareCloud’s EHR solution, talkEHR, making it easily accessible to providers of all sizes. ○ Patient Experience Management (“PXM”) solutions designed to transform interactions between patients and their clinicians, including smartphone applications that assist patients and healthcare providers in the provision of healthcare services, contactless digital check-in solutions, messaging, and online appointment scheduling tools; ○ Business Intelligence (“BI”) and healthcare analytics platforms that allow our clients to derive actionable insights from their vast amount of data; and ○ Customized applications, interfaces, and a variety of other technology solutions that support our healthcare clients. ● Digital health: ○ Chronic care management is a program that supports care for patients with chronic conditions by certified care managers that operate under the supervision of the patient’s regular physician; ○ Remote patient monitoring enables patient data collected outside the clinical setting through remote devices to be fed into their provider’s EHR to enable proactive patient care; and ○ Telemedicine solutions which allow healthcare providers to conduct remote patient visits and extend the timely delivery of care to patients unable to travel to a provider’s office. ● Healthcare IT professional services & staffing: ○ Professional services consisting of a broad range of consulting services including full software implementations and activation, revenue cycle optimization, data analytic services, and educational training services; ○ Strategic advisory services to manage system evaluations and selection, provide interim management, and operational assessments; and ○ Workforce augmentation and on-demand staffing to support our clients as they expand their businesses, seek highly trained personnel, or struggle to address staffing shortages.
This tool brings advanced conversational AI directly into the call center workflow, eliminating hold times and reducing manual workload while delivering accurate, around-the-clock phone support. ○ Patient Experience Management (“PXM”) solutions designed to transform interactions between patients and their clinicians, including smartphone applications that assist patients and healthcare providers in the provision of healthcare services, contactless digital check-in solutions, messaging, and online appointment scheduling tools; ○ Business Intelligence (“BI”) and healthcare analytics platforms that allow our clients to derive actionable insights from their vast amount of data; and ○ Customized applications, interfaces, and a variety of other technology solutions that support our healthcare clients. ● Digital health: ○ Chronic Care Management (“CCM”) is a program that supports care for patients with chronic conditions by certified care managers that operate under the supervision of the patient’s regular physician; ○ Remote Patient Monitoring (“RPM”) enables patient data collected outside the clinical setting through remote devices to be fed into their provider’s EHR to enable proactive patient care; and ○ Telemedicine solutions which allow healthcare providers to conduct remote patient visits and extend the timely delivery of care to patients unable to travel to a provider’s office. ● Healthcare IT professional services & staffing: ○ Professional services consisting of a broad range of consulting services including full software implementations and activation, revenue cycle optimization, data analytic services, and educational training services; ○ Strategic advisory services to manage system evaluations and selection, provide interim management, and operational assessments; and ○ Workforce augmentation and on-demand staffing to support our clients as they expand their businesses, seek highly trained personnel, or struggle to address staffing shortages. ○ Managed services includes inpatient and outpatient IT services, government consulting and product development services; 8 ● MAP App: ○ MAP App is an industry-leading tool for benchmarking and measuring revenue cycle management performance, which was developed by the Healthcare Financial Management Association (the “HFMA”) and is used by top hospitals and healthcare organizations nationwide.
Healthcare IT industry market to be approximately $104 billion in 2024 and is projected to reach $325.2 billion by 2033, growing at a 13.1% compound annual growth rate (“CAGR”). 2 Its largest sub-segment, RCM, is reported to be nearly $155.6 billion in 2023 and is projected to grow at a 10.18% CAGR through 2030 according to Grand View Research. 3 The U.S.
Healthcare IT industry market was calculated to be approximately $322.59 billion in 2024 and is projected to attain $792.05 billion by 2034, growing at a 9.39% compound annual growth rate (“CAGR”) from 2025 to 2034. 2 Its largest sub-segment, RCM, is reported to be nearly $172.2 billion in 2024 and is projected to grow at a 10.1% CAGR through 2030 according to Grand View Research. 3 The U.S.
We are also focused on converting SaaS clients into higher revenue per client offerings such as revenue cycle management and other business services. This expansion of services typically represents a 3-4x increase in overall revenue per client. Leveraging significant cost advantages provided by our technology and global workforce.
We are also focused on converting SaaS clients into higher revenue per client offerings such as revenue cycle management and other business services. Leveraging significant cost advantages provided by our technology and global workforce. Our unique business model includes our cloud-based software and a cost-effective offshore workforce located in our Offshore Offices.
Our product, engineering, quality assurance, and development operations teams are located both onshore and offshore. We complement our internal efforts with services from third-party technology providers for infrastructure, healthcare ecosystem connectivity needs such as prescriptions, clinical laboratories, or specific application requirements.
We complement our internal efforts with services from third-party technology providers for infrastructure, healthcare ecosystem connectivity needs such as prescriptions, clinical laboratories, or specific application requirements. 12 We also employ product management, user experience, and product marketing personnel who work continually on improvements to our products and services design.
We have entered into such engagements with industry participants, and developed application interfaces with numerous EHR systems, together with device and lab integration to support these relationships. Competition The market for RCM, practice management, EHR solutions, and related services is highly competitive, and we expect competition to increase in the future.
We have entered into such engagements with industry participants, and developed application interfaces with numerous EHR systems, together with device and lab integration to support these relationships. Growth through Acquisitions The Healthcare IT industry is highly fragmented, with many local and regional RCM companies serving small medical practices and hospitals.
We believe there are dynamics at play that are significantly increasing the market need for our products and services. These market dynamics present opportunities for us to innovate and focus on impacting the day-to-day challenges our clients face as they work to provide excellent patient care, all while managing and expanding their businesses.
These market dynamics present opportunities for us to innovate and focus on impacting the day-to-day challenges our clients face as they work to provide excellent patient care, all while managing and expanding their businesses. 1 National Health Expenditure Projections 2023-2033 2 U.S. Healthcare IT Market Size, Share, Growth 2025-2034 3 U.S. Revenue Cycle Management Market Size Report, 2030 4 U.S.
For 2024, the Company was not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended. The Company is a non-accelerated filer. Where You Can Find More Information Our website, which we use to communicate important business information, can be accessed at: www.CareCloud.com.
Beginning with this Annual Report on Form 10-K, the Company is now an accelerated filer. 15 Where You Can Find More Information Our website, which we use to communicate important business information, can be accessed at: www.CareCloud.com.
Electronic Health Records Market | Industry Report 2030 5 U.S. Telehealth Market Size & Share | Industry Report, 2030 10 There are continuing legislative and regulatory reform efforts, as well as growing compliance requirements mandated by the federal government and other governmental agencies.
This transition comes in a multitude of forms including reimbursement models associated with quality incentive programs, capitation payments models, bundled payments, and at-risk payer contracts. There are continuing legislative and regulatory reform efforts, as well as growing compliance requirements mandated by the federal government and other governmental agencies.
Removed
Additionally, analysts from the Imarc have estimated the U.S.
Added
The platform consolidates critical data to enhance referral volume, strengthen provider engagement and drive strategic organizational growth; ○ Wellsoft, a solution for provider workflows in emergency departments and urgent care facilities has seamless integration into all major hospital IT systems and ancillary departments providing real-time patient tracking and instant lab orders, drug interaction checking and pharmacy review; ○ CareVue is a cloud-based EHR software that enhances clinical workflows for small hospitals and inpatient behavioral health facilities, driving efficiencies across inpatient settings through enhanced charting tools, e-prescribing and medication management and secure clinical communications; 7 ○ Artificial intelligence (“AI”): ● CareCloud cirrusAI is designed to serve as a digital healthcare assistant, helping to enhance clinical decision-making, streamline workflows, reduce administrative burdens, optimize revenue management, and promote patient-centered care.
Removed
This transition comes in a multitude of forms including reimbursement models associated with quality incentive programs, capitation payments models, bundled payments, and at-risk payer contracts. 1 National Health Expenditure Projections 2023-2032 2 U.S. Healthcare IT Market Size, Share, Growth 2025-2033 3 U.S. Revenue Cycle Management Market Size Report, 2030 4 U.S.
Added
This functionality supports CareCloud’s RCM teams in optimizing providers’ RCM and securing proper reimbursement. ● CareCloud cirrusAI integrates with CareCloud’s EHR solution, talkEHR, making it easily accessible to providers of all sizes. ● Stratus AI Desk Agent is an agentic AI phone receptionist designed to modernize and automate patient phone interactions.
Added
We believe there are dynamics at play that are significantly increasing the market need for our products and services.
Added
Our product, engineering, quality assurance, and development operations teams are located both onshore and offshore.
Added
We believe that the industry continues to be ripe for consolidation and that we can achieve significant growth through acquisitions.
Added
We further believe that it is becoming increasingly difficult for traditional RCM companies, together with a variety of other healthcare industry vendors and healthcare IT companies, to meet the growing technology and business service needs of healthcare providers without a significant investment in an information technology infrastructure and the utilization of a talented, cost-efficient global team.
Added
Since the Company went public in July 2014, we have completed over 20 transactions, acquiring complementary assets to grow our business. We typically leverage our technology and our cost-effective offshore team to quickly deliver additional value to the newly acquired customer base, while reducing costs.
Added
Often, we will incur initial costs associated with the integration of the acquired business with our existing operations, but this early investment is designed to increase customer satisfaction and retention, while laying the foundation for long-term accretion. 14 Competition The market for RCM, practice management, EHR solutions, and related services is highly competitive, and we expect competition to increase in the future.
Added
For 2025, the Company was required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

132 edited+35 added−20 removed234 unchanged
Biggest changeThere are many exemptions available to smaller reporting companies like us that have less than $250 million of worldwide common equity held by non-affiliates. The disclosures we will be required to provide in our SEC filings are still less than they would be if we were not considered a smaller reporting company.
Biggest changeWe are a smaller reporting company and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors. There are many exemptions available to smaller reporting companies like us that have less than $250 million of worldwide common equity held by non-affiliates.
The federal Anti-Kickback Statute (“AKS”) prohibits us from knowingly and willfully soliciting, receiving, offering or providing remuneration in exchange for referrals or recommendations for purposes of selling products or services which are paid for by federal healthcare programs such as Medicare and Medicaid.
The federal Anti-Kickback Statute (the “AKS”) prohibits us from knowingly and willfully soliciting, receiving, offering or providing remuneration in exchange for referrals or recommendations for purposes of selling products or services which are paid for by federal healthcare programs such as Medicare and Medicaid.
Similarly, certain computer software products are regulated as medical devices under the Federal Food, Drug, and Cosmetic Act. While the Food and Drug Administration (“FDA”) has sometimes chosen to disclaim authority to, or to refrain from actively regulating certain software products which are similar to our products, this area of medical device regulation remains in flux.
Similarly, certain computer software products are regulated as medical devices under the Federal Food, Drug, and Cosmetic Act. While the Food and Drug Administration (the “FDA”) has sometimes chosen to disclaim authority to, or to refrain from actively regulating certain software products which are similar to our products, this area of medical device regulation remains in flux.
Any such downward revision, placing it on a watch list or withdrawal of a rating could have an adverse effect on the market price of the Preferred Stock. The market price of our Series B Preferred Stock is variable and is substantially affected by various factors.
Any such downward revision, placing it on a watch list or withdrawal of a rating could have an adverse effect on the market price of the Series B Preferred Stock. The market price of our Series B Preferred Stock is variable and is substantially affected by various factors.
However, there is no assurance that we will achieve anticipated cost savings and cross-selling on our acquisitions, and failure to do so may mean we overpaid for such acquisitions. In completing any future acquisitions, we will rely upon the representations, warranties and indemnities made by the sellers with respect to each acquisition as well as our own due diligence investigation.
However, there is no assurance that we will achieve anticipated cost savings and cross-selling on our acquisitions, and failure to do so may mean we overpaid for such acquisitions. 28 In completing any future acquisitions, we will rely upon the representations, warranties and indemnities made by the sellers with respect to each acquisition as well as our own due diligence investigation.
Further, there can be no assurance that technological advances by one or more of our competitors or future competitors will not result in our present or future applications and services becoming uncompetitive or obsolete. 27 Our business, financial condition, results of operations and growth may be adversely affected by pandemics, epidemics or other public health emergencies, such as COVID-19.
Further, there can be no assurance that technological advances by one or more of our competitors or future competitors will not result in our present or future applications and services becoming uncompetitive or obsolete. Our business, financial condition, results of operations and growth may be adversely affected by pandemics, epidemics or other public health emergencies, such as COVID-19.
There can be no assurance that these actions will achieve their intended benefits. If we are unable to successfully introduce new products or services or fail to keep pace with advances in technology, we would not be able to maintain our customers or grow our business, which will have a material adverse effect on our business.
There can be no assurance that these actions will achieve their intended benefits. 19 If we are unable to successfully introduce new products or services or fail to keep pace with advances in technology, we would not be able to maintain our customers or grow our business, which will have a material adverse effect on our business.
In addition, cancellation of any implementation after it has begun may involve loss to us of time, effort, and expenses invested in the canceled implementation process, and lost opportunity for implementing paying customers in that same period of time. 19 We are required to collect sales and use taxes on certain products and services we sell in certain jurisdictions.
In addition, cancellation of any implementation after it has begun may involve loss to us of time, effort, and expenses invested in the canceled implementation process, and lost opportunity for implementing paying customers in that same period of time. We are required to collect sales and use taxes on certain products and services we sell in certain jurisdictions.
Our intellectual property rights may not be sufficient to help us maintain our position in the market and our competitive advantages. 20 Trade secrets may not be protectable if not properly kept confidential. We strive to enter into non-disclosure agreements with our employees, customers, contractors and business partners to limit access to and disclosure of our proprietary information.
Our intellectual property rights may not be sufficient to help us maintain our position in the market and our competitive advantages. Trade secrets may not be protectable if not properly kept confidential. We strive to enter into non-disclosure agreements with our employees, customers, contractors and business partners to limit access to and disclosure of our proprietary information.
We cannot assure you that we will not be subject to sales and use taxes or related penalties for past sales in states where we believe no compliance is necessary. If the federal government were to impose a tax on imports or services performed abroad, we might be subject to additional liabilities.
We cannot assure you that we will not be subject to sales and use taxes or related penalties for past sales in states where we believe no compliance is necessary. If the federal government were to impose a tax on services performed abroad, we might be subject to additional liabilities.
We are allowed to issue additional shares of Preferred Stock and additional series of preferred stock that would rank equal to or below the Preferred Stock as to dividend payments and rights upon our liquidation, dissolution or winding up of our affairs pursuant to our amended and restated certificate of incorporation and the certificate of designations relating to the Preferred Stock without any vote of the holders of the Preferred Stock.
We are allowed to issue additional shares of Series B Preferred Stock and additional series of preferred stock that would rank equal to or below the Preferred Stock as to dividend payments and rights upon our liquidation, dissolution or winding up of our affairs pursuant to our amended and restated certificate of incorporation and the certificate of designations relating to the Preferred Stock without any vote of the holders of the Preferred Stock.
Competition for acquisitions would likely increase acquisition prices and result in us having fewer acquisition opportunities. Depending on the type of businesses we acquire (e.g., RCM, practice management, EHR, etc.), we may have varying cost saving and/or cross-selling opportunities with the acquired business.
Competition for acquisitions would likely increase acquisition prices and result in us having fewer acquisition opportunities. Depending on the type of business we acquire (e.g., RCM, practice management, EHR, etc.), we may have varying cost saving and/or cross-selling opportunities with the acquired business.
We believe that the labor costs in our Offshore Offices are approximately 15% of the cost of comparably educated and skilled workers in the U.S. If there were potential disruptions in any of these locations, they could have a negative impact on our business.
We believe that the labor costs in our Offshore Offices are approximately 15% - 17% of the cost of comparably educated and skilled workers in the U.S. If there were potential disruptions in any of these locations, they could have a negative impact on our business.
Many factors may lead to decreases in customer revenue, including: ● reduction of customer revenue as a result of changes to the Patient Protection and Affordable Care Act (“ACA”) or fluctuations in medical appointments due to future pandemics; ● a rollback of the expansion of Medicaid or other governmental programs; ● reduction of customer revenue resulting from increased competition or other changes in the marketplace for physician services; ● failure of our customers to adopt or maintain effective business practices; ● actions by third-party payers of medical claims to reduce reimbursement; ● government regulations and government or other payer actions or inactions reducing or delaying reimbursement; ● interruption of customer access to our system; and ● our failure to provide services in a timely or high-quality manner.
Many factors may lead to decreases in customer revenue, including: ● reduction of customer revenue as a result of changes to the Patient Protection and Affordable Care Act (“ACA”), other legislation or fluctuations in medical appointments due to future pandemics; ● a rollback of the expansion of Medicaid or other governmental programs; ● reduction of customer revenue resulting from increased competition or other changes in the marketplace for physician services; ● failure of our customers to adopt or maintain effective business practices; 20 ● actions by third-party payers of medical claims to reduce reimbursement; ● government regulations and government or other payer actions or inactions reducing or delaying reimbursement; ● interruption of customer access to our system; and ● our failure to provide services in a timely or high-quality manner.
We may also conclude that, in some instances, the benefits of protecting our intellectual property rights may be outweighed by the expense. In addition, our platforms incorporate “open source” software components that are licensed to us under various public domain licenses.
We may also conclude that, in some instances, the benefits of protecting our intellectual property rights may be outweighed by the expense. 22 In addition, our platforms incorporate “open source” software components that are licensed to us under various public domain licenses.
The financial markets recently have encountered volatility associated with concerns about the balance sheets of banks, especially small and regional banks who may have significant losses associated with investments that make it difficult to fund demands to withdraw deposits and other liquidity needs.
The financial markets recently have encountered volatility associated with concerns about the balance sheets of domestic banks, especially small and regional banks who may have significant losses associated with investments that make it difficult to fund demands to withdraw deposits and other liquidity needs.
As a result, fluctuating exchange rates may adversely impact our results of operations and cash flows. 28 Risks Related to Our Acquisition Strategy If we do not manage our acquisitions effectively, our revenue, business and operating results may be harmed.
As a result, fluctuating exchange rates may adversely impact our results of operations and cash flows. Risks Related to Our Acquisition Strategy If we do not manage our acquisitions effectively, our revenue, business and operating results may be harmed.
If the distributions fail to qualify as dividends, U.S. holders would be unable to use the dividends-received deduction and may not be eligible for the preferential tax rates applicable to “qualified dividend income.” If any distributions on the Preferred Stock with respect to any fiscal year are not eligible for the dividends-received deduction or preferential tax rates applicable to “qualified dividend income” because of insufficient current or accumulated earnings and profits, it is possible that the market value of the Preferred Stock might decline.
If the distributions fail to qualify as dividends, U.S. holders would be unable to use the dividends-received deduction and may not be eligible for the preferential tax rates applicable to “qualified dividend income.” If any distributions on the Series B Preferred Stock with respect to any fiscal year are not eligible for the dividends-received deduction or preferential tax rates applicable to “qualified dividend income” because of insufficient current or accumulated earnings and profits, it is possible that the market value of the Series B Preferred Stock might decline.
We may issue additional shares of Preferred Stock and additional series of preferred stock that rank on parity with the Preferred Stock as to dividend rights, rights upon liquidation or voting rights.
We may issue additional shares of Series B Preferred Stock and additional series of preferred stock that rank on parity with the Preferred Stock as to dividend rights, rights upon liquidation or voting rights.
The issuance of additional shares of Preferred Stock and additional series of preferred stock could have the effect of reducing the amounts available to the Preferred Stock upon our liquidation or dissolution or the winding up of our affairs.
The issuance of additional shares of Series B Preferred Stock and additional series of preferred stock could have the effect of reducing the amounts available to the Preferred Stock upon our liquidation or dissolution or the winding up of our affairs.
There can be no assurance that we will remain in compliance with the SVB Credit Agreement, and if we default, we may be contractually prohibited from paying dividends on the Preferred Stock. Also, future offerings of debt or senior equity securities may adversely affect the market price of the Preferred Stock.
There can be no assurance that we will remain in compliance with the Provident credit agreement, and if we default, we may be contractually prohibited from paying dividends on the Preferred Stock. Also, future offerings of debt or senior equity securities may adversely affect the market price of the Preferred Stock.
Also, payment of our dividends depends upon our financial condition, remaining in compliance with our affirmative and negative loan covenants with SVB, which we may be unable to do in the future, and other factors as our Board of Directors may deem relevant from time to time.
Also, payment of our dividends depends upon our financial condition, remaining in compliance with our affirmative and negative loan covenants with Provident, which we may be unable to do in the future, and other factors as our Board of Directors may deem relevant from time to time.
The market value of the Preferred Stock may depend more on dividend and interest rates for other preferred stock, commercial paper and other investment alternatives and our actual and perceived ability to pay dividends on, and in the event of dissolution satisfy the liquidation preference with respect to the Preferred Stock.
The market value of the Series B Preferred Stock may depend more on dividend and interest rates for other preferred stock, commercial paper and other investment alternatives and our actual and perceived ability to pay dividends on, and in the event of dissolution satisfy the liquidation preference with respect to the Series B Preferred Stock.
We do not currently have such accumulated earnings and profits. Additionally, we may not have sufficient current earnings and profits during future fiscal years for the distributions on the Preferred Stock to qualify as dividends for U.S. federal income tax purposes.
We do not currently have such accumulated earnings and profits. Additionally, we may not have sufficient current earnings and profits during future fiscal years for the distributions on the Series B Preferred Stock to qualify as dividends for U.S. federal income tax purposes.
If we cannot adapt to changing technologies and industry standards, including changing requirements of third-party applications and software and meet the requirements of our customers, our products and services may become obsolete, and our business would suffer significantly.
If we cannot adapt to changing technologies and industry standards, including changing requirements of third-party applications and software and meeting the requirements of our customers, our products and services may become obsolete, and our business would suffer significantly.
Although the Company resumed payment of the monthly dividends in February 2025, we may not maintain sufficient cash to continue to pay dividends on the Preferred Stock and we cannot assure you that our businesses will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to make the Preferred Stock dividend payments that are currently due or in arrears and to fund our other liquidity needs.
Although the Company resumed payment of the monthly dividends in February 2025, we may not maintain sufficient cash to continue to pay dividends on the Preferred Stock, including the double dividend on the Series B Preferred Stock, and we cannot assure you that our businesses will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to make the Preferred Stock dividend payments that are currently due or in arrears and to fund our other liquidity needs.
In addition, we could be perceived to have facilitated or participated in illegal misappropriation of funds, documents, or data and therefore be subject to civil or criminal liability. 32 Risks Related to Ownership of Shares of Our Common Stock The conversion of the Series A Preferred Stock into common stock in March 2025 (the "Conversion") increased the total number of outstanding shares, potentially diluting the value of existing common shareholders’ equity.
In addition, we could be perceived to have facilitated or participated in illegal misappropriation of funds, documents, or data and therefore be subject to civil or criminal liability. 33 Risks Related to Ownership of Shares of Our Common Stock The conversion of the majority of the Series A Preferred Stock into common stock in March 2025 (the “Conversion”) increased the total number of outstanding shares, potentially diluting the value of existing common shareholders’ equity.
If a breach of our measures protecting personal data covered by HIPAA or the HITECH Act occurs, we may incur significant liabilities.
Regulatory Risks If a breach of our measures protecting personal data covered by HIPAA or the HITECH Act occurs, we may incur significant liabilities.
This shift in voting power could potentially dilute the influence of existing common shareholders and may lead to changes in the Company’s governance structure. The conversion of the Series A Preferred Stock could be perceived negatively by the market.
This shift in voting power could potentially dilute the influence of existing common shareholders and may lead to changes in the Company’s governance structure. The Conversion of the Series A Preferred Stock, and any subsequent conversions, may be perceived negatively by the market.
In particular, we are dependent on the services of Mahmud Haq, our founder, principal stockholder and Executive Chairman, and A. Hadi Chaudhry and Stephen Snyder as Co-Chief Executive Officers. Mr. Haq is instrumental in managing our offshore operations in our Pakistan Offices and coordinating those operations with our U.S. activities. The loss of Mr.
In particular, we are dependent on the services of Mahmud Haq, our founder, principal stockholder and Executive Chairman, Stephen Snyder as Chief Executive Officer and A. Hadi Chaudhry as Chief Strategy Officer. Mr. Haq is instrumental in managing our offshore operations in our Pakistan Offices and coordinating those operations with our U.S. activities. The loss of Mr.
The Conversion could be perceived negatively by the market, potentially leading to a decline in the value of the Company’s common stock. Investors may interpret such conversion as a sign of financial weakness, dilution of ownership, or a shift in the Company’s capital structure that could impact earnings per share or control dynamics.
The Conversion and any subsequent conversions could be perceived negatively by the market, potentially leading to a decline in the value of the Company’s common stock. Investors may interpret such conversion as a sign of financial weakness, dilution of ownership, or a shift in the Company’s capital structure that could impact earnings per share or control dynamics.
The Company cannot predict at this time the full impact of the ACA or other new legislation, the new Administration, agency priorities, rulemaking and healthcare reform measures from U.S. federal or state governments, or third-party payors that may be adopted or implemented in the future on the Company’s financial condition, results of operations and cash flows.
The Company cannot predict at this time the full impact of the ACA, or any other legislative changes thereto, other new legislation, the current Administration, agency priorities, rulemaking and healthcare reform measures from U.S. federal or state governments, or third-party payors that may be adopted or implemented in the future on the Company’s financial condition, results of operations and cash flows.
These factors include, but are not limited to, the following: ● suspension of the dividend payments in December 2023 which were not resumed until February 2025; ● prevailing interest rates, increases in which may have an adverse effect on the market price of the Preferred Stock; ● trading prices of similar securities; ● the annual yield from dividends on the Preferred Stock as compared to yields on other financial instruments; ● general economic and financial market conditions; ● government action or regulation; ● our financial condition, performance and prospects of our competitors; ● changes in financial estimates or recommendations by securities analysts with respect to us or our competitors in our industry; ● our issuance of additional preferred equity or debt securities; and ● actual or anticipated variations in quarterly operating results of us and our competitors.
These factors include, but are not limited to, the following: ● suspension of the dividend payments in December 2023 which were not resumed until February 2025; ● prevailing interest rates, increases in which may have an adverse effect on the market price of the Series B Preferred Stock; ● trading prices of similar securities; ● the annual yield from dividends on the Series B Preferred Stock as compared to yields on other financial instruments; ● general economic and financial market conditions; ● government action or regulation; ● our financial condition, performance and prospects of our competitors; ● changes in financial estimates or recommendations by securities analysts with respect to us or our competitors in our industry; ● our issuance of additional preferred equity or debt securities; and ● actual or anticipated variations in quarterly operating results of us and our competitors. 38 A holder of Preferred Stock has extremely limited voting rights.
The incurrence of additional accounting and legal costs and related expenses in connection with, and the assessment of, taxes, interest, and penalties as a result of audits, litigation, or otherwise could be materially adverse to our current and future results of operations and financial condition. If we lose the services of Mahmud Haq as Executive Chairman, A.
The incurrence of additional accounting and legal costs and related expenses in connection with, and the assessment of, taxes, interest, and penalties as a result of audits, litigation, or otherwise could be materially adverse to our current and future results of operations and financial condition. 21 If we lose the services of Mahmud Haq as Executive Chairman, Stephen Snyder as Chief Executive Officer, A.
Distributions paid to corporate U.S. holders of the Preferred Stock may be eligible for the dividends-received deduction, and distributions paid to non-corporate U.S. holders of the Preferred Stock may be subject to tax at the preferential tax rates applicable to “qualified dividend income,” if we have current or accumulated earnings and profits, as determined for U.S. federal income tax purposes.
Holders of the Series B Preferred Stock may be unable to use the dividends-received deduction and may not be eligible for the preferential tax rates applicable to “qualified dividend income.” Distributions paid to corporate U.S. holders of the Series B Preferred Stock may be eligible for the dividends-received deduction, and distributions paid to non-corporate U.S. holders of the Series B Preferred Stock may be subject to tax at the preferential tax rates applicable to “qualified dividend income,” if we have current or accumulated earnings and profits, as determined for U.S. federal income tax purposes.
Other than the limited circumstances and except to the extent required by law, holders of Preferred Stock do not have any other voting rights. The Preferred Stock is not convertible at the option of the holder, and investors will not realize a corresponding upside if the price of the common stock increases.
Other than the limited circumstances and except to the extent required by law, holders of Preferred Stock do not have any other voting rights. The Series B Preferred Stock is not convertible and investors will not realize a corresponding upside if the price of the common stock increases.
Market interest rates may materially and adversely affect the value of the Preferred Stock. One of the factors that influences the price of the Preferred Stock is the dividend yield on the Preferred Stock (as a percentage of the market price of each class of the Preferred Stock) relative to market interest rates.
Market interest rates may materially and adversely affect the value of the Series B Preferred Stock. One of the factors that influences the price of the Series B Preferred Stock is the dividend yield on the Series B Preferred Stock (as a percentage of the market price of the Series B Preferred Stock) relative to market interest rates.
The Preferred Stock is not convertible into common stock at the option of the holder and earns dividends at a fixed rate. Accordingly, an increase in the market price of our common stock will not necessarily result in an increase in the market price of our Preferred Stock.
The Series B Preferred Stock is not convertible into common stock and earns dividends at a fixed rate. Accordingly, an increase in the market price of our common stock will not necessarily result in an increase in the market price of our Series B Preferred Stock.
If our shareholders sell, or the market perceives that our shareholders intend to sell substantial amounts of our common stock in the public market, the market price of our common stock could decline significantly. As of December 31, 2024, Mahmud Haq controlled 31% of our outstanding shares of common stock, which prevented investors from influencing significant corporate decisions.
If our shareholders sell, or the market perceives that our shareholders intend to sell substantial amounts of our common stock in the public market, the market price of our common stock could decline significantly. As of December 31, 2025, Mahmud Haq controlled 12% of our outstanding shares of common stock, limits investors from influencing significant corporate decisions.
Item 1A. Risk Factors Risks Related to Our Business We operate in a highly competitive industry, and our competitors may be able to compete more efficiently or evolve more rapidly than we do, which could have a material adverse effect on our business, revenue, growth rates and market share.
We operate in a highly competitive industry, and our competitors may be able to compete more efficiently or evolve more rapidly than we do, which could have a material adverse effect on our business, revenue, growth rates and market share.
Hadi Chaudhry and Stephen Snyder as Co-Chief Executive Officers, or other members of our management team, or if we are unable to attract, hire, integrate and retain other necessary employees, our business would be harmed. Our future success depends in part on our ability to attract, hire, integrate and retain the members of our management team and other qualified personnel.
Hadi Chaudhry as Chief Strategy Officer, or other members of our management team, or if we are unable to attract, hire, integrate and retain other necessary employees, our business would be harmed. Our future success depends in part on our ability to attract, hire, integrate and retain the members of our management team and other qualified personnel.
Specific factors that may cause fluctuations in our operating results include: ● demand and pricing for our products and services; ● the encounter volumes of our customer base; ● government or commercial healthcare reimbursement policies; ● physician and patient acceptance of any of our current or future products; ● introduction of competing products, services or technologies; ● our operating expenses which fluctuate due to growth of our business; ● changes in laws or regulations applicable to our products and services; ● timing and size of any new product or technology acquisitions we may complete; and ● variable sales cycle and implementation periods for our products and services.
Specific factors that may cause fluctuations in our operating results include: ● demand and pricing for our products and services; ● the encounter volumes of our customer base; ● government or commercial healthcare reimbursement policies; ● physician and patient acceptance of any of our current or future products; ● introduction of competing products, services or technologies; ● our operating expenses which fluctuate due to growth of our business; ● changes in laws or regulations applicable to our products and services; ● timing and size of any new product or technology acquisitions we may complete; and ● variable sales cycle and implementation periods for our products and services. 34 Healthcare reform may have a material adverse effect on the Company’s financial condition and results of operations.
The Company’s earnings per share calculation will be impacted by the additional common shares, offset by the amount of Series A Preferred Stock dividend that is not included in the calculation. The increased number of common shares outstanding will also lower the book value of each common share, which would adversely affect the market price of the Company’s common stock.
The Company’s earnings per share calculation was impacted by the additional common shares, offset by the amount of Series A Preferred Stock dividend that is not included in the calculation. The increased number of common shares outstanding also lowered the book value of each common share, which may adversely affect the market price of the Company’s common stock.
These agreements are reviewed by our Audit Committee on an annual basis. Since inception, we have entered into several related-party transactions with our founder and Executive Chairman, Mahmud Haq, which subject us to significant contractual obligations. We believe these transactions reflect terms comparable to those that would be available from third parties.
Since inception, we have entered into several related-party transactions with our founder and Executive Chairman, Mahmud Haq, which subject us to significant contractual obligations. We believe these transactions reflect terms comparable to those that would be available from third parties. Our independent audit committee has reviewed these arrangements and continues to do so on an annual basis.
Also, we may elect in the future to obtain a rating for the Preferred Stock, which could adversely affect the market price of the Preferred Stock.
Also, we may elect in the future to obtain a rating for the Series B Preferred Stock, which could adversely affect its market price.
The Conversion resulted in the dilution of existing common shareholders’ ownership percentages. This dilution of ownership will impact the voting power, earnings per share and overall control of the Company for existing common shareholders.
The Conversion resulted in the dilution of existing common shareholders’ ownership percentages. This dilution of ownership impacted the voting power, earnings per share and overall control of the Company for common shareholders prior to the Conversion.
An increase in market interest rates may lead prospective purchasers of the Preferred Stock to expect a higher dividend yield (and higher interest rates would likely increase our borrowing costs and potentially decrease funds available for dividend payments).
An increase in market interest rates may lead prospective purchasers of the Series B Preferred Stock to expect a higher dividend yield (and higher interest rates would likely increase our borrowing costs and potentially decrease funds available for dividend payments). Thus, higher market interest rates could cause the market price of the Series B Preferred Stock to materially decrease.
A holder of Preferred Stock has extremely limited voting rights. The voting rights for a holder of Preferred Stock are limited. Our shares of common stock are the only class of our securities that carry full voting rights, and Mahmud Haq, our Executive Chairman, beneficially owned approximately 31% of our outstanding shares of common stock as of December 31, 2024.
The voting rights for a holder of Preferred Stock are limited. Our shares of common stock are the only class of our securities that carry full voting rights, and Mahmud Haq, our Executive Chairman, beneficially owned approximately 12% of our outstanding shares of common stock as of December 31, 2025. Accordingly, Mr.
The Company resumed paying monthly dividends in February 2025, paying one month of the arrearage. We may not be able to continue to pay dividends on the Preferred Stock if we fall out of compliance with our loan covenants and are prohibited by our bank lender from paying dividends or if we have insufficient cash to make dividend payments.
We may not be able to continue to pay dividends on the Preferred Stock if we fall out of compliance with our loan covenants and are prohibited by our bank lender from paying dividends or if we have insufficient cash to make dividend payments.
If we fall out of compliance, our lender may exercise any of its rights and remedies under the loan agreement, including restricting us from making dividend payments. Notwithstanding these factors, during December 2023, the Company suspended the dividends on the Preferred Stock.
If we fall out of compliance, our lender may exercise any of its rights and remedies under the loan agreement. 36 Notwithstanding these factors, during December 2023, the Company suspended the dividends on the Preferred Stock.
The HITECH Act transferred enforcement authority of the security rule from CMS to the Office for Civil Rights of HHS, thereby consolidating authority over the privacy and security rules under a single office within HHS. Further, HITECH empowered state attorneys’ general to enforce HIPAA.
The HITECH Act transferred enforcement authority of the security rule from CMS to the Office for Civil Rights of HHS, thereby consolidating authority over the privacy and security rules under a single office within HHS.
Our Board of Directors has the authority to issue up to 7,000,000 shares of preferred stock and to determine the price, privileges and other terms of these shares, of which 4,526,231 shares of Series A Preferred Stock and 1,511,372 of Series B Preferred Stock were issued as of December 31, 2024.
Our Board of Directors has the authority to issue up to 7,000,000 shares of preferred stock and to determine the price, privileges and other terms of these shares, of which 984,530 shares of Series A Preferred Stock and 1,511,372 of Series B Preferred Stock were outstanding as of December 31, 2025.
Although payment of the suspended dividends resumed in February 2025, there are still dividends in arrears and we may be unable to raise additional capital without incurring excessive dilution. In December 2023, we suspended payment on the Preferred Stock dividends. The Company resumed monthly payment of the dividends in February 2025 by paying one month of arrears.
Although payment of the suspended dividends resumed in February 2025 and continued throughout the year, there are still dividends in arrears and we may be unable to raise additional capital without incurring excessive dilution. In December 2023, we suspended payment on the Preferred Stock dividends.
In order to operate more efficiently, control costs and improve profitability, we incurred $606,000 and $645,000 of restructuring costs in 2024 and 2023, respectively, primarily consisting of severance and separation costs associated with the optimization of the Company’s operations and profitability improvements. We expect to incur approximately an additional $100,000 of restructuring costs in 2025.
In order to operate more efficiently, control costs and improve profitability, we incurred $154,000 and $606,000 of restructuring costs in 2025 and 2024, respectively, primarily consisting of severance and separation costs associated with the optimization of the Company’s operations and profitability improvements.
We collect, store, have access to and otherwise process certain confidential or sensitive data, including proprietary business information, patient data, personal data or other information that is subject to privacy and security laws, business information and/or customer imposed controls.
Data privacy, identity protection and information security compliance may require significant resources and presents certain risks. We collect, store, have access to and otherwise process certain confidential or sensitive data, including proprietary business information, patient data, personal data or other information that is subject to privacy and security laws, business information and/or customer imposed controls.
We may bear losses incurred as a result of, for example, physical damage to, or destruction of, our facilities (such as our operation centers), and business interruption due to weather events that may be attributable to climate change. These events and impacts could materially adversely affect our business operations, financial position, or results of operation.
We may bear losses incurred as a result of, for example, physical damage to, or destruction of, our facilities (such as our operation centers), and business interruption due to weather events that may be attributable to climate change.
If this trend continues, we cannot assure you that we will be able to continue to maintain or expand our customer base, negotiate contracts with acceptable terms, or maintain our current pricing structure, which would result in a decrease in our revenues and market share. 18 If providers do not purchase our products and services or delay in choosing our products or services, we may not be able to grow our business.
If this trend continues, we cannot assure you that we will be able to continue to maintain or expand our customer base, negotiate contracts with acceptable terms, or maintain our current pricing structure, which would result in a decrease in our revenues and market share.
In addition, our internal control over financial reporting would not prevent or detect all errors and fraud. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.
Our independent audit committee has reviewed these arrangements and continues to do so on an annual basis. Although we have procedures in place to identify related party transactions, it is possible that such transactions could occur without being contemporaneously identified, reviewed and approved by the Audit Committee. We depend on key information systems and third-party service providers.
Although we have procedures in place to identify related party transactions, it is possible that such transactions could occur without being contemporaneously identified, reviewed and approved by the Audit Committee. 26 We depend on key information systems and third-party service providers.
Risks Related to Macroeconomics Conditions Our operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially adversely affect our business, results of operations and financial conditions.
These events and impacts could materially adversely affect our business operations, financial position, or results of operation. 27 Risks Related to Macroeconomics Conditions Our operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially adversely affect our business, results of operations and financial conditions.
Any disruption or failure of these systems or services could cause substantial errors, processing inefficiencies, security breaches, inability to use the systems or process transactions, loss of customers or other business disruptions, all of which could negatively affect our business and financial performance.
Any disruption or failure of these systems or services could cause substantial errors, processing inefficiencies, security breaches, inability to use the systems or process transactions, loss of customers or other business disruptions, all of which could negatively affect our business and financial performance. Rapid technological change in the telehealth industry presents us with significant risks and challenges .
Our Preferred Stock has not been rated. We have not sought to obtain a rating for the Preferred Stock. No assurance can be given, however, that one or more rating agencies might not independently determine to issue such a rating or that such a rating, if issued, would not adversely affect the market price of the Preferred Stock.
No assurance can be given, however, that one or more rating agencies might not independently determine to issue such a rating or that such a rating, if issued, would not adversely affect the market price of the Series B Preferred Stock.
At the current prices of our common and Preferred Stock, we may be unable to execute accretive acquisitions. Historically we have used our common and Preferred Stock to pay in part for acquisitions. Due to the lower market prices of these securities, we may not be able to use these securities to execute future acquisitions.
At the current price of our common stock, we may be unable to execute accretive acquisitions. At times we have used our common stock to pay in part for acquisitions. Due to the lower market price of the common stock, we may not be able to use this security to execute future acquisitions.
As of December 31, 2024, Mahmud Haq, our founder and Executive Chairman, beneficially owned 31% of our outstanding shares of common stock. Due to the Conversion, his ownership percentage was diluted. However, he still controls 12% of our outstanding shares of common stock after the Conversion. As a result, Mr.
As of December 31, 2025, Mahmud Haq, our founder and Executive Chairman, beneficially owned 12% of our outstanding shares of common stock. Although his ownership percentage was diluted due to the Conversion, Mr.
The HITECH Act heightened enforcement of privacy and security rules, indicating that the imposition of penalties will be more common in the future and such penalties will be more severe.
Further, HITECH empowered state attorneys’ general to enforce HIPAA. 29 The HITECH Act heightened enforcement of privacy and security rules, indicating that the imposition of penalties will be more common in the future and such penalties will be more severe.
This control could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible without his support, which in turn could reduce the price of our common stock. 33 Provisions of Delaware law, of our amended and restated charter and amended and restated bylaws may make a takeover more difficult, which could cause our common stock price to decline.
This control could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible without his support, which in turn could reduce the price of our common stock.
Finally, we may be required to spend significant resources to monitor and protect our intellectual property rights, including with respect to legal proceedings, which could result in substantial costs and diversion of resources and could materially and adversely impact our business, financial condition and operating results. 21 Claims by others that we infringe or may infringe on their intellectual property could force us to incur significant costs or revise the way we conduct our business.
Finally, we may be required to spend significant resources to monitor and protect our intellectual property rights, including with respect to legal proceedings, which could result in substantial costs and diversion of resources and could materially and adversely impact our business, financial condition and operating results.
In addition, contentions by a third party such as a vendor or partner that we may pose a threat to their intellectual property can disrupt our ability to work with such party and/or our customers who rely upon that third party’s product or services.
Any of the foregoing could disrupt our business and have a material adverse effect on our business, operating results and financial condition. 23 In addition, contentions by a third party such as a vendor or partner that we may pose a threat to their intellectual property can disrupt our ability to work with such party and/or our customers who rely upon that third party’s product or services.
Many healthcare laws are complex, and their application to specific services and relationships may not be clear. In particular, many existing healthcare laws and regulations, when enacted, did not anticipate or address the services that we provide.
The healthcare industry is heavily regulated and is constantly evolving due to the changing political, legislative, regulatory landscape and other factors. Many healthcare laws are complex, and their application to specific services and relationships may not be clear. In particular, many existing healthcare laws and regulations, when enacted, did not anticipate or address the services that we provide.
This control could have the effect of delaying or preventing a change of control of our Company or changes in management, and will make the approval of certain transactions difficult or impossible without his support, which in turn could reduce the price of our Preferred Stock. 37 Voting rights for holders of the Preferred Stock exist primarily with respect to the ability to elect, voting together with the holders of any other series of our preferred stock having similar voting rights, two additional directors to our Board of Directors, subject to limitations, in the event that eighteen monthly dividends (whether or not consecutive) payable on the Preferred Stock are in arrears, and with respect to voting on amendments to our articles of incorporation or articles of amendment relating to the Preferred Stock that materially and adversely affect the rights of the holders of Preferred Stock or authorize, increase or create additional classes or series of our capital stock that are senior to the Preferred Stock.
Voting rights for holders of the Preferred Stock exist primarily with respect to the ability to elect, voting together with the holders of any other series of our preferred stock having similar voting rights, two additional directors to our Board of Directors, subject to limitations, in the event that eighteen monthly dividends (whether or not consecutive) payable on the Preferred Stock are in arrears, and with respect to voting on amendments to our articles of incorporation or articles of amendment relating to the Preferred Stock that materially and adversely affect the rights of the holders of Preferred Stock or authorize, increase or create additional classes or series of our capital stock that are senior to the Preferred Stock.
We will need to expand and upgrade our systems and infrastructure to accommodate our growth. The failure to manage our growth effectively will materially and adversely affect our business. We may be unable to implement our strategy of acquiring additional companies. We have no unconditional commitments with respect to any acquisition as of the date of this Form 10-K.
We will need to expand and upgrade our systems and infrastructure to accommodate our growth. The failure to manage our growth effectively will materially and adversely affect our business. We may be unable to implement our strategy of acquiring additional companies.
For the year ended December 31, 2024, no additional goodwill impairment was recorded. See Note 3, Goodwill and Intangible Assets - Net , to our consolidated financial statements in this Annual Report on Form 10-K for more details. We are a party to several related-party agreements with our founder and Executive Chairman, Mahmud Haq, which have significant contractual obligations.
See Note 4 , Goodwill and Intangible Assets - Net , to our consolidated financial statements in this Annual Report on Form 10-K for more details. We are a party to several related-party agreements with our founder and Executive Chairman, Mahmud Haq, which have significant contractual obligations. These agreements are reviewed by our Audit Committee on an annual basis.
We must ensure that our EHR solutions continue to be certified according to applicable HITECH Act and Cures Act technical standards so that our customers qualify for any MIPS/MACRA incentive payments and are not subject to penalties for non-compliance.
Our web-based EHR solutions have been certified as complete EHR systems by ICSA Labs or Drummond Group, non-governmental, independent certifying bodies. We must ensure that our EHR solutions continue to be certified according to applicable HITECH Act and Cures Act technical standards so that our customers qualify for any MIPS/MACRA incentive payments and are not subject to penalties for non-compliance.
A breach of our safeguards and processes could expose us to civil penalties of up to $1.5 million for each incident and the possibility of civil litigation. 31 If we or our customers fail to comply with federal and state laws governing submission of false or fraudulent claims to government healthcare programs and financial relationships among healthcare providers, we or our customers may be subject to civil and criminal penalties or loss of eligibility to participate in government healthcare programs.
If we or our customers fail to comply with federal and state laws governing submission of false or fraudulent claims to government healthcare programs and financial relationships among healthcare providers, we or our customers may be subject to civil and criminal penalties or loss of eligibility to participate in government healthcare programs.
Future issuances and sales of senior or pari passu preferred stock, or the perception that such issuances and sales could occur, may cause prevailing market prices for the Preferred Stock and our common stock to decline and may adversely affect our ability to raise additional capital in the financial markets at times and prices favorable to us.
As a result, the voting rights of holders of Preferred Stock may be significantly diluted, and the holders of such other series of preferred stock that we may issue may be able to control or significantly influence the outcome of any vote. 37 Future issuances and sales of senior or pari passu preferred stock, or the perception that such issuances and sales could occur, may cause prevailing market prices for the Preferred Stock and our common stock to decline and may adversely affect our ability to raise additional capital in the financial markets at times and prices favorable to us.
If the revenues of our customers decrease, or if our customers cancel or elect not to renew their contracts, our revenue will decrease. Under most of our customer contracts, which include RCM, we base our charges on a percentage of the revenue that our customer collects through the use of our services.
Under most of our customer contracts, which include RCM, we base our charges on a percentage of the revenue that our customer collects through the use of our services.
Although we expect that one or more acquisition opportunities will become available in the future, we may not be able to acquire additional companies at all or on terms favorable to us.
We have no unconditional commitments with respect to any acquisition as of the date of this Annual Report on Form 10-K. Although we expect that one or more acquisition opportunities will become available in the future, we may not be able to acquire additional companies at all or on terms favorable to us.
Complying with the laws and regulations affecting public companies will increase our costs and the demands on management and could harm our operating results. As a public company, the Sarbanes-Oxley Act requires, among other things, that we assess the effectiveness of our internal control over financial reporting annually and the effectiveness of our disclosure controls and procedures quarterly.
As a public company, the Sarbanes-Oxley Act requires, among other things, that we assess the effectiveness of our internal control over financial reporting annually and the effectiveness of our disclosure controls and procedures quarterly.
The Company’s potential for future issuances of common stock following the Conversion could be limited. The Company may want to issue additional common stock in the future to raise capital for operations, acquisitions, or other strategic initiatives. Such potential for future issuances could be limited as a result of the additional common shares that were issued due to the Conversion.
The Company may want to issue additional common stock in the future to raise capital for operations, acquisitions, or other strategic initiatives. Such potential for future issuances could be limited after the Conversion and any future conversions.
In response to perceived increases in healthcare costs in recent years, there have been, and continue to be, proposals by the federal government, state governments, regulators, and third-party payors to control these costs and, more generally, to reform the U.S. health care system. Certain of these proposals could limit the amounts CareCloud will receive for its products and services.
Political, economic and regulatory developments have affected fundamental changes in the healthcare industry. In response to perceived increases in healthcare costs in recent years, there have been, and continue to be, proposals by the federal government, state governments, regulators, and third-party payors to control these costs and, more generally, to reform the U.S. health care system.

… 107 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+2 added−1 removed10 unchanged
Biggest changeTo defend, detect and respond to cybersecurity incidents, the Company conducts proactive cybersecurity reviews of systems and applications, audits applicable data policies, performs penetration testing using external third-party tools and techniques to test security controls, conducts employee training, monitors emerging laws and regulations related to data protection and information security and implements appropriate changes.
Biggest changeTo defend, detect and respond to cybersecurity incidents, the Company conducts proactive cybersecurity reviews of systems and applications, audits applicable data policies, performs penetration testing using external third-party tools and techniques to test security controls, conducts employee training, monitors emerging laws and regulations related to data protection and information security and implements appropriate changes. 39 We have implemented incident response and breach management processes which have four overarching and interconnected stages: 1) preparation for a cybersecurity incident, 2) detection and analysis of a security incident, 3) containment, eradication and recovery, and 4) post-incident analysis.
Our Vice President of IT Infrastructure is responsible for overseeing the Company’s cybersecurity. He has a Bachelor’s degree in computer science and has 16 years of extensive experience spanning diverse IT domains, with a specialized emphasis on Information Security across endpoints, servers, data centers, cloud infrastructure, and enterprise applications.
Our Vice President of IT Infrastructure is responsible for overseeing the Company’s cybersecurity. He has a bachelor’s degree in computer science and has 18 years of extensive experience spanning diverse IT domains, with a specialized emphasis on Information Security across endpoints, servers, data centers, cloud infrastructure, and enterprise applications.
For 2024 and 2023, our Information Security Management System is compliant with ISO 27001. We also had SOC 2, Type 2 reviews performed for the years 2024 and 2023.
For 2025 and 2024, our Information Security Management System is compliant with ISO 27001. We also had SOC 2, Type 2 reviews performed for the years 2025 and 2024.
As of the date of this Form 10-K, we have not experienced a cybersecurity threat or incident that resulted in a material adverse impact to our business or operations. 38 We also conduct exercises to simulate responses to cybersecurity incidents.
As of the date of this Annual Report on Form 10-K, we have not experienced a cybersecurity threat or incident that resulted in a material adverse impact to our business or operations. We also conduct exercises to simulate responses to cybersecurity incidents.
Security events and data incidents are evaluated, ranked by severity and prioritized for response and remediation. Incidents are evaluated to determine materiality as well as operational and business impact, and reviewed for privacy impact.
Such incident responses are overseen by leaders from our Information Security, Compliance and Legal teams regarding matters of cybersecurity. Security events and data incidents are evaluated, ranked by severity and prioritized for response and remediation. Incidents are evaluated to determine materiality as well as operational and business impact, and reviewed for privacy impact.
Removed
We have implemented incident response and breach management processes which have four overarching and interconnected stages: 1) preparation for a cybersecurity incident, 2) detection and analysis of a security incident, 3) containment, eradication and recovery, and 4) post-incident analysis. Such incident responses are overseen by leaders from our Information Security, Compliance and Legal teams regarding matters of cybersecurity.
Added
In the third quarter of 2025, we engaged an external vendor to conduct penetration testing and manage the security posture of our public-facing website and application. This added an extra layer of oversight to our external security environment, complementing the efforts of our internal data security team.
Added
It also supported our SOC 2 audit readiness and helped us maintain a strong overall security posture.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed0 unchanged
Biggest changeWe also lease approximately 40,000 square feet for five pediatric offices in the Midwest, with leases that will expire between December 2025 and April 2036. We lease approximately 14,000 square feet of land in Islamabad, Pakistan, where we constructed modular buildings used for office space and computer server facilities for two years expiring on September 30, 2026.
Biggest changeWe also lease approximately 40,000 square feet for five pediatric offices in the Midwest, with leases that will expire between February 2026 and April 2036. 40 We lease approximately 14,000 square feet of land in Islamabad, Pakistan, where we constructed modular buildings used for office space and computer server facilities for two years expiring on September 30, 2026.
We believe our current facilities are adequate for our current needs and that suitable additional space will be available as and when needed. 39
We believe our current facilities are adequate for our current needs and that suitable additional space will be available as and when needed.
Item 2. Properties Our corporate headquarters are located at 7 Clyde Road, Somerset, New Jersey 08873 where we occupy approximately 2,400 square feet of space under a month-to-month lease. Additionally, at December 31, 2024 we lease approximately 42,000 square feet of office space in 13 locations throughout the U.S., with lease terms that are typically five years or less.
Item 2. Properties Our corporate headquarters are located at 7 Clyde Road, Somerset, New Jersey 08873 where we occupy approximately 2,400 square feet of space under a month-to-month lease. Additionally, at December 31, 2025 we lease approximately 34,000 square feet of office space in 11 locations throughout the U.S., with lease terms that are typically five years or less.
The Company also leases a total of approximately 251,000 square feet of office space in Pakistan and in Sri Lanka. The lease in Sri Lanka expires in March 2025 and we intend to renew it for an additional year at expiration.
The Company also leases a total of approximately 254,000 square feet of office space in Pakistan and in Sri Lanka. The lease in Sri Lanka expires in March 2026 and we intend to renew it for an additional year at expiration.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

3 edited+6 added−0 removed5 unchanged
Biggest changeIn connection with a prior acquisition, the seller had alleged that the Company owed approximately $800,000 in transition related costs to them. The parties agreed to settle the claim for approximately $316,000, which was paid in September 2024. From time to time, we may become involved in other legal proceedings arising in the ordinary course of our business.
Biggest changeIn connection with a prior acquisition, the seller had alleged that the Company owed approximately $800,000 in transition related costs to them. The parties agreed to settle the claim for approximately $316,000, which was paid in September 2024.
A former customer filed a complaint against the Company in New Jersey State Court to recover damages claimed to have been caused by the mishandling of their account. Plaintiff alleged at least approximately $750,000 in damages which was disputed by the Company. The parties participated in a one-day court-ordered, non-binding arbitration.
In March 2019, a former customer filed a complaint against the Company in New Jersey State Court to recover damages claimed to have been caused by the mishandling of their account. Plaintiff alleged at least approximately $750,000 in damages which was disputed by the Company. The parties participated in a one-day court-ordered, non-binding arbitration.
Please see “Risk Factor - Acquisitions may subject us to liability with regard to the creditors, customers, and shareholders of the sellers.” in Part 1, Item 1A of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures None. PART II
Please see “Risk Factor - Acquisitions may subject us to liability with regard to the creditors, customers, and shareholders of the sellers.” in Part 1, Item 1A of this Annual Report on Form 10-K.
Added
A former customer had a dispute with the Company that was based on services before and after the account was acquired in an acquisition. A complaint was filed in Massachusetts State Court, Essex County in February 2018.
Added
Under the terms of the purchase agreement, the Company’s liability, if any, was solely and expressly limited to damages related to its handling of the account at issue. The parties participated in formal mediation and at that time, Plaintiff’s starting settlement demand was over $2 million. The mediation was not successful.
Added
The Company made an offer of $100,000 in December 2024 to settle the suit, which was accepted. The settlement amount was recorded in accrued expenses at December 31, 2024 in the consolidated balance sheet. A settlement agreement with mutual releases was signed by the parties in January 2025 and payment was made in February 2025.
Added
A dispute occurred with a former customer regarding previous services rendered and they filed a complaint in New York Supreme Court, Onondaga County in January 2024. During settlement communications, Plaintiff’s initial settlement demand was over $2.5 million. During ongoing settlement communications, the Company made an offer of $29,000 in March 2025, which was accepted.
Added
A settlement agreement with mutual releases was signed by the parties in May 2025 and payment was made in June 2025. In April 2025, a dispute arose with a current customer utilizing one of the Company’s systems and they filed a complaint in Connecticut Superior Court, Judicial District of Middlesex. The parties agreed to settle the claim for $24,000.
Added
This amount was accrued at December 31, 2025 and was paid during January 2026. From time to time, we may become involved in other legal proceedings arising in the ordinary course of our business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−1 removed1 unchanged
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers There was no share repurchase activity during the three months ended December 31, 2024. 40 Securities Authorized for Issuance under the Equity Compensation Plan As of December 31, 2024, the following table shows the number of securities to be issued upon vesting under the equity compensation plan approved by the Company’s Board of Directors.
Biggest changeSecurities Authorized for Issuance under the Equity Compensation Plan As of December 31, 2025, the following table shows the number of securities to be issued upon vesting under the equity compensation plan approved by the Company’s Board of Directors.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock has been listed since July 23, 2014 and is trading on the Nasdaq Global Market under the symbol “CCLD”. Common Stockholders As of December 31, 2024, there were approximately 7,800 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock has been listed since July 23, 2014 and is trading on the Nasdaq Global Market under the symbol “CCLD”. Common Stockholders As of February 19, 2026, there were approximately 10,400 holders of record of our common stock.
Equity Compensation Plan Information Plan Category Number of securities to be issued upon vesting Number of securities remaining available for future issuance under equity incentive plan (excluding securities to be issued upon vesting) Equity compensation plan approved by security holders - common shares 242,500 499,683 Equity compensation plan approved by security holders - preferred shares 19,199 49,769 Total 261,699 549,452 Item 6. [Reserved]
Equity Compensation Plan Information Plan Category Number of securities to be issued upon vesting Number of securities remaining available for future issuance under equity incentive plan (excluding securities to be issued upon vesting) Equity compensation plan approved by security holders - common shares 161,400 374,683 Equity compensation plan approved by security holders - preferred shares 19,199 16,000 Total 180,599 390,683 Item 6. [Reserved]
Removed
The Company is prohibited from paying any dividends on common stock without the prior written consent of its senior lender, SVB. Sales of Unregistered Securities There were no sales of unregistered equity securities during the year ended December 31, 2024.
Added
Sales of Unregistered Securities There were no sales of unregistered equity securities during the year ended December 31, 2025. Purchases of Equity Securities by the Issuer and Affiliated Purchasers There was no share repurchase activity during the three months ended December 31, 2025.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

15 edited+4 added−2 removed10 unchanged
Biggest changeRisks Related to our Business ● We operate in a highly competitive industry, and our competitors may be able to compete more efficiently or evolve more rapidly than we do, which could have a material adverse effect on our business, revenue, growth rates and market share. ● If we are unable to successfully introduce new products or services or fail to keep pace with advances in technology, we would not be able to maintain our customers or grow our business, which will have a material adverse effect on our business. ● The continued success of our business model is heavily dependent upon our offshore operations, and any disruption to those operations will adversely affect us. ● Our offshore operations expose us to additional business and financial risks which could adversely affect us and subject us to civil and criminal liability. ● We may be adversely affected by global climate change or market responses to such change. ● Changes in the healthcare industry could affect the demand for our services and may result in a decrease in our revenues and market share. ● If providers do not purchase our products and services or delay in choosing our products or services, we may not be able to grow our business. ● If the revenues of our customers decrease, or if our customers cancel or elect not to renew their contracts, our revenue will decrease. ● As a result of our variable sales and implementation cycles, we may be unable to recognize revenue from prospective customers on a timely basis and we may not be able to offset expenditures. ● We are required to collect sales and use taxes on certain products and services we sell in certain jurisdictions.
Biggest changeRisks Related to our Business ● The continued success of our business model is heavily dependent upon our offshore operations, and any disruption to those operations will adversely affect us. ● Our offshore operations expose us to additional business and financial risks which could adversely affect us and subject us to civil and criminal liability. ● Our proprietary software or service delivery platform may not operate properly, which could damage our reputation, give rise to claims against us, or divert application of our resources from other purposes, any of which could harm our business and operating results. ● Systems failures, cyberattacks or other events and resulting interruptions in the availability of or degradation in the performance of our websites, applications, products or services could harm our business. ● Data privacy, identity protection and information security compliance may require significant resources and present certain risks. ● We use and plan to expand our use of artificial intelligence, and challenges associated with the development, deployment and regulation of AI technologies could adversely affect our business, reputation and results of operations. ● We may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation, or financial results. ● We operate in a highly competitive industry, and our competitors may be able to compete more efficiently or evolve more rapidly than we do, which could have a material adverse effect on our business, revenue, growth rates and market share. ● If we are unable to successfully introduce new products or services or fail to keep pace with advances in technology, we would not be able to maintain our customers or grow our business, which will have a material adverse effect on our business. ● Changes in the healthcare industry could affect the demand for our services and may result in a decrease in our revenues and market share. 4 ● If providers do not purchase our products and services or delay in choosing our products or services, we may not be able to grow our business. ● If the revenues of our customers decrease, or if our customers cancel or elect not to renew their contracts, our revenue will decrease. ● As a result of our variable sales and implementation cycles, we may be unable to recognize revenue from prospective customers on a timely basis and we may not be able to offset expenditures. ● We are required to collect sales and use taxes on certain products and services we sell in certain jurisdictions.
Risks Related to Ownership of Shares of Our Common Stock ● The conversion of the Series A Preferred Stock into common stock in March 2025 (the “Conversion”) increased the total number of outstanding shares, potentially diluting the value of existing common shareholders’ equity. ● Series A Preferred Stock shareholders gained full voting rights upon conversion of their preferred shares into common stock. ● The conversion of the Series A Preferred Stock could be perceived negatively by the market. ● The Company’s potential for future issuances of common stock following the conversion could be limited. ● Our revenues, operating results and cash flows may fluctuate in future periods and we may fail to meet investor expectations, which may cause the price of our common stock to decline. ● Healthcare reform may have a material adverse effect on the Company’s financial condition and results of operations. ● Future sales of shares of our common stock could depress the market price of our common stock. ● As of December 31, 2024, Mahmud Haq controlled 31% of our outstanding shares of common stock, which prevented investors from influencing significant corporate decisions. ● Provisions of Delaware law, of our amended and restated charter and amended and restated bylaws may make a takeover more difficult, which could cause our common stock price to decline. 6 ● Any issuance of additional preferred stock in the future may dilute the rights of our existing stockholders. ● We do not intend to pay cash dividends on our common stock. ● Complying with the laws and regulations affecting public companies will increase our costs and the demands on management and could harm our operating results. ● We are a smaller reporting company and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors.
Risks Related to Ownership of Shares of Our Common Stock ● The conversion of the majority of the Series A Preferred Stock into common stock in March 2025 (the “Conversion”) increased the total number of outstanding shares, potentially diluting the value of existing common shareholders’ equity. ● Series A Preferred Stock shareholders that converted their shares gained full voting rights upon conversion of their preferred shares into common stock. ● The conversion of the Series A Preferred Stock, and any subsequent conversions, may be perceived negatively by the market. ● The Company’s potential for future issuances of common stock following the Conversion could be limited. ● Our revenues, operating results and cash flows may fluctuate in future periods and we may fail to meet investor expectations, which may cause the price of our common stock to decline. ● Healthcare reform may have a material adverse effect on the Company’s financial condition and results of operations. ● Future sales of shares of our common stock could depress the market price of our common stock. ● As of December 31, 2025, Mahmud Haq controlled 12% of our outstanding shares of common stock, which limits investors from influencing significant corporate decisions. ● Provisions of Delaware law, of our amended and restated charter and amended and restated bylaws may make a takeover more difficult, which could cause our common stock price to decline. ● Any issuance of additional preferred stock in the future may dilute the rights of our existing stockholders. ● We do not intend to pay cash dividends on our common stock. ● Complying with the laws and regulations affecting public companies will increase our costs and the demands on management and could harm our operating results. ● We are a smaller reporting company and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors.
Other Information 57 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 57 PART III 57 Item 10. Directors, Executive Officers and Corporate Governance 57 Item 11. Executive Compensation 57 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 57 Item 13. Certain Relationships and Related Transactions, and Director Independence 57 Item 14.
Other Information 58 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 58 PART III 59 Item 10. Directors, Executive Officers and Corporate Governance 59 Item 11. Executive Compensation 59 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 59 Item 13. Certain Relationships and Related Transactions, and Director Independence 59 Item 14.
We may not be able to continue to pay dividends on the Preferred Stock if we fall out of compliance with our loan covenants and are prohibited by our bank lender from paying dividends or if we have insufficient cash to make dividend payments. ● Our Series A and Series B Preferred Stock rank junior to all of our indebtedness and other liabilities. ● We may issue additional shares of Preferred Stock and additional series of preferred stock that rank on parity with the Preferred Stock as to dividend rights, rights upon liquidation or voting rights. ● Market interest rates may materially and adversely affect the value of the Preferred Stock. ● Holders of the Preferred Stock may be unable to use the dividends-received deduction and may not be eligible for the preferential tax rates applicable to “qualified dividend income”. ● Our Preferred Stock has not been rated. ● The market price of our Series B Preferred Stock is variable and is substantially affected by various factors. ● A holder of Preferred Stock has extremely limited voting rights. ● The Preferred Stock is not convertible at the option of the holder and investors will not realize a corresponding upside if the price of the common stock increases. ● Although payment of the suspended dividends resumed in February 2025, there are still dividends in arrears and we may be unable to raise additional capital without incurring excessive dilution. 7 PART I
We may not be able to continue to pay dividends on the Preferred Stock if we fall out of compliance with our loan covenants and are prohibited by our bank lender from paying dividends or if we have insufficient cash to make dividend payments. ● Our Series A and Series B Preferred Stock rank junior to all of our indebtedness and other liabilities. ● We may issue additional shares of Series B Preferred Stock and additional series of preferred stock that rank on parity with the Preferred Stock as to dividend rights, rights upon liquidation or voting rights. ● Market interest rates may materially and adversely affect the value of the Series B Preferred Stock. ● Holders of the Series B Preferred Stock may be unable to use the dividends-received deduction and may not be eligible for the preferential tax rates applicable to “qualified dividend income.” ● Our Series B Preferred Stock has not been rated. ● The market price of our Series B Preferred Stock is variable and is substantially affected by various factors. ● A holder of Preferred Stock has extremely limited voting rights. ● The Series B Preferred Stock is not convertible and investors will not realize a corresponding upside if the price of the common stock increases. ● Although payment of the suspended dividends resumed in February 2025 and continued throughout the year, there are still dividends in arrears and we may be unable to raise additional capital without incurring excessive dilution. 6 PART I
Exhibits and Financial Statement Schedules 58 Signatures 64 2 Forward-Looking Statements Certain statements that we make from time to time, including statements contained in this Annual Report on Form 10-K, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Exhibits and Financial Statement Schedules 60 Signatures 68 2 Forward-Looking Statements Certain statements that we make from time to time, including statements contained in this Annual Report on Form 10-K, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Our failure to comply with regulatory requirements could create liability for us, result in adverse publicity and negatively affect our business. ● If we do not maintain the certification of our EHR solutions pursuant to the HITECH Act and Cures Act, our business, financial condition and results of operations will be adversely affected. ● If a breach of our measures protecting personal data covered by HIPAA or the HITECH Act occurs, we may incur significant liabilities. ● If we or our customers fail to comply with federal and state laws governing submission of false or fraudulent claims to government healthcare programs and financial relationships among healthcare providers, we or our customers may be subject to civil and criminal penalties or loss of eligibility to participate in government healthcare programs. ● Potential healthcare reform and new regulatory requirements placed on our products and services could increase our costs, delay or prevent our introduction of new products or services, and impair the function or value of our existing products and services. ● Additional regulation of the disclosure of medical information outside the United States may adversely affect our operations and may increase our costs. ● Our services present the potential for embezzlement, identity theft, or other similar illegal behavior by our employees.
Our failure to comply with regulatory requirements could create liability for us, result in adverse publicity and negatively affect our business. ● If we do not maintain the certification of our EHR solutions pursuant to the HITECH Act and Cures Act, our business, financial condition and results of operations will be adversely affected. ● If we or our customers fail to comply with federal and state laws governing submission of false or fraudulent claims to government healthcare programs and financial relationships among healthcare providers, we or our customers may be subject to civil and criminal penalties or loss of eligibility to participate in government healthcare programs. ● Potential healthcare reform and new regulatory requirements placed on our products and services could increase our costs, delay or prevent our introduction of new products or services, and impair the function or value of our existing products and services. ● Additional regulation of the disclosure of medical information outside the United States may adversely affect our operations and may increase our costs. ● Our services present the potential for embezzlement, identity theft, or other similar illegal behavior by our employees.
Item 6. [Reserved] 41 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 41 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 55 Item 8. Financial Statements and Supplementary Data 55 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 55 Item 9A. Controls and Procedures 56 Item 9B.
Item 6. [Reserved] 42 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 42 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 57 Item 8. Financial Statements and Supplementary Data 57 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 57 Item 9A. Controls and Procedures 57 Item 9B.
We may be subject to liability for past sales and incur additional related costs and expenses, and our future sales may decrease. ● If we lose the services of Mahmud Haq as Executive Chairman, A.
We may be subject to liability for past sales and incur additional related costs and expenses, and our future sales may decrease. ● If we lose the services of Mahmud Haq as Executive Chairman, Stephen Snyder as Chief Executive Officer, A.
Hadi Chaudhry and Stephen Snyder as Co-Chief Executive Officers, all of which are critical to our ongoing operations and growing our business; 3 ● our ability to realize the expected cost savings and benefits from our restructuring activities and structural cost reductions; ● our ability to comply with covenants contained in our credit agreement with our senior secured lender, Silicon Valley Bank, a division of First Citizens Bank, and other future debt facilities; ● our ability to continue to pay our monthly dividends which were suspended in December 2023 and resumed in February 2025 to the holders of our Series A and Series B preferred stock; ● our ability to incorporate AI into our products faster and more successfully than our competitors, protecting the privacy of medical records and cybersecurity threats; ● our ability to compete with other companies developing products and selling services competitive with ours, and who may have greater resources and name recognition than we have; ● our ability to effectively integrate, manage and keep our information systems secure and operational in the event of a cyber-attack; ● our ability to respond to the uncertainty resulting from pandemics, epidemics or other public health emergencies and the impact they may have on our operations, the demand for our services, our projected results of operations, financial performance or other financial metrics or any of the foregoing risks and economic activity in general; ● our ability to keep and increase market acceptance of our products and services; ● changes in domestic and foreign business, market, financial, political and legal conditions; and ● other factors disclosed in this Annual Report on Form 10-K or our other filings with the Securities and Exchange Commission (the “ SEC”).
Hadi Chaudhry as Chief Strategy Officer, all of which are critical to our ongoing operations and growing our business; ● our ability to realize the expected cost savings and benefits from our restructuring activities and structural cost reductions; ● our ability to comply with covenants contained in our credit agreement with our senior secured lender, Provident Bank, and other future debt facilities; 3 ● our ability to continue to pay our monthly dividends which were suspended in December 2023 and resumed in February 2025 to the holders of our Series A and Series B preferred stock (together the “Preferred Stock”); ● our ability to incorporate AI into our products faster and more successfully than our competitors, protecting the privacy of medical records and cybersecurity threats; ● our ability to compete with other companies developing products and selling services competitive with ours, and who may have greater resources and name recognition than we have; ● our ability to respond to the uncertainty resulting from pandemics, epidemics or other public health emergencies and the impact they may have on our operations, the demand for our services, our projected results of operations, financial performance or other financial metrics or any of the foregoing risks and economic activity in general; ● our ability to keep and increase market acceptance of our products and services; ● changes in domestic and foreign business, market, financial, political and legal conditions; and ● other factors disclosed in this Annual Report on Form 10-K or our other filings with the Securities and Exchange Commission (the “ SEC”).
New risks and uncertainties emerge from time to time, and it is not possible for us to predict all of the risks and uncertainties that could have an impact on the forward-looking statements, including without limitation, risks and uncertainties relating to: ● our ability to manage our growth, including acquiring, partnering with, and effectively integrating acquired businesses into our infrastructure and avoiding legal exposure and liabilities associated with acquired companies and assets; ● our ability to retain our clients and revenue levels, including effectively migrating new clients and maintaining or growing the revenue levels of our new and existing clients; ● our ability to maintain operations in Pakistan, Azad Jammu and Kashmir, and Sri Lanka (together, the “Offshore Offices”) in a manner that continues to enable us to offer competitively priced products and services; ● our ability to keep pace with a rapidly changing healthcare industry; ● our ability to consistently achieve and maintain compliance with a myriad of federal, state, foreign, local, payor and industry requirements, regulations, rules, laws and contracts; ● our ability to maintain and protect the privacy of confidential and protected Company, client and patient information; ● our ability to develop new technologies, upgrade and adapt legacy and acquired technologies to work with evolving industry standards and third-party software platforms and technologies, and protect and enforce all of these and other intellectual property rights; ● our ability to attract and retain key officers and employees, and the continued involvement of Mahmud Haq as Executive Chairman and A.
New risks and uncertainties emerge from time to time, and it is not possible for us to predict all of the risks and uncertainties that could have an impact on the forward-looking statements, including without limitation, risks and uncertainties relating to: ● our ability to maintain operations in Pakistan, Azad Jammu and Kashmir, and Sri Lanka (together, the “Offshore Offices”) in a manner that continues to enable us to offer competitively priced products and services; ● our ability to consistently achieve and maintain compliance with a myriad of federal, state, foreign, local, payor and industry requirements, regulations, rules, laws and contracts; ● our ability to effectively integrate, manage and keep our information systems secure and operational in the event of a cyber-attack; ● our ability to manage our growth, including acquiring, partnering with, and effectively integrating the recent acquisitions of MAP App, Medsphere Systems Corporation, RevNu Medical Management and other acquired businesses into our infrastructure and avoiding legal exposure and liabilities associated with our acquisitions; ● our ability to retain our clients and revenue levels, including effectively migrating new clients and maintaining or growing the revenue levels of our new and existing clients; ● our ability to keep pace with a rapidly changing healthcare industry, including the use of artificial intelligence (“AI”); ● our ability to maintain and protect the privacy of confidential and protected Company, client and patient information; ● our ability to develop new technologies, upgrade and adapt legacy and acquired technologies to work with evolving industry standards and third-party software platforms and technologies, and protect and enforce all of these and other intellectual property rights; ● our ability to attract and retain key officers and employees, and the continued involvement of Mahmud Haq as Executive Chairman, Stephen Snyder as Chief Executive Officer and A.
Hadi Chaudhry and Stephen Snyder as Co-Chief Executive Officers, or other members of our management team, or if we are unable to attract, hire, integrate and retain other necessary employees, our business would be harmed. ● We may be unable to adequately establish, protect or enforce our patents, trade secrets and other intellectual property rights and we may incur significant costs in enforcing our intellectual property rights. 4 ● Claims by others that we infringe or may infringe on their intellectual property could force us to incur significant costs or revise the way we conduct our business. ● Current and future litigation against us could be costly and time-consuming to defend and could result in additional liabilities. ● Our proprietary software or service delivery platform may not operate properly, which could damage our reputation, give rise to claims against us, or divert application of our resources from other purposes, any of which could harm our business and operating results. ● If our security measures are breached or fail and unauthorized access is obtained to a customer’s data, our service may be perceived as insecure, the attractiveness of our services to current or potential customers may be reduced, and we may incur significant liabilities. ● Our products and services are required to meet the interoperability standards, which could require us to incur substantial additional development costs or result in a decrease in revenue. ● Disruptions in internet or telecommunication service or damage to our data centers could adversely affect our business by reducing our customers’ confidence in the reliability of our services and products. ● We may be subject to liability for the content we provide to our customers and their patients. ● We are subject to the effects of payer and provider conduct that we cannot control and that could damage our reputation with customers and result in liability claims that increase our expenses. ● Failure by our clients to obtain proper permissions and waivers may result in claims against us or may limit or prevent our use of data, which could harm our business. ● Any deficiencies in our financial reporting or internal controls could adversely affect our business and the trading price of our securities. ● We may not be able to negotiate a credit facility at reasonable terms as the current credit facility expires in October 2025. ● We maintain our cash at financial institutions often in balances that exceed federally insured limits. ● Our goodwill was subject to impairment in 2023 and may be subject to further impairment in the future, which could have a material adverse effect on our results of operations, financial condition, or future operating results. ● We are a party to several related-party agreements with our founder and Executive Chairman, Mahmud Haq, which have significant contractual obligations.
Hadi Chaudhry as Chief Strategy Officer or other members of our management team, or if we are unable to attract, hire, integrate and retain other necessary employees, our business would be harmed. ● We may be unable to adequately establish, protect or enforce our patents, trade secrets and other intellectual property rights and we may incur significant costs in enforcing our intellectual property rights. ● Claims by others that we infringe or may infringe on their intellectual property could force us to incur significant costs or revise the way we conduct our business. ● Current and future litigation against us could be costly and time-consuming to defend and could result in additional liabilities. ● If our security measures are breached or fail and unauthorized access is obtained to a customer’s data, our service may be perceived as insecure, the attractiveness of our services to current or potential customers may be reduced, and we may incur significant liabilities. ● Our products and services are required to meet the interoperability standards, which could require us to incur substantial additional development costs or result in a decrease in revenue. ● Disruptions in internet or telecommunication service or damage to our data centers could adversely affect our business by reducing our customers’ confidence in the reliability of our services and products. ● We may be subject to liability for the content we provide to our customers and their patients. ● We are subject to the effects of payer and provider conduct that we cannot control and that could damage our reputation with customers and result in liability claims that increase our expenses. ● Failure by our clients to obtain proper permissions and waivers may result in claims against us or may limit or prevent our use of data, which could harm our business. ● Any deficiencies in our financial reporting or internal controls could adversely affect our business and the trading price of our securities. ● We maintain our cash at domestic and foreign financial institutions.
Principal Accountant Fees and Services 57 PART IV 58 Item 15.
Principal Accountant Fees and Services 59 PART IV 60 Item 15.
Risks Related to Our Acquisition Strategy ● At the current prices of our common and Preferred Stock, we may be unable to execute accretive acquisitions. ● We may be unable to retain customers following their acquisition, which may result in a decrease in our revenues and operating results. ● Acquisitions may subject us to liability with regard to the creditors, customers, and shareholders of the sellers. ● Future acquisitions may result in potentially dilutive issuances of equity securities, the incurrence of indebtedness and increased amortization expense.
Risks Related to Our Acquisition Strategy ● If we do not manage our acquisitions effectively, our revenue, business and operating results may be harmed. ● We may be unable to implement our strategy of acquiring additional companies. ● At the current prices of our common stock, we may be unable to execute accretive acquisitions. ● We may be unable to retain customers following their acquisition, which may result in a decrease in our revenues and operating results. ● Acquisitions may subject us to liability with regard to the creditors, customers, and shareholders of the sellers. ● Future acquisitions may result in potentially dilutive issuances of equity securities, the incurrence of indebtedness and increased amortization expense. 5 Regulatory Risks ● If a breach of our measures protecting personal data covered by HIPAA or the HITECH Act occurs, we may incur significant liabilities. ● Actual or perceived failures to comply with healthcare, data protection, privacy, security and fraud and abuse laws and regulations could materially adversely affect our business, results of operations and financial condition. ● The healthcare industry is heavily regulated.
These agreements are reviewed by our Audit Committee on an annual basis. ● We depend on key information systems and third-party service providers. ● Systems failures, cyberattacks or other events and resulting interruptions in the availability of or degradation in the performance of our websites, applications, products or services could harm our business. ● Data privacy, identity protection and information security compliance may require significant resources and present certain risks. ● We use artificial intelligence in our business, and challenges with properly managing its use could result in reputational and competitive harm, legal liability, and adversely affect our results of operations. ● Rapid technological change in the telehealth industry presents us with significant risks and challenges. ● Our business, financial condition, results of operations and growth may be adversely affected by pandemics, epidemics or other public health emergencies, such as COVID-19. 5 Risks Related to Macroeconomics Conditions ● Our operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially adversely affect our business, results of operations and financial condition. ● Our managed medical practices and customers could face supply chain issues that would disrupt their ability to service patients and therefore, impact our revenue. ● Volatility in currency exchange rates may adversely affect our financial condition, results of operations and cash flows.
These agreements are reviewed by our Audit Committee on an annual basis. ● We depend on key information systems and third-party service providers. ● Rapid technological change in the telehealth industry presents us with significant risks and challenges. ● Our business, financial condition, results of operations and growth may be adversely affected by pandemics, epidemics or other public health emergencies, such as COVID-19. ● We may be adversely affected by global climate change or market responses to such change.
Risks Related to Ownership of Shares of Our Preferred Stock ● As a result of the Conversion, there may not be an organized trading market for the Series A Preferred Stock. ● In December 2023 we suspended the payment of the dividends on the Preferred Stock.
Risks Related to Ownership of Shares of Our Preferred Stock ● In December 2023 we suspended the payment of the dividends on the Preferred Stock. The Company resumed paying monthly dividends in February 2025, paying one month of the arrearage each month for the rest of the year.
Removed
Regulatory Risks ● The healthcare industry is heavily regulated.
Added
Balances held domestically may exceed federally insured limits.
Removed
The Company resumed paying monthly dividends in February 2025, paying one month of the arrearage.
Added
Foreign banking institutions do not provide bank deposit insurance. ● Our goodwill was subject to impairment in 2023 and may be subject to further impairment in the future, which could have a material adverse effect on our results of operations, financial condition, or future operating results. ● We are a party to several related-party agreements with our founder and Executive Chairman, Mahmud Haq, which have significant contractual obligations.
Added
Risks Related to Macroeconomics Conditions ● Our operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially adversely affect our business, results of operations and financial condition. ● Our managed medical practices and customers could face supply chain issues that would disrupt their ability to service patients and therefore impact our revenue. ● Volatility in currency exchange rates may adversely affect our financial condition, results of operations and cash flows.
Added
The Company has also announced that starting with the February 2026 dividend payment, it will start paying double dividends monthly on the Series B Preferred Stock to reduce the dividends in arrears.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

71 edited+8 added−24 removed49 unchanged
Biggest changeYear Ended December 31, 2024 2023 2022 2021 2020 ($ in thousands) Adjusted EBITDA $ 24,057 $ 15,429 $ 22,248 $ 22,119 $ 10,871 45 Quarterly Results of Operations December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2024 2024 2024 2024 (1) 2023 2023 2023 2023 ($ in thousands, except per share data) Net revenue $ 28,239 $ 28,546 $ 28,090 $ 25,962 $ 28,416 $ 29,280 $ 29,362 $ 30,001 Operating expenses: Direct operating costs 15,003 15,420 15,242 15,177 16,974 18,260 17,476 18,107 Selling and marketing 1,423 1,375 1,664 1,770 2,121 2,337 2,580 2,612 General and administrative 3,996 4,378 4,028 3,721 4,946 5,482 5,916 5,120 Research and development 1,013 800 1,055 913 1,213 1,260 1,185 1,078 Depreciation and amortization 3,257 3,241 3,714 3,930 4,120 3,903 3,341 3,038 Goodwill impairment charges - - - - 42,000 - - - Lease terminations, unoccupied lease charges and restructuring costs 91 67 116 322 675 8 153 269 Total operating expenses 24,783 25,281 25,819 25,833 72,049 31,250 30,651 30,224 Operating income (loss) 3,456 3,265 2,271 129 (43,633 ) (1,970 ) (1,289 ) (223 ) Net interest expense (48 ) (162 ) (264 ) (338 ) (335 ) (300 ) (275 ) (130 ) Other (expense) income - net (71 ) 60 (294 ) 7 (292 ) (422 ) (186 ) 17 Income (loss) before provision (benefit) for income taxes 3,337 3,163 1,713 (202 ) (44,260 ) (2,692 ) (1,750 ) (336 ) Income tax provision (benefit) 41 41 39 39 (568 ) 57 82 65 Net income (loss) $ 3,296 $ 3,122 $ 1,674 $ (241 ) $ (43,692 ) $ (2,749 ) $ (1,832 ) $ (401 ) Preferred stock dividend 3,286 3,789 3,923 1,312 3,917 3,916 3,910 3,931 Net income (loss) attributable to common shareholders $ 10 $ (667 ) $ (2,249 ) $ (1,553 ) $ (47,609 ) $ (6,665 ) $ (5,742 ) $ (4,332 ) Net income (loss) per common share: Basic and diluted $ 0.00 $ (0.04 ) $ (0.14 ) $ (0.10 ) $ (3.04 ) $ (0.42 ) $ (0.37 ) $ (0.28 ) Adjusted EBITDA $ 7,141 $ 6,840 $ 6,389 $ 3,687 $ 4,128 $ 3,245 $ 3,819 $ 4,237 (1) The consolidated statement of operations for the three months ended March 31, 2024 has been restated to record the earned, but undeclared Preferred Stock dividend.
Biggest changeYear Ended December 31, 2025 2024 2023 2022 2021 ($ in thousands) Adjusted EBITDA $ 27,549 $ 24,057 $ 15,429 $ 22,248 $ 22,119 47 Quarterly Results of Operations December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2025 2025 2025 2025 2024 2024 2024 2024 ($ in thousands, except per share data) Net revenue $ 34,423 $ 31,067 $ 27,377 $ 27,632 $ 28,239 $ 28,546 $ 28,090 $ 25,962 Operating expenses: Direct operating costs 18,288 16,224 14,480 15,464 15,003 15,420 15,242 15,177 Selling and marketing 1,446 1,123 1,118 1,131 1,423 1,375 1,664 1,770 General and administrative 4,809 4,887 4,358 4,332 3,996 4,378 4,028 3,721 Research and development 2,543 1,584 1,020 1,235 1,013 800 1,055 913 Depreciation and amortization 4,219 4,022 3,382 3,337 3,257 3,241 3,714 3,930 Lease termination and restructuring costs - 17 23 114 91 67 116 322 Total operating expenses 31,305 27,857 24,381 25,613 24,783 25,281 25,819 25,833 Operating income 3,118 3,210 2,996 2,019 3,456 3,265 2,271 129 Net interest income (expense) 4 (52 ) (17 ) (16 ) (48 ) (162 ) (264 ) (338 ) Other (expense) income - net (161 ) (55 ) (35 ) (14 ) (71 ) 60 (294 ) 7 Income (loss) before provision for income taxes 2,961 3,103 2,944 1,989 3,337 3,163 1,713 (202 ) Income tax provision 73 43 42 41 41 41 39 39 Net income (loss) $ 2,888 $ 3,060 $ 2,902 $ 1,948 $ 3,296 $ 3,122 $ 1,674 $ (241 ) Preferred stock dividend 1,365 1,365 1,365 2,811 3,286 3,789 3,923 1,312 Net income (loss) attributable to common shareholders $ 1,523 $ 1,695 $ 1,537 $ (863 ) $ 10 $ (667 ) $ (2,249 ) $ (1,553 ) Net income (loss) per common share: Basic and diluted $ 0.04 $ 0.04 $ 0.04 $ (0.04 ) $ 0.00 $ (0.04 ) $ (0.14 ) $ (0.10 ) Adjusted EBITDA $ 7,692 $ 7,733 $ 6,529 $ 5,595 $ 7,141 $ 6,840 $ 6,389 $ 3,687 Reconciliation of net income (loss) to adjusted EBITDA The following table contains a reconciliation of net income (loss) to adjusted EBITDA by year: Year Ended December 31, 2025 2024 2023 2022 2021 ($ in thousands) Net income (loss) $ 10,798 $ 7,851 $ (48,674 ) $ 5,432 $ 2,836 Depreciation 2,511 2,043 2,001 1,952 1,927 Amortization 12,449 12,099 12,401 9,773 10,268 Foreign exchange loss / other expense 284 335 918 712 241 Net interest expense 81 812 1,040 364 440 Income tax provision (benefit) 199 160 (364 ) 177 157 Stock-based compensation expense, net of restructuring costs 454 115 4,716 4,914 5,396 Transaction and integration costs 619 46 286 876 1,364 Goodwill impairment charges - - 42,000 - - Lease terminations, unoccupied lease charges and restructuring costs 154 596 1,105 1,138 2,005 Change in contingent consideration - - - (3,090 ) (2,515 ) Adjusted EBITDA $ 27,549 $ 24,057 $ 15,429 $ 22,248 $ 22,119 48 The following table contains a reconciliation of net income (loss) to adjusted EBITDA by quarter: December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2025 2025 2025 2025 2024 2024 2024 2024 ($ in thousands) Net income (loss) $ 2,888 $ 3,060 $ 2,902 $ 1,948 $ 3,296 $ 3,122 $ 1,674 $ (241 ) Depreciation 704 652 594 561 533 504 503 503 Amortization 3,515 3,370 2,788 2,776 2,724 2,737 3,211 3,427 Foreign exchange loss (gain) / other expense 164 60 41 19 91 (57 ) 306 (5 ) Net interest (income) expense (4 ) 52 17 16 48 162 264 338 Income tax provision 73 43 42 41 41 41 39 39 Stock-based compensation expense (benefit), net of restructuring costs 147 88 111 108 306 252 265 (708 ) Transaction and integration costs 205 391 11 12 11 12 11 12 Lease termination and restructuring costs - 17 23 114 91 67 116 322 Adjusted EBITDA $ 7,692 $ 7,733 $ 6,529 $ 5,595 $ 7,141 $ 6,840 $ 6,389 $ 3,687 Key Metrics In addition to the line items in our consolidated financial statements, we regularly review the following key metrics to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, make strategic business decisions, and assess market share trends and working capital needs.
Interest and Other Income (Expense). Interest income represents interest earned on temporary cash investments and late fees from customers. Interest expense consists primarily of interest costs related to our line of credit, motor vehicle loans and amortization of deferred financing costs. Other income (expense) results primarily from foreign currency transaction gains (losses). Income Taxes.
Interest income represents interest earned on temporary cash investments and late fees from customers. Interest expense consists primarily of interest costs related to our line of credit, motor vehicle loans and amortization of deferred financing costs. Other income (expense) results primarily from foreign currency transaction gains (losses). Income Taxes.
Please see “ Forward-Looking Statements ” on page 3 of this Annual Report on Form 10-K. Overview The Company is a healthcare information technology company that provides technology-enabled business solutions and Software-as-a-Service offerings (“SaaS”), which are often bundled, but are occasionally provided individually, together with related business services to healthcare providers and hospitals throughout the United States.
Please see “ Forward-Looking Statements ” on page 3 of this Annual Report on Form 10-K. 42 Overview The Company is a healthcare information technology company that provides technology-enabled business solutions and Software-as-a-Service offerings (“SaaS”), which are often bundled, but are occasionally provided individually, together with related business services to healthcare providers and hospitals throughout the United States.
Estimates to determine variable consideration such as payment to charge ratios, effective billing rates, and the estimated contractual payment periods are updated at each reporting date. Revenue is recognized over the performance period using the input method. 49 Professional services: Revenues from professional services are recorded as the services are provided as the performance obligations are satisfied over time.
Estimates to determine variable consideration such as payment to charge ratios, effective billing rates, and the estimated contractual payment periods are updated at each reporting date. Revenue is recognized over the performance period using the input method. Professional services: Revenues from professional services are recorded as the services are provided as the performance obligations are satisfied over time.
The Company records the GILTI provisions as they are incurred each period. 48 Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expense and related disclosures.
The Company records the GILTI provisions as they are incurred each period. 50 Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expense and related disclosures.
Although the Company reported GAAP earnings in 2024, it has incurred losses historically and there is uncertainty regarding future U.S. taxable income, which make realization of a deferred tax asset difficult to support in accordance with ASC 740. Accordingly, a valuation allowance was recorded against all deferred tax assets at December 31, 2024 and 2023.
Although the Company reported GAAP earnings in 2025 and 2024, it has incurred tax losses historically and there is uncertainty regarding future U.S. taxable income, which make realization of a deferred tax asset difficult to support in accordance with ASC 740. Accordingly, a valuation allowance was recorded against all deferred tax assets at December 31, 2025 and 2024.
In addition, we served approximately 150 clients who were not medical practices, but are service organizations who serve the healthcare community. The foregoing numbers include clients leveraging any of our products or services and are based in part upon estimates in cases where the precise number of practices or providers is unknown.
In addition, we served approximately 80 clients who were not medical practices, but are service organizations who serve the healthcare community. The foregoing numbers include clients leveraging any of our products or services and are based in part upon estimates in cases where the precise number of practices or providers is unknown.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following is a discussion of our consolidated financial condition and results of operations for the years ended December 31, 2024 and 2023 and other factors that are expected to affect our prospective financial condition.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following is a discussion of our consolidated financial condition and results of operations for the years ended December 31, 2025 and 2024 and other factors that are expected to affect our prospective financial condition.
Our renewal rates for 2024 and 2023 were 95% and 91% of the number of practices that renewed, respectively. These renewal percentages are not indicative of the loss of revenue due to non-renewal.
Our renewal rates for 2025 and 2024 were 91% and 95% of the number of practices that renewed, respectively. These renewal percentages are not indicative of the loss of revenue due to non-renewal.
The decrease for the year ended December 31, 2024 was due to lower spending on selling and marketing activities and a reduction in headcount. General and Administrative Expense.
The decrease for the year ended December 31, 2025 was due to lower spending on selling and marketing activities and a reduction in headcount. General and Administrative Expense.
General and administrative expense consists primarily of personnel-related expense for administrative employees, including compensation, benefits, travel, facility lease costs and insurance, software license fees and outside professional fees. Our Offshore Offices accounted for approximately 22% and 17% of general and administrative expenses for the years ended December 31, 2024 and 2023, respectively. Research and Development Expense.
General and administrative expense consists primarily of personnel-related expense for administrative employees, including compensation, benefits, travel, facility lease costs and insurance, software license fees and outside professional fees. Our Offshore Offices accounted for approximately 21% and 22% of general and administrative expenses for the years ended December 31, 2025 and 2024, respectively. Research and Development Expense.
These solutions accounted for approximately 67% and 65% of our revenues during the years ended December 31, 2024 and 2023, respectively. This includes customers utilizing our proprietary product suites, as well as customers from acquisitions of RCM companies which we are servicing utilizing third-party software.
These solutions accounted for approximately 63% and 67% of our revenues during the years ended December 31, 2025 and 2024, respectively. This includes customers utilizing our proprietary product suites, as well as customers from acquisitions of RCM companies which we are servicing utilizing third-party software.
The reported amounts of direct operating costs do not include depreciation and amortization, which are broken out separately in the consolidated statements of operations. Operations in our Offshore Offices together accounted for approximately 13% and 11% of direct operating costs for the years ended December 31, 2024 and 2023, respectively.
The reported amounts of direct operating costs do not include depreciation and amortization, which are broken out separately in the consolidated statements of operations. Operations in our Offshore Offices together accounted for approximately 14% and 13% of direct operating costs for the years ended December 31, 2025 and 2024, respectively.
Revenue is recorded monthly on either a time and materials or a fixed rate basis for each contract. We also generate revenue from our printing and mailing, group purchasing services and medical practice management services. 47 We earned approximately 1% of our revenue from group purchasing services during both years ended December 31, 2024 and 2023.
Revenue is recorded monthly on either a time and materials or a fixed rate basis for each contract. We also generate revenue from our printing and mailing, group purchasing services and medical practice management services. We earned approximately 1% of our revenue from group purchasing services during the years ended December 31, 2025 and 2024.
We earned approximately 13% and 11% of our revenue from medical practice management services during the years ended December 31, 2024 and 2023, respectively. This revenue represents fees based on our actual costs plus a percentage of the operating profit and is reported in our Medical Practice Management segment. Operating Expenses Direct Operating Costs.
We earned approximately 12% and 13% of our revenue from medical practice management services during the years ended December 31, 2025 and 2024, respectively. This revenue represents fees based on our actual costs plus a percentage of the operating profit and is reported in our Medical Practice Management segment. 49 Operating Expenses Direct Operating Costs.
Our offshore operations together accounted for approximately 15% and 9% of total expenses for the years ended December 31, 2024 and 2023, respectively. A significant portion of those expenses were personnel-related costs (approximately 75% and 76% of foreign costs for the years ended December 31, 2024 and 2023, respectively).
Our offshore operations together accounted for approximately 17% and 15% of total expenses for the years ended December 31, 2025 and 2024, respectively. A significant portion of those expenses were personnel-related costs (approximately 76% and 75% of foreign costs for the years ended December 31, 2025 and 2024, respectively).
Other expense - net was $298,000 for the year ended December 31, 2024 compared to other expense - net of $883,000 for the year ended December 31, 2023. Other expense primarily represents foreign currency transaction gains and losses and legal settlements made by the Company.
Other expense - net was $265,000 for the year ended December 31, 2025 compared to other expense - net of $298,000 for the year ended December 31, 2024. Other expense primarily represents foreign currency transaction gains and losses and legal settlements made by the Company.
Providers and Practices Served: As of December 31, 2024 and December 31, 2023, we provided services to approximately 40,000 providers (which we define as physicians, nurses, nurse practitioners, physician assistants and other clinical staff that render bills for their services), representing approximately 2,600 practices.
Providers and Practices Served: As of December 31, 2025 and 2024, we provided services to approximately 45,000 and 40,000 providers, respectively, (which we define as physicians, nurses, nurse practitioners, physician assistants and other clinical staff that render bills for their services), representing approximately 2,900 and 2,600 practices, respectively.
As of December 31, 2024, talkMD had not yet commenced operations. The Company made arrangements to have the income tax returns prepared for talkMD and advances the funds for the required taxes. Cumulatively, the Company has paid approximately $6,000 on behalf of talkMD for income taxes. We do not engage in off-balance sheet financing arrangements.
As of December 31, 2025, talkMD had not yet commenced operations. The Company made arrangements to have the income tax returns prepared for talkMD and advanced the funds for the required taxes. Cumulatively, the Company has paid approximately $6,500 on behalf of talkMD for income taxes. We do not engage in off-balance sheet financing arrangements.
No impairment charges were recorded during the year ended December 31, 2024. 50 Business Combinations: The Company accounts for business combinations under the provisions of ASC 805, Business Combinations , which requires that the acquisition method of accounting be used for all business combinations.
No impairment charges were recorded during the years ended December 31, 2025 or 2024. Business Combinations: The Company accounts for business combinations under the provisions of ASC 805, Business Combinations , which requires that the acquisition method of accounting be used for all business combinations.
Capitalized software was $5.7 million and $8.6 million during the years ended December 31, 2024 and 2023, respectively. Purchases of property and equipment were $1.7 million and $3.1 million during the years ended December 31, 2024 and 2023, respectively.
Capitalized software was $3.2 million and $5.7 million during the years ended December 31, 2025 and 2024, respectively. Purchases of property and equipment were $4.8 million and $1.7 million during the years ended December 31, 2025 and 2024, respectively.
Revenue for the years ended December 31, 2024 and December 31, 2023 includes $73.7 million and $76.6 million relating to technology-enabled business solutions, $18.2 million and $23.0 million related to professional services and $14.4 million and $13.4 million for medical practice management services, respectively.
Revenue for the years ended December 31, 2025 and 2024 includes $76.9 million and $73.7 million relating to technology-enabled business solutions, $25.4 million and $18.2 million related to professional services and $13.9 million and $14.4 million for medical practice management services, respectively.
Off-Balance Sheet Arrangements As of December 31, 2024, and 2023, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special-purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
We were in compliance with all SVB and Provident covenants in 2025. 56 Off-Balance Sheet Arrangements As of December 31, 2025, and 2024, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special-purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Interest expense on the line of credit was $649,000 and $906,000 and the amortization of deferred financing costs was $127,000 and $169,000 during the years ended December 31, 2024 and 2023, respectively. Other Expense - net.
Interest expense on the line of credit was $152,000 and $649,000 during the years ended December 31, 2025 and 2024, respectively and amortization of deferred financing costs was $44,000 and $127,000 during the years ended December 31, 2025 and 2024, respectively. Other Expense - net.
The current provision for 2024 and 2023 primarily relates to state and foreign income taxes. The pre-tax income and pre-tax loss was $8.0 million and $49.0 million for the years ended December 31, 2024 and 2023, respectively.
The provision for 2025 and 2024 primarily relates to state and foreign income taxes. The pre-tax income was $11.0 million and $8.0 million for the years ended December 31, 2025 and 2024, respectively.
The loss before income taxes for the year ended December 31, 2023 was $49.0 million, of which $42.0 million was a non-cash goodwill impairment charge and $14.4 million was non-cash depreciation and amortization. We have not been adversely affected by inflation as typically we receive a percentage of the fees our clients collect from our revenue cycle management services.
The income before income taxes for the year ended December 31, 2024 was $8.0 million, which included $14.1 million of non-cash depreciation and amortization. We have not been adversely affected by inflation as typically we receive a percentage of the fees our clients collect from our revenue cycle management services.
Out of the total federal NOL carry forward, approximately $237 million is from the CareCloud and Meridian acquisitions and is subject to the federal Section 382 NOL annual usage limitations. The Company has state NOL carry forwards of approximately $211 million, of which $84 million relates to the State of New Jersey. These NOLs expire starting in 2025.
Out of the total federal NOL carry forward, approximately $237 million is from the CareCloud and Meridian acquisitions and is subject to the federal Section 382 NOL annual usage limitations. The Company has state NOL carry forwards of approximately $214 million, of which $87 million relates to the State of New Jersey.
Although the Company reported GAAP earnings in 2024, it has incurred losses historically and there is uncertainty regarding future U.S. taxable income, which make realization of a deferred tax asset difficult to support in accordance with ASC 740. Accordingly, a valuation allowance has been recorded against all deferred tax assets as of December 31, 2024 and December 31, 2023.
Although the Company reported GAAP earnings in 2025 and 2024, it has incurred tax losses historically and there is uncertainty regarding future U.S. taxable income, which make realization of a deferred tax asset difficult to support in accordance with ASC 740.
During the years ended December 31, 2024 and 2023, the Company capitalized approximately $5.7 million and $8.6 million of development costs, respectively, in connection with its internal-use software. Depreciation Expense. Depreciation expense was $2.0 million for both the years ended December 31, 2024 and 2023. Amortization Expense.
During the years ended December 31, 2025 and 2024, the Company capitalized approximately $3.2 million and $5.7 million of development costs, respectively, in connection with its internal-use software. Depreciation Expense.
Interest expense of $900,000 for the year ended December 31, 2024 decreased by $294,000 or 25% from $1.2 million for the year ended December 31, 2023. The decrease in interest expense was due to the decreased use of the line of credit and decreases in the interest rate charged.
Interest expense of $287,000 for the year ended December 31, 2025 decreased by $613,000 or 68% from $900,000 for the year ended December 31, 2024. The decrease in interest expense was due to the decreased use of the line of credit and decreases in the interest rate charged.
Consolidated Statements of Operations Data Year Ended December 31, 2024 2023 2022 2021 2020 ($ in thousands, except per share data) Net revenue $ 110,837 $ 117,059 $ 138,826 $ 139,599 $ 105,122 Operating expenses: Direct operating costs 60,842 70,817 84,434 86,918 64,821 Selling and marketing 6,232 9,650 9,788 8,786 6,582 General and administrative 16,123 21,464 23,820 24,273 22,811 Research and development 3,781 4,736 4,401 4,408 9,311 Change in contingent consideration - - (3,090 ) (2,515 ) (1,000 ) Depreciation and amortization 14,142 14,402 11,725 12,195 9,905 Goodwill impairment charges - 42,000 - - - Lease terminations, unoccupied lease charges and restructuring costs 596 1,105 1,138 2,005 963 Total operating expenses 101,716 164,174 132,216 136,070 113,393 Operating income (loss) 9,121 (47,115 ) 6,610 3,529 (8,271 ) Net interest expense (812 ) (1,040 ) (364 ) (440 ) (446 ) Other (expense) income - net (298 ) (883 ) (637 ) (96 ) 7 Income (loss) before provision (benefit) for income taxes 8,011 (49,038 ) 5,609 2,993 (8,710 ) Income tax provision (benefit) 160 (364 ) 177 157 103 Net income (loss) $ 7,851 $ (48,674 ) $ 5,432 $ 2,836 $ (8,813 ) Preferred stock dividend 12,310 15,674 15,517 14,052 13,877 Net loss attributable to common shareholders $ (4,459 ) $ (64,348 ) $ (10,085 ) $ (11,216 ) $ (22,690 ) Weighted average common shares outstanding basic and diluted 16,146,975 15,669,472 15,109,587 14,541,061 12,678,845 Net loss per common share: basic and diluted $ (0.28 ) $ (4.11 ) $ (0.67 ) $ (0.77 ) $ (1.79 ) Consolidated Balance Sheet Data As of December 31, 2024 2023 2022 2021 2020 ($ in thousands) Cash $ 5,145 $ 3,331 $ 12,299 $ 10,340 $ 20,925 Working capital - net (1) 5,220 (57 ) 12,255 5,997 15,795 Total assets 71,614 77,826 136,174 140,848 137,999 Total liabilities 21,840 36,109 34,485 42,917 36,754 Shareholders’ equity 49,774 41,717 101,689 97,931 101,245 (1) Working capital-net is defined as current assets less current liabilities.
No tax effect has been provided in computing non-GAAP adjusted earnings per share as the Company has sufficient carry forward net operating losses to offset the applicable income taxes. 46 Consolidated Statements of Operations Data Year Ended December 31, 2025 2024 2023 2022 2021 ($ in thousands, except per share data) Net revenue $ 120,499 $ 110,837 $ 117,059 $ 138,826 $ 139,599 Operating expenses: Direct operating costs 64,456 60,842 70,817 84,434 86,918 Selling and marketing 4,818 6,232 9,650 9,788 8,786 General and administrative 18,386 16,123 21,464 23,820 24,273 Research and development 6,382 3,781 4,736 4,401 4,408 Change in contingent consideration - - - (3,090 ) (2,515 ) Depreciation and amortization 14,960 14,142 14,402 11,725 12,195 Goodwill impairment charges - - 42,000 - - Lease terminations, unoccupied lease charges and restructuring costs 154 596 1,105 1,138 2,005 Total operating expenses 109,156 101,716 164,174 132,216 136,070 Operating income (loss) 11,343 9,121 (47,115 ) 6,610 3,529 Net interest expense (81 ) (812 ) (1,040 ) (364 ) (440 ) Other expense - net (265 ) (298 ) (883 ) (637 ) (96 ) Income (loss) before provision (benefit) for income taxes 10,997 8,011 (49,038 ) 5,609 2,993 Income tax provision (benefit) 199 160 (364 ) 177 157 Net income (loss) $ 10,798 $ 7,851 $ (48,674 ) $ 5,432 $ 2,836 Preferred stock dividend 6,906 12,310 15,674 15,517 14,052 Net income (loss) attributable to common shareholders $ 3,892 $ (4,459 ) $ (64,348 ) $ (10,085 ) $ (11,216 ) Weighted average common shares outstanding: basic 37,792,428 16,146,975 15,669,472 15,109,587 14,541,061 Net income (loss) per common share: basic $ 0.10 $ (0.28 ) $ (4.11 ) $ (0.67 ) $ (0.77 ) Consolidated Balance Sheet Data As of December 31, 2025 2024 2023 2022 2021 ($ in thousands) Cash and restricted cash $ 3,617 $ 5,145 $ 3,331 $ 12,299 $ 10,340 Working capital - net (1) 1,315 5,220 (57 ) 12,255 5,997 Total assets 87,598 71,614 77,826 136,174 140,848 Total liabilities 28,092 21,840 36,109 34,485 42,917 Shareholders’ equity 59,506 49,774 41,717 101,689 97,931 (1) Working capital-net is defined as current assets less current liabilities.
Interest income of $88,000 for the year ended December 31, 2024 decreased by $66,000 or 43% from interest income of $154,000 for the year ended December 31, 2023. The interest income represents late fees from customers and interest earned on temporary cash investments, which decreased due to lower balances being invested. Interest Expense.
Interest income of $206,000 for the year ended December 31, 2025 increased by $118,000 or 134% from interest income of $88,000 for the year ended December 31, 2024. The interest income represents late fees from customers and interest earned on temporary cash investments, which increased due to higher cash balances being invested. Interest Expense.
Printing and mailing services: The Company provides printing and mailing services for both revenue cycle management customers and a non- revenue cycle management customer, and invoices on a monthly basis based on the number of prints, the agreed-upon rate per print and the postage incurred. The performance obligation is satisfied once the printing and mailing is completed.
Invoicing is primarily performed as of the end of each month. 51 Printing and mailing services: The Company provides printing and mailing services for both revenue cycle management customers and a non- revenue cycle management customer, and invoices on a monthly basis based on the number of prints, the agreed-upon rate per print and the postage incurred.
The Company has recorded goodwill as a result of its acquisitions. Goodwill is generally not amortized for financial reporting purposes. However, goodwill from asset acquisitions is tax deductible and amortized over 15 years for tax purposes. As such, deferred income tax expense and a deferred tax liability arise as a result of the tax-deductibility of this indefinitely lived asset.
However, goodwill from asset acquisitions is tax deductible and amortized over 15 years for tax purposes. As such, deferred income tax expense and a deferred tax liability arise as a result of the tax-deductibility of this indefinitely lived asset. The resulting deferred tax liability, which is recorded over the amortization period, has an indefinite life.
Group purchasing services: The Company provides group purchasing services which enable medical providers to purchase various vaccines directly from selected pharmaceutical companies at a discounted price. Currently, there are approximately 4,000 medical providers who are members of the program. Revenue is recognized as the vaccine shipments are made to the medical providers.
The performance obligation is satisfied once the printing and mailing is completed. Group purchasing services: The Company provides group purchasing services which enable medical providers to purchase various vaccines directly from selected pharmaceutical companies at a discounted price. Currently, there are approximately 4,000 medical providers who are members of the program.
Fees from the pharmaceutical companies are paid either quarterly or annually and the Company adjusts its revenue accrual at the time of payment.
Revenue is recognized as the vaccine shipments are made to the medical providers. Fees from the pharmaceutical companies are paid either quarterly or annually and the Company adjusts its revenue accrual at the time of payment.
Year Ended December 31, 2024 2023 Net revenue 100.0 % 100.0 % Operating expenses: Direct operating costs 54.9 % 60.5 % Selling and marketing 5.6 % 8.2 % General and administrative 14.5 % 18.3 % Research and development 3.4 % 4.0 % Depreciation and amortization 12.8 % 12.3 % Goodwill impairment charges 0.0 % 35.9 % Lease terminations, unoccupied lease charges and restructuring costs 0.6 % 0.9 % Total operating expenses 91.8 % 140.1 % Operating income (loss) 8.2 % (40.1 %) Net interest expense (0.7 %) 0.9 % Other expense - net (0.3 %) (0.8 %) Income (loss) before provision (benefit) for income taxes 7.2 % (41.8 %) Income tax provision (benefit) 0.1 % (0.3 %) Net income (loss) 7.1 % (41.5 %) Comparison of 2024 and 2023 Year Ended December 31, Change 2024 2023 Amount Percent ($ in thousands) Net revenue $ 110,837 $ 117,059 $ (6,222 ) (5 %) Net revenue.
Year Ended December 31, 2025 2024 Net revenue 100.0 % 100.0 % Operating expenses: Direct operating costs 53.5 % 54.9 % Selling and marketing 4.0 % 5.6 % General and administrative 15.3 % 14.5 % Research and development 5.3 % 3.4 % Depreciation and amortization 12.4 % 12.8 % Lease termination and restructuring costs 0.1 % 0.6 % Total operating expenses 90.6 % 91.8 % Operating income 9.4 % 8.2 % Net interest expense (0.1 %) (0.7 %) Other expense - net (0.2 %) (0.3 %) Income before provision for income taxes 9.1 % 7.2 % Income tax provision 0.2 % 0.1 % Net income 8.9 % 7.1 % Comparison of 2025 and 2024 Year Ended December 31, Change 2025 2024 Amount Percent ($ in thousands) Net revenue $ 120,499 $ 110,837 $ 9,662 9 % Net revenue.
Revenue is recorded based on the number of hours incurred and the agreed-upon hourly rate. Invoicing is primarily performed as of the end of each month.
Revenue is recorded based on the number of hours incurred and the agreed-upon hourly rate.
Application of the goodwill impairment test requires judgment including the use of a discounted cash flow approach, the trading price of publicly traded stock and the guideline public company method. These analyses require significant assumptions and judgments.
The Company has determined that its business consists of two operating segments and two reporting units (Healthcare IT and Medical Practice Management). Application of the goodwill impairment test requires judgment including the use of a discounted cash flow approach, the trading price of publicly traded stock and the guideline public company method. These analyses require significant assumptions and judgments.
Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. Results of Operations The following table sets forth our consolidated results of operations as a percentage of total revenue for the years shown.
Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. 52 Results of Operations The following table sets forth our consolidated results of operations as a percentage of total revenue for the years shown.
In addition, during the years ended December 31, 2024 and 2023, the Company recorded approximately $606,000 and $645,000 of restructuring costs, respectively. Restructuring costs consists of severance and separation costs associated with the optimization of the Company’s operations and profitability improvements.
During the years ended December 31, 2025 and 2024, the Company recorded approximately $154,000 and $606,000 of restructuring costs, respectively. Restructuring costs consists of severance and separation costs associated with the optimization of the Company’s operations and profitability improvements. During the year ended December 31, 2024, there was a gain on a lease termination of approximately $10,000.
For the global intangible low-taxed income (“GILTI”) tax, companies can either account for the GILTI inclusion in the period in which they are incurred or establish deferred tax liabilities for the expected future taxes associated with GILTI.
Accordingly, a valuation allowance has been recorded against all deferred tax assets as of December 31, 2025 and December 31, 2024. For the global intangible low-taxed income (“GILTI”) tax, companies can either account for the GILTI inclusion in the period in which they are incurred or establish deferred tax liabilities for the expected future taxes associated with GILTI.
The current income tax expense for the years ended December 31, 2024 and 2023 was $160,000 and $161,000, respectively. For the year ended December 31, 2023, there was a deferred tax benefit of $525,000. There was no deferred tax recorded for the year ended December 31, 2024.
There was a $199,000 provision for income taxes for the year ended December 31, 2025 compared to $160,000 for the year ended December 31, 2024. The income tax expense for the years ended December 31, 2025 and 2024 was $199,000 and $160,000, respectively. There was no deferred tax recorded for the years ended December 31, 2025 and 2024.
General and administrative expense of $16.1 million for the year ended December 31, 2024 decreased by $5.3 million or 25% from general and administrative expense of $21.5 million for the year ended December 31, 2023. Salary costs decreased by $3.5 million due to the decrease in headcount and the Pakistan exchange rate. Legal, professional and audit fees decreased by $790,000.
General and administrative expense of $18.4 million for the year ended December 31, 2025 increased by $2.3 million or 14% from general and administrative expense of $16.1 million for the year ended December 31, 2024. Salary costs increased by $2.5 million due to the increase in headcount. Legal and professional fees decreased by $794,000. Research and Development Expense.
Liquidity and Capital Resources During the year ended December 31, 2024, there was positive cash flow from operations of $20.6 million and at year-end, the Company had $5.1 million in cash and positive working capital of $5.2 million.
These NOLs expire starting in 2026. 55 Liquidity and Capital Resources During the year ended December 31, 2025, cash flow from operations was $28.6 million and at year-end, the Company had $3.6 million in cash and restricted cash and working capital of $1.3 million.
Set forth below is a presentation of our adjusted EBITDA for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 ($ in thousands) Net revenue $ 110,837 $ 117,059 GAAP net income (loss) 7,851 (48,674 ) Provision (benefit) for income taxes 160 (364 ) Net interest expense 812 1,040 Foreign exchange loss / other expense 335 918 Stock-based compensation expense, net of restructuring costs 115 4,716 Depreciation and amortization 14,142 14,402 Transaction and integration costs 46 286 Goodwill impairment charges - 42,000 Lease terminations, unoccupied lease charges and restructuring costs 596 1,105 Adjusted EBITDA $ 24,057 $ 15,429 Adjusted operating income and adjusted operating margin exclude the following elements which are included in GAAP operating income (loss): ● Stock-based compensation expense, which includes cash-settled awards and the related taxes, based on changes in the stock price; ● Amortization of purchased intangible assets; ● Integration costs, such as severance amounts paid to employees from acquired businesses and transaction costs, such as brokerage fees, pre-acquisition accounting costs and legal fees and exit costs related to contractual agreements; ● Goodwill impairment charges; and ● Lease terminations, unoccupied lease charges and restructuring costs. 43 Set forth below is a presentation of our adjusted operating income and adjusted operating margin, which represents adjusted operating income as a percentage of net revenue, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 ($ in thousands) Net revenue $ 110,837 $ 117,059 GAAP net income (loss) 7,851 (48,674 ) Provision (benefit) for income taxes 160 (364 ) Net interest expense 812 1,040 Other expense - net 298 883 GAAP operating income (loss) 9,121 (47,115 ) GAAP operating margin 8.2 % (40.2 %) Stock-based compensation expense, net of restructuring costs 115 4,716 Amortization of purchased intangible assets 1,577 4,975 Transaction and integration costs 46 286 Goodwill impairment charges - 42,000 Lease terminations, unoccupied lease charges and restructuring costs 596 1,105 Non-GAAP adjusted operating income $ 11,455 $ 5,967 Non-GAAP adjusted operating margin 10.3 % 5.1 % Adjusted net income and adjusted net income per share exclude the following elements which are included in GAAP net income (loss): ● Foreign currency gains and losses and other non-operating expenses; ● Stock-based compensation expense, which includes cash-settled awards and the related taxes, based on changes in the stock price; ● Amortization of purchased intangible assets; ● Integration costs, such as severance amounts paid to employees from acquired businesses and transaction costs, such as brokerage fees, pre-acquisition accounting costs and legal fees and exit costs related to contractual agreements; ● Goodwill impairment charges; ● Lease terminations, unoccupied lease charges and restructuring costs; and ● Income tax provision (benefit) resulting from the amortization of goodwill related to our acquisitions.
Set forth below is a presentation of our adjusted operating income and adjusted operating margin, which represents adjusted operating income as a percentage of net revenue, for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 ($ in thousands) Net revenue $ 120,499 $ 110,837 GAAP net income 10,798 7,851 Provision for income taxes 199 160 Net interest expense 81 812 Other expense - net 265 298 GAAP operating income 11,343 9,121 GAAP operating margin 9.4 % 8.2 % Stock-based compensation expense 454 115 Amortization of purchased intangible assets 2,129 1,577 Transaction and integration costs 619 46 Lease termination and restructuring costs 154 596 Non-GAAP adjusted operating income $ 14,699 $ 11,455 Non-GAAP adjusted operating margin 12.2 % 10.3 % Adjusted net income and adjusted net income per share exclude the following amounts which are included in GAAP net income: ● Foreign currency losses and other non-operating expenses; ● Stock-based compensation expense, which includes cash-settled awards and the related taxes, based on changes in the stock price; ● Amortization of purchased intangible assets; ● Integration costs, such as severance amounts paid to employees from acquired businesses and transaction costs, such as brokerage fees, pre-acquisition accounting costs and legal fees and exit costs related to contractual agreements; and ● Lease termination and restructuring costs. 45 No tax effect has been provided in computing non-GAAP adjusted net income and non-GAAP adjusted net income per share as the Company has sufficient carry forward net operating losses to offset the applicable income taxes.
Net revenue of $110.8 million for the year ended December 31, 2024 decreased by $6.2 million or 5% from revenue of $117.1 million for the year ended December 31, 2023.
Net revenue of $120.5 million for the year ended December 31, 2025 increased by $9.7 million or 9% from revenue of $110.8 million for the year ended December 31, 2024.
Financing Activities Cash used by financing activities during the year ended December 31, 2024 was $11.3 million, compared to $13.3 million of cash used for the year ended December 31, 2023. Cash used by financing activities during 2024 includes the full repayment of the credit line of $10 million and $677,000 of repayments for debt obligations.
Financing Activities Cash used by financing activities during the year ended December 31, 2025 was $5.6 million, compared to $11.3 million for the year ended December 31, 2024. Cash used by financing activities during 2025 includes the payment of dividends on the Preferred Stock of $6.3 million and $620,000 of repayments for debt obligations.
The following table shows our reconciliation of GAAP net income (loss) to non-GAAP adjusted net income for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 ($ in thousands) GAAP net income (loss) $ 7,851 $ (48,674 ) Foreign exchange loss / other expense 335 918 Stock-based compensation expense, net of restructuring costs 115 4,716 Amortization of purchased intangible assets 1,577 4,975 Transaction and integration costs 46 286 Goodwill impairment charges - 42,000 Lease terminations, unoccupied lease charges and restructuring costs 596 1,105 Income tax benefit related to goodwill - (525 ) Non-GAAP adjusted net income $ 10,520 $ 4,801 44 Year Ended December 31, 2024 2023 GAAP net loss attributable to common shareholders, per share $ (0.28 ) $ (4.11 ) Impact of preferred stock dividend 0.76 1.04 Net income (loss) per end-of-period share 0.48 (3.07 ) Foreign exchange loss / other expense 0.02 0.06 Stock-based compensation expense, net of restructuring costs 0.01 0.30 Amortization of purchased intangible assets 0.10 0.31 Transaction and integration costs 0.00 0.02 Goodwill impairment charges - 2.65 Lease terminations, unoccupied lease charges and restructuring costs 0.04 0.07 Income tax benefit related to goodwill - (0.04 ) Non-GAAP adjusted earnings per share $ 0.65 $ 0.30 End-of-period common shares 16,256,236 15,880,092 Outstanding unvested RSUs 242,500 733,908 Total fully diluted shares 16,498,736 16,614,000 Non-GAAP adjusted diluted earnings per share $ 0.64 $ 0.29 For purposes of determining non-GAAP adjusted earnings per share, the Company used the number of common shares outstanding at the end of December 31, 2024 and 2023.
The following table shows our reconciliation of GAAP net income to non-GAAP adjusted net income for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 ($ in thousands) GAAP net income $ 10,798 $ 7,851 Foreign exchange loss / other expense 284 335 Stock-based compensation expense 454 115 Amortization of purchased intangible assets 2,129 1,577 Transaction and integration costs 619 46 Lease termination and restructuring costs 154 596 Non-GAAP adjusted net income $ 14,438 $ 10,520 Year Ended December 31, 2025 2024 GAAP net income (loss) attributable to common shareholders, per share $ 0.10 $ (0.28 ) Impact of preferred stock dividend 0.16 0.76 Net income per end-of-period share 0.26 0.48 Foreign exchange loss / other expense 0.01 0.02 Stock-based compensation expense 0.01 0.01 Amortization of purchased intangible assets 0.05 0.10 Transaction and integration costs 0.01 0.00 Lease termination and restructuring costs 0.00 0.04 Non-GAAP adjusted earnings per share $ 0.34 $ 0.65 End-of-period common shares 42,437,949 16,256,236 For purposes of determining non-GAAP adjusted earnings per share, the Company used the number of common shares outstanding at the end of December 31, 2025 and 2024.
The interest rate on our line of credit is based on the prime rate which had been increasing through 2023 but decreased during 2024. Operating Activities Cash provided by operating activities was $20.6 million and $15.5 million during the years ended December 31, 2024 and 2023, respectively.
The interest rate on our Provident line of credit is based on the secured overnight financing rate which has been declining slightly since the inception of the line of credit. Operating Activities Cash provided by operating activities was $28.6 million and $ 20.6 million during the years ended December 31, 2025 and 2024, respectively.
The Company also tests for impairment between annual test dates if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is performed at the reporting-unit level. The Company has determined that its business consists of two operating segments and two reporting units (Healthcare IT and Medical Practice Management).
Goodwill Impairment: Goodwill is evaluated for impairment annually as of October 31 st , referred to as the annual test date. The Company also tests for impairment between annual test dates if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is performed at the reporting-unit level.
There was no deferred tax liability recorded at December 31, 2024. 53 The Company will maintain a full valuation allowance on deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.
The Company will maintain a full valuation allowance on deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. The Company has recorded goodwill as a result of its acquisitions. Goodwill is generally not amortized for financial reporting purposes.
Other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes. 42 Adjusted EBITDA, adjusted operating income, adjusted operating margin, adjusted net income and adjusted net income per share provide an alternative view of performance used by management and we believe that an investor’s understanding of our performance is enhanced by disclosing these adjusted performance measures.
Adjusted EBITDA, adjusted operating income, adjusted operating margin, adjusted net income and adjusted net income per share provide an alternative view of performance used by management and we believe that an investor’s understanding of our performance is enhanced by disclosing these adjusted performance measures.
Year Ended December 31, Change 2024 2023 Amount Percent ($ in thousands) Net cash provided by operating activities $ 20,642 $ 15,461 $ 5,181 34 % Net cash used in investing activities (7,406 ) (11,613 ) 4,207 36 % Net cash used in financing activities (11,256 ) (13,285 ) 2,029 15 % Effect of exchange rate changes on cash (166 ) 469 (635 ) (135 %) Net increase (decrease) in cash $ 1,814 $ (8,968 ) $ 10,782 120 % The income before income taxes was $8.0 million for the year ended December 31, 2024, which included $14.1 million of non-cash depreciation and amortization.
Year Ended December 31, Change 2025 2024 Amount Percent ($ in thousands) Net cash provided by operating activities $ 28,561 $ 20,642 $ 7,919 38 % Net cash used in investing activities (24,535 ) (7,406 ) (17,129 ) (231 %) Net cash used in financing activities (5,611 ) (11,256 ) 5,645 50 % Effect of exchange rate changes on cash and restricted cash 57 (166 ) 223 134 % Net (decrease) increase in cash and restricted cash $ (1,528 ) $ 1,814 $ (3,342 ) 184 % The income before income taxes was $11.0 million for the year ended December 31, 2025, which included $15.0 million of non-cash depreciation and amortization.
As of December 31, 2024, the Company has a total federal NOL carry forward of approximately $265 million of which approximately $187 million will expire between 2031 and 2038, and the balance of approximately $78 million has an indefinite life.
As of December 31, 2025, the Company has a total federal NOL carry forward of approximately $271 million of which approximately $186 million will expire between 2030 and 2037, and the balance of approximately $85 million has an indefinite life. At December 31, 2025, the Company had federal research and development credit carryforwards of approximately $3.4 million.
Adjusted EBITDA excludes the following elements which are included in GAAP net income (loss): ● Income tax provision (benefit) or the cash requirements to pay our taxes; ● Net interest expense or the cash requirements necessary to service interest on principal payments on our debt; ● Foreign currency gains and losses and other non-operating expenses; ● Stock-based compensation expense, which includes cash-settled awards and the related taxes, based on changes in the stock price; ● Depreciation and amortization charges; ● Integration costs, such as severance amounts paid to employees from acquired businesses and transaction costs, such as brokerage fees, pre-acquisition accounting costs and legal fees and exit costs related to contractual agreements; ● Goodwill impairment charges; ● Lease terminations, unoccupied lease charges and restructuring costs; and ● Change in contingent consideration.
Adjusted EBITDA excludes the following amounts which are included in GAAP net income: ● Income tax provision or the cash requirements to pay our taxes; ● Net interest expense or the cash requirements necessary to service interest on principal payments on our debt; ● Foreign currency losses and other non-operating expenses; ● Stock-based compensation expense, which includes cash-settled awards and the related taxes, based on changes in the stock price; ● Depreciation and amortization charges; ● Integration costs, such as severance amounts paid to employees from acquired businesses and transaction costs, such as brokerage fees, pre-acquisition accounting costs and legal fees and exit costs related to contractual agreements; and ● Lease termination and restructuring costs. 44 Set forth below is a presentation of our adjusted EBITDA for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 ($ in thousands) Net revenue $ 120,499 $ 110,837 GAAP net income 10,798 7,851 Provision for income taxes 199 160 Net interest expense 81 812 Foreign exchange loss / other expense 284 335 Stock-based compensation expense 454 115 Depreciation and amortization 14,960 14,142 Transaction and integration costs 619 46 Lease termination and restructuring costs 154 596 Adjusted EBITDA $ 27,549 $ 24,057 Adjusted operating income and adjusted operating margin exclude the following amounts which are included in GAAP operating income: ● Stock-based compensation expense, which includes cash-settled awards and the related taxes, based on changes in the stock price; ● Amortization of purchased intangible assets; ● Integration costs, such as severance amounts paid to employees from acquired businesses and transaction costs, such as brokerage fees, pre-acquisition accounting costs and legal fees and exit costs related to contractual agreements; and ● Lease termination and restructuring costs.
Amortization expense related to the value of our medical practice management clients is amortized on a straight-line basis over a period of twelve years. Goodwill Impairment Charges.
Amortization expense related to the value of our medical practice management clients is amortized on a straight-line basis over a period of twelve years. Restructuring Costs. Restructuring costs, primarily consist of severance and separation costs associated with the optimization of the Company’s operations and profitability improvements. Interest and Other Income (Expense).
Revenue decreased by $6.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, offset by a decrease in cash operating expenses of $20.2 million for the same period. Accounts receivable increased by $1.2 million and decreased by $2.2 million for the years ended December 31, 2024 and 2023, respectively.
Cash operating expenses increased by $6.6 million for the same period. Accounts receivable increased by $408,000 and $1.2 million for the years ended December 31, 2025 and 2024, respectively. Accounts payable and other liabilities increased by $1.3 million and decreased by $4.7 million for the years ended December 31, 2025 and 2024, respectively.
Amortization expense of $12.1 million for the year ended December 31, 2024 decreased by $302,000 or 2% from amortization expense of $12.4 million for the year ended December 31, 2023. The decrease in amortization expense was due to certain intangible assets related to acquisitions becoming fully amortized. Goodwill Impairment Charges.
Amortization expense of $12.4 million for the year ended December 31, 2025 increased by $350,000 or 3% from amortization expense of $12.1 million for the year ended December 31, 2024. The increase in amortization expense was due to the amortization of the intangible assets related to the current years’ acquisitions. Lease Termination and Restructuring Costs.
Selling and Marketing Expense. Selling and marketing expense of $6.2 million for the year ended December 31, 2024 decreased by $3.4 million or 35% from selling and marketing expense of $9.7 million for the year ended December 31, 2023.
Outsourcing and other customer processing costs increased by $2.4 million and consultancy expenses increased by $270,000. Selling and Marketing Expense. Selling and marketing expense of $4.8 million for the year ended December 31, 2025 decreased by $1.4 million or 23% from selling and marketing expense of $6.2 million for the year ended December 31, 2024.
Direct operating costs of $60.8 million for the year ended December 31, 2024 decreased by $10.0 million or 14% from direct operating costs of $70.8 million for the year ended December 31, 2023.
Direct operating costs of $64.5 million for the year ended December 31, 2025 increased by $3.6 million or 6% from direct operating costs of $60.8 million for the year ended December 31, 2024. Salary costs increased by $1.0 million primarily due to the Medsphere acquisition.
There was a foreign exchange gain of $130,000 and a loss of $790,000 for the years ended December 31, 2024 and 2023, respectively. Transaction gains and losses result from revaluing intercompany accounts which are denominated in U.S. dollars that represent amounts receivable/payable between the entities.
Transaction gains and losses result from revaluing intercompany accounts which are denominated in U.S. dollars that represent amounts receivable/payable between the entities. Whenever the exchange rate varies, the gains and losses are recorded in the consolidated statements of operations. Income Tax Provision.
Net proceeds on the line of credit were $2.0 million during the year ended December 31, 2023. Contractual Obligations and Commitments We have contractual obligations under our line of credit. We also maintain operating leases for property and certain office equipment. We were in compliance with all SVB covenants in 2024.
Contractual Obligations and Commitments We have contractual obligations under our line of credit. We also maintain operating leases for property and certain office equipment.
At a high level, these solutions can be categorized as follows: ● Technology-enabled business solutions, which are sometimes provided as individual offerings and often provided in combination with each other, including: ○ RCM services including end-to-end medical billing, eligibility, analytics, and related services, all of which can be provided utilizing our technology platform or through a third-party system; ○ AI tools are designed to serve as a digital healthcare assistant, helping to enhance clinical decision-making, streamline workflows, reduce administrative burdens, optimize revenue management, and promote patient-centered care; 41 ○ EHRs, which are easy to use and sometimes integrated with our business services, and enable our healthcare provider clients to deliver better patient care, streamline their clinical workflows, decrease documentation errors and potentially qualify for government incentives; ○ PM software and related capabilities, which support our clients’ day-to-day business operations and financial workflows, including automated insurance eligibility software, a robust billing and claims rules engine and other automated tools designed to maximize reimbursement; ○ PXM solutions designed to transform interactions between patients and their clinicians, including smartphone applications that assist patients and healthcare providers in the provision of healthcare services, including contactless digital check-in solutions, messaging and online appointment scheduling tools; ○ CareCloud Wellness, a digital health solution which includes chronic care management interactions with certified care managers, remote patient monitoring which feeds patient data directly to the EHR and highlights exceptions, and telehealth solutions which allow healthcare providers to conduct remote patient visits; ○ Business intelligence and healthcare analytics platforms that allow our clients to derive actionable insights from their vast amount of data; ○ Healthcare claims clearinghouse which enables our clients to electronically scrub and submit claims and process payments from insurance companies; ○ Interoperability and data transformation software to support the complex realities of data exchange with healthcare trading partners, including labs, insurance companies, and other healthcare IT vendors; ○ Customized applications, interfaces and a variety of other technology solutions that support our healthcare clients; ○ Professional services consisting of application and advisory services, revenue cycle services, data analytic services and educational training services; and ○ Workforce augmentation and on-demand staffing to support our clients as they expand their businesses, seek highly trained personnel, or struggle with staffing shortages. ● Medical practice management services are provided to medical practices.
The platform consolidates critical data to enhance referral volume, strengthen provider engagement and drive strategic organizational growth; ○ Wellsoft, a solution for provider workflows in emergency departments and urgent care facilities has seamless integration into all major hospital IT systems and ancillary departments providing real-time patient tracking and instant lab orders, drug interaction checking and pharmacy review; ○ CareVue, a cloud-based EHR software that enhances clinical workflows for small hospitals and inpatient behavioral health facilities, driving efficiencies across inpatient settings through speech-to-text charting, e-prescribing and medication management and secure clinical communications; ○ PXM solutions designed to transform interactions between patients and their clinicians, including smartphone applications that assist patients and healthcare providers in the provision of healthcare services, including contactless digital check-in solutions, messaging and online appointment scheduling tools; ○ CareCloud Wellness, a digital health solution which includes chronic care management interactions with certified care managers and remote patient monitoring which feeds patient data directly to the EHR (and highlights exceptions); and telehealth solutions which allowing healthcare providers to conduct remote patient visits; ○ Business intelligence and healthcare analytics platforms that allow our clients to derive actionable insights from their vast amount of data; ○ Healthcare claims clearinghouse which enables our clients to electronically scrub and submit claims and process payments from insurance companies; ○ Interoperability and data transformation software to support the complex realities of data exchange with healthcare trading partners, including labs, insurance companies, and other healthcare IT vendors; ○ Customized applications, interfaces and a variety of other technology solutions that support our healthcare clients; 43 ○ Professional services consisting of application and advisory services, revenue cycle services, data analytic services and educational training services; ○ Workforce augmentation and on-demand staffing to support our clients as they expand their businesses, seek highly trained personnel, or struggle with staffing shortages; and ○ Managed services which include inpatient and outpatient IT services, government consulting and product development services. ● MAP App is an industry-leading tool for benchmarking and measuring revenue cycle management performance, which was developed by the HFMA and is used by top hospitals and healthcare organizations nationwide. ● Medical practice management services are provided to medical practices.
(Refer to Forward-Looking Statements disclosure on page 3 of this Form 10-K.) 51 Year Ended December 31, Change 2024 2023 Amount Percent ($ in thousands) Direct operating costs $ 60,842 $ 70,817 $ (9,975 ) (14 %) Selling and marketing 6,232 9,650 (3,418 ) (35 %) General and administrative 16,123 21,464 (5,341 ) (25 %) Research and development 3,781 4,736 (955 ) (20 %) Depreciation 2,043 2,001 42 2 % Amortization 12,099 12,401 (302 ) (2 %) Goodwill impairment charges - 42,000 (42,000 ) (100 %) Lease terminations, unoccupied lease charges and restructuring costs 596 1,105 (509 ) (46 %) Total operating expenses $ 101,716 $ 164,174 $ (62,458 ) (38 %) Direct Operating Costs.
(Refer to Forward-Looking Statements disclosure on page 3 of this Annual Report on Form 10-K.) Year Ended December 31, Change 2025 2024 Amount Percent ($ in thousands) Direct operating costs $ 64,456 $ 60,842 $ 3,614 6 % Selling and marketing 4,818 6,232 (1,414 ) (23 %) General and administrative 18,386 16,123 2,263 14 % Research and development 6,382 3,781 2,601 69 % Depreciation 2,511 2,043 468 23 % Amortization 12,449 12,099 350 3 % Lease termination and restructuring costs 154 596 (442 ) (74 %) Total operating expenses $ 109,156 $ 101,716 $ 7,440 7 % 53 Direct Operating Costs.
Year Ended December 31, Change 2024 2023 Amount Percent ($ in thousands) Interest income $ 88 $ 154 $ (66 ) (43 %) Interest expense (900 ) (1,194 ) 294 25 % Other expense - net (298 ) (883 ) 585 66 % Income tax provision (benefit) 160 (364 ) 524 144 % Interest Income.
Year Ended December 31, Change 2025 2024 Amount Percent ($ in thousands) Interest income $ 206 $ 88 $ 118 134 % Interest expense (287 ) (900 ) 613 68 % Other expense - net (265 ) (298 ) 33 11 % Income tax provision 199 160 39 24 % 54 Interest Income.
The increase in the net income of $56.5 million included the following changes in non-cash items: a decrease in stock-based compensation expense of $4.8 million and a decrease in depreciation and amortization of $420,000. No goodwill impairment charges were recorded during 2024 as compared to the $42 million charge recognized in 2023.
The increase in the net income of $2.9 million included the following changes in non-cash items: an increase in stock-based compensation expense of $339,000 and an increase in depreciation and amortization of $739,000. Revenue increased by $9.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
During the year ended December 31, 2023, there was positive cash flow from operations of $15.5 million and at year-end, the Company had $3.3 million in cash and negative working capital of $57,000. The Company has a revolving line of credit with SVB and, as of December 31, 2023, $10 million was outstanding.
During the year ended December 31, 2024, cash flow from operations was $20.6 million and at year-end, the Company had $5.1 million in cash and working capital of $5.2 million. There were no outstanding bank borrowings at both December 31, 2025 and 2024. The following table summarizes our cash flows for the years presented.
Other costs such as computer expenses, utilities and office supplies decreased by $295,000. Research and Development Expense. Research and development expense of $3.8 million for the year ended December 31, 2024 decreased by $955,000 or 20% from research and development expense of $4.7 million for the year ended December 31, 2023.
Research and development expense of $6.4 million for the year ended December 31, 2025 increased by $2.6 million or 69% from research and development expense of $3.8 million for the year ended December 31, 2024. The increase was due to an increase in the offshore headcount.
Non-GAAP adjusted diluted earnings per share was computed using an as-converted method and includes warrants that are in-the-money as of that date as well as outstanding unvested RSUs. Non-GAAP adjusted earnings per share and non-GAAP adjusted diluted earnings per share do not take into account dividends on the Preferred Stock.
Non-GAAP adjusted earnings per share does not take into account dividends on the Preferred Stock.
Accounts payable, accrued compensation and accrued expenses decreased by $4.7 million and $3.3 million for the years ended December 31, 2024 and 2023, respectively. 54 Investing Activities Cash used in investing activities during the year ended December 31, 2024 was $7.4 million, a decrease of $4.2 million compared to $11.6 million during the year ended December 31, 2023.
Investing Activities Cash used in investing activities during the year ended December 31, 2025 was $24.5 million , an increase of $17.1 million compared to $7.4 million during the year ended December 31, 2024. This is primarily due to the Company paying $16.5 million for its acquisitions during the year ended December 31, 2025.
Removed
No tax effect has been provided in computing non-GAAP adjusted net income and non-GAAP adjusted net income per share as the Company has sufficient carry forward net operating losses to offset the applicable income taxes.
Added
At a high level, these solutions can be categorized as follows: ● Technology-enabled business solutions, which are sometimes provided as individual offerings and often provided in combination with each other, including: ○ RCM services which include end-to-end medical billing, eligibility, analytics, and related services, all of which can be provided utilizing our technology platform or through a third-party system; ○ AI tools designed to serve as a digital healthcare assistant, helping to enhance clinical decision-making, streamline workflows, reduce administrative burdens, optimize revenue management, and promote patient-centered care; ○ EHRs, which are easy to use and sometimes integrated with our business services, and enable our healthcare provider clients to deliver better patient care, streamline their clinical workflows, decrease documentation errors and potentially qualify for government incentives for both inpatient and outpatient services; ○ PM software and related capabilities, which support our clients’ day-to-day business operations within the enterprise-level facilities outpatient service areas and financial workflows, including automated insurance eligibility software, contains a robust billing and claims rules engine and other automated tools designed to maximize reimbursement; ○ RCM Cloud, a highly configurable inpatient revenue cycle management software solution that focuses on up front financial accountability, real-time insurance eligibility checking, robust billing, integrated claims resolution, denial management, collection management, and dynamic work queues designed maximize timely reimbursements; ○ HealthLine, which is a medical supply chain and inventory management system built for healthcare settings enables real-time tracking of supplies, equipment and consumables across multiple locations such as exam rooms, ambulances and storage closets; ○ Marketware, which offers a comprehensive physician strategy suite designed to support healthcare organizations in optimizing physician relationship management, streamlining recruitment and onboarding processes, and leveraging performance analytics.
Removed
No tax effect has been provided in computing non-GAAP adjusted earnings per share and non-GAAP adjusted diluted earnings per share as the Company has sufficient carry forward net operating losses to offset the applicable income taxes.
Added
Other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.
Removed
Reconciliation of net income (loss) to adjusted EBITDA The following table contains a reconciliation of net income (loss) to adjusted EBITDA by year.
Added
Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination.
Removed
Year Ended December 31, 2024 2023 2022 2021 2020 ($ in thousands) Net income (loss) $ 7,851 $ (48,674 ) $ 5,432 $ 2,836 $ (8,813 ) Depreciation 2,043 2,001 1,952 1,927 1,354 Amortization 12,099 12,401 9,773 10,268 8,551 Foreign exchange loss / other expense 335 918 712 241 71 Net interest expense 812 1,040 364 440 446 Income tax provision (benefit) 160 (364 ) 177 157 103 Stock-based compensation expense, net of restructuring costs 115 4,716 4,914 5,396 6,502 Transaction and integration costs 46 286 876 1,364 2,694 Goodwill impairment charges - 42,000 - - - Lease terminations, unoccupied lease charges and restructuring costs 596 1,105 1,138 2,005 963 Change in contingent consideration - - (3,090 ) (2,515 ) (1,000 ) Adjusted EBITDA $ 24,057 $ 15,429 $ 22,248 $ 22,119 $ 10,871 46 The following table contains a reconciliation of net income (loss) to adjusted EBITDA by quarter.
Added
Our printing and mailing and group purchasing services aggregated $4.3 million and $4.5 million for the year ended December 31, 2025 and 2024, respectively. During the year ended December 31, 2025 there was approximately $10.5 million of revenue related to the Medsphere acquisition.
Removed
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2024 2024 2024 2024 2023 2023 2023 2023 ($ in thousands) Net income (loss) $ 3,296 $ 3,122 $ 1,674 $ (241 ) $ (43,692 ) $ (2,749 ) $ (1,832 ) $ (401 ) Depreciation 533 504 503 503 505 493 511 492 Amortization 2,724 2,737 3,211 3,427 3,615 3,410 2,830 2,546 Foreign exchange loss (gain) / other expense 91 (57 ) 306 (5 ) 309 426 191 (8 ) Net interest expense 48 162 264 338 335 300 275 130 Income tax provision (benefit) 41 41 39 39 (568 ) 57 82 65 Stock-based compensation expense, net of restructuring costs 306 252 265 (708 ) 933 1,209 1,502 1,072 Transaction and integration costs 11 12 11 12 16 91 107 72 Goodwill impairment charges - - - - 42,000 - - - Lease terminations, unoccupied lease charges and restructuring costs 91 67 116 322 675 8 153 269 Adjusted EBITDA $ 7,141 $ 6,840 $ 6,389 $ 3,687 $ 4,128 $ 3,245 $ 3,819 $ 4,237 Key Metrics In addition to the line items in our consolidated financial statements, we regularly review the following key metrics to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, make strategic business decisions, and assess market share trends and working capital needs.

… 23 more changes not shown on this page.

Other CCLDO 10-K year-over-year comparisons