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Item 1. Business

2021-02-25 compared with 2020-02-28 · 297 added, 335 removed, 48 unchanged (93% of the section changed)

Inc., (and together with its consolidated subsidiaries “MTBC”

or the “Company”) is a healthcare information

technology company that offers an integrated suite of proprietary cloud-based electronic health records and practice management

solutions, together with related business services, to healthcare providers.

The Company’s integrated services are designed

to help customers increase revenues, streamline workflows and make better business and clinical decisions, while reducing administrative

burdens and operating costs.

The Company’s services include full-scale revenue cycle management, electronic health records,

and other technology-driven practice management services for private and hospital-employed healthcare providers.

These solutions

and services include:

cycle management (“RCM”) services, which include end-to-end medical billing, eligibility, analytics, and related

services, all of which can often be provided either with our technology platform or through a third-party system;

healthcare IT solutions, which are bundled with our RCM services, including:

health records (“EHR”), which are easy to use, integrated with our business services or offered as software as

a service (“SaaS”) solutions, and allow our healthcare provider clients to reduce paperwork and qualify for incentives;

management (“PM”) software and related tools, which support our clients’

day-to-day business operations

and workflows;

(“MTBC”

and together with its consolidated subsidiaries, the “Company”, “we”, “us”

and/or “our”) is a healthcare information technology company that provides a full suite of proprietary cloud-based

solutions, together with related business services, to healthcare providers and hospitals throughout the United States.

Our Software-as-a-Service

(“SaaS”) platform includes revenue cycle management (“RCM”), practice management (“PM”), electronic

health record (“EHR”), business intelligence, telehealth, patient experience management (“PXM”) solutions

and complementary software tools and business services for high-performance medical groups and health systems.

a high level, these solutions can be categorized as follows:

services, which include end-to-end medical billing, eligibility, analytics, and related services, all of which can often be

provided either with our technology platform or through a third-party system;

healthcare IT software solutions, which can be bundled with our RCM services, including:

which are easy to use, integrated with our business services or offered as Software-as-a-Service (“SaaS”) solutions,

and allow our healthcare provider clients to deliver better patient care, document their clinical visits effectively and thus

potentially qualify for government incentives, reduce documentation errors and reduce paperwork;

software and related tools, which support our clients’

day-to-day business operations and workflows;

Health (“mHealth”) solutions, including smartphone applications that assist patients and healthcare providers

in the provision of healthcare services;

solutions, which allow healthcare providers to conduct remote patient visits;

claims clearinghouse, which enables our clients to electronically scrub and submit claims to, and process payments from, insurance

intelligence, customized applications, interfaces and a variety of other technology solutions that support our healthcare

purchasing services which include our negotiation of discounts with pharmaceutical manufacturers and the extension of those

discounts to our physician members;

Comprehensive

practice management services, which are offered under long-term management service agreements pursuant to which we provide

certain practices with the administrative support, facilities, supplies, equipment, marketing, RCM, accounting, and other

non-clinical services required to efficiently operate their practices;

Telemedicine,

a service which is launching in 2020, will allow our clients to conduct remote office visits with patients and bill for these

visits where permissible.

are able to deliver our industry-leading solutions at very competitive prices because we leverage a combination of our proprietary

software, which automates our workflows and increases efficiency, together with our team of over 300 experienced health industry

experts throughout the United States.

These experts are supported by our highly educated and specialized offshore workforce of

approximately 2,400 team members at labor costs that we believe are approximately one-tenth the cost of comparable U.S.

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 profitable operations of MTBC.

January 2020, the Company, through a merger with its subsidiary, acquired CareCloud Corporation (“CareCloud”), which

has developed a highly acclaimed cloud-based platform including EHR, PM and patient experience capabilities.

The Company acquired

CareCloud on a cash-free, debt-free basis with neutral working capital.

The total consideration for the merger paid at closing

was $17 million in cash and 760,000 shares of the Company’s 11% Series A Cumulative Redeemable Perpetual Preferred Stock.

The merger agreement provides that if CareCloud’s 2020 revenues exceed $36 million, there will be an earn-out payment to

the seller equal to such excess, up to $3 million.

Additional consideration included warrants to purchase 2,000,000 shares of

the Company’s common stock, 1,000,000 of which has an exercise price per share of $7.50 and a term of two years, and the

second million of which has an exercise price per share of $10.00 and a term of three years.

Of the preferred stock consideration,

160,000 shares of Series A Preferred Stock will be held in escrow for up to 24 months, and an additional 100,000 shares of Series

A Preferred Stock will be held in escrow for up to 18 months, in both cases, to satisfy indemnification obligations of the seller

for losses arising from certain specified contingent liabilities.

April 2019, the Company acquired substantially all of the revenue cycle management business of Etransmedia Technology, Inc.

(“ETM”)

through MTBC’s wholly owned subsidiary MTBC-Med, Inc.

The Company paid $1.6 million in cash for the acquisition.

ETM acquisition added additional clients to the Company’s customer base and, similar to previous acquisitions, broadened

the Company’s presence in the healthcare information technology industry through geographic expansion of its customer base

and by increasing available customer relationship resources and specialized trained staff.

July 2018, the Company acquired substantially all of the revenue cycle management, practice management and group purchasing assets

of Orion Healthcorp, Inc.

and 13 of its affiliates (together “Orion”).

The acquisition was completed through MTBC’s

wholly owned subsidiaries, MTBC Health, Inc.

and MTBC Practice Management, Corp.

The Company paid $12.6 million in cash for the

This acquisition expanded the scope of our offerings to include additional niche hospital solutions, a service that

negotiates vaccine discounts with pharmaceutical manufacturers and then extends those vaccine discounts to its physician members,

and a service that provides end-to-end practice management services to physician practices under multi-decade management service

of our RCM solutions typically requires little or no upfront expenditure by a client.

Additionally, for most of our solutions

and customers, our financial performance is linked directly to the financial performance of our clients, as the vast majority

of our revenues are based on a percentage of our clients’

The standard fee for our complete, integrated, end-to-end

solution is among the lowest in the industry.

We estimate that as of December 31, 2019, we provided services to approximately

10,500 providers, (which we define as physicians, nurses, nurse practitioners, physician assistants and other clinical staff that

render bills for their services) practicing in approximately 1,800 independent medical practices and hospitals, representing 86

specialties and subspecialties in 46 states.

In addition, we served approximately 200 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.

service clients ranging from small practices, consisting of one to ten providers, to community hospitals.

Our customer, that generates

the largest revenue for us, has over 1,800 providers of physical, occupational and speech therapy services to patients in multiple

July 23, 2014, the Company completed its initial public offering (“IPO”) of common stock.

The Company sold approximately

four million shares at a price of $5.00 per share to the public.

November 2015, the Company completed a public offering of its 11% Series A Cumulative Redeemable Perpetual Preferred Stock (the

“Preferred Stock”

or “Series A Preferred Stock”).

The Company sold 231,616 shares at a price of $25.00

per share and received net proceeds of approximately $4.7 million.

In July 2016, the Company sold an additional 63,040 shares

of Preferred Stock and received net proceeds of approximately $1.3 million.

In 2017, the Company raised a total of $16.4 million

in net proceeds from a series of additional offerings totaling approximately 765,000 shares of Preferred Stock, all at $25.00

In May 2017, the Company completed a registered direct offering of one million shares of its common stock at $2.30

per share, raising net proceeds of approximately $2.0 million.

During 2018, the Company issued 1,020,000 shares of Preferred Stock

and received net proceeds of approximately $22.8 million.

During 2019, the Company issued 373,000 shares of Preferred Stock and

received net proceeds, after fees and expenses, of approximately $9.6 million.

February 6, 2019, the Company’s Board of Directors approved an amendment to our Articles of Incorporation to change the

Company’s name to MTBC, Inc.

the employees of our subsidiaries, as of December 2019, the Company employed approximately 2,700 people worldwide on a full-time

We also utilize the services of a small number of part time employees.

In addition, all officers of the Company work on

a full-time basis.

Over the next twelve months, we anticipate increasing our total number of employees only if our revenues increase,

our operating requirements warrant such hiring, or we are hiring for specific functions where we place additional emphasis, such

as marketing and sales.

Growth Strategy

Healthcare IT service industry is highly fragmented, with many local and regional RCM companies serving small medical practices

and hospitals.

We believe that the industry is ripe for consolidation and that we can achieve significant growth organically and

through acquisitions.

We further believe that it is becoming increasingly difficult for traditional RCM companies to meet the

growing technology and business service needs of healthcare providers without a significant investment in an information technology

infrastructure.

Since the Company went public in July 2014, we have acquired substantially all of the assets of 15 RCM companies.

Although the specific arrangements have varied with each transaction, typical arrangements include a discounted price, consideration

which is sometimes tied to revenues from the customer relationships acquired, and structuring the acquisition as an asset purchase

so as to limit our liability.

We typically leverage our technology and our cost-effective offshore team to reduce costs promptly

after the transaction closes, although there will be initial costs associated with the integration of the acquired business with

our existing operations.

believe we can further accelerate organic growth through industry participants, whereby in addition to obtaining referrals, we

utilize them as channel partners to offer integrated solutions to their clients.

We have entered into such arrangements with industry

participants, and from which we began to derive revenue from them starting in mid-2014.

We have developed application interfaces

with numerous EHR systems, together with device and lab integration to support these relationships.

2018, we completed our acquisition of Orion, adding approximately $29 million and $17.8 million of revenue for the years ended

December 31, 2019 and 2018, respectively.

In addition to revenue cycle management, after the Orion acquisition we earned approximately

21% and 19% of our revenue from practice management services for the years ended December 31, 2019 and 2018, respectively, which

represents fees based on our actual costs plus a percentage of the operating profit.

We also earned approximately 2% of our revenue

from group purchasing services for both the years ended December 31, 2019 and 2018.

January 2020, we completed our acquisition of CareCloud, which is our largest acquisition to date.

CareCloud offers software services

for PM, electronic health records and patient experience management on a SaaS basis and also offers RCM services to a portion

of its clients.

December 2019, Healthcare Finance reported that healthcare spending in the U.S.

hit a high-water mark of $3.6 trillion, rising

at a rate of 4.6%.

Office Practice Management Services are provided to medical practices.

In this service model, we provide the medical practice

with appropriate facilities, equipment, supplies, support services and administrative support staff.

We also provide management,

bill-paying and financial advisory services.

solutions enable clients to increase financial and operational performance, streamline clinical workflows, get better insight

through data, and make better business and clinical decisions, resulting in improvement in patient care and collections while

reducing administrative burdens and operating costs.

modernization of the healthcare industry 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

We create elegant, user-friendly applications that solve many of the challenges facing healthcare organizations.

partner with organizations to develop customized, best-in-class solutions to solve their specific challenges while ensuring they

also meet future regulatory and organizational requirements and market demands.

February 2020, Healthcare Finance reported that healthcare spending in the U.S.

is projected to rise to $8.3 trillion by 2040.

They reported that nearly 60% of the total cost goes toward hospitals, physicians and clinical services.

Centers for Medicare and Medicaid Services (“CMS”) also projected that U.S healthcare spending will grow 5.7% annually

on average during years 2020 through 2027, reaching $6.0 trillion by 2027.

CMS also projected that health spending will grow 0.8%

faster than gross domestic product (“GDP”) annually during the years 2020 through 2027;

and as a result, the healthcare

share of GDP is expected to rise from 17.9% in 2017 to 19.4% by 2027.

complex reimbursement processes.

New laws and payer requirements have further complicated insurance reimbursement processes.

For example, Medicare, Medicaid and commercial insurances are increasingly requiring proof of adherence to best practices and

improved patient health outcomes to support full reimbursement.

Moreover, the recent shift to a new generation of insurance codes

has dramatically increased the complexity associated with selecting appropriate procedure and diagnosis codes needed to support

proper claim submission and reimbursement.

toward healthcare information technology.

Since 2011, the federal government has offered financial incentives to eligible

healthcare providers who adopt and meaningfully use EHR technology.

Beginning in 2015, providers who were not meaningfully using

this technology began to incur penalties, which increase over time.

While these incentives and penalties have encouraged many

providers to adopt and meaningfully use EHR software, we believe that most providers are not utilizing an integrated platform

that combines practice management, business intelligence, and revenue cycle management.

The lack of an integrated platform leaves

them ill-equipped to address the multitude of rapidly growing industry challenges and government mandates.

US Healthcare IT industry market has been estimated by Markets & Markets to be approximately $177 billion with its largest

sub-segment RCM to be approximately $87 billion in 2019, growing at a 12% compound annual growth rate (“CAGR”).

North American EHR market has been estimated to be approximately $40 billion, growing at a CAGR of 6% per year.

The Centers for Medicare

and Medicaid Services (“CMS”) also projected that U.S healthcare spending will grow 5.4% annually on average during

years 2021 through 2028, reaching $6.2 trillion by 2028.

CMS also projected that health spending will grow 1.1% faster than gross

domestic product (“GDP”) annually during the years 2019 through 2028;

and as a result, the healthcare share of GDP

is expected to rise from 17.7% in 2018 to 19.7% by 2028.

Additionally,

analysts from by Markets & Markets have estimated the US Healthcare IT industry market to be approximately $177 billion with

its largest sub-segment RCM to be approximately $87 billion in 2019, growing at a 12% compound annual growth rate (“CAGR”).

The North American EHR market has been estimated to be approximately $40 billion, growing at a CAGR of 6% per year.

The Analytics

4 unchanged sentences

flows, provide seamless access to clinical data from EHRs, and streamline the entire revenue cycle management process.

in focus to preventive care.

In an effort to avoid the negative health effects and increased costs associated with undetected

and untreated chronic conditions, most health insurance plans provide co-payment and deductible-free coverage for preventive health

services, such as annual well visits.

Many believe that this shift in focus will, in the long-term, reduce costs and improve patient

Effective preventative health services require access to comprehensive medical records that are readily available to primary

care physicians and other physicians providing preventative healthcare.

Inaccessibility

of critical data.

To thrive in the emerging healthcare landscape, healthcare practices need timely information, such as health

insurance plan eligibility and coverage details, provider performance and productivity data, as well as clinical and reimbursement

benchmarking.

However, we believe that most small and medium size practices do not have access to this type of real-time data,

business intelligence and analytical tools, and thus struggle to efficiently operate their practices and make optimal decisions.

market for practice management, EHR and RCM information solutions and related services is highly competitive, and we expect competition

to increase in the future.

We face competition from other providers of both integrated and stand-alone practice management, EHR

and RCM solutions, including competitors who utilize a web-based platform and providers of locally installed software systems.

Our competitors also include larger healthcare IT companies, such as athenahealth, Inc., Allscripts Healthcare Solutions, Inc.,

eClinicalWorks and Greenway Medical Technologies, Inc.

of our competitors have longer operating histories, greater brand recognition and greater financial, marketing and other resources

We also compete with various regional RCM companies, some of which may continue to consolidate and expand into broader

We expect that competition will continue to increase as a result of incentives provided by various governmental initiatives,

and consolidation in both the information technology and healthcare industries.

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.

Market Opportunity

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.

We believe there are dynamics at play that are significantly increasing market need for our products

and services.

We are constantly monitoring and focused on how our role can address the evolving, day-to-day challenges our clients

face so that they can focus on providing excellent patient care and expanding their businesses.

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.

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.

are continuing legislative and regulatory reform efforts, as well as growing compliance requirements mandated by the federal government

and other governmental agencies.

This ever-evolving regulatory landscape increases the pressure placed on healthcare organizations

to stay abreast of these changes and in compliance.

clients also have to factor in the rising cost of health insurance, changes in health benefit plan design, and the impact that

these factors have had on the increase in patient consumerism.

Patients are seeking lower cost care in response to insurance carriers

shifting more of the cost burden onto patients, causing healthcare organizations to reconsider the full patient experience.

providers now need to think more deeply about patient expectations.

This is especially true as COVID-19 has reshaped the sector

and accelerated its digital transformation.

Strategic-thinking

healthcare organizations across the country are aggressively addressing these new realities and are finding opportunities for

growth and expansion.

We see medical groups across the country and within all specialties and market segments, growing through

consolidation and investing in their businesses at an accelerated pace.

This is also leading clients to focus on delivering emerging

and disruptive care delivery settings.

Much of this change is driving executives and leaders to assess their IT and data strategy,

reevaluating what it means for the future of their organizations.

healthcare industry has seen tremendous change over the past decade.

Our study of the evolving needs of our clients leads us to

believe that there will be a continuing need for our services and products and emerging needs for the products and services that

we are already developing.

These trends will fuel growth over the next several years.

In order for healthcare organizations to

continue to succeed, these new realities require robust solutions and careful execution.

Legacy tools that once powered these

healthcare organizations are insufficient to support their growth and long-term strategies.

Our solutions facilitate the transition

needed by these organizations to drive their future growth.

Our expansive product and services portfolio enables us to displace

competitors and gain market share.

We will continue to pursue this vast addressable market, from the small group ambulatory practices,

to large, complex enterprise medical groups and health systems across a vast array of specialties and care settings which are

focused on providing excellent care to patients across the country.

Business Strategy

objective is to be a market leading provider of integrated, end-to-end SaaS and business services solutions to the healthcare

organizations.

Our mission is to create flexible and comprehensive products and services for our client segments.

we invest significant resources in improving our current offerings and architecting a new platform that will be the backbone of

our long-term strategic initiatives.

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.

achieve our objective and mission, we employ the following strategies:

comprehensive product and services suite to medical practices and hospitals.

We believe that healthcare providers are

in need of an integrated, end-to-end solution and a flexible service delivery model to manage the different facets of their businesses,

from care delivery software, to claim submission, financial reporting, and data analytics.

our solutions.

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 significant resources to research and development to bolster our existing

applications and drive new opportunities for innovation on behalf of our clients.

into new categories / specialties / markets.

We are focused on always reassessing the market landscape, seeking new opportunities

to meet the needs of the clients in our addressable market with our products and services.

This means developing new and exciting

technologies, launching new services, entering new specialties that can leverage our solutions and enable growth for our clients

or expanding into adjacent markets that we may not serve today.

our client base.

We believe the market for our expansive value proposition is underserved, and we will continue to make

investments to capture market share.

We will invest in our sales and marketing activities, partners, and products to expand our

client footprint.

our relationships with existing clients.

We intend to increase the number of SaaS subscription licenses and services purchased

by our current clients as they use our solutions.

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 an

increase in overall revenue per client.

Strengthening

our client community.

We realize that our success is tied directly to our clients’

Accordingly, a substantial

portion of our highly trained and educated workforce is devoted to client service.

significant cost advantages provided by our technology and global workforce.

Our unique business model includes our web-based

software and a cost-effective offshore workforce located primarily in Pakistan and Azad Jammu and Kashmir (together, the “Pakistan

Offices”).

We believe that 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.

acquisitions.

We intend to continue to pursue acquisitions over time.

As with most of our acquisition transactions, our

goal is to retain the acquired clients over the long-term and migrate those clients to our platforms soon after closing and cross-sell

our products and services to this newly acquired client base.

our partner ecosystem.

We offer an integrated partner ecosystem providing healthcare organizations access to a variety

of innovative solutions that complement our suite of products and services.

Our partner ecosystem is a comprehensive collection

of apps, services, specialty solutions, and clinical connections.

This is an integral part of our vision to be the premier cloud-based

platform for healthcare.

Additionally,

given the nature of our large data repository, which is ever-growing as each patient encounter is captured, we will begin utilizing

this data to provide clinical and other process insights that will drive improvements in day-to-day workflows of our clients.

We may build or partner for some or all of these solutions as we continue to broaden our product set.

In the longer term, we also

envision how this will allow for frictionless flow of information, care-coordination capabilities between medical providers and

their patients supplanting what is today a very archaic paper, phone and fax-based infrastructure still deployed at scale in the

solutions are designed to systematically drive clinical quality and patient outcomes, while streamlining staff and provider workflows

and reimbursements, to support different settings of care and healthcare models.

Our product and service strategy is simple:

build products and deliver solutions that meet clients where their needs are.

product and services portfolio is organized across four critical areas:

Software Products - the core systems that power medical practices across clinical, financial and patient workflows, including

our Practice Management systems, Electronic Health Records solutions and our Patient Experience Management applications.

& Business Services - software-enabled revenue cycle management offerings and other business services, such as medical

coding, credentialing, authorization management and the like.

These solutions are geared to drive patient and insurance collections

across the reimbursement life cycle.

Apps and App Ecosystem Partners - additional proprietary software products, including our business intelligence platform,

robotic process automation bots, telemedicine applications, mobile apps and more of those applications that consume our APIs or

other interfaces built by the market at large.

Workforce (MTBC Force) - leveraging our unique resources, and in turn selling this capacity at scale directly to partners

and clients at a reduced rate as compared to other competitors in the same space.

These on-demand workforce capabilities include

offshore engineering capacity for development and offshore revenue cycle management operations personnel.

categorization approach allows us to be both methodical and nimble across medical specialties and market segments while providing

us a framework to create solution sets for the market today and, more importantly, for what our clients will need tomorrow.

believe that our fully integrated solutions uniquely address the challenges in the industry.

Our solutions dramatically simplify

Our solutions are designed to simplify

the complexities inherent in the claim reimbursement process and thereby deliver objectively superior results, such as reduced

claim denial rates, improved customer days in accounts receivable, reduced patient no-shows, increased well visit encounters and

reimbursement.

Our solutions empower our customers with the real-time data they need to be efficient and make better decisions,

such as real-time insurance eligibility and deductible details, provider productivity details and payer benchmarking.

claim denial rates, improved client days in accounts receivable, reduced patient no-shows, increased well visit encounters and

reimbursements.

fully integrated suite of technology and business service solutions is designed to enable healthcare practices to thrive in the

midst of a rapidly changing environment in which managing reimbursement, clinical workflows and day-to-day administrative tasks

are becoming increasingly complex, costly and time-consuming.

midst of a rapidly changing environment in which managing reimbursements, clinical workflows and day-to-day administrative tasks

is becoming increasingly complex, costly and time-consuming.

Moreover, in most cases the standard fee for our complete, integrated,

end-to-end solution is based upon a percentage of a practice’s healthcare-related revenues, with a monthly minimum fee,

plus a nominal one-time setup fee, and is among the lowest in the industry.

Business Strategy

objective is to become the leading provider of integrated, end-to-end SaaS and business service solutions to healthcare providers

practicing in an ambulatory setting.

To achieve this objective, we employ the following strategies:

comprehensive practice management, electronic health records, revenue cycle management and mobile health solutions to independent

healthcare practices and hospitals .

We believe that providers are in need of an integrated, end-to-end solution,

such as the solution that MTBC provides, to manage the different facets of their businesses, from clinical documentation to

claim submission and financial reporting.

exceptional customer service .

We realize that our success is tied directly to our customers’

Accordingly, a substantial portion of our highly trained and educated workforce is devoted to customer service.

significant cost advantages provided by our technology and skilled offshore workforce .

Our unique business

model includes our web-based software and a cost-effective offshore workforce primarily based in Pakistan.

We believe that

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.

strategic acquisitions .

Approximately 58% of our current practices and 78% of the current year’s revenue

were obtained through strategic transactions with revenue cycle management companies.

With most of our acquisition transactions,

our goal is to retain the acquired customers over the long-term and migrate those customers to our platform soon after closing.

Service Offerings

offer fully-integrated, cloud-based SaaS solutions and business services designed for healthcare providers.

Our products and services

offer healthcare providers a unified solution designed to meet the healthcare industry’s demand for the delivery of cost-efficient,

quality care with measurable outcomes.

The four primary components of our proprietary web-based suite of services are:

management applications, (ii) a certified electronic health records solution, (iii) revenue cycle management services, and (iv)

mobile health applications.

We also offer group purchasing services.

PracticePro ®

which we have offered for several years, provides our clients with a seamlessly integrated, end-to-end solution.

TalkEHR ®

our proprietary cloud-based EHR, is also available to customers as a standalone product.

We regularly update our software platform

with the goal of staying on the leading edge of industry developments, payer reimbursements trends and new regulations.

of January 8, 2020, we now offer CareCloud’s widely acclaimed platform to customers, both on a SaaS basis and bundled with

RCM services.

This platform offers additional capabilities beyond those available in talkEHR ®

The Company anticipates

integrating the CareCloud platform and its proprietary platform in the coming years.

practice management application

proprietary, cloud-based practice management application automates the labor-intensive workflow of a medical office in a unified

and streamlined SaaS platform.

The various functions of the platform collectively support the entire workflow of the day-to-day

operations of a medical office in an intuitive and user-friendly format.

For example, our platform provides office staff with

real-time insurance details to allow them to more efficiently collect patient payments;

its automated appointment reminders reduce

patient no-show rates, and its scheduling functionality results in increased reimbursable patient well visit appointments.

individual and secure login to our web-based platform gives physicians, other healthcare providers and staff members’

to a vast array of real time practice management data which they can access at the office or from any other location where they

can access the Internet.

Users can customize the “Practice Dashboard”

to display only the most useful and relevant

information needed to carry out their particular functions.

We believe that this streamlined and centralized automated workflow

allows providers to focus on delivering quality patient care rather than office administration.

health records

our cloud-based EHR solution and CareCloud’s platform have received ONC-ACB Health Information Technology certification.

Moreover, in a previous study, KLAS, a leading independent industry assessor of healthcare information technology products, issued

its annual electronic health records ranking and CareCloud’s EHR placed first in our target market of one to ten providers,

outperforming most leading electronic health records.

Our and CareCloud’s EHR allows a provider to view all patient information

in one online location.

Providers can track patients from their initial appointments;

chart clinical data, history, and other

personal information;

enter and submit claims for medical services;

and review and respond to queries for additional information

regarding the billing process.

Additionally, the EHR software delivers a robust document management system to enable providers

to transition to paperless environments.

The document management function makes available electronic connectivity between practitioners

and patients, thereby streamlining patient care coordination and communications.

In 2015, we introduced a tablet-based EHR, leveraging

our web-based platform in a form that many providers find more convenient.

During the third quarter of 2017, the Company introduced

talkEHR™, a voice enabled EHR solution.

cycle management and other technology-driven business services

proprietary revenue cycle management offering is designed to improve the medical billing reimbursement process, allowing healthcare

providers to accelerate and increase collections, reduce errors in submission and streamline workflow to free up practitioners

to focus on patient care.

Customers using PracticePro®

will generally see higher claims acceptance and resolution, and faster

Our revenue cycle management service employs a proprietary rules-based system designed and constantly updated by

our knowledgeable workforce, who screens and scrubs claims prior to submission for payment.

health solutions

functionality of our cloud-based platform is extended to mobile devices through our integrated suite of mobile health applications.

These mobile health applications include physician end-user tools that support, among other things, electronic prescribing, the

capture of billing charges in the current medical coding formats, and the creation and secure transfer of clinical audio notes

that are converted into text and billing charges.

In 2015, we introduced an ICD-10 mHealth app for iOS and Android, which has

emerged as the most popular ICD-10 app among U.S.

healthcare providers.

We also offer iCheckIn, a patient check-in app for iOS

and Android-based tablet devices.

Our patient applications allow patients to access their medical information, securely communicate

with their doctors’

office, schedule appointments, request prescription refills, pay balances and check-in for office appointments.

2018 MTBC offers comprehensive practice management services to physicians where we provide the medical practice with appropriate

facilities, equipment, supplies, support services and administrative support staff.

We also provide management, bill-paying and

financial advisory services.

The Company’s fees are based on the operating results of the practice.

experience solution:

to the January 2020 acquisition of CareCloud, we now offer their product called Breeze.

This product helps patients manage

every interaction with a practice including check-in, appointments, messages, intake forms and payments on many different electronic

devices thus integrating the core patient activities coordinated by the front office into one seamless digital workflow.

Telemedicine:

December 2019, MTBC introduced a Telemedicine capability which will allow our physician customers to conduct remote telemedicine

appointments with their patients and bill for these appointments where permitted.

We will offer telemedicine services as part

of an integrated suite of services available to our physician customers using our platform.

We are working towards offering telemedicine

on a standalone basis as well.

plus a nominal one-time setup fee, and is competitively priced.

Business Services

Purchasing Organization.

MTBC’s group purchasing organization (GPO) is a trusted partner to more than 4,000 physician

and mid-level provider members.

Our GPO includes our negotiation of discounts with pharmaceutical manufacturers, along with other

products and services that can benefit a medical practice.

and Development

research and development focus is on enhancing and expanding our service offerings while ensuring all offerings meet regulatory

compliance standards.

We continually update our software and technology infrastructures, regularly execute releases of new software

enhancements and adapt our offerings to better serve our medical group and health system clients confronting rapid changes in

the healthcare market space.

agile software development life cycle methodology is designed to ensure that each software release is properly designed, built,

tested, and released.

Our product, engineering, quality assurance and DevOps 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 labs and prescriptions, or specific application requirements.

also employ product management, user experience and product marketing personnel who work continually on improvements to our products

and services design.

estimate that as of December 31, 2020, we provided 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.

addition, we served approximately 200 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.

service clients ranging from small practices to large groups and health systems.

Our clients span from the single doctor independent

medical practice to a large 2,200 provider of physical, occupational and speech therapy services organization located across multiple

states, and a large major academic medical institution with a service area covering millions of patients.

and Marketing

have developed sales and marketing capabilities aimed at driving growth in our client base, including small medical practices,

large groups, and health systems.

We expect to expand by selling our complete suite of services to new clients and up-selling

additional services into our existing client base.

We have a direct sales force, which we augment through our MTBC Force deals

and partner initiatives and marketing campaigns.

Growth Levers

believe that we are in a great position to grow by executing across several growth vectors:

Growth and Direct Sales.

have organized our sales force into different segments for sales of all of our products and services in order to best address

our clients’

needs and our markets.

With this design, our sales team can address a client’s specific needs, whether

a new client is seeking our products or services for the first time, or a current client in need of additional solutions.

marketing team operates in support of our sales force and provides specialized demand generation capabilities for product marketing

and sales efforts.

Our sales approach is consultative in nature for most of our offerings, which generally includes needs analysis

for prospective clients, crafting service proposals, and negotiating contracts that culminates in the commencement of services.

Partnerships.

In addition to our direct sales force, we maintain business relationships with third parties that utilize, promote or

support our sales or services within specific industries or geographic regions.

Some of these partners are customers through MTBC

Force and others are more traditional channel partners who help promote our solutions.

We believe we can further accelerate organic

growth through industry participants, whereby we utilize them as channel partners to offer integrated solutions to their clients.

We have entered into such arrangements with industry participants, and from which we began to derive revenue from them starting

We have developed application interfaces with numerous EHR systems, together with device and lab integration to support

these relationships.

Acquisitions.

The Healthcare IT service industry is highly fragmented, with many local and regional RCM companies serving small medical

practices and hospitals.

We believe that the industry is ripe for consolidation and that we can achieve significant growth through

acquisitions.

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.

Since the Company went public in July 2014, we have completed 16 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.

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.

market for practice management, EHR and RCM solutions and related services is highly competitive, and we expect competition to

increase in the future.

We face competition from other providers of both integrated and stand-alone practice management, EHR and

RCM solutions, including competitors who utilize a web-based platform and providers of locally installed software systems.

of our competitors have longer operating histories, greater brand recognition and greater financial, marketing.

We also compete

with various regional RCM companies, some of which may continue to consolidate and expand into broader markets.

We expect that

competition will continue to increase as a result of incentives provided by various governmental initiatives, and consolidation

in both the information technology and healthcare industries.

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.

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 600 experienced health industry experts onshore.

These experts are supported by our highly

educated and specialized offshore workforce of approximately 3,100 team members at labor costs that we believe are approximately

one-tenth the cost of comparable U.S.

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 profitable operations of MTBC.

the employees of our subsidiaries, as of December 2020, the Company employed approximately 3,700 people worldwide on a full-time

We also utilize the services of a small number of part time employees.

In addition, all officers of the Company work on

a full-time basis.

Over the next twelve months, we anticipate increasing our total number of employees only if our revenues increase,

our operating requirements warrant such hiring, or we are hiring for specific functions where we place additional emphasis, such

as marketing and sales.

Rights of Our Directors, Executive Officers, and Principal Stockholders

17 unchanged sentences

were an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act until December

We note that, as a smaller reporting company and a non-accelerated filer, we may take advantage of specified reduced

reporting requirements and are relieved of certain other significant requirements that are otherwise generally applicable to public

companies, including not being required to comply with the auditor attestation requirements

of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, reduced disclosure obligations regarding executive compensation

in our Annual Report, periodic reports and proxy statements and providing only two years of audited financial statements in our

Annual Report and our periodic reports .

As a smaller reporting company and a non-accelerated filer, we may take advantage of specified reduced reporting requirements

and are relieved of certain other significant requirements that are otherwise generally applicable to public companies, including

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended,

reduced disclosure obligations regarding executive compensation in our Annual Report, periodic reports and proxy statements and

providing only two years of audited financial statements in our Annual Report and our periodic reports.

You Can Find More Information

12 unchanged sentences

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What changed 10-K

Item 1. Business