What changed in this filing

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Item 1A. Risk Factors

2021-02-25 compared with 2020-02-28 · 268 added, 225 removed, 1006 unchanged (33% of the section changed)

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strategy is to expand through organic growth, and through synergistic, accretive acquisitions of healthcare IT companies.

2006, we have acquired the assets or businesses of approximately 20 RCM companies.

The majority of these transactions have occurred

since we went public in July 2014.

Our future acquisitions may require greater than anticipated investment of operational and

financial resources as we seek to migrate customers of these companies to our solutions.

Acquisitions also require the integration

of different software and services, assimilation of new employees, diversion of management and IT resources, and increases in

administrative costs.

Acquisitions may also require additional costs associated with any debt or equity financings undertaken

to pay for such acquisitions.

2006, we have completed 26 transactions acquiring the assets or businesses of RCM, HCIT, and related companies.

The majority of

these transactions have occurred since we went public in July 2014.

Our future acquisitions may require greater than anticipated

investment of operational and financial resources as we seek to migrate customers of these companies to our solutions.

also require the integration of different software and services, assimilation of new employees, diversion of management and IT

resources, and increases in administrative costs.

Acquisitions may also require additional costs associated with any debt or equity

financings undertaken to pay for such acquisitions.

We cannot assure you that any acquisition we undertake will be successful.

Future growth will also

place additional demands on our customer support, sales, and marketing resources, and may require us to hire and train additional

Future growth will also place additional demands on our customer support, sales, and marketing resources, and may require us to

hire and train additional employees.

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.

The failure to manage our growth effectively will materially and adversely affect our business.

may be unable to retain customers following their acquisition, which may result in a decrease in our revenues and operating results.

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experienced professionals when appropriate.

Through the CareCloud transaction, we acquired its software technology

and related business, of which certain elements are currently subject to a civil investigation to determine compliance with certain

federal regulatory requirements.

The Company will cooperate with the inquiry as CareCloud has historically done.

This element was

considered as part of the transaction and we believe that the continued investigation will have no material impact on our financial

statements and that we have properly protected ourselves from liability through the negotiated structure of the transaction.

the outcome of matters such as this are not necessarily predictable.

In the event of an unfavorable outcome, our business, reputation,

and financial condition could be materially and adversely affected.

the CareCloud transaction, we acquired its software technology and related business, of which certain elements have been subject

to a civil investigation since July of 2018 to determine compliance with certain federal regulatory requirements pre-acquisition.

The Company has continued to cooperate with the inquiry as CareCloud has historically done.

This element was considered as part

of the transaction and we believe that the continued investigation will have no material impact on our consolidated financial

statements and that we have properly protected ourselves from liability through the negotiated structure of the transaction, including

a portion of the consideration held in escrow.

The Company currently believes that any potential settlement will be substantially

within the range covered by the escrowed funds.

However, the outcome cannot yet be determined.

In the event of an unfavorable

outcome, our business, reputation, and financial condition could be materially and adversely affected.

may be unable to implement our strategy of acquiring additional companies.

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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), we may have varying cost saving and/or cross-selling opportunities with the acquired business.

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.

on the type of businesses we acquire (e.g., RCM, practice management, EHR), we may have varying cost saving and/or cross-selling

opportunities with the acquired business.

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.

completing any future acquisitions, we will rely upon the representations, warranties and indemnities made by the sellers with

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Related to Our Business

business, financial condition, results of operations and growth could be harmed by the effects of the COVID-19 pandemic.

are subject to risks related to the public health crises such as the global pandemic associated with the coronavirus (COVID-19).

In December 2019, a novel strain of coronavirus, SARS-CoV-2, was reported to have surfaced in Wuhan, China.

Since then, SARS-CoV-2,

and the resulting disease COVID-19, has spread to most countries, and all 50 states within the United States.

In March 2020, the

World Health Organization declared the COVID-19 outbreak a pandemic.

Further, the President of the United States declared the

COVID-19 pandemic a national emergency, invoking powers under the Stafford Act, the legislation that directs federal emergency

disaster response, and under the Defense Production Act, the legislation that facilitates the production of goods and services

necessary for national security and for other purposes.

Numerous governmental jurisdictions, including the State of New Jersey

where we maintain our principal executive offices, and those in which many of our U.S.

and international offices are based, have

imposed, and others in the future may impose, “shelter-in-place”

orders, quarantines, executive orders and similar

government orders and restrictions for their residents to control the spread of COVID-19.

Most states and the federal government,

including the State of New Jersey, together with foreign jurisdictions in which we have operations centers, have declared a state

of emergency related to the spread of COVID-19.

Such orders or restrictions, and the perception that such orders or restrictions

could occur, have resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions

and cancellation of events, among other effects, thereby negatively impacting our customers, employees, and offices, among others.

We may experience further limitations on employee resources in the future, because of sickness of employees or their families.

organizations around the world, including our health care provider customers, have faced and will continue to face, substantial

challenges in treating patients with COVID-19, such as the diversion of staff and resources from ordinary functions to the treatment

of COVID-19, supply, resource and capital shortages and overburdening of staff and resource capacity.

In the United States, governmental

authorities have also recommended, and in certain cases required, that elective, specialty and other procedures and appointments,

including certain primary care services, be suspended or canceled to avoid non-essential patient exposure to medical environments

and potential infection with COVID-19 and to focus limited resources and personnel capacity toward the treatment of COVID-19.

These measures and challenges will likely continue for the duration of the pandemic, which is uncertain, and will disproportionately

harm the results of operations, liquidity and financial condition of these health care organizations and our health care provider

As a result, our health care provider customers may seek contractual accommodations from us in the future.

To the extent

such health care provider customers experience challenges and difficulties, it will adversely affect our business operation and

results of operations.

We note, for example, that approximately 65% of our revenue is directly tied to the cash collected by our

health care provider customers, which means that our short-term revenue has and may in the future decline as less patients visit

their doctors during periods of social distancing.

Further, a recession or prolonged economic contraction as a result of the COVID-19

pandemic could also harm the business and results of operations of our enterprise customers, resulting in potential business closures,

layoffs of employees and a significant increase in unemployment in the United States and elsewhere which may continue even after

the pandemic.

The occurrence of any such events may lead to reduced income for customers and reduced size of workforces, which

could reduce our revenue and harm our business, financial condition and results of operations.

widespread COVID-19 pandemic has resulted in, and may continue to result in, significant volatility and uncertainty in U.S.

international financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.

In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the

value of our common stock and Preferred Stock.

given the dislocation and government-imposed travel related limitations as a consequence of the COVID-19 pandemic, our ability

to complete acquisitions in the near-term may be delayed.

Future acquisitions may be subject to difficulties in evaluating potential

acquisition targets as a result of the inability to accurately predict the duration or long-term economic and business consequences

resulting from the COVID-19 pandemic.

addition, any difficulties we may experience in connection with the integration of CareCloud or Meridian could delay or prevent

us from realizing such expected benefits and enhancing our business, and our business, financial condition and results of operation

could be materially and adversely impacted.

While we are working diligently to accelerate integration activities, the employee

disruptions and communication challenges created by the COVID-19 pandemic present particular challenges to our integration of

CareCloud and Meridian and could make it difficult to effectively and timely complete our integration goals.

global outbreak of COVID-19 continues to rapidly evolve.

We have taken steps intended to mitigate the effects of the pandemic

and to protect our global workforce including, but not limited to:

moving a significant portion of our workforce to remote operations

when and as needed, enacting social distancing and hygiene guidelines set forth by the Centers for Disease Control and Prevention

and World Health Organization at our offices, and discontinuing company travel and events, among others.

Although we believe we

have taken the appropriate actions, we cannot guarantee that these measures will mitigate all or any negative effects of the pandemic.

The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.

at this time precisely predict what effects the COVID-19 outbreak will have on our business, results of operations and financial

condition, including the uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the

duration of the pandemic, the availability of vaccinations, and the governmental responses to the pandemic.

However, we will continue

to monitor the COVID-19 situation closely and are committed to continuing to make appropriate changes as and when needed.

operate in a highly competitive industry, and our competitors may be able to compete more efficiently or evolve more rapidly than

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majority of our operations, including the development and maintenance of our web-based platform, our customer support services

and medical billing activities, are performed by our highly educated workforce of approximately 2,400 employees in Pakistan and

Approximately 98% of our offshore employees are in Pakistan and our remaining employees are located at our smaller

offshore operation center in Sri Lanka.

The performance of our operations in Pakistan, and our ability to maintain our offshore

offices, is an essential element of our business model, as the labor costs in Pakistan are substantially lower than the cost of

comparable labor in India, the United States and other countries, and allows us to competitively price our products and services.

Our competitive advantage will be greatly diminished and may disappear altogether if our operations in Pakistan are negatively

and Sri Lanka have experienced, and continue to experience, political and social unrest, war and acts of terrorism.

Our operations

in our offshore locations may be negatively impacted by these and a number of other factors, including a failing power grid and

infrastructure, vandalism, currency fluctuations, cost of labor and supplies, and changes in local law as well as laws within

the United States relating to these countries.

Client mandates or preferences for on-shore service providers may also adversely

impact our business model.

Our operations in Pakistan and Sri Lanka may also be affected by trade restrictions, such as tariffs

or other trade controls.

If we are unable to continue to leverage the skills and experience of our highly educated workforce,

particularly in Pakistan, we may be unable to provide our products and services at attractive prices, and our business would be

materially and negatively impacted or discontinued.

believe that the labor costs in Pakistan and Sri Lanka are approximately 10% of the cost of comparably educated and skilled workers

If there were potential disruptions in any of these locations, they could have a negative impact on our business.

changes in visa rules could prevent our offshore employees from entering the United States, which could decrease our efficiency.

the ordinary course of business, we bring skilled employees from our offshore subsidiaries to the U.S.

to serve as liaisons on

projects and to expand the respective employees’

understanding of both the U.S.

healthcare industry and the needs and expectations

of our customers.

These visits equip them to better understand and support our business objectives.

While the current administration’s

actions up to this point have not had an impact on us, we cannot predict whether the administration may in the future take actions

that would prevent non-U.S.

employees from visiting the U.S.

If such restrictions were implemented in the future, it may become

more difficult or expensive for us to educate and equip the employees of our foreign subsidiaries to support our business needs.

We may also have difficulty in finding employees and contractors in the U.S that can replace the functions now performed by our

offshore employees that we bring over to the U.S., which could negatively impact our business.

and medical billing activities, are performed by our highly educated workforce of approximately 3,100 employees in our Pakistan

Offices and Sri Lanka.

Approximately 98% of our offshore employees are in our Pakistan offices and our remaining employees are

located at our smaller offshore operation center in Sri Lanka.

The performance of our operations in our Pakistan Offices, and

our ability to maintain our offshore offices, is an essential element of our business model, as the labor costs where our Pakistan

Offices are located are substantially lower than the cost of comparable labor in India, the United States and other countries,

and allows us to competitively price our products and services.

Our competitive advantage will be greatly diminished and may disappear

altogether if our operations in our Pakistan Offices are negatively impacted.

and Sri Lanka have in the past experienced, and could in the future continue to experience periods of political and social unrest,

war and acts of terrorism.

Our operations in our offshore locations may be negatively impacted by these and a number of other

factors, including currency fluctuations, cost of labor and supplies, power grid and infrastructure issues, vandalism, and changes

in local law, as well as laws within the United States relating to these countries.

Client mandates or preferences for onshore

service providers may also adversely impact our business model.

Our operations in our Pakistan Offices and Sri Lanka may also

be affected by trade restrictions, such as tariffs or other trade controls.

If we are unable to continue to leverage the skills

and experience of our highly educated workforce, particularly in our Pakistan Offices, we may be unable to provide our products

and services at attractive prices, and our business would be materially and negatively impacted or discontinued.

believe that the labor costs in our Pakistan Offices and Sri Lanka are approximately 10% 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.

offshore operations expose us to additional business and financial risks which could adversely affect us and subject us to civil

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our current pricing structure, which would result in a decrease in our revenues and market share.

current administration and some members of Congress have been critical of the Affordable Care Act (“ACA”) and have

taken steps toward materially revising or even repealing it.

lawmakers have been critical of the Affordable Care Act (“ACA”) and have taken steps toward materially revising or

even repealing it.

On December 14, 2018, a federal judge in Texas ruled the ACA unconstitutional.

The decision declared that key parts of the legislation were inconsistent with the Constitution.

The decision is still making

its way through the courts and has not made an impact on the exchanges which are still open.

As of now, there has been no impact

to the coverage plans and no final ruling.

The ACA included specific reforms for the individual and small group marketplace, including

an expansion of Medicaid.

We can give no assurances that healthcare reform initiatives, if passed, will not have a material adverse

impact on our operational results or the manner in which we operate our business.

The decision declared that key

parts of the legislation were inconsistent with the Constitution.

The decision is still making its way through the courts and

has not made an impact on the exchanges which are still open.

As of now, there has been no impact to the coverage plans and no

final ruling.

The ACA included specific reforms for the individual and small group marketplace, including an expansion of Medicaid.

We can give no assurances that healthcare reform initiatives, if passed, will not have a material adverse impact on our operational

results or the manner in which we operate our business.

providers do not purchase our products and services or delay in choosing our products or services, we may not be able to grow

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by third-party payers of medical claims to reduce reimbursement;

regulations and government or other payer actions or inaction reducing or delaying reimbursement;

regulations and government or other payer actions or inactions reducing or delaying reimbursement;

of customer access to our system;

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have incurred operating losses and net losses, and we may not be able to achieve or subsequently maintain profitability in the

incurred net losses of approximately $872,000 and $2.1 million for the years ended December 31, 2019 and 2018, respectively.

incurred net losses of approximately $8.8 million and $872,000 for the years ended December 31, 2020 and 2019, respectively.

net loss for the years ended December 31, 2020 and 2019, includes approximately $8.1 million and $1.9 million of non-cash amortization

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results of operations may decrease.

rely on the administrative fees we receive from our GPO suppliers, and the failure to maintain contracts with these GPO suppliers

could have a generally negative effect on our relationships with our members and could affect our business, financial condition

and results of operations.

derive some of our revenue from the administrative fees that we receive from our GPO suppliers.

We maintain contractual relationships

with these suppliers which provide products and services to our members at reduced costs and which pay us administrative fees

based on the dollars spent by our members for such products and services.

Our contracts with these GPO suppliers generally may

be terminated upon 90 days’

A termination of any relationship or agreement with a GPO supplier would result in the

loss of administrative fees.

In addition, if we lose a relationship with a GPO supplier, we may not be able to negotiate similar

arrangements for our members and our ability to maintain our member agreements may be impacted.

a result of our variable sales and implementation cycles, we may be unable to recognize revenue from prospective customers on

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sales and similar taxes.

If one or more taxing authorities determines that taxes should have, but have not, been paid with respect

If one or more taxing authorities determine that taxes should have, but have not, been paid with respect

to our products or services, we may be liable for past taxes in addition to taxes going forward.

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Haq is instrumental in managing

our offshore operations in Pakistan and coordinating those operations with our U.S.

our offshore operations in our Pakistan Offices and coordinating those operations with our U.S.

The loss of Mr.

Haq, who would

be particularly difficult to replace, could negatively impact our ability to effectively manage our cost-effective workforce in

Pakistan, which enables us to provide our products and solutions at attractive prices.

Our future success also depends on the

continued contributions of our other executive officers and certain key employees, each of whom may be difficult to replace, and

upon our ability to attract and retain additional management personnel.

Competition for such personnel is intense, and we compete

for qualified personnel with other employers.

We may face difficulty identifying and hiring qualified personnel at compensation

levels consistent with our existing compensation and salary structure.

If we fail to retain our employees, we could incur significant

expenses in hiring, integrating and training their replacements, and the quality of our services and our ability to serve our

customers could diminish, resulting in a material adverse effect on our business.

who would be particularly difficult to replace, could negatively impact our ability to effectively manage our cost-effective workforce

in our Pakistan Offices, which enables us to provide our products and solutions at attractive prices.

Our future success also

depends on the continued contributions of our other executive officers and certain key employees, each of whom may be difficult

to replace, and upon our ability to attract and retain additional management personnel.

Competition for such personnel is intense,

and we compete for qualified personnel with other employers.

We may face difficulty identifying and hiring qualified personnel

at compensation levels consistent with our existing compensation and salary structure.

If we fail to retain our employees, we

could incur significant expenses in hiring, integrating and training their replacements, and the quality of our services and our

ability to serve our customers could diminish, resulting in a material adverse effect on our business.

may be unable to adequately establish, protect or enforce our patents, trade secrets and other intellectual property rights.

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the trading price of our stock.

proprietary software or service delivery platform (including the platform we acquired through CareCloud) 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.

proprietary software or service delivery platform (including the platforms we acquired through CareCloud and Meridian) 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.

may encounter human or technical obstacles that prevent our proprietary or acquired applications from operating properly.

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that are owned and controlled by third-party contractors in India and elsewhere.

If our security measures are breached or fail

as a result of third-party action, acts of terror, social unrest, employee error, malfeasance or for any other reasons, someone

may be able to obtain unauthorized access to customer or patient data.

Improper activities by third-parties, advances in computer

and software capabilities and encryption technology, new tools and discoveries and other events or developments may facilitate

or result in a compromise or breach of our security systems.

Our security measures may not be effective in preventing unauthorized

access to the customer and patient data stored on our servers.

If a breach of our security occurs, we could face damages for contract

breach, penalties for violation of applicable laws or regulations, possible lawsuits by individuals affected by the breach and

significant remediation costs and efforts to prevent future occurrences.

In addition, whether there is an actual or a perceived

breach of our security, the market perception of the effectiveness of our security measures could be harmed and we could lose

current or potential customers.

Increasingly, threat actors are targeting the

healthcare industry with ransomware and other malicious software.

If our security measures are breached or fail as a result of

third-party action, acts of terror, social unrest, employee error, malfeasance or for any other reasons, someone may be able to

obtain unauthorized access to customer or patient data.

Improper activities by third parties, advances in computer and software

capabilities and encryption technology, new tools and discoveries and other events or developments may facilitate or result in

a compromise or breach of our security systems.

Our security measures may not be effective in preventing unauthorized access to

the customer and patient data stored on our servers.

If a breach of our security occurs, we could face damages for contract breach,

penalties for violation of applicable laws or regulations, possible lawsuits by individuals affected by the breach and significant

remediation costs and efforts to prevent future occurrences.

In addition, whether there is an actual or a perceived breach of

our security, the market perception of the effectiveness of our security measures could be harmed and we could lose current or

potential customers.

products and services are required to meet the interoperability standards, which could require us to incur substantial additional

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data, including patient

health records, reside on our own servers located in the U.S., Pakistan and Sri Lanka.

health records, reside on our own servers located in the U.S., Pakistan Offices and Sri Lanka.

Although we conduct business continuity

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which could adversely affect our business.

technological change in the telehealth industry presents us with significant risks and challenges .

telehealth market is characterized by rapid technological change, changing consumer requirements, short product lifecycles and

evolving industry standards.

Our success will depend on our ability to enhance our solution with next-generation technologies

and to develop or to acquire and market new services to access new consumer populations.

There is no guarantee that we will possess

the resources, either financial or personnel, for the research, design and development of new applications or services, or that

we will be able to utilize these resources successfully and avoid technological or market obsolescence.

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.

healthcare industry is heavily regulated.

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result in adverse publicity and negatively affect our business.

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.

addition, a claim including products or services resulting from a violation of AKS constitutes a violation of the federal False

Claims Act (“FCA”).

If we are determined to have violated the FCA, we may be required to pay up to three times the

actual damages sustained by the government, plus mandatory civil penalties for each separate false claim.

If we are found to be

in violation of the FCA, AKS, ACA, or any other applicable state or any federal fraud and abuse laws, whether by our current practices

or for the past practices of a company we acquire, we may be subject to substantial civil damages and criminal penalties and fines

that could have a material adverse impact on our business.

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.

In addition, a claim including products or services resulting

from a violation of AKS constitutes a violation of the federal False Claims Act (“FCA”).

If we are determined to have

violated the FCA, we may be required to pay up to three times the actual damages sustained by the government, plus mandatory civil

penalties for each separate false claim.

If we are found to be in violation of the FCA, AKS, ACA, or any other applicable state

or any federal fraud and abuse laws, whether by our current practices or for the past practices of a company we acquire, we may

be subject to substantial civil damages and criminal penalties and fines that could have a material adverse impact on our business.

addition, federal and state legislatures and agencies periodically consider proposals to revise aspects of the healthcare industry

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or our operating costs.

we do not maintain the certification of our EHR solution pursuant to the HITECH Act, our business, financial condition and results

our ability to provide our telehealth services in each state is dependent upon a state’s treatment of telehealth and emerging

technologies (such as digital health services), which are subject to changing political, regulatory and other influences.

states have laws that limit or restrict the practice of telehealth, such as laws that require a provider to be licensed and/or

physically located in the same state where the patient is located.

For example, California, New York, Massachusetts, Oregon and

Washington, D.C., among others, are not members of the Interstate Medical Licensure Compact, which streamlines the process by

which physicians licensed in one state are able to practice in other participating states.

Failure to comply with these laws could

result in denials of reimbursement for services (to the extent such services are billed), recoupments of prior payments, professional

discipline for providers or civil or criminal penalties.

we do not maintain the certification of our EHR solutions pursuant to the HITECH Act, our business, financial condition and results

of operations will be adversely affected.

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Such reforms may also make introduction of new products and service

more costly or more time-consuming than we currently anticipate.

costlier or more time-consuming than we currently anticipate.

These changes may also prevent our introduction of new products

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and pricing for our products and services;

encounter volumes of our customer base;

or commercial healthcare reimbursement policies;

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Moreover, these rules and regulations have increased and will continue to increase our legal, accounting,

and financial compliance costs and have made and will continue to make some activities more time-consuming and costly.

and financial compliance costs and have made and will continue to make some activities more time-consuming and costlier.

these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance,

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the Sarbanes-Oxley Act, or Section 404.

As an “emerging growth company”

in previous years, we elected to avail ourselves

of the exemption from the requirement that our independent registered public accounting firm attest to the effectiveness of our

internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act.

However, we may no longer avail ourselves

of this exemption as we ceased to be an “emerging growth company”

and are now a “smaller reporting company.”

Although we are still currently exempt from the requirement to have our independent registered public accounting firm attest to

the effectiveness of our internal control over financial reporting, when our independent registered public accounting firm is

required to undertake such an assessment, the cost of our compliance with Section 404 will correspondingly increase.

Our compliance

with applicable provisions of Section 404 requires that we incur substantial accounting expense and expend significant management

time on compliance-related issues and stay in compliance with reporting requirements.

Moreover, if we are not able to stay in

compliance with the requirements of Section 404 applicable to us in a timely manner, or if we or our independent registered public

accounting firm identifies any deficiency(ies) in our internal control over financial reporting that are deemed to be material

weakness(es), the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or

other regulatory authorities, which would require additional financial and management resources.

As a “smaller reporting company”

in 2020 and previous years, we elected to

avail ourselves of the exemption from the requirement that our independent registered public accounting firm attest to the effectiveness

of our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act.

Although we are still currently

exempt from the requirement to have our independent registered public accounting firm attest to the effectiveness of our internal

control over financial reporting, when our independent registered public accounting firm is required to undertake such an assessment,

the cost of our compliance with Section 404 will correspondingly increase.

Our compliance with applicable provisions of Section

404 requires that we incur substantial accounting expense and expend significant management time on compliance-related issues

and stay in compliance with reporting requirements.

Moreover, if we are not able to stay in compliance with the requirements of

Section 404 applicable to us in a timely manner, or if we or our independent registered public accounting firm identifies any

deficiency(ies) in our internal control over financial reporting that are deemed to be material weakness(es), the market price

of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities,

which would require additional financial and management resources.

investor perceptions of our Company may suffer if deficiencies are found, and this could cause a decline in the market price of

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remained an “emerging growth company”

until December 31 of 2019, under the Securities and Exchange Act of 1934, as

amended, or the Exchange Act.

until December 31, 2019 under the Securities and Exchange Act of 1934, as amended,

or the Exchange Act.

While we were an “emerging growth company”

as defined in the JOBS Act, we were able

to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that

are not “emerging growth companies”

including, but not limited to, not being required to comply with the auditor attestation

requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our

periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive

compensation and stockholder approval of any golden parachute payments not previously approved.

as defined in the JOBS Act, we were able to take advantage

of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging

growth companies”

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

of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports

and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and

stockholder approval of any golden parachute payments not previously approved.

are a smaller reporting company and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting

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held by non-affiliates.

The disclosures we will be required to provide in our SEC filings will increase, but will still

be less than it would be if we were not considered a smaller reporting company.

Specifically, similar to emerging growth companies,

smaller reporting companies are able to provide simplified executive compensation disclosures in their filings;

from the provisions of Section 404 requiring that independent registered public accounting firms provide an attestation reporting

on the effectiveness of internal control over financial reporting, and have certain other decreased disclosure obligations in

their SEC filings.

Our status as a smaller reporting company may make it harder for investors to analyze our results of operations

and financial prospects.

We cannot predict if investors will find our common stock less attractive because we will rely on the

exemption available to smaller reporting companies.

If some investors find our common stock less attractive as a result, there

may be a less active trading market for our common stock and our stock price may be more volatile.

The disclosures we will be required to provide in our SEC fillings will increase, but will still be less

than it would be if we were not considered a smaller reporting company.

Specifically, similar to emerging growth companies, smaller

reporting companies are able to provide simplified executive compensation disclosures in their fillings;

are exempt from the provisions

of Section 404 requiring that independent registered public accounting firms provide an attestation reporting on the effectiveness

of internal control over financial reporting, and have certain other decreased disclosure obligations in their SEC filings.

status as a smaller reporting company may make it harder for investors to analyze our results of operations and financial prospects.

We cannot predict if investors will find our common stock less attractive because we will rely on the exemption available to smaller

reporting companies.

If some investors find our common stock less attractive as a result, there may be a less active trading market

for our common stock and our stock price may be more volatile.

Related to Ownership of Shares of Our Preferred Stock

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will rank senior to the Series A Preferred Stock.

At December 31, 2019, our total liabilities (excluding contingent consideration)

equaled approximately $13.6 million.

At December 31, 2020, our total liabilities equaled approximately $36.8 million.

of our existing or future debt instruments may restrict the authorization, payment or setting apart of dividends on the Series

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The holders of the Series A Preferred Stock will bear the risk of our future

offerings, which may reduce the market price of the Series A Preferred Stock and will dilute the value of their holdings in us.

offerings, which may reduce the market price of the Series A Preferred Stock and will dilute the value of their holdings.

may not be able to pay dividends on the Series A Preferred Stock if we fall out of compliance with our loan covenants and are

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ability to pay cash dividends on the Series A Preferred Stock requires us to have either net profits or positive net assets (total

assets less total liabilities) over our capital, and to be able to pay our debts as they become due in the usual course of business.

We cannot predict with certainty whether we will remain in compliance with the covenants of our senior secured lender, SVB, which

include, among other things, generating adjusted EBITDA and complying with a minimum liquidity ratio.

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

assets less total liabilities), and to be able to pay our debts as they become due in the usual course of business.

predict with certainty whether we will remain in compliance with the covenants of our senior secured lender, SVB, which include,

among other things, generating adjusted EBITDA or complying with a minimum liquidity ratio at times when we are utilizing our

line of credit.

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, we may not have sufficient cash to pay dividends on the Series A Preferred Stock.

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if any, and preferred stock, including the Series A Preferred Stock to pay our indebtedness or to fund our other liquidity needs.

market for our Series A Preferred Stock may not provide investors with adequate liquidity.

Series A Preferred Stock is listed on the Nasdaq Global Market.

However, the trading market for the Series A Preferred Stock may

not be maintained and may not provide investors with adequate liquidity.

The liquidity of the market for the Series A Preferred

Stock depends on a number of factors, including prevailing interest rates, our financial condition and operating results, the

number of holders of the Series A Preferred Stock, the market for similar securities and the interest of securities dealers in

making a market in the Series A Preferred Stock.

We cannot predict the extent to which investor interest in our Company will maintain

the trading market in our Series A Preferred Stock, or how liquid that market will be.

If an active market is not maintained,

investors may have difficulty selling shares of our Series A Preferred Stock.

may issue additional shares of Series A Preferred Stock and additional series of preferred stock that rank on parity with the

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earnings and profits, it is possible that the market value of the Series A Preferred Stock might decline.

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 Series A Preferred Stock to decline.

in our quarterly and year-end operating results are difficult to predict and our income and cash flow may fluctuate significantly

from period to period, which may impact our Board of Directors’

willingness or legal ability to declare a monthly dividend.

If our operating results fall below the expectations of investors or securities analysts, the price of our Series A Preferred

Stock could decline substantially.

Specific factors that may cause fluctuations in our operating results include:

and pricing for our products and services;

or commercial healthcare reimbursement policies;

and patient acceptance of any of our current or future products;

of competing products;

operating expenses which fluctuate due to growth of our business;

and size of any new product or technology acquisitions we may complete;

sales cycle and implementation periods for our products and services.

Series A Preferred Stock has not been rated.

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on a watch list or withdrawal of a rating could have an adverse effect on the market price of the Series A Preferred Stock.

may redeem the Series A Preferred Stock on or after November 4, 2020

or after November 4, 2020, we may, at our option, redeem the Series A Preferred Stock, in whole or in part, at any time or from

time to time.

Also, upon the occurrence of a change of control, we may, at our option, redeem the Series A Preferred Stock, in

whole or in part, within 120 days after the first date on which such change of control occurred.

We may have an incentive to redeem

the Series A Preferred Stock voluntarily if market conditions allow us to issue other preferred stock or debt securities at a

rate that is lower than the dividend on the Series A Preferred Stock.

If we redeem the Series A Preferred Stock, then from and

after the redemption date, dividends will cease to accrue on shares of Series A Preferred Stock, the shares of Series A Preferred

Stock shall no longer be deemed outstanding and all rights as a holder of those shares will terminate, except the right to receive

the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption.

may redeem the Series A Preferred Stock at any time.

November 4, 2020, we may, at our option, redeem the Series A Preferred Stock, in whole or in part, at any time or from time to

Also, upon the occurrence of a change of control, we may, at our option, redeem the Series A Preferred Stock, in whole or

in part, within 120 days after the first date on which such change of control occurred.

We may have an incentive to redeem the

Series A Preferred Stock voluntarily if market conditions allow us to issue other preferred stock or debt securities at a rate

that is lower than the dividend on the Series A Preferred Stock.

If we redeem the Series A Preferred Stock, then from and after

the redemption date, dividends will cease to accrue on shares of Series A Preferred Stock, the shares of Series A Preferred Stock

shall no longer be deemed outstanding and all rights as a holder of those shares will terminate, except the right to receive the

redemption price plus accumulated and unpaid dividends, if any, payable upon redemption.

market price of our Series A Preferred Stock is variable and could be substantially affected by various factors.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors