What changed in this filing

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Item 1. Business

2024-03-21 compared with 2023-03-02 · 141 added, 119 removed, 249 unchanged (51% of the section changed)

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and/or “our”) is a leading provider of technology-enabled services and solutions that redefine the healthcare revenue cycle

We provide technology-enabled revenue cycle management and a full suite of proprietary cloud-based solutions to healthcare providers,

from small practices to enterprise medical groups, hospitals, and health systems throughout the United States.

Healthcare organizations

today operate in highly complex and regulated environments.

Our suite of technology-enabled solutions helps our clients increase financial

and operational performance, streamline clinical workflows, and improve the patient experience.

management process.

We provide technology-enabled revenue cycle management and a full suite of proprietary cloud-based solutions to healthcare

providers, from small practices to enterprise medical groups, hospitals, and health systems throughout the United States.

organizations today operate in highly complex and regulated environments.

Our suite of technology-enabled solutions helps our clients

increase financial and operational performance, streamline clinical workflows, and improve the patient experience.

portfolio of proprietary software and business services includes:

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● Cloud-based

Health Records (“EHR”), which are easy to use and sometimes integrated with our

business services, and enable our healthcare provider clients to deliver better patient care,

streamline their clinical workflows, decrease documentation errors, and potentially qualify

for government incentives;

Health Records, which are easy to use and sometimes integrated with our business services,

and enable our healthcare provider clients to deliver better patient care, streamline their

clinical workflows, decrease documentation errors, and potentially qualify for government

Management (“PM”) software and related capabilities, which support our clients’

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maximize reimbursement;

intelligence (“AI”):

cirrusAI is designed to serve as a digital healthcare assistant, helping to enhance clinical

decision-making, streamline workflows, reduce administrative burdens, optimize revenue management,

and promote patient-centered care.

The functions include:

Clinical Decision Support:

CareCloud cirrusAI Guide automates clinical data input, and assists

clinicians in workflow tasks, providing real-time, evidence-based recommendations and personalized

suggestions via Vertex AI’s generative AI tools for providers to consider.

This innovation

can lead to enhanced diagnosis accuracy and treatment planning.

Virtual Support Assistant:

CareCloud cirrusAI Chat facilitates natural language conversations

with practice staff members, offering valuable assistance in navigating CareCloud Electronic

Health Records (“EHR”) workflows.

This tool streamlines post-training and onboarding

for new staff, reducing response times and providing real-time assistance, ultimately saving

CareCloud cirrusAI Appeals generates customized appeal letters by analyzing patient

claim details, the appeal’s reason, and the specific payer involved for healthcare

workers to review, edit, and send.

This functionality supports CareCloud’s RCM teams

in optimizing providers’ RCM and securing proper reimbursement.

cirrusAI integrates with CareCloud’s EHR solution, talkEHR, making it easily accessible

to providers of all sizes.

Experience Management (“PXM”) solutions designed to transform interactions between

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and activation, revenue cycle optimization, data analytic services, and educational training

○ Strategic advisory services to manage system evaluations and selection, provide interim management, and operational assessments;

○ Workforce augmentation and on-demand staffing to support our clients as they expand their businesses, seek highly trained personnel, or

struggle to address staffing shortages.

advisory services to manage system evaluations and selection, provide interim management,

and operational assessments;

augmentation and on-demand staffing to support our clients as they expand their businesses,

seek highly trained personnel, or struggle to address staffing shortages.

medical practice management solutions include:

practice management:

practice management services for medical providers, including facilities, equipment, supplies,

support services, nurses, and administrative support staff.

practice management services are provided to medical practices.

In this service model, we

provide the medical practice with appropriate facilities, equipment, supplies, support services,

nurses and administrative support staff.

We also provide management, bill-paying and financial

advisory services.

modernization of the healthcare industry, along with the increased adoption of value-based care models, is transforming nearly every

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organizational requirements and market demands.

March 2022, Centers for Medicare & Medicaid Services (“CMS”) 1 reported that national healthcare expenditure

grew by 4.2% in 2021.

healthcare spending will grow 5.1% annually on average during the years 2021 through 2030, reaching

$6.8 trillion by 2030.

CMS also projected that the health share of GDP is expected to be 19.6% in 2030, nearly the same as the 2020 share

June 2023, Centers for Medicare & Medicaid Services (“CMS”) 1 reported that over 2022-2031 the average National

Health Expenditures (“NHE”) growth (5.4%) is projected to outpace that of average Gross Domestic Product (“GDP”)

growth (4.6%) resulting in an increase in the health spending share of GDP from 18.3% in 2021 to 19.6% in 2031.

Additionally,

analysts from Allied Market Research have estimated the U.S.

analysts from The Brainy Research have estimated the U.S.

Healthcare IT industry market to be approximately $105 billion in 2022 and

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View Research.

3 The North American EHR market is expected to be valued at more than $50 billion by 2028.

The Telehealth market

is estimated to be approximately $23 billion with a CAGR of 23%.

CMS Office of the Actuary Releases 2021-2030 Projections of National Health Expenditures | CMS

Healthcare IT Market in US Size, Share, Trends | Report 2030 (alliedmarketresearch.com)

Revenue Cycle Management Market Size, Share, Trends | Report 2023-2030 (Grand View Research)

EHR market is expected to be valued at $40 billion by 2030 with a CAGR of 12.5% from 2022 to 2030.

The Telehealth market is estimated to be approximately $30 billion in 2022 with a CAGR of 23% from 2023 to 2030.

Market Opportunity

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for our clients.

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

market dynamics present opportunities for us to innovate and focus on impacting the day-to-day challenges our clients face as they work

to provide excellent patient care, all while managing and expanding their businesses.

We believe there are dynamics at play that are significantly increasing the market need for our products and services.

These market dynamics present opportunities for us to innovate and focus on impacting the day-to-day challenges our clients face as they

work to provide excellent patient care, all while managing and expanding their businesses.

practices and health systems alike are transitioning to increasingly complex reimbursement delivery models.

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

stay abreast of these changes and in compliance.

The complexities associated with emerging reimbursement models and continued government

regulations present opportunities for us as healthcare organizations seek out partners that offer a broad range of software and services

to help meet their needs.

stay abreast of these changes and to remain in compliance.

The complexities associated with emerging reimbursement models and continued

government regulations present opportunities for us as healthcare organizations seek out partners that offer a broad range of software

and services to help meet their needs.

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

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its digital transformation.

compounding the burden of rising health insurance cost is the ongoing shift in patient demographics.

As the national population ages

into Medicare eligibility, the reimbursement received for procedures and services provided to these patients decreases.

Medicaid is now

the largest insurance product in the country and continues to grow.

Reimbursements overall are not increasing at the same rate as costs,

driving providers and practices to search for increased efficiencies and savings wherever possible.

Strategic-thinking

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adoption of next generation healthcare solutions.

healthcare industry has seen tremendous change over the last three years, with COVID-19 ushering in a new era of digital health.

study of the evolving needs of our clients leads us to believe that there will be an increasing 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.

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 adopt the next generation of healthcare solutions to drive their future growth.

Our expansive product and services portfolio enables us to displace competitors and gain market share across a vast array of specialties,

care settings and customer segments across the country.

The healthcare industry has seen tremendous change over the last three years, with

COVID-19 ushering in a new era of digital health.

Our study of the evolving needs of our clients leads us to believe that there will

be an increasing need for our services and products and emerging needs for the products and services that we are already developing.

CMS – National Health Expenditure Historical

The Brainy Research – US Healthcare IT Market

Revenue Cycle Management Market Size Report, 2030 (grandviewresearch.com)

US Electronic Health Record Market Set to Surge to $39.993 Billion by 2030 with Notable CAGR of 12.5% (yahoo.com)

Healthcare IT Market in US Size, Share, Trends | Report 2030 (alliedmarketresearch.com)

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 adopt the next generation

of healthcare solutions to drive their future growth.

Our expansive product and services portfolio enables us to displace competitors

and gain market share across a vast array of specialties, care settings and customer segments across the country.

Business Strategy

is a market leading provider of integrated, end-to-end SaaS and technology-enabled solutions that help our clients with the business

Our mission is to redefine the next generation of technology-enabled revenue cycle solutions.

To that end, we invest significant

resources toward improving our current offerings and building new solutions that help transform our clients’ organizations with

next generation technology.

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.

Company is focused on reducing costs, returning to profitability and generating positive free cash flow in order to resume paying the

Preferred Stock dividends.

CareCloud is a market leading provider of technology-enabled and integrated end-to-end Software-as-a-Service

(“SaaS”) solutions that help our clients with the business of medicine.

Our mission is to redefine the next generation of

technology-enabled revenue cycle solutions.

To that end, we invest significant resources toward improving our current offerings and building

new solutions that help transform our clients’ organizations with next generation technology.

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

healthcare space.

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comprehensive next generation RCM solutions 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.

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.

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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.

We will continue to dedicate resources to research and development to bolster our existing applications and drive new

opportunities for innovation on behalf of our clients.

into new categories/specialties/markets.

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greater market share.

We are investing more in our sales and marketing activities, partners, and products to expand our client footprint.

We are investing in our sales and marketing activities, partners, and products to expand our client footprint.

our relationships with existing clients.

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Our unique business model includes our cloud-based

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

We believe this operating model provides us with significant cost advantages compared to other revenue cycle management

companies and it allows us to significantly reduce the operational costs of the companies we acquire.

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.

A core component of our model is to strip out expensive third-party software

and vendor costs while improving efficiency and scale with our proven operational model and integration methodology.

software and a cost-effective offshore workforce located in our Offshore Offices.

We believe this operating model provides us with significant

cost advantages compared to other revenue cycle management companies and it allows us to significantly reduce the operational costs of

the companies we acquire.

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.

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.

the market continues to evolve, we may choose to build or partner for some or all of these solutions in order to broaden our product

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deliver solutions that meet our clients’ needs.

the combination of our strategic acquisition strategy and continued development of next generation solutions, we provide comprehensive

the combination of our continued development of next generation solutions and strategic acquisition strategy, we provide comprehensive

products and services tailored for small medical practices, large physician groups and health systems, as well as industry partners.

We continue to optimize our technology offering by integrating them into our application ecosystem and with other industry solutions.

We continue to optimize our technology offerings by integrating them into our application ecosystem and with other industry solutions.

The interconnectivity of our solutions will continue driving a consolidation of brands within our product architecture, aimed at improving

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nurses, nurse practitioners, therapists, physician assistants and other clinicians that render bills for their services) practicing in

approximately 2,600 independent medical practices and hospitals, representing 80 specialties and

subspecialties in 50 states allowing for low revenue concentration risk.

approximately 2,600 independent medical practices and hospitals, representing 80 specialties and subspecialties in 50 states allowing

for low revenue concentration risk.

addition, we served approximately 150 clients that are not medical practices, but are primarily service organizations who serve the healthcare

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Our clients span from the single doctor independent

medical practices to large medical groups, including an enterprise specialty-specific healthcare organization with more than 3,000

providers located across multiple states.

We also service large major academic medical institutions, small and large hospitals

and health systems with service areas covering millions of patients.

medical practices to large medical groups, including an enterprise specialty-specific healthcare organization with more than 3,000 providers

located across multiple states.

We also service large major academic medical institutions, small and large hospitals and health systems

with service areas covering millions of patients.

and Marketing

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We have developed sales and marketing capabilities aimed at driving

growth of our client base, including small medical practices, large groups, and health systems.

We expect to expand by selling our complete

suite of software and services to new clients and up-selling additional solutions into our existing client base.

We have a direct sales

force including team members focused on specific functional or divisional areas, such as CareCloud Force (workforce augmentation) and

medSR (healthcare IT consulting).

the growth of our client base, including small medical practices, large groups, and health systems.

We expect to expand by selling our

complete suite of software and services to new clients and up-selling additional solutions into our existing client base.

We have a direct

sales force including team members focused on specific functional or divisional areas, such as CareCloud Force (workforce augmentation)

and medSR (healthcare IT consulting).

This direct sales force is supplemented by offshore staff who support our sales and marketing efforts

24 hours per day.

In addition, our direct sales are augmented through our partner initiatives and marketing campaigns.

We continue to leverage and optimize various digital channels to present our solutions, identify national events to demonstrate our integrated

capabilities and expand our participation in thought leadership and social communications to connect with the healthcare community.

We continue to

leverage and optimize various digital channels to present our solutions, identify national events to demonstrate our integrated capabilities

and expand our participation in thought leadership and social communications to connect with the healthcare community.

Growth Levers

believe that we are in a great position to continue to grow by leveraging a multi-faceted growth strategy:

believe that we are in a good position to grow through organic growth and partnerships.

Growth and Direct Sales

sales and marketing team has expanded 11 times since 2019.

The core philosophy behind this expansion is for every team member to perform

at the top of their skills and ability.

We have organized our sales force into different segments to promote the respective products

and services for that segment and 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 is

in need of additional solutions.

have organized our sales force into different segments to promote the respective products and services for that segment and 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 is in need of additional solutions.

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

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to support these relationships.

through Acquisitions

Healthcare IT 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 17 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

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

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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

Large groups and health systems that have grown through consolidation often realize economies of scale by

establishing billing and management offices to perform many of the services we offer themselves.

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.

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

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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 CareCloud.

positively transforming distressed competitors into an accretive acquisition.

the employees of our subsidiaries, as of December 2023, the Company employed approximately 3,600 people worldwide on a full-time basis.

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development, and approximately 2% are engaged in sales and marketing.

The balance of the employees are classified as general and administrative,

The balance of the employees is classified as general and administrative,

which includes support staff to maintain our offshore offices, a function that many businesses in other geographies might choose to outsource.

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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.

During 2024, we anticipate further reducing our employee count.

Rights of Our Directors, Executive Officers, and Principal Stockholders

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

with this Form 10-K, the Company is now a non-accelerated filer.

is a non-accelerated filer.

You Can Find More Information

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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 1. Business