What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-03-13 compared with 2024-03-21 · 391 added, 226 removed, 932 unchanged (40% of the section changed)

23 unchanged sentences

Pricing pressures could negatively impact our margins, growth rate and market share.

order to operate more efficiently, control costs and improve profitability, we incurred $645,000 of restructuring costs in 2023, primarily

consisting of severance and separation costs associated with the optimization of the Company’s operations and profitability improvements.

order to operate more efficiently, control costs and improve profitability, we incurred $606,000 and $645,000 of restructuring costs

in 2024 and 2023, respectively, primarily consisting of severance and separation costs associated with the optimization of the Company’s

operations and profitability improvements.

We expect to incur approximately an additional $100,000 of restructuring costs in 2025.

There can be no assurance that these actions

will achieve their intended benefits.

can be no assurance that these actions will achieve their intended benefits.

we are unable to successfully introduce new products or services or fail to keep pace with advances in technology, we would not be able

43 unchanged sentences

and negatively impacted or discontinued.

believe that the labor costs in our Offshore Offices are approximately 9% of the cost of comparably educated and skilled workers in the

believe that the labor costs in our Offshore Offices are approximately 15% of the cost of comparably educated and skilled workers in

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

1 unchanged sentence

criminal liability.

risks and challenges associated with our operations outside the United States include laws and business practices favoring local competitors;

compliance with multiple, conflicting and changing governmental laws and regulations, including employment and tax laws and regulations;

risks and challenges associated with our operations outside the United States include laws and business practices favoring local

compliance with multiple, conflicting and changing governmental laws and regulations, including employment and tax laws

and regulations;

and fluctuations in foreign currency exchange rates.

Foreign operations subject us to numerous stringent U.S.

and foreign laws, including

the Foreign Corrupt Practices Act (“FCPA”), and comparable foreign laws and regulations that prohibit improper payments or

offers of payments to foreign governments and their officials and political parties by U.S.

and other business entities for the purpose

of obtaining or retaining business.

Safeguards we implement to discourage these practices may prove to be less than effective and violations

of the FCPA and other laws may result in severe criminal or civil sanctions, or other liabilities or proceedings against us, including

class action lawsuits and enforcement actions from the SEC, Department of Justice and overseas regulators.

may be adversely affected by global climate change or by legal, regulatory, or market responses to such change.

foreign laws, including the Foreign Corrupt Practices Act of 1977, as amended (“FCPA”), and comparable foreign laws and

regulations that prohibit improper payments or offers of payments to foreign governments and their officials and political parties

and other business entities for the purpose of obtaining or retaining business.

Safeguards we implement to discourage these

practices may prove to be less than effective and violations of the FCPA and other laws may result in severe criminal or civil

sanctions, or other liabilities or proceedings against us, including class action lawsuits and enforcement actions from the SEC,

Department of Justice and overseas regulators.

may be adversely affected by global climate change or market responses to such change.

long-term effects of climate change are difficult to predict and may be widespread.

The impacts may include physical risks (such as severe

rains and flooding as a result of climate change that has been experienced in Pakistan), social and human effects (such as population

dislocations or harm to health and well-being), compliance costs and transition risks (such as regulatory or technology changes), and

other adverse effects.

The effects could impair, for example, the availability and cost of certain products and energy (including utilities),

which in turn may impact our ability to procure goods or services required for the operation of our business at the quantities and levels

We may bear losses incurred as a result of, for example, physical damage to, or destruction of, our facilities (such as our

operation centers), and business interruption due to weather events that may be attributable to climate change.

These events and impacts

could materially adversely affect our business operations, financial position, or results of operation.

The impacts may include physical risks (such as

severe rains and flooding as a result of climate change that has been experienced in Pakistan), social and human effects (such as

population dislocations or harm to health and well-being), and other adverse effects.

The effects could impair, for example, the availability and cost of certain products and energy

(including utilities), which in turn may impact our ability to procure goods or services required for the operation of our business

at the quantities and levels we require.

We may bear losses incurred as a result of, for example, physical damage to, or destruction

of, our facilities (such as our operation centers), and business interruption due to weather events that may be attributable to

climate change.

These events and impacts could materially adversely affect our business operations, financial position, or results

of operation.

in the healthcare industry could affect the demand for our services and may result in a decrease in our revenues and market share.

25 unchanged sentences

Many factors may lead to decreases in customer revenue, including:

of customer revenue as a result of changes to the Affordable Care Act (“ACA”) or fluctuations in medical appointments

due to future pandemics;

of customer revenue as a result of changes to the Patient Protection and Affordable Care Act (“ACA”) or fluctuations in

medical appointments due to future pandemics;

rollback of the expansion of Medicaid or other governmental programs;

7 unchanged sentences

basis and we may not be able to offset expenditures.

sales cycle for our services can be variable, typically ranging from two to four months from initial contact with a potential customer

to contract execution to six to twelve months to rollout services which require each patient to participate.

During the sales cycle,

we expend time and resources in an attempt to obtain a customer without recognizing revenue from that customer to offset such expenditures.

Our implementation cycle is also variable, typically ranging from two to four months from contract execution to completion of implementation.

Each customer’s situation is different, and unanticipated difficulties and delays may arise as a result of a failure by us or by

the customer to meet our respective implementation responsibilities.

During the implementation cycle, we expend substantial time, effort,

and financial resources implementing our services without recognizing revenue.

Even following implementation, there can be no assurance

that we will recognize revenue on a timely basis or at all from our efforts.

In addition, cancellation of any implementation after it

has begun may involve loss to us of time, effort, and expenses invested in the canceled implementation process, and lost opportunity

for implementing paying customers in that same period of time.

sales cycle for our services can be variable, typically ranging from two to four months from initial contact with a potential

customer to contract execution to six to twelve months to rollout services which require each customer to participate.

sales cycle, we expend time and resources in an attempt to obtain a customer without recognizing revenue from that customer to

offset such expenditures.

Our implementation cycle is also variable, typically ranging from two to four months from contract

execution to completion of implementation.

Each customer’s situation is different, and unanticipated difficulties and delays

may arise as a result of a failure by us or by the customer to meet our respective implementation responsibilities or by the

customer for failure to disclose material information to meet implementation requirements.

During the implementation cycle, we expend

substantial time, effort, and financial resources implementing our services without recognizing revenue.

Even following

implementation, there can be no assurance that we will recognize revenue on a timely basis or at all from our efforts.

cancellation of any implementation after it has begun may involve loss to us of time, effort, and expenses invested in the canceled

implementation process, and lost opportunity for implementing paying customers in that same period of time.

are required to collect sales and use taxes on certain products and services we sell in certain jurisdictions.

33 unchanged sentences

we lose the services of Mahmud Haq as Executive Chairman, A.

Hadi Chaudhry as Chief Executive Officer and President, or other members

of our management team, or if we are unable to attract, hire, integrate and retain other necessary employees, our business would be harmed.

Hadi Chaudhry and Stephen Snyder as Co-Chief Executive Officers, or other

members of our management team, or if we are unable to attract, hire, integrate and retain other necessary employees, our business would

future success depends in part on our ability to attract, hire, integrate and retain the members of our management team and other qualified

In particular, we are dependent on the services of Mahmud Haq, our founder, principal stockholder and Executive Chairman,

Hadi Chaudhry, our Chief Executive Officer and President.

Haq is instrumental in managing our offshore operations in our Pakistan

Offices and coordinating those operations with our U.S.

Hadi Chaudhry and Stephen Snyder as Co-Chief Executive Officers.

Haq is instrumental in managing 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 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

Haq, 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.

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.

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

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

162 unchanged sentences

incentive that the physicians received in reliance upon such certification.

our security measures are breached or fail and unauthorized access is obtained to a customer’s data, our service may not be perceived

as secure, the attractiveness of our services to current or potential customers may be reduced, and we may incur significant liabilities.

services involve the web-based storage and transmission of customers’ proprietary information and patient information, including

health, financial, payment and other personal or confidential information.

We rely on proprietary and commercially available systems,

software, tools and monitoring, as well as other processes, to provide security for processing, transmission and storage of such information.

Because of the sensitivity of this information and due to requirements under applicable laws and regulations, the effectiveness of our

security efforts is very important.

We maintain servers, which store customers’ data, including patient health records, in the

our security measures are breached or fail and unauthorized access is obtained to a customer’s data, our service may be perceived

as insecure, the attractiveness of our services to current or potential customers may be reduced, and we may incur significant liabilities.

services involve the web-based storage and transmission of customers’ proprietary information and patient information,

including health, financial, payment and other personal or confidential information.

We rely on proprietary and commercially

available systems, software, tools and monitoring, as well as other processes, to provide security for processing, transmission and

storage of such information.

Because of the sensitivity of this information and due to requirements under applicable laws and

regulations, the effectiveness of our security efforts is very important.

We maintain servers, which store customers’ data, in

and offshore.

We also process, transmit and store some data of our customers on servers and networks that are owned and controlled

by third-party contractors in India and elsewhere.

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

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

Servers that store patient health records are stored in the U.S.

We also process, transmit and store some

data of our customers on servers and networks that are owned and controlled by third-party contractors in India and elsewhere.

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.

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 development

96 unchanged sentences

which could require additional management attention and which could adversely affect our business.

goodwill has been subject to impairment and may be subject to further impairment in the future, which could have a material adverse effect

on our results of operations, financial condition, or future operating results.

perform an annual goodwill impairment test on October 31 st of each year, or more frequently if indicators for potential

impairment exist.

As a result of the annual goodwill impairment test, we recorded impairment charges of approximately $2 million.

Indicators that are considered include significant changes in performance relative to expected operating results, significant

negative industry or economic trends, or a significant decline in our stock price and/or market capitalization or enterprise value

for a sustained period of time.

While we believe the assumptions used in determining whether there was an impairment and the amount

of any resulting impairment were reasonable and commensurate with the views of a market participant, changes in key assumptions in

the future, including increasing the discount rate, lowering forecast for revenue and operating margin, selection of guideline

public companies or lowering the long-term growth rate, could result in additional charges;

similarly, one or more changes in these

assumptions in future periods due to changes in circumstances could result in additional future impairments.

There was a triggering

event at August 31, 2023, but it was determined that there was no impairment.

During December 2023, the Company had an additional

triggering event as a result of the suspension of the dividends on the Preferred Stock.

As a result of the December triggering

event, the Company recorded additional impairment charges of approximately $40 million and we cannot predict if or when additional

future goodwill impairments may occur.

Any additional goodwill impairments could have material adverse effects on our operating

results, net assets, or our cost of, or access to, capital, which could harm our business.

See Note 3, Goodwill and Intangible

Assets - Net , to our consolidated financial statements in this Annual Report on Form 10-K for more details.

may not be able to negotiate a credit facility at reasonable terms as the current credit facility expires in October 2025.

$10 million credit facility with Silicon Valley Bank, a division of First Citizens Bank, (“SVB”) expires in October 2025.

The Company believes it will be able to enter into a new credit facility that will provide sufficient liquidity at favorable terms either

with SVB or another lending institution.

However, negotiations have not yet started, and we may not be able to obtain a credit facility

that provides sufficient liquidity at favorable terms.

maintain our cash at financial institutions, often in balances that exceed federally insured limits.

financial markets recently have encountered volatility associated with concerns about the balance sheets of banks, especially small and

regional banks who may have significant losses associated with investments that make it difficult to fund demands to withdraw deposits

and other liquidity needs.

Although the federal government has announced measures to assist these banks and protect depositors, some

banks have already been impacted and others may be materially and adversely impacted.

Our business is dependent on bank relationships,

and we are proactively monitoring the financial health of such bank relationships.

Continued strain on the banking system may adversely

impact our business, financial condition and results of operations.

goodwill was subject to impairment in 2023 and may be subject to further impairment in the future, which could have a material adverse

effect on our results of operations, financial condition, or future operating results.

perform an annual goodwill impairment test on October 31 st of each year, or more frequently if indicators for potential impairment

As a result of the 2023 annual goodwill impairment test, we recorded impairment charges of approximately $2 million at that time.

Indicators that were considered included significant changes in performance relative to expected operating results, significant negative

industry or economic trends, or a significant decline in our stock price and/or market capitalization or enterprise value for a sustained

period of time.

While we believe the assumptions used in determining whether there was an impairment and the amount of any resulting

impairment were reasonable and commensurate with the views of a market participant, changes in key assumptions in the future, including

increasing the discount rate, lowering forecast for revenue and operating margin, selection of guideline public companies or lowering

the long-term growth rate, could result in additional charges;

similarly, one or more changes in these assumptions in future periods

due to changes in circumstances could result in additional future impairments.

There was a triggering event at August 31, 2023, but it

was determined that there was no impairment.

During December 2023, the Company had an additional triggering event as a result of the

suspension of the payment of the dividends on the Preferred Stock.

As a result of a December 2023 triggering event, the Company recorded

additional impairment charges of approximately $40 million.

We cannot predict if or when additional future goodwill impairments may occur.

Any additional goodwill impairments could have material adverse effects on our operating results, net assets, or our cost of, or access

to, capital, which could harm our business.

For the year ended December 31, 2024, no additional goodwill impairment was recorded.

Note 3, Goodwill and Intangible Assets - Net , to our consolidated financial statements in this Annual Report on Form 10-K for

more details.

are a party to several related-party agreements with our founder and Executive Chairman, Mahmud Haq, which have significant contractual

5 unchanged sentences

Our independent audit committee has reviewed these arrangements and continues to do so on an annual basis.

we have procedures in place to identify related party transactions, it is possible that such transactions could occur without being contemporaneously

have procedures in place to identify related party transactions, it is possible that such transactions could occur without being contemporaneously

identified, reviewed and approved by the Audit Committee.

10 unchanged sentences

could negatively affect our business and financial performance.

failures or cyberattacks and resulting interruptions in the availability of or degradation in the performance of our websites, applications,

products or services could harm our business.

failures, cyberattacks or other events and resulting interruptions in the availability of or degradation in the performance of our websites,

applications, products or services could harm our business.

cybersecurity attacks continue to evolve and increase, our information systems could also be penetrated or compromised by internal and

2 unchanged sentences

and other cyberattacks, human error, earthquakes, hurricanes, floods, fires, natural disasters, power losses, disruptions in telecommunications

services, fraud, military or political conflicts, terrorist attacks, computer viruses, or other events.

Our systems are also subject

to break-ins, sabotage and intentional acts of vandalism.

Some of our systems are not fully redundant and our disaster recovery planning

is not sufficient for all eventualities.

We have experienced and will likely continue to experience system failures, denial of service

attacks and other events or conditions from time to time that interrupt the availability or reduce the speed or functionality of our

websites and mobile applications.

services, fraud, military or political conflicts, such as the conflicts in Ukraine and the Middle East, terrorist attacks, computer viruses,

or other events.

Our systems are also subject to break-ins, sabotage and intentional acts of vandalism.

Some of our systems are not fully

redundant and our disaster recovery planning is not sufficient for all eventualities.

We have experienced and will likely continue to

experience system failures, denial of service attacks and other events or conditions from time to time that interrupt the availability

or reduce the speed or functionality of our websites and mobile applications.

These events likely will result in loss of revenue.

A prolonged interruption in the availability or

reduction in the speed or other functionality of our websites and mobile applications could materially harm our business.

persistent interruptions in our services could cause current or potential users to believe that our systems are unreliable, leading them

to switch to our competitors or to avoid our sites, and could permanently harm our reputation and brands.

Moreover, to the extent that

any system failure or similar event results in damages to our customers or their businesses, these customers could seek significant compensation

from us for their losses and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address.

could arise from external parties or from acts or omissions of internal or service provider personnel.

Such unauthorized access could

disrupt our business and could result in the loss of assets, litigation, remediation costs, damage to our reputation and failure to retain

or attract customers following such an event, which could adversely affect our business.

interruption in the availability or reduction in the speed or other functionality of our websites and mobile applications could materially

harm our business.

Frequent or persistent interruptions in our services could cause current or potential users to believe that our systems

are unreliable, leading them to switch to our competitors or to avoid our sites, and could permanently harm our reputation and brands.

Moreover, to the extent that any system failure or similar event results in damages to our customers or their businesses, these customers

could seek significant compensation from us for their losses and those claims, even if unsuccessful, would likely be time-consuming and

costly for us to address.

These risks could arise from external parties or from acts or omissions of internal or service provider personnel.

Such unauthorized access could disrupt our business and could result in the loss of assets, litigation, remediation costs, damage to

our reputation and failure to retain or attract customers following such an event, which could adversely affect our business.

privacy, identity protection and information security compliance may require significant resources and presents certain risks.

collect, store, have access to and otherwise process certain confidential or sensitive data, including proprietary business information,

patient data, personal data or other information that is subject to privacy and security laws, business information and/or customer imposed

Despite our efforts to protect such data, our business and our products may be vulnerable to security incidents, theft, improper

use of our products, systems, software solutions or networks, unauthorized access, use, disclosure, modification or destruction of information,

defective products and operational disruptions.

The actual or perceived risk of theft, loss, fraudulent use or misuse of customer, employee

or other data as a result of a cybersecurity incident, as well as non-compliance with applicable industry standards or our contractual

or other legal obligations or privacy and information security policies regarding such data, could result in costs, fines, litigation

or regulatory actions.

We could face similar consequences in the future if we, our suppliers, customers or other third parties experience

the actual or perceived risk of theft, loss, fraudulent use or misuse of data, including as a result of employee error or malfeasance,

or as a result of the imaging, software, security and other products we incorporate into our products.

Such an event could lead customers

to select the products and services of our competitors.

A cybersecurity incident could harm our reputation, cause unfavorable publicity

or otherwise adversely affect certain potential customers’ perception of the security and reliability of our services as well as

our credibility and reputation, which could result in lost sales.

operate in an environment in which there are different and potentially conflicting data privacy laws in effect in the various U.S states

and foreign jurisdictions in which we operate and we must understand and comply with each law and standard in each of these jurisdictions

while ensuring the data is secure.

Government enforcement actions can be costly and interrupt the regular operations of our business,

and violations of data privacy laws can result in fines, reputational damage and civil lawsuits, any of which may adversely affect our

business, reputation and financial statements.

of our contracts do not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability

in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.

While we maintain general liability insurance coverage and coverage for errors or omissions, such coverage might not be adequate or otherwise

protect us from liabilities or damages with respect to claims alleging compromises of customer data, that such coverage will continue

to be available to us on acceptable terms or at all, or that such coverage will pay future claims.

The successful assertion of one or

more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including

premium increases or the imposition of large deductible or co-insurance requirements), could have an adverse effect on our business.

use artificial intelligence in our business, and challenges with properly managing its use could result in reputational and competitive

46 unchanged sentences

reasonably at this time, but may materially adversely affect our business, results of operations and financial condition.

Related to Macroeconomics Conditions

operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially

adversely affect our business, results of operations and financial conditions.

macroeconomic conditions, including slow growth or recession, high unemployment, inflation, tariffs, tighter credit, higher interest

rates, labor shortages, and currency fluctuations, can adversely impact consumer confidence and spending and materially adversely affect

demand for our customers’ services.

In addition, healthcare spending can be materially adversely affected in response to changes

in fiscal and monetary policy, financial market volatility, declines in income or asset values and other economic factors.

economic conditions can also lead to increased credit and collectability risk on our trade receivables, the failure of financial institutions

and reduced liquidity.

These and other impacts can materially adversely affect our business, results of operations, financial condition,

cash flows and the price of our common and preferred stock.

managed medical practices and customers could face supply chain issues that would disrupt their ability to service patients and therefore,

impact our revenue.

product shortages can represent a significant threat across the landscape of public health and health care delivery by undermining the

ability to provide timely and high-quality care to patients.

This has been clear in the context of the COVID-19 pandemic.

If our managed

medical practices and customers have supply chain issues and cannot receive the medications, vaccines and other required medical supplies,

this can impact their ability to properly serve patients and thus our revenue would be negatively impacted.

in currency exchange rates may adversely affect our financial condition, results of operations and cash flows.

international operations provide support for the U.S.

We are exposed to the effects (both positive and negative) that fluctuating

exchange rates have on translating the financial statements of our international operations, most of which are denominated in local currencies,

into the U.S.

Fluctuations in exchange rates may affect reported operating results in our international operations.

fluctuating exchange rates may adversely impact our results of operations and cash flows.

Related to Our Acquisition Strategy

we do not manage our acquisitions effectively, our revenue, business and operating results may be harmed.

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.

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 employees.

We will need to expand and upgrade our systems and infrastructure to accommodate

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

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

have no unconditional commitments with respect to any acquisition as of the date of this Form 10-K.

Although we expect that one or more

acquisition opportunities will become available in the future, we may not be able to acquire additional companies at all or on terms

favorable to us.

We will likely need additional financing for such acquisitions, but there is no assurance that we will be able to borrow

funds or raise capital through the issuance of our equity on favorable terms.

Certain of our larger, better capitalized competitors may

seek to acquire some of the companies we may be interested in.

Competition for acquisitions would likely increase acquisition prices

and result in us having fewer acquisition opportunities.

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

opportunities with the acquired business.

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 respect

to each acquisition as well as our own due diligence investigation.

We cannot be assured that such representations and warranties will

be true and correct or that our due diligence will uncover all materially adverse facts relating to the operations and financial condition

of the acquired companies or their customers.

Nor can we be assured that any available insurance will cover all such losses.

To the extent

that we are required to pay for obligations of an acquired company, or if material misrepresentations exist, we may not realize the expected

benefit from such acquisition and we will have overpaid in cash and/or stock for the value received in that acquisition.

the current prices of our common and Preferred Stock, we may be unable to execute accretive acquisitions.

we have used our common and Preferred Stock to pay for acquisitions.

Due to the depressed market prices of these securities, we may not

be able to use these securities to execute future acquisitions.

we have used our common and Preferred Stock to pay in part for acquisitions.

Due to the lower market prices of these securities, we

may not be able to use these securities to execute future acquisitions.

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

238 unchanged sentences

Related to Ownership of Shares of Our Common Stock

conversion of the Series A Preferred Stock into common stock in March 2025 (the "Conversion") increased the total number

of outstanding shares, potentially diluting the value of existing common shareholders’ equity.

Conversion resulted in the dilution of existing common shareholders’ ownership percentages.

This dilution of ownership will

impact the voting power, earnings per share and overall control of the Company for existing common shareholders.

The Company’s

earnings per share calculation will be impacted by the additional common shares, offset by the amount of Series A Preferred Stock

dividend that is not included in the calculation.

The increased number of common shares outstanding will also lower the book value

of each common share, which would adversely affect the market price of the Company’s common stock.

Moreover, existing common

shareholders may experience a reduced ability to influence corporate decision as their voting power becomes more diluted.

A Preferred Stock shareholders gained

full voting rights upon conversion of their preferred shares into common stock.

shareholders do not have voting rights under the terms of their preferred stock, except under extremely limited circumstances.

However, upon

conversion of their preferred shares into common stock, these shareholders gained full voting rights, which could significantly alter

the balance of voting power within the Company.

The conversion of a majority of the Series A Preferred Stock shares could result in

a situation where a large group of former Series A preferred shareholders collectively gain the ability to influence corporate

decisions, including matters related to the election of directors, mergers, acquisitions, and other significant strategic

This shift in voting power could potentially dilute the influence of existing common shareholders and may lead to

changes in the Company’s governance structure.

conversion of the Series A Preferred Stock could be perceived negatively by the market.

Conversion could be perceived negatively by the market, potentially leading to a decline

in the value of the Company’s common stock.

Investors may interpret such conversion as a sign of financial weakness, dilution

of ownership, or a shift in the Company’s capital structure that could impact earnings per share or control dynamics.

This negative

market perception may arise if investors believe the Conversion is being undertaken to address financial challenges, increase liquidity,

or meet other strategic objectives that could signal instability or uncertainty.

Such market reactions could lead to increased volatility

in the Company’s stock price, reduced investor confidence, and challenges in maintaining or attracting capital in the future.

Company’s potential for future issuances of common stock following the Conversion could be limited.

Company may want to issue additional common stock in the future to raise capital for operations, acquisitions, or other strategic

Such potential for future issuances could be limited as a result of the additional common shares that were issued

due to the Conversion.

revenues, operating results and cash flows may fluctuate in future periods and we may fail to meet investor expectations, which may cause

1 unchanged sentence

in our quarterly and year-end operating results are difficult to predict and may fluctuate significantly from period to period.

sales or operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline

substantially.

fail to meet or exceed the financial projections of the investment community or the financial projections we may provide to the public.

If our sales or operating results fall below the expectations of investors or securities analysts, the price of our common stock could

decline substantially.

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

4 unchanged sentences

● introduction

of competing products;

of competing products, services or technologies;

operating expenses which fluctuate due to growth of our business;

in laws or regulations applicable to our products and services;

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

sales cycle and implementation periods for our products and services.

reform may have a material adverse effect on the Company’s financial condition and results of operations.

economic and regulatory developments have effected fundamental changes in the healthcare industry.

In response to perceived increases

in healthcare costs in recent years, there have been, and continue to be, proposals by the federal government, state governments, regulators,

and third-party payors to control these costs and, more generally, to reform the U.S.

health care system.

Certain of these proposals

could limit the amounts CareCloud will receive for its products and services.

The Patient Protection and Affordable Care Act (the “ACA”) substantially changed the way healthcare is financed by both government and private insurers.

Company cannot predict at this time the full impact of the ACA or other new legislation, the new Administration, agency

priorities, rulemaking and healthcare reform measures from U.S.

federal or state governments, or third-party payors that may be adopted

or implemented in the future on the Company’s financial condition, results of operations and cash flows.

Although several legislative

initiatives to repeal and replace the ACA have been proposed, and legal challenges to the constitutionality of the ACA or its component parts have been made, the nature and effect of any modification or repeal of, or legislative substitution for,

the ACA, or any court decision regarding the ACA’s validity, is uncertain, and the Company cannot

predict the effect that any of these events would have on the longer-term viability of the act, or on the Company’s financial condition,

results of operations or cash flows.

However, any changes that create stricter and more costly compliance obligations or lower reimbursement

for the Company’s customers could materially and adversely affect its business, financial condition and results of operations.

Future significant changes in the healthcare systems in the United States could also have a negative impact on the demand for the Company’s

current and future products.

sales of shares of our common stock could depress the market price of our common stock.

of a substantial number of shares of our common stock in the public market could occur at any time.

If our stockholders sell, or the

market perceives that our stockholders intend to sell substantial amounts of our common stock in the public market, the market price

If our shareholders sell, or the

market perceives that our shareholders intend to sell substantial amounts of our common stock in the public market, the market price

of our common stock could decline significantly.

Haq currently controls 31.7% of our outstanding shares of common stock, which will prevent investors from influencing significant corporate

Haq, our founder and Executive Chairman, beneficially owns 31.7% of our outstanding shares of common stock.

of December 31, 2024, Mahmud Haq

controlled 31% of our outstanding shares of common stock, which prevented investors from influencing significant corporate

of December 31, 2024, Mahmud Haq, our founder and Executive Chairman, beneficially owned 31% of our outstanding shares of common

Due to the Conversion, his ownership percentage was diluted.

However, he still controls 12% of our outstanding shares of

common stock after the Conversion.

As a result, Mr.

Haq exercises

a significant level of control over all matters requiring stockholder approval, including the election of directors, amendment of our

certificate of incorporation, and approval of significant corporate transactions.

This control could have the effect of delaying or preventing

a change of control of our company or changes in management, and will make the approval of certain transactions difficult or impossible

without his support, which in turn could reduce the price of our common stock.

Haq exercises a significant level of control over all matters requiring

stockholder approval, including the election of directors, amendment of our certificate of incorporation, and approval of

significant corporate transactions.

This control could have the effect of delaying or preventing a change of control of our company

or changes in management and will make the approval of certain transactions difficult or impossible without his support, which in

turn could reduce the price of our common stock.

of Delaware law, of our amended and restated charter and amended and restated bylaws may make a takeover more difficult, which could

15 unchanged sentences

issuance of additional preferred stock in the future may dilute the rights of our existing stockholders.

Board of Directors has the authority to issue up to 7,000,000 shares of preferred stock and to determine the price, privileges and other

terms of these shares, of which 4,526,231 shares of Series A Preferred Stock and 1,468,792 of Series B Preferred Stock have been issued

as of December 31, 2023.

Our Board of Directors may exercise its authority with respect to the remaining shares of preferred stock without

any further approval of common stockholders.

The rights of the holders of common stock may be adversely affected by the rights of future

holders of preferred stock.

Board of Directors has the authority to issue up to 7,000,000 shares of preferred stock and to determine the price, privileges and

other terms of these shares, of which 4,526,231 shares of Series A Preferred Stock and 1,511,372 of Series B Preferred Stock were

issued as of December 31, 2024.

After the Conversion, there were 984,530 shares of Series A

Preferred Stock outstanding.

Our Board of Directors may exercise its authority with respect to the remaining shares of preferred

stock without any further approval of common stockholders.

The rights of the holders of common stock may be adversely affected by

the rights of future holders of preferred stock.

do not intend to pay cash dividends on our common stock.

40 unchanged sentences

may be more volatile.

climate disclosure rules, if adopted by the SEC, may increase our costs and litigation risks, which could materially and adversely affect

our future results of operations and financial condition.

2022, the SEC proposed new climate disclosure rules, which, if adopted, would require new climate-related disclosure in SEC filings,

including certain climate-related metrics and greenhouse gas emissions data, information about climate-related targets and goals, transition

plans, if any, and extensive attestation requirements.

In addition to requiring public companies to quantify and disclose direct emissions

data, the new rules also would require disclosure of climate impact arising from the operations and uses by the company’s business

partners and contractors and end-users of the company’s products and/or services.

We are currently assessing the impact of the

new rules, if adopted as proposed, but at this time, we cannot predict the costs of implementation or any potential adverse impacts resulting

from the new rules if adopted.

However, we may incur increased costs relating to the assessment and disclosure of climate-related risks

and increased litigation risks related to disclosures made pursuant to the new rules, either of which could materially and adversely

affect our future results of operations and financial condition.

Related to Ownership of Shares of Our Preferred Stock

December 2023 we suspended the dividends on the Preferred Stock and they have not been reinstated.

If and when they are reinstated, we

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

by our bank lender from paying dividends or if we have insufficient cash to make dividend payments.

a result of the Conversion, there may not be an organized trading market for the Series A Preferred Stock.

Nasdaq Global Market requires a minimum number of shareholder to maintain a security’s listing on the exchange.

limited number of Series A Preferred Stock shareholders after the Conversion, this security is likely to be delisted from the Nasdaq

Global Market and there may no longer be an organized market for trading of Series A Preferred Stock.

December 2023 we suspended the payment of the dividends on the Preferred Stock.

The Company resumed paying monthly dividends in February

2025, paying one month of the arrearage.

We may not be able to continue to pay dividends on the Preferred Stock if we fall out of compliance

with our loan covenants and are prohibited by our bank lender from paying dividends or if we have insufficient cash to make dividend

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

1 unchanged sentence

We cannot predict with certainty

whether we will remain in compliance with the covenants of our senior secured lender, Silicon Valley Bank, a division First Citizens

Bank, (“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.

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, during December 2023, the Company suspended the dividends on the Preferred Stock.

If and when the dividends are reinstated,

we may not maintain sufficient cash to continue to pay dividends on the Preferred Stock and we cannot assure you that our businesses

will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable

us to make the Preferred Stock dividend payments that are currently due or in arrears and to fund our other liquidity needs.

to pay dividends may again be impaired if any of the risks described in this document, including the documents incorporated by reference

herein, were to occur.

Also, payment of our dividends depends upon our financial condition, remaining in compliance with our affirmative

and negative loan covenants with SVB, which we may be unable to do in the future, and other factors as our Board of Directors may deem

relevant from time to time.

Although the Company resumed

payment of the monthly dividends in February 2025, we may not maintain sufficient cash to continue to pay dividends on the Preferred

Stock and we cannot assure you that our businesses will generate sufficient cash flow from operations or that future borrowings will

be available to us in an amount sufficient to enable us to make the Preferred Stock dividend payments that are currently due or in

arrears and to fund our other liquidity needs.

Our ability to pay dividends may again be impaired if any of the risks described in

this document, including the documents incorporated by reference herein, were to occur.

Also, payment of our dividends depends upon

our financial condition, remaining in compliance with our affirmative and negative loan covenants with SVB, which we may be unable

to do in the future, and other factors as our Board of Directors may deem relevant from time to time.

Series A and Series B Preferred Stock rank junior to all of our indebtedness and other liabilities.

97 unchanged sentences

price of the Preferred Stock.

may redeem the Series A and Series B 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 time.

On March 18, 2022, we redeemed 800,000 shares of the Series A Preferred Stock in accordance with our amended and restated certificate

of designations for the Series A Preferred Stock.

Since February 15, 2024, we may, at our option, redeem the Series B Preferred Stock,

in whole or in part, at any time or from time to time, paying a small premium if we choose to redeem any Series B Preferred Stock prior

to February 15, 2027.

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

If we redeem the Preferred Stock, then from and after the redemption date, dividends will cease to accrue on

shares of Preferred Stock, the shares of 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.

The Company also intends to allow holders of the Series A Preferred Stock in the future to exchange their shares of the Series A Preferred

Stock into an equivalent number of shares of the Series B Preferred Stock.

Currently, the dividends on the Preferred Stock are suspended.

At the time of redemption, any accumulated and unpaid dividends up to, but not including the date of redemption, is required to be paid.

market price of our Preferred Stock is variable and is substantially affected by various factors.

market price of our Preferred Stock is subject to wide fluctuations in response to numerous factors.

These factors include, but are not

limited to, the following:

of the dividend payments in December 2023;

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

market price of our Series B Preferred Stock is subject to wide fluctuations in response to numerous factors.

These factors include,

but are not limited to, the following:

of the dividend payments in December 2023 which were not resumed until February 2025;

interest rates, increases in which may have an adverse effect on the market price of the

11 unchanged sentences

voting rights for a holder of Preferred Stock are limited.

Our shares of common stock are the only class of our securities that carry

full voting rights, and Mahmud Haq, our Executive Chairman, beneficially owns approximately 31.7% of our outstanding shares of common

As a result, Mr.

Haq exercises a significant level of control over all matters requiring stockholder approval, including the election

of directors, amendment of our certificate of incorporation, and approval of significant corporate transactions.

This control could have

the effect of delaying or preventing a change of control of our Company or changes in management, and will make the approval of certain

transactions difficult or impossible without his support, which in turn could reduce the price of our Preferred Stock.

Our shares of common stock are the only class of our securities that

carry full voting rights, and Mahmud Haq, our Executive Chairman, beneficially owned approximately 31% of our outstanding shares of

common stock as of December 31, 2024.

After the Conversion, he now owns approximately 12% of our outstanding

common shares.

Accordingly, Mr.

Haq exercises a significant level of control over all matters requiring stockholder approval,

including the election of directors, amendment of our certificate of incorporation, and approval of significant corporate

transactions.

This control could have the effect of delaying or preventing a change of control of our Company or changes in

management, and will make the approval of certain transactions difficult or impossible without his support, which in turn could

reduce the price of our Preferred Stock.

rights for holders of the Preferred Stock exist primarily with respect to the ability to elect, voting together with the holders of any

6 unchanged sentences

of Preferred Stock do not have any other voting rights.

Preferred Stock is not convertible, and investors will not realize a corresponding upside if the price of the common stock increases.

Preferred Stock is not convertible into the common stock and earns dividends at a fixed rate.

Accordingly, an increase in the market

price of our common stock will not necessarily result in an increase in the market price of our Preferred Stock.

The market value of

the Preferred Stock may depend more on dividend and interest rates for other preferred stock, commercial paper and other investment alternatives

and our actual and perceived ability to pay dividends on, and in the event of dissolution satisfy the liquidation preference with respect

to, the Preferred Stock.

the dividend on the Preferred Stock is suspended, we may be unable to raise additional capital without incurring excessive dilution.

Preferred Stock is not convertible at the option of the holder, and investors will not realize a corresponding upside if the price of

the common stock increases.

Preferred Stock is not convertible into common stock at the option of the holder and earns dividends at a fixed rate.

Accordingly, an

increase in the market price of our common stock will not necessarily result in an increase in the market price of our Preferred Stock.

The market value of the Preferred Stock may depend more on dividend and interest rates for other preferred stock, commercial paper and

other investment alternatives and our actual and perceived ability to pay dividends on, and in the event of dissolution satisfy the liquidation

preference with respect to the Preferred Stock.

payment of the suspended dividends resumed in February 2025, there are still dividends in arrears and we may be unable to raise additional

capital without incurring excessive dilution.

December 2023, we suspended payment on the Preferred Stock dividends.

While the dividend is suspended, we are not able to use our at-the-market

(“ATM”) facilities or utilize our shelf registration statement.

Additionally, investors may not have interest in purchasing

our securities while the dividend is suspended.

The Company resumed monthly payment of the dividends in

February 2025 by paying one month of arrears.

The dividend arrearage on the converted Series A Preferred

Stock was satisfied through the Conversion.

Although we believe we can use a shelf registration statement to raise additional

capital, until the dividend repayments are made in full, we may not be able to file a shelf registration.

In addition to incurring

excessive dilution, investors may not have an interest in purchasing our securities since the dividend was previously suspended for

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