What changed in this filing

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Item 9A. Controls and Procedures

2025-03-13 compared with 2024-03-21 · 756 added, 656 removed, 1317 unchanged (52% of the section changed)

1 unchanged sentence

of Disclosure Controls and Procedures

management, with the participation of our Chief Executive Officer and Interim Chief Financial Officer, based on the Internal Control-Integrated

Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), evaluated

the effectiveness of our disclosure controls and procedures as of December 31, 2023 as required by Rules 13a-15(b) and 15d-15(b) of the

Exchange Act.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange

Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company

in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods

specified in the SEC’s rules and forms.

management, with the participation of our Co-Chief Executive Officers and Interim Chief Financial Officer, based on the Internal

Control-Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission

(“COSO”), evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024 as required by

Rules 13a-15(b) and 15d-15(b) of the Exchange Act.

The term “disclosure controls and procedures,” as defined in Rules

13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that

information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded,

processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed

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their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and

on the evaluation of our disclosure controls and procedures, as of December 31, 2023, our Chief Executive Officer and Interim Chief Financial

on the evaluation of our disclosure controls and procedures, as of December 31, 2024, our Co-Chief Executive Officers and Interim Chief Financial

Officer concluded that, as of such date, our disclosure controls and procedures were effective.

Our management, including our Chief Executive

Officer and Interim Chief Financial Officer, has concluded that the consolidated financial statements in this Annual Report on Form 10-K

fairly present, in all material respects, our consolidated financial condition, results of operations and cash flows for the periods

Our management, including our Co-Chief Executive

Officers and Interim Chief Financial Officer, have concluded that the consolidated financial statements in this Annual Report on Form

10-K fairly present, in all material respects, our consolidated financial condition, results of operations and cash flows for the periods

presented in accordance with U.S.

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Other Information

the quarter ended December 31, 2023, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading agreement or non-Rule

10b5-1 trading agreement.

the quarter ended December 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)

adopted , modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in

Item 408 of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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following documents are filed as part of this Annual Report on Form 10-K:

Balance Sheets as of December 31, 2023 and 2022

Statements of Operations for the years ended December 31, 2023 and 2022

Statements of Comprehensive (Loss) Income for the years ended December 31, 2023 and 2022

Statements of Shareholders’ Equity for the years ended December 31, 2023 and 2022

Statements of Cash Flows for the years ended December 31, 2023 and 2022

to Consolidated Financial Statements

(1) Financial

(i) Consolidated Balance Sheets as of December 31, 2024 and 2023

(ii) Consolidated Statements of Operations for the years ended December 31, 2024 and 2023

(iii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024 and 2023

(iv) Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2024 and 2023

(v) Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023

(vi) Notes to Consolidated Financial Statements

(2) Financial

Statement Schedules

are no Financial Statement Schedules filed as part of this Annual Report on Form 10-K, as the required information is not applicable

or is included in the Notes to Consolidated Financial Statements.

are no Financial Statement Schedules filed as part of this Annual Report on Form 10-K as the required information is not applicable or

is included in the Notes to Consolidated Financial Statements.

Assignment Agreement dated October 3, 2016, by and between the Company, The Prudential Insurance Company of America, and Prudential Retirement Insurance and Annuity Company (filed as Exhibit 10.1 to the Company’s Form 8-K filed on October 5, 2016, and incorporated herein by reference).

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Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company dated February 26, 2021 (filed as Exhibit 3.1 to the Company’s Form 8-K filed on March 29, 2021 and incorporated herein by reference).

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company dated June 16, 2022 (filed as Exhibit 3.6 to the Company’s Form 8-K/A filed on June 17, 2022 and incorporated herein by reference).

Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company dated June 16, 2022 (filed as Exhibit 3.6 to the Company’s Form 8-K/A filed on June 17, 2022 and incorporated herein by reference).

Certificate of Correction to Certificate of Amendment to Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Form 8-K/A filed June 17, 2022 and incorporated herein by reference).

Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company dated February 5, 2025 (filed as Exhibit 3.1 to the Company’s Form 8-K filed on February 7, 2025 and incorporated herein by reference).

Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated July 6, 2016 (filed as Exhibit 3.3 to the Company’s Form S-1 filed on September 25, 2018, and incorporated herein by reference).

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Eighth Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated June 15, 2022 (filed as Exhibit 3.4 to the Company’s Form 8-K/A filed June 17, 2022 and incorporated herein by reference).

Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable

Perpetual Preferred Stock dated September 11, 2024 (filed as Exhibit 3.1 to the Company’s Form 8-K filed September 16, 2024

and incorporated herein by reference).

Certificate of Designations, Preferences and Rights of 8.75% Series B Cumulative Redeemable Perpetual Preferred Stock (filed as exhibit 3.2 to the Company’s Form 8-K filed January 31, 2022 and incorporated herein by reference).

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10.2 , respectively, to the Company’s Form 8-K filed on July 11, 2023 and incorporated herein by reference).

Employment Agreement between the Company and A.

Hadi Chaudhry dated December 16, 2024 (filed as Exhibit 10.1 to the Company’s Form 8-K filed on December 16, 2024 and incorporated herein by reference).

Employment Agreement between the Company and Stephen Snyder dated December 16, 2024 (filed as Exhibit 10.2 to the Company’s Form 8-K filed on December 16, 2024 and incorporated herein by reference).

Employment Agreement between the Company and Crystal Williams dated December 16, 2024 (filed as Exhibit 10.3 to the Company’s Form 8-K filed on December 16, 2024 and incorporated herein by reference).

Loan and Security Agreement dated as of October 13, 2017 between Medical Transcription Billing, Corp., MTBC Acquisition, Corp.

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Eighth Loan Modification Agreement dated August 31, 2023, by and between the Company and SVB (filed as Exhibit 10.1 to the Company’s Form 8-K filed on September 1, 2023 and incorporated herein by reference).

Ninth Loan Modification Agreement dated October 25, 2024, by and between the Company and SVB (filed as Exhibit 10.1 to the Company’s Form 8-K filed on October 28, 2024 and incorporated herein by reference).

Underwriting Agreement dated January 28, 2022 by and between the Company and B.

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Additional Statement of Work dated January 29, 2024 added as Exhibit B to the Consulting Agreement between the Company and Hill City Advisors, LLC.

Consulting Agreement dated January 9, 2024, and as amended February 12, 2024, by and between the Company and Korn Intellect, LLC.

(filed as Exhibit 10.26 to the Company’s Form 10-K filed on March 21, 2024, and incorporated herein by reference).

Consulting Agreement dated January 9, 2024, and as amended February 12, 2024, by and between the Company and Korn Intellect, LLC (filed as Exhibit 10.27 to the Company’s Form 10-K filed on March 21, 2024, and incorporated herein by reference).

Amendment to Consulting Agreement dated September 5, 2024 between the Company and Korn Intellect, LLC.

Second Amendment to Consulting Agreement dated December 9, 2024 between the Company and Korn Intellect, LLC.

Insider Trading Policy dated December 1, 2024.

List of subsidiaries.

Consent of Rosenberg Rich Baker Berman P.A.

Consent of Grant Thornton LLP.

Certification of the Company’s Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), of the Securities Exchange Act of 1934, as amended.

Certification of the Company’s Co-Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), of the Securities Exchange Act of 1934, as amended.

Certification of the Company’s Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), of the Securities Exchange Act of 1934, as amended.

Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C.

Certification of the Company’s Co-Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of the Company’s Co-Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of the Company’s Interim Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Policy relating to recovery of erroneously awarded compensation, as required by applicable listing standards adopted pursuant to 17 CFR 240.10D-1.

Taxonomy Extension Schema

Taxonomy Extension Calculation Linkbase

Taxonomy Extension Label Linkbase

Taxonomy Extension Presentation Linkbase

Taxonomy Extension Definition Linkbase

Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Policy relating to recovery of erroneously awarded compensation, as required by applicable listing standards adopted pursuant to 17 CFR 240.10D-1 (filed as Exhibit 97.1 to the Company’s Form 10-K filed on March 21, 2024, and incorporated herein by reference).

XBRL Instance

XBRL Taxonomy Extension Schema

XBRL Taxonomy Extension Calculation Linkbase

XBRL Taxonomy Extension Label Linkbase

XBRL Taxonomy Extension Presentation Linkbase

XBRL Taxonomy Extension Definition Linkbase

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Indicates management contract or compensatory plan or arrangement.

certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Securities and Exchange

Act of 1934, as amended, or otherwise subject to the liability of that Section.

Such certifications will not be deemed incorporated

by reference into any filing under the Securities Act or the Exchange Act.

certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Securities and Exchange Act

of 1934, as amended, or otherwise subject to the liability of that Section.

Such certifications will not be deemed incorporated by reference

into any filing under the Securities Act or the Exchange Act.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

CareCloud, Inc.

Hadi Chaudhry

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Executive Officer

Stephen Snyder

Executive Officer

Chief Financial Officer and Corporate Controller

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Hadi Chaudhry

Executive Officer, President and Director

Executive Officer and Director

Stephen Snyder

Executive Officer

Financial and Accounting Officer

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to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm Grant Thornton, LLP (PCAOB ID Number 248 )

of Independent Registered Public Accounting Firm Rosenberg Rich Baker Berman, P.A.

(PCAOB ID Number 89 )

Report of Independent Registered Public Accounting Firm Grant Thornton, LLP .

(PCAOB ID Number 248 )

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Operations for the years ended December 31, 2024 and 2023

Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2023 and 2022

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024 and 2023

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2024 and 2023

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OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Shareholders of CareCloud, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheet

of CareCloud, Inc.

as of December 31, 2024, and the related statements of operations, comprehensive income, shareholders’

equity, cash flows, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the

consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31,

2024 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles

generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising

from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee

and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

We determined that there were no critical audit matters.

/s/ Rosenberg Rich Baker Berman, P.A.

We have served as the Company’s auditor since 2024.

March 13, 2024

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

of Directors and Shareholders

on the financial statements

have audited the accompanying consolidated balance sheets of CareCloud, Inc.

(a Delaware corporation) and subsidiaries (the “Company”)

as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive (loss) income, changes in shareholders’

equity, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred

to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of

the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

have audited the balance sheet of CareCloud, Inc.

as of December 31, 2023, and the related statements of operations, shareholders’ equity, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as

the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material

respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the

year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

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is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

As part of our audit

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

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Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

audit matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinion on the critical audit matters or on the accounts or disclosures to which it relates.

Impairment Assessment - Healthcare IT Reporting Unit

described further in Note 2, 3, and 19 to the consolidated financial statements, the Company performed its annual goodwill impairment

assessment as of October 31, 2023, on its Healthcare IT (HIT) reporting unit.

In addition, the Company identified triggering events on

August 31, 2023 and December 12, 2023 that resulted in goodwill impairment assessments of HIT for each of the respective dates.

annual impairment test date and at December 12, 2023, the Company concluded that the fair value of the HIT reporting unit was less than

the carrying value at these dates, leading to the Company recording an impairment charge.

We identified the Company’s goodwill

impairment assessment over the HIT reporting unit for each of those assessment dates as a critical audit matter.

principal considerations for our determination that the goodwill impairment assessment as of August 31, 2023, October 31, 2023 and December

12, 2023 is a critical audit matter are the significant management estimates and judgements related to forecasts of expected future cash

flows required to estimate the HIT reporting unit’s fair value.

Management’s significant estimates and judgements include

the determination of the discount rates, revenue growth rates, operating margins, long-term growth rate, and weightings assigned to the

valuation methodologies used.

Auditing these estimates requires a high degree of auditor judgement, including the use of professionals

with specialized skills and knowledge.

audit procedures related to the goodwill impairment assessment included the following, among others:

assessed management’s ability to forecast by comparing historical projections to actual results.

evaluated management’s revenue growth rates, operating margins, and cash flows for consistency with relevant historical data

and trends, recent changes in the business, underlying business strategies, and external industry data and forecasts used at each

impairment testing date.

the assistance of our valuation professionals with specialized skills and knowledge,

we evaluated the valuation methodologies, inputs, and assumptions utilized by management, including the long-term growth rate and

discount rate.

performed sensitivity analyses on discount rates used to evaluate the impact that changes in these assumptions have on management’s

Concern Analysis

described further in Note 2 to the consolidated financial statements, as of and for the year end December 31, 2023, the Company generated

a net loss of $48.7 million, suspended the dividend on its Series A and B Preferred Stock and had negative working capital of $57,000

and cash of $3.3 million.

These factors, among others, raised substantial doubt regarding the Company’s ability to continue as

a going concern for a period of at least once year from the date of the issuance of the financial statements;

however, management believes

its plan to mitigate these conditions alleviates this substantial doubt.

Management’s plan includes an assessment of liquidity,

judgments about the Company’s future activities and compliance with terms of its lending arrangement that are based on estimates

of future cash flows.

Significant assumptions used in the Company’s forecasted model of liquidity include forecasted revenue and

accounts receivable, costs, and cash flows.

Changes in these assumptions could have a material impact on the forecasted liquidity and

going concern assessment.

We identified the going concern analysis as a critical audit matter.

principal consideration for our determination that the going concern analysis is a critical audit matter are the significant judgements

and assumptions involved in determining whether it is probable that management’s plans will be effectively implemented and alleviate

substantial doubt about the Company’s ability to continue as a going concern.

More specifically, there was a high degree of auditor

judgment and subjectivity in performing our procedures to evaluate the reasonableness of the Company’s forecasted financial results.

audit procedures related to the going concern assessment included the following, among others:

evaluated the Company’s forecasted financial results and ability to meet obligations as they come due for at least twelve months

from the issuance date of these financial statements by:

the Company’s forecasted future financial results to (1) historical results and previous forecasts, (2) internal communications

to management and the Board of Directors, (3) forward-looking guidance set forth by the Company within their earnings release, (4)

industry data, and (5) forecasted balances against actual results of the first two months of fiscal year 2024.

sensitivity analyses on the Company’s forecasted cash flows and liquidity covenant calculations by adjusting management’s

projected cash balances using actual results subsequent to year end and adjusted levels of revenue growth.

evaluated management’s plans, including estimated cost savings and probability that the Company will be able to successfully

implement these plans to alleviate substantial doubt about the Company’s ability to continue as a going concern.

assessed the appropriateness of the disclosures included within the consolidated financial statements relating to liquidity and going

We believe that our audit provides

a reasonable basis for our opinion.

GRANT THORNTON LLP

have served as the Company’s auditor since 2015.

CARECLOUD, INC.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2023 AND 2022

have served as the Company’s auditor from 2015 to 2023.

21, 2024 (except for Note 18, as to which the date is March 13, 2025)

BALANCE SHEETS

OF DECEMBER 31, 2024 AND 2023

in thousands, except share and per share amounts)

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Deferred revenue

Deferred tax liability

Total liabilities

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Research and development

Change in contingent consideration

Depreciation and amortization

Goodwill impairment charges

Net loss on lease terminations, unoccupied lease charges and restructuring costs

Lease terminations, unoccupied lease charges and restructuring costs

Total operating expenses

OPERATING (LOSS) INCOME

OPERATING INCOME (LOSS)

Interest income

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Other expense - net

(LOSS) INCOME BEFORE (BENEFIT) PROVISION FOR INCOME TAXES

Income tax (benefit) provision

NET (LOSS) INCOME

INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES

Income tax provision (benefit)

NET INCOME (LOSS)

Preferred stock dividend

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notes to consolidated financial statements.

CARECLOUD, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

THE YEARS ENDED DECEMBER 31, 2024 AND 2023

in thousands )

NET (LOSS) INCOME

OTHER COMPREHENSIVE LOSS, NET OF TAX

NET INCOME (LOSS)

OTHER COMPREHENSIVE LOSS

Foreign currency translation adjustment (a)

COMPREHENSIVE (LOSS) INCOME

COMPREHENSIVE INCOME (LOSS)

(a) No tax effect has

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notes to consolidated financial statements.

CARECLOUD, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

STATEMENTS OF SHAREHOLDERS’ EQUITY

THE YEARS ENDED DECEMBER 31, 2024 AND 2023

in thousands, except for number of shares)

Stock Series A

Stock Series B

Additional Paid-in

Accumulated Other

Comprehensive

Accumulated Other Comprehensive

Treasury (Common)

Total Shareholders’

Balance - January 1, 2023 before adoption of ASC 326

Balance - January 1, 2024

Cumulative effect of adopting ASC 326

Balance - January 1, 2023 after adoption

Balance - January 1, 2023 after adoption, shares

Foreign currency translation adjustment

Stock issued under the equity incentive plan

Issuance of Series B Preferred Stock (1)

Shares issued for services

Stock-based compensation, net of cash settlements

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Balance - December 31, 2024

Balance - January 1, 2022

Net (loss) income

Balance - January 1, 2023 before adoption of ASC 326

Cumulative effect of adopting ASC 326

Balance - January 1, 2023 after adoption

Net income (loss)

Foreign currency translation adjustment

Stock issued under the equity incentive plan

Redemption of Series A Preferred Stock

Exercise of common stock warrants

Issuance of Series B Preferred Stock (1)

Stock issuance costs

Shares issued for services

Stock-based compensation, net of cash settlements

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(1) Amounts are net

of issuance cost of approximately $ 71,000 and $ 2.3 million for 2023 and 2022, respectively.

2022, the preferred stock dividends were paid monthly at the rate of $ 2.75 and $ 2.19 for Series A and Series B, respectively, per share

of issuance cost of approximately $ 71,000 .

2023, the preferred stock dividends were paid monthly from January through November at the rate of $ 2.75 and $ 2.19 for Series A and Series

B, respectively, per share per annum.

preferred stock dividends were declared or paid.

notes to consolidated financial statements.

CARECLOUD, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

STATEMENTS OF CASH FLOWS

THE YEARS ENDED DECEMBER 31, 2024 AND 2023

in thousands)

OPERATING ACTIVITIES:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

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Provision for expected credit losses

Deferred income taxes (benefit) provision

Foreign exchange loss

Benefit for deferred income taxes

Foreign exchange (gain) loss

Interest accretion

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Stock-based compensation expense

Change in contingent consideration

Changes in operating assets and liabilities:

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Preferred stock dividends paid

Settlement of contingent obligation

Settlement of tax withholding obligations on stock issued to employees

Repayments of notes payable

Stock issuance costs

Proceeds from issuance of Series B Preferred Stock, net of expenses

Redemption of Series A Preferred Stock

Proceeds from line of credit

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EFFECT OF EXCHANGE RATE CHANGES ON CASH

NET (DECREASE) INCREASE IN CASH

NET INCREASE (DECREASE) IN CASH

CASH - Beginning of the year

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Dividends declared, not paid

Purchase of prepaid insurance and motor vehicle with assumption of notes

Purchase of prepaid insurance with assumption of note

Reclass of deposits for property and equipment placed in service

SUPPLEMENTAL INFORMATION - Cash paid during the year for:

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Management Associates, LLC (together “MediGain”).

MAC has a wholly owned subsidiary in Sri Lanka, RCM MediGain Colombo, Pvt.

In May 2018, the Company formed CareCloud Practice Management, Corp.

(“CPM”), a Delaware corporation, to operate the

medical practice management business acquired from Orion Healthcorp.

MAC had a wholly owned subsidiary in Sri Lanka, RCM MediGain Colombo, Pvt.

Effective February 1, 2024, MAC and its wholly owned subsidiary were merged into CareCloud, Inc.

In May 2018, the Company formed

CareCloud Practice Management, Corp.

(“CPM”), a Delaware corporation, to operate the medical practice management business

acquired from Orion Healthcorp.

January 2020, the Company purchased CareCloud Corporation, a company whose name we took.

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generally accepted in the United States of America (“GAAP”) and include the operating results and financial condition of

CareCloud, its wholly-owned subsidiaries, MAC, CPM, its majority-owned subsidiary MTBC Pvt.

Ltd, majority-owned subsidiary MTBC Bagh

Ltd, CCH (since January 2020), Meridian Medical Management (since June 2020), medSR (since June 2021) and the subsidiary in Sri

The non-controlling interests of MTBC Pvt.

CareCloud, its wholly-owned subsidiary CPM, its majority-owned subsidiary MTBC Pvt.

Ltd, majority-owned subsidiary MTBC Bagh Pvt.

CCH (since January 2020), Meridian Medical Management (since June 2020), medSR (since June 2021) and the subsidiary in Sri Lanka.

non-controlling interests of MTBC Pvt.

and MTBC Bagh Pvt.

are inconsequential to the consolidated financial statements.

All intercompany accounts and transactions have been eliminated in consolidation.

and Going Concern — Primarily due to a decline in revenue associated with our Healthcare IT segment and a goodwill impairment

of $ 42 million, the Company generated a net loss of $ 48.7 million and had a net decrease in cash of $ 9.0 million for the year ended December

At December 31, 2023, the Company had negative working capital of $ 57,000 and cash of $ 3.3 million.

Absent any other action,

the Company will require additional liquidity to continue its operations over the next 12 months.

management has considered its plans to continue the Company as a going concern and believes substantial doubt is alleviated by

focusing on cost-control.

As discussed in Note 13, the Company approved a restructuring plan to reduce headcount and operating costs

and generate positive cash flow.

In addition, the Company has suspended the dividend on the Company’s Preferred Stock, which

saves approximately $ 1.3 million

of cash each month.

The dividend will continue to accrue in arrears each month since it is cumulative, but would not be a legal

obligation until the dividend is reinstated.

The dividend will not be recorded as a liability until its declared by the Board of

The Company projects that this restructuring plan, that was implemented in 2023 and will be completed by the end of 2024,

will reduce expenses, thereby reducing ongoing liquidity needs to enable continuation of operations and compliance with debt covenants

for the foreseeable future.

Although there are no guarantees that the Company will be successful, it believes such initiatives will

enable it to continue as a going concern through at least the next twelve months.

intercompany accounts and transactions have been eliminated in consolidation.

Reporting — The Company views its operations as comprising two operating segments, Healthcare IT and Medical Practice Management.

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(1) impairment of goodwill and long-lived assets, (2) depreciable lives of assets, (3) allowance for

expected credit losses, (4) contingent consideration, (5) estimates of variable consideration related to the contract asset, (6) fair

value of identifiable purchased tangible and intangible assets, including determination of expected customer life, (7) stock-based compensation,

and (8) estimating lease terms and incremental borrowing rates.

expected credit losses, (4) estimates of variable consideration related to the contract asset, (5) fair value of identifiable purchased

tangible and intangible assets, including determination of expected customer life, (6) stock-based compensation, and (7) estimating lease

terms and incremental borrowing rates.

Actual results could significantly differ from those estimates.

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these assets.

During the years ended December 31, 2023 and 2022, the Company capitalized approximately

$ 8.6 million and $ 9.2 million, respectively, primarily consisting of salaries and payroll-related costs of employees and consultants

who devoted time to the development of internal-use software projects.

During the years ended December 31, 2024 and 2023, the Company capitalized approximately $ 5.7 million and $ 8.6 million,

respectively, primarily consisting of salaries and payroll-related costs of employees and consultants who devoted time to the development

of internal-use software projects.

Receivable — Accounts receivable are stated at their net realizable value.

Accounts receivable are presented on the consolidated

balance sheet net of an allowance for expected credit losses, which is established based on a lifetime estimated credit loss expected

Accounts receivable are presented in the consolidated

balance sheets net of an allowance for expected credit losses, which is established based on a lifetime estimated credit loss expected

to occur for trade accounts receivable.

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respectively.

of Long-Lived Assets — The Company reviews its long-lived assets for impairment whenever changes in circumstances indicate

that the carrying value of an asset may not be recoverable.

If the sum of undiscounted expected future cash flows is less than the carrying

amount of the asset group, the Company will recognize an impairment loss based on the fair value of the asset.

was no impairment of internal-use software costs, intangible assets, operating lease right of use assets or property and equipment during

the years ended December 31, 2023 and 2022.

of Long-Lived Assets — The Company

reviews its long-lived assets for impairment whenever changes in circumstances indicate that the carrying value of an asset may not

be recoverable.

If the sum of undiscounted expected future cash flows is less than the carrying amount of the asset group, the

Company will recognize an impairment loss based on the fair value of the asset.

There was no impairment

of internal-use software costs, intangible assets, operating lease right of use assets or property and equipment during the years

ended December 31, 2024 and 2023.

— Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired.

Company tests goodwill for impairment annually as of October 31 st , referred to as the annual test date.

impairment test for the Healthcare IT segment is performed using the discounted cash flow approach, the trading price of publicly

traded stock, and the guideline public company method.

Conditions that could trigger a more frequent impairment assessment include,

but are not limited to, a significant adverse change to the Company in certain agreements, significant underperformance relative to

historical or projected future operating results, loss of customer relationships, an economic downturn in customers’

industries, or increased competition.

The Company tests goodwill for impairment annually as of October 31 st , referred to as the annual test date.

The goodwill impairment

test for the Healthcare IT segment is performed using the discounted cash flow approach, the trading price of publicly traded stock and

the guideline public company method.

Conditions that could trigger a more frequent impairment assessment include, but are not limited

to, a significant adverse change to the Company in certain agreements, significant underperformance relative to historical or projected

future operating results, loss of customer relationships, an economic downturn in customers’ industries, or increased competition.

Impairment testing for goodwill is performed at the reporting-unit level.

The Company has

determined that its business consists of two operating segments and two reporting units.

The Company had a triggering event at

August 31, 2023, but it was determined that no

goodwill impairment existed at that time.

The Company has determined that its business consists of two

operating segments and two reporting units.

The Company had a triggering event at August 31, 2023, but it was determined that no goodwill

impairment existed at that time.

The Company had an additional triggering event in December 2023.

It was determined that

the fair value of the Healthcare IT reporting unit was less than the carrying value at October 31 and on December 12, 2023

(triggering event).

Accordingly, impairment charges of approximately $ 2.0

million and $ 40.0

million, respectively, were recorded.

(See Note 3.) No

impairment charges were recorded during the year ended December 31, 2022.

It was determined that the fair value

of the Healthcare IT reporting unit was less than the carrying value at October 31 and at December 12, 2023 (triggering event).

impairment charges of approximately $ 2.0 million and $ 40.0 million, respectively, were recorded.

(See Note 3).

No impairment charges

were recorded during the year ended December 31, 2024.

Stock — Treasury stock is recorded at cost and represents shares repurchased by the Company.

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in recognizing the expense for share-based payments, as historical forfeiture rates have not been significant.

restricted stock units (“RSUs”) classified as equity, the market price of our common stock on the date of grant is used in

recording the fair value of the award.

For RSUs classified as a liability, the earned amount is marked to market based on the end-of-period

common stock price.

For restricted stock units

(“RSUs”) classified as equity, the market price of our common stock on the date of grant is used in recording the fair value

of the award.

For RSUs classified as a liability, the earned amount is marked to market based on the end-of-period common stock price.

Combinations — The Company accounts for business combinations under the provisions of ASC 805, Business Combinations ,

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to unrecognized tax benefits in its consolidated financial statements.

— Dividends are recorded when declared by

the Company’s Board of Directors.

The Board of Directors had declared monthly dividends on the Series A and Series B Preferred

Stock through February 2024.

However, in December 2023, the dividends on the Preferred Stock were suspended.

The dividend scheduled for

payment on December 15, 2023 together with the remaining dividends that were declared, have been accrued in the consolidated balance

Future monthly dividends will continue to accrue in arrears but will not be recorded as a liability until declared by the Board

of Directors.

Preferred Stock dividends are charged against paid in capital because the Company does not have sufficient retained

The Company is prohibited from paying dividends on its common stock without the prior written consent of its lender, Silicon

Valley Bank, a division of First Citizens Bank (“SVB”).

Dividends are recorded when declared by the Company’s Board of Directors.

The Board of Directors had declared monthly

dividends on the Series A and Series B Preferred Stock through February 2024.

However, in December 2023, the dividends on the

Preferred Stock were suspended.

The dividend scheduled for payment on December 15, 2023 together with the remaining dividends that

were declared, have been accrued in the consolidated balance sheet.

Future monthly dividends will continue to accrue in arrears but

will not be recorded as a liability until declared by the Board of Directors.

In January 2025, the Board of Director declared two

months of suspended dividends.

The Company resumed paying monthly dividends in February 2025, paying one month of arrears.

2025, the Company converted the majority of the Series A Preferred Stock into the Company’s common stock.

The March 2025

dividend payment will include dividends for the Series A Preferred Stock that were not converted and dividends for the Series B

Preferred Stock.

(See Note 20).

Preferred Stock dividends are charged against paid in capital because the Company does not have

sufficient retained earnings.

The Company is prohibited from paying dividends on its common stock without the prior written consent

of its lender, Silicon Valley Bank, a division of First Citizens Bank (“SVB”).

Revenue — Deferred revenue primarily consists of payments received in advance of the revenue recognition criteria being met.

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instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value.

Company follows a fair value measurement hierarchy to measure financial instruments.

The fair value of the Company’s financial

instruments is measured using inputs from the three levels of the fair value hierarchy as follows:

are unadjusted quoted market prices in active markets for identical assets or liabilities that the Company has the ability to access

at the measurement date.

are directly or indirectly observable, which include quoted prices for similar assets and liabilities in active markets, quoted prices

for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable

for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation

or other means.

are unobservable inputs that are used to measure fair value to the extent observable inputs are not available.

The Company follows

a fair value measurement hierarchy to measure financial instruments.

fair value of the Company’s financial instruments is measured using inputs from the three levels of the fair value hierarchy as

Inputs are unadjusted quoted market prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Inputs are directly or indirectly observable, which include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Inputs are unobservable inputs that are used to measure fair value to the extent observable inputs are not available.

Company has certain financial instruments that are not measured at fair value on a recurring basis.

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Foreign currency transaction gains/losses are reported as a component of other expense

– net in the consolidated statements of operations and amounted to losses of approximately $ 790,000 and $ 610,000 for the years

ended December 31, 2023 and 2022, respectively.

Loss on Lease Terminations, Unoccupied Lease Charges and Restructuring Costs — Net loss on lease termination represents the

write-off of leasehold improvements as the result of early lease terminations.

Unoccupied lease charges represent the portion of lease

and related costs for that portion of the space that is vacated and not being utilized by the Company.

The Company was able to turn back

to the landlord one of the unused facilities effective January 1, 2022.

Restructuring costs which were incurred in 2023, primarily consist

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

(See Note 13.)

– net in the consolidated statements of operations and amounted to a gain of approximately $ 130,000 and a loss of approximately

$ 790,000 for the years ended December 31, 2024 and 2023, respectively.

Terminations, Unoccupied Lease Charges and Restructuring Costs — Lease terminations represents the write-off of leasehold improvements

as the result of early lease terminations.

Unoccupied lease charges represent the portion of lease and related costs for that portion

of the space that is vacated and not being utilized by the Company.

Restructuring costs incurred in 2024 and 2023 primarily consist of

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

Accounting Pronouncements — From time to time, new accounting pronouncements are issued by the Financial Accounting Standards

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from Contracts with Customers.

The amendments in

this update require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business

The amendments are effective for public business entities for fiscal years beginning after December 15, 2022.

no impact on the consolidated financial statements as a result of this standard.

The amendments in this update require acquiring entities to apply Topic 606 to recognize and measure

contract assets and contract liabilities in a business combination.

The amendments are effective for public business entities for fiscal

years beginning after December 15, 2022.

There was no impact on the consolidated financial statements as a result of this standard.

March 2023, the FASB issued ASU 2023-01, Leases (Topic 842):

Common Control Arrangements- Issue 2.

The amendments in this update

require that leasehold improvements associated with common control leases be:

(1) amortized by the lessee over the useful life of the

leasehold improvements to the common control group as long as the lessee controls the use of the underlying asset through a lease and

(2) accounted for as a transfer between entities under common control through an adjustment to equity if, and when, the lessee no longer

controls the use of the underlying asset.

The amendments in this update are effective for the fiscal years beginning after December 15,

There was no impact on the consolidated financial statements as a result of this standard.

October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

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December 15, 2024.

Early adoption is permitted.

The expected impact would only be to the financial statement disclosures.

The impact is only to the financial statement disclosures and has been adopted by the Company.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures.

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this update to have a material impact on the consolidated financial statements.

March 2024, the FASB issued ASU 2024-02, Codification Improvements- Amendments to Remove References to the Concepts Statements .

This update contains amendments to the Codification that remove references to various FASB Concepts Statements.

These Codification updates

are for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or the structure

of guidance and other minor improvements.

The resulting amendments are referred to as Codification improvements.

The amendments in this

update are effective for public business entities for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

Company does not expect this update to have a material impact on the consolidated financial statements.

November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation

Disclosures (Subtopic 220-40) .

This update contains amendments that require disclosure, in the notes to financial statements, of

specified information about certain costs and expenses.

The amendments in this update are effective for public business entities for

annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption

is permitted.

The expected impact would only be to the financial statement disclosures.

GOODWILL AND INTANGIBLE ASSETS – NET

consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired.

December 31, 2023, and 2022, approximately $ 90,000 of goodwill was allocated to the Medical Practice Management segment and the balance

was allocated to the Healthcare IT segment.

The following is the summary of the changes to the carrying

amount of goodwill for the years ended December 31, 2023 and 2022:

OF CHANGES TO THE CARRYING AMOUNT OF GOODWILL

At December 31, 2024,

and 2023, approximately $ 90,000 of goodwill was allocated to the Medical Practice Management segment and the balance was allocated to

the Healthcare IT segment.

The following is the summary of the changes to the carrying amount of goodwill for the years ended December

31, 2024 and 2023:

OF CHANGES TO CARRYING AMOUNT OF GOODWILL

Year Ended December 31,

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It was determined that the fair

value of the Healthcare IT reporting unit was less than the carrying value at both October 31 and as a result of the triggering event.

value of the Healthcare IT reporting unit was less than the carrying value at both October 31, 2023 and as a result of the December 2023

triggering event.

Accordingly, impairment charges of approximately $ 2.0 million and $ 40.0 million, respectively, were recorded.

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

is a summary of intangible asset activity for the years ended December 31, 2024 and 2023:

OF FINITE-LIVED INTANGIBLE ASSETS

OF INTANGIBLE ASSETS ACTIVITY

Other Intangible

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Balance, January 1, 2024

Translation loss

Translation gain

Balance, December 31, 2024

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Amortization expense

Translation loss

Translation gain

Balance, December 31, 2024

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value of these assets exceeded their carrying value and that there was no impairment.

There were no triggering events during the year

ended December 31, 2024.

amount for capitalized software represents payroll and development costs incurred for internally developed software.

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$ 12.1 million and $ 12.4 million for the years ended December 31, 2024 and 2023, respectively.

The weighted-average amortization period is three years .

The weighted-average amortization period

is three years .

of December 31, 2024, future amortization expense scheduled to be expensed is as follows:

OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

OF INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

Years ending December 31,

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Property and equipment – net

expense was approximately $ 2.0 million for both the years ended December 31, 2023 and 2022.

a result of a triggering event in December 2023, we also reviewed our property and equipment for impairment.

We determined that the fair

value of these assets exceeded their carrying value and that there was no impairment.

expense was approximately $ 2.0 million for both the years ended December 31, 2024 and 2023, respectively.

a result of a triggering event in December 2023, we reviewed our property and equipment for impairment at that time.

We determined that

the fair value of these assets exceeded their carrying value and that there was no impairment.

There were no triggering events during

the year ended December 31, 2024.

CONCENTRATIONS

Risks — As of December 31, 2023 and 2022, the Company held cash of approximately $ 255,000

million, respectively, in the name of its subsidiaries,

at banks in Pakistan and Sri Lanka.

The banking systems in these countries do not provide deposit insurance coverage.

Additionally, from

time to time, the Company maintains cash balances at financial institutions in the United States in excess of federal insurance limits.

Risks — As of December 31, 2024 and 2023, the Company held cash of approximately $ 119,000 and $ 255,000 , respectively, in the

name of its subsidiaries, at banks in Pakistan and Sri Lanka.

The banking systems in these countries do not provide deposit insurance

Additionally, from time to time, the Company maintains cash balances at financial institutions in the United States in excess

of federal insurance limits.

The Company has not experienced any losses on such accounts.

The cash held by each U.S.

operating company was below the federal insurance

limit at December 31, 2023.

operating company

was below the federal insurance limit at December 31, 2024.

Concentrations

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require collateral for outstanding trade accounts receivable.

As of December 31, 2023, two customers

each individually accounted for approximately 7 % of accounts receivable.

As of December 31, 2022, two customers each individually accounted

for approximately 6 % of accounts receivable.

During the years ended December 31, 2023 and 2022 , there was one customer with sales

of approximately 9 % and 7 % of total revenue, respectively.

Risks — The Company’s offices in Islamabad and Bagh, Pakistan, and Colombo, Sri Lanka conduct significant back-office

As of December 31, 2024, two customers each individually accounted for

approximately 7 % of accounts receivable.

As of December 31, 2023, two customers each individually accounted for approximately 7 % of accounts

During the years ended December 31, 2024 and 2023, there was one customer with sales of approximately 10 % and 9 % of total

revenue, respectively.

Risks — The Company’s offices in Islamabad, Karachi and Bagh, Pakistan, and Colombo, Sri Lanka conduct significant back-office

operations for the Company.

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policies, anti-inflationary measures, currency conversion and remittance, and rates and methods of taxation.

amounts of net assets located outside the United States were approximately $ 7.6

million and $ 8.5 million as of December 31, 2023 and 2022, respectively.

These balances exclude net intercompany

receivables of approximately $ 1.0 million as of both December 31, 2023 and 2022, respectively.

The following is a summary of the

net assets located outside the United States as of December 31, 2023 and 2022:

amounts of net assets located outside the United States were approximately $ 7.0 million and $ 7.6 million as of December 31, 2024 and

2023, respectively.

These balances exclude net intercompany receivables of approximately $ 2.2 million and $ 1.0 million as of December

31, 2024 and 2023, respectively.

The following is a summary of the net assets located outside the United States as of December 31, 2024

OF CONCENTRATION OF RISK, BY GEOGRAPHICAL RISKS FACTOR

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Year Ended December 31,

($ in thousands, except share and per share amounts)

($ in thousands, except share and

per share amounts)

Basic and Diluted:

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Net loss attributable to common shareholders per share - basic and diluted

net loss attributable to common shareholders includes the preferred stock dividend amount earned, but not declared, for the year ended

December 31, 2024 of approximately $ 12.3 million.

The dividend payable at December 31, 2024 in the consolidated balance sheet represents

dividends declared, but not paid, through February 29, 2024.

December 31, 2024, the 242,500 unvested restricted stock units (“RSUs”) as discussed in Note 15 have been excluded from the

above calculations as they were anti-dilutive.

All of the warrants previously outstanding expired unexercised in 2023 and are excluded

from the above calculations.

At December 31, 2022, the 598,245 unvested equity RSUs and 1,128,489 unexercised warrants have been excluded

from the above calculations as they were anti-dilutive.

Vested RSUs, vested restricted shares and exercised warrants have been included

in the above calculations.

At December 31, 2023, the 733,908 unvested equity RSUs excluded from the above calculations

as they were anti-dilutive.

All of the warrants previously outstanding expired unexercised in 2023 and are excluded from the above calculations.

Vested RSUs, vested restricted shares and exercised warrants have been included in the above calculations.

— During October 2017, the Company opened a revolving line of credit from SVB under a three-year agreement which replaced the

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The requirement for the minimum liquidity ratio was slightly reduced.

These amendments expire March 31, 2024 and the credit facility

reverts to its previous terms.

of December 31, 2023 and 2022, there was $ 10 million and $ 8 million, respectively, of borrowings under the credit facility.

on the SVB revolving line of credit is currently charged at the prime rate plus 2.0 % .

There is also a fee of one-half of 1% annually

for the unused portion of the credit line .

The debt is secured by all of the Company’s domestic assets and 65 % of the shares in

its offshore subsidiaries.

Future acquisitions are subject to approval by SVB.

At December 31, 2023, the remaining

borrowing base was approximately $ 4.6 million.

These amendments expired on March 31, 2024 and the credit facility

reverted to its previous terms.

of December 31, 2024, there were no borrowings under the credit facility, compared to $ 10 million in borrowings as of December 31, 2023.

Interest on the revolving line of credit was charged at the prime rate plus 2.0 % for the first quarter of 2024, but decreased to the

prime rate plus 1.5 % on April 1, 2024.

There is also a fee of one-half of 1% annually for the unused portion of the credit line.

debt is secured by all of the Company’s domestic assets and 65 % of the shares in its offshore subsidiaries.

Future acquisitions

are subject to approval by SVB.

At December 31, 2024, the available borrowing base was approximately $ 10.0 million.

connection with the original SVB debt agreement, the Company paid SVB approximately $ 50,000 of fees upfront and issued warrants for SVB

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At December 31, 2024 and 2023, the Company was in compliance with all covenants.

January 2022, the agreement with SVB was modified to allow the Company to issue Series B Preferred Stock and pay monthly dividends on

this stock, to use a portion of the offering proceeds to redeem a portion of the Series A Preferred Stock that is outstanding and to

allow for the potential exchange of shares of Series A Preferred Stock for Series B Preferred Stock.

March 2023, SVB became a division of First Citizens Bank & Trust Company.

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As a result, there were no changes to the terms of the credit agreement.

October, 2024, the Company entered into a Ninth Loan Modification agreement with SVB whereby the Company decreased the amount available

on its revolving line of credit from $ 25 million to $ 10 million which proportionally reduced the anniversary fee and the fee on the unused

portion of the credit line.

As a result of the modification, one covenant was slightly modified.

Company maintains cash balances at SVB in excess of the FDIC insurance coverage limits.

The Company performs periodic evaluations of

the relative credit standing of this financial institution to ensure its credit worthiness.

As of December 31, 2024 and December 31,

2023, the Company held cash of approximately $ 119,000 and $ 255,000 , respectively, in the name of its subsidiaries at banks in Pakistan

and Sri Lanka.

The banking systems in these countries do not provide deposit insurance coverage.

The Company has not experienced any

losses on its cash accounts.

Financing Notes — The Company finances certain vehicle purchases both in the United States and in Pakistan.

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OF MATURITIES OF LONG-TERM DEBT

Years ending December 31,

Line of Credit

Year ending December 31,

Vehicle Financing Notes

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following table represents a disaggregation of revenue for the years ended December 31, 2024 and 2023:

OF DISAGGREGATION OF REVENUE

SCHEDULE OF DISAGGREGATION OF REVENUE

Year Ended December 31,

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for remote patient monitoring are satisfied over time as the recordings are received and the patient receives the remote visit.

for chronic care management for the years ended December 31, 2023 and 2022, was approximately $ 1.5 million and $ 208,000 , respectively.

for chronic care management for the years ended December 31, 2024 and 2023 was approximately $ 3.0 million and $ 1.5 million, respectively.

The revenue for remote patient monitoring for the years ended December 31, 2024 and 2023 was approximately $ 779,000 and $ 400,000 , respectively.

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basis as the professional services are rendered.

Unbilled revenue at December 31, 2023 and 2022 was approximately $ 100,000 and $ 2.0 million,

Unbilled revenue at December 31, 2024 and 2023 was approximately $ 338,000

and $ 100,000 ,

respectively.

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were no unsatisfied performance obligations for contracts with an original duration greater than one year.

The Company has

elected to utilize the practical expedient available within the guidance for contracts with an expected duration of one year or less.

The Company has elected to

utilize the practical expedient available with the guidance for contracts with an expected duration of one year or less.

practice management services:

Company also provides medical practice management services under long-term management service agreements to three medical

We provide the medical practices with the nurses, administrative support, facilities, supplies, equipment, marketing, RCM,

accounting, and other non-clinical services needed to efficiently operate their practices.

Revenue is recognized as the services are

provided to the medical practices.

Revenue recorded in the consolidated statements of operations represents the reimbursement of costs

paid by the Company for the practices and the management fee earned each month for managing the practice.

The management fee is based

on either a fixed fee or a percentage of the net operating income.

Company also provides medical practice management services under long-term management service agreements to three medical practices.

We provide the medical practices with the nurses, administrative support, facilities, supplies, equipment, marketing, RCM, accounting,

and other non-clinical services needed to efficiently operate their practices.

Revenue is recognized as the services are provided to

the medical practices.

Revenue recorded in the consolidated statements of operations represents the reimbursement of costs paid by the

Company for the practices and the management fee earned each month for managing the practice.

The management fee is based on either a

fixed fee or a percentage of the net operating income.

Company assumes all financial risk for the performance of the managed medical practices.

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Billing rates are reviewed at least annually and adjusted based on current insurer reimbursement practices.

The performance

obligation is satisfied as the management services are provided.

The performance obligation

is satisfied as the management services are provided.

contracts for medical practice management services have approximately an additional 14 years remaining and are only cancellable under

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performance obligations outstanding was approximately $ 3.5 million.

We expect to recognize substantially

all of the revenue for the remaining performance obligations over the next three months .

Approximately $ 374,000 of the contract asset

represents revenue earned, not paid, from the group purchasing services.

We expect to recognize substantially all of the revenue for the remaining

performance obligations over the next three months.

Approximately $ 318,000 and $ 476,000 of the contract asset represents revenue earned,

not paid, from the group purchasing services and referral fees, respectively.

that we are entitled to collect under the applicable contract are recorded as accounts receivable.

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of the Company’s accounts receivable, contract asset and deferred revenue are as follows:

OF CHANGES IN ACCOUNTS RECEIVABLE, CONTRACT ASSET AND DEFERRED REVENUE

Receivable – Net

Contract Asset

Deferred Revenue

SCHEDULE OF CHANGES IN ACCOUNTS RECEIVABLE, CONTRACT ASSET AND DEFERRED REVENUE

in thousands)

Balance as of January 1, 2024

(Decrease) increase, net

Increase (decrease), net

Balance as of December 31, 2024

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amount of deferred revenue at the beginning of the year and recognized during the year ended December 31, 2024 and 2023 was approximately

$1.1 million and $1.3 million, respectively.

$ 909,000 and $ 1.1 million, respectively.

sales incentive plans include commissions payable to employees and third parties at the time of the initial contract execution that are

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client life, which is three years.

Deferred commissions were approximately $ 517,000 and $ 643,000 at

December 31, 2023 and 2022,

respectively, and are included in the other assets amounts in the consolidated balance sheets.

The amortization of deferred sales commissions

during the years ended December 31, 2023 and 2022 was approximately $ 487,000 and $ 594,000 , respectively.

Deferred commissions were approximately $ 386,000 and $ 517,000 at December 31, 2024 and 2023, respectively,

and are included in the other assets amounts in the consolidated balance sheets.

The amortization of deferred sales commissions during

the years ended December 31, 2024 and 2023 was approximately $ 327,000 and $ 487,000 , respectively.

Accounts Receivable – Estimate of Credit Losses:

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The pools are aligned with management’s review of financial performance.

For the year ended December 31, 2023, no adjustment

to the pools was necessary.

For the years ended December 31, 2024 and 2023,

no adjustment to the pools was necessary.

utilize a loss-rate method to measure the expected credit loss for each pool.

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in the allowance for expected credit losses for trade accounts receivable are presented in the table below:

OF TRADE ALLOWANCE FOR DOUBTFUL ACCOUNTS

SCHEDULE OF TRADE ALLOWANCE FOR DOUBTFUL ACCOUNTS

Year Ended December 31,

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SHAREHOLDERS’ EQUITY

September 11, 2024 a Certificate of Amendment (the “Amendment”) to the Certificate of Designations, Preferences and Rights

of 11 % Series A Cumulative Redeemable Preferred Stock (the “Existing Certificate”) became effective, amending certain provisions

of the 11 % Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”).

title of the Existing Certificate was amended to read “Amended and Restated Certificate of Designations, Preferences and

Rights of 8.75 %

Series A Cumulative Redeemable Perpetual Preferred Stock.” Holders of Series A Preferred Stock will now receive similar change

of control protections to those afforded to holders of the Company’s Series B Preferred Stock.

The dividend of Series A

Preferred Stock was amended from 11 %

per annum and the per annum dividend amount per share was amended from $ 2.75

per share per annum.

Also, the Company now has the right to exchange the shares of Series A Preferred Stock for common stock at the

liquidation preference value of $ 25

per share, plus accrued and unpaid dividends.

(See Note 20) .

Board of Directors of the Company previously approved common stock repurchase programs.

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The underwriter receives 3 % of the gross proceeds.

During the years ended December 31, 2023 and 2022, no

shares of common stock were issued under this ATM.

During the years ended December 31, 2024 and 2023, no shares of common stock were

issued under this ATM.

This right terminated when the Company suspended the Preferred Stock dividends.

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have been designated as Series B shares.

Company also had the right to sell up to $ 35 million of its Series B Preferred Stock using an ATM facility.

This right terminated when

the Company suspended the Preferred Stock dividends.

The underwriter received 3 % of the gross proceeds.

the year ended December 31, 2023, the Company sold 59,773 of shares of Series B Preferred Stock

under the Company’s ATM and received net proceeds of approximately $ 1.4 million .

During the year ended December 31, 2022, the Company sold 1,324,858 shares of Series B Preferred Stock and received net proceeds

of approximately $ 30.9 million .

This includes 224,048 shares sold

under the Company’s ATM.

On March 18, 2022, the Company used a portion of the proceeds from selling Series B Preferred Stock to

redeem 800,000 shares of Series A Preferred Stock for $ 25.00 per share, plus all accrued and unpaid dividends to, but not including,

the redemption date.

November 4, 2020, the Company has the right to redeem, at its option, the Series A Preferred Stock,

in whole or in part, at a cash redemption price of $ 25.00

per share, plus all accrued and unpaid dividends

to, but not including, the redemption date.

The Series A Preferred Stock has no stated maturity,

is not subject to any sinking fund or other mandatory redemption, and is not convertible into or exchangeable for any of the Company’s

other securities.

Holders of the Series A Preferred Stock have no voting rights except for limited

voting rights if dividends payable on the Series A Preferred Stock are in arrears for eighteen

or more consecutive or non-consecutive monthly dividend periods, at which time they are entitled to appoint two additional directors

to our Board of Directors.

If the Company were to liquidate, dissolve or wind up, the holders of the Series

A Preferred Stock will have the right to receive $ 25.00

per share, plus any accumulated and unpaid dividends

to, but not including, the date of payment, before any payment is made to the holders of the common stock.

A Preferred Stock is listed on the Nasdaq Global Market under the trading symbol “CCLDP.”

February 15, 2024 and prior to February 15, 2025, we may redeem, at our option, the Series B Preferred Stock, in whole or in part, at

a cash redemption price of $ 25.75 per share, plus all accrued and unpaid dividends to, but not including, the redemption date.

after February 15, 2025 and prior to February 15, 2026, we may redeem, at our option, the Series B Preferred Stock, in whole or in part,

at a cash redemption price of $ 25.50 per share, plus all accrued and unpaid dividends to, but not including, the redemption date.

or after February 15, 2026 and prior to February 15, 2027, we may redeem, at our option, the Series B Preferred Stock, in whole or in

Company also had the right to sell up to $ 35

million of its Series B Preferred Stock using an ATM facility.

This right terminated when the Company suspended the Preferred Stock

The ATM facility’s underwriter received 3 %

of the gross proceeds.

During the year ended December 31, 2023, the Company sold 59,773

of shares of Series B Preferred Stock under the Company’s ATM and received net proceeds of approximately $ 1.4

During the year ended December 31, 2024, no shares of Series B Preferred Stock were issued under this ATM.

September 11, 2024, we may, at our option, convert the majority of the Series A Preferred Stock into common stock at any time.

we convert the Series A Preferred Stock, then subsequent to the conversion date, dividends will cease to accrue on shares of the Series

A Preferred Stock, the shares of the 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 shares of common stock plus accumulated and unpaid dividends, if any, payable

upon the conversion.

(See Note 20).

November 4, 2020, the Company has the right to redeem, at its option, the Series A Preferred Stock, in whole or in part, at a cash

redemption price of $ 25.00

per share, plus all accrued and unpaid dividends to, but not including, the redemption date.

The Series A Preferred Stock has no

stated maturity, is not subject to any sinking fund or other mandatory redemption, and is not convertible at the option of the

holder into or exchangeable for any of the Company’s other securities.

Holders of the Series A Preferred Stock have no voting

rights except for limited voting rights if dividends payable on the Series A Preferred Stock are in arrears for eighteen or more

consecutive or non-consecutive monthly dividend periods, at which time they are entitled to appoint two additional directors to our

Board of Directors.

If the Company were to liquidate, dissolve or wind up, the holders of the Series A Preferred Stock will have the

right to receive $ 25.00

per share, plus any accumulated and unpaid dividends to, but not including, the date of payment, before any payment is made to the

holders of the common stock.

The Series A Preferred Stock is listed on the Nasdaq Global Market under the trading symbol

February 15, 2024 and prior to February 15, 2025, we were able to redeem, at our option, the Series B Preferred Stock, in whole or in

part, at a cash redemption price of $ 25.75 per share, plus all accrued and unpaid dividends to, but not including, the redemption date.

On or after February 15, 2025 and prior to February 15, 2026, we may redeem, at our option, the Series B Preferred Stock, in whole or

in part, at a cash redemption price of $ 25.50 per share, plus all accrued and unpaid dividends to, but not including, the redemption

On or after February 15, 2026 and prior to February 15, 2027, we may redeem, at our option, the Series B Preferred Stock, in whole

or in part, at a cash redemption price of $ 25.25 per share, plus all accrued and unpaid dividends to, but not including, the redemption

On or after February 15, 2027, we may redeem, at our option, the Series B Preferred Stock, in whole or in part, at a cash redemption

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is listed on the Nasdaq Global Market under the trading symbol “CCLDO.”

on the Series A and Series B Preferred Stock of $ 2.75 and $ 2.19 , respectively, annually per share are cumulative from the date of issue

and are payable each month when, as and if declared by the Company’s Board of Directors.

In October, 2023, the Board of Directors had declared monthly dividends on the Series A and Series

B Preferred Stock payable through February 2024;

however, on December 11, 2023, the Board of Directors suspended the monthly cash dividends

for Series A Preferred Stock and Series B Preferred Stock beginning with the payment scheduled for December 15, 2023 together with the

remaining dividends that were declared.

The suspension of these dividends will defer approximately $ 1.3 million in cash dividend payments

During this suspension, dividends will continue to accrue in arrears on the Series A and Series B Preferred Stock.

of Directors will regularly review and consider when the suspension should be lifted.

Company has issued 6,603,489 warrants for its common stock, of which 1,128,489 remained

outstanding at December 31, 2022.

All of these warrants expired unexercised during 2023 and there were no warrants outstanding at December

During the year ended December 31, 2022, 125,000 warrants were exercised at a $ 3.92 exercise price.

The warrants were

exercised via a cashless exercise.

on the Series A and Series B Preferred Stock of $ 2.75 (through September 11, 2024 and $ 2.19 thereafter) and $ 2.19 annually per share

respectively, are cumulative from the date of issue and are payable each month when, as and if declared by the Company’s Board

of Directors.

In October 2023, the Board of Directors declared monthly dividends on the Series A and Series B Preferred Stock payable

through February 2024.

However, on December 11, 2023, the Board of Directors suspended the monthly cash dividends for Series A Preferred

Stock and Series B Preferred Stock beginning with the payment scheduled for December 15, 2023 together with the remaining dividends that

were declared.

The suspension of these dividends deferred approximately $ 1.3 million in cash dividend payments each month through September

Due to the above Amendment, effective on September 12, 2024, the combined monthly cash dividends were reduced to approximately

$ 1.1 million per month.

the suspension, dividends continued to accrue in arrears on the Series A and Series B Preferred Stock.

The Company’s Board of Directors

declared payment of two months of dividends in January 2025 and the Company resumed payment of the dividends in February 2025, paying

one month of dividends in arrears at that time.

The second payment is scheduled for March 2025.

the year ended December 31, 2024, no dividends were declared by the Board of Directors.

At December 31, 2024, the Company owed

approximately $ 5.4

million for dividends that had previously been declared through February 2024 (but whose payment was suspended), and also had total

undeclared dividends of approximately $ 12.3

million, which represents the accumulated (but undeclared) dividends due to Preferred Stock shareholders of record on December 31,

Dividends that have accrued in arrears but which have not been declared by the Board of Directors are not recorded in the

consolidated balance sheets but are reflected in the net loss attributable to common shareholders.

Total dividends in arrears at

December 31, 2024 amounted to approximately $ 17.7

million or $ 3.04

per share for the Series A Preferred Stock and $ 2.55

per share for the Series B Preferred Stock.

Company has issued 6,603,489 warrants for its common stock, of which 1,128,489 warrants expired unexercised during 2023.

There were no

warrants outstanding at December 31, 2024 and 2023.

Company incurs common and preferred stock offering costs which consist principally of professional fees, primarily legal and accounting,

and other costs such as printing and registration costs.

In connection with the 2023 and 2022 equity offerings, the Company incurred

approximately $ 71,000 and $ 2.3 million, respectively, of such costs, including underwriting commissions

and placement agent fees.

For the year ended December 31, 2022, there was $ 32,000 of fees paid for comfort letters in connection with

the equity offerings.

In connection with the 2023 equity offerings, the Company incurred approximately

$ 71,000 of such costs, including underwriting commissions and placement agent fees.

COMMITMENTS AND CONTINGENCIES

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award was made during the first quarter of 2024.

The deadline for Ramapo to file a summary action in New Jersey seeking to overturn the

arbitrator’s decision is April 20, 2024.

The Company’s portion of the settlement is approximately $ 32,000 and the insurance

company will pay the balance.

The Company’s portion has been recorded in accrued expenses at December 31, 2023 in the consolidated

balance sheet.

company paid the balance.

The Company’s portion was recorded in accrued expenses at December 31, 2023 in the consolidated balance

former customer filed a complaint against the Company in New Jersey State Court to recover damages claimed to have been caused by the

mishandling of their account.

Plaintiff alleged at least approximately $ 750,000 in damages which was disputed by the Company.

participated in a one-day court-ordered, non-binding arbitration.

At that time, the arbitrator awarded Plaintiff $ 288,750 on its contract

claims, and awarded the Company $ 21,698 on its cross-claim for unpaid fees.

Plaintiff filed to reject this award.

The Company previously

filed a partial motion for summary judgment on the alleged punitive damages, but the court denied that motion finding there is an issue

of fact as to whether those can be awarded at trial.

The Company filed an offer of judgment for $ 200,000 during April 2024 which was

accepted and paid in July 2024.

connection with a prior acquisition, the seller had alleged that the Company owed approximately $ 800,000 in transition related costs

The parties agreed to settle the claim for approximately $ 316,000 , which was paid in September 2024.

time to time, we may become involved in other legal proceedings arising in the ordinary course of our business.

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borrowing rate.

There was one lease modification during the year ended December 31, 2023 and none during the year ended December 31,

We review our incremental borrowing rate for our portfolio of leases on a quarterly basis.

the years ended December 31, 2023 and 2022, there were approximately $ 169,000 and $ 1.0 million, respectively, of unoccupied lease charges

for two of the Company’s facilities.

There were no lease impairments recorded for the years ended December 31, 2023 and 2022.

the year ended December 31, 2022, there was a gain on lease termination of approximately $ 105,000 .

Additionally, a facility lease was

terminated in conjunction with the Company ceasing its document storage services resulting in additional costs of approximately $ 203,000 .

These amounts are included in the net loss on lease terminations, unoccupied lease charges and restructuring costs in the consolidated

statements of operations.

There was one lease modification during both years ended December 31, 2024 and 2023.

We review our incremental borrowing

rate for our portfolio of leases on a quarterly basis.

the year ended December 31, 2024, there were no unoccupied

lease charges recorded as compared to approximately $ 169,000 for

two of the Company’s facilities for the year ended December 31, 2023.

There were no lease

impairments recorded for the years ended December 31, 2024 and 2023.

For the year ended December 31, 2024, there was a gain on lease

terminations of approximately $ 10,000 .

For the year ended December 31, 2023, there was a loss on lease terminations of approximately $ 291,000 .

These amounts are included in lease terminations, unoccupied lease

charges and restructuring costs in the consolidated statement of operations.

expense is included in direct operating costs, general and administrative expense, selling and marketing expense and research and development

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As of December 31, 2024, we had 28 leased properties,

five in Medical Practice Management and 27 in Healthcare IT, with the remaining terms ranging from less than one year to twelve years.

five in Medical Practice Management and 23 in Healthcare IT, with the remaining terms ranging from less than one year to eleven years.

Our lease terms are determined taking into account lease renewal options, the Company’s anticipated operating plans and leases

that are on a month-to-month basi s.

that are on a month-to-month basis .

We also have some related party leases – see Note 12.

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balance sheet information related to leases was as follows:

OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES

SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES

December 31, 2024

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Operating lease ROU assets, net

Operating lease liabilities (current portion)

Operating lease liabilities

Current operating lease liabilities

Non-current operating lease liabilities

Total operating lease liabilities

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Asset lease expense

Foreign exchange loss

Foreign exchange gain/(loss)

ROU assets, net

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Operating leases

leases, Weighted average discount rate:

Operating leases, Weighted average discount rate

cash flow and other information related to leases was as follows:

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ROU assets obtained in exchange for lease liabilities:

Operating leases, excluding impairments and terminations

Operating leases, excluding terminations

of lease liabilities are as follows:

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Long-term lease obligations

Company leases certain apartments which are subleased to others.

The sublease agreements are currently on a month-to-month basis and

are considered operating leases.

For the year ended December 31, 2024, the Company received sublease income of approximately $ 94,000 .

There was no sublease income for the year ended December 31, 2023.

RELATED PARTIES

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Revenues from this customer were approximately

$ 125,000 and $ 58,000 for the years ended December 31,

2023 and 2022, respectively.

As of December 31, 2023 and 2022, the accounts receivable balance due from

this customer was approximately $ 18,000 and $ 10,000 , respectively, an d is included in accounts receivable - net in the consolidated

balance sheets.

$ 138,000 and $ 125,000 for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, the accounts receivable

balance due from this customer was approximately $ 13,000 and $ 18,000 , respectively, and is included in accounts receivable - net in the

consolidated balance sheets.

Company leases its corporate offices in New Jersey, its temporary housing for its foreign visitors, a storage facility, its backup operations

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During the years ended December

31, 2023 and 2022, the Company spent approximately $ 1.8 million

and $ 941,000 , respectively, to upgrade the related party leased facilities.

During the years ended December

31, 2023 and 2022, the Company temporarily advanced the Executive Chairman approximately $ 330,000 and $ 42,000 , respectively, to purchase

31, 2024 and 2023, the Company spent approximately $ 979,000 and $ 1.8 million, respectively, to upgrade the related party leased facilities.

During the year ended December 31, 2023, the Company temporarily advanced the Executive Chairman approximately $ 330,000 , to purchase

vacant land surrounding the Bagh facility for the sole use and benefit of the Company in order to expedite the purchase on the Company’s

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to the leases of the Company’s corporate offices in the amount of approximately $ 16,000 for both the years ended December 31, 2024

The Company also leases two facilities used for temporary housing from a management employee for approximately $ 6,500 per month.

in the ROU asset at December 31, 2024 is approximately $ 550,000

applicable to the related party leases.

in the current and non-current operating lease liability at December 31, 2024 is approximately $ 181,000

and $ 367,000 ,

The Company also leases two facilities used for temporary housing from a management

employee for approximately $ 6,200 per month.

in the ROU asset at December 31, 2023 is approximately $ 331,000 applicable to the related party leases.

Included in the current and non-current

operating lease liability at December 31, 2023 is approximately $ 182,000 and $ 142,000 , respectively, applicable to the related party

in the ROU asset at December 31, 2022 is approximately $ 467,000 applicable to the related party leases.

Included in the current and non-current

operating lease liability at December 31, 2022 is approximately $ 158,000 and $ 301,000 , respectively, applicable to the related party

respectively, applicable to the related party leases.

Included in the ROU asset at December 31, 2023 is approximately $ 331,000

applicable to the related party leases.

in the current and non-current operating lease liability at December 31, 2023 is approximately $ 182,000

and $ 142,000 ,

respectively, applicable to the related party leases.

June 2022, the Company entered into a one-year consulting agreement with an entity owned and controlled by one of its former non-independent

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performing due diligence.

In addition, the Company may make additional payments under the agreement for any successful acquisitions by

the Company based on the purchase price of the transaction.

In addition, the Company could make additional payments under the agreement for any successful acquisitions

by the Company based on the purchase price of the transaction.

No such additional payments were made in 2022.

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in February 2023 and received an additional 14,000 shares in January 2024.

All of the payments made were expensed during the year ended

December 31, 2023.

The amortization is recorded as stock compensation in general and administrative expense in the consolidated statement

All of the payments made were capitalized and amortized over

the service period.

The amortization was recorded as stock compensation in general and administrative expense in the consolidated statement

of operations.

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2014 Equity Incentive Plan.

In addition to the extension of the consulting agreement, the amendment provides that any transaction fees

In addition to the extension of the consulting agreement, the amendment provided that any transaction fees

due will be offset against the last two above payments before any amounts are due to that former director.

There were no transaction

fees through December 31, 2023.

(See Note 20.)

Effective February 1, 2024,

the Company added an additional Statement of Work (“SOW”) to the consulting agreement with the same entity.

As compensation

for the SOW, the entity received $ 25,000 per month.

The SOW was cancelable with ten days’ notice.

The consulting agreement and

SOW, through mutual consent, were terminated as of April 30, 2024.

There were no transaction fees paid through that date.

Effective May

1, 2024, the former non-independent director became President of the Company and effective January 1, 2025 became Co-Chief Executive

January 9, 2024, and as amended February 12, 2024, the Company entered into a consulting agreement with an entity owned and controlled

by a member of its Board of Directors to provide investor relations and other services as requested for $ 8,000 per month (reduced to

$ 2,000 per month effective September 1, 2024 and reduced to an as-needed basis effective January 1, 2025).

The agreement was paid at

the contractual amount plus amounts for additional services requested, and as of January 1, 2025, is paid on an hourly basis.

The consulting

agreement is cancelable with ten days’ notice.

For the year ended December 31, 2024, the expense recorded under this agreement

was approximately $ 75,000 and is included in general and administrative expense in the consolidated statement of operations.

2020, a New Jersey corporation, talkMD Clinicians, PA (“talkMD”), was formed by the wife of the Executive Chairman, who is

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As of December 31, 2024, talkMD had not yet commenced

Cumulatively, the Company has paid approximately

$ 5,000 on behalf of talkMD for income taxes.

Cumulatively, the Company has paid approximately $ 6,000 on behalf of talkMD for income taxes.

RESTRUCTURING COSTS

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In addition, the Company instituted certain other expense reductions.

difference between the free cash flow and the expense savings represents amounts which were previously capitalized as part of

software capitalization.

A majority of the impacted employees exited in the fourth quarter of 2023.

The Company estimates that it

will incur expenses of approximately $ 900,000 related to the reduction in workforce of which approximately $ 645,000 was incurred in 2023, with the remaining

expenses to be incurred in 2024.

These restructuring expenses consisted of one-time termination benefits, including but not limited

to, severance payments and healthcare benefits.

Also as previously noted, the dividends on the Preferred Stock have been suspended

in order to increase cash flow.

following table summarizes restructuring costs which are included in net loss on lease termination, unoccupied lease charges and restructuring

costs in the December 31, 2023 consolidated statement of operations:

OF RESTRUCTURING COSTS

majority of the impacted employees exited in the fourth quarter of 2023.

The Company estimates that it will incur expenses of approximately

$ 1.35 million related to the reduction in workforce of which approximately $ 606,000 and $ 645,000 were incurred in 2024 and 2023, respectively,

with the remaining expenses of approximately $ 100,000 to be incurred in 2025.

These restructuring expenses consisted of one-time termination

benefits, including but not limited to, severance payments and healthcare benefits.

following table summarizes restructuring costs for 2024 and 2023:

SCHEDULE OF RESTRUCTURING COSTS

Year Ended December 31,

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Total restructuring and other costs

expense associated with the restructuring is included in net loss on lease terminations, unoccupied lease charges and restructuring cost

in the consolidated statement of operations for the year ended December 31, 2023.

This line also includes $ 291,000 for net loss on lease

terminations and $ 169,000 for unoccupied lease charges.

The liabilities associated with restructuring costs are included in accrued expenses

and other current liabilities in the December 31, 2023 consolidated balance sheet.

The following table summarizes activity related to

liabilities associated with restructuring costs:

expense associated with the restructuring is included in lease terminations, unoccupied lease charges and restructuring costs in the

consolidated statement of operations for the years ended December 31, 2024 and 2023.

This line also includes $ 291,000 for loss on lease

terminations and $ 169,000 for unoccupied lease charges for the year ended December 31, 2023.

The liabilities associated with restructuring

costs are included in accrued expenses in the consolidated balance sheet.

The following table summarizes

activity related to liabilities associated with restructuring costs:

OF LIABILITIES ASSOCIATED WITH RESTRUCTURING COSTS

Severance and

separation costs

Equity awards

acceleration costs

related costs

restructuring and

Severance and separation costs

Equity awards acceleration costs

Total restructuring and other costs

($ in thousands)

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Balance as of December 31, 2024

Balance as of January 1, 2023

Payments and other adjustments

Balance as of December 31, 2023

EMPLOYEE BENEFIT PLANS

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subsidiaries, although there is no match for CPM employees.

contributions to the plans for the years ended December 31, 2023 and 2022 were approximately $ 587,000 and $ 549,000 ,

respectively.

contributions to the plans for the years ended December 31, 2024 and 2023 were approximately $ 449,000 and $ 587,000 , respectively.

Additionally,

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monthly compensation .

The Company’s contributions for the years ended December 31, 2023 and 2022 were approximately

$ 394,000 and $ 329,000 , respectively.

The Company’s contributions for the years ended December 31, 2024 and 2023 were approximately $ 438,000 and

$ 394,000 , respectively.

Company maintains a defined contribution retirement plan covering all employees in Sri Lanka.

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2023 was approximately $ 28,000 and $ 24,000 , respectively.

The contributions are required to be

deposited with the Employees’ Provident Fund Organization, a government owned entity.

The contributions are required to be deposited with the Employees’ Provident

Fund Organization, a government owned entity.

STOCK-BASED COMPENSATION

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one common share per RSU, immediately after a change in control, as defined in the award agreement.

2023, 1,098,976 RSUs of common stock were granted to employees and independent contractors to vest at different dates during the years

2023 through 2025.

Included therein were 30,000 RSUs of common stock granted over two years equally to the five outside members of the

Board of Directors with 25 % of the shares vesting every six months.

2022, 777,715 RSUs of common stock were granted to employees and independent contractors to vest at different dates during the years

2022 through 2024.

Included therein were 80,000 shares of common stock granted over two years equally to the four outside members of

the Board of Directors with 25 % of the shares vesting every six months.

2024, 226,894 RSUs

of common stock were granted to employees and independent contractors to vest at different dates during the years 2024 through 2026.

Included therein were 30,000 RSUs

of common stock granted over two years equally to each of the five outside members of the Board of Directors with 25 %

of the shares vesting every six months.

During 2023, 1,098,976 RSUs

of common stock were granted to employees and independent contractors to vest at different dates during the years 2023 through 2025.

Included therein were 30,000 RSUs

of common stock granted over two years equally to each of the five outside members of the Board of Directors with 25 %

of the shares vesting every six months.

December 2022, it was agreed that certain bonuses to employees of medSR that were originally going to be paid in cash would be paid in

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for the years ended December 31, 2024 and 2023:

OF SHARE-BASED COMPENSATION ARRANGEMENTS BY SHARE-BASED PAYMENT AWARD

Preferred Stock

DISCLOSURE OF SHARE-BASED COMPENSATION ARRANGEMENTS BY SHARE-BASED PAYMENT AWARD

Series A Preferred Stock

Series B Preferred Stock

Outstanding and unvested shares at January 1, 2024

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Outstanding and unvested shares at December 31, 2023

of December 31, 2023 and 2022, there was approximately $ 1.3 million and $ 1.4 million, respectively, of total unrecognized compensation

cost related to the common stock RSUs classified as equity that will be expensed through 2025.

As of December 31, 2023 and 2022, there

was approximately $ 351,000 and $ 557,000 , respectively, of total unrecognized compensation cost related to the Series B Preferred Stock

RSUs classified as equity that will be, or was, expensed through the following year.

There was no unrecognized compensation cost related

to the Series A Preferred Stock RSUs for both the years ended December 31, 2023 and 2022.

the total outstanding and unvested common stock RSUs at December 31, 2023 and 2022, 733,908 and 598,245 RSUs, respectively, are classified

as equity and 19,587 and 47,230 RSUs, respectively, are classified as a liability.

of December 31, 2024 and 2023, there was approximately $ 416,000 and $ 1.3 million, respectively, of total unrecognized compensation cost

related to the common stock RSUs classified as equity that will be expensed through 2026.

As of December 31, 2024, there was no unrecognized

compensation cost as compared to approximately $ 351,000 of total unrecognized compensation cost as of December 31, 2023 related to the

Series B Preferred Stock RSUs classified as equity that was expensed through the following year.

There was no unrecognized compensation

cost related to the Series A Preferred Stock RSUs for both the years ended December 31, 2024 and 2023.

the total outstanding and unvested common stock RSUs at December 31, 2024, 242,500 are classified as equity and at December 31 2023,

733,908 RSUs are classified as equity and 19,587 RSUs are classified as a liability.

For both 2024 and 2023, all of the Preferred Stock

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SCHEDULE OF SHARE-BASED COMPENSATION, RESTRICTED STOCK UNITS AWARD ACTIVITY

Preferred Stock

Series A Preferred Stock

Series B Preferred Stock

Shares available for grant at January 1, 2024

( 1,098,976 )

RSUs forfeited

1 unchanged sentence

Shares available for grant at January 1, 2023

Shares added to plan

Shares redesignated as Series B

( 1,098,976 )

RSUs forfeited

Shares available for grant at December 31, 2023

liability for the cash-settled awards and accrued payroll taxes on equity awards was approximately $ 767,000 and $ 1.0 million at December

liability for the cash-settled awards and accrued payroll taxes on equity awards was approximately $ 6,000 and $ 767,000 at December 31,

2024 and 2023, respectively, and is included in accrued compensation in the consolidated balance sheets.

During the years ended December

31, 2023 and 2022, approximately $ 19,000 and $ 105,000 , respectively, was paid in connection with the cash-settled awards.

A Preferred Stock

2021, the Compensation Committee granted executive bonuses to be paid in 34,000 shares of Series A Preferred Stock with the final number

of shares and the amount based on specified performance criteria being achieved during 2021.

Also in 2021, 16,010 shares of Series A

Preferred Stock were granted as performance bonuses and in lieu of sales commissions.

During January 2022, the Compensation Committee

determined that the financial objectives were attained and all of the performance bonus shares were issued.

B Preferred Stock

31, 2024 and 2023, approximately $ 45,000 and $ 19,000 , respectively, were paid in connection with the cash-settled awards.

February 2023, the Compensation Committee granted executive bonuses to be paid in 34,000 shares of Series B Preferred Stock, with the

number of shares and the amount based on specified criteria being achieved during the year 2023.

During October, the Compensation Committee

approved for issuance 10,000 of the above shares to one of the executives who retired.

The remaining shares will not be issued.

During October 2023, the Compensation

Committee approved for issuance 10,000 of the above shares to one of the executives who retired.

The remaining shares were not issued

and previously accrued amounts were reversed during 2024.

March 2024, the Compensation Committee approved executive bonuses to be paid in shares of Series B Preferred Stock with the number of

shares and the amount based on specified criteria being achieved for the year 2024.

There were 34,000 shares awarded.

During May 2024,

an additional executive bonus with similar terms was approved and 12,000 shares were awarded.

During December 2024, the Compensation

Committee determined that the financial objectives were attained and all of the performance bonus shares were issued.

compensation expense

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the RSUs classified as equity was $ 2.16 and $ 3.40 for the years ended December 31, 2024 and 2023, respectively.

The weighted average

grant date fair value of the Series A Preferred Stock in connection with the RSUs was $ 26.69 for the year ended December 31, 2022.

were no grants of the Series A Preferred Stock in 2023.

For the Series B Preferred Stock, the weighted average grant date fair value

was $ 25.07 and $ 25.24 for the years ended December 31, 2023 and 2022, respectively.

The following table summarizes the components of

stock-based compensation expense for the years ended December 31, 2023 and 2022:

For the Series B Preferred

Stock, the weighted average grant date fair value was $ 6.33 and $ 25.07 for the years ended December 31, 2024 and 2023, respectively.

The following table summarizes the components of stock-based compensation expense for the years ended December 31, 2024 and 2023:

SCHEDULE OF EMPLOYEE SERVICE SHARE-BASED COMPENSATION, ALLOCATION OF RECOGNIZED PERIOD COSTS

Year Ended December 31,

Stock-based compensation included in the consolidated statements of operations:

compensation included in the consolidated statements of operations:

($ in thousands)

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Selling and marketing

Net loss on lease terminations, unoccupied lease charges and restructuring costs

Lease terminations, unoccupied lease charges and restructuring costs

Total stock-based compensation expense

the years ended December 31, 2024 and 2023, the Company estimated its income tax provision based upon the annual pre-tax income or loss.

Although the Company reported GAAP earnings in 2022 and 2023, it incurred losses historically and there is uncertainty regarding future

taxable income, which makes realization of a deferred tax asset difficult to support in accordance with ASC 740.

Accordingly, a

valuation allowance has been recorded against all federal and state deferred tax assets as of December 31, 2023 and December 31, 2022,

with the exception of a net deferred tax liability relating to the amortization of intangibles for tax purposes.

Although the Company reported GAAP earnings in 2024, it incurred losses historically and there is uncertainty regarding future U.S.

income, which makes realization of a deferred tax asset difficult to support in accordance with ASC 740.

Accordingly, a valuation allowance

has been recorded against all federal and state deferred tax assets as of December 31, 2024 and 2023.

annual adjusted earnings and profits of our foreign affiliates pass through to the U.S.

11 unchanged sentences

Beginning balance

Current year valuation allowance (decrease) increase

Current year valuation allowance increase (decrease)

Ending balance

(loss) income before tax for financial reporting purposes during the years ended December 31, 2023 and 2022 consisted of the following:

SCHEDULE OF INCOME BEFORE INCOME TAX, DOMESTIC AND FOREIGN

income (loss) before provision (benefit) for income taxes for financial reporting purposes during the years ended December 31, 2024 and

2023 consisted of the following:

OF INCOME (LOSS) BEFORE INCOME TAX, DOMESTIC AND FOREIGN

Year Ended December 31,

1 unchanged sentence

United States

(benefit) provision for income taxes for the years ended December 31, 2023 and 2022 consisted of the following:

provision (benefit) for income taxes for the years ended December 31, 2024 and 2023 consisted of the following:

OF COMPONENTS OF INCOME TAX PROVISION (BENEFIT)

1 unchanged sentence

($ in thousands)

Current Income Tax Expense (Benefit)

Deferred Income Tax Expense

Total income tax (benefit) provision

Total income tax provision (benefit)

components of the Company’s deferred income taxes as of December 31, 2024 and 2023 are as follows:

33 unchanged sentences

naked credit).

The resulting deferred tax liability, which is expected to continue to increase over the amortization period, will have

an indefinite life.

As a result of the Company having indefinite life net operating losses under the recent tax reform legislation, the

federal deferred tax liability resulting from the amortization of goodwill was offset against these indefinite federal operating net

loss deferred tax assets to the extent allowable.

to the fact that the aforementioned deferred tax liability could have an indefinite life, it is not netted against the Company’s

deferred tax assets when determining the required valuation allowance in accordance with ASC 740 guidelines.

Doing so would result in

the understatement of the valuation allowance and related deferred income tax expense.

Typically, the resulting deferred tax liability, which is expected to continue to increase over the amortization period,

will have an indefinite life.

As a result of the Company having indefinite life net operating losses under the recent tax reform legislation,

the federal deferred tax liability resulting from the amortization of goodwill was offset against these indefinite federal operating

net losses deferred tax assets to the extent allowable prior to 2023.

As a result of the goodwill impairment charge in 2023, the entire

deferred tax liability was reversed at that time and no additional deferred tax liability was recorded for 2024.

reconciliation of the federal statutory income tax rate ( 21 %) to the Company’s effective income tax rate (determined in dollars)

3 unchanged sentences

($ in thousands)

Federal (benefit) provision at statutory rate

Federal provision (benefit) at statutory rate

Increase (decrease) in income taxes resulting from:

4 unchanged sentences

Stock based compensation

Change in contingent consideration

Goodwill impairment charges

1 unchanged sentence

Valuation allowance

Total income tax (benefit) provision

Total income tax provision (benefit)

December 31, 2024 and 2023, the Company did not record any uncertain tax positions based on the technical merits.

5 unchanged sentences

of unused net operating losses and tax credits in the United States by major taxing jurisdictions in which the Company is subject to

For the first six months of 2022, the Pakistan Federal Board of Revenue allowed a 100 % tax credit against earnings from IT activities,

which precludes the Pakistan subsidiaries from being subject to income taxes.

A new tax became effective July 1, 2022, whereby IT companies

are subject to a 0.25% tax deducted at the source on receipts received from foreign sources with no further tax being due .

Company’s policy that any assessed penalties and interest on uncertain tax positions would be charged to income tax expense.

former Pakistan tax credit and foreign receipts tax does not have a significant impact on the Company’s effective tax rate as all

of its earnings in Pakistan have been fully included in the U.S.

IT companies in Pakistan are subject to a 0.25% tax deducted at the source on receipts received from foreign sources with no further

tax being due .

It is the Company’s policy that any assessed penalties and interest on uncertain tax positions would be charged

to income tax expense.

Pakistan foreign receipts tax does not have a significant impact on the Company’s effective tax rate as all of its earnings in

Pakistan have been fully included in the U.S.

federal tax rate reconciliation at 21 % for 2024 and 2023.

statutory corporate tax rate is 29 % before consideration of the aforementioned tax credit and the foreign receipts tax.

The Pakistan statutory corporate

tax rate is 29 % before consideration of the aforementioned tax credit and the foreign receipts tax.

of December 31, 2024, the Company has a total federal NOL carry forward of approximately $ 265 million of which approximately $ 187 million

9 unchanged sentences

deferred tax assets

or liabilities recorded on the consolidated balance sheet at December 31, 2023.

As of December 31, 2022, the Company recorded a deferred

tax liability related to the amortization of goodwill.

or liabilities recorded in the consolidated balance sheets at December 31, 2024 and 2023, respectively.

OTHER EXPENSE – NET

3 unchanged sentences

($ in thousands)

Foreign exchange losses

Foreign exchange gains (losses)

Other expense

Other expense - net

currency transaction gains and losses primarily result from transactions in foreign currencies other than the functional currency.

transaction gains and losses are recorded in the consolidated statements of operations related to the recurring measurement and settlement

of such transactions.

Foreign currency transaction gains and losses primarily result from

transactions in foreign currencies other than the functional currency.

These transaction gains and losses are recorded in the consolidated

statements of operations related to the recurring measurement and settlement of such transactions.

expense primarily represents legal settlements made by the Company.

SEGMENT REPORTING

Company’s Chief Executive Officer and Executive Chairman serve as the CODM, organize the Company, manage resource allocations and

measure performance among two operating and reportable segments:

(i) Healthcare IT and (ii) Medical Practice Management.

Healthcare IT segment includes technology-assisted revenue cycle management, SaaS solutions and other services.

The Medical Practice

Management segment includes the management of three medical practices.

January 1, 2023 through April 30, 2024, the Chief Executive Officer (“CEO”) and Executive Chairman served as the Chief Decision Maker

(“CODM”), organizing the Company, managing resource allocations and measuring performance among two operating and reportable segments:

Healthcare IT and (ii) Medical Practice Management.

As of May 1, 2024, the Company’s President, CEO and Executive Chairman served as

We report our segment information based on the internal reporting used by

management for making decisions and assessing performance as the source of our reportable segments.

CODM evaluates the financial performance of the business units on the basis of revenue, certain individual and total operating

expenses and operating income (loss) excluding unallocated amounts, which are mainly corporate overhead costs, for assessing

operating results and the allocation of resources.

Our CODM does not evaluate operating segments using asset or liability

The CODM uses segment revenue, certain segment operating expenses and segment operating income (loss) to manage the

segments, comparing actual results to forecasted amounts and investigating the reasons for significant variances.

Currently, a focus

is being placed on reducing costs and managing global headcount.

The segment revenue and segment operating income (loss) is also

used to assess the performance of personnel and in establishing their compensation.

Healthcare IT segment includes technology-assisted revenue cycle management, SaaS solutions and professional and other services.

Medical Practice Management segment includes the management of three medical practices.

Each segment is considered a reporting unit.

The CODM evaluates

the financial performance of the business units on the basis of revenue and direct operating costs excluding unallocated amounts, which

are mainly corporate overhead costs.

Our CODM does not evaluate operating segments using asset or liability information.

The accounting

policies of the segments are the same as those disclosed in the summary of significant accounting policies.

The following tables present

revenues, operating expenses and operating income (loss) by reportable segment for the years ended December 31, 2023 and 2022:

The Company does not have intra-entity sales or asset transfers, however, there are intracompany bank transfers.

The accounting policies

of the segments are the same as those disclosed in the summary of significant accounting policies.

The following tables present revenues,

operating expenses and operating income (loss) by reportable segment for the years ended December 31, 2024 and 2023:

OF REVENUES, OPERATING EXPENSES AND OPERATING INCOME (LOSS) BY REPORTABLE SEGMENT

Healthcare IT

Medical Practice

Practice Management

Year Ended December 31, 2024

1 unchanged sentence

Healthcare IT

Medical Practice

Practice Management

Operating expenses:

3 unchanged sentences

Research and development

in contingent consideration

Depreciation and amortization

Goodwill impairment charges

Loss on lease terminations, unoccupied lease charges and restructuring costs

Lease terminations, unoccupied lease charges and restructuring costs

Total operating expenses

Operating (loss) income

Ended December 31, 2022

Segment operating income

Reconciliation of profit or loss (segment profit/loss):

Unallocated corporate expenses

Net interest expense

Other expenses

Income before income taxes

(a) This revenue represents

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

Healthcare IT

Medical Practice Management

Year Ended December 31, 2023

($ in thousands)

operating costs

and marketing

and administrative

and development

in contingent consideration

and amortization

loss on lease terminations and unoccupied lease charges

Loss on lease terminations, unoccupied lease charges and restructuring costs

Healthcare IT

Practice Management

Operating expenses:

income (loss)

Direct operating costs

Selling and marketing

General and administrative

Research and development

Depreciation and amortization

Goodwill impairment charges

Lease terminations, unoccupied lease charges and restructuring costs

Total operating expenses

Segment operating (loss) income

Reconciliation of profit or loss (segment profit/loss):

Unallocated corporate expenses

Net interest expense

Other expenses

Loss before income taxes

(a) This revenue represents

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

8 unchanged sentences

We held no Level 1 financial instruments

at December 31, 2023 or December 31, 2022.

at December 31, 2024 or 2023.

Quoted prices for similar instruments in active markets with inputs that are observable, either directly or indirectly.

6 unchanged sentences

There was no contingent consideration recorded at December 31, 2024 and 2023.

following table provides a reconciliation of the beginning and ending balances for the contingent consideration measured at fair value

using significant unobservable inputs (Level 3):

OF FAIR VALUE, LIABILITIES MEASURED ON RECURRING BASIS, UNOBSERVABLE INPUT RECONCILIATION

Fair Value Measurement at Reporting

Date Using Significant Unobservable

Inputs, Level 3 Year Ended December 31,

($ in thousands)

Balance - January 1,

Change in fair value

Balance - December 31,

following table provides the assets and liabilities carried at fair value measured on a non-recurring basis as of December 31, 2023.

Refer to Note 2 - Basis of Presentation and Significant Accounting Policies, for a description of the valuation techniques used to

determine the fair value of the assets measured on a non-recurring basis in the table below.

following table provides the assets and liabilities carried at fair value measured on a non-recurring basis as of December 31, 2024 and

Refer to Note 2 - Basis of Presentation and Significant Accounting Policies, for a description of the valuation techniques used

to determine the fair value of the assets measured on a non-recurring basis in the table below:

VALUE OF THE ASSETS MEASURED ON A NON-RECURRING BASIS

Fair Value Measurement at December 31, 2023

Fair Value Measurements at December 31, 2024

Expense for the year ended

3 unchanged sentences

Goodwill - Healthcare IT

Fair Value Measurements at December 31, 2023

Expense for the year ended

Carrying Value

December 31, 2023

($ in thousands)

Goodwill - Healthcare IT

SUBSEQUENT EVENTS

January 9, 2024, and as amended February 12, 2024, the Company entered into a Consulting Agreement with an entity owned and controlled

by a member of its Board of Directors to provide investor relations services for $ 8,000 per month and other services as requested by

the Company to be paid on an hourly basis.

The Consulting Agreement is cancelable with ten days’ notice.

February 1, 2024, MAC and its wholly owned subsidiary were merged into CCI.

Also effective February 1, 2024, the Company added an additional

Statement of Work (“SOW”) to the Consulting Agreement with an entity owned and controlled by one of its former non-independent

As compensation for the SOW, the entity will receive $ 25,000 per month.

The SOW is cancelable with ten days’ notice.

(See Note 12.)

January 2025, the Company’s common stock shareholders approved an increase in the number of authorized common shares from 35

million to 85

An amended certificate of incorporation was filed by the Company.

Also, in January 2025, the Company’s Board of

Directors declared Preferred Stock dividends for January and February 2025, whereby the payment for these two months would be

credited to the arrearage.

February 2025, the Company resumed monthly payment of the dividends on the Series A and B Preferred Stock, paying one month of

dividends in arrears.

The second monthly payment is scheduled to be paid in March 2025, which after the conversion as discussed

below, will include dividends for the Series A Preferred Stock that were not converted and dividends for the Series B

Preferred Stock.

2025, the Board of Directors elected to exercise its conversion rights, which provide for the conversion of each share of Series A

Preferred Stock into 7.3358

shares of common stock, inclusive of all accumulated and unpaid dividends.

Dividends on the converted Series A Preferred shares

ceased to accrue as of the conversion date.

Individual shareholders who, at the exchange date, owned at least 100,000

shares of Series A Preferred Stock did not have their shares automatically converted to common stock so long as they were held by the

Company’s transfer agent, unless they consented to the conversion.

There were approximately 985,000 shares of Series A

Preferred Stock remaining after the Conversion.

Also in March 2025, the Company announced that it will be delisting the Series A

Preferred Stock from the Nasdaq Global Market.

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 9A. Controls and Procedures