What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-12 compared with 2025-03-13 · 319 added, 347 removed, 456 unchanged (59% of the section changed)

22 unchanged sentences

in combination with each other, including:

services including end-to-end medical billing, eligibility, analytics, and related services, all of which can be provided utilizing

our technology platform or through a third-party system;

tools are designed to serve as a digital healthcare assistant, helping to enhance clinical decision-making, streamline workflows,

reduce administrative burdens, optimize revenue management, and promote patient-centered care;

which are easy to use and sometimes integrated with our business services, and enable our healthcare provider clients to deliver

better patient care, streamline their clinical workflows, decrease documentation errors and potentially qualify for government incentives;

software and related capabilities, which support our clients’ day-to-day business operations and financial workflows, including

automated insurance eligibility software, a robust billing and claims rules engine and other automated tools designed to maximize

reimbursement;

solutions designed to transform interactions between patients and their clinicians, including smartphone applications that assist

patients and healthcare providers in the provision of healthcare services, including contactless digital check-in solutions, messaging

and online appointment scheduling tools;

Wellness, a digital health solution which includes chronic care management interactions with certified care managers, remote patient

monitoring which feeds patient data directly to the EHR and highlights exceptions, and telehealth solutions which allow healthcare

providers to conduct remote patient visits;

intelligence and healthcare analytics platforms that allow our clients to derive actionable insights from their vast amount of data;

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

services which include end-to-end medical billing, eligibility, analytics, and related services,

all of which can be provided utilizing our technology platform or through a third-party system;

tools designed to serve as a digital healthcare assistant, helping to enhance clinical decision-making,

streamline workflows, reduce administrative burdens, optimize revenue management, and promote

patient-centered care;

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

healthcare provider clients to deliver better patient care, streamline their clinical workflows,

decrease documentation errors and potentially qualify for government incentives for both

inpatient and outpatient services;

software and related capabilities, which support our clients’ day-to-day business operations

within the enterprise-level facilities outpatient service areas and financial workflows,

including automated insurance eligibility software, contains a robust billing and claims

rules engine and other automated tools designed to maximize reimbursement;

Cloud, a highly configurable inpatient revenue cycle management software solution that focuses

on up front financial accountability, real-time insurance eligibility checking, robust billing,

integrated claims resolution, denial management, collection management, and dynamic work

queues designed maximize timely reimbursements;

○ HealthLine,

which is a medical supply chain and inventory management system built for healthcare settings

enables real-time tracking of supplies, equipment and consumables across multiple locations

such as exam rooms, ambulances and storage closets;

○ Marketware,

which offers a comprehensive physician strategy suite designed to support healthcare organizations

in optimizing physician relationship management, streamlining recruitment and onboarding

processes, and leveraging performance analytics.

The platform consolidates critical data

to enhance referral volume, strengthen provider engagement and drive strategic organizational

a solution for provider workflows in emergency departments and urgent care facilities has

seamless integration into all major hospital IT systems and ancillary departments providing

real-time patient tracking and instant lab orders, drug interaction checking and pharmacy

a cloud-based EHR software that enhances clinical workflows for small hospitals and inpatient

behavioral health facilities, driving efficiencies across inpatient settings through speech-to-text

charting, e-prescribing and medication management and secure clinical communications;

solutions designed to transform interactions between patients and their clinicians, including

smartphone applications that assist patients and healthcare providers in the provision of

healthcare services, including contactless digital check-in solutions, messaging and online

appointment scheduling tools;

Wellness, a digital health solution which includes chronic care management interactions with

certified care managers and remote patient monitoring which feeds patient data directly to

the EHR (and highlights exceptions);

and telehealth solutions which allowing healthcare providers

to conduct remote patient visits;

intelligence and healthcare analytics platforms that allow our clients to derive actionable

insights from their vast amount of data;

claims clearinghouse which enables our clients to electronically scrub and submit claims

and process payments from insurance companies;

○ Interoperability

and data transformation software to support the complex realities of data exchange with healthcare trading partners, including labs,

insurance companies, and other healthcare IT vendors;

applications, interfaces and a variety of other technology solutions that support our healthcare clients;

services consisting of application and advisory services, revenue cycle services, data analytic services and educational training

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

with staffing shortages.

and data transformation software to support the complex realities of data exchange with healthcare

trading partners, including labs, insurance companies, and other healthcare IT vendors;

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

○ Professional

services consisting of application and advisory services, revenue cycle services, data analytic

services and educational training services;

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

seek highly trained personnel, or struggle with staffing shortages;

services which include inpatient and outpatient IT services, government consulting and product

development services.

App is an industry-leading tool for benchmarking and measuring revenue cycle management performance,

which was developed by the HFMA and is used by top hospitals and healthcare organizations

practice management services are provided to medical practices.

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these adjusted performance measures.

EBITDA excludes the following elements which are included in GAAP net income (loss):

tax provision (benefit) or the cash requirements to pay our taxes;

interest expense or the cash requirements necessary to service interest on principal payments on our debt;

currency gains and losses and other non-operating expenses;

compensation expense, which includes cash-settled awards and the related taxes, based on changes in the stock price;

EBITDA excludes the following amounts which are included in GAAP net income:

tax provision or the cash requirements to pay our taxes;

interest expense or the cash requirements necessary to service interest on principal payments

currency losses and other non-operating expenses;

● Stock-based

compensation expense, which includes cash-settled awards and the related taxes, based on

changes in the stock price;

● Depreciation

and amortization charges;

costs, such as severance amounts paid to employees from acquired businesses and transaction costs, such as brokerage fees, pre-acquisition

accounting costs and legal fees and exit costs related to contractual agreements;

impairment charges;

terminations, unoccupied lease charges and restructuring costs;

in contingent consideration.

● Integration

costs, such as severance amounts paid to employees from acquired businesses and transaction

costs, such as brokerage fees, pre-acquisition accounting costs and legal fees and exit costs

related to contractual agreements;

termination and restructuring costs.

forth below is a presentation of our adjusted EBITDA for the years ended December 31, 2025 and 2024:

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($ in thousands)

GAAP net income (loss)

Provision (benefit) for

GAAP net income

Provision for income taxes

Net interest expense

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Stock-based compensation

expense, net of restructuring costs

Depreciation and amortization

Transaction and integration

Goodwill impairment charges

terminations, unoccupied lease charges and restructuring costs

termination and restructuring costs

Adjusted EBITDA

operating income and adjusted operating margin exclude the following elements which are included in GAAP operating income (loss):

compensation expense, which includes cash-settled awards and the related taxes, based on changes in the stock price;

operating income and adjusted operating margin exclude the following amounts which are included in GAAP operating income:

● Stock-based

compensation expense, which includes cash-settled awards and the related taxes, based on

changes in the stock price;

● Amortization

of purchased intangible assets;

costs, such as severance amounts paid to employees from acquired businesses and transaction costs, such as brokerage fees, pre-acquisition

accounting costs and legal fees and exit costs related to contractual agreements;

impairment charges;

terminations, unoccupied lease charges and restructuring costs.

● Integration

costs, such as severance amounts paid to employees from acquired businesses and transaction

costs, such as brokerage fees, pre-acquisition accounting costs and legal fees and exit costs

related to contractual agreements;

termination and restructuring costs.

forth below is a presentation of our adjusted operating income and adjusted operating margin, which represents adjusted operating income

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($ in thousands)

GAAP net income (loss)

Provision (benefit) for

GAAP net income

Provision for income taxes

Net interest expense

expense - net

GAAP operating income (loss)

GAAP operating income

GAAP operating margin

Stock-based compensation

expense, net of restructuring costs

Amortization of purchased

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Transaction and integration

Goodwill impairment charges

terminations, unoccupied lease charges and restructuring costs

termination and restructuring costs

Non-GAAP adjusted operating

net income and adjusted net income per share exclude the following elements which are included in GAAP net income (loss):

currency gains and losses and other non-operating expenses;

compensation expense, which includes cash-settled awards and the related taxes, based on changes in the stock price;

net income and adjusted net income per share exclude the following amounts which are included in GAAP net income:

currency losses and other non-operating expenses;

● Stock-based

compensation expense, which includes cash-settled awards and the related taxes, based on

changes in the stock price;

● Amortization

of purchased intangible assets;

costs, such as severance amounts paid to employees from acquired businesses and transaction costs, such as brokerage fees, pre-acquisition

accounting costs and legal fees and exit costs related to contractual agreements;

impairment charges;

terminations, unoccupied lease charges and restructuring costs;

tax provision (benefit) resulting from the amortization of goodwill related to our acquisitions.

● Integration

costs, such as severance amounts paid to employees from acquired businesses and transaction

costs, such as brokerage fees, pre-acquisition accounting costs and legal fees and exit costs

related to contractual agreements;

termination and restructuring costs.

tax effect has been provided in computing non-GAAP adjusted net income and non-GAAP adjusted net income per share as the Company has

sufficient carry forward net operating losses to offset the applicable income taxes.

following table shows our reconciliation of GAAP net income (loss) to non-GAAP adjusted net income for the years ended December 31, 2024

following table shows our reconciliation of GAAP net income to non-GAAP adjusted net income for the years ended December 31, 2025 and

Ended December 31,

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GAAP net income

Foreign exchange loss

/ other expense

Stock-based compensation

expense, net of restructuring costs

Amortization of purchased

intangible assets

Transaction and integration

Goodwill impairment charges

Lease terminations, unoccupied

lease charges and restructuring costs

Income tax benefit related

Foreign exchange loss / other expense

Stock-based compensation expense

Amortization of purchased intangible assets

Transaction and integration costs

Lease termination and

restructuring costs

Non-GAAP adjusted net

Ended December 31,

GAAP net loss attributable to common

shareholders, per share

GAAP net income (loss) attributable

to common shareholders, per share

of preferred stock dividend

Net income (loss) per end-of-period share

Net income per end-of-period share

Foreign exchange loss /

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Stock-based compensation

expense, net of restructuring costs

Amortization of purchased

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Transaction and integration

Goodwill impairment charges

Lease terminations, unoccupied

lease charges and restructuring costs

tax benefit related to goodwill

termination and restructuring costs

Non-GAAP adjusted earnings per share

End-of-period common shares

Outstanding unvested RSUs

Total fully diluted

Non-GAAP adjusted diluted

earnings per share

purposes of determining non-GAAP adjusted earnings per share, the Company used the number of common shares outstanding at the end of

December 31, 2025 and 2024.

Non-GAAP adjusted diluted earnings per share was computed using an as-converted method and includes warrants

that are in-the-money as of that date as well as outstanding unvested RSUs.

Non-GAAP adjusted earnings per share and non-GAAP adjusted

diluted earnings per share do not take into account dividends on the Preferred Stock.

No tax effect has been provided in computing non-GAAP

adjusted earnings per share and non-GAAP adjusted diluted earnings per share as the Company has sufficient carry forward net operating

Non-GAAP adjusted earnings per share does not take into account dividends on the Preferred Stock.

effect has been provided in computing non-GAAP adjusted earnings per share as the Company has sufficient carry forward net operating

losses to offset the applicable income taxes.

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Net interest expense

(expense) income - net

expense - net

Income (loss) before provision

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stock dividend

loss attributable to common shareholders

Weighted average common

shares outstanding basic and diluted

loss per common share:

basic and diluted

income (loss) attributable to common shareholders

Weighted average common shares outstanding:

income (loss) per common share:

Balance Sheet Data

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($ in thousands)

Cash and restricted cash

Working capital - net (1)

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Shareholders’ equity

Working capital-net is defined as current assets less current liabilities.

capital-net is defined as current assets less current liabilities.

Financial Data

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Depreciation and amortization

Goodwill impairment charges

Lease terminations, unoccupied

lease charges and restructuring costs

Lease termination and

restructuring costs

Total operating expenses

Operating income (loss)

Net interest expense

Operating income

Net interest income (expense)

Other (expense) income

Income (loss) before provision (benefit) for

Income tax provision (benefit)

Income (loss) before provision for income taxes

Income tax provision

Net income (loss)

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Adjusted EBITDA

(1) The consolidated

statement of operations for the three months ended March 31, 2024 has been restated to record the

earned, but undeclared Preferred Stock dividend.

Reconciliation

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Foreign exchange loss (gain) / other expense

Net interest expense

Income tax provision (benefit)

Stock-based compensation expense, net of restructuring

Net interest (income) expense

Income tax provision

Stock-based compensation expense (benefit), net of restructuring costs

Transaction and integration costs

Goodwill impairment charges

Lease terminations, unoccupied

lease charges and restructuring costs

Lease termination and restructuring costs

Adjusted EBITDA

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and Practices Served:

As of December 31, 2024 and December 31, 2023, we provided services to approximately 40,000 providers (which

we define as physicians, nurses, nurse practitioners, physician assistants and other clinical staff that render bills for their services),

representing approximately 2,600 practices.

In addition, we served approximately 150 clients who were not medical practices, but are

service organizations who serve the healthcare community.

The foregoing numbers include clients leveraging any of our products or services

and are based in part upon estimates in cases where the precise number of practices or providers is unknown.

As of December 31, 2025 and 2024, we provided services to approximately 45,000 and 40,000 providers, respectively,

(which we define as physicians, nurses, nurse practitioners, physician assistants and other clinical staff that render bills for their

services), representing approximately 2,900 and 2,600 practices, respectively.

In addition, we served approximately 80 clients who were

not medical practices, but are service organizations who serve the healthcare community.

The foregoing numbers include clients leveraging

any of our products or services and are based in part upon estimates in cases where the precise number of practices or providers is unknown.

Renewal Rate:

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percentages are not indicative of the loss of revenue due to non-renewal.

We primarily derive our on-going revenues from technology-enabled business solutions, reported in our Healthcare IT segment, which

typically includes revenue cycle management and is billed as a percentage of payments collected by our customers.

This fee includes the

ability to use our EHR, practice management systems and other software as part of the bundled fee.

We primarily derive our on-going revenues from technology-enabled business solutions, reported in our Healthcare IT segment, which typically

includes revenue cycle management and is billed as a percentage of payments collected by our customers.

This fee includes the ability

to use our EHR, practice management systems and other software as part of the bundled fee.

These solutions accounted for approximately

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also generate revenue from our printing and mailing, group purchasing services and medical practice management services.

earned approximately 1% of our revenue from group purchasing services during both years ended December 31, 2024 and 2023.

earned approximately 1% of our revenue from group purchasing services during the years ended December 31, 2025 and 2024.

We earned approximately

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Costs associated with the implementation of new customers are expensed as incurred.

reported amounts of direct operating costs do not include depreciation and amortization, which are broken out separately in the consolidated

statements of operations.

Operations in our Offshore Offices together accounted for approximately 13% and 11% of direct operating costs

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

As we grow, we expect to achieve further economies of scale and to see

our direct operating costs decrease as a percentage of revenue.

reported amounts of direct operating costs do not include depreciation and amortization, which are broken out separately

in the consolidated statements of operations.

Operations in our Offshore Offices together accounted for approximately 14% and 13% of

direct operating costs for the years ended December 31, 2025 and 2024, respectively.

As we grow, we expect to achieve further economies

of scale and to see our direct operating costs decrease as a percentage of revenue.

and Marketing Expense.

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over a period of twelve years.

Impairment Charges.

Goodwill impairment charges in 2023, which were related to the Healthcare IT reporting unit, represent the impairment

recorded as it was determined that the fair value of the goodwill was less than the carrying value.

Terminations, Unoccupied Lease Charges and Restructuring Costs.

Lease terminations represent the write-off of leasehold improvements

and gains or losses as the result of lease terminations.

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

vacant space not being utilized by the Company.

Restructuring costs, primarily consist of severance and separation costs associated with

the optimization of the Company’s operations and profitability improvements.

Restructuring

Restructuring costs, primarily consist of severance and separation costs associated with the optimization of the Company’s

operations and profitability improvements.

and Other Income (Expense).

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Other income (expense) results primarily from foreign currency transaction gains (losses).

In preparing our consolidated financial statements, we estimate income taxes in each of the jurisdictions in which we operate.

This process involves estimating actual current tax exposure together with assessing temporary differences resulting from differing treatment

of items for tax and financial reporting purposes.

These differences result in deferred income tax assets and liabilities.

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

taxable income,

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

Accordingly, a valuation allowance has

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

For the global intangible low-taxed income

(“GILTI”) tax, companies can either account for the GILTI inclusion in the period in which they are incurred or establish

deferred tax liabilities for the expected future taxes associated with GILTI.

The Company records the GILTI provisions as they are incurred

In preparing our consolidated financial statements, we estimate income taxes in each of the jurisdictions in which we

This process involves estimating actual current tax exposure together with assessing temporary differences resulting from

differing treatment of items for tax and financial reporting purposes.

These differences result in deferred income tax assets and

Although the Company reported GAAP earnings in 2025 and 2024, it has incurred tax losses historically and there is

uncertainty regarding future U.S.

taxable income, which make realization of a deferred tax asset difficult to support in accordance

with ASC 740.

Accordingly, a valuation allowance has been recorded against all deferred tax assets as of December 31, 2025 and

December 31, 2024.

For the global intangible low-taxed income (“GILTI”) tax, companies can either account for the GILTI

inclusion in the period in which they are incurred or establish deferred tax liabilities for the expected future taxes associated

The Company records the GILTI provisions as they are incurred each period.

Accounting Policies and Estimates

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is evaluated for impairment annually as of October 31 st , referred to as the annual test date.

As a result of the annual impairment

test, an impairment of approximately $2 million was recorded in October 2023.

The Company also tests for impairment between annual test

dates if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

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 (Healthcare IT and Medical Practice Management).

Application of the goodwill impairment test requires judgment including the use

of a discounted cash flow approach, the trading price of publicly traded stock and the guideline public company method.

These analyses

require significant assumptions and judgments.

These assumptions and judgments include estimation of future cash flows, which is dependent

on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows

will occur, determination of our weighted average cost of capital and the selection of comparable companies and the interpretation of

Future business and economic conditions, as well as differences in actual financial results related to any of the assumptions,

could materially impact the consolidated financial statements through impairment of goodwill or intangible assets and acceleration of

the amortization period of the purchased intangible assets which are finite-lived assets.

There was a triggering event at August 31,

2023, but it was determined that there was no impairment.

Due to a triggering event in December 2023, an additional impairment test was

As a result, the Company recorded an additional impairment of approximately $40 million.

No impairment charges were recorded

during the year ended December 31, 2024.

The Company also tests for impairment

between annual test dates if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

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 (Healthcare IT and Medical Practice Management).

Application of the goodwill impairment test requires

judgment including the use of a discounted cash flow approach, the trading price of publicly traded stock and the guideline public company

These analyses require significant assumptions and judgments.

These assumptions and judgments include estimation of future cash

flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful

life over which cash flows will occur, determination of our weighted average cost of capital and the selection of comparable companies

and the interpretation of their data.

Future business and economic conditions, as well as differences in actual financial results related

to any of the assumptions, could materially impact the consolidated financial statements through impairment of goodwill or intangible

assets and acceleration of the amortization period of the purchased intangible assets which are finite-lived assets.

No impairment charges

were recorded during the years ended December 31, 2025 or 2024.

Combinations:

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following table sets forth our consolidated results of operations as a percentage of total revenue for the years shown.

Ended December 31,

Year Ended December 31,

Operating expenses:

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Depreciation and amortization

Goodwill impairment charges

terminations, unoccupied lease charges and restructuring costs

operating expenses

Operating income (loss)

Lease termination and restructuring costs

Total operating expenses

Operating income

Net interest expense

Other expense - net

Income (loss) before provision

(benefit) for income taxes

Income tax provision (benefit)

income (loss)

Income before provision for income taxes

Income tax provision

of 2025 and 2024

Year Ended December 31,

($ in thousands)

Net revenue of $110.8 million for the year ended December 31, 2024 decreased by $6.2 million or 5% from revenue of $117.1

million for the year ended December 31, 2023.

Revenue for the years ended December 31, 2024 and December 31, 2023 includes $73.7 million

and $76.6 million relating to technology-enabled business solutions, $18.2 million and $23.0 million related to professional services

and $14.4 million and $13.4 million for medical practice management services, respectively.

was a $4.8 million decrease in project-based professional services revenue for the year ended December 31, 2024 as compared to 2023.

The 2024 technology-enabled business solutions revenue was negatively impacted by two large accounts that had each been previously acquired

prior to our beginning to serve them after a 2020 acquisition.

The services provided to them were each winding down at the time of our

acquisition and they both transitioned to the systems of their acquirers during 2022.

Revenue from these two customers for the year ended

December 31, 2024 was approximately $300,000, accounting for approximately $2.8 million of the decline in revenue.

No further revenue

from these customers is expected for the year 2025.

(Refer to Forward-Looking Statements disclosure on page 3 of this Form 10-K.)

Ended December 31,

Net revenue of $120.5 million for the year ended December 31, 2025 increased by

$9.7 million or 9% from revenue of $110.8 million

for the year ended December 31, 2024.

Revenue for the years ended December 31, 2025 and 2024 includes

$76.9 million and $73.7 million relating to technology-enabled business solutions, $25.4 million and

$18.2 million related to professional services and $13.9 million and $14.4 million for medical practice management services, respectively.

Our printing and mailing and group purchasing services aggregated $4.3 million and $4.5 million for the year ended December 31, 2025

and 2024, respectively.

the year ended December 31, 2025 there was approximately $10.5 million of revenue related to the

Medsphere acquisition.

(Refer to Forward-Looking Statements disclosure on page 3 of this Annual Report

on Form 10-K.)

Year Ended December 31,

($ in thousands)

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Research and development

Goodwill impairment charges

Lease terminations, unoccupied

lease charges and restructuring costs

operating expenses

Lease termination and restructuring costs

Total operating expenses

Operating Costs.

Direct operating costs of $60.8 million for the year ended December 31, 2024 decreased by $10.0 million or 14% from

Direct operating costs of $64.5 million for the year ended December 31, 2025 increased by $3.6 million or 6% from

direct operating costs of $60.8 million for the year ended December 31, 2024.

Salary costs decreased by $6.3 million due to the decrease

in the Pakistan exchange rate, a decrease in the U.S.

headcount and the redeployment of employees performing functions that were classified

as direct operating costs to functions classified as research and development expense.

Outsourcing and other customer processing costs

decreased by $2.4 million and billable expenses decreased by $1.3 million.

Salary costs increased by $1.0 million primarily due to

the Medsphere acquisition.

Outsourcing and other customer processing costs increased by $2.4 million and consultancy expenses increased

and Marketing Expense.

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and Administrative Expense.

General and administrative expense of $16.1 million for the year ended December 31, 2024 decreased by

General and administrative expense of $18.4 million for the year ended December 31, 2025 increased by

$2.3 million or 14% from general and administrative expense of $16.1 million for the year ended December 31, 2024.

Salary costs decreased

by $3.5 million due to the decrease in headcount and the Pakistan exchange rate.

Legal, professional and audit fees decreased by $790,000.

Other costs such as computer expenses, utilities and office supplies decreased by $295,000.

Salary costs increased

by $2.5 million due to the increase in headcount.

Legal and professional fees decreased by $794,000.

and Development Expense.

Research and development expense of $3.8 million for the year ended December 31, 2024 decreased by $955,000

or 20% from research and development expense of $4.7 million for the year ended December 31, 2023.

The decrease was due to a decrease

headcount which was offset by the redeployment of employees performing functions that were previously classified as direct

operating costs to functions classified as research and development expense.

During the years ended December 31, 2024 and 2023, the Company

capitalized approximately $5.7 million and $8.6 million of development costs, respectively, in connection with its internal-use software.

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

Amortization expense of $12.1 million for the year ended December 31, 2024 decreased by $302,000 or 2% from amortization

Research and development expense of $6.4 million for the year ended December 31, 2025 increased by $2.6

million or 69% from research and development expense of $3.8 million for the year ended December 31, 2024.

The increase was due to an

increase in the offshore headcount.

During the years ended December 31, 2025 and 2024, the Company capitalized approximately $3.2 million

and $5.7 million of development costs, respectively, in connection with its internal-use software.

Depreciation expense was $2.5 million for the year ended December 31, 2025 and increased by $468,000 or 23% from depreciation

expense of $2.0 million for the year ended December 31, 2024.

The decrease in amortization expense was due to certain intangible assets

related to acquisitions becoming fully amortized.

Impairment Charges.

Goodwill impairment charges in 2023 represent the impairment recorded as it was determined that the fair value

of the Healthcare IT reporting unit was less than the carrying value at both the annual impairment test date of October 31, 2023 and

as a result of a triggering event in December 2023.

There were no impairment charges recorded in 2024.

Terminations, Unoccupied Lease Charges and Restructuring Costs.

Lease terminations represent the write-off of leasehold improvements

and gains or losses as the result of lease terminations.

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

During the year ended December 31, 2023, the Miami office lease that we assumed in connection with an acquisition ended and

we entered into a new lease arrangement with the landlord for significantly less space.

Charges of $102,000 for the year ended December

31, 2023, were incurred as a result of vacating the former premises.

During the year ended December 31, 2022, a facility lease was terminated

in conjunction with the Company ceasing its document storage services resulting in additional costs for the year ended December 31, 2023

In addition, during the year ended December 31, 2023, the Company paid $27,000 to settle a claim regarding a lease termination

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

not being utilized by the Company.

Unoccupied lease charges for the year ended December 31, 2023 were $169,000.

There were no unoccupied

lease charges in 2024.

In addition, during the years ended December 31, 2024 and 2023, the Company recorded approximately $606,000 and

$645,000 of restructuring costs, respectively.

Restructuring costs consists of severance and separation costs associated with the optimization

of the Company’s operations and profitability improvements.

Ended December 31,

The increase primarily relates to certain leasehold improvements being

Amortization expense of $12.4 million for the year ended December 31, 2025 increased by $350,000 or 3% from amortization

expense of $12.1 million for the year ended December 31, 2024.

The increase in amortization expense was due to the amortization of the

intangible assets related to the current years’ acquisitions.

Termination and Restructuring Costs.

During the years ended December 31, 2025 and 2024, the Company recorded approximately $154,000

and $606,000 of restructuring costs, respectively.

Restructuring costs consists of severance and separation costs associated with the

optimization of the Company’s operations and profitability improvements.

During the year ended December 31, 2024, there was a gain

on a lease termination of approximately $10,000.

Year Ended December 31,

($ in thousands)

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Other expense - net

Income tax provision (benefit)

Interest income of $88,000 for the year ended December 31, 2024 decreased by $66,000 or 43% from interest income of $154,000

Income tax provision

Interest income of $206,000 for the year ended December 31, 2025 increased by $118,000 or 134% from interest income of $88,000

for the year ended December 31, 2024.

The interest income represents late fees from customers and interest earned on temporary cash investments,

which decreased due to lower balances being invested.

Interest expense of $900,000 for the year ended December 31, 2024 decreased by $294,000 or 25% from $1.2 million for the

year ended December 31, 2023.

The decrease in interest expense was due to the decreased use of the line of credit and decreases in the

interest rate charged.

Interest expense on the line of credit was $649,000 and $906,000 and the amortization of deferred financing costs

was $127,000 and $169,000 during the years ended December 31, 2024 and 2023, respectively.

which increased due to higher cash balances being invested.

Interest expense of $287,000 for the year ended December 31, 2025 decreased by $613,000 or 68% from $900,000 for the year

ended December 31, 2024.

The decrease in interest expense was due to the decreased use of the line of credit and decreases in the interest

rate charged.

Interest expense on the line of credit was $152,000 and $649,000 during the years ended December 31, 2025 and 2024, respectively

and amortization of deferred financing costs was $44,000 and $127,000 during the years ended December 31, 2025 and 2024, respectively.

Expense - net.

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made by the Company.

There was a foreign exchange gain of $130,000 and a loss of $790,000 for the years ended December 31, 2024 and 2023,

respectively.

Legal and other settlements recorded during the years ended December 31, 2025 and 2024 were approximately $175,000

and $465,000, respectively.

There was a foreign exchange loss of $109,000 and a gain of $130,000 for the years ended December 31, 2025

and 2024, respectively.

Transaction gains and losses result from revaluing intercompany accounts which are denominated in U.S.

dollars that represent

amounts receivable/payable between the entities.

Whenever the exchange rate varies, the gains and losses are recorded in the consolidated

statements of operations.

Tax Provision (Benefit).

There was a $160,000 provision for income taxes for the year ended December 31, 2024 compared to the benefit

for income taxes of $364,000 for the year ended December 31, 2023.

current income tax expense for the years ended December 31, 2024 and 2023 was $160,000 and $161,000, respectively.

For the year ended

December 31, 2023, there was a deferred tax benefit of $525,000.

There was no deferred tax recorded for the year ended December 31, 2024.

The current provision for 2024 and 2023 primarily relates to state and foreign income taxes.

The pre-tax income and pre-tax loss was

$8.0 million and $49.0 million for the years ended December 31, 2024 and 2023, respectively.

Although the Company reported GAAP earnings

in 2024, it has incurred losses historically and there is uncertainty regarding future U.S.

taxable income, which make realization of

a deferred tax asset difficult to support in accordance with ASC 740.

Accordingly, a valuation allowance was recorded against all deferred

tax assets at December 31, 2024 and 2023.

that represent amounts receivable/payable between the entities.

Whenever the exchange rate varies, the gains and losses are recorded

in the consolidated statements of operations.

Tax Provision.

There was a $199,000 provision for income taxes

for the year ended December 31, 2025 compared to $160,000 for the year ended December 31, 2024.

income tax expense for the years ended December 31, 2025 and 2024 was $199,000 and $160,000, respectively.

There was no deferred tax

recorded for the years ended December 31, 2025 and 2024.

The provision for 2025 and 2024 primarily relates to state and foreign

income taxes.

The pre-tax income was $11.0 million and

$8.0 million for the years ended December 31, 2025 and 2024, respectively.

Although the Company reported GAAP earnings in 2025 and

2024, it has incurred tax losses historically and there is uncertainty regarding future U.S.

taxable income, which make realization

of a deferred tax asset difficult to support in accordance with ASC 740.

Accordingly, a valuation allowance was recorded against all

deferred tax assets at December 31, 2025 and 2024.

The Company will maintain a full valuation allowance on deferred tax

assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.

Company has recorded goodwill as a result of its acquisitions.

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tax liability, which is recorded over the amortization period, has an indefinite life.

In 2023, there was a goodwill impairment charge

of $42 million, a portion of which was allocated to the tax deductible portion of the goodwill balance.

The impairment charge resulted

in the reversal of the entire deferred tax liability at December 31, 2023.

There was no deferred tax liability recorded at December 31,

Company will maintain a full valuation allowance on deferred tax assets until there is sufficient evidence to support the reversal of

all or some portion of these allowances.

of December 31, 2025, the Company has a total federal NOL carry forward of approximately $271 million of which approximately $186 million

will expire between 2030 and 2037, and the balance of approximately $85 million has an indefinite life.

Out of the total federal NOL

carry forward, approximately $237 million is from the CareCloud and Meridian acquisitions and is subject to the federal Section 382 NOL

annual usage limitations.

The Company has state NOL carry forwards of approximately $211 million, of which $84 million relates to the

State of New Jersey.

At December 31, 2025, the Company

had federal research and development credit carryforwards of approximately $3.4 million.

Out of the total federal NOL carry forward,

approximately $237 million is from the CareCloud and Meridian acquisitions and is subject to the federal Section 382 NOL annual usage

The Company has state NOL carry forwards of approximately $214 million, of which $87 million relates to the State of New

These NOLs expire starting in 2026.

and Capital Resources

the year ended December 31, 2024, there was positive cash flow from operations of $20.6 million and at year-end, the Company had $5.1

million in cash and positive working capital of $5.2 million.

During the year ended December 31, 2023, there was positive cash flow from

operations of $15.5 million and at year-end, the Company had $3.3 million in cash and negative working capital of $57,000.

has a revolving line of credit with SVB and, as of December 31, 2023, $10 million was outstanding.

The line of credit was fully repaid

during the year ended December 31, 2024 and there was nothing outstanding at December 31, 2024.

During the year ended December 31, 2023,

the Company sold 59,773 shares of 8.75% Series B Preferred Stock and raised $1.4 million in net proceeds after fees and expenses.

the year ended December 31, 2025, cash flow from operations was $28.6 million and at year-end, the Company had $3.6 million in cash and

restricted cash and working capital of $1.3 million.

During the year ended December 31, 2024, cash flow from

operations was $20.6 million and at year-end, the Company had

$5.1 million in cash and working capital of $5.2 million.

There were no outstanding bank borrowings

at both December 31, 2025 and 2024.

following table summarizes our cash flows for the years presented.

Ended December 31,

Year Ended December 31,

($ in thousands)

Net cash provided

by operating activities

Net cash used in investing

Net cash used in financing

of exchange rate changes on cash

increase (decrease) in cash

income before income taxes was $8.0 million for the year ended December 31, 2024, which included $14.1 million of non-cash depreciation

and amortization.

The loss before income taxes for the year ended December 31, 2023 was $49.0 million, of which $42.0 million was a non-cash

goodwill impairment charge and $14.4 million was non-cash depreciation and amortization.

Net cash provided by operating activities

Net cash used in investing activities

Net cash used in financing activities

Effect of exchange rate changes on cash and restricted cash

Net (decrease) increase in cash and restricted cash

income before income taxes was $11.0 million for

the year ended December 31, 2025, which included $15.0 million of non-cash depreciation and amortization.

The income before income taxes

for the year ended December 31, 2024 was $8.0 million, which included $14.1 million of non-cash depreciation and amortization.

have not been adversely affected by inflation as typically we receive a percentage of the fees our clients collect from our revenue cycle

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The interest rate on

our line of credit is based on the prime rate which had been increasing through 2023 but decreased during 2024.

provided by operating activities was $20.6 million and $15.5 million during the years ended December 31, 2024 and 2023, respectively.

The increase in the net income of $56.5 million included the following changes in non-cash items:

a decrease in stock-based compensation

expense of $4.8 million and a decrease in depreciation and amortization of $420,000.

No goodwill impairment charges were recorded during

2024 as compared to the $42 million charge recognized in 2023.

Revenue decreased by $6.2 million for the year ended December 31, 2024

compared to the year ended December 31, 2023, offset by a decrease in cash operating expenses of $20.2 million for the same period.

receivable increased by $1.2 million and decreased by $2.2 million for the years ended December 31, 2024 and 2023, respectively.

payable, accrued compensation and accrued expenses decreased by $4.7 million and $3.3 million for the years ended December 31, 2024 and

2023, respectively.

used in investing activities during the year ended December 31, 2024 was $7.4 million, a decrease of $4.2 million compared to $11.6 million

during the year ended December 31, 2023.

Capitalized software was $5.7 million and $8.6 million during the years ended December 31, 2024

and 2023, respectively.

Purchases of property and equipment were $1.7 million and $3.1 million during the years ended December 31, 2024

and 2023, respectively.

used by financing activities during the year ended December 31, 2024 was $11.3 million, compared to $13.3 million of cash used for

the year ended December 31, 2023.

Cash used by financing activities during 2024 includes the full repayment of the credit line of

$10 million and $677,000 of repayments for debt obligations.

Cash provided by financing activities during 2023 includes $1.4 million

of net proceeds from issuing 59,773 shares of Series B Preferred Stock, offset by $888,000 of repayments for debt obligations, and

$14.3 million of preferred stock dividends paid.

There was also $579,000 of payments to settle the tax withholding obligations in 2024

compared to $1.5 million in 2023.

Net proceeds on the line of credit were $2.0 million during the year ended December 31,

our Provident line of credit is based on the secured overnight financing rate which has been declining slightly since the inception of

the line of credit.

provided by operating activities was $28.6 million and $ 20.6

million during the years ended December 31, 2025 and 2024, respectively.

The increase in the net income of $2.9

million included the following changes in non-cash items:

an increase in stock-based compensation expense of $339,000

and an increase in depreciation and amortization of $739,000.

Revenue increased by $9.7 million for

the year ended December 31, 2025 compared to the year ended December 31, 2024.

Cash operating expenses increased

by $6.6 million for the same period.

receivable increased by $408,000 and $1.2 million for

the years ended December 31, 2025 and 2024, respectively.

Accounts payable and other liabilities increased by $1.3

million and decreased by $4.7 million for the years ended December 31, 2025 and 2024, respectively.

used in investing activities during the year ended December 31, 2025 was $24.5 million , an increase

of $17.1 million compared to $7.4 million during the year ended December 31, 2024.

This is primarily due to the Company paying $16.5 million for its acquisitions during the year ended December 31, 2025.

software was $3.2 million and $5.7 million during the years ended December 31, 2025 and 2024, respectively.

Purchases of property and

equipment were $4.8 million and $1.7 million during the years ended December 31, 2025 and 2024, respectively.

used by financing activities during the year ended December 31, 2025 was $5.6 million, compared to $11.3 million for the year ended December

Cash used by financing activities during 2025 includes the payment of dividends on the Preferred Stock of $6.3 million and

$620,000 of repayments for debt obligations.

Cash used by financing activities during 2024 includes the repayment of the credit line

of $10 million and $677,000 of repayments for debt obligations.

During the year ended December 31, 2025, the Company borrowed approximately $1.5 million to finance the purchase of an aircraft and several

There was also $24,000 of payments to settle the tax withholding obligations

in 2025 compared to $579,000 in 2024.

During the year ended December 31, 2025, the Company borrowed approximately $9.3 million on the

line of credit primarily to finance the acquisition of Medsphere and which it repaid by the end of the year.

Obligations and Commitments

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We also maintain operating leases for property and certain office equipment.

were in compliance with all SVB covenants in 2024.

were in compliance with all SVB and Provident covenants in 2025.

Sheet Arrangements

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The Company made arrangements

to have the income tax returns prepared for talkMD and advances the funds for the required taxes.

to have the income tax returns prepared for talkMD and advanced the funds for the required taxes.

Cumulatively, the Company has paid

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

What changed 10-K

Item 7. Management’s Discussion and Analysis