What changed in this filing

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Item 9A. Controls and Procedures

2026-03-12 compared with 2025-03-13 · 1086 added, 828 removed, 1245 unchanged (61% of the section changed)

1 unchanged sentence

of Disclosure Controls and Procedures

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.

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, 2025 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, 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 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.

on the evaluation of our disclosure controls and procedures, as of December 31, 2025, 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

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.

generally accepted accounting principles.

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and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized

acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

is required to base its assessment on the effectiveness of our internal control over financial reporting on a suitable, recognized control

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management has performed its assessment according to the guidelines established by COSO.

Our management concluded that as of December

31, 2024, the Company’s internal control over financial reporting was effective.

Management excluded MAP App, Medsphere and RevNu

from its assessment of internal controls over financial reporting, our current year acquisitions, as it was not possible to conduct an

assessment of the acquired businesses’ internal controls over financial reporting in the period between the commencement date and

the date of management’s assessment.

During 2025, the net revenue recorded by the Company for MAP App, Medsphere and RevNu was

approximately $226,000, $10.5 million and $882,000, respectively and the net assets acquired were approximately $625,000, $16.5 million

and $565,000 respectively, including goodwill.

Our management concluded that as of December 31, 2025, the Company’s internal control

over financial reporting was effective.

has performed analysis and procedures in preparing our consolidated financial statements.

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

of its inherent limitations, our internal controls over financial reporting provide reasonable, not absolute, assurance that the financial

statements and notes thereto are free of material error.

In addition, no internal control structure can provide absolute assurance that

all instances of fraud have been detected.

Also, projections of any evaluation of effectiveness to future periods are subject to the

risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures

may deteriorate.

Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control

over financial reporting.

Management’s report was not subject to attestation by the Company’s registered public accounting

firm pursuant to the rules of the SEC that permit the Company to provide only management’s report in this Annual Report on Form

of its inherent limitations, our internal controls over financial reporting provide reasonable, not absolute, assurance that the consolidated

financial statements and notes thereto are free of material error.

In addition, no internal control structure can provide absolute assurance

that all instances of fraud have been detected.

Also, projections of any evaluation of effectiveness to future periods are subject to

the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and

procedures may deteriorate.

LLP, an independent registered public accounting firm, has audited the consolidated financial statements as of December 31, 2025 and

for the year then ended included in this Annual Report on Form 10-K and, as part of their audit, has issued their attestation report,

included herein, on the effectiveness of our internal control over financial reporting.

in Internal Control over Financial Reporting

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

(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

Balance Sheets as of December 31, 2025 and 2024

Statements of Operations for the years ended December 31, 2025 and 2024

Statements of Comprehensive Income for the years ended December 31, 2025 and 2024

Statements of Shareholders’ Equity for the years ended December 31, 2025 and 2024

Statements of Cash Flows for the years ended December 31, 2025 and 2024

to Consolidated Financial Statements

Statement Schedules

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Transition Services Agreement by and among CareCloud Acquisition, Corp., MedMatica Consulting Associates, Inc., and Jerold Howell, dated June 1, 2021 (filed as Exhibit 2.3 to the Company’s Form 8-K filed on June 2, 2021 and incorporated herein by reference).

Asset Purchase Agreement between Medsphere Systems Corporation (“Medsphere”) and CareCloud Holdings, Inc.

(“Holdings”) dated as of August 22, 2025 (filed as Exhibit 2.1 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Transition Services Agreement between Medsphere and Holdings dated as of August 22, 2025 (filed as Exhibit 2.2 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Security Agreement by the Company and its subsidiaries in favor of Wells Fargo Bank N.A.

(“Wells Fargo”) dated as of August 22, 2025 (filed as Exhibit 2.3 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Patent Security Agreement by Holdings and CareCloud Health, Inc.

in favor of Wells Fargo dated as of August 22, 2025 (filed as Exhibit 2.4 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Copyright Security Agreement by Holdings in favor of Wells Fargo dated as of August 22, 2025 (filed as Exhibit 2.5 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Trademark Security Agreement by the Company and Holdings in favor of Wells Fargo dated as of August 22, 2025 (filed as Exhibit 2.6 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Deferred Payment Agreement by and among Wells Fargo, Holdings, the Company and its other subsidiaries dated as of August 22, 2025 (filed as Exhibit 2.7 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Guaranty by and among Wells Fargo as Lender and Holdings as Issuer dated as of August 22, 2025 (filed as Exhibit 2.8 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Bill of Sale by and between Medsphere and Holdings dated as of August 22, 2025 (filed as Exhibit 2.9 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Power of Attorney by and between Medsphere and Holdings dated as of August 22, 2025 (filed as Exhibit 2.10 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Intellectual Property Assignment Agreement by and between Medsphere and Holdings dated as of August 22, 2025 (filed as Exhibit 2.11 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Assignment and Assumption Agreement between Medsphere and Holdings dated as of August 22, 2025 (filed as Exhibit 2.12 to the Company’s Form 8-K filed on August 25, 2025, and incorporated herein by reference).

Amended and Restated Certificate of Incorporation of the Company dated April 4, 2014 (filed as Exhibit 3.1 to the Company’s Form S-1 filed on September 25, 2018 and incorporated herein by reference).

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Employment Agreement between the Company and Bill Korn dated as of May 1, 2018 (filed as Exhibit 10.4 to the Company’s Form 8-K filed on May 7, 2018, and incorporated herein by reference).

Agreement and Bonus Agreement between the Company and Larry Steenvoorden each dated as of July 6, 2023 (filed as Exhibit 10.1 and

Agreement and Bonus Agreement between the Company and Larry Steenvoorden each dated as of July 6, 2023 (filed as Exhibit 10.1

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

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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).

Employment Agreement between the Company and Mahmud Haq dated as of December 26, 2025 (filed as Exhibit 10.1 to the Company’s Form 8-K filed on December 29, 2025 and incorporated herein by reference).

Employment Agreement between the Company and A.

Hadi Chaudhry dated December 26, 2025 (filed as Exhibit 10.2 to the Company’s Form 8-K filed on December 29, 2025 and incorporated herein by reference).

Employment Agreement between the Company and Stephen Snyder dated December 26, 2025 (filed as Exhibit 10.3 to the Company’s Form 8-K filed on December 29, 2025 and incorporated herein by reference).

Employment Agreement between the Company and Crystal Williams dated December 26, 2025 (filed as Exhibit 10.1 to the Company’s Form 8-K filed on December 29, 2025 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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(filed as Exhibit 1.1 to the Company’s Form 8-K filed on February 14, 2022 and incorporated herein by reference).

Agreement dated September 3, 2025 between the Company and Provident Bank.

(filed as Exhibit 10.1 to the Company’s Form 8-K filed on September 9, 2025 and incorporated herein by reference).

Commercial Line of Credit Note between the Company and Provident Bank (filed as Exhibit 10.2 to the Company’s Form 8-K filed on September 9, 2025 and incorporated herein by reference).

Consulting Agreement dated June 3, 2022 by and between the Company and Hill City Advisors, LLC (filed as Exhibit 10.22 to the Company’s Form 10-K filed on March 2, 2023, and incorporated herein by reference).

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

(filed as Exhibit 10.32 to the Company’s Form 10-K filed on March 13, 2025, and incorporated herein by reference).

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

Insider Trading Policy dated December 1, 2024.

(filed as Exhibit 10.33 to the Company’s Form 10-K filed on March 13, 2025, and incorporated herein by reference).

Consulting Agreement dated July 28, 2025 between the Company and Stochastic Solutions, LLC.

Insider Trading Policy dated December 1, 2024 (filed as Exhibit 19.1 to the Company’s Form 10-K filed on March 13, 2025, and incorporated herein by reference).

List of subsidiaries.

Consent of Tanner LLP.

Consent of Rosenberg Rich Baker Berman P.A.

Consent of Grant Thornton LLP.

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 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 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.

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

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

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on its behalf by the undersigned, thereunto duly authorized.

Hadi Chaudhry

Executive Officer

CareCloud, Inc.

Stephen Snyder

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Chairman and Director

Hadi Chaudhry

Executive Officer and Director

Stephen Snyder

Executive Officer

Financial and Accounting Officer

Executive Officer (Principal Executive Officer)

Chief Financial Officer and Corporate Controller (Principal Financial and Accounting Officer)

Cameron Munter

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to Consolidated Financial Statements

of Independent Registered Public Accounting Firm Tanner LLP (PCAOB ID Number 270 )

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 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

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

Notes to Consolidated Financial Statements

Balance Sheets as of December 31, 2025 and 2024

Statements of Operations for the years ended December 31, 2025 and 2024

Statements of Comprehensive Income for the years ended December 31, 2025 and 2024

Statements of Shareholders’ Equity for the years ended December 31, 2025 and 2024

Statements of Cash Flows for the years ended December 31, 2025 and 2024

to Consolidated Financial Statements

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.

of Directors and Shareholders

CareCloud, Inc.

on the Consolidated Financial Statements and Internal Control over Financial Reporting

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

and subsidiaries (the “Company”) as of December

31, 2025, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for the

year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal

Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company

as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with

accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material

respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated

Framework (2013) issued by COSO.

Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting,

and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s

Report on Internal Control Over Financial Reporting (“Management’s Report”).

Our responsibility is to express an opinion

on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on

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 audits in accordance with the standards of the PCAOB.

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

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether

effective internal control over financial reporting was maintained in all material respects.

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

of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing

the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based

on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

that our audits provide a reasonable basis for our opinions.

audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial

reporting of MAP App, Medsphere and RevNu, each a wholly-owned subsidiary.

During the year ended December 31, 2025, the net revenue recorded

by the Company for MAP App, Medsphere and RevNu was approximately $226,000, $10,500,000 and $882,000, respectively, and the net assets

acquired were approximately $625,000, $16,500,000 and $565,000, respectively, including goodwill.

As indicated in Management’s

Report, MAP App, Medsphere and RevNu were acquired during 2025.

Management’s assertion on the effectiveness of the Company’s

internal control over financial reporting excluded internal control over financial reporting of MAP App, Medsphere and RevNu.

and Limitations of Internal Control over Financial Reporting

company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance

with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection

of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,

or that the degree of compliance with the policies or procedures may deteriorate.

Audit Matters

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.

have served as the Company’s auditors since 2025.

March 12, 2026

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

of Directors and Shareholders

the Board of Directors and

of CareCloud, Inc.

on the financial statements

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.

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.

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.

federal 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.

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 audit

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

1 unchanged sentence

Accordingly, we express no such opinion.

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.

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 statements.

Our audit also included evaluating the accounting principles used and significant

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 audit provides

a reasonable basis for our opinion.

GRANT THORNTON LLP

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)

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

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.

ROSENBERG RICH BAKER BERMAN, P.A

served as the Company’s auditor for 2024.

BALANCE SHEETS

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Current assets:

Restricted cash

Accounts receivable - net

Contract asset

Current assets - related party

Prepaid expenses and other current assets

Current assets - related

Prepaid expenses and other

current assets

Total current assets

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Accrued expenses

Operating lease liability (current portion)

Deferred revenue (current portion)

Notes payable (current portion)

Operating lease liability

(current portion)

Deferred revenue (current

Notes payable (current

Contingent consideration

(current portion)

Dividend payable

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Notes payable

Borrowings under line of credit

Contingent consideration

Operating lease liability

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SHAREHOLDERS’ EQUITY:

Preferred stock, $ 0.001 par value - authorized 7,000,000 shares.

Series A, issued and outstanding 4,526,231 shares at December 31, 2024 and December 31, 2023.

Series B, issued and outstanding 1,511,372 and 1,468,792 shares at December 31, 2024 and December 31, 2023, respectively

Common stock, $ 0.001 par value - authorized 35,000,000 shares.

Issued 16,997,035 and 16,620,891 shares at December 31, 2024 and December 31, 2023, respectively.

Outstanding 16,256,236 and 15,880,092 shares at December 31, 2024 and December 31, 2023, respectively

Preferred stock, $ 0.001 par value - authorized

7,000,000 shares.

Series A, issued and outstanding 984,530 and 4,526,231 shares at December 31, 2025 and December 31, 2024, respectively.

Series B, issued and outstanding 1,511,372 shares at December 31, 2025 and December 31, 2024.

Common stock, $ 0.001 par value - authorized

85,000,000 and 35,000,000 shares at December 2025 and 2024, respectively.

Issued 43,178,748 and 16,997,035 shares at December 31,

2025 and December 31, 2024, respectively.

Outstanding 42,437,949 and 16,256,236 shares at December 31, 2025 and December 31, 2024,

Additional paid-in capital

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Accumulated other comprehensive loss

740,799 common shares held in treasury, at cost at December 31, 2024 and December 31, 2023

740,799 common shares held in treasury,

at cost at December 31, 2025 and December 31, 2024

Total shareholders’ equity

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Depreciation and amortization

Goodwill impairment charges

Lease terminations, unoccupied lease charges and restructuring costs

Lease termination and restructuring

Total operating expenses

OPERATING INCOME (LOSS)

OPERATING INCOME

Operating income

Interest income

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Other expense - net

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

Income tax provision (benefit)

NET INCOME (LOSS)

INCOME BEFORE PROVISION FOR INCOME TAXES

Income tax provision

Preferred stock dividend

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

Net loss per common share:

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

Net income (loss) per share:

basic and diluted

Weighted-average common shares used to compute basic and diluted loss per share

Weighted-average common

shares used to compute basic income (loss) per share

Weighted-average common

shares used to compute diluted income (loss) per share

notes to consolidated financial statements.

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

THE YEARS ENDED DECEMBER 31, 2024 AND 2023

STATEMENTS OF COMPREHENSIVE INCOME

in thousands)

NET INCOME (LOSS)

OTHER COMPREHENSIVE LOSS

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation adjustment (a)

COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE INCOME

(a) No tax effect has

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in thousands, except for number of shares)

Additional Paid-in

Accumulated Other Comprehensive

Treasury (Common)

Stock Series A

Stock Series B

Comprehensive

Total Shareholders’

Balance - January 1, 2025

Cumulative effect of adopting ASC 326

Balance - January 1, 2023 after adoption

Balance - January 1, 2023 after adoption, shares

Foreign currency translation adjustment

Conversion of preferred stock and accrued dividends

to common stock

( 3,541,701 )

Stock issued under the equity incentive plan

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Balance - December 31, 2025

Balance - January 1, 2023 before adoption of ASC 326

Cumulative effect of adopting ASC 326

Balance - January 1, 2023 after adoption

Net income (loss)

Balance - January 1, 2024

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

(1) Amounts are net

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.

the year ended December 31, 2025, the Company declared twelve months of dividends and paid eleven months of dividends on the Preferred

the year ended December 31, 2024, no preferred stock dividends were declared or paid.

notes to consolidated financial statements.

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OPERATING ACTIVITIES:

Net income (loss)

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

Adjustments to reconcile net income to net

cash provided by operating activities:

Depreciation and amortization

Lease amortization

Deferred revenue

Provision for expected credit losses

Benefit for deferred income taxes

Foreign exchange (gain) loss

Provision for expected

credit losses

Foreign exchange loss (gain)

Interest accretion

Goodwill impairment charges

Stock-based compensation expense

Changes in operating assets and liabilities:

Stock-based compensation

Changes in operating assets

and liabilities:

Accounts receivable

Contract asset

Accounts payable and other liabilities

Net cash provided by operating activities

Accounts payable and other

Deferred revenue

Net cash provided by operating

INVESTING ACTIVITIES:

Purchases of property and equipment

Capitalized software and other intangible assets

Net cash used in investing activities

Purchases of property and

Capitalized software and

other intangible assets

Payments for acquisitions

Net cash used in investing

FINANCING ACTIVITIES:

Preferred stock dividends paid

Settlement of tax withholding obligations on stock issued to employees

Preferred stock dividends

Payment of contingent obligations

Payment of tax withholding

obligations on stock issued to employees

Proceeds from term-loan borrowings

Repayments of notes payable

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

Proceeds from line of credit

Repayment of line of credit

Net cash used in financing activities

EFFECT OF EXCHANGE RATE CHANGES ON CASH

NET INCREASE (DECREASE) IN CASH

Net cash used in financing

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND

RESTRICTED CASH

NET (DECREASE) INCREASE IN CASH AND RESTRICTED

CASH - Beginning of the year

CASH - End of the year

SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES:

Dividends declared, not paid

CASH AND RESTRICTED CASH - End of the year

SUPPLEMENTAL NONCASH INVESTING AND FINANCING

Conversion of preferred

stock and accrued dividends to common stock

Dividends declared, not

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:

Reclass of deposits for

property and equipment placed in service

SUPPLEMENTAL INFORMATION - Cash paid during

the year for:

notes to consolidated financial statements.

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OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

ORGANIZATION AND BUSINESS

Inc., (together with its consolidated subsidiaries, “CareCloud,” the “Company,” “we,” “us”

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In June 2021, CAC purchased

certain assets and assumed certain liabilities of MedMatica Consulting Associates Inc., (“MedMatica”) and purchased the stock

certain assets and assumed certain liabilities of MedMatica Consulting Associates Inc.

(“MedMatica”) and purchased the stock

of Santa Rosa Staffing, Inc.

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which has not yet begun operations.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

August 2025, the Company formed CareCloud Holdings, Inc (“Holdings”), as an indirect subsidiary.

Holdings purchased certain

assets and assumed certain liabilities of Medsphere Systems Corporation (“Medsphere”).

Medsphere was in the business of providing

healthcare IT software and related services to the inpatient and ambulatory market.

During October 2025, the Company formed N884AM Holdings,

to acquire an aircraft which is used primarily for sales and marketing activities.

OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

of Consolidation — The accompanying consolidated financial statements have been prepared in accordance with accounting principles

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

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.

CareCloud, and its wholly-owned subsidiaries including their wholly-owned subsidiaries and its majority-owned subsidiaries, MTBC Pvt.

Ltd and MTBC Bagh Pvt.

The non-controlling interests of MTBC Pvt.

and MTBC Bagh Pvt.

are inconsequential to the consolidated financial statements.

intercompany accounts and transactions have been eliminated in consolidation.

are inconsequential to the consolidated

financial statements.

All 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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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.

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

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

Actual results could significantly differ from those estimates.

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to occur for trade accounts receivable.

and Equipment — Property and equipment are stated at cost, less accumulated depreciation.

Depreciation is calculated using

the straight-line basis over the estimated useful lives of the assets ranging from three to five years .

Ordinary maintenance and repairs

are expensed as incurred.

Depreciation for computers is calculated over three years , while the remaining assets (except leasehold improvements)

are depreciated over five years .

The Company amortizes leasehold improvements over the lesser of the lease term or the remaining economic

life of those assets.

Generally, the lease term is the base lease term plus certain renewal option periods for which renewal is reasonably

certain and for which failure to exercise the renewal option would result in an economic penalty to the Company.

Assets — Intangible assets include customer relationships, covenants not-to-compete acquired in connection with acquisitions,

software purchase and development costs and trademarks acquired.

Amortization for intangible assets related to revenue cycle management

is recorded primarily using the double declining balance method over three to four years .

and Equipment — Property and equipment are

stated at cost, less accumulated depreciation.

Depreciation is calculated using the straight-line basis over the estimated useful lives

of the assets ranging from 3 three to five

Ordinary maintenance and repairs are expensed

Depreciation for computers is calculated over three

years , while the remaining assets (except leasehold

improvements) are depreciated over five

The Company amortizes leasehold improvements

over the lesser of the lease term or the remaining economic life of those assets.

Generally, the lease term is the base lease term plus

certain renewal option periods for which renewal is reasonably certain and for which failure to exercise the renewal option would result

in an economic penalty to the Company.

Assets — Intangible assets include customer

relationships, covenants not-to-compete acquired in connection with acquisitions, software purchase and development costs and trademarks

Amortization for intangible assets related to revenue cycle management is recorded primarily using the 200% double declining

balance method over 3

three to four

Amortization for intangible assets related

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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.

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.

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

December 31, 2025 and 2024.

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

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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 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.

No impairment charges were recorded during the years ended December 31, 2025 and 2024.

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

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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.

(“RSUs”) classified as equity, the market price of our common or preferred 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

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

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— 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”).

At December 31, 2023, 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, were accrued in the consolidated balance sheet at December 31, 2024.

Future monthly dividends continued to accrue

in arrears but were not recorded as a liability until they were declared by the Board of Directors.

The Company resumed paying monthly

dividends in February 2025, paying one month of arrears each month for the remainder of the year.

In March 2025, the Company converted

the majority of the Series A Preferred Stock into the Company’s common stock which included payment of the dividends in arrears

at that time for the shares that were converted.

The dividend payments made for the remainder of 2025 included dividends for the Series

A Preferred Stock that were not converted and dividends for the Series B Preferred Stock.

Preferred stock dividends are charged against

paid in capital because the Company does not have sufficient retained earnings.

The dividend payable in the December 31, 2025 consolidated

balance sheet represents dividends declared, but unpaid at that date.

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

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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.

The fair value of the Company’s financial instruments is measured

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

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 a gain of approximately $ 130,000 and a loss of approximately

– net in the consolidated statements of operations and amounted to a loss of approximately $ 109,000 and a gain of approximately

$ 130,000 for the years ended December 31, 2025 and 2024, 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.

Restructuring

Costs — Restructuring costs incurred in 2025 and 2024 primarily consist of severance and separation costs associated with the

optimization of the Company’s operations and profitability improvements.

(See Note 14).

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

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position, results of operations and cash flows.

June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses:

Measurement of Credit Losses on Financial Instruments.

The guidance in Accounting Standards Update (“ASU”) 2016-13 replaces the incurred loss impairment methodology under current

The new impairment model requires immediate recognition of estimated credit losses expected to occur for most financial assets

and certain other instruments.

It will apply to all entities.

For trade receivables, loans and held-to-maturity debt securities, entities

will be required to estimate lifetime expected credit losses.

This may result in the earlier recognition of credit losses.

2019, the FASB issued ASU No.

2019-10, which delayed this standard’s effective date for SEC smaller reporting companies to the

fiscal years beginning on or after December 15, 2022.

The Company adopted this guidance on January 1, 2023 using a modified retrospective

adoption methodology, whereby the cumulative impact of all prior periods is recorded in accumulated deficit or other impacted balance

sheet items upon adoption.

The impact to the accumulated deficit as of January 1, 2023 for the allowance related to accounts receivable

was a charge of approximately $ 186,000 and a corresponding increase to the allowance for expected credit losses.

October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities

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 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):

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December 15, 2024.

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

The impact was 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.

The amendments in

this update enhance the transparency and decision usefulness of income tax disclosures primarily related to rate reconciliation and income

taxes paid information.

The update also includes certain other amendments to improve the effectiveness of income tax disclosures.

amendments are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The Company does not expect

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

The amendments

in this update enhance the transparency and decision usefulness of income tax disclosures primarily related to rate reconciliation

and income taxes paid information.

The update also includes certain other amendments to improve the effectiveness of income tax

The amendments are effective for annual periods beginning after December 15, 2024.

The impact was only to the financial

statement disclosures which has been adopted by the Company prospectively by adding such disclosures as income taxes paid by

jurisdiction and effective income tax rate percentages in the rate reconciliation table.

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

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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.

There was no impact on the consolidated

financial statements as a result of this standard.

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

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

GOODWILL AND INTANGIBLE ASSETS – NET

In September 2025, the FASB issued ASU

2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) .

This update makes targeted improvements

to Subtopic 350-40 to increase the operability of the recognition guidance by removing all references to software development project

stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop

software in the future.

The amendments in this update are effective for all entities for annual reporting periods beginning after December

15, 2027, and interim reporting periods within those annual reporting periods.

Early adoption is permitted as of the beginning of an

annual reporting period.

The Company is in the process of determining if this update will have a significant impact on the consolidated

financial statements.

December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) .

This update improves the guidance in Topic 270, Interim

Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable.

The amendments

in this update are effective for all entities that provide interim financial statements and notes in accordance with generally accepted

accounting principles for interim reporting periods within annual reporting periods beginning after December 15, 2027.

The amendments

in this update can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements.

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

December 2025, the FASB issued ASU 2025-12, Codification Improvements .

This project facilitates Codification updates for a broad

range of Topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements.

The Board decided that the types of issues that it will consider through this project are improvements that are not expected to have

a significant effect on current accounting practice or result in significant costs to most entities.

The amendments in this Update are

effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those

annual reporting periods.

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

October 1, 2025 (the “MAP App Closing Date”), the Company entered into an Asset Purchase Agreement (the “APA”)

with the Healthcare Financial Management Association (the “HFMA”), an Illinois not-for-profit corporation, to acquire MAP

The acquisition has been accounted for as a business combination.

Under the APA, the Company paid $ 467,817 (the “Closing Payment”)

as consideration plus potential earnouts.

The Company will pay an additional cash payment (the “Earnout Payment”) equal to

the aggregate net revenue earned by the Company during the twelve-month period beginning ninety days from the MAP App Closing Date (the

“Initial Earnout Period”) from (i) customers who were MAP App subscribers as of the MAP App Closing Date and remain active

subscribers, in good standing, throughout the Initial Earnout Period (“Acquired MAP Accounts”), (ii) prospective customers

included in the MAP App pipeline as of the MAP App Closing Date (“Pipeline MAP Accounts”) and (iii) new customers resulting

from the HFMA’s efforts that are neither Acquired MAP Accounts nor Pipeline MAP Accounts (“Ramp-up Customers”).

the thirty-six month period beginning immediately after the Initial Earnout Period (“Post Earnout Period”), the Company will

make additional quarterly payments to the HFMA in amounts equal to 5 % of the aggregate net revenue earned during the preceding quarter

from all Acquired MAP Accounts, Pipeline MAP Accounts and Ramp-up Customers and 20 % of the aggregate net revenue earned during the preceding

quarter from all newly signed Pipeline MAP Accounts procured in connection with the agreement.

The Earnout Payment will be reduced by

the sum of the Closing Payment and $ 353,000 , the deferred revenue amounts.

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 nationwide.

preliminary purchase price allocation of the MAP App acquisition is summarized as follows:

OF ALLOCATION OF PURCHASE PRICE

in thousands)

Notes payable

Contingent escrow

Contingent consideration

Total purchase price

OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN BUSINESS ACQUISITION

in thousands)

Accounts receivable

Contract asset

Property and equipment

Customer relationships

Technology acquired

Accounts payable

Accrued compensation

Deferred revenue

Total preliminary purchase price allocation

fair value of customer relationships was based on the estimated discounted cash flows generated by these intangibles.

The goodwill represents

the Company’s ability to develop software relationships with hospitals to support RCM growth.

The goodwill from this acquisition

is deductible ratably for income tax purposes over fifteen years.

It was estimated that the probable future payments required under the

APA will be approximately $ 157,000 which has been recorded as part of the preliminary purchase price allocation as contingent consideration.

Company performed the valuation of the acquired assets and the contingent consideration.

The purchase price allocation is preliminary

and will be finalized by the end of the first quarter of 2026 when additional information is obtained regarding customer attrition.

weighted-average amortization period of the acquired intangible assets is approximately three years.

earned from the clients obtained from the MAP App acquisition was approximately $ 226,000 during the three months and year ended December

acquisition reflects both the HFMA’s desire to partner with a leader in healthcare technology to expand MAP App’s core capabilities

and CareCloud’s strategy to expand its SaaS-based ecosystem with best-in-class tools that complement its AI-powered revenue cycle

August 22, 2025 (the “Medsphere Closing Date”), Holdings, a newly created, indirect subsidiary of CareCloud, executed an

Asset Purchase Agreement (the “Purchase Agreement”) with Medsphere Systems Corporation, a Delaware corporation (“Medsphere”).

The acquisition was accounted for as a business combination.

Pursuant to the Purchase Agreement, Holdings acquired certain assets and

assumed certain liabilities of Medsphere, which was in the business of providing healthcare IT software and related services primarily

inpatient and ambulatory market.

aggregate purchase price for the acquisition was $ 16,500,000 , plus the assumption of certain liabilities.

The purchase price was comprised

(i) $ 8,250,000 in cash, subject to provisions as set forth in the Purchase Agreement and (ii) $ 8,250,000 payable by Holdings to Medsphere’s

secured bank lender Wells Fargo Bank, N.A.

(“Wells Fargo”) pursuant to a Deferred Payment Agreement, bearing interest at

a rate of 12 % per year with a maturity date of February 20, 2026 .

The Company and its subsidiaries were also party to the Deferred Payment

Agreement as guarantors.

The obligations of the Company and its subsidiaries under the Deferred Payment Agreement were secured by their

assets pursuant to security documents executed by the Company and its subsidiaries in favor of Wells Fargo.

The obligation to Well Fargo

was satisfied on September 3, 2025.

(See Note 8).

purchase price allocation of the Medsphere acquisition is summarized as follows:

OF ALLOCATION OF PURCHASE PRICE

in thousands)

Notes payable

Contingent escrow

Total purchase price

OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN BUSINESS ACQUISITION

in thousands)

Accounts receivable

Contract asset

Property and equipment

Customer relationships

Technology acquired

Accounts payable

Accrued compensation

Deferred revenue

Total purchase price allocation

fair value of the contract asset was based on the expected revenue earned by Medsphere as of the Medsphere Closing Date.

The fair value

of customer relationships was based on the estimated discounted cash flows generated by these intangibles.

The goodwill represents the

Company’s ability to expand in the inpatient and ambulatory market and operational synergies that we expect to achieve that would

not be available to other market participants.

The goodwill from this acquisition is deductible ratable for income tax purposes over

fifteen years.

The acquired accounts receivable is recorded at fair value, which represents amounts that have been subsequently paid

or are expected to be paid by clients.

The fair value of the technology is based on the present value of the expected after-tax royalty

The fair value of the property and equipment, accounts payable, accrued compensation and deferred revenue were based on the

acquisition date fair values.

Company engaged a third-party valuation specialist to determine the fair value of the intangible assets acquired in the Medsphere acquisition.

The fair value of the remaining assets and liabilities were determined by the Company.

The weighted-average amortization period of the

acquired intangible assets is approximately three years .

earned from the clients obtained from the Medsphere acquisition was approximately $ 10.5 million during the year ended December 31, 2025.

The restricted cash balance at December 31, 2025 in the consolidated balance sheet represents the contingent escrow portion of the purchase

price allocation.

The liability for the contingent consideration escrow is included in the current portion of contingent consideration

in the December 31, 2025 consolidated balance sheet.

Medsphere acquisition added additional clients to the Company’s customer base, allowed access to additional inpatient clients and

the clinical software market, expanded the Company’s ambulatory footprint and provided entry into certain managed services.

April 1, 2025 (the “RevNu Closing Date”), the Company entered into an Asset Purchase Agreement (the “APA”) with

Gratius Enterprises, Inc., doing business as RevNu Medical Management (“RevNu”), pursuant to which the Company acquired certain

assets of RevNu.

The acquisition has been accounted for as a business combination.

Under the APA, the Company is obligated to make quarterly

payments equal to twenty percent (20%) of the revenue generated from the acquired RevNu client accounts for a period of forty-two (42)

months following the RevNu Closing Date (the “RevNu Quarterly Payments”).

The total purchase price is contingent upon future

revenue performance and includes the estimated fair value of the RevNu Quarterly Payments.

In the event that the service agreement with

a specified customer is terminated, the Company will have no further obligation to make additional payments under the APA.

ended December 31, 2025, the quarterly payments due to RevNu totaled approximately $ 53,000 .

is in the business of providing audiology and hearing aid billing/revenue cycle IT solutions and related services to hearing healthcare

providers/practices.

The total consideration for this acquisition consisted of contingent consideration of approximately $ 565,000 .

purchase price allocation of RevNu is summarized as follows:

OF PRELIMINARY PURCHASE PRICE ALLOCATION

in thousands)

Contract asset

Customer relationships

Total purchase price allocation

fair value of the contract asset was based on the expected revenue earned by RevNu as of the RevNu Closing Date.

The fair value of customer

relationships was based on the estimated discounted cash flows generated by these intangibles.

The goodwill represents the Company’s

ability to expand in the audiology and hearing aid market.

The goodwill from this acquisition is deductible ratably for income tax purposes

over fifteen years.

It was estimated that the probable future payments required under the APA will be approximately $ 565,000 which has

been recorded as part of the purchase price allocation as contingent consideration.

Company performed the valuation of the acquired assets and the contingent consideration.

The weighted-average amortization period of

the acquired intangible assets is approximately three years.

earned from the clients obtained from the RevNu acquisition was approximately $ 882,000 during the year ended December 31, 2025.

RevNu acquisition added additional clients in the audiology market to the Company’s customer base and, similar to previous acquisitions,

broadened the Company’s presence in the healthcare information technology industry through expansion of its customer base and by

increasing available customer relationship resources and specialized trained staff.

forma financial information (Unaudited)

unaudited pro forma information below represents the Company’s consolidated results of operations as if the MAP App, Medsphere,

RevNu and one other small acquisition occurred on January 1, 2024.

The pro forma information has been included for comparative purposes

and is not indicative of results of operations the Company would have had if the acquisitions occurred on the above date, nor is it necessarily

indicative of future results.

The unaudited pro forma information reflects material, non-recurring pro forma adjustments directly attributable

to the business combinations.

The difference between the actual net revenue and the pro forma net revenue is approximately $ 22.2 million

and $ 43.2 million for the years ended December 31, 2025 and 2024, respectively and are reflected as pro forma adjustments below.

differences primarily represent revenue recorded from the MAP App, Medsphere, RevNu and one other small acquisition.

Other differences

arise primarily from amortizing purchased intangibles using the double declining balance method, depreciating acquired fixed assets,

adjusting the interest expense and reversing debt exit fees and the goodwill amortization and impairment.

OF PRO FORMA FINANCIAL INFORMATION

Ended December 31,

($ in thousands, except per share

Net income (loss) attributable to common shareholders

Net income (loss) per share - basic and fully

AND INTANGIBLE ASSETS – NET

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

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OF CHANGES TO CARRYING AMOUNT OF GOODWILL

Year Ended December 31,

Ended December 31,

($ in thousands)

Beginning gross balance

Impairment charges

Ending gross balance

a result of a triggering event in December 2023 resulting from the suspension of the Preferred Stock dividend, the Company updated its

annual goodwill impairment test that was performed as of October 31, 2023 for the Healthcare IT segment.

It was determined that the fair

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, 2025 and 2024:

OF INTANGIBLE ASSETS ACTIVITY

Other Intangible

Relationships

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Balance, January 1, 2025

Translation gain

Translation loss

Balance, December 31, 2025

ACCUMULATED AMORTIZATION

Balance, January 1, 2025

Amortization expense

Translation gain

Translation loss

Balance, December 31, 2025

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Balance, January 1, 2024

Translation loss

Translation gain

Balance, December 31, 2024

ACCUMULATED AMORTIZATION

Balance, January 1, 2024

Amortization expense

Translation loss

Translation gain

Balance, December 31, 2024

Net book value

a result of a triggering event in December 2023, we also reviewed our other long term assets for impairment.

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.

reviewed our other long-term assets for impairment.

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, 2025.

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

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OF INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

Years ending December 31,

ending December 31,

in thousands)

PROPERTY AND EQUIPMENT

AND EQUIPMENT

and equipment consisted of the following:

OF PROPERTY AND EQUIPMENT

Ended December 31,

($ in thousands)

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Less accumulated depreciation

Property and equipment – net

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.

Property and equipment

expense was approximately $ 2.5 million and $ 2.0 million for the years ended December 31, 2025 and 2024, respectively.

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.

There were no triggering events during the years ended December 31, 2025 and 2024.

CONCENTRATIONS

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.

Risks — As of December 31, 2025 and 2024, the Company held cash of approximately $ 1.1 million and $ 119,000 , 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

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As of December 31, 2025, two customers each individually accounted for

approximately 7 % and 5 % of accounts receivable, respectively.

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.

During the years ended December 31, 2025 and 2024, there was one customer with sales of approximately

10 % of total revenue, respectively.

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

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providing operational support and operating as a backup to the Islamabad office.

The Bagh office now operates as the main operational

center for the Company.

The Company’s operations outside the United States are subject to special considerations and significant

risks not typically associated with companies in the United States.

The Company’s business, financial condition and results of

operations may be influenced by the political, economic, and legal environment in the countries in which it operates and by the general

state of these countries’ economies.

The Bagh office operates as the main operational center

for the Company.

The Company’s operations outside the United States are subject to special considerations and significant risks

not typically associated with companies in the United States.

The Company’s business, financial condition and results of operations

may be influenced by the political, economic, and legal environment in the countries in which it operates and by the general state of

these countries’ economies.

The Company’s results may be adversely affected by, among other things, changes in governmental

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Non-current liabilities

NET LOSS PER COMMON SHARE

following table reconciles the weighted-average shares outstanding for basic and diluted net loss per common share for the years ended

December 31, 2024 and 2023:

NET INCOME (LOSS) PER COMMON SHARE

following table reconciles the weighted-average shares outstanding for basic and diluted net income (loss) per common share for the years

ended December 31, 2025 and 2024:

OF RECONCILIATION OF WEIGHTED-AVERAGE SHARES OUTSTANDING FOR BASIC AND DILUTED NET LOSS PER COMMON SHARE

Year Ended December 31,

($ in thousands, except share and

per share amounts)

Ended December 31,

($ in thousands, except share

and per share amounts)

Basic and Diluted:

Net loss attributable to common shareholders

Weighted-average common shares used to compute basic and diluted loss per share

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.

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

previous credit facility.

The SVB credit facility is a secured revolving line of credit where borrowings are based on a formula of 200%

of repeatable revenue adjusted by an annualized attrition rate as defined in the credit agreement .

During the third quarter of 2018,

the credit line was increased from $ 5 million to $ 10 million and the term was extended for an additional year .

During the third quarter

of 2021, the credit line was further increased to $ 20 million and the term was extended for two years .

During February 2023, the line

of credit was increased to $ 25 million and the term was extended for two years through October 13, 2025 .

Effective August 31, 2023, the

credit facility agreement was amended whereby the interest rate was increased from the prime rate plus 1.5 % to the prime rate plus 2.0 %.

(loss) attributable to common shareholders

Weighted-average common

shares used to compute basic income (loss) per share

Weighted-average common

shares used to compute diluted income (loss) per share

Net income (loss) attributable

to common shareholders per share - basic and diluted

net income (loss) attributable to common shareholders includes the preferred stock dividend amounts earned for the year ended December

31, 2025 of approximately $ 6.9 million and 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, 2025 and 2024 in the consolidated balance sheets represents

dividends declared, but not paid, through December 31, 2025 and 2024, respectively.

December 31, 2025, the 161,400 unvested common stock restricted stock units (“RSUs”) as discussed in Note 16 were included

in the above earnings per share calculation but did not change the amount.

At December 31, 2024, the 242,500 unvested equity RSUs were

excluded from the above earnings per share calculation as they were anti-dilutive.

Valley Bank (“SVB”) — During October 2017, the Company opened a revolving line of credit from SVB under a three-year

agreement which replaced the previous credit facility.

SVB credit facility was secured revolving line of credit where borrowings were based on a formula of 200% of repeatable revenue adjusted

by an annualized attrition rate as defined in the credit agreement .

Effective August 31, 2023, the credit facility agreement was amended whereby the interest rate was increased from the prime rate plus

to the prime rate plus 2.0 % .

The requirement for the minimum liquidity ratio was slightly reduced.

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

to purchase 125,000 shares of its common stock, and committed to pay an annual anniversary fee of $ 50,000 a year.

Based on the terms

in the original SVB credit agreement, these warrants had a strike price equal to $ 3.92 .

They had a five -year exercise window and net

exercise rights, and were valued at $ 3.12 per warrant.

These warrants were exercised during 2022.

As a result of the revision in the

SVB credit line, which increased the credit line from $ 5 million to $ 10 million and reduced the interest rate by 25 basis points, the

Company paid approximately $ 50,000 of fees upfront and issued an additional 28,489 warrants, with a strike price equal to $ 5.26 , a five -year

exercise window and net exercise rights.

The additional warrants were valued at $ 3.58 per warrant and expired unexercised in September

The SVB credit agreement contains various covenants and conditions governing the revolving line of credit including a current annual

fee of $ 44,000 .

These covenants include a minimum level of adjusted EBITDA or a minimum liquidity ratio, one of which must be satisfied

when borrowings are outstanding.

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

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

The agreements that governed the former SVB relationship

remain in place.

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

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.

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 was also a fee

of one-half of 1% annually for the unused portion of the credit line .

The debt was secured by all of the Company’s domestic assets

and 65 % of the shares in its offshore subsidiaries.

SVB credit agreement contained various covenants and conditions governing the revolving line of credit including an annual fee of $ 44,000 .

These covenants included a minimum level of adjusted EBITDA or a minimum liquidity ratio, one of which must be satisfied when borrowings

are outstanding.

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

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

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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.

During August 2025, the Company terminated

the line of credit.

August 22, 2025, the Company entered into a Deferred Payment Agreement with Wells Fargo for $8,250,000 pursuant to the Purchase Agreement

with Medsphere.

The Deferred Payment Agreement had an interest rate of 12% per year with a maturity date of February 20, 2026 and was

secured by substantially all of the Company’s assets.

The Deferred Payment Agreement was paid on September 3, 2025 .

(See Note 3).

September 3, 2025, the Company entered into an agreement (the “Agreement”) with Provident Bank (“Provident”)

whereby Provident provided the Company with an available line of credit of $ 10

facility is secured by, among other things, a first lien security interest in substantially all of the domestic assets and other

property of the Company.

The interest rate of the facility is an adjustable rate equal to the margin (300 basis points) over an

independent index which is equal to the Secured Overnight Financing Rate (“SOFR”).

The cost of the Provident line of

credit, which is included in interest expense, is approximately $116,000 for the year ended December 31, 2025.

The Agreement

contains various covenants and conditions governing the revolving line of credit including an initial commitment fee of $35,000 and

an annual fee of $35,000 thereafter.

At December 31, 2025, the Company was in compliance with all covenants .

The Agreement

terminates on September 1, 2027, but can be renewed by the parties.

entering into the Agreement, the Company borrowed approximately $ 8.3 million on its line of credit with Provident to satisfy the obligation

to Wells Fargo incurred in connection with the Medsphere acquisition.

The Company repaid the borrowed amount during the year ended December

At December 31, 2025, the available borrowing base was $ 10.0 million.

November 7, 2025, the Company entered into a five-year loan agreement with Republic Bank & Trust Company

(“Republic”) for $ 1,032,000

for the purchase of an aircraft, which serves as security for the loan.

The interest rate on the loan is fixed at 6.75 %

and is guaranteed by the Company.

The Company plans to liquidate this loan within the next two years.

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

The Company performs periodic evaluations

of the relative credit standing of Provident to ensure its credit worthiness.

As of December 31, 2025 and December 31, 2024, the Company

held cash of approximately $ 1.1

million and $ 119,000 ,

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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notes typically have three 3 to six year terms and are issued at current market rates.

Financing — The Company finances certain insurance purchases over the term of the policy life.

The interest rate charged is

Financing Note — The Company financed an aircraft purchase with a note for $ 1,032,000 with Republic.

of the outstanding notes payable and other obligations as of December 31, 2025 are as follows:

OF MATURITIES OF LONG-TERM DEBT

Year ending December 31,

Vehicle Financing Notes

Insurance Financing

ending December

($ in thousands)

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of our current contracts with customers contain a single performance obligation.

For contracts where we provide multiple services, such

as where we perform multiple ancillary services, each service represents its own performance obligation.

The standalone selling prices

are based on the contractual price for the service.

The Company accounts for individual performance obligations

separately if they are distinct.

For contracts where we provide multiple services, such as where we perform multiple ancillary services,

each service represents its own performance obligation.

The transaction price is allocated to the separate performance obligations on

a relative standalone selling price (“SSP”) basis.

The Company determines the SSP based on the Company’s overall pricing

objectives by reviewing the Company’s significant pricing practices, including discounting practices, geographical locations, the

size and volume of the Company’s transactions, the customer type, price lists, pricing strategy, and historical standalone sales.

The SSP is analyzed on a periodic basis to identify if the Company has experienced significant changes in selling prices.

apply the portfolio approach as permitted by ASC 606 as a practical expedient to contracts with similar characteristics and we use estimates

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SCHEDULE OF DISAGGREGATION OF REVENUE

Year Ended December 31,

Ended December 31,

($ in thousands)

Healthcare IT:

Technology-enabled business solutions

Technology-enabled

business solutions

Professional services

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Medical Practice Management:

Medical practice management services

practice management services

Technology-enabled

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streamlined SaaS platform.

The Company has a large number of clients who utilize the Company’s practice management software, electronic

health records software, patient experience management solutions, business intelligence software and/or robotic process automation software

on a SaaS basis, but who do not utilize the Company’s revenue cycle management services.

SaaS fees may be fixed based on the number

of providers, or may be variable.

digital health services, which began generating revenue in 2022, include chronic care management, where a care manager has remote visits

with patients with one or more chronic conditions under the supervision of a physician who is our client.

The performance obligation

for chronic care management is satisfied at a point in time once the patient receives the remote visit.

The digital health services also

include remote patient monitoring where our system monitors recordings from FDA approved internet connected devices.

These devices record

patient trends and alerts the physician to changes which might trigger the need for additional follow-up visits.

The performance obligations

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, 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.

The Company has a large number of clients who utilize the Company’s practice management, urgent care

and clinical workflow software, electronic health records software, patient experience management solutions, business intelligence software,

inventory management systems, and/or robotic process automation software on a SaaS basis, but who do not utilize the Company’s

revenue cycle management services.

SaaS fees may be fixed based on the number of providers, or may be variable.

digital health services, which began generating revenue in 2022, include Chronic Care Management (“CCM”), where a care manager

has remote visits with patients with one or more chronic conditions under the supervision of a physician who is our client.

The performance

obligation for CCM is satisfied at a point in time once the patient receives the remote visit.

The digital health services also include

Remote Patient Monitoring (“RPM”) where our system monitors recordings from FDA approved internet connected devices.

devices record patient trends and alerts the physician to changes which might trigger the need for additional follow-up visits.

The performance

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

The revenue for CCM for the years ended December 31, 2025 and 2024 was approximately $ 2.8 million and $ 3.0 million, respectively.

The revenue for RPM for the years ended December 31, 2025 and 2024 was approximately $ 794,000 and $ 779,000 , respectively.

medical billing clearinghouse service takes claim information from customers, checks the claims for errors and sends this information

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systems and hospitals.

Our professional services beginning in 2025 include managed IT services, government consulting and product development

The performance obligation is satisfied over time using the input method.

The revenue is recorded on a monthly

basis as the professional services are rendered.

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

and $ 100,000 ,

respectively.

The revenue is recorded on a monthly basis as the

professional services are rendered.

Unbilled revenue at December 31, 2025 and 2024 was approximately $ 79,000 and $ 338,000 , respectively.

and mailing services:

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a contract asset for revenue earned and not paid as the ultimate payment is conditioned on achieving certain volume thresholds.

all of the above revenue streams other than group purchasing services and chronic care management, revenue is recognized over time, which

is typically one month or less, which closely matches the point in time that the customer simultaneously receives and consumes the benefits

provided by the Company.

all of the above revenue streams other than group purchasing services and CCM, revenue is recognized over time, which is typically one

month or less, which closely matches the point in time that the customer simultaneously receives and consumes the benefits provided by

For the group purchasing services, revenue is recognized at a point in time.

Each service is substantially the

same and has the same periodic pattern of transfer to the customer.

Each of the services provided above is considered a separate performance

Each service is substantially the same and

has the same periodic pattern of transfer to the customer.

Each of the services provided above is considered a separate performance obligation.

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

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in thousands)

Balance as of January 1, 2024

Increase (decrease), net

Balance as of December 31, 2024

Balance as of January 1, 2023

(Decrease) increase, net

Balance as of December 31, 2023

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

$ 909,000 and $ 1.1 million, respectively.

as of January 1, 2025

(decrease), net

as of December 31, 2025

as of January 1, 2024

(decrease), net

as of December 31, 2024

amount of deferred revenue that was recorded at the beginning of the year and recognized during the years ended December 31, 2025 and

2024 was approximately $ 735,000

and $ 909,000 ,

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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requires we pool assets with similar risk characteristics and consider current economic conditions when estimating losses.

of the ASU 2016-13 for trade accounts receivable was recorded as a charge to accumulated deficit of approximately $ 186,000 as of January

adoption, we segmented the accounts receivable population into pools based on their risk assessment.

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SCHEDULE OF TRADE ALLOWANCE FOR DOUBTFUL ACCOUNTS

Year Ended December 31,

Ended December 31,

($ in thousands)

Beginning balance

Adoption of ASC 326

Recoveries/adjustments

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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.

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

Preferred Stock was amended from 11 % to 8.75 % per annum and the per annum dividend amount per share was amended from $ 2.75 to $ 2.1875

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) .

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.

The last program expired January 25, 2017 .

The last program expired in January 2017 .

a result of these stock repurchases, the Company has 740,799 common shares held as treasury stock at an aggregate cost of $ 662,000 .

Company had the right to sell up to $ 50 million of its common stock using an “at-the-market” facility (“ATM”).

The underwriter receives 3 % of the gross proceeds.

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.

of our common stock are entitled to one vote for each share held on all matters properly submitted to a vote of shareholders on which

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The common stock is listed on the Nasdaq Global Market under the trading symbol “CCLD.”

January 2025, the Company’s common stock shareholders approved an increase in the number of authorized common shares from 35 million

to 85 million.

An amended certificate of incorporation was filed by the Company.

Company has seven million authorized shares of preferred stock of which 4,560,000 have been designated as Series A shares and the balance

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

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).

September 11, 2024, we have had the right, at our option, to convert the majority of the Series A Preferred Stock into common stock

If we convert shares of the Series A Preferred Stock, then subsequent to the conversion date, dividends would cease

to accrue on shares of the Series A Preferred Stock.

The shares of the Series A Preferred Stock will then 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.

March 6, 2025, the Board of Directors elected to exercise its conversion rights, which provided 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 (the “Conversion”).

Dividends on the converted shares of Series A Preferred Stock ceased to accrue as of the conversion

Individual shareholders who, on 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

There were 3,541,701

shares of Series A Preferred Stock converted at that time and

shares of Series A Preferred Stock continued to be outstanding

at that time and through December 31, 2025.

Due to the Conversion, the monthly cash dividends on Series A Preferred Stock were reduced

to approximately $ 455,000

As a result of the Conversion, the Company delisted

the Series A Preferred Stock from the Nasdaq Global Market.

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

1 unchanged sentence

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

This right continues for the remaining

shares of the Series A Preferred Stock still outstanding.

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

2 unchanged sentences

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, 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

2 unchanged sentences

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

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.

on the Series A Preferred Stock of $ 2.75 annually

per share (through September 11, 2024 and $ 2.19 thereafter)

and the Series B Preferred Stock at $ 2.19 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

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.

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 11, 2024.

Due to the above Amendment, effective on September 12, 2024, the

combined monthly cash dividends were reduced to approximately $ 1.1 million

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

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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.

one month of dividends in arrears each month during the remainder of 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

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 equity offerings, the Company incurred approximately

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

undeclared dividends of approximately $ 12.3 million, which represents the accumulated (but undeclared) dividends due to Preferred Stock

shareholders of record on December 31, 2024.

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.

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 and continuing through the remainder of the year and applying these amounts to the earliest payments in arrears.

made starting in March 2025, which occurred after the Conversion included dividends for the shares of Series A Preferred

Stock that were not converted and dividends for the Series B Preferred Stock.

December 31, 2025, the Company had total undeclared dividends of approximately $ 6.8 million or $ 2.73 per share for both the Series A

and Series B Preferred Stock which represents the accumulated (but undeclared) dividends due to preferred shareholders of record on

December 31, 2025.

Dividends in arrears that have not been declared by the Board of Directors are not recorded in the consolidated balance

Dividends earned during the period are reflected in the consolidated statements of operations, whether or not they were declared.

As of December 31, 2025, dividends have been declared by the Board of Directors for holders of record through that date.

plans to continue declaring monthly dividends until such time as the arrearage on the Preferred Stock is satisfied.

The Company has announced

that it will pay two months of dividends each month starting with the February 15, 2026 payment for the Series B Preferred Stock to satisfy

the 14 months of accumulated and unpaid dividends.

were no warrants outstanding at December 31, 2025 and 2024.

COMMITMENTS AND CONTINGENCIES

Proceedings — On December 9, 2022, an arbitrator rendered a decision in favor of MTBC Acquisition Corp.

and dismissed the claims brought against MAC by Randolph Pain Relief and Wellness Center (“RPRWC”), determining that RPRWC

failed to prove any breach of the applicable billing services agreement and failed to prove that any alleged damages were due.

for RPRWC to file a summary action in Superior Court of New Jersey seeking to overturn the arbitrator’s decision was April 5, 2023

and no summary action was filed by such deadline.

As such, the arbitrator’s decision dismissing RPRWC’s claims is final.

December 22, 2023, an arbitrator rendered a decision in favor of Ramapo Anesthesiologists, PC (“Ramapo”) and granted in part

and denied in part certain claims brought against Origin Healthcare Solutions, LLC;

Meridian Medical Management, Inc.;

and the Company

for alleged breach of contract and other allegations.

Proceedings — On December 22, 2023, an arbitrator rendered a decision in favor of Ramapo Anesthesiologists, PC (“Ramapo”)

and granted in part and denied in part certain claims brought against Origin Healthcare Solutions, LLC, Meridian Medical Management,

Inc., and the Company for alleged breach of contract and other allegations.

Ramapo was awarded mitigation related costs of $ 117,000 .

The payment for such an

award was made during the first quarter of 2024.

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

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.

The payment for such an award was made during the first quarter of 2024.

The Company’s portion of the settlement is approximately

$ 32,000 and the insurance company paid the balance.

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

in the consolidated balance sheet.

March 2019, a 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.

The parties 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.

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.

former customer had a dispute with the Company that was based on services before and after the account was acquired in an acquisition.

A complaint was filed in Massachusetts State Court, Essex County in February 2018.

Under the terms of the purchase agreement, the Company’s

liability, if any, was solely and expressly limited to damages related to its handling of the account at issue.

The parties participated

in formal mediation and at that time, Plaintiff’s starting settlement demand was over $ 2 million.

The mediation was not successful.

The Company made an offer of $ 100,000 in December 2024 to settle the suit, which was accepted.

The settlement amount was recorded in

accrued expenses at December 31, 2024 in the consolidated balance sheet.

A settlement agreement with mutual releases was signed by the

parties in January 2025 and payment was made in February 2025.

dispute occurred with a former customer regarding previous services rendered and they filed a complaint in New York Supreme Court, Onondaga

County in January 2024.

During settlement communications, Plaintiff’s initial settlement demand was over $ 2.5 million.

During ongoing

settlement communications, the Company made an offer of $ 29,000 in March 2025, which was accepted.

A settlement agreement with mutual

releases was signed by the parties in May 2025 and payment was made in June 2025.

dispute arose with a current customer utilizing the Company’s system and they filed a complaint in Connecticut Superior Court,

Judicial District of Middlesex in April 2025.

The parties agreed to settle the claim for $ 24,000 .

This amount was accrued at December

31, 2025 and was paid during January 2026.

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 both years ended December 31, 2024 and 2023.

There was one lease modification during both the years ended December 31, 2025 and 2024.

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.

were no lease impairments recorded for the years ended December 31, 2025 and 2024.

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, 2025, we had 27 leased properties,

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 basis .

five in Medical Practice Management and 22 in Healthcare IT, with the remaining terms ranging from less than one year to ten years.

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 basis .

We also have some related party leases – see Note 13.

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OF LEASE EXPENSE

Year Ended December 31,

Ended December 31,

($ in thousands)

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SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES

December 31, 2024

December 31, 2023

($ in thousands)

Operating leases:

Operating lease ROU assets, net

Current operating lease liabilities

Non-current operating lease liabilities

Total operating lease liabilities

Operating lease

ROU assets, net

Current operating lease

operating lease liabilities

Operating leases:

Asset lease expense

Foreign exchange gain/(loss)

ROU assets, net

Operating lease right-of-use assets

exchange (loss)/gain

Weighted average remaining lease term (in years):

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Operating leases

Operating leases, Weighted average discount rate

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

OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES

Year Ended December 31,

Ended December 31,

($ in thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

Operating cash

flows from operating leases

ROU assets obtained in exchange for lease liabilities:

Operating leases, excluding terminations

Operating leases, excluding

of lease liabilities are as follows:

OF MATURITIES OF LEASE LIABILITIES

Operating leases - Years ending December 31,

Operating leases - Years

ending December 31,

in thousands)

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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

For the years ended December 31, 2025 and 2024, the Company received sublease income of

approximately $ 31,000

and $ 94,000 ,

respectively.

Company had sales to a related party, a physician who is the wife of the Executive Chairman.

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consolidated balance sheets.

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

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

center in Bagh, Pakistan and an apartment for temporary housing in Dubai, the UAE, from the Executive Chairman.

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During the years ended December

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

behalf as only individuals with citizenship in Kashmir are allowed to purchase land in this region.

All advanced amounts were repaid

shortly after the advance was made.

Current assets-related party in the consolidated balance sheets includes security deposits related

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 ,

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.

31, 2025 and 2024, the Company spent approximately $ 1.6 million and $ 979,000 , respectively, to upgrade the related party leased facilities.

The 2025 expenditures were primarily related to the expansion of the Company’s AI center.

Current assets-related party in the consolidated

balance sheets includes security deposits related to the leases of the Company’s corporate offices in the amount of approximately

$ 16,000 for both the years ended December 31, 2025 and 2024.

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

management employee for approximately $ 6,700 per month.

in the ROU asset at December 31, 2025 is approximately $ 430,000 applicable to the related party leases.

Included in the current and non-current

operating lease liability at December 31, 2025 is approximately $ 202,000 and $ 226,000 , respectively, applicable to the related party

Included in the ROU asset at December 31, 2024 is approximately $ 550,000 applicable to the related party leases.

the current and non-current operating lease liability at December 31, 2024 is approximately $ 181,000 and $ 367,000 , respectively, applicable

to the related party leases.

2025, the Company employed the son of the current Chief Executive Officer.

For the year ended December 31, 2025, the Company

recorded approximately $ 38,000

of salary expense.

July 2025, the Company entered into a month-to-month consulting agreement with an entity owned and controlled by the son of the Executive

Chairman to provide consulting services to the Company in artificial intelligence technology for $15,000 per month plus travel expenses.

The expense recorded under this agreement was approximately $ 83,000 for the year ended December 31, 2025.

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 was cancelable with ten days’ notice.

This agreement was terminated by the Company effective February 22, 2026.

years ended December 31, 2025 and 2024, the expense recorded under this agreement was approximately $ 13,000 and $ 75,000 , respectively,

and is included in general and administrative expense in the consolidated statement of operations.

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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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.

Officer and effective January 1, 2026 became the Chief Executive Officer.

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

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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.

The Company incurred expenses of approximately $ 1.4 million

related to the reduction in workforce of which approximately $ 154,000 and $ 606,000 were incurred in 2025 and 2024, respectively.

restructuring expenses consisted of one-time termination benefits, including but not limited to, severance payments and healthcare benefits.

following table summarizes restructuring costs for 2025 and 2024:

SCHEDULE OF RESTRUCTURING COSTS

Year Ended December 31,

Ended December 31,

($ in thousands)

Severance and separation costs

Equity awards acceleration costs associated with severance

Equity awards acceleration costs associated

with severance

Other exit related costs

Total restructuring and other 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:

Total restructuring

and other costs

expense associated with the restructuring is included in restructuring costs in the consolidated statement of operations for the years

ended December 31, 2025 and 2024.

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

Total restructuring and other costs

separation costs

related costs

restructuring

and other costs

($ in thousands)

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Balance as of January 1, 2024

Beginning balance

Payments and other adjustments

Balance as of December 31, 2024

Ending balance

EMPLOYEE BENEFIT PLANS

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1,000,000 shares of common stock and 200,000 shares of Series B Preferred Stock were added to the A&R Plan for future issuance.

of December 31, 2024, 499,683 shares of common stock, 33,769 shares of Series A Preferred Stock and 16,000 shares of Series B Preferred

Stock are available for grant.

Permissible awards include incentive stock options, non-statutory stock options, stock appreciation rights,

restricted stock, RSUs, performance stock and cash-settled awards and other stock-based awards in the discretion of the Compensation

Committee of the Board of Directors including unrestricted stock grants.

of December 31, 2025, 374,683 shares of common stock and 16,000 shares of Series B Preferred Stock are available for grant.

awards include incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance stock

and cash-settled awards and other stock-based awards in the discretion of the Compensation Committee of the Board of Directors including

unrestricted stock grants.

equity based RSUs contain a provision in which the units shall immediately vest and become converted into common shares at the rate of

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

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

common stock.

The change of paying the bonuses in common stock resulted in approximately 135,000 shares being issued in February 2023.

This change resulted in approximately $ 404,000 of stock compensation expense, which offset the amounts previously accrued.

2025, 25,000 RSUs of common stock were granted to each of the five outside members of the Board of Directors with 25 % of the shares

vesting every six months.

During 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 to each

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

In connection with the death of

one director during 2025, all such director’s unvested RSUs fully vested in accordance with the terms of the Company’s equity

incentive plan.

following table summarizes the RSU and restricted stock transactions related to the common and Preferred Stock under the A&R Plan

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

Series A Preferred Stock

Series B Preferred Stock

Preferred Stock

Outstanding and unvested shares at January 1, 2025

2 unchanged sentences

Outstanding and unvested shares at December

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

RSUs are classified as equity.

of December 31, 2025 and 2024, there was approximately $ 271,000 and $ 416,000 , respectively, of total unrecognized compensation cost related

to the common stock RSUs classified as equity that will be expensed through 2027.

As of December 31, 2025 and 2024, there were no unrecognized

compensation costs related to the Series A and Series B Preferred Stock RSUs.

the total outstanding and unvested common stock RSUs at December 31, 2025 and 2024, all of 161,400 and 242,500 , respectively, are classified

For both 2025 and 2024, all of the Series B Preferred Stock RSUs are classified as equity.

following table summarizes the share activity during the years ended December 31, 2025 and 2024 and the amount of common and preferred

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

Series A Preferred Stock

Series B Preferred Stock

Shares available for grant at January 1, 2025

RSUs forfeited

RSUs cancelled

Shares available for grant at December

Shares available for grant at January 1, 2024

( 1,098,976 )

RSUs forfeited

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

December 31, 2025, there was no liability for taxes withheld in connection with the equity awards.

The liability for the cash-settled

awards and accrued payroll taxes on equity awards was approximately $ 6,000 at December 31, 2024, and is included in accrued compensation

in the consolidated balance sheet.

During the year ended December 31, 2024, approximately $ 45,000 was paid in connection with the cash-settled

There were no cash-settled awards at December 31, 2025.

No amounts were paid in connection with cash-settled awards during the

year ended December 31, 2025.

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

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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:

Stock, the weighted average grant date fair value was $ 6.33 for the year ended December 31, 2024.

following table summarizes the components of stock-based compensation expense for the years ended December 31, 2025 and 2024:

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

Year Ended December 31,

compensation included in the consolidated statements of operations:

Ended December 31,

in thousands)

Direct operating costs

Direct operating costs (benefit)

General and administrative

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Selling and marketing

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 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.

stock-based compensation expense

the years ended December 31, 2025 and 2024, the Company estimated its income tax provision based upon the annual pre-tax income.

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

taxable income, to which the Company believes 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, 2025 and 2024.

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

as federal and state taxable income under the

Global Intangible Low-Taxed Income (“GILTI”) regime.

For the tax years ended December 31, 2024 and 2023, the net GILTI from

our foreign affiliates was absorbed against our current year U.S.

Global Intangible Low-Taxed Income (“GILTI”) regime now referred to as Net Controlled Foreign Corporation Tested Income (“NCTI”).

For the tax years ended December 31, 2025 and 2024, the net NCTI from our foreign affiliates was absorbed against our current year U.S.

consolidated loss.

For state tax purposes, the Company’s foreign

earnings may be taxable depending on each individual state’s legislative stance on the recent tax reform legislation.

in the deferred tax valuation allowance was as follows for the years ended December 31, 2024 and 2023:

For state tax purposes, the Company’s foreign earnings may be taxable depending on each individual state’s

legislative stance on the recent tax reform legislation.

The activity in the deferred tax valuation allowance was as follows for the

years ended December 31, 2025 and 2024:

SCHEDULE OF DEFERRED TAX VALUATION ALLOWANCE

Year Ended December 31,

Ended December 31,

($ in thousands)

Beginning balance

Current year valuation allowance increase (decrease)

Current year valuation

allowance increase

Ending balance

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:

income before provision for income taxes for financial reporting purposes during the years ended December 31, 2025 and 2024 consisted

of the following:

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

Year Ended December 31,

Ended December 31,

($ in thousands)

United States

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)

Year Ended December 31,

International

provision for income taxes for the years ended December 31, 2025 and 2024 consisted of the following:

OF COMPONENTS OF INCOME TAX PROVISION

Ended December 31,

($ in thousands)

Total income tax provision (benefit)

International

Total income tax provision

components of the Company’s deferred income taxes as of December 31, 2025 and 2024 are as follows:

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Deferred tax assets:

Allowance for expected credit losses

Allowance for

expected credit losses

Deferred revenue

Property and intangible assets

State net operating loss (“NOL”) carryforwards

Federal net operating loss (“NOL”) carryforwards

Section 163(j) interest limitation

Property and intangible

State net operating loss

(“NOL”) carryforwards

Federal net operating loss

(“NOL”) carryforwards

Section 163(j) interest

Stock based compensation

ASC 842 - ROU asset

Prepaid commissions

Cumulative balance translation adjustment

Cumulative balance translation

Section 267 limitation

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Section 174 costs

Valuation allowance

Total deferred tax assets

Deferred tax liabilities:

Goodwill amortization

Net deferred tax liability

Prepaid commissions

Right-of-use assets

deferred tax liabilities

(a) Certain prior period balances have been reclassified to conform to the current period presentation.

income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax

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payable on taxable income in future years.

Deferred income tax liabilities represent amounts that will increase income taxes payable

in future years.

Company has recorded goodwill as a result of its acquisitions.

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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)

for the years ended December 31, 2024 and 2023 is as follows:

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

deferred tax liability was reversed at that time and no additional deferred tax liability was recorded at December 31, 2025 and 2024.

income tax paid, net of refunds received, for the years ended December 31, 2025 and 2024 consisted of the following:

OF INCOME TAX PAID NET

Ended December 31,

($ in thousands)

International

reconciliation of the provision for income taxes to the amount computed by applying the 21 % statutory U.S.

federal income tax rate

to income before income taxes for the year after the adoption of ASU 2023-09 is as follows:

of Effective Income Tax Rate Reconciliation

Year Ended December 31, 2025

($ in thousands)

Federal provision (benefit) at statutory rate

Provision at U.S.

federal statutory rate

State and local income tax, net of federal income tax effect (a)

Foreign tax effects:

Impact of foreign operations

Effect of cross-border tax laws:

Subpart F GILTI inclusion

Nontaxable or nondeductible items

Changes in valuation allowance

Deferred tax adjustment

Provision for income taxes

The states and local jurisdictions that contribute to the majority (greater than 50%) of the effect in this category include New

Jersey, California, Texas and Ohio.

A reconciliation of the provision

for income taxes to the amount computed by applying the 21 % statutory U.S.

federal income tax rate to income before income taxes for

the year prior to the adoption of ASU 2023-09 is as follows:

Year Ended December 31, 2024

($ in thousands)

Provision at U.S.

federal statutory rate

Increase (decrease) in income taxes resulting from:

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Stock based compensation

Goodwill impairment charges

Deferred true-up

Valuation allowance

Total income tax provision (benefit)

Deferred tax adjustment

Changes in valuation allowance

Provision for income taxes

December 31, 2025 and 2024, the Company did not record any uncertain tax positions based on the technical merits.

Therefore, a tabular

roll forward was excluded and there has been no accrued interest and penalties.

The Company is subject to taxation in the United States,

various states, Pakistan and Sri Lanka.

As of December 31, 2024, all tax years since 2014 remain open to examination due to the carryover

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

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.

tabular roll forward was excluded and there has been no accrued interest and penalties for the years ended December 31, 2025 and

The Company is subject to taxation in the United States, various states, Pakistan and Sri Lanka.

As of December 31, 2025, all

tax years since 2014 remain open to examination due to the carryover of unused net operating losses and tax credits in the United

States by major taxing jurisdictions in which the

Company is subject to tax.

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

As of December 31, 2025 and 2024, the Company had no unrecognized tax benefits and did not recognize any interest or

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

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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.

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or liabilities recorded in the consolidated balance sheets at December 31, 2025 and 2024, respectively.

July 4, 2025, the One Big Beautiful Act (“OBBBA”) was enacted into law.

The OBBBA contained several tax changes to

corporate tax provisions, including foreign-related tax reporting items.

The Company carefully assessed all aspects of

the OBBBA and has determined that its impacts are immaterial to its income tax position.

OTHER EXPENSE – NET

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SCHEDULE OF OTHER (EXPENSE) INCOME - NET

Year Ended December 31,

Ended December 31,

($ in thousands)

Foreign exchange gains (losses)

Foreign exchange (losses) gains

Other expense

Other expense - net

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

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.

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.

Other expense primarily represents legal settlements made by the Company.

January 1, 2024 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

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

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

Chairman served as the CODM.

Effective January 1, 2025, the Executive Chairman and the two Co-CEOs served as the CODM.

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.

expenses and operating income (loss), as shown below, 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

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

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

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operating expenses and operating income (loss) by reportable segment for the years ended December 31, 2025 and 2024:

OF REVENUES, OPERATING EXPENSES AND OPERATING INCOME (LOSS) BY REPORTABLE SEGMENT

Healthcare IT

SCHEDULE OF REVENUES, OPERATING EXPENSES AND OPERATING INCOME (LOSS) BY REPORTABLE SEGMENT

Practice Management

Year Ended December 31, 2024

December 31, 2025

in thousands)

Healthcare IT

Practice Management

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Depreciation and amortization

Goodwill impairment charges

Lease terminations, unoccupied lease charges and restructuring costs

Total operating expenses

Restructuring

operating expenses

Segment operating income

Reconciliation of profit or loss (segment profit/loss):

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

before income taxes

Practice Management

December 31, 2024

in thousands)

Healthcare IT

Practice Management

5 unchanged sentences

Depreciation and amortization

Goodwill impairment charges

Lease terminations, unoccupied lease charges and restructuring costs

Lease termination and restructuring

Total operating expenses

Segment operating (loss) income

Reconciliation of profit or loss (segment profit/loss):

Segment operating income

Operating 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

Other expense

Income before income taxes

(a) This revenue represents fees based

on our actual costs plus a percentage of the operating profit.

VALUE OF FINANCIAL INSTRUMENTS

value measurements are based upon observable and unobservable inputs.

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completed acquisitions.

There was no contingent consideration recorded at December 31, 2024 and 2023.

The fair value at December 31, 2025 is based on a discounted cash flow analysis reflecting the likelihood of

achieving specified performance measure or events and captures the contractual nature of the contingencies, the passage of time and the

associated discount rate.

There was no contingent consideration recorded at December 31, 2024.

following table provides the assets and liabilities carried at fair value measured on a non-recurring basis as of December 31, 2025 and

1 unchanged sentence

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 Measurements at December 31, 2024

Expense for the year ended

Carrying Value

December 31, 2024

VALUE OF THE ASSETS AND LIABILITIES MEASURED ON A NON-RECURRING BASIS

Value Measurements at December 31, 2025

for the year ended

($ in thousands)

Goodwill - Healthcare IT

Fair Value Measurements at December 31, 2023

Expense for the year ended

Carrying Value

December 31, 2023

Value Measurements at December 31, 2024

for the year ended

($ in thousands)

Goodwill - Healthcare IT

SUBSEQUENT EVENTS

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.

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):

FAIR VALUE OF THE ASSETS MEASURED ON A NON-RECURRING BASIS

Measurement at Reporting Date Using Significant Unobservable Inputs, Level 3

Ended December 31,

($ in thousands)

Balance - January 1,

Change in fair value

Balance - December 31,

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