CareCloud, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our 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. Disclosure controls and procedures include, without limitation, controls and procedures 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 accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based 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. 57 Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act. 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 reporting purposes in accordance with generally accepted accounting principles. 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 our assets; (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 our receipts and expenditures are being made only in accordance with authorizations of our management; 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 consolidated financial statements. Management is required to base its assessment on the effectiveness of our internal control over financial reporting on a suitable, recognized control framework. Management has utilized the criteria established in COSO to evaluate the effectiveness of internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Our management has performed its assessment according to the guidelines established by COSO. 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. Management has performed analysis and procedures in preparing our consolidated financial statements. We have concluded that our consolidated financial statements fairly present, in all material respects, our financial condition, results of operations and cash flows at and for the periods presented. Because 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. Tanner 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. Changes in Internal Control over Financial Reporting During the fourth quarter of 2025, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information During the quarter ended December 31, 2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted , modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K). Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 58 PART III Item 10. Directors, Executive Officers and Corporate Governance Information required by this item will be included in our definitive Proxy Statement for the 2026 Meeting of Shareholders which will be filed within 120 days of the end of our fiscal year ended December 31, 2025 (“2026 Proxy Statement”) and is incorporated herein by reference. Item 11. Executive Compensation Information required by this item will be included in the 2026 Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information required by this item will be included in the 2026 Proxy Statement and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence Information required by this item will be included in the 2026 Proxy Statement and is incorporated herein by reference. Item 14. Principal Accountant Fees and Services Information required by this item will be included in the 2026 Proxy Statement and is incorporated herein by reference. 59 PART IV Item 15. Exhibits and Financial Statement Schedules (a) The following documents are filed as part of this Annual Report on Form 10-K: (1) Financial Statements (i) Consolidated Balance Sheets as of December 31, 2025 and 2024 (ii) Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2025 and 2024 (iv) Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2025 and 2024 (v) Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 (vi) Notes to Consolidated Financial Statements (2) Financial Statement Schedules There are no Financial Statement Schedules filed as part of this Annual Report on Form 10-K as the required information is not applicable or is included in the Notes to Consolidated Financial Statements. (b) Exhibit Index: Exhibit Number Description 2.1 Assignment Agreement dated October 3, 2016, by and between the Company, The Prudential Insurance Company of America, and Prudential Retirement Insurance and Annuity Company (filed as Exhibit 10.1 to the Company’s Form 8-K filed on October 5, 2016, and incorporated herein by reference). 2.2 Strict Foreclosure Agreement dated October 3, 2016, by and between MTBC Acquisition, Corp., MediGain, LLC and Millennium Practice Management Associates, LLC (filed as Exhibit 10.2 to the Company’s Form 8-K filed on October 5, 2016, and incorporated herein by reference). 2.3 Transition Services Agreement dated October 3, 2016, by and between MTBC Acquisition, Corp., MediGain, LLC and Millennium Practice Management Associates, LLC (filed as Exhibit 10.3 to the Company’s Form 8-K filed on October 5, 2016, and incorporated herein by reference). 2.4 First Amendment to Assignment Agreement dated January 3, 2017, by and between the Company, The Prudential Insurance Company of America, and Prudential Retirement Insurance and Annuity Company (filed as Exhibit 2.1 to the Company’s Form 8-K filed on January 6, 2017, and incorporated herein by reference). 2.5 Second Amendment to Assignment Agreement dated January 23, 2017, by and between the Company, The Prudential Insurance Company of America, and Prudential Retirement Insurance and Annuity Company (filed as Exhibit 2.1 to the Company’s Form 8-K filed on January 24, 2017, and incorporated herein by reference). 2.6 Asset Purchase Agreement dated June 25, 2018, by and between MTBC, and Orion Healthcorp, Inc. (filed as Exhibit 10.1 to the Company’s Form 8-K filed on July 2, 2018, and incorporated herein by reference). 2.7 Transition Services Agreement dated June 25, 2018, by and between MTBC, and Orion Healthcorp, Inc. (filed as Exhibit 2.29 to the Company’s Form S-1 filed on September 25, 2018, and incorporated herein by reference). 2.8 Asset Purchase Agreement dated March 27, 2019, by and between MTBC-Med, Inc., and Etransmedia Technology, Inc., et. al. (filed as Exhibit 10.1 to the Company’s Form 8-K filed on March 28, 2019, and incorporated herein by reference). 60 2.9 Amended and Restated Asset Purchase Agreement dated April 3, 2019, by and between MTBC-Med, Inc., and Etransmedia Technology, Inc., et. al. (filed as Exhibit 10.1 to the Company’s Form 8-K filed on April 4, 2019, and incorporated herein by reference). 2.10 Agreement and Plan of Merger by and among MTBC, Inc., MTBC Merger Sub, Inc., CareCloud Corporation and Runway Growth Credit Fund Inc., as the Seller’s representative dated January 8, 2020 (filed as Exhibit 2.1 to the Company’s Form 8-K filed on January 8, 2020, and incorporated herein by reference). 2.11 Escrow Agreement dated January 8, 2020 by and among MTBC, Inc., Runway Growth Credit Fund., Inc. and TD Bank (filed as Exhibit 10.17 to the Company’s Form 10-K filed on February 28, 2020, and incorporated herein by reference). 2.12 Stock Purchase Agreement dated June 16, 2020 by and among MTBC, Inc., Origin Holdings, Inc., Meridian Billing Management Co., Origin Holdings, Inc., and GMM II Holdings, LLC, (filed as Exhibit 2.1 to the Company’s Form 8-K on June 17, 2020, and incorporated herein by reference). 2.13 Asset and Stock Purchase Agreement by and among CareCloud Acquisition. Corp., MedMatica Consulting Associates, Inc., and Jerold Howell dated June 1, 2021 (filed as Exhibit 2.1 to the Company’s Form 8-K filed on June 2, 2021, and incorporated herein by reference). 2.14 Non-Competition and Non-Solicitation Agreement by and among Santa Rosa Consulting, Inc., SureTest Holdings, LLC, Laura O’Toole, Mark Scruggs, Raleigh Brewer, Thomas Watford, and CareCloud Acquisition, Corp., dated June 1, 2021 (filed as Exhibit 2.2 to the Company’s Form 8-K filed on June 2, 2021, and incorporated herein by reference). 2.15 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). 2.16 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). 2.17 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). 2.18 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). 2.19 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). 2.20 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). 2.21 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). 2.22 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). 2.23 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). 61 2.24 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). 2.25 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). 2.26 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). 2.27 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). 3.1 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). 3.2 Certificate of Amendment of Certificate of Incorporation of the Company dated June 28, 2016 (filed as Exhibit 3.2 to the Company’s Form S-1 filed on September 25, 2018 and incorporated herein by reference). 3.3 Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company dated June 18, 2018 (filed as Exhibit 3.6 to the Company’s Form S-1 filed on September 25, 2018 and incorporated herein by reference). 3.4 Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company dated February 6, 2019 (filed as Exhibit 3.1 to the Company’s Form 8-K filed on February 7, 2019 and incorporated herein by reference). 3.5 Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company dated June 25, 2019 (filed as Exhibit 3.1 to the Company’s Form 8-K filed on June 25, 2019 and incorporated herein by reference). 3.6 Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company dated February 26, 2021 (filed as Exhibit 3.1 to the Company’s Form 8-K filed on March 29, 2021 and incorporated herein by reference). 3.7 Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company dated June 16, 2022 (filed as Exhibit 3.6 to the Company’s Form 8-K/A filed on June 17, 2022 and incorporated herein by reference). 3.8 Certificate of Correction to Certificate of Amendment to Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Form 8-K/A filed June 17, 2022 and incorporated herein by reference). 3.9 Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company dated February 5, 2025 (filed as Exhibit 3.1 to the Company’s Form 8-K filed on February 7, 2025 and incorporated herein by reference). 3.10 Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated July 6, 2016 (filed as Exhibit 3.3 to the Company’s Form S-1 filed on September 25, 2018, and incorporated herein by reference). 3.11 First Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated September 15, 2017 (filed as Exhibit 3.4 to the Company’s Form S-1 filed on September 25, 2018, and incorporated herein by reference). 3.12 Second Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated March 23, 2018 (filed as Exhibit 3.5 to the Company’s Form S-1 filed on September 25, 2018, and incorporated herein by reference). 62 3.13 Third Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated September 25, 2018 (filed as Exhibit 3.7 to the Company’s Form S-1 filed on September 25, 2018, and incorporated herein by reference). 3.14 Fourth Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated January 9, 2020 (filed as Exhibit 3.1 to the Company’s Form 8-K filed on January 28, 2020, and incorporated herein by reference). 3.15 Fifth Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated May 19, 2020 (filed as Exhibit 3.2 to the Company’s Form 8-K filed on May 21, 2020, and incorporated herein by reference). 3.16 Sixth Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated July 9, 2020 (filed as Exhibit 3.1 to the Company’s Form 8-K filed on July 9, 2020, and incorporated herein by reference). 3.17 Seventh Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock (filed as exhibit 3.1 to the Company’s Form 8-K filed January 31, 2022 and incorporated herein by reference). 3.18 Certificate of Correction to Eighth Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock (filed as Exhibit 3.2 to the Company’s Form 8-K/A filed June 17, 2022 and incorporated herein by reference). 3.19 Eighth Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated June 15, 2022 (filed as Exhibit 3.4 to the Company’s Form 8-K/A filed June 17, 2022 and incorporated herein by reference). 3.20 Ninth Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Perpetual Preferred Stock dated September 11, 2024 (filed as Exhibit 3.1 to the Company’s Form 8-K filed September 16, 2024 and incorporated herein by reference). 3.21 Certificate of Designations, Preferences and Rights of 8.75% Series B Cumulative Redeemable Perpetual Preferred Stock (filed as exhibit 3.2 to the Company’s Form 8-K filed January 31, 2022 and incorporated herein by reference). 3.22 Certificate of Correction to First Amendment to Certificate of Designations, Preferences and Rights of 8.75% Series B Cumulative Redeemable Perpetual Preferred Stock (filed as Exhibit 3.3 to the Company’s Form 8-K/A filed June 17, 2022 and incorporated herein by reference). 3.23 First Amendment to Certificate of Designations, Preferences and Rights of 8.75% Series B Cumulative Redeemable Perpetual Preferred Stock dated June 15, 2022 (filed as Exhibit 3.5 to the Company’s Form 8-K/A filed June 17, 2022 and incorporated herein by reference). 3.24 Amended and Restated By-laws of the Company (filed as Exhibit 3.2 to the Company’s Amendment No. 1 to Form S-1 filed on April 7, 2014, and incorporated herein by reference). 4.1 Form of common stock certificate of the Company (filed as Exhibit 4.1 to Amendment No. 2 to the Company’s Form S-1 filed on May 7, 2014, and incorporated herein by reference). 4.2 Form of stock certificate of the 11% Series A Cumulative Redeemable Perpetual Preferred Stock (filed as Exhibit 4.2 to Amendment No. 2 to the Company’s Form S-1 on October 19, 2015, and incorporated herein by reference). 4.3 Form of stock certificate of the 8.75% Series B Cumulative Redeemable Perpetual Preferred Stock (filed as Exhibit 4.3 to the Company’s Form 8-A on January 31, 2022 and incorporated herein by reference). 63 4.4 Warrant to Purchase Stock dated as of October 13, 2017 issued by the Company to Silicon Valley Bank (filed as Exhibit 10.2 to the Company’s Form 8-K filed on October 16, 2017, and incorporated herein by reference). 4.5 Warrant to Purchase Stock issued by the Company on September 20, 2018 to Silicon Valley Bank (filed as Exhibit 10.2 to the Company’s Form 8-K filed on September 20, 2018, and incorporated herein by reference). 4.6 Warrant to Purchase Stock issued by the Company on January 8, 2020 to Runway Growth Credit Fund Inc. (filed as Exhibit 4.5 to the Company’s Form 10-K filed on February 28, 2020, and incorporated herein by reference). 4.7 Warrant to Purchase Stock issued by the Company on January 8, 2020 to Runway Growth Credit Fund Inc. (filed as Exhibit 4.6 to the Company’s Form 10-K filed on February 28, 2020, and incorporated herein by reference) . 4.8 Form of Warrant to Purchase Stock issued by the Company on June 16, 2020 with respect to the Meridian transaction (filed as Exhibit 4.7 to the Company’s Form S-1 filed on August 20, 2020, and incorporated herein by reference). 4.9 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (filed as Exhibit 4.9 to the Company’s Form 10-K filed on March 2, 2023, and incorporated herein by reference). 10.1 Form of Indemnification Agreement between the Company and each of its directors and executive officers (filed as Exhibit 10.1 to Amendment No. 2 to the Company’s Form S-1 filed on May 7, 2014, and incorporated herein by reference). 10.2 * Amended and Restated Equity Incentive Plan of the Company (filed as Appendix B to the Company’s Proxy Statement on Schedule 14A filed on February 10, 2017, and incorporated herein by reference). 10.3 * First Amendment to the Amended and Restated Equity Incentive Plan of the Company (filed as Exhibit 10.16 to the Company’s Form 10-Q filed on August 8, 2018, and incorporated herein by reference). 10.4* Second Amendment to MTBC, Inc. Amended and Restated Equity Incentive Plan (filed as Exhibit 3.1 to the Company’s Form 8-K filed on May 21, 2020, and incorporated herein by reference). 10.5 * Form of Restricted Stock Unit Agreement under Amended and Restated Equity Incentive Plan (filed as Exhibit 10.3 to Amendment No. 1 to the Company’s Form S-1 filed on April 7, 2014, and incorporated herein by reference). 10.6 * Third Amendment to Amended and Restated Equity Incentive Plan (filed as Exhibit 3.1 to the Company’s Form 8-K filed on June 9, 2022, and incorporated herein by reference). 10.7 * Form of Restricted Stock Award Agreement under the Amended and Restated Equity Incentive Plan (filed as Exhibit 10.12 to the Company’s Form 10-K filed on March 24, 2016, and incorporated herein by reference). 10.8 Lease between Company and Mahmud Haq with respect to offices located at 7 Clyde Road, Somerset, NJ 08873 (filed as Exhibit 10.4 to the Company’s Form S-1 filed on December 20, 2013, and incorporated herein by reference). 10.9 * Employment Agreement between the Company and Mahmud Haq dated as of May 1, 2018 (filed as Exhibit 10.1 to the Company’s Form 8-K filed on May 7, 2018, and incorporated herein by reference). 10.10 * Employment Agreement between the Company and A. Hadi Chaudhry dated as of March 23, 2021 (filed as Exhibit 10.2 to the Company’s Form 8-K filed on March 24, 2021, and incorporated herein by reference). 10.11 * 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). 64 10.12 * Employment Agreement and Bonus Agreement between the Company and Larry Steenvoorden each dated as of July 6, 2023 (filed as Exhibit 10.1 and 10.2 , respectively, to the Company’s Form 8-K filed on July 11, 2023 and incorporated herein by reference). 10.13 * Employment Agreement between the Company and A. Hadi Chaudhry dated December 16, 2024 (filed as Exhibit 10.1 to the Company’s Form 8-K filed on December 16, 2024 and incorporated herein by reference). 10.14 * Employment Agreement between the Company and Stephen Snyder dated December 16, 2024 (filed as Exhibit 10.2 to the Company’s Form 8-K filed on December 16, 2024 and incorporated herein by reference). 10.15 * 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). 10.16 * 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). 10.17 * 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). 10.18 * 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). 10.19 * 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). 10.20 Loan and Security Agreement dated as of October 13, 2017 between Medical Transcription Billing, Corp., MTBC Acquisition, Corp. and Silicon Valley Bank (filed as Exhibit 10.1 to the Company’s Form 8-K filed on October 16, 2017, and incorporated herein by reference). 10.21 Joinder and First Loan Modification Agreement dated as of September 20, 2018 between Medical Transcription Billing, Corp., MTBC Acquisition, Corp., MTBC Health, Inc. and MTBC Practice Management, Corp. and Silicon Valley Bank (filed as Exhibit 10.1 to the Company’s Form 8-K filed on September 20, 2018, and incorporated herein by reference). 10.22 Second Loan Modification Agreement dated November 15, 2019, by and between the Company and SVB (filed as Exhibit 1.1 to the Company’s Form 8-K filed on November 21, 2019, and incorporated herein by reference). 10.23 Joinder and Third Loan Modification Agreement dated as of February 28, 2020 between MTBC, Inc., MTBC Acquisition Corp., MTBC Health, Inc. and MTBC Practice Management Corp., MTBC-Med, Inc., CareCloud Corporation and Silicon Valley Bank (filed as Exhibit 10.16 to the Company’s Form 10-K filed on February 28, 2020, and incorporated herein by reference). 10.24 Joinder and Fourth Loan Modification Agreement dated September 21, 2020, by and between the Company and SVB (filed as Exhibit 1.1 to the Company’s Form 8-K filed on September 25, 2020, and incorporated herein by reference). 10.25 Joinder and Fifth Loan Modification Agreement dated September 21, 2021, by and between the Company and SVB (filed as Exhibit 10.1 to the Company’s Form 8-K filed on September 22, 2021 and incorporated herein by reference). 10.26 Sixth Loan Modification Agreement dated January 27, 2022, by and between the Company and SVB (filed as Exhibit 10.19 to the Company’s Form 10-Q filed on May 9, 2022 and incorporated herein by reference). 65 10.27 Seventh Loan Modification Agreement dated February 17, 2023, by and between the Company and SVB (filed as Exhibit 10.1 to the Company’s Form 8-K filed on February 21, 2023 and incorporated herein by reference). 10.28 Eighth Loan Modification Agreement dated August 31, 2023, by and between the Company and SVB (filed as Exhibit 10.1 to the Company’s Form 8-K filed on September 1, 2023 and incorporated herein by reference). 10.29 Ninth Loan Modification Agreement dated October 25, 2024, by and between the Company and SVB (filed as Exhibit 10.1 to the Company’s Form 8-K filed on October 28, 2024 and incorporated herein by reference). 10.30 Underwriting Agreement dated January 28, 2022 by and between the Company and B. Riley FBR, Inc. as representative of several underwriters named therein (filed as Exhibit 1.1 to the Company’s Form 8-K filed on January 31, 2022, and incorporated herein by reference). 10.31 At Market Issuance Sales Agreement dated February 14, 2022 by and between CareCloud, Inc. and B. Riley Securities, Inc. (filed as Exhibit 1.1 to the Company’s Form 8-K filed on February 14, 2022 and incorporated herein by reference). 10.32 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). 10.33 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). 10.34 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). 10.35 Amendment to Consulting Agreement dated February 16, 2023 by and between the Company and Hill City Advisors, LLC (filed as Exhibit 10.23 to the Company’s Form 10-K filed on March 2, 2023, and incorporated herein by reference). 10.36 Additional Statement of Work dated January 29, 2024 added as Exhibit B to the Consulting Agreement between the Company and Hill City Advisors, LLC. (filed as Exhibit 10.26 to the Company’s Form 10-K filed on March 21, 2024, and incorporated herein by reference). 10.37 Consulting Agreement dated January 9, 2024, and as amended February 12, 2024, by and between the Company and Korn Intellect, LLC (filed as Exhibit 10.27 to the Company’s Form 10-K filed on March 21, 2024, and incorporated herein by reference). 10.38 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). 10.39 Second Amendment to Consulting Agreement dated December 9, 2024 between the Company and Korn Intellect, LLC. (filed as Exhibit 10.33 to the Company’s Form 10-K filed on March 13, 2025, and incorporated herein by reference). 10.40 Consulting Agreement dated July 28, 2025 between the Company and Stochastic Solutions, LLC. 19.1 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). 21.1 List of subsidiaries. 66 23.1 Consent of Tanner LLP. 23.2 Consent of Rosenberg Rich Baker Berman P.A. 31.1 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. 31.2 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. 32.1 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. 32.2 Certification of the Company’s Interim Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Policy relating to recovery of erroneously awarded compensation, as required by applicable listing standards adopted pursuant to 17 CFR 240.10D-1 (filed as Exhibit 97.1 to the Company’s Form 10-K filed on March 21, 2024, and incorporated herein by reference). 101.INS XBRL Instance 101.SCH XBRL Taxonomy Extension Schema 101.CAL XBRL Taxonomy Extension Calculation Linkbase 101.LAB XBRL Taxonomy Extension Label Linkbase 101.PRE XBRL Taxonomy Extension Presentation Linkbase 101.DEF XBRL Taxonomy Extension Definition Linkbase 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Indicates management contract or compensatory plan or arrangement. The certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. 67 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CareCloud, Inc. By: /s/ Stephen Snyder Stephen Snyder Chief Executive Officer Date: March 12, 2026 By: /s/ Norman Roth Norman Roth Interim Chief Financial Officer and Corporate Controller Date: March 12, 2026 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Signature Title Date /s/ Mahmud Haq March 12, 2026 Mahmud Haq Executive Chairman and Director /s/ Stephen Snyder March 12, 2026 Stephen Snyder Chief Executive Officer (Principal Executive Officer) /s/ Norman Roth March 12, 2026 Norman Roth Interim Chief Financial Officer and Corporate Controller (Principal Financial and Accounting Officer) /s/ Anne Busquet March 12, 2026 Anne Busquet Director /s/ Bill Korn March 12, 2026 Bill Korn Director /s/ Cameron Munter March 12, 2026 Cameron Munter Director /s/ Lawrence Sharnak March 12, 2026 Lawrence Sharnak Director 68 Index to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm Tanner LLP (PCAOB ID Number 270 ) F-2 Report of Independent Registered Public Accounting Firm Rosenberg Rich Baker Berman, P.A. (PCAOB ID Number 89 ) F-3 Consolidated Balance Sheets as of December 31, 2025 and 2024 F-4 Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 F-5 Consolidated Statements of Comprehensive Income for the years ended December 31, 2025 and 2024 F-6 Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2025 and 2024 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 F-8 Notes to Consolidated Financial Statements F-9 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders CareCloud, Inc. Opinions on the Consolidated Financial Statements and Internal Control over Financial Reporting We 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”). We also have 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). In 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. Basis for Opinions The 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 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. We 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. Our 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. Our audit 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. We believe that our audits provide a reasonable basis for our opinions. Our 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. Definition and Limitations of Internal Control over Financial Reporting A 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 principles. 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 company; (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. Because 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. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters. /s/ Tanner LLP We have served as the Company’s auditors since 2025. Lehi, Utah March 12, 2026 F- 2 REPORT 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 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. 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 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. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters. /s/ ROSENBERG RICH BAKER BERMAN, P.A We served as the Company’s auditor for 2024. Somerset, New Jersey March 13, 2025 F- 3 CARECLOUD, INC. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2025 AND 2024 ($ in thousands, except share and per share amounts) December 31, December 31, 2025 2024 ASSETS Current assets: Cash $ 3,117 $ 5,145 Restricted cash 500 - Accounts receivable - net 15,062 12,774 Contract asset 3,664 4,334 Inventory 507 574 Current assets - related party 16 16 Prepaid expenses and other current assets 2,872 1,957 Total current assets 25,738 24,800 Property and equipment - net 7,775 5,290 Operating lease right-of-use assets 3,106 3,133 Intangible assets - net 18,968 18,698 Goodwill 31,442 19,186 Other assets 569 507 TOTAL ASSETS $ 87,598 $ 71,614 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 6,937 $ 4,565 Accrued compensation 4,136 1,817 Accrued expenses 5,970 4,951 Operating lease liability (current portion) 927 1,287 Deferred revenue (current portion) 4,148 1,212 Notes payable (current portion) 728 310 Contingent consideration (current portion) 909 - Dividend payable 668 5,438 Total current liabilities 24,423 19,580 Notes payable 441 26 Contingent consideration 232 - Operating lease liability 2,187 1,847 Deferred revenue 809 387 Total liabilities 28,092 21,840 COMMITMENTS AND CONTINGENCIES (NOTE 11) - - SHAREHOLDERS’ EQUITY: 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. 2 6 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, respectively 43 17 Additional paid-in capital 119,936 121,046 Accumulated deficit ( 55,832 ) ( 66,630 ) Accumulated other comprehensive loss ( 3,981 ) ( 4,003 ) Less: 740,799 common shares held in treasury, at cost at December 31, 2025 and December 31, 2024 ( 662 ) ( 662 ) Total shareholders’ equity 59,506 49,774 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 87,598 $ 71,614 See notes to consolidated financial statements. F- 4 CARECLOUD, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 ($ in thousands, except share and per share amounts) 2025 2024 December 31, 2025 2024 NET REVENUE $ 120,499 $ 110,837 OPERATING EXPENSES: Direct operating costs 64,456 60,842 Selling and marketing 4,818 6,232 General and administrative 18,386 16,123 Research and development 6,382 3,781 Depreciation and amortization 14,960 14,142 Lease termination and restructuring costs 154 596 Total operating expenses 109,156 101,716 OPERATING INCOME 11,343 9,121 Operating income (loss) OTHER: Interest income 206 88 Interest expense ( 287 ) ( 900 ) Other expense - net ( 265 ) ( 298 ) INCOME BEFORE PROVISION FOR INCOME TAXES 10,997 8,011 Income tax provision 199 160 NET INCOME $ 10,798 $ 7,851 Preferred stock dividend 6,906 12,310 NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 3,892 $ ( 4,459 ) Net income (loss) per share: basic and diluted $ 0.10 $ ( 0.28 ) Weighted-average common shares used to compute basic income (loss) per share 37,792,428 16,146,975 Weighted-average common shares used to compute diluted income (loss) per share 37,953,828 16,146,975 See notes to consolidated financial statements. F- 5 CARECLOUD, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ($ in thousands) 2025 2024 December 31, 2025 2024 NET INCOME $ 10,798 $ 7,851 OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustment (a) 22 ( 134 ) COMPREHENSIVE INCOME $ 10,820 $ 7,717 (a) No tax effect has been recorded as the Company recorded a valuation allowance against the tax benefit from its foreign currency translation adjustments. See notes to consolidated financial statements. F- 6 CARECLOUD, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 ($ in thousands, except for number of shares) Shares Amount Shares Amount Shares Amount Capital Deficit Loss Stock Equity Preferred Stock Series A Preferred Stock Series B Common Stock Additional Paid-in Accumulated Accumulated Other Comprehensive Treasury (Common) Total Shareholders’ Shares Amount Shares Amount Shares Amount Capital Deficit Loss Stock Equity Balance - January 1, 2025 4,526,231 $ 5 1,511,372 $ 1 16,997,035 $ 17 $ 121,046 $ ( 66,630 ) $ ( 4,003 ) $ ( 662 ) $ 49,774 Net income - - - - - - - 10,798 - - 10,798 Foreign currency translation adjustment - - - - - - - - 22 - 22 Conversion of preferred stock and accrued dividends to common stock ( 3,541,701 ) ( 4 ) - - 25,981,248 26 2,413 - - - 2,435 Stock issued under the equity incentive plan - - - - 200,465 - - - - - - Stock-based compensation, net of cash settlements - - - - - - 437 - - - 437 Preferred stock dividends - - - - - - ( 3,960 ) - - - ( 3,960 ) Balance - December 31, 2025 984,530 $ 1 1,511,372 $ 1 43,178,748 $ 43 $ 119,936 $ ( 55,832 ) $ ( 3,981 ) $ ( 662 ) $ 59,506 Balance - January 1, 2024 4,526,231 $ 5 1,468,792 $ 1 16,620,891 $ 17 $ 120,706 $ ( 74,481 ) $ ( 3,869 ) $ ( 662 ) $ 41,717 Balance 4,526,231 $ 5 1,468,792 $ 1 16,620,891 $ 17 $ 120,706 $ ( 74,481 ) $ ( 3,869 ) $ ( 662 ) $ 41,717 Net Income - - - - - - - 7,851 - - 7,851 Foreign currency translation adjustment - - - - - - - - ( 134 ) - ( 134 ) Stock issued under the equity incentive plan - - 42,580 - 376,144 - - - - - - Stock-based compensation, net of cash settlements - - - - - - 345 - - - 345 Preferred stock dividends - - - - - - ( 5 ) - - - ( 5 ) Balance - December 31, 2024 4,526,231 $ 5 1,511,372 $ 1 16,997,035 $ 17 $ 121,046 $ ( 66,630 ) $ ( 4,003 ) $ ( 662 ) $ 49,774 Balance 4,526,231 $ 5 1,511,372 $ 1 16,997,035 $ 17 $ 121,046 $ ( 66,630 ) $ ( 4,003 ) $ ( 662 ) $ 49,774 For the year ended December 31, 2025, the Company declared twelve months of dividends and paid eleven months of dividends on the Preferred Shares. For the year ended December 31, 2024, no preferred stock dividends were declared or paid. See notes to consolidated financial statements. F- 7 CARECLOUD, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 ($ in thousands) 2025 2024 OPERATING ACTIVITIES: Net income $ 10,798 $ 7,851 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,208 14,469 Lease amortization 1,767 1,994 Provision for expected credit losses 286 334 Foreign exchange loss (gain) 109 ( 130 ) Interest accretion 310 592 Stock-based compensation expense 454 115 Changes in operating assets and liabilities: Accounts receivable ( 408 ) ( 1,220 ) Contract asset 754 760 Inventory 67 ( 109 ) Other assets ( 1,230 ) 673 Accounts payable and other liabilities 1,271 ( 4,650 ) Deferred revenue ( 825 ) ( 37 ) Net cash provided by operating activities 28,561 20,642 INVESTING ACTIVITIES: Purchases of property and equipment ( 4,778 ) ( 1,697 ) Capitalized software and other intangible assets ( 3,249 ) ( 5,709 ) Payments for acquisitions ( 16,508 ) - Net cash used in investing activities ( 24,535 ) ( 7,406 ) FINANCING ACTIVITIES: Preferred stock dividends paid ( 6,295 ) - Payment of contingent obligations ( 124 ) - Payment of tax withholding obligations on stock issued to employees ( 24 ) ( 579 ) Proceeds from term-loan borrowings 1,452 - Repayments of notes payable ( 620 ) ( 677 ) Proceeds from line of credit 9,343 - Repayment of line of credit ( 9,343 ) ( 10,000 ) Net cash used in financing activities ( 5,611 ) ( 11,256 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH 57 ( 166 ) NET (DECREASE) INCREASE IN CASH AND RESTRICTED CASH ( 1,528 ) 1,814 CASH - Beginning of the year 5,145 3,331 CASH AND RESTRICTED CASH - End of the year $ 3,617 $ 5,145 SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES: Conversion of preferred stock and accrued dividends to common stock $ 2,435 $ - Dividends declared, not paid $ 668 $ 5 Purchase of prepaid insurance with assumption of note - 685 Reclass of deposits for property and equipment placed in service $ - $ 296 SUPPLEMENTAL INFORMATION - Cash paid during the year for: Income taxes $ 246 $ 157 Interest $ 226 $ 677 See notes to consolidated financial statements. F- 8 CARECLOUD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 1. ORGANIZATION AND BUSINESS CareCloud, Inc., (together with its consolidated subsidiaries, “CareCloud,” the “Company,” “we,” “us” and/or “our”) is a healthcare information technology company that provides a full suite of proprietary cloud-based solutions, related business services, to healthcare providers and hospitals throughout the United States. The Company’s integrated services are designed to help customers increase revenues, streamline workflows and make better business and clinical decisions, while reducing administrative burdens and operating costs. Our Software-as-a-Service (“SaaS”) platform includes revenue cycle management (“RCM”), practice management (“PM”), electronic health records (“EHR”), business intelligence, telehealth, patient experience management (“PXM”) solutions and complementary software tools and business services for high-performance medical groups and health systems. CareCloud has its corporate offices in Somerset, New Jersey and maintains client support teams throughout the U.S., and offshore offices in Pakistan and Azad Jammu and Kashmir, a region administered by Pakistan (the “Pakistan Offices”), and in Sri Lanka. CareCloud was founded in 1999 under the name Medical Transcription Billing, Corp. and incorporated under the laws of the State of Delaware in 2001. In 2004, the Company formed MTBC Private Limited (“MTBC Pvt. Ltd.”), a 99.9 % majority-owned subsidiary of CareCloud based in Pakistan. The remaining 0.1 % of the shares of MTBC Pvt. Ltd. is equally owned by the founder and Executive Chairman of CareCloud and a local employee who is also a director of this entity. In 2016, the Company formed MTBC Acquisition Corp. (“MAC”), a Delaware corporation, in connection with its acquisition of substantially all of the assets of MediGain, LLC and its subsidiary, Millennium Practice Management Associates, LLC (together “MediGain”). MAC had a wholly owned subsidiary in Sri Lanka, RCM MediGain Colombo, Pvt. Ltd. Effective February 1, 2024, MAC and its wholly owned subsidiary were merged into CareCloud, Inc. In May 2018, the Company formed CareCloud Practice Management, Corp. (“CPM”), a Delaware corporation, to operate the medical practice management business acquired from Orion Healthcorp. In January 2020, the Company purchased CareCloud Corporation, a company whose name we took. That company is now known as CareCloud Health, Inc. (“CCH”). In June 2020, the Company purchased Meridian Billing Management Co. and its affiliate Origin Holdings, Inc. (collectively “Meridian” and sometimes referred to as “Meridian Medical Management”). Both companies were subsequently merged and the surviving company was renamed Meridian Medical Management, Inc. During March 2021, the Company formed a new wholly-owned subsidiary, CareCloud Acquisition, Corp. (“CAC”). In June 2021, CAC purchased certain assets and assumed certain liabilities of MedMatica Consulting Associates Inc. (“MedMatica”) and purchased the stock of Santa Rosa Staffing, Inc. (“SRS”). The assets and liabilities of MedMatica were merged into SRS and the company was renamed medSR, Inc. (“medSR”). Effective April 1, 2022, the Company formed MTBC Bagh Private Limited (“MTBC Bagh Pvt. Ltd.”), a 99.8 % majority-owned subsidiary of CareCloud based in Azad Jammu and Kashmir, a region administered by Pakistan. The remaining 0.2 % of the shares of MTBC Bagh Pvt. Ltd. is equally owned by the founder and Executive Chairman of CareCloud and the same director/employee as noted above. During the second quarter of 2023, the Company formed a wholly owned subsidiary, CareCloud ME Health Consultancy LLC, in the United Arab Emirates, which has not yet begun operations. During 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, Inc. to acquire an aircraft which is used primarily for sales and marketing activities. F- 9 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Principles 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, and its wholly-owned subsidiaries including their wholly-owned subsidiaries and its majority-owned subsidiaries, MTBC Pvt. Ltd and MTBC Bagh Pvt. Ltd, CCH. The non-controlling interests of MTBC Pvt. Ltd. and MTBC Bagh Pvt. Ltd. are inconsequential to the consolidated financial statements. All intercompany accounts and transactions have been eliminated in consolidation. Segment Reporting — The Company views its operations as comprising two operating segments, Healthcare IT and Medical Practice Management. The chief operating decision maker (“CODM”) monitors and reviews financial information at these segment levels for assessing operating results and the allocation of resources. Use of Estimates — The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include, but are not limited to: (1) impairment of goodwill and long-lived assets, (2) depreciable lives of assets, (3) allowance for 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, (7) contingent consideration and (8) estimating lease terms and incremental borrowing rates. Actual results could significantly differ from those estimates. Revenue Recognition — We derive revenue from five primary sources: (1) technology-enabled business solutions including revenue cycle management, (2) professional services, (3) printing and mailing services, (4) group purchasing services and (5) medical practice management services. All of our revenue arrangements are based on contracts with customers. Most of our contracts with customers contain single performance obligations, although certain contracts do contain multiple performance obligations where we perform more than one service for the same customer. We account for individual performance obligations separately if they are distinct within the context of the contract. For contracts where we provide multiple services such as where we perform multiple ancillary services, each service represents its own performance obligation. Selling or transaction prices are based on the contractual prices for each service at its stand-alone selling price. A five-step approach is applied in the recognition of revenue under ASC 606: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when we satisfy a performance obligation. Although we believe that our approach to estimates and judgments is reasonable, actual results could differ, and we may be exposed to increases or decreases in revenue that could be material. Our estimates of variable consideration may prove to be inaccurate, in which case we may have understated or overstated the revenue recognized in a reporting period. The amount of variable consideration recognized to date that remains subject to estimation is included within the contract asset within the consolidated balance sheet. Payment of invoices is due as specified in the underlying customer agreement, typically 30 days from the invoice date, which occurs on the date of transfer of control of the services to the customer. Since payment terms are less than a year, we have elected the practical expedient and do not assess whether a customer contract has a significant financing component. The Company’s revenue arrangements generally do not include a general right of refund for services provided (See Note 9, Revenue, for additional information). Direct Operating Costs — Direct operating costs consist primarily of salaries and benefits related to personnel who provide services to clients and at our managed medical practices, claims processing costs, medical supplies at our managed practices and other direct costs related to the Company’s services. Costs associated with the implementation of new clients are expensed as incurred. The reported amounts of direct operating costs include allocated amounts for rent expense and overhead costs. Selling and Marketing Expenses — Selling and marketing expenses consist primarily of compensation and benefits, travel and advertising expenses and are expensed as incurred. The Company incurred approximately $ 2.2 million and $ 2.9 million of advertising costs for the years ended December 31, 2025 and 2024, respectively. F- 10 Research and Development Expenses — Research and development expenses consist primarily of personnel-related costs incurred performing market research, analyzing proposed products and developing new products. Internal-Use Software Costs — The Company capitalizes certain development costs incurred in connection with its internal-use software. Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable that the expenditures will result in additional functionality. Capitalized costs are recorded as part of intangible assets in the accompanying consolidated balance sheets. Maintenance and training costs are expensed as incurred. Internal use software is amortized on a straight line basis over its estimated useful life, generally three years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. During the years ended December 31, 2025 and 2024, the Company capitalized approximately $ 3.2 million and $ 5.7 million, respectively, primarily consisting of salaries and payroll-related costs of employees and consultants who devoted time to the development of internal-use software projects. Accounts Receivable — Accounts receivable are stated at their net realizable value. Accounts receivable are presented in the consolidated balance sheets net of an allowance for expected credit losses, which is established based on a lifetime estimated credit loss expected to occur for trade accounts receivable. Property 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 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. Intangible 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 200% double declining balance method over 3 three to four years . Amortization for intangible assets related to the group purchasing organization and medical practice management is recorded on a straight line basis over 4 four and twelve years , respectively. Evaluation 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, 2025 and 2024. Goodwill — Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. The Company tests goodwill for impairment annually as of October 31 st , referred to as the annual test date. The goodwill impairment test for the Healthcare IT segment is performed using the discounted cash flow approach, the trading price of publicly traded stock and the guideline public company method. Conditions that could trigger a more frequent impairment assessment include, but are not limited to, a significant adverse change to the Company in certain agreements, significant underperformance relative to historical or projected future operating results, loss of customer relationships, an economic downturn in customers’ industries, or increased competition. Impairment testing for goodwill is performed at the reporting-unit level. The Company has determined that its business consists of two operating segments and two reporting units. No impairment charges were recorded during the years ended December 31, 2025 and 2024. Treasury Stock — Treasury stock is recorded at cost and represents shares repurchased by the Company. No shares were repurchased or issued from treasury stock during the years ended December 31, 2025 and 2024. F- 11 Stock-Based Compensation — The Company recognizes compensation for all share-based payments granted based on the grant date fair value. Compensation expense is generally recognized on a straight-line basis over the vesting period. The Company does not estimate forfeitures in recognizing the expense for share-based payments, as historical forfeiture rates have not been significant. For restricted stock units (“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 stock price. Business Combinations — The Company accounts for business combinations under the provisions of ASC 805, Business Combinations , which requires that the acquisition method of accounting be used for all business combinations. Assets acquired and liabilities assumed are recorded at the date of acquisition at their respective fair values. ASC 805 also specifies criteria that intangible assets acquired in a business combination must be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date with changes in the fair value recorded through earnings. Income Taxes — The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in operations in the period that includes the enactment date. The Company records net deferred tax assets to the extent that these assets will more likely than not be realized. All available positive and negative evidence is considered in making such a determination, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. A valuation allowance would be recorded to reduce deferred income tax assets when it is determined that it is more likely than not that the Company would not be able to realize its deferred income tax assets in the future in excess of their net recorded amount. The Company records uncertain tax positions on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. At December 31, 2025 and 2024, the Company did not have any uncertain tax positions that required recognition. Interest and penalties related to uncertain tax positions are recognized in income tax expense. For the years ended December 31, 2025 and 2024, the Company did not recognize any penalties or interest related to unrecognized tax benefits in its consolidated financial statements. Dividends — Dividends are recorded when declared by the Company’s Board of Directors. 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. Deferred Revenue — Deferred revenue primarily consists of payments received in advance of the revenue recognition criteria being met. Deferred revenue includes certain deferred implementation services fees that are recognized as revenue ratably over the longer of the life of the agreement or the estimated expected customer life, which is currently estimated to be three years. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current deferred revenue and the remaining portion is recorded as non-current. At the time of customer termination, any unrecognized service fees associated with implementation services are recognized as revenue. F- 12 Fair Value Measurements — ASC 820, Fair Value Measurement , requires the disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. The Company follows a fair value measurement hierarchy to measure financial instruments. The fair value of the Company’s financial instruments is measured using inputs from the three levels of the fair value hierarchy as follows: Level 1 — 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. Level 2 — 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. Level 3 — Inputs are unobservable inputs that are used to measure fair value to the extent observable inputs are not available. The Company has certain financial instruments that are not measured at fair value on a recurring basis. These financial instruments are subject to fair value adjustments only in certain circumstances and include cash, accounts receivable, accounts payable and accrued expenses, borrowings under term loans and line of credit, and notes payable. Due to the short term nature of these financial instruments and that the borrowings bear interest at prevailing market rates, the carrying value approximates the fair value. Foreign Currency Translation — The financial statements of the Company’s foreign subsidiaries are translated from their functional currency into U.S. dollars, the Company’s functional currency. All foreign currency assets and liabilities are translated at the period-end exchange rate, and all revenue and expenses are translated at transaction date exchange rates. The effects of translating the financial statements of the foreign subsidiaries into U.S. dollars are reported as a cumulative translation adjustment, a separate component of accumulated other comprehensive loss in the consolidated statements of shareholders’ equity, except for transactions related to the intercompany receivable for which transaction adjustments are recorded in the consolidated statements of operations as they are not deemed to be permanently reinvested. Foreign currency transaction gains/losses are reported as a component of other expense – 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. 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). Recent Accounting Pronouncements — From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) and are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently adopted and recently issued accounting pronouncements will not have a material impact on our consolidated financial position, results of operations and cash flows. In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements- Issue 2. The amendments in this update require that leasehold improvements associated with common control leases be: (1) amortized by the lessee over the useful life of the leasehold improvements to the common control group as long as the lessee controls the use of the underlying asset through a lease and (2) accounted for as a transfer between entities under common control through an adjustment to equity if, and when, the lessee no longer controls the use of the underlying asset. The amendments in this update are effective for the fiscal years beginning after December 15, 2023. There was no impact on the consolidated financial statements as a result of this standard. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This update amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. The new guidance is intended to align U.S. GAAP requirements with those of the SEC and to facilitate the application of U.S. GAAP for all entities. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If by June 30, 2027 the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the associated amendment will be removed from the Codification and will not become effective. F- 13 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Disclosures . The amendments in this update improve segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The impact was only to the financial statement disclosures and has been adopted by the Company. In 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. 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. In March 2024, the FASB issued ASU 2024-02, Codification Improvements- Amendments to Remove References to the Concepts Statements . This update contains amendments to the Codification that remove references to various FASB Concepts Statements. These Codification updates are for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or the structure of guidance and other minor improvements. The resulting amendments are referred to as Codification improvements. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2024. There was no impact on the consolidated financial statements as a result of this standard. In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) . This update contains amendments that require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments in this update are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The expected impact would only be to the financial statement disclosures. 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. In 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. In 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. F- 14 3. ACQUISITIONS Effective 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 App. 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”). During 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. MAP 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. The preliminary purchase price allocation of the MAP App acquisition is summarized as follows: SCHEDULE OF ALLOCATION OF PURCHASE PRICE ($ in thousands) Cash $ 468 Notes payable Contingent escrow Contingent consideration 157 Total purchase price $ 625 SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN BUSINESS ACQUISITION ($ in thousands) Accounts receivable $ - Contract asset Property and equipment Customer relationships $ 587 Technology acquired 42 Trademark 10 Goodwill 339 Accounts payable Accrued compensation Deferred revenue ( 353 ) Total preliminary purchase price allocation $ 625 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 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. The 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. The weighted-average amortization period of the acquired intangible assets is approximately three years. Revenue earned from the clients obtained from the MAP App acquisition was approximately $ 226,000 during the three months and year ended December 31, 2025. The 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 platform. On 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 to the U.S. inpatient and ambulatory market. F- 15 The aggregate purchase price for the acquisition was $ 16,500,000 , plus the assumption of certain liabilities. The purchase price was comprised of: (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). The purchase price allocation of the Medsphere acquisition is summarized as follows: SCHEDULE OF ALLOCATION OF PURCHASE PRICE ($ in thousands) Cash $ 7,750 Notes payable 8,250 Contingent escrow 500 Total purchase price $ 16,500 SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN BUSINESS ACQUISITION ($ in thousands) Accounts receivable $ 2,166 Contract asset 52 Property and equipment 240 Customer relationships 6,210 Technology acquired 1,810 Trademarks 250 Goodwill 11,880 Accounts payable ( 1,734 ) Accrued compensation ( 544 ) Deferred revenue ( 3,830 ) Total purchase price allocation $ 16,500 The 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 savings. The fair value of the property and equipment, accounts payable, accrued compensation and deferred revenue were based on the acquisition date fair values. The 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 . Revenue 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. The 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. F- 16 On 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. For the year ended December 31, 2025, the quarterly payments due to RevNu totaled approximately $ 53,000 . RevNu 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 . The purchase price allocation of RevNu is summarized as follows: SCHEDULE OF PRELIMINARY PURCHASE PRICE ALLOCATION ($ in thousands) Contract asset $ 14 Customer relationships 519 Goodwill 32 Total purchase price allocation $ 565 The 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. The 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. Revenue earned from the clients obtained from the RevNu acquisition was approximately $ 882,000 during the year ended December 31, 2025. The 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. Pro forma financial information (Unaudited) The 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. These 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. SCHEDULE OF PRO FORMA FINANCIAL INFORMATION 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands, except per share amounts) Net revenue $ 142,698 $ 154,057 Net income $ 7,195 $ 3,969 Net income (loss) attributable to common shareholders $ 289 $ ( 8,341 ) Net income (loss) per share - basic and fully diluted $ 0.01 $ ( 0.52 ) F- 17 4. GOODWILL AND INTANGIBLE ASSETS – NET Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. At December 31, 2025, and 2024, approximately $ 90,000 of goodwill was allocated to the Medical Practice Management segment and the balance was allocated to the Healthcare IT segment. The following is the summary of the changes to the carrying amount of goodwill for the years ended December 31, 2025 and 2024: SCHEDULE OF CHANGES TO CARRYING AMOUNT OF GOODWILL 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands) Beginning gross balance $ 19,186 $ 19,186 Additions 12,256 - Ending gross balance $ 31,442 $ 19,186 Below is a summary of intangible asset activity for the years ended December 31, 2025 and 2024: SCHEDULE OF INTANGIBLE ASSETS ACTIVITY Customer Capitalized Other Intangible Relationships Software Assets Total COST ($ in thousands) Balance, January 1, 2025 $ 47,597 $ 35,108 $ 9,653 $ 92,358 Additions 7,376 3,249 2,112 12,737 Translation loss - ( 28 ) - ( 28 ) Balance, December 31, 2025 $ 54,973 $ 38,329 $ 11,765 $ 105,067 Useful lives 3 - 12 years 3 years 3 years ACCUMULATED AMORTIZATION Balance, January 1, 2025 $ 45,947 $ 22,766 $ 4,947 $ 73,660 Amortization expense 1,833 10,320 296 12,449 Translation loss - ( 10 ) - ( 10 ) Balance, December 31, 2025 47,780 33,076 5,243 86,099 Net book value $ 7,193 $ 5,253 $ 6,522 $ 18,968 COST Balance, January 1, 2024 $ 47,597 $ 29,379 $ 9,653 $ 86,629 Additions - 5,709 - 5,709 Translation gain - 20 - 20 Balance, December 31, 2024 $ 47,597 $ 35,108 $ 9,653 $ 92,358 Useful lives 3 - 12 years 3 years 3 years ACCUMULATED AMORTIZATION Balance, January 1, 2024 $ 44,372 $ 12,237 $ 4,946 $ 61,555 Amortization expense 1,575 10,522 1 12,098 Translation gain - 7 - 7 Balance, December 31, 2024 45,947 22,766 4,947 73,660 Net book value $ 1,650 $ 12,342 $ 4,706 $ 18,698 We 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. The amount for capitalized software represents payroll and development costs incurred for internally developed software. Other intangible assets primarily represent non-compete agreements, purchased and acquired software and trademarks. Amortization expense was approximately $ 12.4 million and $ 12.1 million for the years ended December 31, 2025 and 2024, respectively. The weighted-average amortization period is three years. F- 18 As of December 31, 2025, future amortization expense scheduled to be expensed is as follows: SCHEDULE OF INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE Years ending December 31, ($ in thousands) 2026 $ 10,040 2027 5,038 2028 2,708 2029 1,032 2030 150 Total $ 18,968 5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands) Computer equipment $ 6,843 $ 5,963 Aircraft 1,347 - Office furniture and equipment 2,950 2,342 Transportation equipment 1,833 1,185 Leasehold improvements 8,002 6,358 Assets not placed in service - 164 Total property and equipment 20,975 16,012 Less accumulated depreciation ( 13,200 ) ( 10,722 ) Property and equipment – net $ 7,775 $ 5,290 Depreciation expense was approximately $ 2.5 million and $ 2.0 million for the years ended December 31, 2025 and 2024, respectively. We 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. 6. CONCENTRATIONS Financial 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 coverage. Additionally, from time to time, the Company maintains cash balances at financial institutions in the United States in excess of federal insurance limits. The Company has not experienced any losses on such accounts. The cash held by each U.S. operating company was below the federal insurance limit at December 31, 2025. Concentrations of credit risk with respect to trade accounts receivable are managed by periodic credit evaluations of customers. The Company does not require collateral for outstanding trade accounts receivable. 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. During the years ended December 31, 2025 and 2024, there was one customer with sales of approximately 10 % of total revenue, respectively. Geographical Risks — The Company’s offices in Islamabad, Karachi and Bagh, Pakistan, and Colombo, Sri Lanka conduct significant back-office operations for the Company. The Company has no revenue earned outside of the United States. The office in Bagh is located in a different territory of Pakistan from the Islamabad office known as Azad Jammu and Kashmir. The Bagh office was opened in 2009 for the purpose of providing operational support and operating as a backup to the Islamabad office. 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 policies with respect to laws and regulations, changes in local countries’ telecommunications industries, regulatory rules and policies, anti-inflationary measures, currency conversion and remittance, and rates and methods of taxation. F- 19 Carrying amounts of net assets located outside the United States were approximately $ 8.5 million and $ 7.0 million as of December 31, 2025 and 2024, respectively. These balances exclude net intercompany receivables of approximately $ 1.6 million and $ 2.2 million as of December 31, 2025 and 2024, respectively. The following is a summary of the net assets located outside the United States as of December 31, 2025 and 2024: SCHEDULE OF CONCENTRATION OF RISK, BY GEOGRAPHICAL RISKS FACTOR 2025 2024 December 31, 2025 2024 ($ in thousands) Current assets $ 1,315 $ 211 Non-current assets 9,280 8,337 Assets 10,595 8,548 Current liabilities ( 1,839 ) ( 1,336 ) Non-current liabilities ( 231 ) ( 172 ) Net assets $ 8,525 $ 7,040 7. NET INCOME (LOSS) PER COMMON SHARE The 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: SCHEDULE OF RECONCILIATION OF WEIGHTED-AVERAGE SHARES OUTSTANDING FOR BASIC AND DILUTED NET LOSS PER COMMON SHARE 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands, except share and per share amounts) Basic and Diluted: Net income (loss) attributable to common shareholders $ 3,892 $ ( 4,459 ) Weighted-average common shares used to compute basic income (loss) per share 37,792,428 16,146,975 Weighted-average common shares used to compute diluted income (loss) per share 37,953,828 16,146,975 Net income (loss) attributable to common shareholders per share - basic and diluted $ 0.10 $ ( 0.28 ) The 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. At 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. 8. DEBT Silicon 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. The 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 1.5 % 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. F- 20 As 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. The 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. During October 2024, the Company entered into a Ninth Loan Modification agreement with SVB whereby the Company decreased the amount available on its revolving line of credit from $ 25 million to $ 10 million which proportionally reduced the anniversary fee and the fee on the unused portion of the credit line. As a result of the modification, one covenant was slightly modified. During August 2025, the Company terminated the line of credit. On 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). On 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 million. The 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. Upon 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 31, 2025. At December 31, 2025, the available borrowing base was $ 10.0 million. On 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. The 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. Vehicle Financing Notes — The Company finances certain vehicle purchases both in the United States and in Pakistan. The vehicle financing notes typically have three 3 to six year terms and are issued at current market rates. Aircraft Financing Note — The Company financed an aircraft purchase with a note for $ 1,032,000 with Republic. F- 21 Maturities of the outstanding notes payable and other obligations as of December 31, 2025 are as follows: SCHEDULE OF MATURITIES OF LONG-TERM DEBT Financing Notes Years ending December 31, Vehicle Aircraft Total ($ in thousands) 2026 $ 86 $ 642 $ 728 2027 83 338 421 2028 20 - 20 Total $ 189 $ 980 $ 1,169 9. REVENUE Introduction The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers . All revenue is recognized as our performance obligations are satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under ASC 606. The Company recognizes revenue when the revenue cycle management services begin on the medical billing claims, which is generally upon receipt of the claim from the provider. For many services, the Company recognizes revenue as a percentage of the amount the customer collects on the medical billing claims. The Company’s software is utilized at the time the provider sees the patient, and the Company estimates the value of the consideration it will earn over the remaining contractual period as our services are provided and recognizes the fees over the term; this estimation involves predicting the amounts our clients will ultimately collect associated with the services they provided. Certain significant estimates, such as payment-to-charge ratios, effective billing rates and the estimated contractual payment periods are required to measure revenue cycle management revenue under the new standard. Most of our current contracts with customers contain a single performance obligation. 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. We apply the portfolio approach as permitted by ASC 606 as a practical expedient to contracts with similar characteristics and we use estimates and assumptions when accounting for those portfolios. Our contracts generally include standard commercial payment terms. We have no significant obligations for refunds, warranties or similar obligations and our revenue does not include taxes collected from our customers. Disaggregation of Revenue from Contracts with Customers We derive revenue from five primary sources: (1) Technology-enabled business solutions, (2) professional services, (3) printing and mailing services, (4) group purchasing services and (5) medical practice management services. F- 22 The following table represents a disaggregation of revenue for the years ended December 31, 2025 and 2024: SCHEDULE OF DISAGGREGATION OF REVENUE 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands) Healthcare IT: Technology-enabled business solutions $ 76,907 $ 73,672 Professional services 25,363 18,202 Printing and mailing services 3,362 3,579 Group purchasing services 934 952 Medical Practice Management: Medical practice management services 13,933 14,432 Total $ 120,499 $ 110,837 Revenue $ 120,499 $ 110,837 Technology-enabled business solutions: Revenue derived on an on-going basis from our technology-enabled solutions, which typically includes revenue cycle management services, is billed as a percentage of payments collected by our customers. The fee for our services often includes the ability to use our EHR and practice management software as well as RCM as part of the bundled fee. The SaaS component is not a material portion of the contract compared to the stand-alone value of RCM. Technology-assisted revenue cycle management services are the recurring process of submitting and following up on claims with health insurance companies in order for the healthcare providers to receive payment for the services they rendered. The Company typically invoices customers on a monthly basis based on the actual collections received by its customers and the agreed-upon rate in the sales contract. The fee for these services typically includes use of practice management software and related tools (on a SaaS basis), electronic health records (on a SaaS basis), medical billing services and use of mobile health solutions. We consider the services to be one performance obligation since the promises are not distinct in the context of the contract. The performance obligation consists of a series of distinct services that are substantially the same and have the same periodic pattern of transfer to our customers. In many cases, our clients may terminate their agreements with 90 days’ notice without cause, thereby limiting the term in which we have enforceable rights and obligations, although this time period can vary between clients. Our payment terms are normally net 30 days. Although our contracts typically have stated terms of one or more years, under ASC 606 our contracts are considered month-to-month and accordingly, there is no financing component. For the majority of our revenue cycle management contracts, the total transaction price is variable because our obligation is to process an unknown quantity of claims, as and when requested by our customers over the contract period. When a contract includes variable consideration, we evaluate the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, we include variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with variable consideration is subsequently resolved. Estimates to determine variable consideration such as payment to charge ratios, effective billing rates, and the estimated contractual payment periods are updated at each reporting date. Revenue is recognized over the performance period using the input method. Our proprietary, cloud-based practice management application automates the labor-intensive workflow of a medical office in a unified and streamlined SaaS platform. 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. Our 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. 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. 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. F- 23 The medical billing clearinghouse service takes claim information from customers, checks the claims for errors and sends this information electronically to insurance companies. The Company invoices customers on a monthly basis based on the number of claims submitted and the agreed-upon rate in the agreement. This service is provided to medical practices and providers to medical practices who are not revenue cycle management customers. The performance obligation is satisfied once the relevant submissions are completed. Additional services such as coding and transcription are rendered in connection with the delivery of revenue cycle management and related medical services. The Company invoices customers monthly, based on the actual amount of services performed at the agreed-upon rate in the contract. These services are only offered to revenue cycle management customers. These services do not represent a material right because the services are optional to the customer and customers electing these services are charged the same price for those services as if they were on a standalone basis. Each individual coding or transcription transaction processed represents a performance obligation, which is satisfied over time as that individual service is rendered. Professional services: Our professional services include an extensive set of services including EHR vendor-agnostic optimization and activation, project management, IT transformation consulting, process improvement, training, education and staffing for large healthcare organizations including health systems and hospitals. Our professional services beginning in 2025 include managed IT services, government consulting and product development services. 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, 2025 and 2024 was approximately $ 79,000 and $ 338,000 , respectively. Printing and mailing services: The Company provides printing and mailing services for both revenue cycle management customers and a non- revenue cycle management customer, and invoices on a monthly basis based on the number of prints, the agreed-upon rate per print and the postage incurred. The performance obligation is satisfied once the printing and mailing is completed. Group purchasing services: The Company provides group purchasing services which enable medical providers to purchase various vaccines directly from selected pharmaceutical companies at a discounted price. Currently, there are approximately 4,000 medical providers who are members of the program. Revenue is recognized as the vaccine shipments are made to the medical providers. Fees from the pharmaceutical companies are paid either quarterly or annually and the Company adjusts its revenue accrual at the time of payment. The Company makes significant judgments regarding the variable consideration which we expect to be entitled to for the group purchasing services which includes the anticipated shipments to the members enrolled in the program, anticipated volumes of purchases made by the members, and the changes in the number of members. The amounts recorded are constrained by estimates of decreases in shipments and loss of members to avoid a significant revenue reversal in the subsequent period. The only performance obligation is to provide the pharmaceutical companies with the medical providers who want to become members in order to purchase vaccines. The performance obligation is satisfied once the medical provider agrees to purchase a specific quantity of vaccines and the medical provider’s information is forwarded to the vaccine suppliers. The Company records a contract asset for revenue earned and not paid as the ultimate payment is conditioned on achieving certain volume thresholds. For 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 the Company. 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 obligation. There were no unsatisfied performance obligations for contracts with an original duration greater than one year. The Company has elected to utilize the practical expedient available with the guidance for contracts with an expected duration of one year or less. F- 24 Medical practice management services: The Company also provides medical practice management services under long-term management service agreements to three medical practices. We provide the medical practices with the nurses, administrative support, facilities, supplies, equipment, marketing, RCM, accounting, and other non-clinical services needed to efficiently operate their practices. Revenue is recognized as the services are provided to the medical practices. Revenue recorded in the consolidated statements of operations represents the reimbursement of costs paid by the Company for the practices and the management fee earned each month for managing the practice. The management fee is based on either a fixed fee or a percentage of the net operating income. The Company assumes all financial risk for the performance of the managed medical practices. Revenue is impacted by the amount of the costs incurred by the practices and their operating income. The gross billing of the practices is impacted by billing rates, changes in current procedural terminology code reimbursement and collection trends which in turn impacts the management fee that the Company is entitled to. Billing rates are reviewed at least annually and adjusted based on current insurer reimbursement practices. The performance obligation is satisfied as the management services are provided. Our contracts for medical practice management services have approximately an additional 13 years remaining and are only cancellable under very limited circumstances. The Company receives a management fee each month for managing the day-to-day business operations of each medical group as a fixed fee or a percentage payment of the net operating income which is included in revenue in the consolidated statements of operations. Our medical practice management services obligations consist of a series of distinct services that are substantially the same and have the same periodic pattern of transfer to our customers. Revenue is recognized over time, however for reporting and convenience purposes, the management fee is computed at each month end. Information about contract balances: As of December 31, 2025, the estimated revenue expected to be recognized in the future related to the remaining revenue cycle management performance obligations outstanding was approximately $ 3.2 million. We expect to recognize substantially all of the revenue for the remaining performance obligations over the next three months. Approximately $ 264,000 and $ 249,000 of the contract asset represents revenue earned, not paid, from the group purchasing services and referral fees, respectively. Amounts that we are entitled to collect under the applicable contract are recorded as accounts receivable. Invoicing is performed at the end of each month when the services have been provided. The contract asset includes our right to payment for services already transferred to a customer when the right to payment is conditional on something other than the passage of time. For example, contracts for revenue cycle management services where we recognize revenue over time but do not have a contractual right to payment until the customer receives payment of their claim from the insurance provider. The contract asset also includes the revenue accrued, not received, for the group purchasing services. F- 25 Changes in the contract asset are recorded as adjustments to net revenue. The changes primarily result from providing services to revenue cycle management customers that result in additional consideration and are offset by our right to payment for services becoming unconditional and changes in the revenue accrued for the group purchasing services. The contract asset for our group purchasing services is reduced when we receive payments from vaccine manufacturers and is increased for revenue earned, not received. The opening and closing balances of the Company’s accounts receivable, contract asset and deferred revenue are as follows: SCHEDULE OF CHANGES IN ACCOUNTS RECEIVABLE, CONTRACT ASSET AND DEFERRED REVENUE Accounts Receivable - Net Contract Asset Deferred Revenue (current) Deferred Revenue (long term) ($ in thousands) Balance as of January 1, 2025 $ 12,774 $ 4,334 $ 1,212 $ 387 Acquisitions 2,166 84 4,183 - Increase (decrease), net 122 ( 754 ) ( 1,247 ) 422 Balance as of December 31, 2025 $ 15,062 $ 3,664 $ 4,148 $ 809 Balance as of January 1, 2024 $ 11,888 $ 5,094 $ 1,380 $ 256 Increase (decrease), net 886 ( 760 ) ( 168 ) 131 Balance as of December 31, 2024 $ 12,774 $ 4,334 $ 1,212 $ 387 Deferred revenue: The 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. Deferred commissions: Our sales incentive plans include commissions payable to employees and third parties at the time of the initial contract execution that are capitalized as incremental costs to obtain a contract. The capitalized commissions are amortized over the period the related services are transferred. As we do not offer commissions on contract renewals, we have determined the amortization period to be the estimated client life, which is three years. Deferred commissions were approximately $ 211,000 and $ 386,000 at December 31, 2025 and 2024, respectively, and are included in the other assets amounts in the consolidated balance sheets. The amortization of deferred sales commissions during the years ended December 31, 2025 and 2024 was approximately $ 248,000 and $ 327,000 , respectively. Trade Accounts Receivable – Estimate of Credit Losses: ASU 2016-13 requires the recognition of lifetime estimated credit losses expected to occur for trade accounts receivable. The guidance also requires we pool assets with similar risk characteristics and consider current economic conditions when estimating losses. At adoption, we segmented the accounts receivable population into pools based on their risk assessment. Risks related to trade accounts receivable are a customer’s inability to pay or bankruptcy. Each pool was defined by their internal credit assessment and business size. The pools are aligned with management’s review of financial performance. For the years ended December 31, 2025 and 2024, no adjustment to the pools was necessary. We utilize a loss-rate method to measure the expected credit loss for each pool. The loss rate is calculated using a three-year lookback period of write-offs and adjustments, divided by the revenue for each pool by aging category, net of customer payments during that period. We consider current and future economic conditions, internal forecasts, customer collection experience and credit memos issued during the current period when assessing loss rates. We reviewed these factors and concluded that no adjustments should be made to the historical loss rate data for the current quarter. In addition, the Company uses specific account identification in determining the total allowance for expected credit losses. Trade receivables are written off only after the Company has exhausted all collection efforts. Changes in the allowance for expected credit losses for trade accounts receivable are presented in the table below: SCHEDULE OF TRADE ALLOWANCE FOR DOUBTFUL ACCOUNTS 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands) Beginning balance $ 837 $ 879 Provision 286 334 Recoveries/adjustments - 2 Write-offs ( 269 ) ( 378 ) Ending balance $ 854 $ 837 F- 26 10. SHAREHOLDERS’ EQUITY On September 11, 2024, a Certificate of Amendment (the “Amendment”) to the Certificate of Designations, Preferences and Rights of 11 % Series A Cumulative Redeemable Preferred Stock (the “Existing Certificate”) became effective, amending certain provisions of the 11 % Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”). The 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 % 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). Treasury stock The Board of Directors of the Company previously approved common stock repurchase programs. The last program expired in January 2017 . As a result of these stock repurchases, the Company has 740,799 common shares held as treasury stock at an aggregate cost of $ 662,000 . Common stock Holders 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 holders of common stock are entitled to vote . Holders of common stocks are entitled to receive dividends only at times and amounts as determined by the Board of Directors. The common stock is not entitled to pre-emptive rights, and is not subject to conversion, redemption or sinking fund provisions. The common stock is listed on the Nasdaq Global Market under the trading symbol “CCLD.” In 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. Preferred stock The 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. Since September 11, 2024, we have had the right, at our option, to convert the majority of the Series A Preferred Stock into common stock at any time. 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. On 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 date. 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 Conversion. There were 3,541,701 shares of Series A Preferred Stock converted at that time and 984,530 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 per month. As a result of the Conversion, the Company delisted the Series A Preferred Stock from the Nasdaq Global Market. Since November 4, 2020, the Company has the right to redeem, at its option, the Series A Preferred Stock, in whole or in part, at a cash redemption price of $ 25.00 per share, plus all accrued and unpaid dividends to, but not including, the redemption date. 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. Since 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 part, at a cash redemption price of $ 25.50 per share, plus all accrued and unpaid dividends to, but not including, the redemption date. 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 date. 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 price of $ 25.00 per share, plus all accrued and unpaid dividends to, but not including, the redemption date. The Series B Preferred Stock is listed on the Nasdaq Global Market under the trading symbol “CCLDO.” Dividends 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 Directors. In October 2023, the Board of Directors declared monthly dividends on the Series A and Series B Preferred Stock payable through February 2024. However, on December 11, 2023, the Board of Directors suspended the monthly cash dividends for Series A Preferred Stock and Series B Preferred Stock beginning with the payment scheduled for December 15, 2023 together with the remaining dividends that were declared. The suspension of these dividends deferred approximately $ 1.3 million in cash dividend payments each month through September 11, 2024. Due to the above Amendment, effective on September 12, 2024, the combined monthly cash dividends were reduced to approximately $ 1.1 million per month. F- 27 During the suspension, dividends continued to accrue in arrears on the Series A and Series B Preferred Stock. The Company’s Board of Directors declared payment of two months of dividends in January 2025 and the Company resumed payment of the dividends in February 2025, paying one month of dividends in arrears each month during the remainder of 2025. During the year ended December 31, 2024, no dividends were declared by the Board of Directors. At December 31, 2024, the Company owed approximately $ 5.4 million for dividends that had previously been declared through February 2024 (but whose payment was suspended), and also had total undeclared dividends of approximately $ 12.3 million, which represents the accumulated (but undeclared) dividends due to Preferred Stock shareholders of record on December 31, 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. In 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. The payments 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. At 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 sheets. 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. The Company 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. Warrants There were no warrants outstanding at December 31, 2025 and 2024. 11. COMMITMENTS AND CONTINGENCIES Legal 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 sheet. F- 28 In 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. 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. In connection with a prior acquisition, the seller had alleged that the Company owed approximately $ 800,000 in transition related costs to them. The parties agreed to settle the claim for approximately $ 316,000 , which was paid in September 2024. A 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. A 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. A 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. From time to time, we may become involved in other legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, in the opinion of our management, would individually or taken together have a material adverse effect on our business, consolidated results of operations, financial position or cash flows of the Company. 12. LEASES We determine if an arrangement is a lease at inception. We have operating leases for office and temporary living space as well as for some office equipment. Operating leases are included in operating lease ROU assets, current operating lease liability and non-current operating lease liability in our consolidated balance sheets as of December 31, 2025 and 2024. The Company does not have any finance leases. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rates, which are derived from information available at the lease commencement date, in determining the present value of lease payments. We give consideration to our bank financing arrangements, geographical location and collateralization of assets when calculating our incremental borrowing rates. F- 29 Our lease terms include options to extend the lease when it is reasonably certain that we will exercise that option. Leases with a term of less than 12 months are not recorded in the consolidated balance sheets . Our lease agreements do not contain any residual value guarantees. For real estate leases, we account for the lease and non-lease components as a single lease component. Some leases include escalation clauses and termination options that are factored in the determination of the lease payments when appropriate. If a lease is modified after the effective date, the operating lease ROU asset and liability is re-measured using the current incremental borrowing rate. 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. There were no lease impairments recorded for the years ended December 31, 2025 and 2024. Lease expense is included in direct operating costs, general and administrative expense, selling and marketing expense and research and development expense in the consolidated statements of operations based on the nature of the expense. As of December 31, 2025, we had 27 leased properties, five in Medical Practice Management and 22 in Healthcare IT, with the remaining terms ranging from less than one year to ten 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 . We also have some related party leases – see Note 13. The components of lease expense were as follows: SCHEDULE OF LEASE EXPENSE 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands) Operating lease cost $ 2,142 $ 2,451 Short-term lease cost 5 4 Variable lease cost 19 28 Total - net lease cost $ 2,166 $ 2,483 Short-term lease cost represents leases that were not capitalized as the lease term as of the later of January 1, 2025 or the beginning of the lease was less than 12 months. Variable lease costs include utilities, real estate taxes and common area maintenance costs. Supplemental balance sheet information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES December 31, 2025 December 31, 2024 ($ in thousands) Operating leases: Operating lease ROU assets, net $ 3,106 $ 3,133 Current operating lease liabilities $ 927 $ 1,287 Non-current operating lease liabilities 2,187 1,847 Total operating lease liabilities $ 3,114 $ 3,134 Operating leases: ROU assets $ 4,876 $ 5,125 Asset lease expense ( 1,767 ) ( 1,994 ) Foreign exchange (loss)/gain ( 3 ) 2 ROU assets, net $ 3,106 $ 3,133 Weighted average remaining lease term (in years): Operating leases 6.1 5.0 Weighted average discount rate: Operating leases 8.5 % 14.2 % F- 30 Supplemental cash flow and other information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,122 $ 2,467 ROU assets obtained in exchange for lease liabilities: Operating leases, excluding terminations $ 1,743 $ 864 Maturities of lease liabilities are as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITIES Operating leases - Years ending December 31, ($ in thousands) 2026 $ 1,134 2027 756 2028 447 2029 238 2030 225 Thereafter 1,073 Total lease payments 3,873 Less: imputed interest ( 759 ) Total lease obligations 3,114 Less: current obligations 927 Long-term lease obligations $ 2,187 The Company leases certain apartments which are subleased to others. The sublease agreements are currently on a month-to-month basis and are considered operating leases. For the years ended December 31, 2025 and 2024, the Company received sublease income of approximately $ 31,000 and $ 94,000 , respectively. 13. RELATED PARTIES The Company had sales to a related party, a physician who is the wife of the Executive Chairman. Revenues from this customer were approximately $ 125,000 and $ 138,000 for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the accounts receivable balance due from this customer was approximately $ 15,000 and $ 13,000 , respectively, and is included in accounts receivable - net in the consolidated balance sheets. The 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. The related party rent expense for the years ended December 31, 2025 and 2024 was approximately $ 285,000 and $ 281,000 , respectively, and is included in direct operating costs and general and administrative expense in the consolidated statements of operations. During the years ended December 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. Included 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 leases. Included in the ROU asset at December 31, 2024 is approximately $ 550,000 applicable to the related party leases. Included 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. F- 31 During 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. During 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. Effective 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. For the 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. During June 2022, the Company entered into a one-year consulting agreement with an entity owned and controlled by one of its former non-independent directors whereby that director received 10,000 shares of the Company’s 8.75 % Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”) in exchange for assisting the Company to identify and acquire additional companies, including performing due diligence. In addition, the Company could make additional payments under the agreement for any successful acquisitions by the Company based on the purchase price of the transaction. No such additional payments were made in 2022. During February 2023, the agreement was amended and extended through December 2024 whereby the former director received 14,000 shares of Series B Preferred Stock in February 2023 and received an additional 14,000 shares in January 2024. All of the payments made were capitalized and amortized over the service period. The amortization was recorded as stock compensation in general and administrative expense in the consolidated statement of operations. All such shares of the Series B Preferred Stock were issued in accordance with the Company’s Amended and Restated 2014 Equity Incentive Plan. In addition to the extension of the consulting agreement, the amendment provided that any transaction fees due will be offset against the last two above payments before any amounts are due to that former director. Effective February 1, 2024, the Company added an additional Statement of Work (“SOW”) to the consulting agreement with the same entity. As compensation for the SOW, the entity received $ 25,000 per month. The SOW was cancelable with ten days’ notice. The consulting agreement and SOW, through mutual consent, were terminated as of April 30, 2024. There were no transaction fees paid through that date. Effective May 1, 2024, the former non-independent director became President of the Company and effective January 1, 2025 became Co-Chief Executive Officer and effective January 1, 2026 became the Chief Executive Officer. During 2020, a New Jersey corporation, talkMD Clinicians, PA (“talkMD”), was formed by the wife of the Executive Chairman, who is a licensed physician, to provide telehealth services. talkMD was determined to be a variable interest entity (“VIE”) for financial reporting purposes because the entity will be controlled by the Company. As of December 31, 2025, talkMD had not yet commenced operations. Cumulatively, the Company has paid approximately $ 6,500 on behalf of talkMD for income taxes. 14. RESTRUCTURING COSTS During October 2023, the Company committed to effectively align resources with business priorities and improve profitability through a reduction in the workforce for the Healthcare IT segment. The Company identified opportunities for improvements in its workforce realignment, strategy and staffing, and increased its focus on performance management, to ensure it has the right skillsets and number of employees to execute its long-term vision. In addition, the Company instituted certain other expense reductions. A majority of the impacted employees exited in the fourth quarter of 2023. 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. These restructuring expenses consisted of one-time termination benefits, including but not limited to, severance payments and healthcare benefits. F- 32 The following table summarizes restructuring costs for 2025 and 2024: SCHEDULE OF RESTRUCTURING COSTS 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands) Severance and separation costs $ 154 $ 606 Equity awards acceleration costs associated with severance - - Other exit related costs - - Total restructuring and other costs $ 154 $ 606 The 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: SCHEDULE OF LIABILITIES ASSOCIATED WITH RESTRUCTURING COSTS Severance and separation costs Other exit related costs Total restructuring and other costs ($ in thousands) Balance as of January 1, 2025 $ - $ - $ - Additions 154 - 154 Payments and other adjustments ( 154 ) - ( 154 ) Balance as of December 31, 2025 $ - $ - $ - Balance as of January 1, 2024 $ 145 $ 26 $ 171 Beginning balance $ 145 26 $ 171 Additions 606 - 606 Payments and other adjustments ( 751 ) ( 26 ) ( 777 ) Balance as of December 31, 2024 $ - $ - $ - Ending balance $ - $ - $ - 15. EMPLOYEE BENEFIT PLANS The Company has qualified 401(k) plans covering all U.S. employees who have completed one month of service. The plans provide for matching contributions by the Company for employees of the Company and most U.S. subsidiaries, although there is no match for CPM employees. Employer contributions to the plans for the years ended December 31, 2025 and 2024 were approximately $ 345,000 and $ 449,000 , respectively. Additionally, the Company has a defined contribution retirement plan covering all employees located in our Pakistan Offices who have completed three months of service. The plan provides for monthly contributions by the Company which are equal to 10% of qualified employees’ basic monthly compensation . The Company’s contributions for the years ended December 31, 2025 and 2024 were approximately $ 546,000 and $ 438,000 , respectively. The Company maintains a defined contribution retirement plan covering all employees in Sri Lanka. The employee and employer contribute 8 % and 12 %, respectively, of the employee’s gross salary. The Company’s contribution for the years ended December 31, 2025 and 2024 was approximately $ 26,000 and $ 28,000 , respectively. The contributions are required to be deposited with the Employees’ Provident Fund Organization, a government owned entity. 16. STOCK-BASED COMPENSATION In April 2014, the Company adopted the Medical Transcription Billing, Corp. 2014 Equity Incentive Plan (the “Original Plan”), reserving a total of 1,351,000 shares of common stock for grants to employees, officers, directors and consultants. On April 14, 2017, the Original Plan was amended and restated whereby an additional 1,500,000 shares of common stock and 100,000 shares of Series A Preferred Stock were added to the plan for future issuance (the “A&R Plan”). During 2018, an additional 200,000 shares of Series A Preferred Stock were added to the A&R Plan for future issuance. In May 2020, an additional 2,000,000 shares of common stock and an additional 300,000 shares of Series A Preferred Stock were added to the A&R Plan for future issuance. During 2022, an additional 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. As of December 31, 2025, 374,683 shares of common 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. F- 33 The 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. Common stock During 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. The following table summarizes the RSU and restricted stock transactions related to the common and Preferred Stock under the A&R Plan for the years ended December 31, 2025 and 2024: DISCLOSURE OF SHARE-BASED COMPENSATION ARRANGEMENTS BY SHARE-BASED PAYMENT AWARD Common Stock Series A Preferred Stock Series B Preferred Stock Outstanding and unvested shares at January 1, 2025 242,500 - 19,199 Granted 125,000 - - Vested ( 206,100 ) - - Forfeited - - - Outstanding and unvested shares at December 31, 2025 161,400 - 19,199 Outstanding and unvested shares at January 1, 2024 753,495 - 57,199 Granted 226,894 - 46,000 Vested ( 513,190 ) - ( 60,000 ) Forfeited ( 224,699 ) - ( 24,000 ) Outstanding and unvested shares at December 31, 2024 242,500 - 19,199 As 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. Of the total outstanding and unvested common stock RSUs at December 31, 2025 and 2024, all of 161,400 and 242,500 , respectively, are classified as equity. For both 2025 and 2024, all of the Series B Preferred Stock RSUs are classified as equity. F- 34 The following table summarizes the share activity during the years ended December 31, 2025 and 2024 and the amount of common and preferred shares available for grant at December 31, 2025 and 2024: SCHEDULE OF SHARE-BASED COMPENSATION, RESTRICTED STOCK UNITS AWARD ACTIVITY Common Stock Series A Preferred Stock Series B Preferred Stock Shares available for grant at January 1, 2025 499,683 33,769 16,000 RSUs granted ( 125,000 ) - - RSUs cancelled - ( 33,769 ) - Shares available for grant at December 31, 2025 374,683 - 16,000 Shares available for grant at January 1, 2024 493,579 33,769 38,000 RSUs granted ( 226,894 ) - ( 46,000 ) RSUs forfeited 232,998 - 24,000 Shares available for grant at December 31, 2024 499,683 33,769 16,000 At 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 awards. 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. Preferred Stock In February 2023, the Compensation Committee granted executive bonuses to be paid in 34,000 shares of Series B Preferred Stock, with the number of shares and the amount based on specified criteria being achieved during the year 2023. During October 2023, the Compensation Committee approved for issuance 10,000 of the above shares to one of the executives who retired. The remaining shares were not issued and previously accrued amounts were reversed during 2024. In March 2024, the Compensation Committee approved executive bonuses to be paid in shares of Series B Preferred Stock with the number of shares and the amount based on specified criteria being achieved for the year 2024. There were 34,000 shares awarded. During May 2024, an additional executive bonus with similar terms was approved and 12,000 shares were awarded. During December 2024, the Compensation Committee determined that the financial objectives were attained and all of the performance bonus shares were issued. Stock-based compensation expense The Company recognizes compensation expense on a straight-line basis over the total requisite service period for the entire award. For stock awards classified as equity, the market price of our common stock or Preferred Stock on the date of grant is used to record the fair value of the award and includes the related taxes. For stock awards classified as a liability, the earned amount is marked to market based on the end of period common stock price. The weighted average grant date fair value of the common stock price in connection with the RSUs classified as equity was $ 2.38 and $ 2.16 for the years ended December 31, 2025 and 2024, respectively. For the Series B Preferred Stock, the weighted average grant date fair value was $ 6.33 for the year ended December 31, 2024. The 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, 2025 2024 ($ in thousands) Direct operating costs (benefit) $ - $ ( 27 ) General and administrative 451 72 Research and development 3 ( 4 ) Selling and marketing - 74 Total stock-based compensation expense $ 454 $ 115 F- 35 17. INCOME TAXES For 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 future U.S. 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. The 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 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. 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, 2025 2024 ($ in thousands) Beginning balance $ 89,664 $ 87,597 Current year valuation allowance increase 5,983 2,067 Ending balance $ 95,647 $ 89,664 The income before provision for income taxes for financial reporting purposes during the years ended December 31, 2025 and 2024 consisted of the following: SCHEDULE OF INCOME (LOSS) BEFORE INCOME TAX, DOMESTIC AND FOREIGN Year Ended December 31, 2025 2024 ($ in thousands) United States $ 10,094 $ 7,191 International 903 820 Total $ 10,997 $ 8,011 The provision for income taxes for the years ended December 31, 2025 and 2024 consisted of the following: SCHEDULE OF COMPONENTS OF INCOME TAX PROVISION Year Ended December 31, 2025 2024 ($ in thousands) Current: Federal $ - $ - State 150 120 International 49 40 199 160 Deferred: Federal - - State - - International - - - - Total income tax provision $ 199 $ 160 F- 36 The components of the Company’s deferred income taxes as of December 31, 2025 and 2024 are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES December 31, December 31, 2025 2024 (a) ($ in thousands) Deferred tax assets: Allowance for expected credit losses $ 219 $ 213 Deferred revenue 141 103 Property and intangible assets 4,098 3,015 State net operating loss (“NOL”) carryforwards 30,594 20,981 Federal net operating loss (“NOL”) carryforwards 56,836 55,569 Section 163(j) interest limitation - 1,669 Stock based compensation - ( 173 ) Cumulative balance translation adjustment 1,019 1,015 Section 267 limitation 6 6 Credit carryovers 2,498 2,498 ASC 842 - Lease liability 727 558 Accrued compensation 475 86 Section 174 costs - 4,996 Valuation allowance ( 95,647 ) ( 89,664 ) Total deferred tax assets 966 872 Deferred tax liabilities: Prepaid commissions ( 221 ) ( 267 ) Right-of-use assets ( 731 ) ( 559 ) Other ( 14 ) ( 46 ) Total deferred tax liabilities $ ( 966 ) $ ( 872 ) (a) Certain prior period balances have been reclassified to conform to the current period presentation. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating loss carryforwards. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Deferred income tax liabilities represent amounts that will increase income taxes payable in future years. The Company has recorded goodwill as a result of its acquisitions. Goodwill is generally not amortized for financial reporting purposes. However, in 2023 the Company recorded a $ 42 million goodwill impairment charge, which partially reduced the basis of the tax-deductible goodwill. For tax purposes, goodwill from asset acquisitions is tax deductible and amortized over 15 years. As such, deferred income tax expense and a deferred tax liability arise as a result of the tax-deductibility of this indefinitely lived asset (also known as a naked credit). Typically, the resulting deferred tax liability, which is expected to continue to increase over the amortization period, will have an indefinite life. As a result of the Company having indefinite life net operating losses under the recent tax reform legislation, the federal deferred tax liability resulting from the amortization of goodwill was offset against these indefinite federal operating net losses deferred tax assets to the extent allowable prior to 2023. As a result of the goodwill impairment charge in 2023, the entire deferred tax liability was reversed at that time and no additional deferred tax liability was recorded at December 31, 2025 and 2024. The income tax paid, net of refunds received, for the years ended December 31, 2025 and 2024 consisted of the following: SCHEDULE OF INCOME TAX PAID NET 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands) Federal $ - $ - State 152 118 Local 36 8 International 58 31 Total $ 246 $ 157 F- 37 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 after the adoption of ASU 2023-09 is as follows: Schedule of Effective Income Tax Rate Reconciliation Year Ended December 31, 2025 Amount Percent ($ in thousands) Provision at U.S. federal statutory rate $ 2,309 21.0 % State and local income tax, net of federal income tax effect (a) 119 1.1 % Foreign tax effects: Pakistan - - Impact of foreign operations ( 140 ) ( 1.3 )% Effect of cross-border tax laws: Subpart F GILTI inclusion 827 7.5 % Nontaxable or nondeductible items ( 6 ) ( 0.1 )% Changes in valuation allowance ( 2,934 ) ( 26.6 )% Deferred tax adjustment 24 0.2 % Provision for income taxes $ 199 1.8 % (a) 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 $ 1,682 Increase (decrease) in income taxes resulting from: State tax expense, net of federal benefit 94 Non-deductible items 30 Impact of foreign operations ( 132 ) Subpart F GILTI inclusion 1,066 Stock based compensation ( 177 ) Deferred tax adjustment ( 2,708 ) Changes in valuation allowance 305 Provision for income taxes $ 160 At 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 for the years ended December 31, 2025 and 2024. 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 expense. As of December 31, 2025 and 2024, the Company had no unrecognized tax benefits and did not recognize any interest or penalties. The Pakistan foreign receipts tax does not have a significant impact on the Company’s effective tax rate as all of its earnings in Pakistan have been fully included in the U.S. federal tax rate reconciliation at 21 % for 2025 and 2024. The Pakistan statutory corporate tax rate is 29 % before consideration of the aforementioned tax credit and the foreign receipts tax. As of December 31, 2025, the Company has a total federal NOL carry forward of approximately $ 271 million of which approximately $ 186 million will expire between 2030 and 2037, and the balance of approximately $ 85 million has an indefinite life. 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 limitations. The Company has state NOL carry forwards of approximately $ 214 million, of which $ 87 million relates to the State of New Jersey. These NOLs expire starting in 2026. The Company has a full valuation allowance on its deferred tax assets in the U.S. which results in there being no U.S. deferred tax assets or liabilities recorded in the consolidated balance sheets at December 31, 2025 and 2024, respectively. On July 4, 2025, the One Big Beautiful Act (“OBBBA”) was enacted into law. The OBBBA contained several tax changes to certain U.S. 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. 18. OTHER EXPENSE – NET Other expense - net for the years ended December 31, 2025 and 2024 consisted of the following: SCHEDULE OF OTHER (EXPENSE) INCOME - NET 2025 2024 Year Ended December 31, 2025 2024 ($ in thousands) Foreign exchange (losses) gains $ ( 109 ) $ 130 Other expense ( 156 ) ( 428 ) Other expense - net $ ( 265 ) $ ( 298 ) 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. Other expense primarily represents legal settlements made by the Company. F- 38 19. SEGMENT REPORTING From 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 segments: (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. The CODM evaluates the financial performance of the business units on the basis of revenue, certain individual and total operating 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 information. 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. Currently, a focus is being placed on reducing costs and managing global headcount. The segment revenue and segment operating income (loss) is also used to assess the performance of personnel and in establishing their compensation. The Healthcare IT segment includes technology-assisted revenue cycle management, SaaS solutions and professional and other services. The Medical Practice Management segment includes the management of three medical practices. Each segment is considered a reporting unit. The Company does not have intra-entity sales or asset transfers, however, there are intracompany bank transfers. The accounting policies of the segments are the same as those disclosed in the summary of significant accounting policies. The following tables present revenues, operating expenses and operating income (loss) by reportable segment for the years ended December 31, 2025 and 2024: SCHEDULE OF REVENUES, OPERATING EXPENSES AND OPERATING INCOME (LOSS) BY REPORTABLE SEGMENT Healthcare IT Medical Practice Management Total Year Ended December 31, 2025 ($ in thousands) Healthcare IT Medical Practice Management Total Net revenue $ 106,566 $ 13,933 (a) $ 120,499 Operating expenses: Direct operating costs 53,077 11,379 64,456 Selling and marketing 4,789 29 4,818 General and administrative 9,932 2,510 12,442 Research and development 6,382 - 6,382 Depreciation and amortization 14,632 328 14,960 Restructuring costs 154 - 154 Total operating expenses 88,966 14,246 103,212 Segment operating income (loss) $ 17,600 $ ( 313 ) 17,287 Reconciliation of profit or loss (segment profit/loss): Unallocated corporate expenses ( 5,944 ) Net interest expense ( 81 ) Other expense ( 265 ) Income before income taxes $ 10,997 F- 39 Healthcare IT Medical Practice Management Total Year Ended December 31, 2024 ($ in thousands) Healthcare IT Medical Practice Management Total Net revenue $ 96,405 $ 14,432 (a) $ 110,837 Operating expenses: Direct operating costs 49,945 10,897 60,842 Selling and marketing 6,201 31 6,232 General and administrative 9,093 1,911 11,004 Research and development 3,781 - 3,781 Depreciation and amortization 13,813 329 14,142 Lease termination and restructuring costs 596 - 596 Total operating expenses 83,429 13,168 96,597 Segment operating income $ 12,976 $ 1,264 14,240 Operating income (loss) $ 12,976 $ 1,264 14,240 Reconciliation of profit or loss (segment profit/loss): Unallocated corporate expenses ( 5,119 ) Net interest expense ( 812 ) Other expense ( 298 ) Income before income taxes $ 8,011 (a) This revenue represents fees based on our actual costs plus a percentage of the operating profit. 20. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market participant assumptions in the absence of observable market information. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair values of assets and liabilities required to be measured at fair value are categorized based upon the level of judgement associated with the inputs used to measure their value in one of the following three categories: Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. We held no Level 1 financial instruments at December 31, 2025 or 2024. Level 2: Quoted prices for similar instruments in active markets with inputs that are observable, either directly or indirectly. Our Level 2 financial instruments include notes payable which are carried at cost and approximate fair value since the interest rates being charged approximate market rates. Level 3: Unobservable inputs are significant to the fair value of the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Our Level 3 instruments include the fair value of contingent consideration related to completed acquisitions. 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. F- 40 The following table provides the assets and liabilities carried at fair value measured on a non-recurring basis as of December 31, 2025 and 2024. Refer to Note 2 - Basis of Presentation and Significant Accounting Policies, for a description of the valuation techniques used to determine the fair value of the assets measured on a non-recurring basis in the table below: FAIR VALUE OF THE ASSETS AND LIABILITIES MEASURED ON A NON-RECURRING BASIS Fair Value Measurements at December 31, 2025 Expense for the year ended Carrying Value Level 1 Level 2 Level 3 December 31, 2025 ($ in thousands) Goodwill - Healthcare IT $ 31,442 $ - $ - $ 31,442 $ - Fair Value Measurements at December 31, 2024 Expense for the year ended Carrying Value Level 1 Level 2 Level 3 December 31, 2024 ($ in thousands) Goodwill - Healthcare IT $ 19,186 $ - $ - $ 19,186 $ - The 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 2025 2024 Fair Value Measurement at Reporting Date Using Significant Unobservable Inputs, Level 3 Year Ended December 31, 2025 2024 ($ in thousands) Balance - January 1, $ - $ - Acquisitions 1,265 - Change in fair value - - Payments ( 124 ) - Balance - December 31, $ 1,141 $ - F- 41