Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 29, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | CareCloud, Inc. | |
Entity Central Index Key | 0001582982 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,400,834 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash | $ 20,925 | |
Accounts receivable - net, of allowance for doubtful accounts of $517 and $522 at March 31, 2021 and December 31, 2020, respectively | 12,089 | |
Contract asset | 4,105 | |
Inventory | 399 | |
Current assets - related party | 13 | |
Prepaid expenses and other current assets | 7,288 | |
Total current assets | 44,819 | |
Property and equipment - net | 4,921 | |
Operating lease right-of-use assets | $ 7,075 | 7,743 |
Intangible assets - net | 29,978 | |
Goodwill | 49,291 | |
Other assets | 1,247 | |
TOTAL ASSETS | 137,999 | |
CURRENT LIABILITIES: | ||
Accounts payable | 6,461 | |
Accrued compensation | 2,590 | |
Accrued expenses | 8,501 | |
Operating lease liability (current portion) | 4,236 | 4,729 |
Deferred revenue (current portion) | 1,173 | |
Accrued liability to related party | 1 | |
Deferred payroll taxes | 927 | |
Notes payable (current portion) | 401 | |
Dividend payable | 4,241 | |
Total current liabilities | 29,024 | |
Notes payable | 41 | |
Deferred payroll taxes | 927 | |
Operating lease liability | 5,220 | 6,297 |
Deferred revenue | 305 | |
Deferred tax liability | 160 | |
Total liabilities | 36,754 | |
COMMITMENTS AND CONTINGENCIES (Note 8) | ||
SHAREHOLDERS' EQUITY: | ||
Preferred stock, $0.001 par value - authorized 7,000,000 shares at March 31, 2021 and December 31, 2020; issued and outstanding 5,502,961 and 5,475,279 shares at March 31, 2021 and December 31, 2020, respectively | 5 | |
Common stock, $0.001 par value - authorized 29,000,000 shares at March 31, 2021 and December 31, 2020; issued 15,140,589 and 14,121,044 shares at March 31, 2021 and December 31, 2020, respectively; 14,399,790 and 13,380,245 shares outstanding at March 31, 2021 and December 31, 2020, respectively | 14 | |
Additional paid-in capital | 136,781 | |
Accumulated deficit | (33,889) | |
Accumulated other comprehensive loss | (1,004) | |
Less: 740,799 common shares held in treasury, at cost at March 31, 2021 and December 31, 2020 | (662) | |
Total shareholders' equity | 103,513 | 101,245 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 137,999 | |
Unaudited | ||
CURRENT ASSETS: | ||
Cash | 20,995 | |
Accounts receivable - net, of allowance for doubtful accounts of $517 and $522 at March 31, 2021 and December 31, 2020, respectively | 12,419 | |
Contract asset | 4,375 | |
Inventory | 379 | |
Current assets - related party | 13 | |
Prepaid expenses and other current assets | 7,067 | |
Total current assets | 45,248 | |
Property and equipment - net | 5,323 | |
Operating lease right-of-use assets | 7,075 | |
Intangible assets - net | 29,166 | |
Goodwill | 49,291 | |
Other assets | 1,323 | |
TOTAL ASSETS | 137,426 | |
CURRENT LIABILITIES: | ||
Accounts payable | 4,734 | |
Accrued compensation | 2,040 | |
Accrued expenses | 10,215 | |
Operating lease liability (current portion) | 4,236 | |
Deferred revenue (current portion) | 1,225 | |
Accrued liability to related party | 1 | |
Deferred payroll taxes | 927 | |
Notes payable (current portion) | 167 | |
Dividend payable | 3,777 | |
Total current liabilities | 27,322 | |
Notes payable | 35 | |
Deferred payroll taxes | 927 | |
Operating lease liability | 5,220 | |
Deferred revenue | 285 | |
Deferred tax liability | 124 | |
Total liabilities | 33,913 | |
COMMITMENTS AND CONTINGENCIES (Note 8) | ||
SHAREHOLDERS' EQUITY: | ||
Preferred stock, $0.001 par value - authorized 7,000,000 shares at March 31, 2021 and December 31, 2020; issued and outstanding 5,502,961 and 5,475,279 shares at March 31, 2021 and December 31, 2020, respectively | 6 | |
Common stock, $0.001 par value - authorized 29,000,000 shares at March 31, 2021 and December 31, 2020; issued 15,140,589 and 14,121,044 shares at March 31, 2021 and December 31, 2020, respectively; 14,399,790 and 13,380,245 shares outstanding at March 31, 2021 and December 31, 2020, respectively | 15 | |
Additional paid-in capital | 140,666 | |
Accumulated deficit | (35,853) | |
Accumulated other comprehensive loss | (659) | |
Less: 740,799 common shares held in treasury, at cost at March 31, 2021 and December 31, 2020 | (662) | |
Total shareholders' equity | 103,513 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 137,426 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts receivable | $ 522 | |
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares authorized | 7,000,000 | |
Preferred stock, shares issued | 5,475,279 | |
Preferred stock, shares outstanding | 5,475,279 | |
Common stock, par value | $ 0.001 | |
Common stock, shares authorized | 29,000,000 | |
Common stock, shares issued | 14,121,044 | |
Common stock, shares outstanding | 13,380,245 | |
Treasury stock, shares | 740,799 | |
Unaudited | ||
Allowance for doubtful accounts receivable | $ 517 | |
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares authorized | 7,000,000 | |
Preferred stock, shares issued | 5,502,961 | |
Preferred stock, shares outstanding | 5,502,961 | |
Common stock, par value | $ 0.001 | |
Common stock, shares authorized | 29,000,000 | |
Common stock, shares issued | 15,140,589 | |
Common stock, shares outstanding | 14,399,790 | |
Treasury stock, shares | 740,799 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
NET REVENUE | $ 29,768 | $ 21,867 |
OPERATING EXPENSES: | ||
Direct operating costs | 18,060 | 13,567 |
Selling and marketing | 1,890 | 1,581 |
General and administrative | 5,624 | 5,593 |
Research and development | 2,026 | 2,333 |
Depreciation and amortization | 2,831 | 1,333 |
Impairment and unoccupied lease charges | 1,018 | 297 |
Total operating expenses | 31,449 | 24,704 |
OPERATING LOSS | (1,681) | (2,837) |
OTHER: | ||
Interest income | 15 | 38 |
Interest expense | (79) | (118) |
Other (expense) income - net | (220) | 445 |
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES | (1,965) | (2,472) |
Income tax (benefit) provision | (1) | 30 |
NET LOSS | (1,964) | (2,502) |
Preferred stock dividend | 3,128 | 2,643 |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (5,092) | $ (5,145) |
Net loss per common share: basic and diluted | $ (0.36) | $ (0.42) |
Weighted-average common shares used to compute basic and diluted loss per share | 14,084,749 | 12,310,818 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Statement of Comprehensive Income [Abstract] | |||
NET LOSS | $ (1,964) | $ (2,502) | |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | |||
Foreign currency translation adjustment (a) | [1] | 345 | (590) |
COMPREHENSIVE LOSS | $ (1,619) | $ (3,092) | |
[1] | No tax effect has been recorded as the Company recorded a valuation allowance against the tax benefit from its foreign currency translation adjustments. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury (Common) Stock [Member] | Total | |
Balance at Dec. 31, 2019 | $ 2 | $ 13 | $ 69,403 | $ (25,075) | $ (843) | $ (662) | $ 42,838 | |
Balance, shares at Dec. 31, 2019 | 2,539,325 | 12,978,485 | ||||||
Net loss | (2,502) | (2,502) | ||||||
Foreign currency translation adjustment | (590) | (590) | [1] | |||||
Issuance of stock under the equity incentive plan | ||||||||
Issuance of stock under the equity incentive plan, shares | 28,870 | 129,607 | ||||||
Issuance of preferred stock in connection with an acquisition | $ 1 | 18,999 | 19,000 | |||||
Issuance of preferred stock in connection with an acquisition, shares | 760,000 | |||||||
Stock-based compensation, net of cash settlements | 794 | 794 | ||||||
Issuance of warrants in connection with an acquisition | 300 | 300 | ||||||
Preferred stock dividends | (2,643) | (2,643) | ||||||
Balance at Mar. 31, 2020 | $ 3 | $ 13 | 86,853 | (27,577) | (1,433) | (662) | 57,197 | |
Balance, shares at Mar. 31, 2020 | 3,328,195 | 13,108,092 | ||||||
Balance at Dec. 31, 2020 | $ 5 | $ 14 | 136,781 | (33,889) | (1,004) | (662) | 101,245 | |
Balance, shares at Dec. 31, 2020 | 5,475,279 | 14,121,044 | ||||||
Net loss | (1,964) | (1,964) | ||||||
Foreign currency translation adjustment | 345 | 345 | [1] | |||||
Issuance of stock under the equity incentive plan | $ 1 | (1) | ||||||
Issuance of stock under the equity incentive plan, shares | 27,682 | 161,545 | ||||||
Stock-based compensation, net of cash settlements | 623 | 623 | ||||||
Exercise of common stock warrants | $ 1 | 6,391 | 6,392 | |||||
Exercise of common stock warrants, shares | 858,000 | |||||||
Preferred stock dividends | (3,128) | (3,128) | ||||||
Balance at Mar. 31, 2021 | $ 6 | $ 15 | $ 140,666 | $ (35,853) | $ (659) | $ (662) | $ 103,513 | |
Balance, shares at Mar. 31, 2021 | 5,502,961 | 15,140,589 | ||||||
[1] | No tax effect has been recorded as the Company recorded a valuation allowance against the tax benefit from its foreign currency translation adjustments. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (1,964) | $ (2,502) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,945 | 1,504 |
Lease amortization | 728 | 684 |
Deferred revenue | 32 | (89) |
Provision for doubtful accountst | 192 | 281 |
(Benefit) provision for deferred income taxes | (36) | 15 |
Foreign exchange loss (gain) | 143 | (423) |
Interest accretion | 139 | 167 |
Gain on sale of assets | 2 | |
Stock-based compensation expense | 1,267 | 1,307 |
Changes in operating assets and liabilities, net of businesses acquired: | ||
Accounts receivable | (522) | (302) |
Contract asset | (270) | 38 |
Inventory | 20 | 5 |
Other assets | (10) | (110) |
Accounts payable and other liabilities | (1,706) | (4,461) |
Net cash provided by (used in) operating activities | 958 | (3,884) |
INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (695) | (539) |
Capitalized software | (1,524) | (1,641) |
Cash paid for acquisitions (net) | (11,853) | |
Net cash used in investing activities | (2,219) | (14,033) |
FINANCING ACTIVITIES: | ||
Preferred stock dividends paid | (3,592) | (1,981) |
Settlement of tax withholding obligations on stock issued to employees | (1,402) | (820) |
Repayments of notes payable, net | (241) | (139) |
Proceeds from exercise of warrants | 6,392 | |
Proceeds from line of credit | 9,750 | |
Net cash provided by financing activities | 1,157 | 6,810 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 174 | (492) |
NET INCREASE (DECREASE) IN CASH | 70 | (11,599) |
CASH - beginning of the period | 20,925 | 19,994 |
CASH - end of the period | 20,995 | 8,395 |
SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Preferred stock issued in connection with an acquisition | 19,000 | |
Dividends declared, not paid | 3,777 | 2,407 |
Warrants issued | 300 | |
SUPPLEMENTAL INFORMATION - Cash paid during the period for: | ||
Income taxes | 59 | 6 |
Interest | $ 16 | $ 41 |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | 1. Organization and Business CareCloud, Inc., formerly MTBC, Inc. (“CareCloud”, and together with its consolidated subsidiaries, the “Company”, “we”, “us” and/or “our”) is a healthcare information technology company that offers an integrated suite of proprietary cloud-based electronic health records and practice management solutions, together with related business services, to healthcare providers. 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. The Company’s services include full-scale revenue cycle management, comprehensive practice management services, electronic health records, patient experience management solutions and other technology-driven practice management services for private and hospital-employed healthcare providers. CareCloud has its corporate offices in Somerset, New Jersey and maintains client support teams throughout the U.S., in Pakistan 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 (or “MTBC Pvt. Ltd.”), a 99.9% majority-owned subsidiary of CareCloud based in Pakistan. The remaining 0.01% of the shares of MTBC Pvt. Ltd. is owned by the founder and Executive Chairman of CareCloud. 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 has a wholly owned subsidiary in Sri Lanka, RCM MediGain Colombo, Pvt. Ltd. In May 2018, the Company formed CareCloud Practice Management, Corp. (“CPM”), a Delaware corporation, to operate the practice management business acquired from Orion Healthcorp. During March 2021, the Company formed a new wholly-owned subsidiary, CareCloud Acquisition, Corp. which did not have any activity through March 31, 2021. 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”). See Note 3. During the first quarter of 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 March 31, 2021, talkMD had not yet commenced operations or had any transactions or agreements with the Company or otherwise. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 2. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 8-03. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to present fairly the Company’s financial position as of March 31, 2021, the results of operations for the three months ended March 31, 2021 and 2020 and cash flows for the three months ended March 31, 2021 and 2020. When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. The condensed consolidated balance sheet as of December 31, 2020 was derived from our audited consolidated financial statements. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2020, which are included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 25, 2021. Recent Accounting Pronouncements Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS 2020 Acquisitions On June 16, 2020, the Company entered into a Stock Purchase Agreement with Meridian Billing Management Co., a Vermont corporation, Origin Holdings, Inc., a Delaware corporation, and GMM II Holdings, LLC, a Delaware limited liability company (“Seller”), pursuant to which the Company purchased all of the issued and outstanding capital stock of Meridian from the Seller. Meridian is in the business of providing medical billing, revenue cycle management, electronic medical records, medical coding and related services. These revenues have been included in the Company’s Healthcare IT segment. The acquisition has been accounted for as a business combination. The total consideration paid at closing was $11.9 million, net of cash received, 200,000 shares of the Company’s Preferred Stock plus warrants to purchase 2,250,000 shares of the Company’s common stock, with an exercise price per share of $7.50 and a term of two years. The Company also assumed Meridian’s negative net working capital and certain long-term lease liabilities where the leased space is either not being utilized or will be vacated shortly, with an aggregate value of approximately $4.8 million. A summary of the total consideration is as follows: Meridian Purchase Price ($ in thousands) Cash $ 11,864 Preferred stock 5,000 Warrants 4,770 Total purchase price $ 21,634 Of the Preferred Stock consideration, 100,000 shares were held in escrow for up to one month pending completion of technical migration and customer acceptance. The shares held in escrow were released on August 3, 2020. The Company’s Preferred Stock and warrants issued as part of the acquisition consideration were issued in a transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The warrants were valued using the Black-Scholes method. The Company registered for resale under the Securities Act the Preferred Stock and the securities underlying the warrants. During the current quarter, 858,000 warrants were exercised at $7.50 each. The Meridian acquisition added additional clients to the Company’s customer base and, similar to previous acquisitions, broadened the Company’s presence in the healthcare information technology industry through geographic expansion of its customer base and by increasing available customer relationship resources and specialized trained staff. The Company engaged a third-party valuation specialist to assist the Company in valuing the assets acquired and liabilities assumed from Meridian. The following table summarizes the preliminary purchase price allocation. The Company expects to finalize the purchase price allocation by the end of the second quarter of 2021 and is finalizing the projections and the valuation of the acquired assets and assumed liabilities. The preliminary purchase price allocation for Meridian is summarized as follows: ($ in thousands) Accounts receivable $ 3,558 Prepaid expenses 704 Contract asset 881 Property and equipment 426 Operating lease right-of-use assets 2,776 Customer relationships 12,900 Technology 900 Goodwill 13,789 Accounts payable (3,373 ) Accrued expenses & compensation (3,932 ) Deferred revenue (907 ) Operating lease liabilities (6,025 ) Other current liabilities (63 ) Total preliminary purchase price allocation $ 21,634 The acquired accounts receivable are recorded at fair value which represents amounts that have subsequently been paid or are expected to be paid by clients. The fair value of customer relationships was based on the estimated discounted cash flows generated by these intangibles. The goodwill from this acquisition is not deductible for income tax purposes and represents the Company’s ability to have an expanded local presence in additional markets and operational synergies that we expect to achieve that would not be available to other market participants. The weighted-average amortization period of the acquired intangible assets is approximately three years. Revenue earned from the clients obtained from the Meridian acquisition was approximately $8.9 million during the three months ended March 31, 2021. On January 8, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CareCloud Corporation, a Delaware corporation which was subsequently renamed CareCloud Health, Inc. (“CCH”), MTBC Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”) and Runway Growth Credit Fund Inc. (“Runway”), solely in its capacity as a seller representative, pursuant to which Merger Sub merged with and into CCH (the “Merger”), with CCH surviving as a wholly-owned subsidiary of the Company. The Merger became effective simultaneously with the execution of the Merger Agreement. The acquisition has been accounted for as a business combination. The total consideration for the Merger included approximately $11.9 million paid in cash at closing, the assumption of a working capital deficiency of approximately $5.1 million and 760,000 shares of the Company’s Preferred Stock. The Merger Agreement provided that if CCH’s 2020 revenues exceed $36 million, there will be an earn-out payment to the seller equal to such excess, up to $3 million. Based on the 2020 revenues, no earn-out payment was required. Additional consideration included warrants to purchase 2,000,000 shares of the Company’s common stock, 1,000,000 of which have an exercise price per share of $7.50 and a term of two years, and the other 1,000,000 warrants have an exercise price per share of $10.00 and a term of three years. A summary of the total consideration is as follows: CCH Purchase Price ($ in thousands) Cash $ 11,853 Preferred stock 19,000 Warrants 300 Contingent consideration 1,000 Total purchase price $ 32,153 Of the Preferred Stock consideration, 160,000 shares were placed in escrow for up to 24 months, and an additional 100,000 shares were placed in escrow for up to 18 months, in both cases, to satisfy indemnification obligations of the seller for losses arising from certain specified contingent liabilities. Shares net of such losses will be released upon the joint instruction of the Company and Runway in accordance with the applicable escrow terms. Such shares were entitled to the monthly dividend, which was to be paid when, and if, the shares were released. The Company had accrued the dividend monthly on the Preferred Stock held in escrow. Due to the settlement of the obligation in April 2021, accrued dividends of $513,000 relating to the 160,000 shares held in escrow were reversed during the current quarter. During July 2020, it was determined that 55,726 shares of the Preferred Stock would be released from escrow and cancelled since one of the contingent liabilities was settled for the amount of the cancelled shares. This included a cash payment of approximately $1.3 million. Dividends previously accrued on these shares of $102,000 were reversed as of June 30, 2020, since the amounts will not need to be paid. The remaining shares continue to be held in escrow. The Company’s Preferred Stock and warrants issued as part of the Merger consideration were issued in a transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The warrants were valued using the Black-Scholes method. The Company registered for resale under the Securities Act the Preferred Stock and the securities underlying the warrants. The CCH acquisition added additional clients to the Company’s customer base. The Company acquired CCH’s software technology and related business. Similar to previous acquisitions, this transaction broadened the Company’s presence in the healthcare information technology industry through geographic expansion of its customer base and by increasing available customer relationship resources and specialized trained staff. The Company engaged a third-party valuation specialist to assist the Company in valuing the assets acquired and liabilities assumed from CCH. The following table summarizes the purchase price allocation: ($ in thousands) Accounts receivable $ 2,299 Prepaid expenses 1,278 Contract asset 538 Property and equipment 403 Operating lease right-of-use assets 2,859 Customer relationships 8,000 Trademark 800 Software 4,800 Goodwill 22,868 Other long term assets 540 Accounts payable (6,943 ) Accrued expenses (2,081 ) Current loan payable (80 ) Operating lease liabilities (2,859 ) Deferred revenue (269 ) Total purchase price allocation $ 32,153 The acquired accounts receivable are recorded at fair value which represents amounts that have subsequently been paid or are expected to be paid by clients. The fair value of customer relationships was based on the estimated discounted cash flows generated by these intangibles. The goodwill from this acquisition is not deductible for income tax purposes and represents the Company’s ability to have an expanded local presence in additional markets and operational synergies that we expect to achieve that would not be available to other market participants. The weighted-average amortization period of the acquired intangible assets is approximately three years. Revenue earned from the clients obtained from the CCH acquisition was approximately $8.3 million and $7.6 million during the three months ended March 31, 2021 and March 31, 2020, respectively. Pro forma financial information (Unaudited) The unaudited pro forma information below represents the condensed consolidated results of operations as if the CCH and Meridian acquisitions occurred on January 1, 2020. The pro forma information has been included for comparative purposes and is not indicative of results of operations that 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 revenue and the pro forma revenue for the three months ended March 31, 2020 is approximately $10.9 million of additional revenue recorded by Meridian and approximately $600,000 recorded by CCH. Three Months Ended March 31, 2020 ($ in thousands except per share amounts) Total revenue $ 33,416 Net loss $ (3,499 ) Net loss attributable to common shareholders $ (6,849 ) Net loss per common share $ (0.56 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets - Net | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets - Net | 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. The following is the summary of the changes to the carrying amount of goodwill for the three months ended March 31, 2021 and the year ended December 31, 2020: Three Months Ended Year Ended March 31, 2021 December 31, 2020 ($ in thousands) Beginning gross balance $ 49,291 $ 12,634 Acquisitions - 36,657 Ending gross balance $ 49,291 $ 49,291 Intangible assets include customer contracts and relationships and covenants not-to-compete acquired in connection with acquisitions, as well as trademarks acquired and software costs. Intangible assets - net as of March 31, 2021 and December 31, 2020 consist of the following: Three Months Ended Year Ended March 31, 2021 December 31, 2020 ($ in thousands) Contracts and relationships acquired $ 44,497 $ 44,497 Capitalized software 7,284 5,760 Non-compete agreements 1,236 1,236 Other intangible assets 7,959 7,906 Total intangible assets 60,976 59,399 Less: Accumulated amortization 31,810 29,421 Intangible assets - net $ 29,166 $ 29,978 Amortization expense was approximately $2.4 million and $1.1 million for the three months ended March 31, 2021 and 2020, respectively. The remaining weighted-average amortization period is approximately 3.4 years. As of March 31, 2021, future amortization scheduled to be expensed is as follows: Years ending December 31, ($ in thousands) 2021 (nine months) $ 7,255 2022 9,562 2023 7,434 2024 3,265 2025 300 Thereafter 1,350 Total $ 29,166 |
Net Loss Per Common Share
Net Loss Per Common Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 5. NET LOss per COMMON share The following table reconciles the weighted-average shares outstanding for basic and diluted net loss per share for the three months ended March 31, 2021 and 2020: March 31, 2021 2020 ($ in thousands, except share and per share amounts) Basic and Diluted: Net loss attributable to common shareholders $ (5,092 ) $ (5,145 ) Weighted-average common shares used to compute basic and diluted loss per share 14,084,749 12,310,818 Net loss attributable to common shareholders per share - Basic and Diluted $ (0.36 ) $ (0.42 ) All unvested restricted stock units (“RSUs”) and unexercised warrants have been excluded from the above calculations as they were anti-dilutive. Vested RSUs, vested restricted shares and exercised warrants have been included in the above calculations. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt SVB Vehicle Financing Notes Insurance Financing — The Company finances certain insurance purchases over the term of the policy life. The interest rate charged is 4.0 % based on the annual renewal. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | 7. leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liability and non-current operating lease liability in our condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020. Each time the Company acquires a business, the ROU assets and the lease liabilities are recorded at fair value as of the date of acquisition. 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 lease payments over the lease term. 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. 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 condensed 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. During the three months ended March 31, 2021, there were $243,000 of unoccupied lease charges for two of the Company’s facilities. During the three months ended March 31, 2020, a lease impairment of approximately $297,000 was recorded since the Company is no longer using one of its leased facilities. In February 2021, the Company was able to settle one of the lease obligations assumed in connection with the Meridian acquisition for an amount that approximated the remaining lease liability. We lease all of our facilities and some equipment. Lease expense is included in direct operating costs and general and administrative expenses in the condensed consolidated statements of operations based on the nature of the expense. As of March 31, 2021, we had 36 leased properties, five in Practice Management and 31 in Healthcare IT, with remaining terms ranging from less than one year to five years. Our lease terms are determined taking into account lease renewal options, the Company’s anticipated operating plans and leases that are on a month-to-month basis. We also have some related party leases – see Note 9. The components of lease expense were as follows: Three Months Ended 2021 2020 ($ in thousands) Operating lease cost $ 1,057 $ 800 Short-term lease cost 22 9 Variable lease cost 6 13 Total- net lease cost $ 1,085 $ 822 Short-term lease cost represents leases that were not capitalized as the lease term as of the later of January 1, 2021 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: March 31, 2021 December 31, 2020 ($ in thousands) Operating leases: Operating lease ROU assets, net $ 7,075 $ 7,743 Current operating lease liabilities $ 4,236 $ 4,729 Non-current operating lease liabilities 5,220 6,297 Total operating lease liabilities $ 9,456 $ 11,026 Operating leases: ROU assets $ 7,792 $ 10,648 Asset lease expense (728 ) (2,889 ) Foreign exchange gain (loss) 11 (16 ) ROU assets, net $ 7,075 $ 7,743 Weighted average remaining lease term (in years): Operating leases 2.83 2.71 Weighted average discount rate: Operating leases 6.78 % 6.76 % Supplemental cash flow and other information related to leases was as follows: Three Months Ended 2021 2020 ($ in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,396 $ 679 ROU assets obtained in exchange for lease liabilities: Operating leases, net of impairment and terminations $ 211 $ 3,617 Maturities of lease liabilities are as follows: Operating leases - Year ending December 31, ($ in thousands) 2021 (nine months) $ 3,661 2022 3,941 2023 1,790 2024 570 2025 309 2026 42 Total lease payments 10,313 Less: imputed interest (857 ) Total lease obligations 9,456 Less: current obligations (4,236 ) Long-term lease obligations $ 5,220 As of March 31, 2021, we have one operating lease commitment that has not yet commenced with an aggregate gross lease liability of approximately $1.6 million. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Legal Proceedings On April 23, 2019, the Appellate Division reversed the Chancery Court’s ruling that CareCloud is required to participate in the Arbitration and remanded the case for further proceedings before the Chancery Court on that issue. The Appellate Division upheld the Chancery Court’s ruling that MAC was required to participate in the Arbitration. The parties completed discovery in the remanded matter, and both CareCloud and RPRWC filed cross-motions for summary judgement in their favor. On February 6, 2020, the Chancery Court denied RPRWC’s motion for summary judgment and granted CareCloud’s motion for summary judgment, holding that CareCloud cannot be compelled to participate in the Arbitration. RPRWC has informed CareCloud that it does not intend to appeal the Chancery Court’s ruling and that it intends to move forward solely against MAC in the Arbitration. On March 25, 2020, the Chancery Court lifted the stay of arbitration relative to RPRWC and MAC. Due to conflicting information provided by RPRWC, it is unclear what the extent of the claimed damages are in this matter which at this time appear to be entirely speculative. According to its arbitration demand, RPRWC seeks compensatory damages of $6.6 million, plus costs, for MPMA’s alleged breach of the billing services agreement. On June 12, 2020, in response to a directive from the arbitrator, RPRWC disclosed a statement of damages to MAC in which it increased its alleged damages from $6.6 million and costs to $20 million and costs. On July 24, 2020, RPRWC disclosed a declaration to MAC, in which RPRWC estimates its damages to be approximately $11 million plus costs. MAC intends to vigorously defend against RPRWC’s claims. If RPRWC is successful in the Arbitration, CareCloud and MAC anticipate the award would be substantially less than the amount claimed. Through the CCH transaction, we acquired its software technology and related business, of which certain elements were, at the time of the acquisition, subject to a civil investigation to determine pre-acquisition compliance with certain federal regulatory requirements. Following the closing of the transaction, the Company has continued to cooperate with the inquiry as CCH has historically done since the commencement of the investigation in July of 2018. This element was considered as part of the transaction as $4 million of the transaction’s consideration was held in escrow for the resolution of this investigation. The Company has accrued $4.2 million to resolve this investigation, of which up to $4 million is the escrow, which has been recorded as an indemnification asset which is included in the condensed consolidated balance sheets at December 31, 2020 and March 31, 2021 in prepaid expenses and other current assets with an offsetting amount in accrued expenses. The Company settled the obligation in April 2021 substantially within the range covered by the escrowed funds. From time to time, we may become involved in other legal proceedings arising in the ordinary course of our business. Including the proceedings described above, 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. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Parties | 9. 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 $4,000 and $5,000 for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, and December 31, 2020, the receivable balance due from this customer was approximately $1,000 and $2,000, respectively. The Company is a party to a nonexclusive aircraft dry lease agreement with Kashmir Air, Inc. (“KAI”), which is owned by the Executive Chairman. The Company recorded an expense of approximately $30,000 and $41,000 for the three month periods ended March 31, 2021 and 2020. As of both March 31, 2021 and December 31, 2020, the Company had a liability outstanding to KAI of approximately $1,000, which is included in accrued liability to related party in the condensed consolidated balance sheets. The lease for the current aircraft was entered into as of April 1, 2019 and has been included in the ROU asset and operating lease liability at December 31, 2020 and March 31, 2021. The Company leases its corporate offices in New Jersey, its temporary housing for its foreign visitors, a printing and mailing facility and its backup operations center in Bagh, Pakistan, from the Executive Chairman. The related party rent expense for both the three months ended March 31, 2021 and 2020 was approximately $47,000 and is included in direct operating costs and general and administrative expense in the condensed consolidated statements of operations. During the three months ended March 31, 2021, the Company spent approximately $289,000 to upgrade two of the leased facilities. Current assets-related party in the condensed consolidated balance sheets includes security deposits and prepaid rent related to the leases of the Company’s corporate offices in the amount of approximately $13,000 as of both March 31, 2021 and December 31, 2020. Included in the ROU asset at March 31, 2021 and December 31, 2020 is approximately $216,000 and $283,000, respectively, applicable to the related party leases. Included in the current and non-current operating lease liability at March 31, 2021 is approximately $142,000 and $85,000, respectively, applicable to the related party leases. At December 31, 2020, the current and non-current operating lease liability applicable to related party leases was approximately $202,000 and $92,000, respectively. During the first quarter of 2020, talkMD Clinicians, PA, a New Jersey corporation was formed to provide telehealth services. This entity is owned by the wife of the Executive Chairman since an entity providing medical services must be owned by a physician. The Company did not have any transactions with this entity since its formation. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 10. REVENUE Introduction The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers Most of our current contracts with customers contain a single performance obligation. For contracts where we provide multiple services, such as where we perform multiple ancillary services, each service represents its own performance obligation. Selling prices are based on the contractual price for the service, which approximates the stand alone selling price. We apply the portfolio approach as permitted by ASC 606 as a practical expedient to contracts with similar characteristics and we use estimates and assumptions when accounting for those portfolios. Our contracts generally include standard commercial payment terms. We have no significant obligations for refunds, warranties or similar obligations and our revenue does not include taxes collected from our customers. Disaggregation of Revenue from Contracts with Customers We derive revenue from eight primary sources: revenue cycle management services, SaaS solutions, professional services, ancillary services, group purchasing services, printing and mailing services, and clearinghouse and EDI (electronic data interchange) services and practice management services. The following table represents a disaggregation of revenue for the three months ended March 31: Three Months Ended March 31, 2021 2020 ($ in thousands) Healthcare IT: Revenue cycle management services $ 19,448 $ 13,190 SaaS solutions 5,261 3,614 Professional services 617 391 Ancillary services 984 721 Group purchasing services 188 177 Printing and mailing services 383 429 Clearinghouse and EDI services 152 319 Practice Management: Practice management services 2,735 3,026 Total $ 29,768 $ 21,867 Revenue cycle management services: 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 software-as-a-service (“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. SaaS Solutions: 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 software, electronic health records software, patient experience management solutions, business intelligence software and/or robotic process automation software on a SaaS basis, but who do not utilize the Company’s revenue cycle management services. SaaS fees may be fixed based on the number of providers, or may be variable. Other revenue streams: The Company also provides implementation and professional services to certain customers and records revenue monthly on a time and materials or a fixed rate basis. This is a separate performance obligation from any revenue cycle management, SaaS, clearinghouse and recurring EDI services provided, for which the Company receives and records monthly fees. The performance obligation is satisfied over time as the implementation or professional services are rendered. Ancillary services represent services such as coding, credentialing and transcription that 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 ancillary service transaction processed represents a performance obligation, which is satisfied over time as that individual service is rendered. 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. 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. 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. For all of the above revenue streams other than group purchasing services, 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. Practice management services: The Company also provides 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 practice management services have approximately an additional 20 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 condensed consolidated statements of operations. Our 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: The contract assets in the condensed consolidated balance sheets represent the revenue associated with the amounts we estimate our revenue cycle management clients will ultimately collect associated with the services they have provided and the relative fee we charge associated with those collections, together with amounts related to the group purchasing services. As of March 31, 2021, the estimated revenue expected to be recognized in the future related to the remaining revenue cycle management performance obligations outstanding was approximately $4.1 million. We expect to recognize substantially all of the revenue for the remaining performance obligations over the next three months. Approximately $227,000 of the contract asset represents revenue earned, not paid, from the group purchasing services. Accounts receivable are shown separately at their net realizable value in our condensed consolidated balance sheets. 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 results from our revenue cycle management services and is due to the timing of revenue recognition, submission of claims from our customers and payments from the insurance providers. 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. The contract asset was approximately $4.4 million and $2.9 million as of March 31, 2021 and 2020, respectively. Changes in the contract asset are recorded as adjustments to net revenue. The changes primarily result from providing services to revenue cycle management customers that result in additional consideration and are offset by our right to payment for services becoming unconditional and changes in the revenue accrued for the group purchasing services. The contract asset for our group purchasing services is reduced when we receive payments from vaccine manufacturers and is increased for revenue earned, not received. Deferred revenue represents sign-up fees received from customers that are amortized over three years. The opening and closing balances of the Company’s accounts receivable, contract asset and deferred revenue are as follows for the three months ended March 31, 2021 and 2020: Accounts Receivable, Net Contract Deferred Revenue (current) Deferred ($ in thousands) Balance as of January 1, 2021 $ 12,089 $ 4,105 $ 1,173 $ 305 Increase (decrease), net 330 270 52 (20 ) Balance as of March 31, 2021 $ 12,419 $ 4,375 $ 1,225 $ 285 Balance as of January 1, 2020 $ 6,995 $ 2,385 $ 20 $ 19 CCH acquisition 2,299 538 - 269 Increase (decrease), net 21 (38 ) 4 (92 ) Balance as of March 31, 2020 $ 9,315 $ 2,885 $ 24 $ 196 Deferred commissions: Our sales incentive plans include commissions payable to employees and third parties at the time of 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 for contracts entered into by CCH. Deferred commissions were approximately $1.0 million and $411,000 at March 31, 2021 and 2020, respectively, and are included in the other assets amounts in the condensed consolidated balance sheets. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 11. STOCK-BASED COMPENSATION In April 2014, the Company adopted the Medical Transcription Billing, Corp. 2014 Equity Incentive Plan (the “2014 Plan”), reserving 1,351,000 shares of common stock for grants to employees, officers, directors and consultants. During 2017, the 2014 Plan was amended and restated whereby an additional 1,500, 000 shares of common stock and 100,000 shares of Preferred Stock were added to the plan for future issuance. The 2014 Plan was amended and restated on April 14, 2017 (the “Amended and Restated Equity Incentive Plan”). During 2018, an additional 200,000 of preferred shares were added to the plan for future issuance. In May 2020, an additional 2,000,000 shares of common stock and 300,000 shares of Preferred Stock were added to the plan for future issuance. As of March 31, 2021, 1,327,937 shares of common stock and 332,153 shares of 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. 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 share per RSU, immediately after a change in control, as defined in the award agreement. The preferred stock RSUs contain a similar provision, which vest and convert to Preferred Stock upon a change in control. Common and preferred stock RSUs In January 2021, the Compensation Committee approved executive bonuses to be paid in shares of Preferred Stock, with the number of shares and the amount based on specified criteria being achieved during the year 2021. The actual amount will be settled in early 2022 based on the achievement of the specified criteria. For the three months ended March 31, 2021, an expense of approximately $154,000, was recorded for these bonuses based on the value of the shares at the grant date and recognized over the service period. The portion of the stock compensation expense to be used for the payment of withholding and payroll taxes is included in accrued compensation in the condensed consolidated balance sheets. The balance of the stock compensation expense has been recorded as additional paid-in capital. The following table summarizes the RSU transactions related to the common and preferred stock under the Equity Incentive Plan for the three months ended March 31, 2021 and 2020: Common Stock Preferred Stock Outstanding and unvested shares at January 1, 2021 382,435 44,000 Granted 395,100 37,922 Vested (226,525 ) (47,922 ) Forfeited (5,023 ) - Outstanding and unvested shares at March 31, 2021 545,987 34,000 Outstanding and unvested shares at January 1, 2020 451,085 44,000 Granted 326,175 44,000 Vested (176,334 ) (44,000 ) Forfeited (18,958 ) - Outstanding and unvested shares at March 31, 2020 581,968 44,000 Of the total outstanding and unvested common stock RSUs at March 31, 2021, 532,987 RSUs are classified as equity and 13,000 RSUs are classified as a liability. All of the preferred stock RSUs are classified as equity. 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 in recording 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 liability for the cash-settled awards was approximately $320,000 and $976,000 at March 31, 2021 and December 31, 2020, respectively, and is included in accrued compensation in the condensed consolidated balance sheets. The following table summarizes the components of share-based compensation expense for the three months ended March 31, 2021 and 2020: Stock-based compensation included in the condensed consolidated statements of operations: Three Months Ended March 31, 2021 2020 ($ in thousands) Direct operating costs $ 305 $ 171 General and administrative 624 851 Research and development 137 76 Selling and marketing 201 209 Total stock-based compensation expense $ 1,267 $ 1,307 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. INCOME TAXES The income tax benefit for the three months ended March 31, 2021 was approximately $1,000, comprised of a current tax expense of $35,000 and a deferred tax benefit of $36,000. The current income tax provision for the three months ended March 31, 2021 and 2020 primarily relates to state minimum taxes and foreign income taxes. The deferred tax (benefit) provision for the three months ended March 31, 2021 and 2020 relates to the book and tax difference of amortization on indefinite-lived intangibles, primarily goodwill. To the extent allowable, the federal tax provision has been offset by the indefinite life net operating loss. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. Several new corporate tax provisions were included in the CARES Act, including, but not limited to, the following: increasing the limitation threshold for determining deductible interest expense, class life changes to qualified improvements (in general - from 39 years to 15 years), and the ability to carry back net operating losses incurred from tax years 2018 through 2020 up to the five preceding tax years. The Company has evaluated the income tax provisions of the CARES Act and determined the impact to be either immaterial or not applicable. Under the CARES Act, the Company took advantage of the payroll tax deferral provision. As of both March 31, 2021 and December 31, 2020, the Company has deferred approximately $1.9 million of payroll taxes. The Company has incurred cumulative losses which make realization of a deferred tax asset difficult to support in accordance with ASC 740. Accordingly, a valuation allowance has been recorded against the Federal and state deferred tax assets as of March 31, 2021 and December 31, 2020. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 13. FAIR VALUE OF FINANCIAL INSTRUMENTS As of March 31, 2021, and December 31, 2020, the carrying amounts of accounts receivable, accounts payable and accrued expenses approximated their estimated fair values because of the short-term nature of these financial instruments. Fair value measurements-Level 2 Our notes payable are carried at cost and approximate fair value since the interest rates being charged approximate market rates. As a result, the Company categorizes these borrowings as Level 2 in the fair value hierarchy. Contingent Consideration The Company’s contingent consideration is a Level 3 liability. The fair value of the contingent consideration is primarily driven by changes in revenue estimates related to acquisitions, the passage of time and the associated discount rate. As of December 31, 2020, the contingent consideration liability was fully settled and there was no additional contingent consideration during the three months ended March 31, 2021. The following table provides a reconciliation of the beginning and ending balances for the contingent consideration measured at fair value using significant unobservable inputs (Level 3): Fair Value Measurement at Reporting Date Using Significant Unobservable Inputs, Level 3 Three Months Ended March 31, 2020 ($ in thousands) Balance - January 1, $ - Acquisition 1,050 Change in fair value - Payments - Balance - March 31, $ 1,050 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | 14. SEGMENT REPORTING Both our Chief Executive Officer and Executive Chairman serve as the Chief Operating Decision Maker (“CODM”), organize the Company, manage resource allocations and measure performance among two operating and reportable segments: (i) Healthcare IT and (ii) Practice Management. The Healthcare IT segment includes revenue cycle management, SaaS solutions and other services. The Practice Management segment includes the management of three medical practices. Each segment is considered a reporting unit. The CODM evaluates financial performance of the business units on the basis of revenue and direct operating costs excluding unallocated amounts, which are mainly corporate overhead costs. Our CODM does not evaluate operating segments using asset or liability information. The accounting policies of the segments are the same as those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 25, 2021. The following tables present revenues, operating expenses and operating (loss) income by reportable segment: Three Months Ended March 31, 2021 ($ in thousands) Healthcare IT Practice Management Unallocated Corporate Expenses Total Net revenue $ 27,033 $ 2,735 $ - $ 29,768 Operating expenses: Direct operating costs 15,987 2,073 - 18,060 Selling and marketing 1,882 8 - 1,890 General and administrative 3,426 520 1,678 5,624 Research and development 2,026 - - 2,026 Depreciation and amortization 2,749 82 - 2,831 Impairment and unoccupied lease charges 1,018 - - 1,018 Total operating expenses 27,088 2,683 1,678 31,449 Operating (loss) income $ (55 ) $ 52 $ (1,678 ) $ (1,681 ) Three Months Ended March 31, 2020 ($ in thousands) Healthcare IT Practice Management Unallocated Corporate Expenses Total Net revenue $ 18,841 $ 3,026 $ - $ 21,867 Operating expenses: Direct operating costs 11,166 2,401 - 13,567 Selling and marketing 1,572 9 - 1,581 General and administrative 3,881 556 1,156 5,593 Research and development 2,333 - - 2,333 Depreciation and amortization 1,254 79 - 1,333 Impairment charges 297 - - 297 Total operating expenses 20,503 3,045 1,156 24,704 Operating loss $ (1,662 ) $ (19 ) $ (1,156 ) $ (2,837 ) |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | 15. SUBSEQUENT EVENT As discussed in Note 8, during April 2021 the Company settled a civil investigation substantially within the range of the funds held in escrow. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Schedule of Business Acquisition, Pro Forma Information | Three Months Ended March 31, 2020 ($ in thousands except per share amounts) Total revenue $ 33,416 Net loss $ (3,499 ) Net loss attributable to common shareholders $ (6,849 ) Net loss per common share $ (0.56 ) |
Meridian Billing Management Co [Member] | |
Summary of Total Consideration on Business Consideration | A summary of the total consideration is as follows: Meridian Purchase Price ($ in thousands) Cash $ 11,864 Preferred stock 5,000 Warrants 4,770 Total purchase price $ 21,634 |
Schedule of Assets Acquired and Liabilities Assumed | The Company engaged a third-party valuation specialist to assist the Company in valuing the assets acquired and liabilities assumed from Meridian. The following table summarizes the preliminary purchase price allocation. The Company expects to finalize the purchase price allocation by the end of the second quarter of 2021 and is finalizing the projections and the valuation of the acquired assets and assumed liabilities. The preliminary purchase price allocation for Meridian is summarized as follows: ($ in thousands) Accounts receivable $ 3,558 Prepaid expenses 704 Contract asset 881 Property and equipment 426 Operating lease right-of-use assets 2,776 Customer relationships 12,900 Technology 900 Goodwill 13,789 Accounts payable (3,373 ) Accrued expenses & compensation (3,932 ) Deferred revenue (907 ) Operating lease liabilities (6,025 ) Other current liabilities (63 ) Total preliminary purchase price allocation $ 21,634 |
CareCloud Health, Inc. [Member] | |
Summary of Total Consideration on Business Consideration | A summary of the total consideration is as follows: CCH Purchase Price ($ in thousands) Cash $ 11,853 Preferred stock 19,000 Warrants 300 Contingent consideration 1,000 Total purchase price $ 32,153 |
Schedule of Assets Acquired and Liabilities Assumed | The Company engaged a third-party valuation specialist to assist the Company in valuing the assets acquired and liabilities assumed from CCH. The following table summarizes the purchase price allocation: ($ in thousands) Accounts receivable $ 2,299 Prepaid expenses 1,278 Contract asset 538 Property and equipment 403 Operating lease right-of-use assets 2,859 Customer relationships 8,000 Trademark 800 Software 4,800 Goodwill 22,868 Other long term assets 540 Accounts payable (6,943 ) Accrued expenses (2,081 ) Current loan payable (80 ) Operating lease liabilities (2,859 ) Deferred revenue (269 ) Total purchase price allocation $ 32,153 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. The following is the summary of the changes to the carrying amount of goodwill for the three months ended March 31, 2021 and the year ended December 31, 2020: Three Months Ended Year Ended March 31, 2021 December 31, 2020 ($ in thousands) Beginning gross balance $ 49,291 $ 12,634 Acquisitions - 36,657 Ending gross balance $ 49,291 $ 49,291 |
Schedule of Finite-Lived Intangible Assets | Intangible assets include customer contracts and relationships and covenants not-to-compete acquired in connection with acquisitions, as well as trademarks acquired and software costs. Intangible assets - net as of March 31, 2021 and December 31, 2020 consist of the following: Three Months Ended Year Ended March 31, 2021 December 31, 2020 ($ in thousands) Contracts and relationships acquired $ 44,497 $ 44,497 Capitalized software 7,284 5,760 Non-compete agreements 1,236 1,236 Other intangible assets 7,959 7,906 Total intangible assets 60,976 59,399 Less: Accumulated amortization 31,810 29,421 Intangible assets - net $ 29,166 $ 29,978 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of March 31, 2021, future amortization scheduled to be expensed is as follows: Years ending December 31, ($ in thousands) 2021 (nine months) $ 7,255 2022 9,562 2023 7,434 2024 3,265 2025 300 Thereafter 1,350 Total $ 29,166 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Losses Per Share, Basic and Diluted | The following table reconciles the weighted-average shares outstanding for basic and diluted net loss per share for the three months ended March 31, 2021 and 2020: March 31, 2021 2020 ($ in thousands, except share and per share amounts) Basic and Diluted: Net loss attributable to common shareholders $ (5,092 ) $ (5,145 ) Weighted-average common shares used to compute basic and diluted loss per share 14,084,749 12,310,818 Net loss attributable to common shareholders per share - Basic and Diluted $ (0.36 ) $ (0.42 ) |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Lease Expense | The components of lease expense were as follows: Three Months Ended 2021 2020 ($ in thousands) Operating lease cost $ 1,057 $ 800 Short-term lease cost 22 9 Variable lease cost 6 13 Total- net lease cost $ 1,085 $ 822 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: March 31, 2021 December 31, 2020 ($ in thousands) Operating leases: Operating lease ROU assets, net $ 7,075 $ 7,743 Current operating lease liabilities $ 4,236 $ 4,729 Non-current operating lease liabilities 5,220 6,297 Total operating lease liabilities $ 9,456 $ 11,026 Operating leases: ROU assets $ 7,792 $ 10,648 Asset lease expense (728 ) (2,889 ) Foreign exchange gain (loss) 11 (16 ) ROU assets, net $ 7,075 $ 7,743 Weighted average remaining lease term (in years): Operating leases 2.83 2.71 Weighted average discount rate: Operating leases 6.78 % 6.76 % |
Schedule of Supplemental Cash Flow and Other Information Related to Leases | Supplemental cash flow and other information related to leases was as follows: Three Months Ended 2021 2020 ($ in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,396 $ 679 ROU assets obtained in exchange for lease liabilities: Operating leases, net of impairment and terminations $ 211 $ 3,617 |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities are as follows: Operating leases - Year ending December 31, ($ in thousands) 2021 (nine months) $ 3,661 2022 3,941 2023 1,790 2024 570 2025 309 2026 42 Total lease payments 10,313 Less: imputed interest (857 ) Total lease obligations 9,456 Less: current obligations (4,236 ) Long-term lease obligations $ 5,220 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table represents a disaggregation of revenue for the three months ended March 31: Three Months Ended March 31, 2021 2020 ($ in thousands) Healthcare IT: Revenue cycle management services $ 19,448 $ 13,190 SaaS solutions 5,261 3,614 Professional services 617 391 Ancillary services 984 721 Group purchasing services 188 177 Printing and mailing services 383 429 Clearinghouse and EDI services 152 319 Practice Management: Practice management services 2,735 3,026 Total $ 29,768 $ 21,867 |
Schedule of Accounts Receivable, Contract Asset and Deferred Revenue | The opening and closing balances of the Company’s accounts receivable, contract asset and deferred revenue are as follows for the three months ended March 31, 2021 and 2020: Accounts Receivable, Net Contract Deferred Revenue (current) Deferred ($ in thousands) Balance as of January 1, 2021 $ 12,089 $ 4,105 $ 1,173 $ 305 Increase (decrease), net 330 270 52 (20 ) Balance as of March 31, 2021 $ 12,419 $ 4,375 $ 1,225 $ 285 Balance as of January 1, 2020 $ 6,995 $ 2,385 $ 20 $ 19 CCH acquisition 2,299 538 - 269 Increase (decrease), net 21 (38 ) 4 (92 ) Balance as of March 31, 2020 $ 9,315 $ 2,885 $ 24 $ 196 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table summarizes the RSU transactions related to the common and preferred stock under the Equity Incentive Plan for the three months ended March 31, 2021 and 2020: Common Stock Preferred Stock Outstanding and unvested shares at January 1, 2021 382,435 44,000 Granted 395,100 37,922 Vested (226,525 ) (47,922 ) Forfeited (5,023 ) - Outstanding and unvested shares at March 31, 2021 545,987 34,000 Outstanding and unvested shares at January 1, 2020 451,085 44,000 Granted 326,175 44,000 Vested (176,334 ) (44,000 ) Forfeited (18,958 ) - Outstanding and unvested shares at March 31, 2020 581,968 44,000 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table summarizes the components of share-based compensation expense for the three months ended March 31, 2021 and 2020: Stock-based compensation included in the condensed consolidated statements of operations: Three Months Ended March 31, 2021 2020 ($ in thousands) Direct operating costs $ 305 $ 171 General and administrative 624 851 Research and development 137 76 Selling and marketing 201 209 Total stock-based compensation expense $ 1,267 $ 1,307 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | 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 Measurement at Reporting Date Using Significant Unobservable Inputs, Level 3 Three Months Ended March 31, 2020 ($ in thousands) Balance - January 1, $ - Acquisition 1,050 Change in fair value - Payments - Balance - March 31, $ 1,050 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Revenues, Operating Expenses and Operating Income (Loss) by Reportable Segment | The following tables present revenues, operating expenses and operating (loss) income by reportable segment: Three Months Ended March 31, 2021 ($ in thousands) Healthcare IT Practice Management Unallocated Corporate Expenses Total Net revenue $ 27,033 $ 2,735 $ - $ 29,768 Operating expenses: Direct operating costs 15,987 2,073 - 18,060 Selling and marketing 1,882 8 - 1,890 General and administrative 3,426 520 1,678 5,624 Research and development 2,026 - - 2,026 Depreciation and amortization 2,749 82 - 2,831 Impairment and unoccupied lease charges 1,018 - - 1,018 Total operating expenses 27,088 2,683 1,678 31,449 Operating (loss) income $ (55 ) $ 52 $ (1,678 ) $ (1,681 ) Three Months Ended March 31, 2020 ($ in thousands) Healthcare IT Practice Management Unallocated Corporate Expenses Total Net revenue $ 18,841 $ 3,026 $ - $ 21,867 Operating expenses: Direct operating costs 11,166 2,401 - 13,567 Selling and marketing 1,572 9 - 1,581 General and administrative 3,881 556 1,156 5,593 Research and development 2,333 - - 2,333 Depreciation and amortization 1,254 79 - 1,333 Impairment charges 297 - - 297 Total operating expenses 20,503 3,045 1,156 24,704 Operating loss $ (1,662 ) $ (19 ) $ (1,156 ) $ (2,837 ) |
Organization and Business (Deta
Organization and Business (Details Narrative) - MTBC Private Limited [Member] | Dec. 31, 2004 |
Ownership percentage | 99.90% |
Founder and Executive Chairman [Member] | |
Ownership percentage | 0.01% |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jun. 16, 2020 | Jan. 08, 2020 | Apr. 30, 2021 | Jul. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Accrued dividends on preferred stock (reversed) | $ 3,128 | $ 2,643 | ||||||
Difference between actual revenue and proforma revenue | 33,416 | |||||||
Meridian Acquisition [Member] | ||||||||
Revenue earned from acquisition | 8,900 | |||||||
Difference between actual revenue and proforma revenue | $ 10,900 | |||||||
CareCloud Health, Inc. [Member] | ||||||||
Revenue earned from acquisition | 8,300 | 7,600 | ||||||
Difference between actual revenue and proforma revenue | 600 | |||||||
Preferred Stock [Member] | ||||||||
Accrued dividends on preferred stock (reversed) | ||||||||
Common Stock [Member] | ||||||||
Accrued dividends on preferred stock (reversed) | ||||||||
Stock Purchase Agreement [Member] | ||||||||
Warrants to purchase | 2,250,000 | |||||||
Warrants exercise price | $ 7.50 | $ 7.50 | ||||||
Warrants term | 2 years | |||||||
Warrants exercise | 858,000 | |||||||
Stock Purchase Agreement [Member] | Preferred Stock [Member] | ||||||||
Consideration paid | $ 11,900 | |||||||
Number of shares issued | 200,000 | |||||||
Aggregate value of Meridian's negative net working capital and certain long-term lease liabilities | $ 4,800 | |||||||
Shares held in escrow | 100,000 | |||||||
Merger Agreement [Member] | ||||||||
Shares held in escrow | 160,000 | |||||||
Working capital deficiency | $ 5,100 | |||||||
Revenues earn-out payment, description | The Merger Agreement provided that if CCH's 2020 revenues exceed $36 million, there will be an earn-out payment to the seller equal to such excess, up to $3 million. | |||||||
Additional shares held in escrow | 100,000 | |||||||
Additional shares held in escrow, term | 18 months | |||||||
Accrued dividends on preferred stock (reversed) | $ 102 | |||||||
Shares released from escrow | 55,726 | |||||||
Cash payment | $ 1,300 | |||||||
Merger Agreement [Member] | Subsequent Event [Member] | ||||||||
Accrued dividends on preferred stock (reversed) | $ 513 | |||||||
Merger Agreement [Member] | Preferred Stock [Member] | ||||||||
Consideration paid | $ 11,900 | |||||||
Number of shares issued | 760,000 | |||||||
Shares held in escrow | 160,000 | |||||||
Shares held in escrow, term | 24 months | |||||||
Merger Agreement [Member] | Warrants [Member] | ||||||||
Warrants to purchase | 2,000,000 | |||||||
Merger Agreement [Member] | Common Stock [Member] | ||||||||
Warrants to purchase | 1,000,000 | |||||||
Warrants exercise price | $ 7.50 | |||||||
Warrants term | 2 years | |||||||
Merger Agreement [Member] | Other Warrants [Member] | ||||||||
Warrants to purchase | 1,000,000 | |||||||
Warrants exercise price | $ 10 | |||||||
Warrants term | 3 years |
Acquisitions - Summary of Total
Acquisitions - Summary of Total Consideration on Business Consideration (Details) - USD ($) $ in Thousands | Jun. 16, 2020 | Jan. 08, 2020 |
Meridian Acquisition [Member] | ||
Cash | $ 11,864 | |
Preferred stock | 5,000 | |
Warrants | 4,770 | |
Total purchase price | $ 21,634 | |
CareCloud Health, Inc. [Member] | ||
Cash | $ 11,853 | |
Preferred stock | 19,000 | |
Warrants | 300 | |
Contingent consideration | 1,000 | |
Total purchase price | $ 32,153 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 16, 2020 | Jan. 08, 2020 |
Goodwill | $ 49,291 | ||
Meridian Acquisition [Member] | |||
Accounts receivable | $ 3,558 | ||
Prepaid expenses | 704 | ||
Contract asset | 881 | ||
Property and equipment | 426 | ||
Operating lease right-of-use assets | 2,776 | ||
Customer relationships | 12,900 | ||
Technology | 900 | ||
Goodwill | 13,789 | ||
Accounts payable | (3,373) | ||
Accrued expenses & compensation | (3,932) | ||
Deferred revenue | (907) | ||
Operating lease liabilities | (6,025) | ||
Other current liabilities | (63) | ||
Total preliminary purchase price allocation | $ 21,634 | ||
CareCloud Health, Inc. [Member] | |||
Accounts receivable | $ 2,299 | ||
Prepaid expenses | 1,278 | ||
Contract asset | 538 | ||
Property and equipment | 403 | ||
Operating lease right-of-use assets | 2,859 | ||
Customer relationships | 8,000 | ||
Trademark | 800 | ||
Software | 4,800 | ||
Goodwill | 22,868 | ||
Other long term assets | 540 | ||
Accounts payable | (6,943) | ||
Accrued expenses & compensation | (2,081) | ||
Current loan payable | (80) | ||
Deferred revenue | (269) | ||
Operating lease liabilities | (2,859) | ||
Total preliminary purchase price allocation | $ 32,153 |
Acquisitions - Schedule of Busi
Acquisitions - Schedule of Business Acquisition, Pro Forma Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($)$ / shares | |
Business Combinations [Abstract] | |
Total revenue | $ 33,416 |
Net loss | (3,499) |
Net loss attributable to common shareholders | $ (6,849) |
Net loss per common share | $ / shares | $ (0.59) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Net (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expenses | $ 2,400 | $ 1,100 |
Weighted-average amortization period | 3 years 4 months 24 days | 3 years 4 months 24 days |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Net - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning gross balance | $ 49,291 | $ 12,634 |
Acquisitions | 36,657 | |
Ending gross balance | $ 49,291 | $ 49,291 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Net - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 60,976 | $ 59,399 |
Less: Accumulated amortization | 31,810 | 29,421 |
Intangible assets - net | 29,166 | 29,978 |
Contracts and Relationships Acquired [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 44,497 | 44,497 |
Capitalized Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 7,284 | 5,760 |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 1,236 | 1,236 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 7,959 | $ 7,906 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Net - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 (nine months) | $ 7,255 | |
2022 | 9,562 | |
2023 | 7,434 | |
2024 | 3,265 | |
2025 | 300 | |
Thereafter | 1,350 | |
Total | $ 29,166 | $ 29,978 |
Net Loss Per Common Share - Sch
Net Loss Per Common Share - Schedule of Losses Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net loss attributable to common shareholders | $ (5,092) | $ (5,145) |
Weighted-average common shares used to compute basic and diluted loss per share | 14,084,749 | 12,310,818 |
Net loss attributable to common shareholders per share - Basic and Diluted | $ (0.36) | $ (0.42) |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | |||
Oct. 31, 2017 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2018 | |
Insurance Financing [Member] | ||||
Debt instrument interest rate | 4.00% | |||
SVB Credit Facility [Member] | ||||
Secured revolving line of credit percentage | 200.00% | |||
Borrowing credit facility | ||||
Unused portion of credit line fee, percentage | 1.00% | |||
Revolving line of credit, collateral | The debt is secured by all of the Company's domestic assets and 65% of the shares in its offshore facilities. Future acquisitions are subject to approval by SVB. | |||
SVB Credit Facility [Member] | Minimum [Member] | ||||
Revolving line of credit, interest rate | 6.50% | |||
SVB Credit Facility [Member] | Prime Rate [Member] | ||||
Revolving line of credit, interest rate | 1.50% | |||
SVB Credit Facility [Member] | Old [Member] | ||||
Revision of borrowing limit from SVB Bank | $ 5,000 | |||
SVB Credit Facility [Member] | New [Member] | ||||
Revision of borrowing limit from SVB Bank | $ 10,000 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Unoccupied lease charges | $ 243 | |
Lease impairment | $ 297 | |
Operating lease not yet commenced, commitment payable | $ 1,600 | |
Minimum [Member] | ||
Operating lease term | 1 year | |
Maximum [Member] | ||
Operating lease term | 5 years |
Leases - Schedule of Lease Expe
Leases - Schedule of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 1,057 | $ 800 |
Short-term lease cost | 22 | 9 |
Variable lease cost | 6 | 13 |
Total- net lease cost | $ 1,085 | $ 822 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease ROU assets, net | $ 7,075 | $ 7,743 |
Current operating lease liabilities | 4,236 | 4,729 |
Non-current operating lease liabilities | 5,220 | 6,297 |
Total operating lease liabilities | 9,456 | 11,026 |
ROU assets | 7,792 | 10,648 |
Asset lease expense | (728) | (2,889) |
Foreign exchange gain (loss) | 11 | (16) |
ROU assets, net | $ 7,075 | $ 7,743 |
Weighted average remaining lease term (in years): Operating leases | 2 years 9 months 29 days | 2 years 8 months 16 days |
Weighted average discount rate: Operating leases | 6.78% | 6.76% |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Cash Flow and Other Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 1,396 | $ 679 |
Operating leases, net of impairment and terminations | $ 211 | $ 3,617 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Operating leases - Year ending December 31, | ||
2021 (nine months) | $ 3,661 | |
2022 | 3,941 | |
2023 | 1,790 | |
2024 | 570 | |
2025 | 309 | |
2026 | 42 | |
Total lease payments | 10,313 | |
Less: imputed interest | (857) | |
Total lease obligations | 9,456 | $ 11,026 |
Less: current obligations | (4,236) | (4,729) |
Long-term lease obligations | $ 5,220 | $ 6,297 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Jul. 24, 2020 | Jun. 12, 2020 | Mar. 25, 2020 | Mar. 31, 2021 |
Compensatory damages description | RPRWC seeks compensatory damages of $6.6 million, plus costs, for MPMA's alleged breach of the billing services agreement. | |||
Compensatory damages | $ 11,000 | $ 20,000 | $ 6,600 | |
CareCloud Health, Inc. [Member] | Civil Investigation [Member] | ||||
Transaction's consideration was held in escrow | $ 4,000 | |||
Estimated expenses to resolve investigation | $ 4,200 |
Related Parties (Details Narrat
Related Parties (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Net revenue | $ 29,768 | $ 21,867 | |
Upgradation lease facilities | 1,085 | 822 | |
Operating lease right-of-use assets | 7,075 | $ 7,743 | |
Operating lease liability (current portion) | 4,236 | 4,729 | |
Non-current operating lease liabilities | 5,220 | 6,297 | |
Related Party Leases [Member] | |||
Operating lease right-of-use assets | 216 | 283 | |
Operating lease liability (current portion) | 142 | 202 | |
Non-current operating lease liabilities | 85 | 92 | |
Nonexclusive Aircraft Dry Lease Agreement [Member] | Kashmir Air, Inc [Member] | |||
Operating leases, rent expense | 30 | 41 | |
Accrued liability to related party | 1 | 1 | |
Physician [Member] | |||
Net revenue | 4 | 5 | |
Receivable balance due from customer | 1 | 2 | |
Executive Chairman [Member] | |||
Operating leases, rent expense | 47 | $ 47 | |
Upgradation lease facilities | 289 | ||
Security deposits and prepaid rent | $ 13 | $ 13 |
Revenue (Details Narrative)
Revenue (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Contract asset represents revenue earned, not paid from group purchasing services | $ 4,400 | $ 2,900 |
Deferred commissions | 1,000 | $ 411 |
Revenue Cycle Management and Orion Acquisition [Member] | ||
Remaining performance obligations | $ 4,100 | |
Orion Acquisition [Member] | ||
Estimated recognition period for remaining performance obligations | 3 months | |
Contract asset represents revenue earned, not paid from group purchasing services | $ 227 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total | $ 29,768 | $ 21,867 |
Healthcare IT [Member] | ||
Total | 27,033 | 18,841 |
Healthcare IT [Member] | Revenue Cycle Management Services [Member] | ||
Total | 19,448 | 13,190 |
Healthcare IT [Member] | SaaS Solutions [Member] | ||
Total | 5,261 | 3,614 |
Healthcare IT [Member] | Professional Services [Member] | ||
Total | 617 | 391 |
Healthcare IT [Member] | Ancillary Services [Member] | ||
Total | 984 | 721 |
Healthcare IT [Member] | Group Purchasing Services [Member] | ||
Total | 188 | 177 |
Healthcare IT [Member] | Printing and Mailing Services [Member] | ||
Total | 383 | 429 |
Healthcare IT [Member] | Clearinghouse and EDI Services [Member] | ||
Total | 152 | 319 |
Practice Management [Member] | ||
Total | 2,735 | 3,026 |
Practice Management [Member] | Practice Management Services [Member] | ||
Total | $ 2,735 | $ 3,026 |
Revenue - Schedule of Accounts
Revenue - Schedule of Accounts Receivable, Contract Asset and Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Beginning balance | $ 44,819 | |
Deferred Revenue (Current) [Member] | ||
Beginning balance | 1,173 | $ 20 |
CCH acquisition | ||
Increase (decrease), net | 52 | 4 |
Ending balance | 1,225 | 24 |
Deferred Revenue (Long Term) [Member] | ||
Beginning balance | 305 | 19 |
CCH acquisition | 269 | |
Increase (decrease), net | (20) | (92) |
Ending balance | 285 | 196 |
Accounts Receivable Net [Member] | ||
Beginning balance | 12,089 | 6,995 |
CCH acquisition | 2,299 | |
Increase (decrease), net | 330 | 21 |
Ending balance | 12,419 | 9,315 |
Contract Asset [Member] | ||
Beginning balance | 4,105 | 2,385 |
CCH acquisition | 538 | |
Increase (decrease), net | 270 | (38) |
Ending balance | $ 4,375 | $ 2,885 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2021 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2020 | May 31, 2020 | Apr. 30, 2014 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Liability for cash settled amount | $ 320 | $ 976 | ||||
Accrued compensation | 320 | $ 976 | ||||
Preferred Stock [Member] | Restricted Shares [Member] | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Recognized compensation | $ 154 | |||||
Unvested stock option award, equity | 532,987 | |||||
Restricted stock award classified as liability | 13,000 | |||||
2014 Equity Incentive Plan [Member] | Common Stock [Member] | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Common stock capital shares reserved for future issuance | 2,000,000 | |||||
Number of shares available for grant | 1,327,937 | |||||
2014 Equity Incentive Plan [Member] | Preferred Stock [Member] | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Preferred stock capital shares reserved for future issuance | 300,000 | |||||
Number of shares available for grant | 332,153 | |||||
2014 Equity Incentive Plan [Member] | Employees, Officers, Directors and Consultants [Member] | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 1,351,000 | |||||
Amended and Restated Equity Incentive Plan [Member] | Common Stock [Member] | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Number of shares added to amended and restated equity incentive plan | 1,500,000 | |||||
Amended and Restated Equity Incentive Plan [Member] | Preferred Stock [Member] | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Number of shares added to amended and restated equity incentive plan | 200,000 | 100,000 |
Stock-Based Compensation - Disc
Stock-Based Compensation - Disclosure of Share-based Compensation Arrangements by Share-based Payment Award (Details) - Restricted Shares [Member] - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Common Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding and unvested at beginning | 382,435 | 451,085 |
Granted | 395,100 | 326,175 |
Vested | (226,525) | (176,334) |
Forfeited | (5,023) | (18,958) |
Outstanding and unvested at ending | 545,987 | 581,968 |
Preferred Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding and unvested at beginning | 44,000 | 44,000 |
Granted | 37,922 | 44,000 |
Vested | (47,922) | (44,000) |
Forfeited | ||
Outstanding and unvested at ending | 34,000 | 44,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 1,267 | $ 1,307 |
Direct Operating Costs [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 305 | 171 |
General and Administrative [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 624 | 851 |
Research and Development [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 137 | 76 |
Selling and Marketing [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 201 | $ 209 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income tax benefit | $ 1 | $ (30) | |
Current tax expense | 35 | ||
Deferred tax benefit | $ 36 | $ (15) | |
Threshold deductible interest expenses, description | The ability to carry back net operating losses incurred from tax years 2018 through 2020 up to the five preceding tax years. | ||
Deferred payroll taxes | $ 927 | ||
CARES Act [Member] | |||
Deferred payroll taxes | $ 1,900 | $ 1,900 | |
CARES Act [Member] | Maximum [Member] | |||
Threshold deductible interest expenses period | 39 years | ||
CARES Act [Member] | Minimum [Member] | |||
Threshold deductible interest expenses period | 15 years |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Fair Value, Input, Level 3 [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance, beginning | |
Acquisition | 1,050 |
Change in fair value | |
Payments | |
Balance, ending | $ 1,050 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 3 Months Ended |
Mar. 31, 2021Segment | |
Segment Reporting [Abstract] | |
Number of operating segment | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Revenues, Operating Expenses and Operating Income (Loss) by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net revenue | $ 29,768 | $ 21,867 |
Direct operating costs | 18,060 | 13,567 |
Selling and marketing | 1,890 | 1,581 |
General and administrative | 5,624 | 5,593 |
Research and development | 2,026 | 2,333 |
Depreciation and amortization | 2,831 | 1,333 |
Impairment and unoccupied lease charges | 1,018 | 297 |
Total operating expenses | 31,449 | 24,704 |
Operating (loss) income | (1,681) | (2,837) |
Healthcare IT [Member] | ||
Net revenue | 27,033 | 18,841 |
Direct operating costs | 15,987 | 11,166 |
Selling and marketing | 1,882 | 1,572 |
General and administrative | 3,426 | 3,881 |
Research and development | 2,026 | 2,333 |
Depreciation and amortization | 2,749 | 1,254 |
Impairment and unoccupied lease charges | 1,018 | 297 |
Total operating expenses | 27,088 | 20,503 |
Operating (loss) income | (55) | (1,662) |
Practice Management [Member] | ||
Net revenue | 2,735 | 3,026 |
Direct operating costs | 2,073 | 2,401 |
Selling and marketing | 8 | 9 |
General and administrative | 520 | 556 |
Research and development | ||
Depreciation and amortization | 82 | 79 |
Impairment and unoccupied lease charges | ||
Total operating expenses | 2,683 | 3,045 |
Operating (loss) income | 52 | (19) |
Unallocated Corporate Expenses [Member] | ||
Net revenue | ||
Direct operating costs | ||
Selling and marketing | ||
General and administrative | 1,678 | 1,156 |
Research and development | ||
Depreciation and amortization | ||
Impairment and unoccupied lease charges | ||
Total operating expenses | 1,678 | 1,156 |
Operating (loss) income | $ (1,678) | $ (1,156) |