Effective May 15, 2026, the Company entered into an Asset Purchase Agreement (the “APA”) with EHCP, a New Jersey LLC, to acquire certain assets. The acquisition has been accounted for as a business combination. Under the APA, the purchase price was $1 million, subject to deductions for the deferred revenue obligations assumed. The Company paid $681,000 upon closing and the remaining purchase price will be paid in installments, subject to certain provisions, and has been accounted for as contingent consideration. Empower provides full-service healthcare compliance and advisory services. Empower helps medical practices and health systems navigate the complex regulatory landscape through services spanning compliance and ethics, privacy and security, revenue integrity, and merger and acquisition support. Empower also provides audit defense, risk mitigation, and regulatory readiness, and operates an educational marketplace of training, webinars, and workshops for healthcare professionals.

The preliminary purchase price allocation of the Empower acquisition is summarized as follows:

SCHEDULE OF ALLOCATION OF PURCHASE PRICE

SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN BUSINESS ACQUISITION 

The fair value of customer relationships was based on the estimated discounted cash flows generated by these intangibles. The goodwill from this acquisition is deductible ratably for income tax purposes over fifteen years.

The Company performed the valuation of the acquired assets. The weighted-average amortization period of the acquired intangible asset is approximately three years. The Company expects to finalize the valuation and complete the purchase price allocation during the third quarter of this year.

Revenue earned from the clients obtained from the Empower acquisition was approximately $262,000 during the three months ended June 30, 2026.

Effective October 1, 2025 (the “MAP App Closing Date”), the Company entered into an Asset Purchase Agreement (the “APA”) with the Healthcare Financial Management Association (the “HFMA”), an Illinois not-for-profit corporation, to acquire MAP App. The acquisition has been accounted for as a business combination. Under the APA, the Company paid $467,817 (the “Closing Payment”) as consideration plus potential earnouts. The Company will pay an additional cash payment (the “Earnout Payment”) equal to the aggregate net revenue earned by the Company during the twelve-month period beginning ninety days from the MAP App Closing Date (the “Initial Earnout Period”) from (i) customers who were MAP App subscribers as of the MAP App Closing Date and remain active subscribers, in good standing, throughout the Initial Earnout Period (“Acquired MAP Accounts”), (ii) prospective customers included in the MAP App pipeline as of the MAP App Closing Date (“Pipeline MAP Accounts”) and (iii) new customers resulting from the HFMA’s efforts that are neither Acquired MAP Accounts nor Pipeline MAP Accounts (“Ramp-up Customers”). During the thirty-six month period beginning immediately after the Initial Earnout Period, the Company will make additional quarterly payments to the HFMA in amounts equal to 5% of the aggregate net revenue earned during the preceding quarter from all Acquired MAP Accounts, Pipeline MAP Accounts and Ramp-up Customers and 20% of the aggregate net revenue earned during the preceding quarter from all newly signed Pipeline MAP Accounts procured in connection with the agreement. The Earnout Payment will be reduced by the sum of the Closing Payment and $353,000, the deferred revenue amount assumed as part of the acquisition.

MAP App is an industry-leading tool for benchmarking and measuring revenue cycle management performance, which was developed by the HFMA and is used by top hospitals and healthcare organizations nationwide.

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

SCHEDULE OF ALLOCATION OF PURCHASE PRICE

SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN BUSINESS ACQUISITION

The fair value of customer relationships was based on the estimated discounted cash flows generated by these intangibles. The goodwill represents the Company’s ability to develop software relationships with hospitals to support Revenue Cycle Management (“RCM”) growth. The goodwill from this acquisition is deductible ratably for income tax purposes over fifteen years. It was estimated that the probable future payments required under the APA will be approximately $150,000 which has been recorded as part of the purchase price allocation as contingent consideration.

The Company performed the valuation of the acquired assets and the contingent consideration. The purchase price allocation was finalized this quarter. The weighted-average amortization period of the acquired intangible assets is approximately three years.

Revenue earned from the clients obtained from the MAP App acquisition was approximately $167,000 and $358,000 during the three and six months ended June 30, 2026, respectively.

The acquisition reflects both the HFMA’s desire to partner with a leader in healthcare technology to expand MAP App’s core capabilities and CareCloud’s strategy to expand its Software-as-a-Service (“SaaS”) based ecosystem with best-in-class tools that complement its AI-powered revenue cycle platform.

On August 22, 2025 (the “Medsphere Closing Date”), Holdings entered into and closed on an APA with Medsphere, (the “Seller”). The acquisition was accounted for as a business combination. Pursuant to the APA, Holdings acquired certain assets and assumed certain liabilities of Seller, which is in the business of providing healthcare IT software and related services primarily to the U.S. inpatient and ambulatory market.

The aggregate purchase price for the acquisition was $16,500,000, plus the assumption of certain liabilities. The purchase price was comprised of: (i) $8,250,000 in cash, subject to provisions as set forth in the agreement and (ii) $8,250,000 payable by Holdings to Seller’s secured bank lender Wells Fargo Bank, N.A. (“Wells Fargo”) pursuant to a Deferred Payment Agreement, bearing interest at a rate of 12% per year with a maturity date of February 20, 2026. The Company and its subsidiaries were also party to the Deferred Payment Agreement as guarantors. The obligations of the Company and its subsidiaries under the Deferred Payment Agreement were secured by their assets pursuant to security documents executed by the Company and its subsidiaries in favor of Wells Fargo. The obligation to Wells Fargo was satisfied on September 3, 2025. (See Note 7.)

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

SCHEDULE OF ALLOCATION OF PURCHASE PRICE

SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN BUSINESS ACQUISITION 

The fair value of the accounts receivable was based on actual collections subsequent to the acquisition. The fair value of the contract asset was based on the expected revenue earned by Medsphere as of the Medsphere Closing Date. The fair value of customer relationships was based on the estimated discounted cash flows generated by these intangibles. The goodwill represents the Company’s ability to expand in the inpatient and ambulatory market and operational synergies that we expect to achieve that would not be available to other market participants. The goodwill from this acquisition is deductible ratably for income tax purposes over fifteen years. The acquired accounts receivable is recorded at fair value, which represents amounts that have been subsequently paid or are expected to be paid by clients. The fair value of the technology was based on the present value of the expected after-tax royalty savings. The fair value of the liabilities assumed was based on actual amounts owed.

The Company engaged a third-party valuation specialist to determine the fair value of the intangible assets acquired in the Medsphere acquisition. The weighted-average amortization period of the acquired intangible assets is approximately three years.

Revenue earned from the clients obtained from the Medsphere acquisition was approximately $6.8 million and $13.6 million during the three and six months ended June 30, 2026, respectively. The contingent escrow was included in the restricted cash balance at December 31, 2025 and was subsequently paid.

The Medsphere acquisition added additional clients to the Company’s customer base, allowed access to certain inpatient clients and the clinical software market, expanded the Company’s ambulatory footprint and provided entry into managed services.

On April 1, 2025 (the “RevNu Closing Date”), the Company entered into an APA with Gratius Enterprises, Inc., doing business as RevNu Medical Management (“RevNu”), pursuant to which the Company acquired certain assets of RevNu. The acquisition has been accounted for as a business combination. Under the APA, the Company is obligated to make quarterly payments equal to twenty percent (20%) of the revenue generated from the acquired RevNu client accounts for a period of forty-two (42) months following the RevNu Closing Date (the “RevNu Quarterly Payments”). The total purchase price is contingent upon future revenue performance and includes the estimated fair value of the RevNu Quarterly Payments. In the event that the service agreement with a specified customer is terminated, the Company will have no further obligation to make additional payments under the APA. For the quarter ended June 30, 2026, the quarterly payment due to RevNu was approximately $59,000.

RevNu was in the business of providing audiology and hearing aid billing/revenue cycle IT solutions and related services to hearing healthcare providers/practices. The total consideration for this acquisition consisted of contingent consideration of approximately $565,000.

The purchase price allocation of RevNu is summarized as follows:

SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN BUSINESS ACQUISITION

The fair value of the contract asset was based on the expected revenue earned by RevNu as of the RevNu Closing Date. The fair value of customer relationships was based on the estimated discounted cash flows generated by these intangibles. The goodwill represents the Company’s ability to expand in the audiology and hearing aid market. The goodwill from this acquisition is deductible ratably for income tax purposes over fifteen years. It was estimated that the probable payments required under the APA will be approximately $565,000 which has been recorded as part of the purchase price allocation as contingent consideration.

The Company performed the valuation of the acquired assets and the contingent consideration. The weighted-average amortization period of the acquired intangible assets is approximately three years.

Revenue earned from the clients obtained from the RevNu acquisition was approximately $316,000 and $616,000 during the three and six months ended June 30, 2026.

The RevNu 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 expansion of its customer base and by increasing available customer relationship resources and specialized trained staff.

Pro forma financial information (Unaudited)

The unaudited pro forma information below represents the Company’s condensed consolidated results of operations as if the Empower, MAP App, Medsphere, RevNu and one other small acquisition occurred on January 1, 2025. The pro forma information has been included for comparative purposes and is not indicative of the results of operations the Company would have had if the acquisitions occurred on the above date, nor is it necessarily indicative of future results. The unaudited pro forma information reflects material, non-recurring pro forma adjustments directly attributable to the business combinations. The difference between the actual net revenue and the pro forma net revenue is approximately $9.2 million and $19.2 million for the three and six months ended June 30, 2025, and is reflected as a pro forma adjustment below. This difference primarily represents revenue recorded by Empower, MAP App, Medsphere, RevNu and one other acquisition. The difference between the actual net revenue and the pro forma net revenue is approximately $491,000 and $1.5 million for the three and six months ended June 30, 2026. Other differences arise primarily from amortizing purchased intangibles using the double declining balance method, depreciating acquired fixed assets, adjusting the interest expense and reversing debt exit fees and the goodwill amortization and impairment.

SCHEDULE OF PRO FORMA FINANCIAL INFORMATION