In June 2026, the Company adopted the CareCloud, Inc. 2026 Equity Incentive Plan (the “2026 Plan”), reserving a total of 1,000,000 shares of common stock for grants to employees, officers, directors and consultants. Following the shareholder approval of the 2026 Plan, no additional awards may be granted under the Amended and Restated 2014 Equity Incentive Plan, and the 374,683 shares of common stock and 16,000 shares of Series B Preferred Stock that remained available for future grants under that plan were canceled and are no longer available for issuance. Outstanding awards previously granted under the Amended and Restated 2014 Equity Incentive Plan will remain outstanding. 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 common share per RSU, immediately after a change in control, as defined in the award agreement.

Common and preferred stock RSUs

For the three and six months ended June 30, 2026, stock compensation expense of approximately $64,000 and $128,000, respectively, and for the three and six months ended June 30, 2025 of approximately $111,000 and $219,000, respectively, was recorded. Stock compensation expense recorded is 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 Company’s Equity Incentive Plan for the six months ended June 30, 2026 and 2025:

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

At June 30, 2026 and December 31, 2025 there was no liability for taxes withheld in connection with the equity awards. No amounts were paid in connection with cash-settled awards during the three and six months ended June 30, 2026 and 2025.

Stock-based compensation expense

The following table summarizes the components of share-based compensation expense for the three and six months ended June 30, 2026 and 2025:

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