CareCloud proposes amendment to the terms of its Series A preferred stock

July 9, 2024

SOMERSET, NJ, July 9, 2024 (GLOBE NEWSWIRE) – CareCloud, Inc. (the “Company”) (Nasdaq: CCLD CCLDO, CCLDP), a leading provider of medical technology solutions to physician practices and health systems nationwide, today announced that it has begun soliciting proxies from the holders (the “Series A Preferred Stockholders”) of its 11% Series A Cumulatively Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”) to approve an amendment to the certificate of designations, preferences and rights of the Company’s 11% Series A Cumulatively Redeemable Perpetual Preferred Stock (the “Preferred Stock Proposal”). Under the Preferred Stock Proposal, holders of Series A Preferred Stock would receive similar change of control protections as holders of the Company’s 8.75% Series B Cumulatively Redeemable Perpetual Preferred Stock (the “Series B Preferred Stock”). Future dividends on the Series A Preferred Stock would be equal to those on the Series B Preferred Stock, and the Company would have the future right to exchange the Series A Preferred Stock for common stock at the liquidation preference value of $25 per share, plus all accrued and unpaid dividends.

Mahmud Haq, Founder and Chief Executive Officer of CareCloud, stated, “We believe that our proposed amendments to the terms of our Series A Preferred Stock are in the best interests of our company and all classes of shareholders. These amendments would optimally position our shareholders for any future transaction and enable us to continue to create value as CareCloud grows.”

The proxy. On July 8, 2024, the Company filed a definitive proxy statement (the “Proxy Statement”) with respect to a special meeting of Series A Preferred Stockholders (the “Special Meeting”). This Proxy Statement, in turn, is the result of the capital structure analysis conducted by Citizens JMP, which was prompted by the Board’s exercise of its fiduciary duty in response to an unsolicited expression of interest in acquiring the Company (as more fully explained in our press releases dated May 9 and May 13, 2024).

The Proxy requests approval of the Preferred Stock Proposal. If approved by the holders of two-thirds (66 2/3%) of the Series A Preferred Stock, the terms of the Series A Preferred Stock would be amended as follows:

	(I)	Change of control rights. Adding a change of control provision, as currently provided to holders of Series B Preferred Stock, that would require an acquirer of a controlling interest in the Company’s common stock to redeem (if required) the Series A Preferred Stock in exchange for shares of the Company’s common stock based on a liquidation preference price of $25 per share plus all accrued and unpaid dividends (as opposed to current terms that would allow an acquirer of the Company to leave the Series A Preferred Stock outstanding after a transaction as security of a publicly traded company after all accrued and unpaid dividends have been paid);

	(iii)	Equivalent dividend rate. Change in dividend to 8.75% per annum (equivalent to the dividend on Series B preferred shares); and

	(iii)	Interchangeability. Implementation of an exchange feature that would allow the Company, at its sole discretion, to automatically exchange its outstanding shares of Series A Preferred Stock at any time for a number of shares of Common Stock equal to the quotient of (1) the sum of (a) the liquidation preference amount of $25.00 per share and (b) the amount of all accrued and unpaid dividends on the applicable share of Series A Preferred Stock being exchanged and (2) the volume weighted average price of the Company’s Common Stock.

Ownership interests of directors and named officers. The directors and named officers of the Company owned the following percentages of the classes of shares listed below as of June 30, 2023 and 2024, respectively, and during this period ownership increased by the following percentages compared to the prior year:

Class	30.06.2023		30.06.2024		Percentage increase year-on-year
Ordinary shares	34.7	%	38.3	%	10	%
Series A Preferred Shares	0	%	0	%	0	%
Series B Preferred Shares	1.8	%	2.7	%	50	%

Date and Time. The date for the special meeting is August 23, 2024, which is the minimum notice period required by the Securities and Exchange Commission and allows approximately 40 days for the solicitation of proxies.

Around CareCloud

CareCloud brings disciplined innovation to healthcare. Our suite of technology-enabled solutions helps customers increase financial and operational performance, optimize clinical workflows, and improve the patient experience. More than 40,000 providers rely on CareCloud to improve patient care while reducing administrative burden and operational costs. Learn more about our products and services, including revenue cycle management (RCM), practice management (PM), electronic health records (EHR), business intelligence, patient experience management (PXM), and digital health at www.carecloud.com.

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Important additional information and where to find it. CareCloud filed a definitive proxy statement on Form 14A with the SEC on July 8, 2024, with respect to the future solicitation of proxies for the special meeting of Series A Preferred Stockholders (including any adjournment, postponement, continuation and rescheduling thereof, the “Special Meeting”). The information contained in this press release is merely a summary of certain relevant portions of the definitive proxy statement, and it is important that Series A Preferred Stockholders review the entire filing. SERIES A PREFERRED SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER AMENDMENTS OR SUPPLEMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE CARECLOUD FILING.. Investors and security holders may obtain copies of these documents and other documents filed by CareCloud with the SEC for free at the website maintained by the SEC at. www.sec.gov. The notice of the special meeting of Series A preferred stockholders and our definitive proxy statement for the special meeting, the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 are available at www.sec.gov.

Future-oriented Statements
This press release contains certain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements relate to expected future events, future operating results or future financial performance. In some cases, you can identify forward-looking statements by the use of terminology such as “may,” “could,” “will,” “should,” “might,” “intends,” “expects,” “plans,” “goals,” “projects,” “anticipates,” “believes,” “seeks,” “estimates,” “predicts,” “possible,” “potential,” “objective” or “continue” or the negative of these terms or other comparable terminology.

Our business involves risks and uncertainties, many of which are beyond our control, any one or a combination of which could materially affect our results of operations and whether the forward-looking statements ultimately prove to be accurate. Forward-looking statements in this press release include, among others, statements that reflect management’s expectations regarding future financial performance and operating expenses, expected growth, profitability and business prospects, the impact of pandemics on our financial performance and operations, and the expected results from the integration of our acquisitions.

These forward-looking statements are neither historical facts nor assurances of future performance. Rather, they are only predictions that are uncertain and involve significant known and unknown risks, uncertainties and other factors that may cause our (or our industry’s) actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. New risks and uncertainties emerge from time to time and it is not possible for us to predict all of the risks and uncertainties that may affect the forward-looking statements. These include, among others, risks and uncertainties related to the Company’s ability to manage growth, migrate newly acquired customers and retain new and existing customers, maintain global operations in a cost-effective manner, increase operating efficiencies and reduce operating costs, anticipate and appropriately adapt to changes in reimbursement and other industry regulations and trends, retain the services of key employees, develop new technology, upgrade and adapt old and acquired technology to be compatible with evolving industry standards, compete with products and services of other companies that compete with ours, and other important risks and uncertainties listed and discussed under the heading “Risk Factors” in the Company’s filings with the U.S. Securities and Exchange Commission.

The statements contained in this press release are made as of the date of this press release, even if subsequently posted by the Company on its website or otherwise. The Company undertakes no obligation to update the forward-looking statements provided to reflect events or circumstances that occur after the date on which they are made.

Source: CareCloud

Pursue Contact:
Norman Roth
Interim Chief Financial Officer and Corporate Controller
CareCloud, Inc.
[email protected]

investor Contact:
Bill Korn
CareCloud, Inc.
[email protected]