CareCloud (NASDAQ: CCLDP) buys Medsphere healthcare IT assets for $16,500,000

Rhea-AI Filing Summary

CareCloud, Inc. entered into and closed an Asset Purchase Agreement on August 22, 2025, under which its new subsidiary CareCloud Holdings, Inc. acquired certain healthcare IT software and services assets from Medsphere Systems Corporation for an aggregate purchase price of $16,500,000 plus assumed liabilities. The price includes $8,250,000 in cash and $8,250,000 owed under a Deferred Payment Agreement with Wells Fargo Bank, N.A. that bears 12% annual interest and matures on February 20, 2026.

The Company and its subsidiaries guarantee the deferred payment and have granted Wells Fargo security interests in their assets under various security agreements. CareCloud purchased insurance to cover losses from breaches of Medsphere’s representations and warranties, but it generally cannot seek recovery from Medsphere for such breaches except in cases of fraud or intentional misrepresentation, and indemnification for covenant breaches is limited. A transition services agreement provides IT, customer support, billing, and operational support to help integrate the acquired assets, and required financial and pro forma statements will be filed later by amendment.

Insights

Healthcare IT M&A analyst

CareCloud adds Medsphere assets with $16.5M deal and secured debt.

CareCloud is expanding its healthcare IT footprint by acquiring certain Medsphere Systems Corporation assets for $16,500,000 plus assumed liabilities. The structure splits funding between $8,250,000 in cash and $8,250,000 under a Deferred Payment Agreement with Wells Fargo Bank, N.A., bearing 12% interest and maturing on February 20, 2026.

The deferred payment is guaranteed by the Company and its subsidiaries and secured by their assets through multiple security agreements, increasing balance-sheet leverage and encumbering collateral. At the same time, CareCloud uses representation and warranty insurance so that, outside of fraud or intentional misrepresentation, it largely looks to the insurer rather than Medsphere for covered breaches, which can streamline recovery but reduces direct seller recourse.

A transition services agreement provides IT transition, customer support continuity, invoicing, billing, and operational assistance, which should help maintain service levels as assets are integrated. Investors will gain clearer visibility once the required historical financial statements and pro forma information are filed by amendment within the allowed 71-day window.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 22, 2025

CARECLOUD, INC.

(Exact name of registrant as specified in its charter)

Delaware		001-36529		22-3832302
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

7 Clyde Road, Somerset, New Jersey, 08873

(Address of principal executive offices, zip code)

(732) 873-5133

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		CCLD		Nasdaq Global Market
8.75% Series B Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share		CCLDO		Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

On August 22, 2025, CareCloud Holdings, Inc (“Holdings”), a newly created, indirect subsidiary of CareCloud, Inc. (the “Company”), entered into and closed on an Asset Purchase Agreement (the “Purchase Agreement”) with Medsphere Systems Corporation, a Delaware corporation (the “Seller”). Pursuant to the Purchase Agreement, Holdings acquired certain assets of Seller, which is in the business of providing healthcare IT software and related services 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 Company believes that the expected annual long-term revenue approximates the purchase price, consistent with prior acquisitions. 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 are also party to the Deferred Payment Agreement as guarantors. The obligations of the Company and its subsidiaries under the Deferred Payment Agreement are secured by their assets pursuant to security documents executed by the Company and its subsidiaries in favor of Wells Fargo (such security documents, collectively with the Deferred Payment Agreement, the “Bank Documents”).

The Purchase Agreement contains customary representations, warranties and covenants. The Company has purchased insurance to provide coverage for losses resulting from Seller’s breach of its representations and warranties; however, Holdings will not have recourse against Seller for breach of representations and warranties other than for fraud or intentional misrepresentation. Holdings and Seller have limited indemnification rights for breach of covenants.

Seller and Holdings entered into a transition services agreement (“TSA”) whereby Seller will provide various services to assist with the transition and integration of the acquired assets, including IT transition, customer support continuity, invoicing and billing and operational process transition.

The foregoing summary of the Purchase Agreement, TSA and Bank Documents is not a complete description of such documents and the transactions contemplated thereby and is qualified entirely by reference to the complete text of such documents, copies of which are attached as exhibits to this Current Report on Form 8-K and are incorporated herein by reference.

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Item 2.01 Completion of Acquisition or Disposition of Assets.

On August 22, 2025, as a result of the Purchase Agreement and the transactions contemplated thereunder, Holdings purchased certain assets and assumed certain liabilities of Seller.

The information provided above in “Item 1.01 – Entry into a Material Definitive Agreement” of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided above in “Item 1.01 – Entry into a Material Definitive Agreement” of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 8.01 Other Events.

On August 25, 2025, the Company issued a press release announcing the entry into the Purchase Agreement. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses or funds acquired.

The financial statements required by Item 9.01(a) will be filed by amendment to this Current Report on Form 8-K not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

(b) Pro forma financial information.

The pro forma financial information required by Item 9.01(b) will be filed by amendment to this Current Report on Form 8-K not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

(d) Exhibits.

	2.1		Asset Purchase Agreement between Seller and Holdings dated as of August 22, 2025.
	2.2		Transition Services Agreement between Seller and Holdings dated as of August 22, 2025.
	2.3		Security Agreement by the Company and its subsidiaries in favor of Wells Fargo dated as of August 22, 2025.
	2.4		Patent Security Agreement by Holdings and CareCloud Health, Inc. in favor of Wells Fargo dated as of August 22, 2025.
	2.5		Copyright Security Agreement by Holdings in favor of Wells Fargo dated as of August 22, 2025.
	2.6		Trademark Security Agreement by the Company and Holdings in favor of Wells Fargo dated as of August 22, 2025.
	2.7		Deferred Payment Agreement by and among Wells Fargo, Holdings, the Company and its other subsidiaries dated as of August 22, 2025.
	2.8		Guaranty by and among Wells Fargo as Lender and Holdings as Issuer dated as of August 22, 2025.
	2.9		Bill of Sale by and between Medsphere and Holdings dated as of August 22, 2025.
	2.10		Power of Attorney by and between Medsphere and Holdings dated as of August 22, 2025.
	2.11		Intellectual Property Assignment Agreement by and between Medsphere and Holdings dated as of August 22, 2025.
	2.12		Assignment and Assumption Agreement between Medsphere and Holdings dated as of August 22, 2025.
	99.1		Press Release dated August 25, 2025.
	104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		CareCloud, Inc.
Date:	August 25, 2025	By:	/s/ Norman Roth
			Norman Roth
			Interim Chief Financial Officer and Corporate Controller

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FAQ

What transaction did CareCloud (CCLDP) announce involving Medsphere?

CareCloud, through its subsidiary CareCloud Holdings, Inc., entered into and closed an Asset Purchase Agreement to acquire certain healthcare IT software and services assets from Medsphere Systems Corporation on August 22, 2025.

What is the total purchase price for the Medsphere assets acquired by CareCloud (CCLDP)?

The aggregate purchase price is $16,500,000, plus the assumption of certain liabilities related to the acquired Medsphere assets.

How is CareCloud (CCLDP) funding the $16,500,000 Medsphere asset acquisition?

The purchase price consists of $8,250,000 in cash and $8,250,000 payable under a Deferred Payment Agreement with Wells Fargo Bank, N.A., which bears 12% annual interest and matures on February 20, 2026.

What security and guarantees are associated with CareCloud’s deferred payment to Wells Fargo?

The Company and its subsidiaries are guarantors under the Deferred Payment Agreement, and their assets secure the obligation through multiple security documents, including security, patent, copyright, and trademark security agreements in favor of Wells Fargo.

How is CareCloud (CCLDP) managing representation and warranty risk in the Medsphere acquisition?

CareCloud purchased insurance to cover losses from Medsphere’s breaches of representations and warranties. Holdings generally has no recourse against Medsphere for such breaches except in cases of fraud or intentional misrepresentation, and indemnification for covenant breaches is limited.

What transition support is Medsphere providing to CareCloud after the acquisition?

Medsphere and CareCloud Holdings entered into a Transition Services Agreement under which Medsphere will provide IT transition, customer support continuity, invoicing and billing, and operational process transition services.

Will CareCloud (CCLDP) provide financial statements for the Medsphere acquisition?

Yes. CareCloud plans to file the required historical financial statements and pro forma financial information for the acquisition by amendment, no later than 71 days after the date the current report is required to be filed.