CareCloud, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

Segment Reporting

6 Months Ended

Jun. 30, 2019

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 and other services. The Practice Management segment includes the management of three medical practices and starting April 1, 2019, certain practice management services are being provided to a fourth practice. 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, 2018 filed with the SEC on March 20, 2019. There was only one operating segment during the three and six months ended June 30, 2018 as the Practice Management segment was acquired in July 2018. The following table presents revenues, operating expenses and operating income (loss) by reportable segment:

	Six Months Ended June 30, 2019
	Healthcare IT			Practice Management		Unallocated Corporate Expenses			Total
Net revenue	$	25,580,319		$	6,249,391	$	-		$	31,829,710
Operating expenses:
Direct operating costs		16,403,912			4,840,023		-			21,243,935
Selling and marketing		726,147			17,809		-			743,956
General and administrative		5,757,549			955,760		2,592,521			9,305,830
Research and development		473,064			-		-			473,064
Change in contingent consideration		(64,203	)		-		-			(64,203	)
Depreciation and amortization		1,435,071			157,830		-			1,592,901
Total operating expenses		24,731,540			5,971,422		2,592,521			33,295,483
Operating income (loss)	$	848,779		$	277,969	$	(2,592,521	)	$	(1,465,773	)

	Three Months Ended June 30, 2019
	Healthcare IT			Practice Management		Unallocated Corporate Expenses			Total
Net revenue	$	13,460,575		$	3,288,924	$	-		$	16,749,499
Operating expenses:
Direct operating costs		8,929,458			2,466,937		-			11,396,395
Selling and marketing		374,196			8,361		-			382,557
General and administrative		3,295,146			559,390		1,289,218			5,143,754
Research and development		218,408			-		-			218,408
Depreciation and amortization		757,084			79,077		-			836,161
Total operating expenses		13,574,292			3,113,765		1,289,218			17,977,275
Operating (loss) income	$	(113,717	)	$	175,159	$	(1,289,218	)	$	(1,227,776	)