87% of Early Proxies Favor CareCloud’s Series A Proxy Proposal

Rhea-AI Summary

CareCloud (Nasdaq: CCLD) announced the continuation of proxy solicitation from Series A Preferred Shareholders to approve an amendment to the Certificate of Designations, Preferences and Rights of its Series A Preferred Stock. As of August 2, 2024, 38% of Series A Preferred Stock shares have returned proxies, with 87% in favor of the Preferred Stock Proposal.

If approved, Series A Preferred Stock holders would receive similar change of control protections as Series B Preferred Stock holders. The proposal also includes aligning the Series A dividend with Series B and granting the Company the right to exchange Series A shares for common stock at $25/share plus accrued dividends.

To pass, the proposal needs approval from 66.67% of outstanding Series A Preferred Stock. Voting is open until August 21, 2024. The Company cautions that future results may differ from current trends.

Positive

• 87% of early proxies favor the Preferred Stock Proposal
• Potential alignment of Series A and Series B Preferred Stock terms
• Company may gain right to exchange Series A shares for common stock at $25/share plus dividends

Negative

• Proposal still requires approval from 66.67% of all outstanding Series A Preferred Stock
• Non-voted shares are counted as 'no' votes, making approval more challenging
• Potential dilution of common stock if Series A shares are exchanged

Insights

Financial Analyst

The 87% early approval rate for CareCloud's Series A Proxy Proposal is a positive indicator for the company's strategic move. This change could align the Series A and B Preferred Stock terms, potentially simplifying the company's capital structure. The proposed changes, including change of control protections and dividend adjustments, could make the Series A stock more attractive to investors. However, the 66.67% approval threshold is still a hurdle, with only 38% of shares voting so far. The option to exchange for common stock at $25/share plus dividends could provide flexibility for both the company and investors. Overall, this move suggests CareCloud is proactively managing its capital structure, which could be viewed favorably by the market.

Corporate Governance Expert

This proxy solicitation represents a significant corporate governance event for CareCloud. The proposed changes would harmonize the rights of Series A and B Preferred Shareholders, potentially reducing complexity in the company's share structure. The high early approval rate suggests strong shareholder support, but the low overall participation (38%) is concerning. The company's proactive communication and multiple voting options demonstrate good shareholder engagement practices. However, the automatic "no" for non-votes could be seen as unfavorable to some governance advocates. Investors should carefully review the full SEC filings to understand the long-term implications of these changes on their rights and the company's capital structure.

SOMERSET, N.J., Aug. 06, 2024 (GLOBE NEWSWIRE) -- CareCloud, Inc. (the “Company”) (Nasdaq: CCLD, CCLDO, CCLDP), a leader in healthcare technology solutions for medical practices and health systems nationwide, today announced the continuation of proxy solicitation from the holders (the “Series A Preferred Shareholders”) of its 11% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”) to approve an amendment to the Company’s Certificate of Designations, Preferences and Rights of its Series A Preferred Stock (the “Preferred Stock Proposal”). With approximately 38% of the shares of Series A Preferred Stock having already returned their proxies as of August 2, 2024, nearly 87% of these shares are in favor of the changes recommended in the Preferred Stock Proposal.

If the Preferred Stock Proposal is ultimately approved, holders of Series A Preferred Stock would receive similar change of control protections to those afforded to holders of the Company’s Series B 8.75% Cumulative Redeemable Perpetual Preferred Stock (the “Series B Preferred Stock”). Also, the dividend of Series A Preferred Stock would mirror that of the Series B Preferred Stock, and the Company would, going forward, have the right to exchange the shares of Series A Preferred Stock for common stock at the liquidation preference value of the $25/share, plus accrued and unpaid dividends.

To become effective, the Preferred Stock Proposal must be approved by at least 66.67% of the shares of all outstanding Series A Preferred Stock – or about 3 million of the outstanding 4.5 million shares. Investors wishing to submit their voting instructions can do so now through August 21, 2024 by calling 844-874-6164, by visiting www.aalvote.com/ccld, or by mailing back their completed proxy card received from CareCloud. Anyone who would rather attend the Special Meeting in person can do so by following the instructions contained in the Definitive Proxy materials.

Proxy solicitation is ongoing and the Company cannot predict future proxy or voting results, which could be more or less favorable than the trends seen to date. Any shares that are not voted will be deemed “no” votes, making it more difficult for the Company to achieve the minimum two-thirds vote in favor of the Preferred Stock Proposal.

The information contained in this press release is a summary of certain relevant portions of the Definitive Proxy Statement and other materials filed with the SEC. It is important that Series A Preferred Shareholders review the entirety of the filings, which are available on the SEC’s website and on https://ir.carecloud.com/series-a-special-proxy.

About CareCloud

CareCloud brings disciplined innovation to the business of healthcare. Our suite of technology-enabled solutions helps clients increase financial and operational performance, streamline clinical workflows and improve the patient experience. More than 40,000 providers count on CareCloud to help them improve patient care while reducing administrative burdens and operating 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.

Follow CareCloud on LinkedIn, Twitter and Facebook.

Important Additional Information and Where To Find It. CareCloud filed with the SEC a definitive proxy statement on Schedule 14A on July 8, 2024, with respect to its future solicitation of proxies for the Special Meeting of Series A Preferred Stock shareholders (including any and all adjournments, postponements, continuations, and reschedulings thereof, the "Special Meeting"). The information contained in this press release is merely a summary of certain relevant portions of the Proxy Statement and it is important that Series A Preferred Stock shareholders review the entirety of the filing. SERIES A PREFERRED STOCK 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 CARECLOUD'S FILING. Investors and security holders may obtain copies of these documents and other documents filed with the SEC by CareCloud free of charge through the website maintained by the SEC at www.sec.gov. The Notice of the Special Meeting of Series A Preferred Stockholders and our 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 quarterly period ended March 31, 2024 are available at www.sec.gov.

Forward-Looking Statements

This press release contains various 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 anticipated future events, future results of operations or future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “shall,” “should,” “could”, “intends,” “expects,” “plans,” “goals,” “projects,” “anticipates,” “believes,” “seeks,” “estimates,” “predicts,” “possible,” “potential,” “target,” or “continue” or the negative of these terms or other comparable terminology.

Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Forward-looking statements in this press release include, without limitation, statements reflecting management's expectations for future financial performance and operating expenditures, expected growth, profitability and business outlook, the impact of pandemics on our financial performance and business activities, and the expected results from the integration of our acquisitions.

These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are only predictions, are uncertain and involve substantial known and unknown risks, uncertainties and other factors which 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. We do not have an ongoing obligation to update shareholders regarding future proxy or vote trends, even if they are materially different from those experienced to date. 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 could have an impact on the forward- looking statements, including without limitation, risks and uncertainties relating to the Company’s ability to manage growth, migrate newly acquired customers and retain new and existing customers, maintain cost-effective global operations, increase operational efficiency and reduce operating costs, predict and properly adjust to changes in reimbursement and other industry regulations and trends, retain the services of key personnel, develop new technologies, upgrade and adapt legacy and acquired technologies to work with evolving industry standards, compete with other companies products and services competitive with ours, and other important risks and uncertainties referenced and discussed under the heading titled “Risk Factors” in the Company’s filings with the Securities and Exchange Commission.

The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligations to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

SOURCE CareCloud

Company Contact:
Norman Roth
Interim Chief Financial Officer and Corporate Controller
CareCloud, Inc.
nroth@carecloud.com

Investor Contact:

Bill Korn
CareCloud, Inc.
ir@carecloud.com

FAQ

What percentage of early proxies favor CareCloud's Series A Proxy Proposal?

87% of early proxies favor CareCloud's (CCLD) Series A Proxy Proposal as of August 2, 2024.

What is the deadline for voting on CareCloud's Preferred Stock Proposal?

The deadline for voting on CareCloud's (CCLD) Preferred Stock Proposal is August 21, 2024.

What percentage of Series A Preferred Stock is needed to approve CareCloud's proposal?

CareCloud (CCLD) needs approval from at least 66.67% of the outstanding Series A Preferred Stock to pass the proposal.

How would the dividend of CareCloud's Series A Preferred Stock change if the proposal is approved?

If approved, the dividend of CareCloud's (CCLD) Series A Preferred Stock would mirror that of the Series B Preferred Stock.