SEC Comment Letter for CareCloud, Inc. (CCLD, CCLDO) (CIK 0001582982) (CCLD) — May 27, 2014
CareCloud, Inc. (CCLD, CCLDO) (CIK 0001582982)
Date: May 27, 2014 · CIK: 0001582982 · Accession: 0000000000-14-026703
AI Filing Summary & Sentiment
File numbers found in text: 333-192989
Referenced dates: May 2, 2014
Letter
May 23, 2014 Via E -Mail Mahmud Haq Chief Executive Officer Medical Transcription Billing, Corp. 7 Clyde Road Somerset, New Jersey 08873
Re: Medical Transcription Billing, Corp. Amendment No. 2 to Registration Statement on Form S -1 Filed on May 8, 2014 File No. 333-192989
Dear Mr. Haq:
We have reviewed your amended registration statement and response letter dated May 7 , 2014 , and have the following comments. Unless otherwise noted, where prior comments are referenced, they refer to our letter dated May 2, 2014 .
Risk Factors
“In prior acquisitions, we have encountered difficulties in retaining …,” page 13
1. Please expand this risk factor to include the informa tion you provided in response to prior comment 10.
Prospectus Summary, page 2
2. Please disclose the percentage of your common stock that, upon completion of the offering, will be held by directors, executive officers and principal stockholders. Also, briefly identify any corresponding risks to investors.
“The healthcare industry is heavily regulated …,” page 25
3. In the context of discussing regulatory risks, you explain that the fee structure you utilize predominates i n the medical billing industry. Th is mitigating disclosure is inappropriate in the context of the risk factor discussion. Please revise.
Mahmud Haq Medical Transcription Billing, Corp. May 23, 2014 Page 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources, page 74
4. You state that you have obtained a support letter from Mahmud Haq, our Chief Executive Officer, purs uant to which he has notified you of his intent and ability to provide you with up to $400,000 in the form of equity or a loan. Yet the agreement with your CEO filed as ex hibit 10.10, does not provide a specific dollar amount. Please advise.
Notes to Consolidated Financial Statements as of and for the Years Ended December 31, 2013 and 2012
13. Income Taxes, page F -24
5. We note your disclosure that for state tax purposes, th e Company’s Pakistan earnings generally are not taxed. As a result, the Company has reported cumulative losses at the state level for the last three years. However, we note that you have reco rded state tax expense of $41,714 for the year ended December 31, 2013. Please clarify the nature of this tax expense, and revise your disclosure accordingly. Further, we note your disclosure that it is more likely than not that you will not be able to utilize your state deferred tax assets, and a valuation allowance ha s been recorded against all state deferred tax assets as of December 31, 2013. We note that the valuation allowance against your state operating loss carry forwards is $82,000. However, we note that your deferred tax asset relating to your state operating loss carry forwards is only $17,000. Please reconcile these amounts and revise your disclosures accordingly.
Consolidated Financial Statements as of and for the Three Months Ended March 31, 2014 and
Notes to Consolidated Financial Statements as of and for the Three Months Ended March 31,
10. Income Taxes
6. We note your disclosure that because a relatively small change in your projected pre -tax income (loss) could result in a volatile annual effective rate, you used a discrete tax approach in c alculating the tax benefit for the three months ended March 31, 2014. Please clarify the authoritative literature you are relying on in following this approach. In this regard, your rationale does not appear to meet the conditions of ASC 740 -270-30-36(b) allowing for exclusion of a jurisdiction from the overall computation of the estimated annual effective tax rate. If you are asserting that you are unable to estimate an annual effective tax rate in a foreign jurisdiction in dollars, or you are otherwise un able to make a reliable estimate of your ordinary income or loss, or the related tax or benefit, please clarify why you are unable to make these estimates and revise your disclosures accordingly. Please also clarify the factors that have changed from your previous interim
Mahmud Haq Medical Transcription Billing, Corp. May 23, 2014 Page 3
reporting periods. Further, tell us how you considered the provisions of ASC 740 -270-30- 17 which require that an estimated annual effective tax rate be applied to the portion of ordinary income and the related tax that can be reliably est imated. [
Exhibits
7. Please include an updated consent from your independent registered public accounting firm.
You may contact Laura Veator, Staff Accountant, at (202) 551 -3716, or Stephen Krikorian, Accounting Branch Chief at (202) 551 -3488, if you have questions regarding comments on the financial s tatements and related matters. Please contact Ivan Griswold, Attorney -Advisor, at (202) 551-3853 or, in his absence, me at (202) 551 -3488 with any other questions.
Sincerely,
/s/ Stephen Krikorian for
Show Raw Text
May 23, 2014
Via E -Mail
Mahmud Haq
Chief Executive Officer
Medical Transcription Billing, Corp.
7 Clyde Road
Somerset, New Jersey 08873
Re: Medical Transcription Billing, Corp.
Amendment No. 2 to Registration Statement on Form S -1
Filed on May 8, 2014
File No. 333-192989
Dear Mr. Haq:
We have reviewed your amended registration statement and response letter dated May 7 ,
2014 , and have the following comments. Unless otherwise noted, where prior comments are
referenced, they refer to our letter dated May 2, 2014 .
Risk Factors
“In prior acquisitions, we have encountered difficulties in retaining …,” page 13
1. Please expand this risk factor to include the informa tion you provided in response to prior
comment 10.
Prospectus Summary, page 2
2. Please disclose the percentage of your common stock that, upon completion of the
offering, will be held by directors, executive officers and principal stockholders. Also,
briefly identify any corresponding risks to investors.
“The healthcare industry is heavily regulated …,” page 25
3. In the context of discussing regulatory risks, you explain that the fee structure you utilize
predominates i n the medical billing industry. Th is mitigating disclosure is inappropriate
in the context of the risk factor discussion. Please revise.
Mahmud Haq
Medical Transcription Billing, Corp.
May 23, 2014
Page 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources, page 74
4. You state that you have obtained a support letter from Mahmud Haq, our Chief Executive
Officer, purs uant to which he has notified you of his intent and ability to provide you
with up to $400,000 in the form of equity or a loan. Yet the agreement with your CEO
filed as ex hibit 10.10, does not provide a specific dollar amount. Please advise.
Notes to Consolidated Financial Statements as of and for the Years Ended December 31, 2013
and 2012
13. Income Taxes, page F -24
5. We note your disclosure that for state tax purposes, th e Company’s Pakistan earnings
generally are not taxed. As a result, the Company has reported cumulative losses at the
state level for the last three years. However, we note that you have reco rded state tax
expense of $41,714 for the year ended December 31, 2013. Please clarify the nature of
this tax expense, and revise your disclosure accordingly. Further, we note your disclosure
that it is more likely than not that you will not be able to utilize your state deferred tax
assets, and a valuation allowance ha s been recorded against all state deferred tax assets as
of December 31, 2013. We note that the valuation allowance against your state operating
loss carry forwards is $82,000. However, we note that your deferred tax asset relating to
your state operating loss carry forwards is only $17,000. Please reconcile these amounts
and revise your disclosures accordingly.
Consolidated Financial Statements as of and for the Three Months Ended March 31, 2014 and
2013
Notes to Consolidated Financial Statements as of and for the Three Months Ended March 31,
2014
10. Income Taxes
6. We note your disclosure that because a relatively small change in your projected pre -tax
income (loss) could result in a volatile annual effective rate, you used a discrete tax
approach in c alculating the tax benefit for the three months ended March 31, 2014. Please
clarify the authoritative literature you are relying on in following this approach. In this
regard, your rationale does not appear to meet the conditions of ASC 740 -270-30-36(b)
allowing for exclusion of a jurisdiction from the overall computation of the estimated
annual effective tax rate. If you are asserting that you are unable to estimate an annual
effective tax rate in a foreign jurisdiction in dollars, or you are otherwise un able to make
a reliable estimate of your ordinary income or loss, or the related tax or benefit, please
clarify why you are unable to make these estimates and revise your disclosures
accordingly. Please also clarify the factors that have changed from your previous interim
Mahmud Haq
Medical Transcription Billing, Corp.
May 23, 2014
Page 3
reporting periods. Further, tell us how you considered the provisions of ASC 740 -270-30-
17 which require that an estimated annual effective tax rate be applied to the portion of
ordinary income and the related tax that can be reliably est imated. [
Exhibits
7. Please include an updated consent from your independent registered public accounting
firm.
You may contact Laura Veator, Staff Accountant, at (202) 551 -3716, or Stephen Krikorian,
Accounting Branch Chief at (202) 551 -3488, if you have questions regarding comments on the
financial s tatements and related matters. Please contact Ivan Griswold, Attorney -Advisor, at (202)
551-3853 or, in his absence, me at (202) 551 -3488 with any other questions.
Sincerely,
/s/ Stephen Krikorian for
Mark P. Shuman
Branch Chief - Legal
cc: Via E -Mail
Zev M. Bomrind
Fox Rothschild LLP