8-K
Healthcare Triangle, Inc. (HCTI)
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) January 25, 2023
HEALTHCARE
TRIANGLE, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40903 | 84-3559776 |
|---|---|---|
| (State<br> or other jurisdiction of incorporation) | (Commission<br> File Number) | (IRS<br> Employer Identification No.) |
7901Stoneridge Dr., Suite 220 Pleasanton, CA 94588
(Address of principal executive offices)
(925)-270-4812
**(**Registrant’s telephone number, including area code)
N/A
(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<br><br> on which registered |
|---|---|---|
| Common<br> Stock, par value $0.00001 per share | HCTI | The<br> Nasdaq Stock Market LLC |
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. ☐
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Item4.01 Changes in Registrant’s Certifying Accountant.
On January 25 , 2023, the Board of Directors (“Board”) of Healthcare Triangle, Inc. (the “Company” or “HTI”) engaged BF Borgers CPA PC (“Borgers”) as the Company’s independent certified public accountant to audit the Company’s financial statements for the year ended December 31, 2022.
During the Company’s two most recent fiscal years and the subsequent interim period through January 25, 2023, neither the Company nor anyone on its behalf consulted with Borgers regarding: (i) the application of accounting principles to a specified transaction, either completed or proposed; the type of audit opinion that might be rendered on the Company's consolidated financial statements, and neither a written report nor oral advice was provided that Borgers concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event (as defined in Item 304(a)(1)(iv) or (v) of Regulation SK) of which there were neither.
Item5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements ofCertain Officers.
(b) On January 25, 2023, the Board of Directors appointed Ronald McClurg, Paige Heaphy and Jainal Bhuiyan as directors to the Company’s Board of Directors. The Board believes that each of Mr. McClurg, Ms. Heaphy and Mr. Bhuiyan are “independent directors” as such term is defined by Nasdaq Rule 5605(a)(2). There was no arrangement or understanding between the new directors and any other person pursuant to which such directors were selected as directors. Each director signed an Appointment Letter Agreement with the Company, the form of which is attached hereto as Exhibit 99.1, pursuant to which each director will be: (i) paid an annual cash stipend of $40,000 (except for Mr. Rosa, who receives an additional $20,000 as Chairman of the Board and $10,000 as chairman of the Compensation Committee, and (ii) for Mr. McClurg and Ms. Heaphy, who are paid $10,000 each for acting as the Chairman of the Audit Committee, and of the Nominating and Corporate Governance Committee, respectively); and (iii) granted options to annually acquire 50,000 shares of the Company’s common stock at an exercise price of $0.26 per share through the earlier of January 25, 2028 or 18 months after cessation of his/her service pursuant to the Company’s 2020 Stock Incentive Plan (except for Mr. Rosa who received options to receive 200,000 shares and will receive options to acquire 100,000 shares annually). Except as otherwise provided above, no such director appointee has engaged in any other transaction with the Company in an amount that exceeded $120,000 during the Company’s fiscal year ended December 31, 2022 or as of the date of this Current Report on Form 8-K and no such transaction is currently contemplated.
The following table illustrates the composition of the Board of Directors of HTI as of the date of this Current Report on Form 8-K:
| Name | IndependentDirector<br><br> <br>(Y/N) | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee |
|---|---|---|---|---|
| Dave Rosa^(1)^ | Y | X | X^(2)^ | |
| Ronald McClurg | Y | X^(2)^ | X | X |
| Paige Heaphy | Y | X | X^(2)^ | |
| Jainal Bhuiyan | Y | X | X | |
| Lakshmanan Kannappan | N | |||
| Shibu Kizhakevilayil | N | |||
| ^(1)^ | Mr. Rosa has been<br>appointed Chairman of the Board of Directors. | |||
| --- | --- | |||
| ^(2)^ | Chairman of the<br>noted Committee. | |||
| --- | --- |
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On January 25, 2023, Mr Suresh Venkatachari (“Mr. Venkatachari”) resigned as director and Chairman of the Company. Mr. Dave Rosa has been appointed as the Chairman of the Board replacing Mr. Venkatachari.
(c) On January 5, 2023 Mr. Roy Sookhoo and the Company entered into an offer letter effective January 25, 2023 pursuant to which he was engaged as the Company’s Chief Operating Officer at an annual base salary of $400,000, plus 75,757 shares of the Company’s common stock at no cost, which shares will be fully vested in the event HTI terminates his employment within the first 12 months without cause. However, if he resigns before 12 months, he will be entitled only to the shares that are vested prior to the period. He is eligible to participate in the Company’s other employee benefits including but not limited to, the “unlimited paid time off” policy with a 60 day waiting period, as well as seven paid Company holidays. The Company will also reimburse him for business expenditures paid on behalf of HTI’s business and will issue him a laptop computer for Company use only. A copy of the Offer Letter is attached hereto as Exhibit 99.2.
Mr. Sookhoo first started in the healthcare information technology industry thirty years ago. Through many roles and companies across the nation, he has become a transformational leader, helping organizations achieve their strategic objectives by enabling people, process, and technology. Prior to his joining HTI, Mr. Sookhoo was the Chief Information Officer for the University of New Mexico Sciences Center from July 2020 to August 2022 where he led all aspects of infrastructure and application technology including data centers, cybersecurity, desktop computing, data and voice networks, cloud strategy, IT performance metrics, service desk, disaster recovery, and business continuity. From January 2019 to April 2020, Mr. Sookhoo served as the Senior Vice President and Chief Information Officer and Information Security Officer for Coordinated Health, a part of Lehigh Valley Health Network, Allentown, Pennsylvania, and from September 2016 to January 2019, he was the Vice President and Chief Information Officer at the SUNY Downstate Medical Center in Brooklyn, New York. Prior thereto, he advanced in other positions of responsibility in healthcare information technology. Mr. Sookhoo earned an Executive Master of Business Administration from Columbia University, a Bachelor of Science degree in Mathematics from Brigham Young University and a Master of Science Degree from National University, San Diego, California.
There was no arrangement or understanding between him and any other person pursuant to which he was selected as an officer of the Company. There is no family relationship between Mr. Sookhoo and any directors or other executive officer of HTI. Mr. Sookhoo was a consultant to the Company during the fiscal year ended December 31, 2022 and during January 2023. Mr. Sookhoo received $130,000 in consulting fees from the Company in the fiscal year ended December 31, 2022.
ForwardLooking Statements
This Current Report contains forward-looking statements that involve risks and uncertainties intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995, as amended. All statements other than statements of current or historical fact contained in this Current Report, including statements regarding the Company’s expected timeline for compliance with the Nasdaq’s Corporate Governance Rules, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “should,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. The Company has based these forward-looking statements on the current expectations about future events held by management. While the Company believes these expectations are reasonable, such forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond the Company’s control. The Company’s actual future results may differ materially from those discussed here for various reasons. Given these uncertainties, you should not place undue reliance on these forward-looking statements. The forward-looking statements included in this Current Report are made only as of the date hereof. We do not undertake any obligation to update any such statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments.
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Item9.01 Financial Statements and Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Form of Appointment Letter Agreement. |
| 99.2 | Offer Letter dated January 5, 2023 between the Company and Roy Sookhoo. |
| 99.3 | Amendment to Offer Letter dated January 25, 2023 between Company and Roy Sookhoo. |
| 104 | Cover<br> Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURE
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.
| Healthcare Triangle, Inc. | |
|---|---|
| Date:<br> January 27, 2023 | By:<br> /s/ Thyagarajan Ramachandran |
| Name:<br> Thyagarajan Ramachandran | |
| Title:<br> Chief Financial Officer |
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January 23, 2023
[New Director],
AppointmentLetter Agreement- Healthcare Triangle, Inc. Board of Directors
Dear [New Director]:
We are pleased to tell you that the Board of Directors (the "Board") of Healthcare Triangle, Inc. (the "Company") has elected you to serve as a Member of the Board and Chairman of the Audit committee commencing from January 23, 2023.
l. Your Duties:
You will be expected to attend (either in person or by teleconference) all regular meetings of the Board, of which we expect to hold approximately four to six per annum, as well as to attend (either in person or by teleconference), if feasible, any special meetings of the Board and to sign all written consents if you deem appropriate. In addition, you will be expected to perform such other duties as are reasonably contemplated by your holding office as a director of the Company or which may reasonably be assigned to you by the Board from time to time, including Committee(s) membership.
b) As a director you will at all times act as a fiduciary in the service of the best interests of the Company. ln addition, you agree to (i) provide all information regarding yourself as the Company requires to satisfy its disclosure obligations under applicable securities laws; and (ii) timely file with the Securities and Exchange Commission all reports and schedules required of you in your personal capacity by virtue of your relationship with the Company (e.g., Forms 3, 4 and 5 as contemplated by Section l6(a) of the Securities Exchange Act of 1934).
c) As you will appreciate, your time commitment will ultimately be a function of the matters confronting the Company from time to time and matters properly requiring your attention as a director of the Company.
d) You shall comply with all the fiduciary-duty obligations of a director as imposed by Delaware law. Subject to your fiduciary-duty obligations as a director as imposed by Delaware law, this Letter does not otherwise restrict you from accepting appointment as a director of any other company, providing consulting services, becoming employed by or engaging in any other business or other activity whatsoever.
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- Remuneration:
a) Initial Options: You will an initial grant of stock option of 50,000 shares of the Company's common stock on the date of grant under our 2020 Stock Incentive Plan (Plan). Such stock options shall remain exercisable until the earlier of the 5 years from the date of grant or 18 months after the cessation of service, whichever is sooner.
b) Annual Options: The Company expects to provide you for service on the Board, an annual grant of stock options for 50,000shares of the Company's common stock on the date of grant under our 2020 Stock incentive Plan (Plan). Such stock options shall remain exercisable until the earlier of the 5 years from the date of grant or 18 months after the cessation of service, whichever is sooner.
c) Cash: You will receive an annual cash stipend of $50,000. Cash stipend of $40,000 for being a Board member, and $10,000 for being Chairman of the Audit Committee, payable on the first day of each calendar quarter, for your service on the Board.
d) Expenses: Subject to you providing the Company with receipts or other evidence of payment. the Company will pay for or reimburse you for all travelling, hotel and other expenses reasonably incurred by you in connection with attending and returning from Board or Committee meetings or otherwise in connection with the Company's business. "Reasonable" air travel expenses assume economy class for flights under 4 hours and business class for flights over 4 hours.
- Termination of Director Status:
a) Your status as a Director may be terminated at any time by the vote of the stockholders of the Company (including any failure to elect you for an ensuing term at any annual meeting of stockholders) in accordance with the certificate of incorporation and bylaws of the Company. Any such termination will not affect your rights under options that have become vested, subject to the post-service exercisability period.
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b) You acknowledge and agree that if the stockholders of the Company terminate your status as a Director (including any failure to elect you for an ensuing term at any annual meeting of stockholders), you will have no claim of any kind against the Company by reason of the termination.
c) You are at liberty to resign from the Board at any time by notice in writing to the Company.
- What happens after termination of Director Status?
If your Director status is terminated for any reason or you resign for any reason:
a) The Company may set off any amounts you owe the Company against any amounts the Company owes to you as a Director at the date of termination except for amounts the Company is not entitled by law to set off;
b) You must return all the Company's property (including property leased by the Company) to the Company on termination including all written or machine readable material, software, computers, credit cards, keys and vehicles; and
c) You shall return to the Company all confidential information and documentation (including any copies thereof) regarding the Company and its affiliates (including confidential information of third parties entrusted to the Company) within 5 business days following the Company's request and to delete or destroy any electronic or written information relating to the Company, as shall be requested by the Company.
- Confidential Information:
a) You acknowledge and agree that during your service with the Company, you will receive confidential information regarding the Company and its affiliates (including confidential information of third parties entrusted to the Company) and that you will not disclose any such information to any other party nor use for your own benefit or for the benefit of any third person any of the confidential information so obtained at any time during or after the term of your service with the Company without the Company's prior written consent.
b) You recognize and affirm that in the event of your breach of any provision of this Section 5, money damages would be inadequate and the Company and its subsidiaries would have no adequate remedy at law. Accordingly, you agree that in the event of a breach or threatened breach by you of the provisions of this Section 5, the Company, in addition and supplementary to any other rights and remedies existing in its favor, may apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof (without posting a bond or other security).
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- Protection:
a) During the term of your engagement hereunder, the Company will use reasonable commercial efforts to procure and maintain directors' and officers' liability insurance policies with a minimum of $5,000,000 Aggregate Limit, and to ensure that you are included as an insured thereunder.
b) The Company will enter into a standard and customary Indemnification Agreement with you on terms reasonably acceptable to you which will provide for (i) your indemnification by the Company to the fullest extent permitted by law for all acts and/or omissions directly and/or indirectly related to any services provided by you to the Company and (ii) the advancement of your expenses in the event any action and/or investigation is commenced regarding any acts and/or omissions directly and/or indirectly related to any services provided by you to the Company.
- Miscellaneous
a) Alterations: This Letter cannot be amended except in a writing signed by each party.
b) Entire Agreement: This Letter constitutes the entire agreement between the parties in connection with its subject matter and supersedes all previous agreements or understandings between the parties in connection with its subject matter.
c) Further Action: Each party must do, at its own expense, everything reasonably necessary (including executing documents) to give full effect to the performance of his/its obligations under this Letter and the transactions contemplated by it.
d) Waiver: A party does not waive a right, power or remedy (or any other right, power or remedy) if it fails to exercise or delays in exercising the right, power or remedy. A single or partial exercise of a right, power or remedy does not prevent another or further exercise of that or another right, power or remedy. A waiver of a right, power or remedy must be in writing and signed by the party giving the waiver.
e) Relationship: This Letter does not create a relationship of employment, agency or partnership between the parties. Unless the Board adopts a specific resolution so providing, you do not have authority to bind the Company to any contract or commitment; and you agree not to purport to do so.
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f) Governing Law: This Letter shall be governed by and construed in accordance with the laws of Delaware (without giving effect to choice of law principles or rules thereof that would cause the application of the laws of any jurisdiction other than Delaware).
g) Severability: Any provision of this Letter which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
h) Counterparts: This Letter may be executed in counterparts. All executed counterparts constitute one document.
Please sign and return the attached copy of this Letter to indicate that you have read, have understood and accept the terms of your appointment.
Very truly yours,
Healthcare Triangle, Inc.
By: /s/ Thyagarajan Ramachandran
Name: Thyagarajan Ramachandran
Title: Chief Financial Officer
Agreed to and accepted by:
| [New Director] |
|---|
January 5,2023
Roy Sookhoo
1504 Cereza Drive SE
Rio Rancho, NM
87124
Dear Roy,
Healthcare Triangle Inc. (HCTI) is pleased to offer you the role of Chief Operating Officer reporting to the Board of Directors.
Itemized below are the proposed terms of our offer:
| 1. | As Chief Operating<br>Officer and a full time, permanent employee, your base salary will be $400,000. |
|---|---|
| 2. | You will receive<br>$20,000 worth of stocks at no cost, issued on the your hire date as per the closing market price. These stocks will be fully vested in<br>the event HCTI terminates your employment within the first 12 months without cause. However, if you resign before 12 months, you will<br>be entitled only to the stocks that are vested prior to the period. |
| --- | --- |
| 3. | As a full time,<br>permanent employee, you will be granted the option to purchase shares of common stock of Healthcare Triangle, Inc. Details are attached. |
| --- | --- |
| 4. | As a full time,<br>permanent employee, you will be eligible to participate in our Unlimited PTO policy. Your vacation time eligibility is based on the completion<br>of a 60-day waiting period. You are also entitled to 7 paid company holidays. |
| --- | --- |
| 5. | The start date<br>shall be January 8, 2023. |
| --- | --- |
| 6. | You will be eligible<br>to participate in our 401K plan on the first day of the quarter following your 6 month anniversary. |
| --- | --- |
| 7. | Other benefits<br>will include health insurance, dental insurance, vision insurance, flexible spending account, life insurance and worker’s compensation.<br>Health, dental and vision insurance will start on the first day of the month following your hire date. |
| --- | --- |
| 8. | Pay and expense<br>reimbursement will be distributed twice a month following the completion of each normal pay period on the 15th and last day of the month.<br>You will be eligible to enroll in direct deposit. |
| --- | --- |
| 9. | We will provide<br>you with a company issued laptop for business use only which will remain property of Healthcare Triangle Inc. |
| --- | --- |
| 10. | This offer is contingent<br>on the successful completion of reference checks, a background check and drug screen. |
| --- | --- |
We will look upon you as an emissary of the company and ask that you help us to reinforce a standard of high ethics in working with fellow Healthcare Triangle Associates and with our clients.
Weonce again welcome you to be a part of Healthcare Triangle Inc. We appreciate your confidence in our business philosophy and look forward to working closely with you.
My best regards,
Kristi Lane
Vice President of Talent Management
/s/Kristi Lane
Kristi Lane
1/6/2023
| 12:22 PST
Date
I Roy Sookoo have read and understood the letter of offer and hereby accept your offer of employment.
| Signature: /s/ Roy Sookoo | Date: 1/6/2023 | 12:33 PST |
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January 25, 2023
Roy Sookhoo
1504 Cereza Drive, SE
Rio Rancho, NM 87124
Dear Roy,
This letter will serve as an amendment to your original offer letter dated January 5, 2023. Itemized below are the proposed terms of our offer:
| 1. | Your<br> start date has been changed to January 25, 2023. As Chief Operating Officer and a full time,<br> permanent employee, your base salary will be $400,000. |
|---|---|
| 2. | $20,000<br> worth of HCTI stock has been voided and replaced with 75,757 shares of HCTI stock at no cost,<br> issued on the date the board approves. These stocks will be fully vested in the event HCTI<br> terminates your employment within the first 12 months without cause. However, if you resign<br> before 12 months, you will be entitled only to the stocks that are vested prior to the period. |
| --- | --- |
| 3. | All<br> other terms and conditions originally entered into and agreed upon remain in place. |
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Kindly indicate your receipt and acknowledgment by your electronic signature.
| My Best Regards, | |||
|---|---|---|---|
| Thyagarajan Ramachandran | /s/ Thyagarajan Ramachandran | 1/27/2023 | 10:36 CST |
| Chief Financial Officer |
I Roy Sookhoo have read and understood the letter of offer and hereby accept your offer of employment.
| Signature: /s/ Roy Sookhoo | Date: 1/27/203 | 08:34 PST |
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