HCTI 10-K
Healthcare Triangle, Inc. (HCTI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
1934
For the fiscal year ended
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As of April 15, 2026,
Table of Contents
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NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, including the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors,” contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, involving substantial risks and uncertainties. The words “believe,” “may,” “will,” “potentially,” “plan,” “could,” “should,” “predict,” “ongoing,” “estimate,” “continue,” “anticipate,” “intend,” “project,” “expect,” “seek,” or the negative of these words, or terms or similar expressions conveying uncertainty of future events or outcomes, or that concern our expectations, strategy, plans or intentions, are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, or expected. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements discussed under the heading “Risk Factors” and in our publicly available filings and press releases. These statements include, among other things, those regarding:
| ● | our ability to continue to add new customers and increase sales to our existing customers; |
| ● | our ability to develop new solutions and bring them to market in a timely manner; |
| ● | our ability to timely and effectively scale and adapt our existing solutions; |
| ● | our dependence on establishing and maintaining a strong brand; |
| ● | the occurrence of service interruptions and security or privacy breaches and related remediation efforts and fines; |
| ● | system failures or capacity constraints |
| ● | the rate of growth of, and anticipated trends and challenges in, our business and in the market for our products; |
| ● | our future financial performance, including our expectations regarding our revenue, cost of revenue, operating expenses, including changes in technology and development, marketing and advertising, general and administrative and customer care expenses, and our ability to achieve and maintain future profitability; |
| ● | our ability to continue to efficiently acquire customers, maintain our high customer retention rates and maintain the level of our customers’ lifetime spend; |
| ● | our ability to provide high quality customer care; |
| ● | the effects of increased competition in our markets and our ability to compete effectively; |
| ● | our ability to grow internationally; |
| ● | the impact of fluctuations in foreign currency exchange rates on our business and our ability to effectively manage the exposure to such fluctuations; |
| ● | our ability to effectively manage our growth and associated investments, including our migration of the vast majority of our infrastructure to the public cloud; |
| ● | our ability to maintain our relationships with our partners; |
| ● | adverse consequences of our substantial level of indebtedness and our ability to repay our debt; |
| ● | our ability to maintain, protect and enhance our intellectual property; |
| ● | our ability to maintain or improve our market share; |
| ● | our ability to continue generating cashflows and to maintain sufficiency of cash and cash equivalents to meet our needs for at least the next 12 months; |
| ● | beliefs and objectives for future operations; |
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| ● | our ability to stay in compliance with laws and regulations currently applicable to, or which may become applicable to, our business both in the United States (U.S.) and internationally; |
| ● | economic and industry trends or trend analysis; |
| ● | our ability to attract and retain qualified employees and key personnel; |
| ● | anticipated income tax rates, tax estimates and tax standards; |
| ● | interest and other embedded rate changes; |
| ● | the future trading prices of our common stock; |
| ● | our expectations regarding the outcome of any regulatory investigation or litigation; |
| ● | the amount and timing of future repurchases of our common stock under any share repurchase program; |
| ● | the potential impact of shareholder activism on our business and operations; and |
| ● | the length and severity of pandemics and their impact on our business, customers and employees; as well as other statements regarding our future operations, financial condition, growth prospects and business strategies. |
We operate in very competitive and rapidly changing environments, and new risks emerge from time-to-time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report may not occur, and actual results could differ materially and adversely from those implied in our forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although we believe the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this report to confirm such statements to actual results or to changes in our expectations, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Unless expressly indicated or the context suggests otherwise, references to “Healthcare Triangle”, “HTI”, “HCTI”, “company”, “we”, “us” and “our” refer to Healthcare Triangle Inc. and its consolidated subsidiaries and joint ventures.
All references to the number of common shares and price per Common Stock have been adjusted to reflect the following:
| - | one-for-two hundred forty-nine reverse stock split effective August 1, 2025; and | |
| - | one-for-sixty reverse stock split effective February 10, 2026. |
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RISK FACTORS SUMMARY
Investing in our common stock involves numerous risks, including the risks summarized below and described in further detail in “Part I, Item 1A. Risk Factors” of this Annual Report on Form 10-K, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects. These risks include, but are not limited to, the risks noted below.
| ● | Competition with companies that have greater financial, technical, and marketing resources than we have could result in a loss of clients and/or a lowering of prices for our products, causing a decrease in our revenues and/or market share. |
| ● | We are dependent on the continued availability of third-party hosting and transmission services. Loss of contractual relationship with operational issues with, or changes to the costs of, our third-party data center providers could harm our business, reputation, or results of operations. |
| ● | If SecureKloud, a related party, ceases to provide us with services our business could suffer. |
| ● | As a “controlled company” under the Nasdaq Marketplace Rules, we may choose to exempt our Company from certain corporate governance requirements that could have an adverse effect on our public stockholders. |
| ● | A significant inadvertent disclosure or breach of confidential and/or personal information we hold, or of the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation, and results of operations. |
| ● | Defects or disruptions in our cloud software solutions could result in diminished demand for our platforms and services, a reduction in our revenues, and subject us to substantial liability. |
| ● | We have experienced rapid growth, and if we fail to manage our growth effectively, we may be unable to execute our business plan. |
| ● | We may be unable to successfully introduce new products or services or fail to keep pace with advances in technology. |
| ● | Our business depends in part on our ability to establish and maintain additional strategic relationships. |
| ● | Our sales cycle can be lengthy and unpredictable, which may cause our revenue and operating results to fluctuate significantly. |
| ● | Protection of certain intellectual property may be difficult and costly, and our inability to protect our intellectual property could reduce the value of our products and services. |
| ● | We may be liable for infringing the intellectual property rights of others. |
| ● | We may not be able to protect our intellectual property rights throughout the world. |
| ● | Our use of third-party open-source software could negatively affect our ability to offer our products and services through our platforms and subject us to possible litigation. |
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| ● | Any failure to protect our intellectual property that is not registered could impair our business. |
| ● | Markets for our products and services are highly competitive and subject to rapid technological change, and we may be unable to compete effectively in these markets. |
| ● | Increased government involvement in healthcare could materially and adversely impact our business. |
| ● | Consolidation in the healthcare industry could adversely impact our business, financial condition, and operating results. |
| ● | We are subject to numerous regulatory requirements of the healthcare industry and is susceptible to a changing regulatory environment. |
| ● | We may be directly and indirectly liable for its client’s non-compliance with laws and regulations addressing Electronic Health Records. |
| ● | We may be subject to liability as a result of a failure or a perceived failure to comply with laws and regulations governing approval and reimbursement of claims by healthcare industry payers. |
| ● | We may have to incur material expenses in order to accommodate its client’s interoperability requests dictated by interoperability standards of exchange of health information. |
| ● | We may not see the benefits from government funding programs initiated to accelerate the adoption and utilization of health information technology. |
| ● | We may be subject to false or fraudulent claim laws. |
| ● | The market for our data analysis systems and software solutions is new and unproven and may not grow. |
| ● | If we fail to regain compliance with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted. |
| ● | If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares. |
| ● | Series A Preferred Stock with super voting rights allow the holder to own approximately 96% of the cumulative voting rights and therefore puts them in a position to be able to exert a controlling influence over our business affairs and matters submitted to stockholders for approval. |
The elimination of personal liability against our directors and officers under Delaware law and the existence of indemnification rights held by our directors, officers and employees may result in substantial expenses.
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PART I
Item 1. Business
We are a healthcare information technology company focused on advancing innovative industry-transforming solutions in the sectors of cloud services, data science, and professional and managed services for the Electronic Health Record (EHR), Healthcare and Life Sciences industry.
Our approach leverages our proprietary technology platforms, extensive industry knowledge, and healthcare domain expertise to provide solutions and services that reinforce healthcare progress. Through our platform, solutions, and services, we support healthcare delivery organizations, healthcare insurance companies, pharmaceutical and Life Sciences, biotech companies, and medical device manufacturers in their efforts to improve data management, develop analytical insights into their operations, and deliver measurable clinical, financial, and operational improvements.
We offer a comprehensive suite of software, solutions, platforms and services that enables some of the world’s leading healthcare and pharma organizations to deliver personalized healthcare, precision medicine, advances in drug discovery, development and efficacy, collaborative research and development, respond to real world evidence, and accelerate their digital transformation. We combine our expertise in the healthcare technology domain, cloud technologies, DevOps and automation, data engineering, advanced analytics, AI/ML, Internet of things (“IoT”), security, compliance, and governance to deliver platforms and solutions that drive improved results in the complex workflows of Life Sciences, biotech, healthcare providers, and payers. Our differentiated solutions, enabled by intellectual property platforms provide advanced analytics, data science applications, and data aggregation in a secure, compliant and cost-effective manner to our customers. Our approach reinforces healthcare progress through advanced technology, extensive industry knowledge, and domain expertise.
Our deep expertise in healthcare allows us to reinforce our clients’ progress by accelerating their innovation. Our healthcare IT services include EHR and software implementation, optimization, extension to community partners, as well as application managed services, and backup and disaster recovery capabilities on public cloud. Our 24x7 managed services are used by hospitals and health systems, payers, Life Sciences, and biotech organizations in their effort to improve health outcomes and deliver deeper, more meaningful patient and consumer experiences. Through our services, our customers achieve return on investment in their technology by delivering measurable improvements. Combined with our software and solutions, our services provide clients with an end-to-end partnership for their technology innovation.
We believe our principal competitive factors in our market include our technology capabilities, domain expertise, and on-demand customer support for companies to realize the benefits of modern cloud, data, and security architectures. There are several unique factors mentioned below that make HTI an attractive service provider for healthcare and Life Sciences companies:
| ● | Technology Platforms: our proprietary software platforms, CloudEz and DataEz, are leveraged by our healthcare and Life Sciences customers for cloud transformation, automation, data management, security and data governance, and clinical and non-clinical operations management. Our readabl.ai platform uses state-of-the-art public cloud artificial intelligence and machine learning to recognize and extract healthcare information from documents, faxes, and narrative reports. |
| ● | Ziloy is an AI-powered mental wellness platform that delivers personalized mental health support through proprietary AI and GenAI-driven workflows. It provides guided self-care tools, insights, and tailored wellness programs to help individuals and organizations improve emotional well-being and build mental resilience. |
| ● | Ezovion is a cloud-based hospital management platform that helps hospitals and clinics digitize their operations. It integrates patient records, appointments, billing, labs, pharmacy, EMR, teleconsultation, and analytics into a single system to improve operational efficiency and patient care. Built as a cloud-based SaaS platform, Ezovion enables connected healthcare with secure data exchange and intelligent insights for healthcare providers. |
| ● | Technology Enabled Services: our ability to deliver world-class services in the areas of cloud technologies, data, AI/ML, security, compliance, governance and extend these capabilities with clinical and operational consultants that work across the healthcare industry to improve patient and consumer outcomes. |
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| ● | Expertise in Compliance: our compliance and validation experts enable us to implement Health Insurance Portability and Accountability Act (HIPAA) requirements in GxP regulated establishments; GxP encompasses a broad range of compliance-related activities such as Good Laboratory Practices (GLP), Good Clinical Practices (GCP), and Good Manufacturing Practices (GMP). HTI’s technology platforms CloudEz and DataEz are HITRUST self-certified. HTI also supports BAA (Business Associate Agreement) coverage for healthcare clients along with cloud providers and PCI-DSS standards. |
| ● | Engagement and Flexibility: HTI’s ability to achieve customer operational objectives through our design and commercialization of innovative solutions with an outcome-based approach and prompt feedback. |
| ● | Team Members: our world-class team of certified cloud architects and our unique expertise in large global pharmaceutical and biotech organizations and other participants of the healthcare industry. |
| ● | Personal Approach to Customers: our strong relationship management and deep understanding of customer requirements enable us to continuously drive innovation. Our delivery methodology and automation-based approach give us the ability to respond to our customers’ needs and requirements rapidly. |
| ● | Partnership with Industry Leaders: our established relationships with healthcare and Life Sciences teams of the public cloud providers, including Amazon Web Services (“AWS”), Google Cloud, Microsoft Azure Cloud, and EHR vendors such as MEDITECH and Epic Systems while engaging with our customers for overall success. |
Our organizational capabilities and unique advantages also include solving data insights and data interoperability challenges for the HCLS industry with our domain knowledge and technology solutions. To accelerate healthcare providers’ adoption of cloud and next-generation technologies, we leverage our Life Sciences and medical device industry experience in cloud, data, IoT, AI/ML, security & compliance.
The majority of our revenue is generated by our full-time employees who provide Software Services and Managed Services and Support to our clients. Our Software Services include strategic advisory, implementation and development services, whereas Managed Services and Support include post implementation support and cloud hosting. Readabl.AI and Ezovion Healthcare Information Management Software are sold as our SaaS offerings on a subscription basis, which we expect will provide us with recurring revenues. We do not yet have enough information about our competition or customer acceptance of the proposed SaaS offerings to determine whether or not recurring subscription revenue will have a material impact on our revenue growth.
Background
We are led by a diverse, global, and talented team of data scientists, thought leaders, software developers, and subject matter experts who seek to understand our customers’ challenges and are dedicated to tackling these challenges. As of December 31, 2025, we had a total of 43 full-time employees, 15 part-time employees, and 26 sub-contractors. Many of the senior management team and the members of our board of directors hold advanced degrees and some are leading experts in software development, regulatory science, and market access.
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The Company is a born-on-the-cloud Premier Partner of AWS and an audited next generation MSP. We are a leading partner of Google Cloud and a Gold Cloud Partner of Microsoft Azure Cloud. HTI is currently one of the top tier Healthcare and Life Sciences competency partners of AWS among more than 130,000 partners in their global community of partners. The Company is also recognized as one of the top eight partners of Google Cloud Healthcare Interoperability Readiness Program. The Company has also established partnerships with Medical Information Technology, Inc. MEDITECH, Epic Systems, Splunk Inc., Snowflake Inc., Looker Inc. (acquired by Google), and other technology companies. The Company has several Fortune 500 clients in the Life Sciences industry and partners with many hospitals in their cloud transformation journey. We conduct our business directly with hospitals and other healthcare providers. Our Healthcare IT services include systems selection, EHR implementation, post-implementation support to manage EHRs, legacy support, optimization, training, and creation of efficient EHR systems, and improvement of clinical outcomes for hospitals.
Market
Our target markets are healthcare delivery organizations (e.g, hospitals, clinics, physician practices, and other healthcare providers) and Life Sciences organizations (e.g., pharmaceutical and biotech companies). These target markets are large and rapidly expanding, and the opportunity before us is substantial as data increasingly becomes more critical to successful clinical quality improvement and outcomes, financial performance, drug discoveries, and the ever important need to ensure a positive patient and consumer experience.
The US healthcare cloud transformation services market is expected to grow to $35.8 billion by 2034 with 11.5% CAGR during the period 2026 to 2034 as per IMARC Group (1). SkyQuest business report estimates that the global market for healthcare data science and analytics will be $266.03 billion by 2034 with a CAGR of 25.6% (2). The US healthcare IT services market is estimated to be $388.99 billion by 2030 with a CAGR 15.46% as per Grand View Research (3). The artificial intelligence in the healthcare market valued $ 317.1 billion in 2032 with a CAGR of 37.1% as per Global Market Insights (4).
Based on the market trends in cloud transformation, healthcare data science and analytics, healthcare IT services, and medical document management, we believe our CloudEz, DataEz, Readabl.AI, Ziloy.AI and Ezovion platforms are well positioned to capture significant market opportunities. As customers increasingly adopt digital technologies, AI powered analytics, digital health solutions, Hospital Information Management Systems (HIMS), and digital mental wellness platforms, the acceleration toward digital health provides opportunities for Healthcare technology companies like HTI to transform the Healthcare and Life Sciences industry, creating substantial opportunities for innovative, scalable digital and cost-effective health solutions.
We believe the industry challenges and market dynamics described below are transforming the way data and analytics are used by healthcare organizations and provide us with a significant opportunity.
| (1) | https://www.imarcgroup.com/united-states-healthcare-cloud-computing-market |
| (2) | https://www.skyquestt.com/report/healthcare-analytics-market |
| (3) | https://www.grandviewresearch.com/industry-analysis/us-healthcare-it-software-market-report |
| (4) | https://www.gminsights.com/industry-analysis/healthcare-artificial-intelligence-market |
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Challenges associated with increasing complexity of healthcare data
Across the healthcare landscape, a significant amount of data is being created every day, driven by patient care, payment systems, regulatory compliance, and recordkeeping. This includes information within patient health records, clinical trials, pharmacy benefit programs, imaging systems, sensors, and monitoring platforms, laboratory results, patient-reported information, hospital, and physician performance programs, and billing and payment processing.
The U.S. Healthcare system has invested billions of dollars to collect vast amounts of detailed information in digital format. Examples of major areas of investment include electronic transactional systems that digitize clinical information (e.g., EHR systems, pharmacy, laboratory, imaging, patient satisfaction, and healthcare information exchanges), financial information (e.g., general ledger, costing, and billing), and operational information (e.g., supply chain, human resources, time and attendance, IT support, and patient engagement). Wearables and sensors drive personalized health data for continuous monitoring of patients through daily activity logs, biometric sensors, fall sensors, social activity sensors, etc. These wearables and sensors result in a proliferation of healthcare data that also includes socioeconomic, genomic, and remote patient monitoring information. Collecting, storing, and using healthcare data is complicated by the breadth and depth of disparate sources, the multitude of formats, and increasing regulatory requirements.
The data is vital for Life Sciences and pharmaceutical industries; however, traditional and current data platforms are not equipped to meet this surge or the analytic demands. Today, the data platform is expected to stay relevant for at least 15 years, be able to democratize the data, and still be secure and compliant. Data and analytics in healthcare is transforming the way illnesses are identified and treated, improving quality of life and avoiding preventable deaths.
We believe our DataEz platform addresses these challenges. DataEz is a cloud-based data pipeline platform that helps to enable personal healthcare data management, analytics, and data science capabilities for large Life Sciences, pharmaceutical, and healthcare organizations. It integrates with a larger variety of data sources to ingest, process, store, analyze, and gain insights from the data. By leveraging the real-world evidence data and the ability to diagnose through advanced predictive modelling, AI/ML makes the process simpler and less expensive. Life Sciences industries will require a secure, privacy-compliant, and future-proof data platform as a foundation for large-scale genomics collaborations and for efforts to analyze archived data, including privacy-protected data. This means most organizations will turn into data organizations and will aggressively leverage data as a core asset to drive innovation in their businesses.
Challenges due to lack of coordination and interoperability
The healthcare industry is fragmented and inefficient, with different legacy health insurers, hospital systems, provider groups, and pharmacy networks each possessing distinct incentive structures—some or all of which may diverge from consumers’ interests. Even as consumer demand for greater coordination grows, inflexible and disparate legacy technological systems present a significant barrier to meeting consumers’ wants and needs.
After decades of investing in EHR technology, the state of interoperability is insufficient and inhibits care coordination, health data exchange, clinical efficiency, and the quality of care provided to patients. Given that the EHR is the principal electronic interface used today at the point of care, the path to improved data-driven decision support will require integration between EHR systems and other data and analytics providers. Incidentally, the U.S. Healthcare system is in the midst of an “open data wave,” with an increasing focus on, and demand for, patient data interoperability. Additionally, recent laws and regulations, such as the 21st Century Cures Act, promote and prioritize interoperability and the free exchange of health information. The federal government’s new regulations aim to help patients gain better control of their health data via smartphone apps, interoperability is expected to increase between providers, payers, and healthcare technology companies.
We believe our Healthcare Interoperability solutions and proprietary platforms drive resilient interoperable health infrastructure as a catalyst for delivering better care and reducing costs. We participate in Google Cloud’s Healthcare Interoperability Readiness Program, which aims to help free up patient data and make it more accessible across the continuum of care, as well as set up organizations for long-term success with more modern, interoperable API-first architectures. We help healthcare providers understand their current interoperability maturity levels and map out a stepwise journey to enable interoperability. For example, our Readabl.AI is a Google Cloud-based AI/ML platform to ingest documents, which provides OCR (optical character recognition) capabilities with Natural Language Processing where the patient information is extracted and matched/validated with healthcare providers’ EHR system via FHIR (Fast Healthcare Interoperability Resources) API.
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Our Technology and Services
We offer two proprietary software platforms, CloudEz and DataEz, for cloud transformation, automation, data management, security and data governance, and clinical and non-clinical operations management. The platforms are composed of individual, proprietary technology toolsets and deep data assets that can be rapidly configured to empower the operationalization of large-scale, data-driven healthcare initiatives. The platforms enable healthcare organizations to implement highly sophisticated value-based initiatives on a very large scale. At the core of value-based initiatives is the need to aggregate and analyze data, garner meaningful insight from the results, and use these insights to drive material change to outcomes and economics. The platforms address these needs through their major competencies: (i) large-scale data connectivity, integration, and validation capabilities, (ii) advanced predictive analytics and high-speed computing, (iii) toolsets to translate resulting insights into real-world impact, and (iv) purpose-built data visualization and reporting.
CloudEz Technology Platform
CloudEz is an enterprise multi-cloud transformation and management platform that enables customers to manage their cloud infrastructure across private, hybrid, and public cloud infrastructures from providers such as AWS, Microsoft Azure, and Google Cloud. CloudEz offers cloud services to highly regulated industries, including healthcare, Life Sciences, and pharma and biotech organizations, in their cloud transformation journey. It leverages a library of infrastructure and application code developed ‘in-house’ to deliver infrastructure services that are secure and compliant. CloudEz also delivers an automated infrastructure compliance framework that facilitates our customers in being continuously compliant with regulatory requirements.
Implementing a secured cloud that requires continuous adherence of GxP / HIPAA compliance across a number of business units that individually span over a number of different vendors is the biggest challenge across all regulatory specific industries, such as pharma and healthcare. An automation framework that offers secure, continuous GxP / HIPAA compliance for pharmaceutical and healthcare businesses is required for faster deployment of business applications.
CloudEz platform has several security controls including identity & access management, cloud security & governance, data security, security information & event management, network and application security.
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DataEz Technology Platform
Managing a data and data analytics platform is cumbersome with numerous moving components and current best practices that are prone to over-complication. The implemented architecture of some competing solutions is typically not scalable or does not allow workload flexibility. Reengineering such massive ecosystems is neither cost-effective nor practical for enterprises that want to focus on maintaining their market position. Additionally, and more importantly, when enterprise IT teams want to build their Data Lakes, centralized repository that store data, on the cloud, they must deal with overwhelming complexities – from choosing the right cloud provider that addresses their needs and ensures necessary government regulatory security and compliances are met to continuously managing a cost-effective infrastructure.
HTI brings together large-scale datasets, expansive connectivity, robust technology infrastructure, and industry-leading subject matter expertise. The capabilities of the HTI platforms enable both the efficient determination of highly meaningful insights and the reliable achievement of meaningful impact in the quality and economics of healthcare.
DataEz is a cloud-based data analytics and data science platform purpose-built for the data analytics and data science requirements of large Life Sciences/pharmaceutical and healthcare provider organizations. This platform enables our healthcare customers to ingest, securely analyze, and transform data from disparate sources to gain operational, financial, and clinical insights. DataEz is a fully secured and compliant platform that meets the regulatory requirements and we offer this as a solution and Software as a Service (SaaS) subscription model for Life Sciences and healthcare provider customers.
Combinations of all proprietary technology toolsets are configured to quickly empower highly differentiated solutions for customer needs in a highly scalable fashion. The flexibility of the platform’s modular design enables customers to integrate the capabilities of the platform with their own internal capabilities or other third-party solutions. The platforms bring to the marketplace a highly extensible, national-scale capability to interconnect with the healthcare ecosystem on a massive scale. This enables healthcare organizations to aggregate and analyze data in petabyte volumes, arrive at sophisticated insights in real-time, drive meaningful impact, and intuitively visualize data and information to inform business strategy and execution.
DataEz platform includes the advanced analytics capability for data scientists and analysts to rapidly spin up secure analytics workbenches. Analytics workbench enables agile analytics, by providing capabilities of data discovery, model building, model management, model consumption, visualization, and workflow management in an integrated platform to accelerate the data science life cycle using AI/ML algorithms as well as data analytics at scale.
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DataEz Platform Architecture:
DataEz platform architecture is composed of various stages of data pipeline management including ingestion, quarantine, pre-curated, data curated, analytics/data warehouse, visualization/data warehouse and visualization/data science.
DataEz: Data Lake Management, Analytics & Data Science platform architecture diagram
Readabl.AI
Despite significant investments in electronic health records, paper-based and other forms of unstructured data such as faxes and clinical reports continue to be widely used to share patient information. Many healthcare providers still rely on legacy communication methods, which creates challenges in efficiently managing, processing, and integrating clinical data. This ongoing reliance on unstructured and paper-based information highlights the need for advanced digital solutions that can accurately capture, interpret, and integrate medical data into modern healthcare systems.
Healthcare organizations demand an advanced automation solution to easily convert paper-based unstructured data into meaningful information for patient care. Readabl.AI uses state-of-the-art public cloud artificial intelligence and machine learning to recognize and extract healthcare information from documents, faxes, and narrative reports. Including Readabl.AI in customer organization’s workflow improves patient care and clinical efficiencies while maintaining security & confidentiality. Readabl.AI ensures that the necessary health information is available for patient care with reduced labor requirements and faster processing.
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Readabl.AI is offered as a solution on public cloud marketplaces such as Google Cloud marketplace and is commercially available on a Software-as-a-Service (SaaS) subscription model.
Ziloy.AI
Ziloy.AI, HTI’s AI-powered mental wellness platform, is designed to support emotional well-being through personalized digital care. Leveraging proprietary artificial intelligence and generative AI technologies, the platform delivers integrative and personalized mental wellness programs through proprietary treatment algorithms, self-care tools, and data-driven insights. Ziloy.AI is intended to support individuals and organizations in improving mental health outcomes by providing scalable, accessible, and proactive mental wellness solutions through a secure digital platform.
The platform adopts a multidisciplinary and integrative treatment approach that combines modern Ayurvedic psychiatry, clinical psychology, psychotherapy, nutrition guidance, and therapeutic practices such as yoga and mindfulness to address both symptoms and underlying root causes of mental health conditions. Personalized treatment algorithms are developed by the clinical teams and may include therapy sessions, lifestyle interventions, digital self-care tools, and ongoing progress monitoring delivered through a secure, cloud-based environment. This technology-enabled model is designed to expand access to mental health care while supporting improved patient outcomes and long-term emotional well-being.
Ezovion Healthcare Information Management Systems (HIMS)
Ezovion is HTI’s cloud-based Healthcare Information Management System (HIMS) designed to help hospitals, clinics, and healthcare providers digitize their clinical, administrative, and financial operations through an integrated platform. The system supports patient registration, appointment management, electronic health records (EHR), laboratory and pharmacy management, billing, inventory, and revenue cycle management through an integrated workflow. Ezovion also provides capabilities such as telehealth, analytics, patient engagement tools, and interoperability standards to enable secure data exchange across healthcare systems. The platform is designed to improve operational efficiency, streamline clinical workflows, and support data-driven decision-making for healthcare providers.
The platform is modular and scalable that can be deployed across hospitals, specialty clinics, diagnostic centers, and multi-facility healthcare networks. The system supports interoperability with third-party healthcare applications and medical devices and is built on a secure cloud-based architecture that enables centralized data management, reporting, and analytics. By integrating clinical, operational, and financial information into a unified digital environment, Ezovion enables healthcare organizations to enhance care coordination, improve regulatory compliance, and optimize operational performance.
Cloud IT Services
Cloud IT is a service that we provide that incorporates several of our existing technological platforms. Below are several of the benefits of our Cloud IT service:
| 1. | Multi-Cloud Advisory: Our certified public cloud architects and engineers are highly experienced and successful in providing end-to-end cloud advisory and deployment services. Our expert team of cloud certified professionals develops and deploys complex applications onto public, private, and hybrid clouds. In addition, we have a proven track record of migrating various IT infrastructures into cloud technologies, enabling healthcare organizations to attain their business goals. We help our customers analyze and identify suitable cloud options for their IT enterprise by clearly defining strategies of the cloud and the roadmap for its transformation. Our experts create secure, scalable, innovative, and robust cloud solutions that address the requirements of healthcare organizations by performing a detailed evaluation of technical compatibility and business objectives. |
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| 2. | DevOps as a Service: Cloud DevOps, often also referred to as DevSecOps given the criticality of security of the cloud, is the IT methodology through which enterprises migrate and manage their platforms and solutions in a continuous fashion on the cloud. Healthcare enterprise IT leadership can rely on HTI’s turnkey managed services, strategic advisory services, proven methodology, automation capabilities, and expertise to steadily migrate their IT assets to the cloud. |
| 3. | Cloud Security Operations Centre (SOC): CloudEz comes with advanced AI/ML-enabled alerts and monitoring services over and across the enterprise cloud environment. By implementing automated BOTs, our operations center ensures our clients have a de-risked cloud environment by ensuring continuous security and regulatory compliance. |
| 4. | Healthcare Cloud Backup and Disaster Recovery (BU/DR): Our cloud disaster recovery solution is a fully managed infrastructure solution that enables hospitals to host their DR instances on public cloud platforms such as AWS. Our solution specifically serves the MEDITECH market today. MEDITECH BU/DR solution will soon be available on AWS marketplace for healthcare customers. |
| 5. | Ransomware Protection: We are taking a proactive role in educating and equipping rural hospitals, community hospitals, and large health systems with critical resources for improving their preparedness, prevention, detection, response, and recovery from ransomware incidents. Our service offerings include risk assessment, recommendations for most effective tools and processes, continuous monitoring of systems and backup and recovery plan. |
Healthcare IT Services:
Healthcare IT is a separate service we provide primarily to hospitals and healthcare centers. Our healthcare IT services have been utilized by 100+ hospitals across the US. These services include EHR implementation and optimization, managed services, interoperability, data assessments and tools, and clinical and training consulting to improve clinical outcomes and the patient experience.
| ● | EHR Implementation and Optimization: HTI is among one of the few MEDITECH READY-certified implementation partners for MEDITECH, a leading EHR system vendor. This READY certification from MEDITECH enables HTI to provide hospital clients with their EHR implementations. We have worked with hundreds of MEDITECH customers and successfully implemented and optimized the MEDITECH platform. Additionally, HTI is one of approximately 15 partners among over 100+ firms tracked by Epic Systems Corporation, a leading provider of electronic health record (EHR) systems used by healthcare organizations worldwide that works with Epic on a regular basis to discuss synergies and client performances. Our implementation solution set specifically addresses mergers and acquisitions as well as community technology extensions. We have successfully enabled over 600 community physicians in over 100 locations through our community technology deployment services. |
| ● | EHR Managed Services: Our end-to-end EHR managed services cover hospital-wide IT support including Tier 2/Tier 3 support, technical support, report writing, on-demand application support, Community Connect, and acquisition services. HTI addresses healthcare organizations’ growing frustrations, inefficiencies, and high provider turnover in the healthcare communities through training and support to prevent loss of additional clinical resources, downturns in patient service volume, and loss of significant revenue. HTI’s Epic team offers a monthly support plan that provides comprehensive flexibility. It gives “flex support” for clients, allowing for the division of necessary work hours across different Epic resources and applications. Since the pandemic started, more hospitals and health systems are slowly making the transition to cloud platforms to host their EHRs and information systems to offer real-time data insights and more storage solutions. HTI sees this as an opportunity to provide EHR-as-a-service capabilities in real-time for hospitals on public cloud platforms. |
| ● | Interoperability Assessments and Services: HTI is recognized as one of the top eight partners of the Google Cloud Healthcare Interoperability Readiness Program. Our services enable health systems to understand their readiness to meet CURES act requirements and develop and execute a roadmap across technology platforms utilizing HL7’s (Health Level Seven International provides standards and solutions to empower global health data interoperability) and FHIR (Fast Healthcare Interoperability Resources) standards. |
| ● | Data Assessment and Toolsets: healthcare clients also approach us to build two-way data applications for quick and seamless communication with patients and to perform predictive analytics based on prior outcomes and readings from monitoring devices. We offer self-cataloguing data lakes and automated data quality check solutions. These cutting-edge solutions consist of a public cloud-based data lake where the data from various devices and sensors are ingested and stored through automated provisioning, and a scalable dashboard that is capable of monitoring hundreds of thousands of patients at a time based on the cloud-stored data. |
| ● | Clinical and Training Consulting: HTI also provides clinical and operational consultants to healthcare organizations to support the improvement of their business, clinical, and patient outcomes and experience. |
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Corporate Information
Our principal executive office is located at 7901 Stoneridge Drive, Suite 210, Pleasanton, CA 94588, while our satellite lease office is located at 666 Plainsboro Road, Suite 448, Plainsboro, NJ 08536. Our telephone number is (925) 270-4812. Our website address is https://www.healthcaretriangle.com/. The information on our website or that may be accessed by links on our website is not incorporated by reference into this Form 10-K. We make available, free of charge and through our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to any such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after they are electronically filed with or furnished to the U.S. Securities and Exchange Commission.
Item 1A. Risk Factors
Investing in our common stock is highly speculative and involves a significant degree of risk. Before you invest in our securities, you should give careful consideration to the following risk factors, in addition to the other information included in this Annual Report on Form 10-K, including our financial statements and related notes, before deciding whether to invest in our securities. The occurrence of any of the adverse developments described in the following risk factors could materially and adversely harm our business, financial condition, results of operations or prospects. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
Risks Related to Our Company
Competition with companies that have greater financial, technical, and marketing resources than we have could result in a loss of clients and/or a lowering of prices for our products, causing a decrease in our revenues and/or market share.
There are a number of companies that are our principal and secondary competitors and offer products and systems that are comparable to our solutions and address the markets we serve. The principal competitive factors in our markets include product features, performance, and support, product scalability and flexibility, ease of deployment and use, the total cost of ownership, and time to value. Some of our current and potential competitors have advantages over us, such as longer operating histories, significantly greater financial, technical, marketing, or other resources, a stronger brand and business user recognition, larger intellectual property portfolios, and broader global distribution and presence. Further, competitors may be able to offer products or functionality similar to ours at a more attractive price than we can by integrating or bundling their software products with their other product offerings. In addition, our industry is evolving rapidly and is becoming increasingly competitive. Larger and more established companies may focus on creating a learning system or solutions that could directly compete with one or more of our offerings. If companies move a greater proportion of their data and computational needs to the cloud, new competitors may emerge which offer services comparable to ours or that are better suited for cloud-based data, and the demand for one or more of our offerings may decrease. Smaller companies could also launch new products and services that we do not offer and that could gain market acceptance quickly. We may also face competition from providers of cloud management systems and database systems, and other segment-specific applications. Any of these companies, as well as other technology or healthcare companies, could decide at any time to specifically target hospitals and Life Sciences companies within our target market. A number of existing and potential competitors are more established than we are and have greater name recognition and financial, technical, and marketing resources. Products of our competitors may have better performance, lower prices, and broader market acceptance than our products. We expect increased competition that could cause us to lose clients, lower our prices to remain competitive, and, consequently, experience lower revenues, revenue growth, and profit margins, which would have a material adverse effect on our financial condition and business prospects.
We are dependent on the continued availability of third-party hosting and transmission services. Loss of contractual relationship with operational issues with, or changes to the costs of, our third-party data center providers could harm our business, reputation, or results of operations.
We currently serve the majority of our platform functions from third-party data center hosting facilities operated by Amazon Web Services, Google Cloud, and Microsoft Azure Cloud, and we primarily use shared servers in such facilities. We are dependent on these third parties to provide continuous power, cooling, Internet connectivity, and physical and technological security for our servers, and our operations depend, in part, on their ability to protect these facilities against any damage or interruption from natural disasters, such as earthquakes and hurricanes, power or telecommunication failures, criminal acts, and similar events. In the event that any of our third-party facilities arrangements is terminated, or if there is a lapse of service or damage to a facility, we could experience interruptions in our platforms as well as delays and additional expenses in arranging new facilities and services.
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Any damage to, or failure of, the systems of our third-party providers could result in interruptions to our platforms. Despite precautions taken at our data centers, the occurrence of spikes in usage volume, a natural disaster, such as earthquakes or hurricane, an act of terrorism, vandalism or sabotage, a decision to close a facility without adequate notice, or other unanticipated problems at a facility could result in lengthy interruptions in the availability of our platform. Even with current and planned disaster recovery arrangements, our business could be harmed. Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur. These factors in turn could further reduce our revenue, subject us to liability and cause us to issue credits, or cause customers to stop using our platforms, any of which could materially and adversely affect our business.
SecureKloud could cease to provide us with services and as a result, our business could suffer.
SecureKloud, an affiliate of the Company, provides us with essential services, including software development, infrastructure development, sales support, recruitment and immigration support, project coordination, human resources and operation support and management/advisory services. Although we pay SecureKloud for these services at what we believe are market rates and were negotiated in good faith on an arms-length basis, if we became aware in the future of third parties that could provide such services on terms more favorable than SecureKloud, it may create delivery risk on some of our existing projects. Also, if SecureKloud was no longer able to provide us these services, we may be forced to obtain them from third parties on terms that are less favorable. If SecureKloud is unable to provide us services it now provides, such events could have a material adverse effect on our business and financial condition.
As a “controlled company” under the Nasdaq Marketplace Rules, we may choose to exempt our Company from certain corporate governance requirements that could have an adverse effect on our public stockholders.
Under Rule 4350(c) of the Nasdaq Marketplace Rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that a majority of our directors be independent, as defined in Nasdaq rules and the requirement that our compensation and nominating and corporate governance committees consist entirely of independent directors. Although we do not intend to rely on the “controlled company” exemption under Nasdaq rules, we could elect to rely on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority of the members of our Board might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, during any time while we remain a controlled company relying on the exemption and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements. Our status as a controlled company could cause our common stock to look less attractive to certain investors or otherwise harm our trading price.
A significant inadvertent disclosure or breach of confidential and/or personal information we hold, or of the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation, and results of operations.
Our business requires the storage, transmission, and utilization of data, including healthcare information, patient’s information, personal information, and other information that must be maintained on a confidential basis. These activities have made, and may in the future make, our clients and our products a target of cyber-attacks by third parties seeking unauthorized access to the data contained on our platforms. As a result of the types and volume of personal data on our systems, we believe that healthcare companies may be a target for such breaches and attacks.
In recent years, the frequency, severity, and sophistication of cyber-attacks, computer malware, viruses, social engineering, and other intentional misconduct by computer hackers have significantly increased, and government agencies and security experts have warned about the growing risks of hackers, cybercriminals, and other potential attackers targeting information technology systems. Such third parties could attempt to gain entry into our systems for the purpose of stealing data or disrupting the systems. In addition, our security measures may also be breached due to employee error, malfeasance, system errors, or vulnerabilities, including vulnerabilities of our vendors, suppliers, their products, or otherwise. Third parties may also attempt to fraudulently induce employees or customers into disclosing sensitive information such as usernames, passwords, or other information to gain access to the data contained on our platforms, including patient information.
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While we and our third-party cloud providers have implemented security measures designed to protect against security breaches, these measures could fail or may be insufficient, particularly as techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until launched against a target, resulting in the unauthorized disclosure, modification, misuse, destruction, or loss of our or our customers’ data or other sensitive information. Any failure to prevent or mitigate security breaches and improper access to or disclosure of the data we maintain, including personal information, could result in litigation, indemnity obligations, regulatory enforcement actions, investigations, fines, penalties, mitigation and remediation costs, disputes, reputational harm, diversion of management’s attention, and other liabilities and damage to our business.
We cannot be certain that advances in criminal capabilities, the discovery of new vulnerabilities in our systems, and attempts to exploit those vulnerabilities, physical system or facility break-ins and data thefts or other developments will not compromise or breach the technology protecting our systems and the information we possess.
We may incur significant costs in protecting against or remediating cyber-attacks. Any security breach could result in operational disruptions that impair our ability to meet our customers’ requirements, which could result in decreased revenue. Also, whether there is an actual or a perceived breach of our security, our reputation could suffer irreparable harm, causing our current and prospective customers to reject our products and services in the future, deterring data suppliers from supplying us data or customers from using our services, or changing consumer behavior adversely affecting our technology’s market coverage. Further, we could be forced to expend significant resources in response to a security breach, including those expended in notifying individuals and providing mitigating services, repairing system damage, increasing cybersecurity protection costs by deploying additional personnel and protection technologies, and litigating and resolving legal claims or governmental inquiries and investigations, all of which could divert the attention of our management and key personnel away from our business operations.
Finally, while we provide guidance and specific requirements in some cases, we do not directly control any of our clients’ cybersecurity operations, or the amount of investment they place in guarding against cybersecurity threats. Accordingly, we are subject to any flaws in or breaches of their systems, which could materially impact our business, operating results, and financial results.
An inability to attract and retain highly skilled employees could adversely affect our business.
To execute our growth plan, we must attract and retain highly qualified employees skilled in both software engineering and healthcare industry regulations. Competition for these employees is intense, especially with respect to software engineers with high levels of experience in cloud-related services. We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with the appropriate level of qualifications. Many of the companies with which we compete for experienced employees have greater resources than we have and may offer compensation packages that are perceived to be better than ours. Additionally, changes in our compensation structure may be negatively received by employees and result in attrition or cause difficulty in the recruiting process. If we fail to attract new employees or fail to retain and motivate our current employees, our business and future growth prospects could be adversely affected.
Defects or disruptions in our cloud software solutions could result in diminished demand for our platforms and services, a reduction in our revenues, and subject us to substantial liability.
We have from time to time found defects in our solutions, and new defects may be detected in the future. In addition, we have experienced, and may in the future experience, service disruptions, degradations, outages, and other performance problems. These types of problems may be caused by a variety of factors, including human or software errors, viruses, cyber-attacks, fraud, spikes in customer usage, problems associated with our third-party computing infrastructure and network providers, infrastructure changes, and denial of service issues. Service disruptions may result from errors we make in delivering, configuring, or hosting our solutions, or designing, installing, expanding, or maintaining our platform’s computing infrastructure. In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. It is also possible that such problems could result in losses of data.
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Since our customers use our platforms and services for important aspects of their business, any errors, defects, disruptions, service degradations, or other performance problems with our solutions could hurt our reputation and may damage our customers’ business. If that occurs, our customers may delay or withhold payment to us, cancel their agreements with us, elect not to renew, or make service credit claims, warranty claims, or other claims against us, and we could lose future sales. The occurrence of any of these events could result in diminishing demand for our solutions, a reduction of our revenues, an increase in our bad debt expense or in collection cycles for accounts receivable or could require us to incur the expense of litigation or substantial liability.
We have experienced rapid growth, and if we fail to manage our growth effectively, we may be unable to execute our business plan.
Since we were founded, we have experienced rapid growth and expansion of our operations. Our revenues, customer base, product and service offerings, countries of operation, facilities, and computing infrastructure requirements have all increased substantially, and we expect them to continue to grow in the future. We have also experienced rapid growth in our employee base. As we continue to expand, both organically and through acquisitions, we must effectively integrate, develop, and motivate an increasing number of employees, which includes a growing number of our workforce that operates in flexible or remote work environments, while executing our growth plan and maintaining the beneficial aspects of our culture. Any failure to preserve our culture could negatively affect our future success, including our ability to attract and retain highly qualified employees and to achieve our business objectives.
Our rapid growth has placed, and will continue to place, a significant strain on our management capabilities, administrative and operational infrastructure, facilities, IT, and other resources. We anticipate that additional investments in our facilities and computing infrastructure will be required to scale our operations. To effectively manage growth, we must continue to: improve our key business applications, processes, and computing infrastructure; enhance information and communication systems; and ensure that our policies and procedures evolve to reflect our current operations and are appropriately communicated to and observed by employees (an increasing portion of whom are working and are expected to work remotely). These enhancements and improvements will require additional investments and allocation of valuable management and employee time and resources. Failure to effectively manage growth could result in difficulty or delays in deploying our solutions, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features, or other operational difficulties, and any of these difficulties could adversely impact our business performance and results of operations.
We may be unable to successfully introduce new products or services or fail to keep pace with advances in technology.
The successful implementation of our business model depends on our ability to adapt to evolving technologies and increasingly aggressive industry standards and introduce new products and services accordingly. We cannot provide assurance that we will be able to introduce new products on schedule, or at all, or that such products will achieve market acceptance. Moreover, competitors may develop competitive products that could adversely affect our operating results. Any failure by us to introduce planned products or other new products or to introduce these products on schedule could have an adverse effect on our revenue growth and operating results.
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If we cannot adapt to changing technologies, our products and services may become obsolete and our business could suffer. Because the markets in which we operate are characterized by rapid technological change, we may be unable to anticipate changes in our current and potential clients’ or users’ requirements that could make our existing technology obsolete. Our success will depend, in part, on our ability to continue to enhance our existing products and services, develop new technology that addresses the increasingly sophisticated and varied needs of our prospective clients and users, license leading technologies and respond to technological advances and emerging industry standards and practices, all on a timely and cost-effective basis. The development of our proprietary technology entails significant technical and business risks. We may not be successful in using new technologies effectively or adapting our proprietary technology to evolving client or user requirements or emerging industry standards. Any of the foregoing could materially and adversely impact our business, financial condition, and operating results.
Our business depends in part on our ability to establish and maintain additional strategic relationships.
To be successful, we must continue to maintain our existing strategic relationships and establish additional strategic relationships with leaders in a number of the markets in which we operate. This is critical to our success because we believe that these relationships contribute towards our ability to:
| ● | extend the reach of our products and services to a larger number of participants in the Healthcare and Life Sciences industry; |
| ● | develop and deploy new products and services; |
| ● | further enhance our brand; and |
| ● | generate additional revenue and cash flows. |
Entering into strategic relationships is complicated because strategic partners may decide to compete with us in some or all of the markets in which we operate. In addition, we may not be able to maintain or establish relationships with key participants in the healthcare and Life Sciences industries if we conduct business with their competitors.
We depend, in part, on our strategic partners’ ability to generate increased acceptance and use of our products and services. If we lose any of these strategic relationships or fail to establish additional relationships, or if our strategic relationships fail to benefit us as expected, this could materially and adversely impact on our business, financial condition, and operating results.
Our sales cycle can be lengthy and unpredictable, which may cause our revenue and operating results to fluctuate significantly.
Our sales cycle can be lengthy and unpredictable. Our sales efforts involve educating our customers about the use and benefits of our offerings and solutions, including the technical capabilities of our solutions and the potential cost savings and productivity gains achievable by deploying them. Additionally, many of our potential clients are typically already in long-term contracts with their current providers and face significant costs associated with transitioning to our offerings and solutions. As a result, potential customers typically undertake a significant evaluation process, which frequently involves not only our software platforms and component systems infrastructure and platforms but also their existing capabilities and solutions and can result in a lengthy sales cycle. We spend substantial time, effort, and money on our sales efforts without any assurance that our efforts will produce any sales. In addition, purchases of our platform as a service infrastructure are frequently subject to budget constraints, multiple approvals, and unplanned administrative, processing, and other delays. Many of our potential hospital clients have used all or a significant portion of their revenues to comply with federal mandates to adopt electronic medical records to maintain their Medicaid and Medicare reimbursement levels. In the event we are unable to manage our lengthy and unpredictable sales cycle, our business may be adversely affected.
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Our revenues have historically been concentrated among our top customers, and the loss of any of these customers could reduce our revenues and adversely impact our operating results.
Historically, our revenue has been concentrated among a small number of customers. During the fiscal year ended December 31, 2025, our top customer and our top five customers accounted for 20% and 58% of our revenue, respectively. As a result, the loss of one or more of these customers could materially reduce our revenue, harm our results of operations, and limit our growth.
| For The Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
Amount (In ‘000) | %
of Revenue | Amount (In ‘000) | %
of Revenue | |||||||||||||
| Customer 1 | $ | 2,718 | 20 | % | $ | 1,945 | 17 | % | ||||||||
| Customer 2 | 2,568 | 18 | % | 1,911 | 16 | % | ||||||||||
| Customer 3 | 1,347 | 10 | % | 1,233 | 11 | % | ||||||||||
| Customer 4 | 852 | 6 | % | 877 | 7 | % | ||||||||||
| Customer 5 | $ | 548 | 4 | % | $ | 847 | 7 | % | ||||||||
Risks Related to Our Intellectual Property and Our Platforms and Services
Protection of certain intellectual property may be difficult and costly, and our inability to protect our intellectual property could reduce the value of our products and services.
Our trademarks, trade secrets, copyrights, and other intellectual property rights are important assets to us. Various events outside of our control pose a threat to our intellectual property rights, as well as to our products, services, and technologies. For instance, any of our current or future intellectual property rights may be challenged by others or invalidated through administrative process or litigation.
We have taken efforts to protect our proprietary rights, including a combination of license agreements, confidentiality policies and procedures, confidentiality provisions in employment agreements, confidentiality agreements with third parties, and technical security measures, as well as our reliance on copyright, trademark, trade secret, and unfair competition laws. These efforts may not be sufficient or effective. For example, the secrecy of our trade secrets or other confidential information could be compromised by our employees or by third parties, which could cause us to lose the competitive advantage resulting from those trade secrets or confidential information. Unauthorized third parties may try to copy or reverse engineer portions of our products or otherwise infringe upon, misappropriate or use our intellectual property. We may not be able to discover or determine the extent of any unauthorized use of our proprietary rights. We may also conclude that, in some instances, the benefits of protecting our intellectual property rights may be outweighed by the expense.
In addition, our platforms incorporate “open source” software components that are licensed to us under various public domain licenses. Open-source license terms are often ambiguous, and there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses. Therefore, the potential impact of such terms on our business is somewhat unknown. Further, some enterprises may be reluctant or unwilling to use cloud-based services, because they have concerns regarding the risks associated with the security and reliability, among other things, of the technology delivery model associated with these services. If enterprises do not perceive the benefits of our services, then the market for these services may not expand as much or develop as quickly as we expect, either of which would adversely affect our business, financial condition, or operating results.
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Legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain and still evolving. The laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and effective intellectual property protection may not be available in every country in which our products and services are distributed.
Any impairment of our intellectual property rights, or our failure to protect our intellectual property rights adequately, could give our competitors access to our technology and could materially and adversely impact our business and operating results. Any increase in the unauthorized use of our intellectual property could also divert the efforts of our technical and management personnel and resulting in significant additional expense to us, which could materially and adversely impact our operating results.
Finally, to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming, and distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. Negative publicity related to a decision by us to initiate such enforcement actions against a customer or former customer, regardless of its accuracy, may adversely impact our other customer relationships or prospective customer relationships, harm our brand and business, and could cause the market price of our common stock to decline. Our failure to secure, protect and enforce our intellectual property rights could adversely affect our brand and our business.
We may be liable for infringing the intellectual property rights of others.
Our competitors may develop similar intellectual property, duplicate our products and/or services, or design around any patents or other intellectual property rights we hold. Litigation may be necessary to enforce our intellectual property rights or to determine the validity and scope of the patents, intellectual property, or other proprietary rights of third parties, which could be time-consuming and costly and have an adverse effect on our business and financial condition. Intellectual property infringement claims could be made against us and our ecosystem partners, especially as the number of our competitors grows. These claims, even if not meritorious, could be expensive and divert our attention from operating our company and result in a temporary inability to use the intellectual property subject to such claim. In addition, if we, our ecosystem partners, and/or customers become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantial damage award and develop comparable non-infringing intellectual property, to obtain a license, or to cease providing the content or services that contain the infringing intellectual property. We may be unable to develop a non-infringing intellectual property or obtain a license on commercially reasonable terms, if at all.
We may not be able to protect our intellectual property rights throughout the world.
Third parties may attempt to commercialize competitive products or services in foreign countries where we do not have a trademark or copyright registration or where legal recourse may be limited. This may have a significant commercial impact on our foreign business operations which we expect to expand.
Registration and enforcement of intellectual property rights to our platforms and services in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. The requirements for patentability may differ in certain countries, particularly developing countries. For example, Europe has a heightened requirement for patentability of software inventions. Thus, even in countries where we do pursue patent protection, there can be no assurance that any patents will issue with claims that cover our products. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the United States and in some cases may even force us to grant a compulsory license to competitors or other third parties. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States or from selling or importing products concerning our healthcare technology into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and services and further, may export otherwise infringing products and services to territories where we have patent protection, but enforcement on infringing activities is inadequate. These products or services may compete with ours, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
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Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. In addition, certain countries in Europe and certain developing countries, including India and China, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to our patents to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license. Finally, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.
Our use of third-party open-source software could negatively affect our ability to offer our products and services through our platforms and subject us to possible litigation.
We have incorporated, and may in the future incorporate, third-party open-source software in our technologies. Open-source software is generally licensed by its authors or other third parties under open-source licenses. From time to time, companies that use third-party open-source software have faced claims challenging the use of such open-source software and requesting compliance with the open-source software license terms. Accordingly, we may be subject to suits by parties claiming ownership of what we believe to be open-source software or claiming non-compliance with the applicable open-source licensing terms. Some open-source software licenses require end-users who use, distribute or make available across a network software and services that include open-source software to offer to the public aspects of the technology that incorporates the open-source software for no cost, make publicly available source code (which in some circumstances could include valuable proprietary code) for modifications or derivative works created based upon incorporating or using the open-source software and/or to license such modifications or derivative works under the terms of the particular open source license. If we combine our proprietary software with open-source software in a certain manner, we could, under certain open-source licenses, be required to release or license the source code of our proprietary software to the public. Additionally, if a third-party software provider has incorporated open-source software into software that we license from such provider, we could be required to disclose any of our source code that incorporates or is a modification of our licensed software. While we use tools designed to help us monitor and comply with the licenses of third-party open-source software and protect our valuable proprietary source code, we may inadvertently use third-party open-source software in a manner that exposes us to claims of non-compliance with the terms of their licenses, including claims of intellectual property rights infringement or for breach of contract. Furthermore, there exists today an increasing number of types of open-source software licenses, almost none of which have been tested in courts of law to provide guidance of their proper legal interpretations, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our use of the open-source software. If we were to receive a claim of non-compliance with the terms of any of these open-source licenses, we may be required to publicly release certain portions of our proprietary source code, expend substantial time and resources to re-engineer some of our software, or pay damages, settlement fees or a royalty to use certain open-source software. Any of the foregoing could disrupt and harm our business.
In addition, the use of third-party open-source software typically exposes us to greater risks than the use of third-party commercial software because open-source licensors generally do not provide support, warranties, controls, indemnification, or other contractual protections regarding the functionality or origin of the software. Use of open-source software may also present additional security risks because the public availability of such software may make it easier for hackers and other third parties to determine how to compromise our platform. Any of the foregoing could harm our business, financial condition, results of operations, and prospects and could help our competitors develop products and services that are similar to or better than ours.
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Any failure to protect our intellectual property that is not registered could impair our business.
Although we rely on copyright laws to protect the works of authorship (including software) created by us, we do not register the copyrights in any of our copyrightable works. Copyrights of U.S. origin must be registered before the copyright owner may bring an infringement suit in the United States. Furthermore, if a copyright of U.S. origin is not registered within three months of publication of the underlying work, the copyright owner may be precluded from seeking statutory damages or attorney’s fees in any United States enforcement action and may be limited to seeking actual damages and lost profits. Accordingly, if one of our unregistered copyrights of U.S. origin is infringed by a third party, we will need to register the copyright before we can file an infringement suit in the United States, and our remedies in any such infringement suit may be limited.
We are subject to numerous privacy and data security laws and related contractual requirements and our failure to comply with those obligations could cause us significant harm.
In the normal course of our business, we collect, process, use and disclose information about individuals, including protected health information and other patient data, as well as information relating to health professionals and our employees. The collection, processing, use, disclosure, disposal, and protection of such information is highly regulated both in the United States and other jurisdictions, including but not limited to, under HIPAA, as amended by HITECH; U.S. state privacy, security, and breach notification and healthcare information laws; the European Union’s GDPR; and other European privacy laws as well as privacy laws being adopted in other regions around the world. These laws and regulations are complex, and their interpretation is rapidly evolving, making implementation and enforcement, and thus compliance requirements, ambiguous, uncertain, and potentially inconsistent. In addition, our collection, processing, use, disclosure, and protection of information are subject to related contractual requirements. Compliance with such laws and related contractual requirements may require changes to our collection, use, transfer, disclosure, or other processing of information about individuals, and may thereby increase compliance costs. Failure to comply with such laws and/or related contractual obligations could result in regulatory enforcement or claims against us for breach of contract or may lead third parties to terminate their contracts with us and/or choose not to work with us in the future. Should this occur, there could be a material adverse effect on our reputation, business, financial condition, and results of operations.
These regulations often govern the use, handling, and disclosure of information about individuals, including medical information, and require the use of standard contracts, privacy and security standards, and other administrative simplification provisions. In relation to HIPAA, we do not consider our service offerings to generally cause us to be subject as a covered entity; however, in certain circumstances, we are subject to HIPAA as a business associate and may enter into business associate agreements.
Additionally, the Federal Trade Commission (the “FTC”) and many state attorneys general are interpreting existing federal and state consumer protection laws to impose evolving standards for the online collection, use, dissemination, and security of information about individuals, including health-related information. Courts may also adopt the standards for fair information practices promulgated by the FTC, which concern consumer notice, choice, security, and access. Consumer protection laws require us to publish statements that describe how we handle information about individuals and choices individuals may have about the way we handle their information. If such information that we publish is considered untrue, we may be subject to government claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences. Furthermore, according to the FTC violating consumers’ privacy rights or failing to take appropriate steps to keep information about consumers secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the FTC Act.
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In addition, certain states have adopted robust privacy and security laws and regulations. Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners. For example, the CCPA, which took effect in 2020, imposes obligations and restrictions on businesses regarding their collection, use, and sharing of personal information and provides new and enhanced data privacy rights to California residents, such as affording them the right to access and delete their personal information and to opt-out of certain sharing of personal information. Protected health information that is subject to HIPAA is excluded from the CCPA, however, the information we hold about individuals that is not subject to HIPAA would be subject to the CCPA. It is unclear how HIPAA and the other exceptions may be applied under the CCPA. The CCPA may increase our compliance costs and potential liability. Many similar privacy laws have been proposed at the federal level and in other states.
The GDPR became enforceable on May 25, 2018. The GDPR regulates our processing of personal data and imposes stringent requirements. The GDPR includes sanctions for violations up to the greater of €20 million or 4.0% of worldwide gross annual revenue and applies to services providers such as us. In addition, from the beginning of 2021(when the transitional period following Brexit expires), we will have to comply with the GDPR and also the UK GDPR, with each regime having the ability to fine up to the greater of €20 million (£17 million) or 4% of global turnover. The relationship between the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear, for example how data transfers between EU member states and the United Kingdom will be treated and the role of the Information Commissioner’s Office following the end of the transitional period. These changes will lead to additional costs and increase our overall risk exposure.
Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the EEA to the United States, e.g., on July 16, 2020, the Court of Justice of the European Union (“CJEU”) invalidated the EU-US Privacy Shield Framework (“Privacy Shield”) under which personal data could be transferred from the EEA to U.S. entities who had self-certified under the Privacy Shield scheme. While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and a potential alternative to the Privacy Shield), it made clear that reliance on them alone may not necessarily be sufficient in all circumstances; this has created uncertainty. At the moment we have not implemented any Privacy Shield procedures or certifications. We also currently rely on the standard contractual clauses to transfer personal data outside the EEA, including to the United States. It may subject us to a lawsuit of a European Union citizen, if we inadvertently process their personally identifiable information.
The United States, the European Union, and other jurisdictions where we operate continue to issue new and enhance existing, privacy and data security protection regulations related to the collection, use, disclosure, disposal, and protection of information about individuals, including medical information. Privacy and data security laws are rapidly evolving both in the United States and internationally, and the future interpretation of those laws is somewhat uncertain. E.g., we do not know how E.U. regulators will interpret or enforce many aspects of the GDPR and some regulators may do so in an inconsistent manner. In the United States, privacy and data security is an area of emphasis for some but not all state regulators, and new legislation has been and likely will continue to be introduced at the state and/or federal level. For instance, there is a new act on the ballot in California, the California Privacy Rights Act, which may go into effect in 2023. Additional legislation or regulation might, among other things, require us to implement new security measures and processes or bring within the legislation or regulation de-identified health or other information about individuals, each of which may require substantial expenditures or limit our ability to offer some of our services.
Risks Related to Our Industry
Markets for our products and services are highly competitive and subject to rapid technological change, and we may be unable to compete effectively in these markets.
The market for healthcare solutions is intensely competitive and is characterized by rapidly evolving technology, solution standards, and users’ needs, and the frequent introduction of new products and services. There can be no assurance that we capture additional opportunities in such rapidly evolving markets. Some of our competitors may be more established, benefit from greater name, recognition and have substantially greater financial, technical, and marketing resources than us. Moreover, we expect that competition will continue to increase as a result of potential incentives provided by government programs and as a result of consolidation in both the IT and healthcare industries. If one or more of our competitors or potential competitors were to merge or partner with another of our competitors, the change in the competitive landscape could adversely affect our ability to compete effectively.
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We compete on the basis of several factors, including:
| ● | breadth and depth of services, including our open architecture and the level of product integration across care settings; |
| ● | integrated platform; |
| ● | regulatory compliance; |
| ● | reputation; |
| ● | reliability, accuracy, and security; |
| ● | client service; |
| ● | the total cost of ownership; |
| ● | innovation; and |
| ● | industry acceptance, expertise, and experience. |
There can be no assurance that we will be able to compete successfully against current and future competitors or that the competitive pressures that we face will not materially and adversely impact our business, financial condition, and operating results.
Increased government involvement in healthcare could materially and adversely impact our business.
United States healthcare system reform at both the federal and state level could increase government involvement in healthcare, reconfigure reimbursement rates and otherwise change the business environment of our clients and the other entities with which we have a business relationship. We cannot predict whether or when future healthcare reform initiatives at the federal or state level or other initiatives affecting our business will be proposed, enacted, or implemented or what impact those initiatives may have on our business, financial condition, or operating results. Our clients and the other entities with which we have a business relationship could react to these initiatives and the uncertainty surrounding these proposals by curtailing or deferring investments, including those for our products and services.
Consolidation in the healthcare industry could adversely impact our business, financial condition, and operating results.
Many healthcare industry organizations are consolidating to create integrated healthcare delivery systems with greater market power. As provider networks and managed care organizations consolidate, thus decreasing the number of market participants, the competition to provide products and services like ours will become more intense, and the importance of establishing and maintaining relationships with key industry participants will increase. These industry participants may try to use their market power to negotiate price reductions for our products and services. Further, consolidation of management and billing services through integrated delivery systems may decrease demand for our products. Such consolidation may also lead to integrated delivery systems requiring newly acquired physician practices to replace our products and services with those already in use in the larger enterprise. Any of these factors could materially and adversely impact our business, financial condition, and operating results.
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We are subject to numerous regulatory requirements of the healthcare industry and is susceptible to a changing regulatory environment.
As a participant in the healthcare industry, our operations and relationships, and those of our clients, are regulated by a number of foreign, federal, state, and local governmental entities. The impact of such regulations on us, our products, and our services can be both direct and indirect. The direct impact is present to the extent we are ourselves subject to the pertinent laws and regulations. The indirect effect of such regulations can be experienced both in terms of the level of government reimbursement available to our clients and to the extent, our products must be capable of being used by our clients in a manner compliant with applicable laws and regulations. Furthermore, our efforts to expand into new markets internationally may subject us to numerous additional laws and regulations that may be potentially burdensome in compliance.
The ability of our clients to comply with laws and regulations while using our software platforms and solutions could affect the marketability of our products or our compliance with our client contracts or even expose us to direct liability under the theory that we had assisted our clients in a violation of healthcare laws or regulations. Because our business relationships with doctors, hospitals, and Life Sciences clients are unique and the healthcare IT industry (as a whole) is. to a certain extent, in its incipient stage, the application of many state and federal regulations to our business operations and to our clients may be uncertain.
Additionally, a tendency to impose additional regulation in the U.S. federal and state privacy and security laws (such as CCPA); fraud and abuse laws, including anti-kickback laws and limitations on physician referrals; numerous quality measurement programs being adopted by our clients; and laws related to distribution and marketing, including the off-label promotion of prescription drugs, which may be directly or indirectly applicable to our operations and relationships or the business practices of our clients. It is possible that a review of our business practices or those of our clients by courts or regulatory authorities could result in a determination that could adversely affect us.
In addition, the healthcare regulatory environment may change in a way that restricts our existing operations or our growth. The healthcare industry generally and the EHR industry specifically are expected to continue to undergo significant legal and regulatory changes for the foreseeable future, which could have an adverse effect on our business, financial condition, and operating results. We cannot predict the effect of possible future enforcement, legislation, and regulation.
We may be directly and indirectly liable for its client’s non-compliance with laws and regulations addressing Electronic Health Records.
A number of relevant federal and state laws govern the use and content of EHRs, including fraud and abuse laws that may affect the approach to our technological solutions. We provide solutions and expert services in connection with EHR to a variety of healthcare providers. As a result, our platforms and services have to be designed in a manner that facilitates our clients’ compliance with applicable laws and regulations. We cannot predict the content or effect of possible changes to these laws or new federal and state laws that might govern these systems and services. Furthermore, we may be required to obtain pertinent certifications or permissions to meet industry standards that could adversely impact our business.
The Company and its products are subject to laws and regulations concerning privacy, information security, data protection, consumer protection, and protection of minors, and these laws and regulations are continually evolving. Our actual or perceived failure to comply with these laws and regulations could harm our business, financial condition, results of operations, reputation, or prospects.
In addition to healthcare-specific information protection requirements, we store sensitive information, including personal information about our employees, and our platforms involve the storage and transmission of customers’ personal information on equipment, networks, and corporate systems run by us or managed by third parties including Amazon, Apple, Facebook, Google, and Microsoft. We are subject to a number of laws, rules, and regulations requiring us to provide notification to players, investors, regulators, and other affected parties in the event of a security breach of certain personal data or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to practically implement. The costs of compliance with these laws, including the European Union’s General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018 (“CCPA”), have increased and may increase in the future. Our corporate systems, third-party systems, and security measures may be breached due to the actions of outside parties, employee error, malfeasance, a combination of these, or otherwise, and, as a result, an unauthorized party may obtain access to, or compromise the integrity of, our data, our employees’ data, our customers’ data or any third-party data we may possess. Any such security breach could require us to comply with various breach notification laws, may affect our ability to operate, and may expose us to litigation, remediation and investigation costs, increased costs for security measures, loss of revenue, damage to our reputation, and potential liability, each of which could be material.
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Various government and consumer agencies have called for new regulation and changes in industry practices and are continuing to review the need for greater regulation for the collection of information concerning consumer behavior on the Internet, including regulation aimed at restricting certain targeted advertising practices. For example, the State of California’s passage of the CCPA, which went into effect on January 1, 2020, and created new privacy rights for consumers residing in the state. There is also increased attention being given to the collection of data from minors. For instance, the Children’s Online Privacy Protection Act (“COPPA”) requires companies to obtain parental consent before collecting personal information from children under the age of 13. Compliance with GDPR, CCPA, COPPA, and similar legal requirements has required us to devote significant operational resources and incur significant expenses.
We strive to comply with all applicable laws, policies, legal obligations, and certain industry codes of conduct relating to privacy and data protection, to the extent reasonably attainable. However, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. It is also possible that new laws, policies, legal obligations, or industry codes of conduct may be passed, or existing laws, policies, legal obligations, or industry codes of conduct may be interpreted in such a way that could prevent us from being able to offer services to citizens of a certain jurisdiction or may make it costlier or more difficult for us to do so. Any failure or perceived failure by us to comply with our privacy policy and terms of service, our privacy-related obligations to players or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other player data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause our players to lose trust in us, which could have an adverse effect on our business, financial condition, results of operations, reputation or prospects. Additionally, if third parties we work with, such as players, vendors, or developers violate applicable laws or our policies, such violations may also put our clients’ and their patients’ information at risk and could, in turn, have an adverse effect on our business, financial condition, results of operations, reputation, or prospects.
The Company and its products are subject to laws and regulations concerning healthcare provider’s practices and patients’ information protection. Our actual or perceived failure to comply with these laws and regulations could harm our business, financial condition, results of operations, reputation, or prospects.
As part of the operation of our business, we, and our subcontractors may have access to, or our clients may provide to us, individually identifiable health information related to the treatment, payment, and operations of providers’ practices. In the United States, government and industry legislation and rulemaking, especially HIPAA, HITECH, and standards and requirements published by industry groups such as the Joint Commission require the use of standard transactions, standard identifiers, security other standards and requirements for the transmission of certain electronic health information. National standards and procedures underripe include the “Standards for Electronic Transactions and Code Sets” (the “Transaction Standards”); the “Security Standards” (the “Security Standards”); and the “Standards for Privacy of Individually Identifiable Health Information” (the “Privacy Standards”). The Transaction Standards require the use of specified data coding, formatting, and content in all specified “healthcare Transactions” conducted electronically. The Security Standards require the adoption of specified types of security measures for certain electronic health information, which is called Protected Health Information (“PHI”). The Privacy Standards grant a number of rights to individuals as to their PHI and restrict the use and disclosure of PHI by “Covered Entities,” defined as “health plans,” “healthcare providers,” and “healthcare clearinghouses.”
Any failure or perceived failure by us to comply with the aforementioned laws and regulations in connection with our products and services provided to our clients or used by third parties, or our related legal obligations, or any compromise of security that results in the unauthorized release or transfer protected information, may result in governmental enforcement actions, litigation, class action, or public statements against us by consumer advocacy groups or others and could cause our clients to lose trust in us, which could have an adverse effect on our business, financial condition, results of operations, reputation or prospects.
The Company and its products are subject to laws and regulations concerning electronic prescribing standards and the adoption of controlled substance electronic prescribing. Our actual or perceived failure to comply with these laws and regulations could harm our business, financial condition, results of operations, reputation, or prospects.
The use of our software by physicians to perform a variety of functions, including electronic prescribing, which refers to the electronic routing of prescriptions to pharmacies and the ensuing dispensation, is governed by state and federal law, including fraud and abuse laws. States have differing prescription format requirements, which we have programmed into our software. There is significant variation in the laws and regulations governing prescription activity, as federal law and the laws of many states permit the electronic transmission of certain controlled prescription orders, while the laws of several states neither specifically permit nor specifically prohibit the practice. Restrictions exist at the federal level on the use of electronic prescribing for controlled substances and certain other drugs, including a regulation enacted by the Drug Enforcement Association in mid-2010. However, some states (most notably New York) have passed complementary laws governing the use of electronic prescribing tools in the use of prescribing opioids and other controlled substances, and we expect this to continue to be addressed with regulations in other states. In addition, the HHS published its final “E-Prescribing and the Prescription Drug Program” regulations in 2005 (effective January 1, 2006), and final regulations governing the standards for electronic prescribing under Medicare Part D in 2008 (effective June 6, 2008) (the “ePrescribing Regulations”). These regulations are required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) and consist of detailed standards and requirements, in addition to the HIPAA Standard discussed above, for prescription and other information transmitted electronically in connection with a drug benefit covered by the MMA’s Prescription Drug Benefit. Further, in 2016, Congress passed the Comprehensive Addiction and Recovery Act, which contained components related to Prescription Drug Monitoring Programs and other elements that relate to the use of our technologies. These standards are detailed and broad and cover not only routing transactions between prescribers and pharmacies, but also electronic eligibility, formulary, and benefits inquiries. In general, regulations in this area can be burdensome and evolve regularly, meaning that any potential benefits to our clients from utilizing such solutions and services may be superseded by a newly promulgated regulation that adversely affects our business model. Our efforts to provide solutions that enable our clients to comply with these regulations could be time consuming and expensive.
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Any failure or perceived failure by us to comply with the aforementioned laws and regulations in connection with our products and services provided to our clients or used by third parties, or our related legal obligations, or any compromise of security that results in the unauthorized release or transfer protected information, may result in governmental enforcement actions, litigation, class action, or public statements against us by consumer advocacy groups or others and could cause our clients to lose trust in us, which could have an adverse effect on our business, financial condition, results of operations, reputation, or prospects.
We may be subject to liability as a result of a failure or a perceived failure to comply with laws and regulations governing approval and reimbursement of claims by healthcare industry payers.
Our software solutions allow to electronically transmits medical claims by physicians to patients’ payers for approval and reimbursement. In addition, our services include assistance in cloud processing and submission of medical claims by physicians to patients’ payers for approval and reimbursement. Federal law provides that it is both a civil and a criminal violation for any person to submit, or cause to be submitted, a claim to any payer, including, without limitation, Medicare, Medicaid, and all private health plans and managed care plans, seeking payment for any services or products that overbills or bills for items that have not been provided to the patient. We have in place policies and procedures that we believe assure that all claims that are transmitted by our system and through our services are accurate and complete, provided that the information given to us by our clients is also accurate and complete. If, however, we or our subcontractors do not follow those procedures and policies, or they are not sufficient to prevent inaccurate claims from being submitted, we could be subject to liability.
In the event our software platforms and solutions are found to be subject to FDA’s regulations and approval in connection with the certain types of medical devices our software integrates with, we may have to incur additional costs or be subjected to potential criminal and civil penalties in case of the actual or perceived failure of us to comply with such regulations.
Certain computer software products are regulated as medical devices under the Federal Food, Drug and Cosmetic Act. The 21st Century Cures Act, passed in December 2016, clarified the definition of a medical device to exclude health information technology such as Electronic Health Records; however, the legislation did leave the opportunity for that designation to be revisited if determined to be necessary by changing industry and technological dynamics. Accordingly, the Food and Drug Administration (the “FDA”) may become increasingly active in regulating computer software intended for use in healthcare settings. Depending on the product, we could be required to notify the FDA and demonstrate substantial equivalence to other products on the market before marketing such products or obtain FDA approval by demonstrating safety and effectiveness before marketing a product. Depending on the intended use of a device, the FDA could require us to obtain extensive data from clinical studies to demonstrate safety or effectiveness or substantial equivalence. If the FDA requires this data, we could be required to obtain approval of an investigational device exemption before undertaking clinical trials. Clinical trials can take extended periods of time to complete. We cannot provide assurances that the FDA would approve or clear a device after the completion of such trials. In addition, these products would be subject to the Federal Food, Drug, and Cosmetic Act’s general controls. The FDA can impose extensive requirements governing pre- and post-market conditions such as approval, labelling, and manufacturing, as well as governing product design controls and quality assurance processes. Failure to comply with FDA requirements can result in criminal and civil fines and penalties, product seizure, injunction, and civil monetary policies—each of which could have an adverse effect on our business.
We may have to incur material expenses in order to accommodate its client’s interoperability requests dictated by interoperability standards of exchange of health information.
Our clients are concerned with and often require that our software solutions and health care devices be interoperable with other third-party health care information technology suppliers. With the passing of the MACRA in 2015, the U.S. Congress declared it a national objective to achieve widespread exchange of health information through interoperable certified EHR technology nationwide by December 31, 2018. The 21st Century Cures Act, which was passed and signed into law in December 2016, includes numerous provisions intended to encourage this nationwide interoperability.
In February 2019, HHS’s Office of the National Coordinator for Health Information Technology (“ONC”) released a proposed rule titled, “21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program.” Following an extended public comment period, in March 2020 ONC released the final rule which implements the key interoperability provisions included in the Cures Act. Specifically, it calls on developers of certified EHRs and health IT products to adopt standardized application programming interfaces (“APIs”), which will help allow individuals to securely and easily access structured and unstructured EHI formats using smartphones and other mobile devices. This provision and others included in the rule create a lengthy list of new certification and maintenance of certification requirements that developers of EHRs and other health IT products have to meet in order to maintain approved federal government certification status. Although our current products do not require such certification, they may be required to be certified in future. Meeting and maintaining this certification status will require additional development costs.
The ONC rule also implements the information blocking provisions of the 21st Century Cures Act, including identifying reasonable and necessary activities that do not constitute information blocking. Under the 21st Century Cures Act, the U.S. Department of Health and Human Services (“HHS”) has the regulatory authority to investigate and assess civil monetary penalties of up to $1,000,000 against certified health IT developers found to be in violation of “information blocking.” This new oversight and authority to investigate claims of information blocking creates significant risks for us and our clients and could potentially create substantial new compliance costs.
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Other regulatory provisions included in the ONC Cures Act final rule could create compliance costs and/or regulatory risks for us. Because these regulations are subject to future changes and/or significant enforcement discretion by federal agencies, the ultimate impact of these regulations is unknown.
There is significant uncertainty in the healthcare industry, both as a result of recently enacted legislation and changing government regulation, which may have a material adverse impact on the businesses of our hospital clients and ultimately on our business, financial condition, and results of operations.
The healthcare industry is subject to changing political, economic, and regulatory influences that may affect the procurement processes and operation of healthcare facilities, including our hospital clients. During the past decade, the healthcare industry has been subject to increased legislation and regulation of, among other things, reimbursement rates, payment programs, information technology programs, and certain capital expenditures (collectively, the “Health Reform Laws”). The Health Reform Laws contain various provisions that impact us and our clients. Some of these provisions have a positive impact, by expanding the use of electronic health records in certain federal programs, for example, while others, such as reductions in reimbursement for certain types of providers, have a negative impact due to fewer available resources. The continued increase in fraud and abuse penalties is expected to adversely affect participants in the healthcare sector, including us.
The activity related to the repeal, repair, and/or replacement of the Patient Protection and Affordable Care Act (“PPACA”), including any changes resulting from continued judicial and congressional challenges to certain aspects of the law, and the 2015 repeal of the Sustainable Growth Rate and replacement with the MACRA may have an impact on our business. The Affordable Care Act, passed in 2010, contained various provisions that have impacted us and our clients, and any replacement or adjustment of that law may change requirements related to our products or how our clients use them, as well as reimbursement available to our clients. These may have a positive impact by requiring the expanded use of EHRs and analytics tools to participate in certain federal programs, for example, while others, such as those mandating reductions in reimbursement for certain types of providers, may have a negative impact by reducing the resources available to purchase our products. Increases in fraud and abuse enforcement and penalties may also adversely affect participants in the healthcare sector, including us.
As existing regulations mature and become better defined, we anticipate that these regulations will continue to directly affect certain of our products and services, but we cannot fully predict the effect at this time. We have taken steps to modify our products, services, and internal practices as necessary to facilitate our compliance with the regulations, but there can be no assurance that we will be able to do so in a timely or complete manner. Achieving compliance with these regulations could be costly and distract management’s attention and divert other company resources, and any non-compliance by us could result in civil and criminal penalties.
We may not see the benefits from government funding programs initiated to accelerate the adoption and utilization of health information technology.
While government programs have been implemented to improve the efficiency and quality of the healthcare sector, including expenditures to stimulate business and accelerate the adoption and utilization of healthcare technology, we may not see the anticipated benefits of such programs. Under the ARRA, the PPACA, and the MACRA, significant government financial resources are being invested in healthcare, including financial incentives to healthcare providers who can demonstrate meaningful use of certified EHR technology since 2011. While we expect the ARRA, the PPACA, and the MACRA to continue to create sales opportunities over the next several years, we are unsure of the immediate or long-term impact of these government actions.
HITECH established the Medicare and Medicaid EHR Incentive Programs to provide incentive payments for eligible professionals, hospitals, and critical access hospitals as they adopt, implement, upgrade, or demonstrate meaningful use of certified EHR technology. HITECH, and subsequently MACRA, also authorized CMS to apply payment adjustments, or penalties, to Medicare eligible professionals and eligible hospitals that are not meaningful users under the Medicare EHR Incentive Program. Centers for Medicare & Medicaid Services (“CMS”).
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Although we believe that our service offerings will meet the requirements of HITECH and MACRA to allow our clients to qualify for financial incentives and avoid financial penalties for implementing and using our services, there can be no guaranty that our clients will achieve meaningful use (or its equivalent under MACRA’s Merit Based Incentive Payment System, Promoting Interoperability) or actually receive such planned financial incentives for our services. We also cannot predict the speed at which healthcare providers will adopt electronic health record systems in response to these government incentives, whether healthcare providers will select our products and services, or whether healthcare providers will implement an electronic health record system at all. In addition, the financial incentives associated with the meaningful use program are tied to provider participation in Medicare and Medicaid, and we cannot predict whether providers will continue to participate in these programs. Any delay in the purchase and implementation of electronic health records systems by healthcare providers in response to government programs, or the failure of healthcare providers to purchase an electronic health record system, could have an adverse effect on our business, financial condition, and results of operations. It is also possible that additional regulations or government programs related to electronic health records, amendment or repeal of current healthcare laws and regulations, or the delay in regulatory implementation could require us to undertake additional efforts to meet meaningful use standards, materially impact our ability to compete in the evolving healthcare IT market, materially impact healthcare providers’ decisions to implement electronic health records systems or have other impacts that would be unfavorable to our business. The costs of achieving and maintaining certified electronic health record technology (“CEHRT”) are also significant and because the definition of CEHRT and its use requirements for clients are subject to regulatory changes, these programs and future regulatory changes to them could adversely impact our business.
We may be subject to false or fraudulent claim laws.
There are numerous federal and state laws that forbid the submission of false information or the failure to disclose information in connection with submission and payment of physician claims for reimbursement. In some cases, these laws also forbid the abuse of existing systems for such submission and payment. Any failure of our revenue cycle management services to comply with these laws and regulations could result in substantial liability including, but not limited to, criminal liability, could adversely affect demand for our services and could force us to expend significant capital, research and development, and other resources to address the failure. Errors by us or our systems with respect to entry, formatting, preparation, or transmission of claim information may be determined or alleged to be in violation of these laws and regulations. Determination by a court or regulatory agency that our services violate these laws could subject us to civil or criminal penalties, invalidate all or portions of some of our client contracts, require us to change or terminate some portions of our business, require us to refund portions of our services fees, cause us to be disqualified from serving clients doing business with government payers and have an adverse effect on our business.
If the healthcare information technology market fails to continue to develop as quickly as expected, our business, financial condition, and operating results could be materially and adversely affected.
The electronic healthcare information market is rapidly evolving. A number of market entrants have introduced or developed products and services that are competitive with one or more components of the platforms and programmatic solutions we offer. We expect that additional companies will continue to enter this market, especially in response to recent legislative actions. In new and rapidly evolving industries, there is significant uncertainty and risk as to the demand for, and market acceptance of, recently introduced products and services. Because the markets for our products and services are new and evolving, we are not able to predict the size and growth rate of the markets with any certainty. If markets fail to develop, develop more slowly than expected, or become saturated with competitors, our business, financial condition, and operating results could be materially and adversely impacted.
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If the demand for cloud-based solutions declines, particularly in the Life Sciences industry, our revenues could decrease, and our business could be adversely affected.
The continued expansion of the use of cloud-based solutions, particularly in the Life Sciences industry, depends on a number of factors, including the cost, performance, and perceived value associated with cloud-based solutions, as well as the ability of providers of cloud-based solutions to address and maintain security, privacy, and unique regulatory requirements or concerns. If we or other cloud-based solution providers experience security incidents, loss of customer data, disruptions in delivery, or other problems, the market for cloud-based solutions in the Life Sciences industry, including our solutions, may be adversely affected. If cloud-based solutions do not continue to achieve more widespread adoption in the Life Sciences industry, or there is a widespread reduction in demand for cloud-based solutions, our revenues could decrease and our business could be adversely affected.
Unfavorable conditions in our industry or the U.S. economy, or reductions in information technology spending, could limit our ability to grow our business and negatively affect our operating results.
Our operating results may vary based on the impact of changes in our industry or the United States economy on us or our clients. The revenue growth and potential profitability of our business depend on demand for the workforce and provide platforms and programmatic for healthcare providers. We sell our products and services to organizations whose businesses fluctuate based on general economic and business conditions. In addition, a portion of our revenue is attributable to the number of users of our products at each of our clients, which in turn is influenced by the employment and hiring patterns of our clients and potential clients. To the extent that economic uncertainty or weak economic conditions cause our clients and potential clients to freeze or reduce their headcount, demand for our products may be negatively affected. If economic conditions deteriorate, our clients and potential clients may elect to decrease their workforce development budgets for cloud-based platforms and programmatic solutions by deferring or reconsidering purchases, which would limit our ability to grow our business and negatively affect our operating results.
The market for our data analysis systems and software solutions is new and unproven and may not grow.
We believe our future success will depend in large part on establishing and growing a market for our systems infrastructure and that are able to provide operational intelligence, particularly designed to collect and index machine data. Our systems infrastructure is designed to address interoperability challenges across the healthcare continuum. It integrates big data with real-time resources and applies machine learning algorithms to inform and optimize treatment decisions. In order to grow our business, we intend to expand the functionality of our offering to increase its acceptance and use by the broader market. In particular, our systems infrastructure is targeted at those in the healthcare continuum that are transitioning from fee-for-service to a value-based reimbursement model. While we believe this to be the current trend in healthcare, this trend may not continue in the future. Our systems infrastructure is less effective with a traditional fee-for-service model and if there is a reversion in the industry towards fee-for-service, or a shift to another model, we would need to update our offerings, and we may not be able to do so effectively or at all. It is difficult to predict client adoption and renewal rates, client demand for our software, the size and growth rate of the market for our solutions, the entry of competitive products, or the success of existing competitive products. Many of our potential clients may already be a party to existing agreements for competing offerings that may have lengthy terms or onerous termination provisions, and they may have already made substantial investments into those platforms which would result in high switching costs. Any expansion in our market depends on several factors, including the cost, performance, and perceived value associated with such operating system and software applications particularly considering the shifting market dynamics. Although we have experienced rapid adoption of our systems infrastructure and software solutions, the rate may slow or decline in the future, which would harm our business and operating results. In addition, while many large hospital systems and payers use our solutions, many of these entities use only certain of our offerings, and we may not be successful in driving broader adoption of our solutions among these existing users, which would limit our revenue growth.
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If the market for our offerings does not achieve widespread adoption or there is a reduction in demand for our offerings in our market caused by a lack of customer acceptance, technological challenges, lack of accessible machine data, competing technologies and products, decreases in corporate spending, weakening economic conditions, or otherwise, it could result in reduced customer orders, early terminations, reduced renewal rates or decreased revenues, any of which would adversely affect our business operations and financial results. You should consider our business and prospects in light of the risks and difficulties we may encounter in this new and unproven market.
If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.
The Securities and Exchange Commission (or SEC) has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on Nasdaq and if the price of our common stock is less than $5.00, our common stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.
One shareholder owns over 96% of our voting rights and will be able to exert a controlling influence over our business affairs and matters submitted to stockholders for approval. As a result, that shareholder has control over all matters submitted to our stockholders for approval, including the election and removal of directors, amendments to our certificate of incorporation and bylaws, the approval of any business combination, and any other significant corporate transaction. These actions may be taken even if they are opposed by other stockholders, including public stockholders like you.
Sales of a significant number of shares of our common stock in the public markets, or the perception that such sales could occur, could depress the market price of our common stock.
Sales of a substantial number of shares of our common stock in the public markets could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock would have on the market price of our common stock.
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If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Several analysts cover our stock. If one or more of those analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted by SEC rules and plan to rely on exemptions from certain disclosure requirements that are applicable to other SEC-registered public companies that are not emerging growth companies. These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the SOX, not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, the information we provide stockholders will be different than the information that is available with respect to other public companies. In this prospectus, we have not included all of the executive compensation-related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
The elimination of personal liability against our directors and officers under Delaware law and the existence of indemnification rights held by our directors, officers and employees may result in substantial expenses.
Our Amended and Restated Certificate of Incorporation and our Bylaws eliminate the personal liability of our directors and officers to us and our stockholders for damages for breach of fiduciary duty as a director or officer to the extent permissible under Delaware law. Further, our amended and restated certificate of incorporation and our Bylaws and individual indemnification agreements we have entered with each of our directors and executive officers provide that we are obligated to indemnify each of our directors or officers to the fullest extent authorized by the Delaware law and, subject to certain conditions, advance the expenses incurred by any director or officer in defending any action, suit or proceeding prior to its final disposition. Those indemnification obligations could expose us to substantial expenditures to cover the cost of settlement or damage awards against our directors or officers, which we may be unable to afford. Further, those provisions and resulting costs may discourage us or our stockholders from bringing a lawsuit against any of our current or former directors or officers for breaches of their fiduciary duties, even if such actions might otherwise benefit our stockholders.
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Our certificate of incorporation will designate the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Our amended and restated certificate of incorporation specifies that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of us, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our Certificate of Incorporation or the Bylaws, or (d) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above
We believe these provisions benefit us by providing increased consistency in the application of Delaware law by chancellors particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. However, the provision may have the effect of discouraging lawsuits against our directors, officers, employees and agents as it may limit any stockholder’s ability to bring a claim in a judicial forum that such stockholder finds favorable for disputes with us or our directors, officers, employees or agents. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our restated certificate of incorporation to be inapplicable or unenforceable in such action. If a court were to find the choice of forum provision contained in our restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition or results of operations.
These broad market and industry fluctuations may materially adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock are low.
In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
We currently do not intend to declare dividends on our common stock in the foreseeable future and, as a result, your returns on your investment may depend solely on the appreciation of our common stock.
We currently do not expect to declare any dividends on our common stock in the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used to provide working capital, to support our operations, and to finance the growth and development of our business. Any determination to declare or pay dividends in the future will be at the discretion of our board of directors, subject to applicable laws, and dependent upon a number of factors, including our earnings, capital requirements, and overall financial conditions. In addition, our ability to pay dividends on our common stock may be restricted by the terms of any future debt or preferred securities issuances. Accordingly, your only opportunity to achieve a return on your investment in our Company may be if the market price of our common stock appreciates and you sell your shares at a profit. The market price for our common stock may never exceed, and may fall below, the price that you pay for such common stock.
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Item 1B. Unresolved Staff Comments
None
Item 1C. Cybersecurity
HCTI employs a multilayer approach to addressing cybersecurity risk based on the National Institute of Standards and Technology (NIST) framework. It has established a dedicated cybersecurity team that utilizes internal and external assessments, automated monitoring tools, and input from public and private partners to identify potential cyber threats. External third-party security firms are engaged to assist with cybersecurity risk assessments, penetration testing and system security analysis. HCTI’s cybersecurity team works in conjunction with the risk management, legal, finance, accounting, operations, and information technology areas to assess the risk these identified cybersecurity threats present to the organization. To ensure consistency, these cybersecurity risk assessments are incorporated into HCTI’s Enterprise Risk Management process, HCTI’s information technology leadership reviews the company’s enterprise risk management-level cybersecurity risks on a quarterly basis, and key cybersecurity risks are incorporated into HCTI’s enterprise risk management framework. Cybersecurity risks are managed and controlled through multiple overlapping layers of cybersecurity defenses that include:
| ● | expert input from both public and private partnerships; |
| ● | the implementation of a comprehensive cybersecurity policy that encompasses but is not limited to social media, acceptable use (devices, wireless, remote access, internet use), information governance, monitoring, authentication, encryption, vulnerability management, third-party management, and recovery; |
| ● | required annual cybersecurity training for all employees with additional supplemental cybersecurity training required based on role; |
| ● | random employee phish testing and follow-up; |
| ● | procedural and automated cyber controls in conjunction with robust detection, mitigation, and recovery capabilities; |
| ● | the formation of a multidisciplinary cybersecurity incident response team; |
| ● | the integration of multiple threat intelligence sources into our cybersecurity tools and processes; |
| ● | the retention of external cybersecurity threat response resources; |
| ● | the formation of a multidisciplinary cybersecurity incident response team; and |
| ● | multiple cyber event simulation and tabletop exercises per year to hone the cybersecurity incident response team preparedness. |
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HCTI’s technical officers have primary responsibility for the development and oversight of HCTI’s cybersecurity team and the development and maintenance of the company’s related cybersecurity policies and procedures. The team has several years’ worth of experience working in the information and operational technology field and are registered professional engineers. The company’s cybersecurity team continuously assesses the evolving cyber threat landscape based on their expertise and that of our third-party partners. They then work with all parts of HCTI to protect against, detect, identify, respond to, and recover from the risks that cybersecurity threats present. The cybersecurity team views and responds to cybersecurity risks in a holistic manner, applying a comprehensive multilayered strategy to prevent, detect, and mitigate them. They have identified HCTI’s critical cyber assets and taken appropriate steps to protect them. External expertise is regularly engaged to assess HCTI’s cybersecurity program and help the cybersecurity team to strengthen the organization’s monitoring, alerting, prevention, mitigation, and recovery capabilities. Tabletop simulations, third party cyber vulnerability assessments, maturity assessments, and partnerships are used to assess and refine all elements of our cybersecurity program.
To continually manage and control the material risks that cybersecurity threats present to the organization, HCTI invests significantly in the cybersecurity elements outlined above. In addition, the Company has made significant investments to fulfill the operational and financial regulatory requirements laid out by the North American Electric Reliability Corporation Critical Infrastructure Protection Standards and Sarbanes-Oxley Act of 2002.
HCTI
faces a number of cybersecurity risks in connection with its business. Although such risks have
Item 2. Properties
We lease and maintain our primary offices at 7901 Stoneridge Drive, Suite # 210 Pleasanton CA, USA 94588. We also have our satellite lease offices at 666 Plainsboro Road, Suite 448, Plainsboro, NJ 08536. We currently do not own any real estate.
Item 3. Legal Proceedings
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We may in the future receive claims from third parties asserting, among other things, infringement of their intellectual property rights. Future litigation may be necessary to defend ourselves, our partners and our customers by determining the scope, enforceability and validity of third-party proprietary rights, or to establish our proprietary rights. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us. To date, we have not been made aware of any actual, pending or threatened litigation against the Company.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is trading on the Nasdaq Capital Market under the symbol “HCTI.”
Holders
As of April 15, 2026, there were 46 stockholders of record of our common stock, including Cede & Co., which houses numerous other holders of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, this number is not representative of the total number of beneficial owners of our stock.
Dividends
We have never declared or paid any cash dividend on our common stock. We intend to retain any future earnings to finance the operation and expansion of our business and fund our share repurchase program, and we do not expect to pay cash dividends in the foreseeable future.
Recent Sales of Unregistered Securities
None
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We did not repurchase any of our securities in 2025 or 2024.
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides information as of December 31, 2025, regarding our common stock that may be issued under the Plan(1):
| Plan category: | Number of Securities to be issued Upon Exercise of Outstanding Options, Warrants, and Rights (a) | Weighted Average Exercise Price of Outstanding Options (b) |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in column (a)) (c) | |||||||||
| Equity compensation plans approved by stockholders (2) | 2,710 | $ | 1,093 | 3,997,290 | ||||||||
| Total | 2,710 | $ | 1,093 | 3,997,290 | ||||||||
| (1) | Our board of directors and shareholders have approved a total reserve of 4,000,000 shares for issuance under the Plan which represents 0.2% of the authorized common-stock equity on December 31, 2025. |
| (2) | The Plan permits grants of equity awards to employees, directors, consultants and other independent contractors. |
We have not issued any options outside of the Plan.
Performance Graph
We are a “smaller reporting company,” as defined by Item 10(f)(1) of Regulation S-K, and therefore are not required to provide the information required by paragraph (e) of Item 201 of Regulation S-K.
Transfer Agent
The transfer agent for the common stock is VStock Transfer LLC, 18 Lafayette Place, Woodmere, New York, telephone (212) 828-8436.
Item 6. [Reserved]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion summarizes the significant factors affecting the operating results, financial condition, liquidity, and cash flows of our Company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes thereto, and the consolidated financial statements and the related notes thereto all included elsewhere in this report. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity, and capital resources, and all other non-historical statements in this discussion are forward-looking statements and are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, and in the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors”.
Overview
Healthcare Triangle, Inc. is a leading healthcare information technology company focused on advancing innovative, industry-transforming solutions in the areas of cloud services, data science, professional and managed services for the Healthcare and Life Sciences industry.
The Company was formed on October 29, 2019, as a Nevada corporation and then converted into a Delaware corporation on April 24, 2020, to provide IT and data services to the Healthcare and Life Sciences (“HCLS”) industry. The business commenced on January 1, 2020, after SecureKloud transferred its Life Sciences business to us. As of December 31, 2025, we had a total of 43 full-time employees, 15 part-time employees, and 26 sub-contractors. Many of the senior management team and the members of our board of directors hold advanced degrees and some are leading experts in software development, regulatory science, and market access. During the year ended December 31, 2025, we generated revenues of approximately $13.9 million compared to $11.7 million for the year ended December 31, 2024, which represents an increase of $2.2 million or 19% compared to the previous year.
Our approach leverages our proprietary technology platforms, extensive industry knowledge, and healthcare domain expertise to provide solutions and services that reinforce healthcare progress. Through our platform, solutions, and services, we support healthcare delivery organizations, healthcare insurance companies, pharmaceutical, and Life Sciences, biotech companies, and medical device manufacturers in their efforts to improve data management, develop analytical insights into their operations, and deliver measurable clinical, financial, and operational improvements.
We offer a comprehensive suite of software, solutions, platforms, and services that enables some of the world’s leading healthcare and pharma organizations to deliver personalized healthcare, precision medicine, advances in drug discovery, development and efficacy, collaborative research and development, respond to real-world evidence, and accelerate their digital transformation. We combine our expertise in the healthcare technology domain, cloud technologies, DevOps and automation, data engineering, advanced analytics, AI/ML, IoT, security, compliance, and governance to deliver platforms and solutions that drive improved results in the complex workflows of Life Sciences, biotech, healthcare providers, and payers. Our differentiated solutions, enabled by our intellectual property and delivered as a service, provide advanced analytics, data science applications, and data aggregation in these highly regulated environments in a more compliant, secure, and cost-effective manner to our customers.
Our deep expertise in healthcare allows us to reinforce our clients’ progress by accelerating their innovation. Our healthcare IT services include Electronic Health Records (EHR) and software implementation, optimization, extension to community partners, as well as application managed services, and backup and disaster recovery capabilities on public cloud. Our 24x7 managed services are used by hospitals and health systems, payers, Life Sciences, and biotech organizations in their effort to improve health outcomes and deliver deeper, more meaningful patient and consumer experiences. Through our services, our customers achieve a return on investment in their technology by delivering measurable improvements. Combined with our software and solutions, our services provide clients with an end-to-end partnership for their technological innovation.
Our Business Model
The majority of our revenue is generated by our full-time employees and consultants who provide software services and Managed Services and Support to our clients in the Healthcare and Life Sciences industry. Our software services include strategic advisory, implementation, and development services, while our Managed Services and Support offerings include post-implementation support and cloud hosting.
Our proprietary platforms, including CloudEz, DataEz, Readabl.AI, Ziloy, and Ezovion, are available for deployment through our solution delivery model as well as through Software-as-a-Service (SaaS) offerings, and continue to be enhanced and upgraded on a regular basis to address evolving client needs and technological advancements.
While these platforms are commercially available, we are still in the early stages of scaling our SaaS offerings and do not yet have sufficient information regarding competitive dynamics or customer adoption to determine the extent to which subscription-based revenue will materially impact our overall revenue growth.
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Key Factors of Success
We believe that our future growth, success, and performance are dependent on many factors, including those mentioned below. While these factors present significant opportunities for us, they also represent the challenges that we must successfully address in order to grow our business and improve our results of operations.
Investment in scaling the business
We need to continuously invest in research and development to build new solutions, sales, and marketing to promote our solutions to new and existing customers in various geographies, and other operational and administrative functions in systems, controls and governance to support our expected growth and our transition to a public company. We anticipate that our employee strength will increase because of these investments.
Adoption of our solutions by new and existing customers
We believe that our ability to increase our customer base will enable us to drive growth. Most of our customers initially deploy our solutions within a division or geography and may only initially deploy a limited set of our available solutions. Our future growth is dependent upon our existing customers’ continued success and renewals of our solutions agreements, deployment of our solutions to additional divisions or geographies and the purchase of subscriptions to additional solutions. Our growth is also dependent on the adoption of our solutions by new customers. Our customers are large organizations who typically have long procurement cycles which may lead to declines in the pace of our new customer additions.
Subscription services adoption
The key factor to our success in generating substantial recurring subscription revenues in future will be our ability to effectively market and encourage new customers to adopt our Software-as-a-Service (SaaS) offerings. We are in the early stages of marketing our SaaS offerings such as DataEz, CloudEz and Readabl.AI, Ziloy and Ezovion, and do not yet have enough information about our competition or customer acceptance to determine whether or not recurring subscription revenue from these offerings will have a material impact on our overall revenue growth.
Mix of solutions and software services revenues
Another factor to our success is the ability to sell our solutions to the existing software services customers. During the initial period of deployment by a customer, we generally provide a greater number of services including advisory, implementation and training. At the same time, many of our customers have historically purchased our solutions after the deployment. Hence, the proportion of total revenues for a customer associated with software services is relatively high during the initial deployment period. While our software services help our customers achieve measurable improvements and make them stickier, they have lower gross margins than solution-based revenue. Over time, we expect the revenues to shift towards recurring and subscription-based revenues.
Components of Results of Operations
Revenues
We provide our services and manage our business under these operating segments:
| ● | Software Services |
| ● | Managed Services and Support | |
| ● | Corporate and Others |
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Software Services
The Company earns revenue primarily through the sale of software services that is generated from providing strategic advisory, implementation, and development services. The Company enters into Statement of Work (SOW) which provides for service obligations that need to be fulfilled as agreed with the customer. The majority of our software services arrangements are billed on a time and materials basis and revenues are recognized over time based on time incurred and contractually agreed rates. Certain software services revenues are billed on a fixed fee basis and revenues are typically recognized over time as the services are delivered based on time incurred and customer acceptance. We recognize revenue when we have the right to invoice the customer using the allowable practical expedient under ASC 606-10-55-18 since the right to invoice the customer corresponds with the performance obligations completed.
Managed Services and Support
Managed Services and Support include post implementation support and cloud hosting. Managed Services and Support are a distinct performance obligation. Revenue for Managed Services and Support is recognized ratably over the life of the contract.
Corporate and Others
This segment includes Corporate Head Office of the Company as well as the standard contracts for its Platform Services, however the statement of work contained in such contracts is unique for each customer. A typical Platform Services contract would provide for some or all of the following types of services being provided to the customer: Data Analytics, Backup and Recovery, through our Platform. The revenue from Platform services is a distinct performance obligation and recognized based on SSP. During the periods presented the Company generated revenue from Platform services on a fixed-price solutions delivery model. Revenues related to fixed-price contracts are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized based on the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information; such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately, where appropriate.
Cost of revenue
Cost of revenue consists primarily of employee-related costs associated with the rendering of our services, including salaries, benefits and stock-based compensation expense, the cost of subcontractors, travel costs, cloud hosting charges and allocated overhead the cost of providing professional services is significantly higher as a percentage of the related revenues than for our subscription services due to the direct labor costs and costs of subcontractors. Our business and operational models are designed to be highly scalable and leverage variable costs to support revenue-generating activities.
While we may grow our headcount overtime to capitalize on our market opportunities, we believe our increased investment in automation, electronic health record integration capabilities, and economies of scale in our operating model, will position us to grow our platform solutions revenue at a greater rate than our cost of revenue.
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Operating Expenses
Research and development
Research and development expense (majorly our investment in innovation) consists primarily of employee-related expenses, including salaries, benefits, incentives, employment taxes, severance, and equity compensation costs for our software developers, engineers, analysts, project managers, and other employees engaged in the development and enhancement of our cloud-based platform applications. Research and development expenses also include certain third-party consulting fees. Our research and development expense excludes any depreciation and amortization.
We expect to continue our focus on developing new product offerings and enhancing our existing product offerings. As a result, we expect our research and development expense to increase in absolute dollars, although it may vary from period to period as a percentage of revenue.
Sales and marketing
Sales and marketing expense consists primarily of employee-related expenses, including salaries, benefits, commissions, travel, discretionary incentive compensation, employment taxes, severance, and equity compensation costs for our employees engaged in sales, sales support, business development, and marketing. Sales and marketing expense also includes operating expenses for marketing programs, research, trade shows, and brand messages, and public relations costs.
We expect our sales and marketing expenses to continue to increase in absolute dollar terms as we strategically invest to expand our business, although it may vary from period to period as a percentage of total revenues.
General and administrative
Our general and administrative expenses consist primarily of employee-related expenses including salaries, benefits, discretionary incentive compensation, employment taxes, severance, and stock-based compensation expenses, for employees who are responsible for management information systems, administration, human resources, finance, legal, and executive management. The general and administrative expenses also include occupancy expenses (including rent, utilities, and facilities maintenance), professional fees, consulting fees, insurance, travel, contingent consideration, transaction costs, integration costs, and other expenses. Our general and administrative expenses exclude depreciation and amortization.
In the nearest future, we expect our general and administrative expenses to continue to increase to support business growth. Over the long term, we expect general and administrative expenses to decrease as a percentage of revenue.
Depreciation and amortization expenses
Our depreciation and amortization expense consists primarily of depreciation of fixed assets, amortization of Customer relationship and software costs, and amortization of IP technology and intangible assets. We expect our depreciation and amortization expense to increase as we expand our business organically and through acquisitions.
An impairment charge is recognized when the carrying value of an asset exceeds its estimated recoverable amount.
Other income / (expense), net
Other income / (expense), net, consists of finance cost and gains or losses on foreign currency.
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Deferred revenues
Advanced billings to clients in excess of revenue earned are recorded as deferred revenue until the revenue recognition criteria are met.
Unbilled accounts receivable
Unbilled accounts receivable is a contract asset related to the delivery of our professional services for which the related billings will occur in a future period. Unbilled receivables are classified as accounts receivable on the consolidated balance sheet.
Although we believe that our approach to estimates and judgments regarding revenue recognition is reasonable, actual results could differ and we may be exposed to increases or decreases in revenue that could be material.
Provision for income taxes
Provision for income taxes consists of federal and state income taxes in the United States, including deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes.
Results of Operations
The following tables set forth selected Consolidated Statements of Operations and Comprehensive Loss data and such data as a percentage of total revenues for each of the periods indicated:
| Year Ended December 31, | ||||||||||||||||
| (Amounts in ‘000) | ||||||||||||||||
| 2025 | % of Sales | 2024 | % of Sales | |||||||||||||
| Revenue | $ | 13,891 | 100 | % | $ | 11,696 | 100 | % | ||||||||
| Less: | ||||||||||||||||
| Cost of revenue (exclusive of depreciation /amortization) | 12,001 | 86 | % | 8,806 | 75 | % | ||||||||||
| Sales and marketing | 3,084 | 22 | % | 2,203 | 19 | % | ||||||||||
| General and administrative | 7,337 | 53 | % | 3,950 | 34 | % | ||||||||||
| Bad debt expense | 17 | 0 | % | 170 | 1 | % | ||||||||||
| Research and development | 536 | 4 | % | 429 | 4 | % | ||||||||||
| Depreciation and amortization | 705 | 5 | % | 889 | 8 | % | ||||||||||
| Other income | (857 | ) | (6 | )% | (7 | ) | 0 | % | ||||||||
| Changes in fair value | (41 | ) | 0 | % | - | 0 | % | |||||||||
Forex loss | 18 | 0 | % | - | 0 | % | ||||||||||
| Interest expense | 567 | 4 | % | 1,213 | 10 | % | ||||||||||
| Income taxes | - | 0 | % | 12 | 0 | % | ||||||||||
Net loss | $ | (9,476 | ) | (68 | )% | $ | (5,969 | ) | (51 | )% | ||||||
37
Revenue from operations
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Net Revenue | $ | 13,891 | $ | 11,696 | 2,195 | 19 | % | |||||||||
Revenue increased by $2.2 million, or 19% to $13.9 million for the year ended December 31, 2025 as compared to $11.7 million for the year ended December 31, 2024. Revenue from Software Services, Managed Services and Support and Corporate and Others revenue have increased in the current year.
Our top 5 customers accounted for 58% of revenue during the year ended December 31, 2025, and 58% during the year ended December 31, 2024, respectively.
The following table shows the breakdown of our revenues for the year ended December 31, 2025, and 2024 for each of our top 5 customers.
| Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
Amount (In ‘000) | %
of Revenue | Amount (In ‘000) | %
of Revenue | |||||||||||||
| Customer 1 | $ | 2,718 | 20 | % | $ | 1,945 | 17 | % | ||||||||
| Customer 2 | 2,568 | 18 | % | 1,911 | 16 | % | ||||||||||
| Customer 3 | 1,347 | 10 | % | 1,233 | 11 | % | ||||||||||
| Customer 4 | 852 | 6 | % | 877 | 7 | % | ||||||||||
| Customer 5 | $ | 548 | 4 | % | $ | 847 | 7 | % | ||||||||
The following table provides details of Customer 1 revenue by operating segments:
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Software services | $ | - | $ | 98 | $ | (98 | ) | (100 | )% | |||||||
| Managed services and support | 2,718 | 1,847 | 871 | 47 | % | |||||||||||
| Total Revenue | $ | 2,718 | $ | 1,945 | $ | 773 | 40 | % | ||||||||
Revenue from Customer 1 increased by $0.8 million, or 40% to $2.7 million for the year ended December 31, 2025, as compared to $1.9 million for the year ended December 31, 2024. Software services decreased by $0.1 million, or 100 % to $0 for the year ended December 31, 2025, as compared to $0.1 million for the year ended December 31, 2024. Managed Services and Support revenue increased by $0.9 million, or 47% to $2.7 million for the year ended December 31, 2025, as compared to $1.8 million for the year ended December 31, 2024.
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Cost of revenue (exclusive of depreciation /amortization)
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Cost of revenue (exclusive of depreciation /amortization) | $ | 12,001 | $ | 8,806 | $ | 3,195 | 36 | % | ||||||||
Cost of revenue (exclusive of depreciation /amortization) increased by $3.2 million, or 36 % to $12 million for the year ended December 31, 2025, as compared to $8.8 million for the year ended December 31, 2024.
Gross margin
During the year ended December 31, 2025, the gross margin generated by the Company remained 13.6%, as compared to 24.7% during the year ended December 31, 2024. This is mainly due to the acquisition and onboarding of the SecureKloud contracts, which had been negotiated at lower margins prior to the acquisition. Going forward, all new contracts are being negotiated at higher margins, and as a result we expect future gross margins to increase materially over the next few quarters.
Sales and marketing
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Sales and marketing | $ | 3,084 | $ | 2,203 | $ | 881 | 40 | % | ||||||||
Sales and marketing increased by $0.9 million, or 40% to $3 million for the year ended December 31, 2025, as compared to $2.2 million for the year ended December 31, 2024.
General and administrative
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In thousands) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| General and administrative | $ | 7,337 | $ | 3,950 | $ | 3,387 | 86 | % | ||||||||
General and administrative increased by $3.4 million, or 86% to $7.3 million for the year ended December 31, 2025, as compared to $4 million for the year ended December 31, 2024.
Bad debt expense
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Bad debt expense | $ | 17 | $ | 170 | $ | (153 | ) | (90 | )% | |||||||
Bad debt expense decreased by $0.2 million, or 90% to $0.02 million for the year ended December 31, 2025, as compared to $0.2 million for the year ended December 31, 2024.
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Research and development
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Research and development | $ | 536 | $ | 429 | $ | 107 | 25 | % | ||||||||
Research and development increased by $0.1 million, or 25% to $0.5 million for the year ended December 31, 2025, as compared to $0.4 million for the year ended December 31, 2024.
Depreciation and amortization
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Depreciation and amortization | $ | 705 | $ | 889 | (184 | ) | (21 | )% | ||||||||
Depreciation and amortization decreased by $0.2 million, or 21% to $0.7 million for the year ended December 31, 2025, as compared to $0.9 million for the year ended December 31, 2024.
Interest expense
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Interest expense | $ | 567 | $ | 1,213 | $ | (646 | ) | (53 | )% | |||||||
Interest expense decreased by 53% to $0.6 million for the year ended December 31, 2025, as compared to $1.2 million for the year ended December 31, 2024.
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Other income
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Other income | $ | 857 | $ | 7 | $ | 850 | 12,143 | % | ||||||||
Other income increased by 12,143% to $0.9 million for the year ended December 31, 2025, as compared to $0.01 million for the year ended December 31, 2024.
Provision for income taxes
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Provision for income taxes | $ | - | $ | 12 | $ | (12 | ) | (100 | )% | |||||||
Provision for income taxes decreased by 100% to $0 for the year ended December 31, 2025, as compared to $0.01 million for the year ended December 31, 2024.
Changes in fair value
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Changes in fair value | $ | 41 | $ | - | $ | 41 | 100 | % | ||||||||
Changes in fair value remained $0.04 million for the year ended December 31, 2025, showing an increase of 100%, as compared to $0 for the year ended December 31, 2024.
Forex loss
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Forex loss | $ | (18 | ) | $ | - | $ | (18 | ) | (100 | )% | ||||||
Forex loss increased by 100% to $0.02 million for the year ended December 31, 2025, as compared to $0 for the year ended December 31, 2024.
41
Revenue, Cost of Revenue and Operating Profit by Operating Segments
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Software services | $ | 8,255 | $ | 4,692 | $ | 3,563 | 76 | % | ||||||||
| Managed services and support | 5,358 | 6,716 | (1,358 | ) | (20 | )% | ||||||||||
| Corporate & others | 278 | 288 | (10 | ) | (3 | )% | ||||||||||
| Net revenue | $ | 13,891 | $ | 11,696 | $ | 2,195 | 19 | % | ||||||||
We manage our business under three operating segments, which are Software Services, Managed Services and Support and Corporate & Others.
Revenue from Software Services increased by $3.6 million, or 76% to $8.3 million for the year ended December 31, 2025, as compared to $4.7 million for the year ended December 31, 2024. Revenue from Managed Services and Support decreased by $1.4 million, or 20% to $5.4 million for the year ended December 31, 2025, as compared to $6.7 million for the year ended December 31, 2024. Revenue from Corporate & Others decreased by $0.01 million, or 3% to $0.3 million for the year ended December 31, 2025, as compared to $0.3 million for the year ended December 31, 2024.
Factors affecting revenues of Software Services, Managed Services and Support and Corporate & Others
Our strategy is to achieve meaningful long-term revenue growth through sales of Managed Services and Support, and Corporate & Others, to existing and new clients within our target market. To increase cross-selling opportunities between our operating segments and support long-term revenue growth, our focus has shifted toward Managed Services and Support and Corporate & Others, which typically generate recurring revenue, compared to the Software Services segment, which is generally non-recurring in nature.
This strategic focus supports stronger client relationships and customer retention by leveraging our Managed Services and Support and Other offerings as ongoing value-added solutions. In addition, our emphasis on subscription-based, platform-driven delivery models is expected to help expand our customer base and improve customer retention, which can be more challenging in our traditional Software Services segment.
Our platforms, including CloudEz, DataEz, Readabl.AI, Ziloy, and Ezovion, are gaining increased market traction, which we expect will contribute to growth in revenue from platform services. To support this growth, we have made additional investments in Sales and Marketing as well as Research and Development to expand our Managed Services and Support and Corporate & Other offerings. We expect this trend to continue and to have a positive impact on our overall results of operations.
Cost of Revenue
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Software Services | $ | 6,893 | $ | 3,962 | $ | 2,931 | 74 | % | ||||||||
| Managed Services and Support | 4,229 | 4,671 | (442 | ) | (9 | )% | ||||||||||
| Corporate & Others | 879 | 173 | 706 | 408 | % | |||||||||||
| Cost of Revenue | $ | 12,001 | $ | 8,806 | $ | 3,195 | 36 | % | ||||||||
Cost of Revenue from Software Services increased by $2.9 million, or 74% to $6.9 million for the year ended December 31, 2025, as compared to $4 million for the year ended December 31, 2024. Cost of Revenue from Managed Services and Support decreased by $0.4 million, or 9% to $4.2 million for the year ended December 31, 2025, as compared to $4.7 million for the year ended December 31, 2024. Cost of Revenue from Corporate & others increased by $0.7 million, or 408% to $0.9 million for the year ended December 31, 2025, as compared to $0.2 million for the year ended December 31, 2024.
42
Segment operating profits by reportable segment were as follows:
| For the Year ended December 31, 2025 | ||||||||||||||||
| Particulars | Software Services | Managed Services and Support | Corporate & Others | Total | ||||||||||||
| Net revenue | $ | 8,255 | $ | 5,358 | $ | 278 | $ | 13,891 | ||||||||
| Less: | ||||||||||||||||
| Cost of revenue | (6,893 | ) | (4,229 | ) | (879 | ) | (12,001 | ) | ||||||||
| Segment gross profit | 1,362 | 1,129 | (601 | ) | 1,890 | |||||||||||
| Sales and marketing | (833 | ) | (493 | ) | (1,758 | ) | (3,084 | ) | ||||||||
| General and administrative | (732 | ) | (304 | ) | (6,301 | ) | (7,337 | ) | ||||||||
| Bad debts | - | - | (17 | ) | (17 | ) | ||||||||||
| Research and development | (222 | ) | - | (314 | ) | (536 | ) | |||||||||
| Segment operating profit/(loss) | $ | (425 | ) | $ | 332 | $ | (8,991 | ) | $ | (9,084 | ) | |||||
| Interest expense | - | - | (567 | ) | (567 | ) | ||||||||||
| Depreciation and amortization | (419 | ) | (272 | ) | (14 | ) | (705 | ) | ||||||||
| Other income | - | - | 857 | 857 | ||||||||||||
Forex loss | - | - | (18 | ) | (18 | ) | ||||||||||
| Changes in fair value | - | - | 41 | 41 | ||||||||||||
| Income/(Loss) before income tax | (844 | ) | 60 | (8,692 | ) | (9,476 | ) | |||||||||
| Income tax | - | - | - | - | ||||||||||||
| Net income/(loss) | $ | (844 | ) | $ | 60 | $ | (8,692 | ) | $ | (9,476 | ) | |||||
For
the Year ended | ||||||||||||||||
| Particulars | Software Services(*) | Managed Services and Support(*) | Corporate & Others(*), (1) | Total | ||||||||||||
| Net Revenue | $ | 4,692 | $ | 6,716 | $ | 288 | $ | 11,696 | ||||||||
| Less: | - | |||||||||||||||
| Cost of revenue | (3,962 | ) | (4,671 | ) | (173 | ) | (8,806 | ) | ||||||||
| Segment gross profit | 730 | 2,045 | 115 | 2,890 | ||||||||||||
| Sales and marketing | (505 | ) | (722 | ) | (976 | ) | (2,203 | ) | ||||||||
| General and administrative | (195 | ) | (279 | ) | (3,476 | ) | (3,950 | ) | ||||||||
| Bad debts | (170 | ) | (170 | ) | ||||||||||||
| Research and development | - | - | (429 | ) | (429 | ) | ||||||||||
| Segment operating profit / (loss) | $ | 30 | $ | 1,044 | $ | (4,936 | ) | $ | (3,862 | ) | ||||||
| Interest expense | - | - | (1,213 | ) | (1,213 | ) | ||||||||||
| Depreciation and amortization | (356 | ) | (511 | ) | (22 | ) | (889 | ) | ||||||||
| Other income | - | - | 7 | 7 | ||||||||||||
| Income/(Loss) before income tax | (326 | ) | 533 | (6,164 | ) | (5,957 | ) | |||||||||
| Income tax | - | - | (12 | ) | (12 | ) | ||||||||||
| Net income/(loss) | $ | (326 | ) | $ | 533 | $ | (6,176 | ) | $ | (5,969 | ) | |||||
(1) |
formerly classified under Platform Segment. |
| (*) | Prior year figures have been reclassified for the purpose of comparison. |
43
Liquidity and Capital Resources
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| (In ‘000) | ||||||||
| Cash, cash equivalents and short-term investments | $ | 7,625 | $ | 20 | ||||
| Total cash, cash equivalents and short-term investments | $ | 7,625 | $ | 20 | ||||
For
The Year Ended | ||||||||
| 2025 | 2024 | |||||||
| (In ‘000) | ||||||||
| Cash flows used in operating activities | $ | (16,523 | ) | $ | (1,081 | ) | ||
| Cash flows used in investing activities | (1,751 | ) | - | |||||
| Cash flows provided by/(used in) financing activities | 25,879 | (133 | ) | |||||
| Net increase/(decrease) in cash and cash equivalents | $ | 7,605 | $ | (1,214 | ) | |||
As of December 31, 2025, our principal sources of liquidity for working capital purposes were cash, cash equivalents and short-term investments totaling $7.6 million.
The Company incurred losses from operations of $9,789 and $4,751, negative operating cash flows of $16,523 and $1,081, and accumulated deficits of $42,999 and $33,571 for the years ended December 31, 2025 and 2024, respectively. Management evaluated these conditions and concluded that they have been sufficiently mitigated by the Company’s net assets of $9,944 (including cash and cash equivalents of $7,625) at December 31, 2025, and the gross proceeds of $9,825 raised through equity issuance subsequent to the year-end. Accordingly, management has concluded that the Company has sufficient resources to fund operations and meet its obligations as they become due for a period of at least twelve months from the date these consolidated financial statements are issued. Refer to Note 9 for further details.
The Company has historically financed its operations primarily through equity issuances, debt financings, and other capital raising transactions. Management is actively pursuing additional sources of liquidity and is focused on improving operating performance through revenue growth, expense management, and working capital optimization. The Company may also seek strategic alternatives or other financing arrangements to support its capital requirements.
There can be no assurance, however, that the Company will be able to obtain additional capital on acceptable terms, or at all, or that it will achieve sustainable positive cash flows from operations. Failure to obtain additional funding or achieve improved operating performance could have a material adverse effect on the Company’s business, financial condition, and results of operations.
Liquidity
The current ratio measures a company’s ability to pay off its current liabilities (payable within one year) with its total current assets such as cash, accounts receivable, and inventories. The higher the ratio, the better the Company’s liquidity position. A good current ratio is between 1.2 to 2, which means that a business has 2 times more current assets than liabilities to cover its debts. The Company’s current ratio, as of December 31, 2025, is 1.03 compared to 0.33 as of December 31, 2024.
The Company’s debt equity ratio, as of December 31, 2025, is 1.08, compared to (0.50) as on December 31, 2024. A debt-to-equity ratio below 1 means that a company has lower exposure to debts than equity.
The Company does not have inventory and hence the quick ratio is the same as the current ratio.
44
Sources of Liquidity
As of December 31, 2025, our principal sources of liquidity consisted of cash and cash equivalents of $7.6 million. We have financed our operations primarily through financing activity and operating cash flows. We believe our existing cash and cash equivalents generated from operations will be sufficient to meet our routine working capital over the next 12 months. Our future capital requirements will depend on many factors including our growth rate, subscription renewal activity, our ability to fund such capital requirements and in turn attract investors to invest in our business, the expansion of sales and marketing activities and the ongoing investments in platform development.
Operating Activities
Net cash used in operating activities was ($16.5) million and ($1.1) million respectively for the years ended December 31, 2025, and 2024.
Investing Activities
Net cash used in investing activities was ($1.8) million and $0 respectively for the years ended December 31, 2025, and 2024.
Financing Activities
Net cash generated from financing activities was $25.9 million and net cash used in financing activities was ($0.1) respectively for the years ended December 31, 2025, and 2024.
Off-Balance Sheet Arrangements
We do not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes as defined by Item 303(a)(4) of SEC Regulation S-K, as of December 31, 2025.
45
Item 8. Financial Statements and Supplementary Data
HEALTHCARE TRIANGLE, INC.
Audited Consolidated Financial Statements
December 31, 2025 and 2024
F-1
Chartered Professional Accountants Licensed Public Accountants Park Pla Corporate Centre 15 Wertheim Court, Suite 409 Richmond Hill, ON L4B 3H7, Canada
Tel: 905 882 9500 & 416 671 7292 Fax: 905 882 9580 Email: [email protected] www.srco.ca |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Healthcare Triangle, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheet of Healthcare Triangle, Inc. and its subsidiaries (collectively referred to as the “Company”) as of December 31, 2025, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
| We have served as the Company’s auditor since 2025 April 13, 2026 | CHARTERED PROFESSIONAL ACCOUNTANTS Authorized to practice public accounting by the Chartered Professional Accountants of Ontario |
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Healthcare Triangle, Inc.:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Healthcare Triangle, Inc. (the Company) as of December 31, 2024, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for the period ended December 31, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has yet to achieve profitable operations, has negative cash flows from operating activities, and is dependent upon future issuances of equity or other financings to fund ongoing operations all of which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition
The Company recognizes revenue upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.
Auditing management’s evaluation of agreements with customers involves significant judgement, given the fact that some agreements require management’s evaluation and allocation of the standalone transaction prices to the performance obligation.
To evaluate the appropriateness and accuracy of the assessment by management, we evaluated management’s assessment in relationship to the relevant agreements.
The procedures performed included evaluation of the methods and assumptions used by the Company, tests of the data used and an evaluation of the findings. We evaluated and tested the Company’s significant judgments that determine revenue recognized by the Company
/s/ M&K CPAS, PLLC
We have served as the Company’s auditor since 2024.
The Woodlands, TX
March 31, 2025
F-3
HEALTHCARE TRIANGLE INC
Consolidated Balance Sheets
| As of December 31, | ||||||||||
| Note | 2025 | 2024 | ||||||||
| (In ‘000) | ||||||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | $ | ||||||||
| Accounts receivable, net | 3.1 | |||||||||
| Other current assets | 3.2 | |||||||||
| Total current assets | ||||||||||
| Furniture and equipment, net | 3.4 | |||||||||
| Goodwill | 3.3 | |||||||||
| Other intangible assets, net | 3.3 | |||||||||
Advances | 3.5 | |||||||||
| Total assets | $ | $ | ||||||||
| Liabilities and stockholders’ equity (deficit) | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable | $ | $ | ||||||||
| Short-term borrowing | 3.6 | |||||||||
| Other current liabilities | 3.7 | |||||||||
| Contingent consideration | 3.8 | |||||||||
| Total current liabilities | ||||||||||
| Stockholders’ equity (deficit) | 3.10 | |||||||||
| Preferred stock, par value $ | ||||||||||
| Series A, Super Voting Preferred Stock - | ||||||||||
| Series B Convertible preferred stock, | ||||||||||
| Common stock, par value $ | ||||||||||
| Non-controlling interest | ( | ) | ||||||||
| Additional paid-in capital | ||||||||||
Accumulated deficit | ( | ) | ( | ) | ||||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
HEALTHCARE TRIANGLE INC
Consolidated Statements of Operations and Comprehensive Loss
| Years Ended | ||||||||||||
| December 31, | ||||||||||||
| Note | 2025 | 2024(*) | ||||||||||
| (In ‘000) | ||||||||||||
| Net revenue | $ | $ | ||||||||||
| Cost of revenue (exclusive of depreciation and amortization shown separately below) | ||||||||||||
| Gross margin | ||||||||||||
| Operating expenses | ||||||||||||
| Sales and marketing | ||||||||||||
| General and administrative | ||||||||||||
| Research and development | ||||||||||||
| Bad debts expense | ||||||||||||
| Depreciation and amortization | 3.3, 3.4 | |||||||||||
| Total operating expenses | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ||||||||
| Other income | ||||||||||||
| Changes in fair value | 3.6 | |||||||||||
| Forex loss | ( | ) | ||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||
| Loss before income tax | ( | ) | ( | ) | ||||||||
| Provision for income tax | ( | ) | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||||||
| Other comprehensive income/(loss) | ||||||||||||
| Foreign currency translation gain | ||||||||||||
| Deemed dividend | ( | ) | ||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||||||
| Comprehensive loss attributable to: | ||||||||||||
| Stockholders | 5 | $ | ( | ) | $ | ( | ) | |||||
| Non-controlling interest | 5 | $ | ( | ) | $ | |||||||
| Net loss per common share - basic and diluted, attributable to: | ||||||||||||
| Stockholders | $ | ( | ) | $ | ( | ) | ||||||
| Non-controlling interest | $ | ( | ) | $ | ||||||||
| Weighted average shares outstanding used in per common share computations: | ||||||||||||
| Basic and diluted | ||||||||||||
| (*) |
The accompanying notes are an integral part of these consolidated financial statements.
F-5
HEALTHCARE TRIANGLE INC
Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
(Amounts in ‘000)
| Preferred stock (Series A) | Preferred stock (Series B) | Common stock | Additional paid-in | Non- controlling | Accumulated | Total stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | capital | interest | deficit | equity (deficit) | |||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Effects of exchange translation reserve | - | - | - | |||||||||||||||||||||||||||||||||||||
| Shares issued for services | ||||||||||||||||||||||||||||||||||||||||
| Common stock issued for cash | ||||||||||||||||||||||||||||||||||||||||
| Prefunded warrants issued for cash | ||||||||||||||||||||||||||||||||||||||||
| Series B (cashless warrants) | ||||||||||||||||||||||||||||||||||||||||
| Expenses relating to funding | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Shares issued for acquisition (contingent consideration) | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||||||||||||||||||||||
| Warrants inducement | ||||||||||||||||||||||||||||||||||||||||
| Expenses relating to warrants inducement | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Shares issued for acquisition | ||||||||||||||||||||||||||||||||||||||||
| Conversion of debt to equity | ||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||
| Preferred stock (Series A) | Preferred stock (Series B) | Common stock |
Additional paid-in |
Accumulated | Total stockholders’ equity |
|||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | capital | deficit | (deficit) | ||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||||||||||
| Net loss | - | - | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Shares issued for services | ||||||||||||||||||||||||||||||||||||
| Shares issued for Cash | ||||||||||||||||||||||||||||||||||||
| Conversion of Debt to Equity | ||||||||||||||||||||||||||||||||||||
| Issuance of preferred stock in connection with acquisition of customer contracts from a common control entity | ( |
) | ||||||||||||||||||||||||||||||||||
| Issue of Options (ISO/NSO) | - | - | - | |||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
HEALTHCARE TRIANGLE INC
Consolidated Statements of Cash Flows
| Years Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (In ‘000) | ||||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization | ||||||||
| Bad debt expense | ||||||||
| Amortization of debt discount | ||||||||
| Conversion fees | ||||||||
| Stock compensation expenses | ||||||||
| Net unrealized exchange gain | ( |
) | ||||||
| Expenses settled through equity | ||||||||
| Interest expense | ||||||||
| Other income | ( |
) | ( |
) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( |
) | ||||||
| Other current assets | ( |
) | ||||||
| Advances | ( |
) | ( |
) | ||||
| Accounts payable and accrued expenses | ( |
) | ||||||
| Other current liabilities | ( |
) | ||||||
| Contingent consideration | ( |
) | ||||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| Cash flows from investing activities | ||||||||
Purchase of furniture and equipment |
( |
) | ||||||
| Acquisition of intangible assets | ( |
) | ||||||
| Increase in other non-current assets | ( |
) | ||||||
| Net cash used in investing activities | ( |
) | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from / (Repayment of) short term borrowing | ( |
) | ||||||
| Proceeds from equity issuance | ||||||||
| Interest paid | ( |
) | ||||||
| Net cash provided by financing activities | ( |
) | ||||||
| Net increase/(decrease) in cash and cash equivalents | ( |
) | ||||||
| Cash and cash equivalents | ||||||||
| Cash and cash equivalents at the beginning of the year | ||||||||
| Cash and cash equivalents at the end of the year | $ | $ | ||||||
| Supplementary disclosure of cash flows information | ||||||||
| Interest | $ | $ | ||||||
| Income tax | ||||||||
| Conversion of debt to common stock | ||||||||
| Settlement of contingent consideration | ||||||||
| Common stock issued for acquisition | ||||||||
| Series A, super voting preferred stock | ||||||||
| Issuance of Series B preferred stock in connection with acquisition of customer contracts from a common control entity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-7
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
1) Organization and Description of Business
Healthcare
Triangle Inc. (“HTI” or “the Company”) was incorporated under the laws of the State of Nevada on October 29,
2019, and then converted into a Delaware corporation on
The Company reinforces healthcare progress through breakthrough technology and extensive industry know-how. HTI support healthcare providers and payors, hospitals and Pharma/Life Sciences organizations in their effort to improve health outcomes by enabling the adoption of new technologies, data enlightenment, business agility and accelerate responding to immediate business needs and competitive threats. The highly regulated HCLS industry turn to HTI for expertise in digital transformation on the cloud, security and compliance, develops, data lifecycle management, healthcare interoperability, clinical and business performance optimization.
HTI will concentrate on accelerating value to three healthcare sectors:
| 1. | Pharmaceutical companies, which require improved efficiencies in the clinical trial process. HTI modernizes their IT infrastructure to advance the clinical trial process to drug discovery and delivery. |
| 2. | Hospitals and health systems, which face interoperability challenges as mergers, acquisitions and partnerships drive increasing need for integrated healthcare infrastructures. HTI’s health IT expertise optimizes providers’ enterprise digital structure needs connecting disparate systems and applying analytics capabilities. |
| 3. | Life sciences, payers and all healthcare organizations must protect and secure personal health information (PHI), a regulatory compliance mandate that HTI addresses and manages for its customers. |
As an organization with the deep-rooted cloud expertise, HTI’s technology significantly relies on Big Data, Analytics, DevOps, Security/Compliance, Identity Access Management (IAM), Machine Learning (ML), Artificial Intelligence (AI), and Internet of Things (IoT).
Subsidiaries and Joint Operations
Devcool Inc. was incorporated under the laws of the State of California on September
25, 2016. Devcool Inc. solves complex technology problems and delivers innovation to healthcare industry. Devcool Inc. has successfully
implemented projects for top Healthcare insurance companies and hospitals across the United States of America. On December 10, 2021, HTI
entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with Devcool, Go To Assistance Inc., a California
corporation, and Mr. Sandeep Deokule, the then Chief Executive Officer of Devcool Inc. Pursuant to the Share Purchase Agreement, the Company
acquired
F-8
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
On June 16, 2025, Healthcare Triangle, Inc. through its wholly owned subsidiary
QuantumNexis Inc., incorporated in 2025 under the laws of the State of California and Niyama Healthcare, Inc., a Delaware corporation,
a provider of Mental Health and Hospital Information Systems technology, across India, South East Asia, and Europe (the “Seller”)
entered into an Asset Transfer Agreement (the “Agreement”). Pursuant to the Agreement, QuantumNexis Inc. agreed to purchase
from the Seller the Transferred Assets (comprising of contracts, intellectual property and related assets), and (ii) the Seller’s
Basis of Consolidated Financial Statements
The accompanying consolidated financial statements include the accounts of HTI
and its wholly owned subsidiaries Devcool Inc., and QuantumNexis Inc., which also owns
Liquidity and Financing
The Company incurred losses from operations of $
Emerging Growth Company Status
We are an “emerging growth company,” as defined in the Jumpstart Our
Business Startups Act of 2012. We will remain an emerging growth company until the earlier of (i) December 31, 2026 (the last day of the
fiscal year following the fifth anniversary of our IPO), (ii) the last day of the first fiscal year in which we have total annual gross
revenue of less than $
We have elected to take advantage of certain of the reduced disclosure obligations in this Annual Report on Form 10-K and may elect to take advantage of other reduced reporting requirements in our future filings with the SEC. As a result, the information that we provide to our stockholders may be different from the information you might receive from other public reporting companies in which you hold equity interests. In particular, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the Securities Act) for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, so long as we remain an emerging growth company, we will not be subject to the same implementation timing of new or revised accounting standards as other public companies that are not emerging growth companies until these standards apply to private companies unless we elect to early adopt as permitted by the relevant guidance for private companies.
F-9
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
2) Summary of Significant Accounting Policies
The accompanying consolidated statements of operations and comprehensive loss include expenses for certain functions performed by SecureKloud Limited, a related party. These expenses are based primarily on direct usage or other relevant allocations during the respective periods. We believe the assumptions underlying the accompanying consolidated financial statements, including the assumptions regarding these expenses from this related party, are reasonable. Actual results may differ from these expenses, assumptions and estimates.
Accounting Policy on Common Control Transactions
The preparation of financial statements is in conformity with GAAP, and specifically with ASC 805. As such, any assets acquired from non-arm’s length parties are recorded at their original carrying amounts.
Ultimately ASC 805-50-30-5 provides, “When accounting for a transfer of assets or exchange of shares between entities under common control, the entity that receives the net assets or the equity interests shall initially measure the recognized assets and liabilities transferred at their carrying amounts in the accounts of the transferring entity at the date of transfer. If the carrying amounts of the assets and liabilities transferred differ from the historical cost of the parent of the entities under common control, for example, because push down accounting had not been applied, then the financial statements of the receiving entity shall reflect the transferred assets and liabilities at the historical cost of the parent of the entities under common control.”
Use of Estimates
The preparation of financial statements is in conformity with GAAP which requires us to make estimates, judgments and assumptions that affect the financial statements and the notes thereto. These estimates are based on information available as of the date of the financial statements. On a regular basis, management evaluates these estimates and assumptions. Items subject to such estimates and assumptions include, but are not limited to:
| ● | the fair value of assets acquired, and liabilities assumed, including contingent consideration for business combinations |
| ● | expected credit loss relating to accounts receivable | |
| ● | the fair value of convertible debt | |
| ● | the useful lives of furniture, equipment and intangible assets | |
| ● | the future cashflows associated with goodwill and intangible assets held | |
| ● | share-based compensation, including warrants | |
| ● | the collectability of advances | |
| ● | estimation of future cashflows to fund the Company’s operations |
F-10
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Segment Information
The management has chosen to organize the Company around differences in products and services and segregated the reporting segments as Software Services, Managed Services and Support, and Corporate & others.
Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assessing performance. The Company defines the term CODM to be the Chief Financial Officer and Chief Operating Officer of the Company. The CODM along with the management team reviews the financial information presented on a segment basis as well as consolidated basis for purposes of allocating resources and evaluating our financial performance. Accordingly, the Company has determined that it operates in three distinct reportable operating segments, and all required financial segments information can be found in the consolidated financial statements. Additionally, assets and liabilities for reportable segments are not disclosed as such information is not regularly reviewed by the Company’s CODM.
Expenses included in segment operating profit consist principally of direct selling, delivery costs and research and development expenses. Certain Sales and Marketing expenses, General and Administrative expenses, depreciation, and amortization are allocated to individual segments in the ratio of respective segment revenue.
Revenue Recognition
We recognize revenues as we transfer control of deliverables (services, solutions, and platform) to our clients in an amount reflecting the consideration to which we expect to be entitled. To recognize revenues, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. We account for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We apply judgment in determining the customer’s ability and intention to pay based on factors including historical payment experience, credit profile, and geographic and industry risk factors. For customers acquired through business combinations, collectability is assessed using the acquired entity’s collection history with those customers, supplemented by post-acquisition payment performance. A contract is recognized only where collectability of substantially all consideration is probable.
For performance obligations where control is transferred over time, revenues are recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the deliverables to be provided. Revenue is earned and recognized in the following segments:
A. Software Services
The Company enters into contractual obligations with the customers to perform (i) Strategic advisory services which include assessment of the enterprise network, applications environment and advise on the design and tools; (ii) Implementation services which include deployment, upgrades, enhancements, migration, training, documentation and maintenance of various electronic health record systems and (iii) Development services which include customization of network and applications in the public cloud environment.
Revenue from Strategic advisory, Implementation and Development services are distinct performance obligation and is recognized on time-and-material or fixed-price project basis. Revenues related to time-and-material are recognized over the period the services are provided using labor hours. Revenues related to fixed-price contracts are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized based on the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information; such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately, where appropriate.
We may enter into contracts that consist of multiple performance obligations. Such contracts may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For contracts with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we estimate standalone selling price by using the expected cost plus a margin approach. We establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change.
Contract modifications, such as extensions of statement of work duration or changes in resources and rates, are evaluated under ASC 606 and accounted for prospectively as a separate contract or modification of the existing contract, based on whether the modification adds distinct performance obligations at standalone selling prices.
F-11
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
When the estimated costs to complete a performance obligation exceed the expected transaction price, the full amount of the anticipated loss is recognized immediately in the period in which the loss becomes probable and estimable.
Certain contracts include variable consideration such as rate adjustments, which is estimated using the most likely amount method and included in the transaction price only to the extent that a significant revenue reversal is not probable. Estimates are reassessed at each reporting date.
B. Managed Services and Support
The Company has standard contracts for its Managed Services and Support, however the statement of work contained in such contracts is unique for each customer. A typical Managed Services and Support contract would provide for some or all of the following types of services being provided to the customer: Cloud hosting, Continuous monitoring of applications, security and compliance and support.
Revenue from Managed services and support is a distinct performance obligation and recognized based on Standalone Selling Price (SSP), ratably on a straight-line basis over the period in which the services are rendered. Contract with customers includes subcontractor services or third-party cloud infrastructure services in certain integrated services arrangements. In these types of arrangements, revenue is recognized net of costs when the Company is acting as an agent between the customer and the vendor, and gross when the Company is the principal for the transaction. In doing so, the Company first evaluates whether it controls the platform or service before it is transferred to the customer. The Company considers whether it has the primary obligation to fulfil the contract, pricing discretion and other factors to determine whether it controls the platform or service and therefore is acting as principal or agent.
C. Corporate & Others
This segment includes Platform Services revenue alongside unallocated corporate head office costs. A typical Platform Services contract would provide for some or all of the following types of services being provided to the customer: Data Analytics, Backup and Recovery, through our Platform with contract terms unique to each customer. The Company delivers Platform Services through its proprietary platform. Where third-party technology or infrastructure is included in the arrangement, the Company evaluates whether it is acting as principal or agent based on whether it controls the service before transfer to the customer.
The revenue from Platform services is a distinct performance obligation and recognized based on SSP. During the periods presented the Company generated revenue from Platform services on a fixed-price solutions delivery model. Revenues related to fixed-price contracts are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized based on the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information; such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized in full in the period in which the loss becomes probable and estimable.
Our contractual terms and conditions for revenue mandate that our services are documented and subject to inspection, testing at the time of delivery to customer. In addition, the Company needs to integrate seamlessly into the customers’ systems. Also, the customer has a right to cancel all, or part of the services rendered if it is not in accordance with statement of work and within the stipulated time.
Contract Balances
The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deferred revenue (contract liabilities) on the Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, generally monthly, upon achievement of contractual milestones. Typically, billing occurs after revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers, particularly on our international contracts, before revenue is recognized, resulting in contract liabilities. These advances or deposits are liquidated when revenue is recognized.
F-12
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Cash and Cash Equivalents
The Company considers all highly liquid investments (including money market funds) with original maturity at acquisition of three months or less to be cash equivalents. The Company maintains cash balances, which may exceed federally insured limits. The Company does not believe that this results in any significant credit risk.
Accounts Receivable
The Company extends credit to clients based upon the management’s assessment of their credit worth on an unsecured basis. Trade accounts receivables are stated at the amount the Company expects to collect and do not bear interest. The Company includes any balances that are determined to be uncollectible in its allowance for doubtful accounts.
Recourse Credit Facility Arrangement
The
Company and one of its subsidiaries use a recourse credit facility for obtaining advance funding against its accounts receivables. The
maximum amount of advance available to the Company under the arrangement is $
Allowance for Doubtful Accounts (current expected credit loss)
The Company provides an allowance for uncollectible accounts (current expected credit loss) based on historical experience and management evaluation of trend analysis. The collectability of trade receivable balances is regularly evaluated based on a combination of factors such as customer creditworthiness, past transaction history with the customer, current economic industry trends and changes in customer payment pattern. Additionally, if it is determined that a customer will be unable to fully meet its financial obligation, such as in the case of a bankruptcy filing or other material event impacting its business, a specific allowance for doubtful accounts may be recorded to reduce the related receivable to the amount expected to be recovered.
Although we believe that our approach to significant estimates and judgments regarding our allowance for doubtful accounts is reasonable, actual results could differ and we may be exposed to increases or decreases in required allowances that could be material.
Furniture and Equipment
Furniture
and equipment are stated at cost. The Company provides for depreciation of furniture and equipment using the straight-line method over
the estimated useful lives of the related assets ranging from
F-13
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Business Combinations
As per ASC 805-50, a common-control transaction does not meet the definition of a business combination because there is no change in control over the net assets. The accounting for these transactions is addressed in the “Transactions Between Entities Under Common Control”. The net assets are derecognized by the transferring entity and recognized by the receiving entity at the historical cost of the parent of the entities under common control. Any difference between the proceeds transferred or received and the carrying amounts of the net assets is recognized in equity in the transferring and receiving entities’ separate financial statements and eliminated in consolidation. The change in accounting principle is applied retroactively for all periods presented.
The Company accounts for business combinations using the acquisition method of accounting. The Company recognizes the identifiable assets acquired and liabilities assumed at their acquisition-date fair values and recognizes any excess of the total consideration paid over the fair value of the identifiable net assets as goodwill. Any purchase price that is considered contingent consideration is measured at its estimated fair value at the acquisition date and remeasured at each reporting period, with changes in estimated fair value recorded in general and administrative expenses in the consolidated statements of operations and comprehensive loss. Acquisition transaction costs are expensed when incurred. The operating results of an acquisition are included in the Company’s consolidated financial statements as of the acquisition date.
Goodwill represented the excess of the acquisition cost over the fair market value of the net assets acquired. All goodwill was allocated to the Niyama and Ezovion acquisition, as identified in note 3.3. The Company considers various qualitative factors that could indicate impairment of goodwill such as macroeconomic conditions, industry and market environment, overall financial performance of the Company, cash flow from operating activities. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment to compare the fair value of the reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds the fair value, an impairment loss is recognized limited to the total amount of goodwill allocated to that reporting unit. A combination of the income approach and the market approach may be used to determine fair value of the reporting unit.
Identifiable intangible assets with finite lives are amortized over their useful lives. Acquisition-related costs are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in our consolidated financial statements from the date of effective control.
Valuation of Contingent Earn-out Consideration
Acquisitions may include contingent consideration payments based on the achievement of certain future financial performance measures of the acquired company. Contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. We believe our estimates and assumptions are reasonable, however, there is significant judgment involved. We evaluate, on a routine, periodic basis, the estimated fair value of the contingent consideration and changes in estimated fair value, subsequent to the initial fair value estimate at the time of the acquisition, will be reflected in income or expense in the consolidated statements of operations and comprehensive loss. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria. Any changes in the estimated fair value of contingent consideration may have a material impact on our operating results.
F-14
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Convertible Debt
The Company accounts for convertible debt instruments in accordance with ASC 480, Distinguishing Liabilities from Equity, ASC 815, Derivatives and Hedging, ASC 825, Financial Instruments, and ASC 820, Fair Value Measurement. Upon issuance of a convertible debt instrument, the Company evaluates the instrument to determine whether it should be classified as a liability or equity and whether any embedded features require separate accounting. This assessment includes evaluating whether the instrument is mandatorily redeemable or otherwise subject to liability classification under ASC 480 and whether embedded conversion features meet the definition of a derivative under ASC 815.
Convertible instruments that provide for settlement in a variable number of shares based on future stock prices generally do not meet the fixed-for-fixed criterion required for equity classification under ASC 815. When a conversion feature meets the definition of a derivative and does not qualify for the equity scope exception, it would otherwise require bifurcation and separate accounting at fair value through earnings.
The Company has elected the fair value option under ASC 825 for its convertible debt instruments at initial recognition. Upon election of the fair value option:
| ● | The entire hybrid instrument is measured at fair value, | |
| ● | Embedded derivatives are not bifurcated, and | |
| ● | Subsequent changes in fair value are recognized in earnings in the consolidated statements of operations and comprehensive loss. The fair value option election is irrevocable and is made on an instrument-by-instrument basis at initial recognition. The Company has elected the fair value option to eliminate the complexity of bifurcating embedded conversion features that would otherwise require separate derivative accounting. |
Issuance costs associated with convertible debt instruments for which the fair value option has been elected are expensed as incurred and are not deferred or recorded as a reduction of the carrying amount of the liability.
Convertible debt measured at fair value is remeasured at each reporting date, with changes in fair value recognized in other income (expense). Upon conversion, the carrying amount of the liability (measured at fair value on the conversion date) is derecognized, and equity is recognized for the same amount. No gain or loss is recognized upon conversion when the instrument is measured at fair value.
The fair value of convertible debt instruments is determined in accordance with ASC 820. Fair value represents the price that would be paid to transfer the liability in an orderly transaction between market participants at the measurement date.
Where the convertible instrument includes path-dependent or market-based conversion features, the Company uses valuation techniques such as Monte Carlo simulation models that incorporate significant unobservable inputs, including stock price volatility, expected term, risk-free interest rates, conversion discount provisions, floor price features, and assumptions regarding holder conversion behavior.
Because the valuation of these instruments requires the use of significant unobservable inputs, such instruments are classified within Level 3 of the fair value hierarchy.
The Company evaluates whether changes in fair value attributable to instrument-specific credit risk should be presented in other comprehensive income. Given that these instruments contain path-dependent conversion features whose fair value is inseparable from the credit component, the instrument-specific credit risk portion is not separately determinable and the entire change in fair value is recognized in earnings.
Fair Value Measurement
The Company measures its financial assets at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
| Level 1 — | Inputs are observable and reflect quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. |
| Level 2 — | Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. |
| Level 3 — | Inputs that are unobservable |
F-15
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Money market funds and U.S. treasury securities are classified within Level 1 because they are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Other debt securities and investments are classified within Level 2 if the investments are valued using model driven valuations which use observable inputs such as quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency.
| December 31, 2025 | ||||||||||||||||
| Fair Value Measured Using | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Financial Assets: | ||||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||||
| Financial liabilities: | ||||||||||||||||
| 2025 Convertible Notes(*) (refer note 3.6-B) | $ | $ | $ | $ | ||||||||||||
| (*) |
| December 31, 2024 | ||||||||||||||||
| Fair Value Measured Using | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Financial Assets: | ||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||
| Financial liabilities: | ||||||||||||||||
| Accounts payable | $ | $ | $ | $ | ||||||||||||
| Short-term borrowing | ||||||||||||||||
Contingent consideration | $ | $ | $ | $ | ||||||||||||
Earnings/(Loss) Per Share
Earnings/(Loss) per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common stocks outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether paid or not) and the dividends accumulated for the period on cumulative preferred stock (whether earned or not) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common stocks that would have been outstanding if the dilutive potential common stocks had been issued during the period to reflect the potential dilution that could occur from common stocks issuable through contingent shares issuance arrangement, stock options or warrants. Potentially dilutive securities consist of common stock issuable upon the conversion of convertible debenture using the if-converted method and common stock issuable upon the vesting of non-vested shares or exercise of stock options and warrants using the treasury stock method. The number of potentially dilutive securities are calculated based on the most advantageous conversion rate or exercise price from the standpoint of the security holder.
F-16
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Sales and Marketing Expenses
Sales
and Marketing expenses for the years ended December 31, 2025, and 2024 were
Stock-Based Compensation
The Company accounts for stock-based awards to employees and consultants in accordance with applicable accounting principles ASC-718, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on the grant date, fair value of the award, determined using the Black-Scholes option pricing model (refer to the stock compensation note 3.11 for the assumptions). For awards with graded vesting, the straight-line method is applied over the total requisite service period of the award. Compensation expense is recognized only for awards that ultimately vest. Non-employee awards are measured at grant date fair value using the same methodology applied to employee awards and are not subsequently remeasured, consistent with ASU 2018-07. Options forfeited are cancelled and added back to the available options pool. The Company accounts for forfeitures as they occur rather than estimating expected forfeitures at the grant date.
Pursuant to the approved “2020 Stock Incentive
Plan” (the Plan), the Company reserved a maximum of
Income taxes
The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Management evaluates all available evidence about future taxable income and other possible sources of realization of deferred tax assets. A valuation allowance is established to reduce deferred tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized. To the extent the Company establishes a valuation allowance or increased the allowance in any given period, an expense is recognized within the provision for income taxes in the statement of income.
The provision for income taxes was determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the period. Deferred taxes result from differences between the financial and tax basis of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates applicable in the years in which they are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax law is recognized in income in the period that includes the enactment date.
Concentration
Financial
instruments that potentially subject the Company to concentration of credit risk consist principally of cash, trade receivables, and
due from affiliates. Due from affiliates amounts are unsecured and are receivable from related parties. The credit worthiness of such
related parties are assessed via ongoing monitoring of their financial condition and cashflows. Any deterioration is taken into consideration
in assessing the risk of non-collectability of such balances. For accounts receivable, while there is a large customer base, credit risk
associated with trade receivables is present due to the concentration of sales and account receivable with a few major customers. The
Company monitors the credit worthiness of its customers through various factors, including review of their financial statements and other
associated information. For the years ended December 31, 2025, and 2024, sales to five major customers accounted for approximately
F-17
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Top Five Customers’ Revenue:
| For The Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | |||||||||||||
| Customer 1 | $ | % | $ | % | ||||||||||||
| Customer 2 | % | % | ||||||||||||||
| Customer 3 | % | % | ||||||||||||||
| Customer 4 | % | % | ||||||||||||||
| Customer 5 | $ | % | $ | % | ||||||||||||
Top Five Customers’ Accounts Receivable:
| As of December 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | |||||||||||||
| Customer 1 | $ | % | $ | % | ||||||||||||
| Customer 2 | % | % | ||||||||||||||
| Customer 3 | % | % | ||||||||||||||
| Customer 4 | % | % | ||||||||||||||
| Customer 5 | $ | % | $ | % | ||||||||||||
The
Company maintains cash balances in various financial institutions. The balances are generally insured by the Federal Deposit Insurance
Corporation up to $
As of December 31, 2025, and 2024, the Company
had $
3) Notes to the Consolidated Financial Statements
3.1) Accounts Receivable, net
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Accounts receivable, gross | $ | $ | ||||||
| Less: Allowance for doubtful accounts (current expected credit loss) | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
As of December 31, 2025, the Company remeasured
its allowance for current expected credit loss to $
F-18
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Current Expected Credit Loss movement* as follows:
| As at December 31, | ||||||||
| 2025 | 2024 | |||||||
| Opening balance | $ | $ | ||||||
| Provision/(Reversal) for the year | ( | ) | ||||||
| Closing balance | $ | $ | ||||||
| * | Amount collected during the years ended December 31, 2025, and 2024, was $ |
3.2) Other current assets
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Advance to Teyame(1) | ||||||||
| Project work-in-progress | * | |||||||
| Others | * | |||||||
| Total | $ | $ | ||||||
| * | |
| (1) |
3.3) Goodwill and Other Intangibles, net
| As of December 31, | |||||||||
| 2025 | 2024 | ||||||||
| Goodwill | (see ‘A’ below) | $ | $ | ||||||
| Other intangible assets, net | (see ‘B’ below) | $ | $ | ||||||
Niyama Acquisition
On June 16, 2025 (the “Acquisition Date”), Healthcare Triangle, Inc.
(the “Company”) completed the acquisition of (i) the Niyama mental health SaaS platform (the “Platform”) and related
assets and (ii)
Ezovion is a privately held India-based technology services company with active revenue-generating operations at the Acquisition Date. The Niyama platform is a fully developed mental health SaaS solution designed to complement the Company’s existing healthcare technology offerings.
F-19
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
The
results of operations of Ezovion have been included in the Company’s consolidated financial statements beginning June 16, 2025.
The revenue and net loss contribution since the date of acquisition until December 31, 2025, is less than
Consideration Transferred
The
total fair value of consideration transferred on the Acquisition Date was approximately $
| ● | Cash paid at closing and within | |
| ● | Fair value of equity consideration ( | |
| ● | Fair value of contingent consideration (earn-out): $ |
The deferred cash payment was discounted to present value using a market-based discount rate. The earn-out has been provisionally valued at based on initial probability-weighted revenue forecasts. This amount is subject to revision within the measurement period ending June 16, 2026, as management finalizes its assessment of the earn-out targets and market-based inputs.
Purchase Price Allocation
The Company allocated the purchase price to the identifiable
assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date. The valuation was performed
with the assistance of an independent third-party valuation specialist, using Multi Period Excess Earnings Method, and Royalty Relief
Method. The weighted average cost of capital was estimated at
| As of the Acquisition Date (June 16, 2025) | ||||||
| Tangible assets acquired: | ||||||
| Cash and cash equivalents | $ | |||||
| Accounts receivable, net | ||||||
| Other current assets | ||||||
| Total tangible assets | (a) | $ | ||||
| Liabilities assumed: | ||||||
| Accounts payable | $ | |||||
| Other current liabilities | ||||||
| Notes payable | ||||||
| Total liabilities assumed | (b) | $ | ||||
| Net liabilities assumed | (c = a – b) | $ | ( | ) | ||
| Identifiable intangible assets | ||||||
| Trade name / trademark | $ | |||||
| Developed technology (IP) | ||||||
| Total identifiable intangible assets | (d) | $ | ||||
| Goodwill | (e) | $ | ||||
| Total net assets acquired | (c + d + e) | $ | ||||
The purchase price allocation reflects management’s estimates of fair value as of the Acquisition Date.
Identifiable Intangible Assets
The identifiable intangible assets primarily consist of developed technology related to the Niyama platform and trade name assets. The developed technology represents a fully developed SaaS solution capable of commercial deployment.
These
intangible assets are amortized on a straight-line basis over their estimated useful lives of
F-20
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Contingent Consideration
The
Acquisition includes a cash-settled earn-out with a contractual maximum payment of $
The contingent consideration liability is remeasured at fair value at each reporting date, with changes in fair value recognized in earnings.
At
the Acquisition date and at year-end, the present fair value of the contingent consideration was estimated to be $
Acquisition-Related Costs
Acquisition-related transaction costs were expensed as incurred and included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.
A. Goodwill
Goodwill represents the excess of consideration transferred over the fair value of identifiable net assets acquired and is primarily attributable to:
| ● | Expected synergies from integrating the acquired Platform with Ezovion’s operational capabilities and the Company’s broader service offerings; | |
| ● | The assembled workforce; and | |
| ● | Anticipated future growth opportunities. |
Goodwill is tested for impairment at least annually, or more frequently if indicators of impairment arise. No impairment indicator existed as at the balance sheet date and accordingly no impairment expense was recognized for the year ended December 31, 2025. As the Company is in accumulated losses, there is no tax impact on these financial statements.
B. Other Intangible Assets, net
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||
| Useful | Gross | Amortization | Net | Gross | Net | |||||||||||||||||||||||||||
| life | Carrying | expense for | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||||||||||
| (Years) | Amount | the year | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||||||||
| Intellectual property | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Customer relationship | ||||||||||||||||||||||||||||||||
| Product development | ||||||||||||||||||||||||||||||||
| Software | ||||||||||||||||||||||||||||||||
| Trademark | ||||||||||||||||||||||||||||||||
| Intangible assets, total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
The total cost of intangibles purchased during
the year amounted to $
F-21
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
3.4) Furniture and Equipment
Furniture and equipment consisted of the following:
| Useful life | As of December 31, | |||||||||
| (Years) | 2025 | 2024(1) | ||||||||
| Furniture and equipment, at cost | $ | $ | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||||
| Furniture and equipment, net | $ | $ | ||||||||
| (1) |
During
the year ended December 31, 2025, the Company purchased furniture and equipment amounting to $
3.5) Advances
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Advance to contractor - for AI tools and software development | $ | $ | ||||||
| Advance to contractor - for services | ||||||||
| Total Advances | $ | $ | ||||||
Advances represent the amounts transferred to related party contractors of the Company during the year, for provision of certain services to the Company. These advances are expected to be settled in the ordinary course of business.
These amounts were advanced in connection with the Company’s
engagement of its related parties, SecureKloud Technologies Limited (“SKL”) and Blockedge Technologies Inc. (“Blockedge”),
who were engaged to design, develop and deliver an Integrated Health Advisory & Care Platform & Tools including certain artificial
intelligence-enabled software tools and related intellectual property, intended to support the Company’s current and future product offerings
at a cost not-to-exceed $
Pursuant to this arrangement, $
The
advance outstanding as of December 31, 2024, amounting to $
F-22
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
A. Identification of related parties
The following entities and individuals are considered related parties, along with the nature of the relationship:
| Name of the related party | Nature of relationship |
| SecureKloud Technologies Limited (“SKL”) | |
| SecureKloud Technologies Inc. (“SKI”) | |
| Blockedge Technologies Inc. (“Blockedge”) | |
| Suresh Venkatachari(1) | |
| Dave Rosa | |
| Jainal Bhuiyan | |
| Ron McClurg | |
| Shibu Kizhakevilayal(2) | |
| Sujatha Ramesh(3) | |
| David Ayanoglou(4) | |
| Thyagarajan Ramachandran(4) | |
| Lakshmanan Kannappan(5) |
| (1) | |
| (2) | |
| (3) | |
| (4) | |
| (5) |
F-23
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
B. Transactions details:
On
January 1, 2025, the Company entered into a Master Service Agreement with SecureKloud Technologies Inc. (“SKI”) and Securekloud
Technologies Limited (“SKL). The initial term of the agreement is
In accordance with the Master Services Agreement, the Company provides resources to Blockedge Technologies, Inc relating to technical services according to the statement of work from the Company. The Company also receives management and administrative services from Blockedge Technologies, Inc.
In addition, on January 1, 2025, the Company entered
into a Rental Sublease Agreement with SecureKloud Technologies Inc. (“SKI”), The initial term of the agreement between SKI
and the principal lessor is
The advance as of December 31, 2025, is $
| - | SecureKloud Technologies Limited(*) (a public company in India) advance as of December 31, 2025, is $ |
| - | SecureKloud Technologies, Inc.(*), advance as of December
31, 2025, is as compared to $ |
| (*) | During the year ended December 31, 2025, the Company, together with SecureKloud Technologies Limited and SecureKloud Technologies, Inc., entered into a tripartite agreement dated March 25, 2025, pursuant to which, SecureKloud Technologies Limited took over all the contractual obligations, outstanding balance and transactions between the Company and SecureKloud Technologies, Inc. Accordingly, the balance receivable from SecureKloud Technologies Inc., has since been novated to SecureKloud Technologies, Limited as of the effective date of the novation. No consideration was exchanged as part of the novation. |
F-24
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
C. Related party transactions:
Following are the transactions with related parties during the periods presented:
| Year ended December 31, |
||||||||||
| Related Parties | Nature of transactions | 2025 | 2024** | |||||||
| SecureKloud Technologies Limited (“SKL”) | Services received | $ | ( |
) | $ | |||||
| Amount collected from customers on behalf of the related party | ( |
) | ||||||||
| Amounts advanced | ||||||||||
| SecureKloud Technologies, Inc. (“SKI”) | Services received | ( |
) | ( |
) | |||||
| Amounts advanced(***) | ||||||||||
| Services rendered | ||||||||||
| Amounts collected by related party on behalf of the Company | ||||||||||
| Rent expenses paid | ( |
) | ( |
) | ||||||
| Blockedge Technologies, Inc. (“Blockedge”) | Services received | ( |
) | |||||||
| Amounts advanced(****) | ||||||||||
| Revenue earned | ||||||||||
| Accounts receivable | ||||||||||
| Dave Rosa | Remuneration (including stock options) | |||||||||
| Jainal Bhuiyan | Remuneration (including stock options) | |||||||||
| Ron McClurg | Remuneration (including stock options) | |||||||||
| Sujatha Ramesh | Remuneration | |||||||||
| David Ayanoglou | Remuneration | |||||||||
| Thyagarajan Ramachandran | Remuneration | |||||||||
| Suresh Venkatachari | Remuneration | |||||||||
| Shibu Kizhakevilayal | Remuneration | |||||||||
| Lakshmanan Kannappan | Remuneration | $ | $ | |||||||
| (**) | |
| (***) | |
| (****) |
3.6) Short-Term Borrowing
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Seacoast Business Funding [refer (A) below] | $ | $ | ||||||
| Convertible notes [refer (B) below] | ||||||||
| Advance from employee [refer (C) below] | ||||||||
| Total | $ | $ | ||||||
A. Seacoast Business Funding
During
2022, the Company obtained a credit facility from Seacoast business funding (SBF), a division of Seacoast National Bank. The funding
is against the accounts receivable of the Company and one of its subsidiaries. The maximum amount of advance under the arrangement is $
The SBF facility incurred a factoring interest
cost of
The
carrying amount of associated liabilities was $
F-25
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
B. Convertible Notes
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Convertible notes payable [refer (1) and (2) below] | $ | $ | ||||||
| Less: discount | ( | ) | ||||||
| Notes payable, net of discount | ||||||||
| Notes payable, current portion, net of discount | $ | $ | ||||||
| 2025 Convertible notes, current portion – at fair value [see (3) below] | $ | $ | ||||||
During the year ended December 31, 2025, the Company settled the entire outstanding balance of convertible notes payable as of the prior year end as shown below, and there was no gain or loss upon settlement.
1. L1 Capital
On December 28, 2023, the Company entered into
the Securities Purchase Agreement with the selling stockholder, pursuant to which the Company agreed to issue to the selling stockholder,
in a private placement (the “L1-Private Placement”), Senior Secured
Under the first tranche of funding, which closed upon signing of the
Purchase Agreement on December 28, 2023, the Company issued a L1-Note to the investor in the principal amount of $
Each L1-Note matures 18 months after issuance,
does not bear any interest unless an event of default occurs, in which case the L1-Note will bear interest at an annual rate of
Each L1-Note is fully repayable in cash upon maturity. In addition, the investor has the option of requiring prepayment of up to 25% of the issuance amount of subsequent financing. In addition, as to each L1-Note, beginning on the earlier of (i) 60 days from issuance and (ii) the date on which the resale registration statement registering the Conversion Shares issuable under the L1-Note and the L1-Warrant Shares issuable under the corresponding 2023-Warrants has been declared effective by the Securities and Exchange Commission, the Company must make monthly payments equal to 105% of the total principal amount multiplied by the quotient determined by dividing one by the number of months remaining until the maturity date as of the initial payment date (the “Monthly Payments”), until the principal amount has been paid in full prior to or on the maturity date or, if earlier, upon acceleration, conversion or redemption of the L1-Note in accordance with its terms.
F-26
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
The Monthly Payments are payable in cash; provided
that subject to certain limitations the Company may elect to pay all or part of a Monthly Payment in Conversion Shares in lieu of a cash
payment based on a price per share equal to the lower of (i) conversion price then in effect, and (ii)
On December 28, 2023, the Company issued Senior
Secured
The Company recorded $
During the year ended December 31, 2024, the Company converted $
| Date | Installment | Loan | Conversion fees | Total repayment | Conversion price(*) | No of shares(*) | Equity | APIC | ||||||||||||||||||||||
| 2/14/2024 | 1 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| 2/14/2024 | 2 | |||||||||||||||||||||||||||||
| 3/1/2024 | 3 | |||||||||||||||||||||||||||||
| 3/1/2024 | 4 | |||||||||||||||||||||||||||||
| 3/1/2024 | 5 | |||||||||||||||||||||||||||||
| 3/19/2024 | 6 | |||||||||||||||||||||||||||||
| 4/23/2024 | 7 | |||||||||||||||||||||||||||||
| 5/9/2024 | 8 | |||||||||||||||||||||||||||||
| 5/9/2024 | 9 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| (*) |
There was no gain or loss recorded on the conversions
as they were consummated within the terms of the original agreement. As of December 31, 2024, the L1 Capital note was outstanding at $
During the year ended December 31, 2025, the Company converted the
outstanding balance of $
| Date | Loan | Conversion fees and interest | Total repayment | Conversion price(*) | No of shares(*) | |||||||||||||||
| 1/7/2025 | $ | $ | $ | $ | ||||||||||||||||
| 2/3/2025 | ||||||||||||||||||||
| 2/14/2025 | ||||||||||||||||||||
| 2/18/2025 | ||||||||||||||||||||
| 2/21/2025 | ||||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||
| (*) | Represents values adjusted for one-for-two hundred forty-nine reverse stock split effective August 1, 2025, and one-for-sixty reverse stock split effective February 10, 2026. |
2. Pioneer Garage
On October 9, 2024, the Company and an investor entered an agreement
to issue to the investor,
During the year ended December 31, 2025, the
Company repaid convertible note amounting to $
F-27
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
3. 2025 Convertible Notes
On
November 20, 2025, the Company issued senior unsecured convertible notes (the “2025 Debentures”) to two unrelated
institutional investors. The 2025 Debentures have an aggregate face value of $
The 2025 Debentures are convertible into shares of the Company’s common stock, entirely at the option of the holders, at any time prior to maturity at a conversion price equal to the greater of:
| ● | ||
| ● | $ |
The Company elected the fair value option for these debentures under ASC 825, Financial Instruments, at initial recognition. Accordingly, the 2025 Debentures are recorded at fair value and remeasured at each reporting date, with changes in fair value recognized in earnings.
The fair value of these debentures is classified within Level 3 of the fair value hierarchy because the valuation uses significant unobservable inputs and management judgment. The Company engaged an independent third-party valuation specialist to estimate the fair value of the debentures using a Monte Carlo simulation model. The valuation model simulated multiple potential future stock-price paths and expected settlement outcomes and incorporated the contractual terms of the instruments, including the variable conversion feature, floor price, maturity, and other debt-specific provisions.
As
of December 31, 2025, the significant assumptions used in the valuation included the Company’s common stock price of $
Because the valuation is based on unobservable inputs, changes in those assumptions could result in a materially different fair value measurement. In general, higher assumed volatility, lower expected conversion prices, or assumptions that accelerate or increase stock-based settlement would increase the fair value of the debentures, while lower volatility or assumptions resulting in greater cash settlement or reduced conversion value would decrease the fair value.
During 2025, the holders of the 2025 Debentures converted $
For the year ended December 31, 2025, the Company recognized:
| ● | $ | |
| ● | a $ |
For the year ended December 31, 2025, the Company evaluated the portion of the change in fair value attributable to changes in instrument-specific credit risk and concluded that such amount was not significant relative to the total change in fair value recognized for the debentures.
The following table presents changes in the fair value of the Debentures:
| 2025 | 2024 | |||||||
| Fair value at issuance | $ | $ | ||||||
| Less: Conversions to equity stock (fair value) | ( | ) | ||||||
| Change in fair value (recognized in earnings) | ( | ) | ||||||
Fair value on December 31 | $ | $ | ||||||
F-28
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
C. Advance from employee
An employee of the Company provided a short-term
advance, amounting to $
3.7) Other Current Liabilities
As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Accrued payroll | $ | $ | ||||||
| Accrued audit fees | ||||||||
| Insurance payable | ||||||||
| Commission accrual | ||||||||
| Milestone deposit | * | |||||||
| Director’s fees | ||||||||
| Other | $ | |||||||
| Total | $ | $ | ||||||
| * |
3.8) Contingent consideration
As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Contingent consideration | $ | $ | ||||||
On February 24, 2025, the Company executed a settlement
agreement pertaining to the acquisition of Devcool Inc. and issued
On
June 16, 2025, Healthcare Triangle, Inc. through its wholly owned subsidiary Quantum Nexus Inc. and Niyama Healthcare, Inc., a Delaware
corporation, a provider of Mental Health and Hospital Information Systems technology, across India, South East Asia, and Europe (the
“Seller”) entered into an Asset and Stock Transfer Agreement (the “Agreement”). As part of this transaction,
the Company estimated the contingent consideration, with a maximum face value of $
3.9) Leases
The Company determines if an arrangement contains a lease at inception. Right of use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.
Leases
with a term of
F-29
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
The
Company is currently operating from two office locations leased by SecureKloud, a related party. The Company does not have any signed
lease agreement in its name. The Company’s principal facility is located in Pleasanton, CA and has another facility in Plainsboro,
NJ. Rent expenses for the year ended December 31, 2025, and 2024, were $
3.10) Stockholder Equity / (Deficit)
All references to the number of common shares and price per Common Stock, for all periods presented, have been adjusted to reflect the following:
| - | one-for-two hundred forty-nine reverse stock split effective August 1, 2025; and | |
| - | one-for-sixty reverse stock split effective February 10, 2026. |
These reverse splits reduced the number of issued and outstanding shares of common stock in proportion to the split ratio, without changing the total authorized shares or the par value per share. The basic and diluted earnings consider the effect of reverse split across the reporting periods.
Accordingly,
unless indicated otherwise, all the current period and historical per share data, number of shares issued and outstanding, stock awards,
and other common stock equivalents for the periods presented in this Annual Report on Form 10-K have been adjusted retroactively, where
applicable, to reflect the Reverse Stock Split. There was no change to the shares authorized or in the par value per share of common
stock of $
The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity. The Company issued fractional shares at the participant level in connection with the Reverse Stock Split.
A. Common Stock
| i. | Issuance of Shares |
On June 16, 2025, Healthcare Triangle, Inc and Niyama Healthcare, Inc., a Delaware corporation, a provider of Mental Health and Hospital Information Systems technology, across India, Southeast Asia, and Europe (the “Seller”) entered into an Asset Transfer Agreement. See also note 3.3 for further details.
| ii. | Pre-Funded Warrants |
| ● | During July 2022, the Company made a private placement of |
| ● | On December 28, 2023, the Company issued a convertible note to the investor in the principal amount of $ |
| ● | On February 27, 2025, Healthcare Triangle, Inc. (the “Company”) entered into Securities Purchase Agreements (the “Purchase Agreement”) with institutional investors (the “Investors”) for the private placement of |
F-30
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
The
initial exercise price for both the Series A Warrants and Series B Warrants is $
The
Company received gross proceeds of approximately $
The Company allocated the proceeds between the Common Stock, Pre-Funded Warrants, and Common Warrants (some of which were exercisable on cash basis, whereas others were exercisable on an alternative cashless basis) on a relative fair value basis and recorded the amount allocated to the Common Warrants within additional paid-in capital on the accompanying consolidated balance sheet as the Common Warrants met all the criteria for equity classification. During the year ended December 31, 2025, all the prefunded warrants have been converted into equity, and all of the alternative cashless warrants have been exercised. As the remaining Common Warrants were equity classified, they do not require subsequent remeasurement after the issuance.
The Common Warrants contain standard adjustments to the exercise price including stock splits, stock dividends, rights offerings and pro rata distributions.
All common stock numbers and price per common stock are stated at post reverse-split of one-for-two hundred forty-nine, effective August 1, 2025, and one-for-sixty, effective February 10, 2026.
As of December 31, 2025,
Black Scholes warrants fair value:
| Instrument | Shares/ Warrants* | Fair value | Gross proceeds | Expenses on fund raising | Net proceeds | |||||||||||||||
| Common Stock | ( | ) | ||||||||||||||||||
| Pre-funded Warrants | ( | ) | ||||||||||||||||||
| Series A Warrants [refer (1) below] | ||||||||||||||||||||
| Series B Warrants | ( | ) | ||||||||||||||||||
| ( | ) | |||||||||||||||||||
| (*) | |
| (1) |
F-31
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
The movement of warrants during the years ended December 31, 2025, and 2024, is shown below:
| Weighted | ||||||||||||||||
| weighted | average | |||||||||||||||
| average | remaining | Aggregate | ||||||||||||||
| Number of | exercise | contractual | intrinsic | |||||||||||||
| Warrants | warrants | price | term | value | ||||||||||||
| Outstanding on January 1, 2025 | $ | |||||||||||||||
| Issued | ||||||||||||||||
| Exercised | ( | ) | — | ( | ) | |||||||||||
| Outstanding on December 31, 2025 | ||||||||||||||||
| Exercisable on December 31, 2025 | $ | |||||||||||||||
| Weighted | ||||||||||||||||
| Weighted | average | |||||||||||||||
| average | remaining | Aggregate | ||||||||||||||
| Number of | exercise | contractual | intrinsic | |||||||||||||
| Warrants | warrants | price | term | value | ||||||||||||
| Outstanding on January 1, and December 31, 2024 | $ | |||||||||||||||
| Exercisable on December 31, 2024 | $ | |||||||||||||||
The Company recognized a cost of $
B. Preferred Stock
The
Company’s Certificate of Incorporation provides for a class of its authorized stock known as preferred stock, comprised of
i. Series A
With
respect to payment of dividends and distribution of assets upon liquidation, dissolution, or winding up of the Corporation, whether voluntary
or involuntary, the Series A Convertible Preferred Stock will rank: (i) senior to all other classes or series of capital stock of the
Corporation now existing or hereafter authorized, classified or reclassified, and (ii) junior to all Indebtedness of the Corporation
now existing or hereafter authorized (including Indebtedness convertible into Common Stock). The holders of the Series A Convertible
Preferred Stock shall not be entitled to receive dividends paid on the Corporation’s Common Stock. Each share of Series A Super
Voting Preferred Stock is entitled to
On March 12, 2025, as part of the
arrangement with him upon founding of the Company, the Board of Directors of the Company approved the issuance of
The Series A Preferred Stocks remain impartial and are not impacted
by stock split or reverse split. As of December 31, 2025, and 2024, the total issued and outstanding Series A Preferred Stocks were
F-32
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
ii. Series B
With respect to payment of dividends and distribution of assets upon liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, the Series B Convertible Preferred Stock ranks: (i) senior to all other classes or series of capital stock of the Corporation now existing or hereafter authorized, classified or reclassified, and (ii) junior to all indebtedness of the Corporation now existing or hereafter authorized (including indebtedness convertible into common stock). The holders of the Series B Convertible Preferred Stock are not entitled to receive dividends paid on the Corporation’s common stock.
On October 21, 2024, Healthcare Triangle Inc., acquired substantially all of the business, assets, and operations relating to cloud and technology domain of SecureKloud Technologies, Inc., a Nevada corporation. The Acquired Assets were acquired by Healthcare Triangle, Inc under an Asset Transfer Agreement, dated October 21, 2024.
The consideration for the Acquired Assets consisted of the issuance
of
3.11) Share Based Compensation
We estimate the fair value of our stock options using the Black-Scholes option pricing model. This requires the input of subjective assumptions, including the fair value of our underlying common stock, the expected term of stock options, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock, the most critical of which, prior to our IPO, was the estimated fair value of common stock. The assumptions used in our option pricing model represent our best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. The resulting fair value, net of actual forfeitures, is recognized on a straight-line basis over the period during which an employee is required to provide service in exchange for the award
These assumptions used in the Black-Scholes option pricing model, are estimated as follows:
| ● | Expected volatility. Since our IPO in July 2020, the Company’s common stock has been publicly traded on NASDAQ, and accordingly, the trading history is considered a reasonable measure to ascertain the expected volatility over a period equivalent to the expected term of the awards. |
| ● | Expected term. We estimate the expected term using the simplified method, as we do not have sufficient historical exercise activity to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The simplified method calculates the average period the stock options are expected to remain outstanding as the midpoint between the vesting date and the contractual expiration date of the award. |
| ● | Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for maturities corresponding with the expected term of the option. |
| ● | Expected dividend yield. We have never declared or paid any dividends and do not presently plan to pay dividends in the foreseeable future. Consequently, we use an expected dividend yield of zero. |
F-33
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
We are required to estimate the fair value of the common stock underlying our stock-based awards when performing fair value calculations Historically for all periods prior to our IPO, given the absence of a public trading market for our common stock, and in accordance with the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation, we exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock including:
| ● | contemporaneous valuations performed at periodic intervals by unrelated third-party specialists |
| ● | our actual operating and financial performance. |
| ● | relevant precedent transactions involving our capital stock; |
| ● | likelihood of achieving a liquidity event, such as an initial public offering or a sale of our company given prevailing market conditions and the nature and history of our business; |
| ● | market multiples of comparable companies in our industry; |
| ● | stage of development. |
| ● | industry information such as market size and growth; |
| ● | illiquidity of stock-based awards involving securities in a private company; and |
| ● | macroeconomic conditions. |
In valuing our common stock prior to our IPO, our board of directors determined the enterprise value of our company using both the income approach and market approach valuation methods. The income approach estimates value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using a discount rate based on the cost of capital at a company’s stage of development. The market approach estimates value based on a comparison of the subject company to comparable public companies in a similar line of business. From the comparable companies, a representative market value multiple is determined and then applied to the subject company’s financial results to estimate the enterprise value of the subject company.
The following table summarizes the movement of share options during the years ended
December 31, 2025, and 2024 (post reverse-splits of
| 2025 | 2024* | |||||||
| Share options outstanding as of January 1 | $ | $ | ||||||
| Granted during the year | ||||||||
| Forfeited / Expired | ( | ) | ( | ) | ||||
| Share options outstanding as of December 31 | $ | $ | ||||||
| * |
A summary of option activity under the employee share option plan as of December 31, 2025, and changes during the year then ended, is presented below.
| Number
of share options | Weighted
average exercise price | |||||||
| Balance available under the plan as at January 1, 2025 | ||||||||
| Additions to the plan(1) | ||||||||
| Granted (2) | ( | ) | ||||||
| Forfeited / Expired | ||||||||
| Balance available under the plan as of December 31, 2025 | ||||||||
| (1) |
| (2) |
F-34
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
The following table summarizes the movement of unvested options during the year ended December 31, 2025:
| Number of share options | Weighted average grant date fair value per option | |||||||
| Unvested as of January 1, 2025 | $ | |||||||
| Granted during the year(2) | ||||||||
| Vested during the year | ( | ) | ||||||
| Unvested as of December 31, 2025 | $ | |||||||
As of December 31, 2025, there was no unrecognized share-based compensation expense related to unvested options.
Summary of option activity under the employee share option plan as of December 31, 2024, and changes during the year then ended, is presented below:
| Number of share options | Weighted
average exercise price | |||||||
| Balance available under the plan as of January 1, 2024 | ||||||||
| Granted | ( | ) | $ | |||||
| Forfeited / Expired | ||||||||
| Additions to the plan | ||||||||
| Balance available under the plan as of December 31, 2024 | ||||||||
The following table summarizes the activities for our unvested options for the year ended December 31, 2024*:
| Number of share options | Weighted average grant date fair value per option | |||||||
| Unvested on January 1, 2024 | $ | |||||||
| Granted during the year(2) | ||||||||
| Vested during the year | ( | ) | ||||||
| Forfeited during the year | ( | ) | $ | |||||
| Unvested on December 31, 2024 | $ | |||||||
| * |
| (2) |
F-35
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
The Company issued and valued options using the Black-Scholes model for all 2025 and 2024 issuances with the following significant assumptions:
| Fair value assumptions | 2025 | 2024 | ||||||
| Expected volatility | % | % | ||||||
| Expected terms (in years) | ||||||||
| Risk-free interest rate | % | % | ||||||
| Dividend Yield | % | % | ||||||
The
Company recognized compensation expenses related to stock options of $
4) Provision for income taxes
The Company recognizes the tax benefit from uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters as other expense in the statement of income. Based on management’s evaluations, there are no uncertain tax positions requiring recognition as of the date of these financial statements.
The components of the Company’s net deferred tax assets as of December 31, 2025, and 2024, were as follows (in thousands):
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carry-forward | $ | $ | ||||||
| Add back: | ||||||||
| Stock-based compensation | ( | ) | ( | ) | ||||
| Acquisition related cost | ( | ) | ||||||
| Depreciation and amortization | ( | ) | ( | ) | ||||
| Bad debt | ( | ) | ( | ) | ||||
| Gain on revaluation | ||||||||
| Other income | ||||||||
| Total deferred tax asset | ||||||||
| Less: valuation allowance | $ | ( | ) | $ | ( | ) | ||
| Deferred tax asset, net of valuation allowance | ||||||||
| Deferred tax liabilities | ||||||||
| Net deferred tax asset | ||||||||
F-36
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Income tax expense was computed as follows:
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Federal income tax | $ | $ | ||||||
| State income tax | ||||||||
| Total Income expenses | $ | $ | ||||||
The
Company’s effective tax rate is
The
Company’s current tax expense is $
The Company’s federal and state income tax returns are generally subject to possible examination by the taxing authorities until the expiration of the related statute of limitations on those tax returns which is generally three years from the original filing deadline. The Company regularly reviews its deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing taxable temporary differences and tax planning strategies. The Company’s judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute the business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax provision would increase or decrease in the period in which the assessment is changed.
5) Net Loss per share
The Company presents basic and diluted loss per share (“EPS”) data for its common stock. Basic EPS is calculated by dividing the net income attributable to stockholders of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is determined by adjusting the net income attributable to stockholders of the Company and the weighted average number of shares of common stock outstanding during the period for the effects of all potential dilutive shares, including awards under stock-based compensation arrangements.
The Company’s unvested restricted stock awards are considered participating securities under FASB Codification topic, Earnings Per Share, because they entitle holders to non-forfeitable rights to dividends until the awards vest or are forfeited. When a company has a security that qualifies as a “participating security,” the Codification requires the use of the two-class method when computing basic EPS. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. In determining the amount of net income to allocate to common stockholders, income is allocated to both common stock and participating securities based on their respective weighted average shares outstanding for the period, with net income attributable to common stockholders ultimately equaling net income less net income attributable to participating securities. Diluted EPS for the Company’s common stock is computed using the more dilutive of the two-class method or the treasury stock method. The diluted EPS equals basic EPS due to anti-dilution.
Schedule of EPS:
| Year ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Net loss attributable to non-controlling interest | $ | ( | ) | $ | ||||
| Weighted average shares outstanding used in basic per common share computations | ||||||||
| Basic / Diluted EPS – Stockholders | $ | ( | ) | $ | ( | ) | ||
| Basic / Diluted EPS – Non-controlling interest | $ | ( | ) | $ | ||||
F-37
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
6) Segment Information
The management has chosen to organize the Company around differences in products and services and segregated the reporting segments as Software Services, Managed Services and Support, and Corporate & others.
Operating
segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the Chief
Operating Decision Maker (“CODM”) in deciding how to allocate resources and assessing performance.
Expenses
included in segment operating profit consist principally of direct selling, delivery costs and research and development expenses.
| Year Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (In ‘000) | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Software Services | $ | $ | $ | % | ||||||||||||
| Managed Services and Support | ( | ) | ( | )% | ||||||||||||
| Corporate & Others | ( | ) | ( | )% | ||||||||||||
| Net revenue | $ | $ | $ | % | ||||||||||||
F-38
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
Operating Profit by Operating Segments
| For the Year ended December 31, 2025 | ||||||||||||||||
| Software Services | Managed Services and Support | Corporate and Others | Total | |||||||||||||
| Net revenue | $ | $ | $ | $ | ||||||||||||
| Less: | ||||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Segment gross profit | ( | ) | ||||||||||||||
| Sales and marketing | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Bad debts | ( | ) | ( | ) | ||||||||||||
| Research and development | ( | ) | ( | ) | ( | ) | ||||||||||
| Segment operating profit/(loss) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income | ||||||||||||||||
Forex loss | ( | ) | ( | ) | ||||||||||||
| Changes in fair value | ||||||||||||||||
| Income/(Loss) before income tax | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax | ||||||||||||||||
| Net income/(loss) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
F-39
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
For
the Year ended | ||||||||||||||||
| Particulars | Software Services(*) | Managed Services and Support(*) | Corporate & Others(*), (1) | Total | ||||||||||||
| Net Revenue | $ | $ | $ | $ | ||||||||||||
| Less: | ||||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Segment gross profit | ||||||||||||||||
| Sales and marketing | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Bad debts | ( | ) | ( | ) | ||||||||||||
| Research and development | ( | ) | ( | ) | ||||||||||||
| Segment operating profit / (loss) | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income | ||||||||||||||||
| Income/(Loss) before income tax | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax | ( | ) | ( | ) | ||||||||||||
| Net income/(loss) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| (1) |
| (*) |
7) Legal Matters
The Company is not involved in any action, arbitration and/or other legal proceedings that it expects to have a material adverse effect on the business, financial condition, results of operations or liquidity of the Company. All legal costs are expensed as incurred.
F-40
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
8) New Accounting Pronouncements
| A. | Implemented |
ASU No. 2023-09. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disclosure of disaggregated information about a reporting entity’s effective tax rate reconciliation as well as disclosures on income taxes paid by jurisdiction. ASU No. 2023-09 is effective for annual periods beginning after December 15, 2024. The guidance is required to be applied on a prospective basis, with the option to apply the standard retrospectively. We adopted ASU No. 2023-09 on a retrospective basis in the fourth quarter of fiscal 2025. The adoption of this guidance resulted in additional financial statement disclosures and had no impact to our consolidated financial condition, results of operations, or cash flows.
B. Not Implemented
I. ASU No. 2025-06. In September 2025, the FASB issued ASU No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,” which is intended to modernize internal-use software guidance by removing all references to project stages and by clarifying the thresholds entities apply to begin capitalizing costs. ASU No. 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. We are currently evaluating the impact of the standard on our consolidated financial statements.
II. ASU No. 2024-03. In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which is intended to improve disclosures about a public business entity’s expenses by requiring disaggregated disclosure, in the notes to the financial statements, of prescribed categories of expenses within relevant income statement captions. ASU No. 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The new standard may be applied either on a prospective or retrospective basis. We are currently evaluating the impact of the standard on our consolidated financial statement disclosures.
Recent accounting pronouncements adopted or pending adoption not discussed above are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows. |
F-41
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
9) Subsequent Events
| 1) | On January 22, 2026, Healthcare Triangle, Inc. entered into a share purchase agreement to acquire Teyame AI Holdings Inc. and Teyame AI LLC. The aggregate purchase price for the Acquired Companies is up to $ |
The cash consideration includes: (i)
$
The equity consideration includes (a)
restricted shares or pre-funded warrants of the Company’s common stock with an agreed value of $
The Share Purchase Agreement also provides
for an earnout payable in the Company’s preferred stock to certain key management employees of the Acquired Companies, with an
aggregate value of up to $
| 2) | The Company effected a |
F-42
HEALTHCARE TRIANGLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share data)
| 3) | The Company issued shares and sold certain securities generating $ |
| 4) | During January and February 2026, the holders of the 2025 Debentures (see note 3.6) converted $ |
| 5) | On March 31, 2026, the Company formalized its arrangement with SecureKloud Technologies Limited (“SKL”) and Blockedge Technologies Inc. (“Blockedge”), to design, develop and deliver an Integrated Health Advisory & Care Platform & Tools including certain artificial intelligence-enabled software tools and related intellectual property, intended to support the Company’s current and future product offerings at a cost not-to-exceed $ |
The Company has evaluated subsequent events through April 13, 2026, the date on which the consolidated financial statements were issued and has determined that no other material subsequent events have occurred that would require disclosure.
F-43
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
None
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Company’s management, including its Chief Operating Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e). The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company’s desired disclosure control objectives. In designing periods specified in the SEC’s rules and forms, and that such information is accumulated and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company’s certifying officers have concluded that the Company’s disclosure controls and procedures are effective in reaching that level of assurance.
At the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Operating Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, our Chief Operating Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to the Company, based on the assessment and control of disclosure decisions currently performed by a small team. The Company plans to expand its management team and build a fulsome internal control framework required by a more complex entity.
Management’s Annual Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Section 13a-15(f) of the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in conformity with U.S. generally accepted accounting principles and include those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
As of December 31, 2025, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission (2013). Based on the criteria established by COSO management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.
46
This Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting as smaller reporting companies are not required to include such report. Management’s report is not subject to attestation by the Company’s independent registered public accounting firm.
Limitations on the Effectiveness of Controls
Management has confidence in its internal controls and procedures. The Company’s management believes that a control system, no matter how well designed and operated can provide only reasonable assurance and cannot provide absolute assurance that the objectives of the internal control system are met, and no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitation in all internal control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal control over financial reporting during the year ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
During
the year ended December 31, 2025, no director or officer of the Company
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The following are our executive officers and directors, and their respective ages and positions as of April 15, 2026.
| Name | Age | Position | ||
| Dave Rosa | 60 | Chairman of the Board of Directors. | ||
| Ronald McClurg | 65 | Director | ||
| Jainal Bhuiyan | 43 | Director | ||
| Sujatha Ramesh | 54 | Director and Chief Operating Officer | ||
| David Ayanoglou | 46 | Chief Financial Officer |
Dave Rosa
Mr. Dave Rosa has served as a member of our board of directors since August 2021. Since 2016, Mr. Rosa has been and currently is President and CEO of NeuroOne Medical Technologies (NMTC: Nasdaq), a publicly traded company on the Nasdaq. He also serves on the boards of Biotricity (BTCY: OTC), a publicly traded company on the Over the Counter (OTC) platform, where he currently serves as compensation committee chairman and Neuro Event Labs, a privately held company in Finland, where he currently serves as Chairman of the Board. Mr. Rosa has over 25 years of experience holding a variety of senior management roles representing several medical device markets. His recent experience includes developing early-stage companies to commercialization and Nasdaq listing. Mr. Rosa holds a Master of Business Administration degree from Duquesne University and Bachelor of Science degree in Commerce and Engineering from Drexel University.
We believe that Mr. Rosa is well qualified to serve as Chairman of the Board of Directors, with his entrepreneurial, leadership, operational and capital markets experience.
Ronald McClurg
Mr. Ronald McClurg has over 30 years of financial leadership experience with public and private companies. Mr. McClurg has served as Chief Financial Officer of NeuroOne Medical Technologies Corp. (Nasdaq: NMTC) since January 2021. Prior to joining NeuroOne, from October 2003 to June 2019, Mr. McClurg served as VP – Finance and Administration and Chief Financial Officer of Incisive Surgical, Inc., a privately-held medical device manufacturer. Prior to 2003, Mr. McClurg served as Chief Financial Officer and Treasurer of Wavecrest Corporation, a privately-held manufacturer of electronic test instruments for the semiconductor industry, and served as Chief Financial Officer for several publicly-held companies, including Video Sentry Corporation, Insignia Systems, Inc. (Nasdaq: ISIG), and Orthomet, Inc. Currently, he serves on the board of governors of Biomagnetic Sciences, LLC and serves as a director and audit committee chair for Biotricity, Inc. (Nasdaq: BTCY). Mr. McClurg holds a Bachelor of Business Administration degree in accounting from the University of Wisconsin — Eau Claire.
We believe that Mr. McClurg is qualified to serve as a member of our Board based on his outstanding skills and unique experience in Finance domain with public companies.
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Jainal Bhuiyan
Mr. Jainal Bhuiyan is currently a Senior Managing Director in investment banking at Paulson Investment Company. Prior to Paulson he was a partner at HRA Capital, a boutique investment bank he co-founded in 2012.
Over the course of his 18 years of healthcare investment banking and capital markets experience, he has advised private and public healthcare companies from start-ups to commercially mature enterprises, totaling more than $3B in transactions. He holds FINRA Series 7, Series 63 and Series 79 licenses.
We believe that Mr. Bhuiyan is qualified to serve as a member of our Board based on his outstanding skills and unique experience in investment banking in healthcare sector.
Sujatha Ramesh
Ms. Sujatha Ramesh, age 54, has a distinguished career of over 25 years of senior executive experience in the technology and financial services industry, having previously served as Global Head of Strategic Initiatives at Citigroup (2006–2024), where she held senior leadership roles and led operational transformation, governance, risk management, financial optimization, and technology modernization across global markets. Prior to Citigroup, she held leadership positions at Publicis Sapient, Infinite Computer Solutions, and Capgemini (formerly iGATE Global Solutions), managing technology projects and digital transformation initiatives across North America, Europe, Asia, and Latin America. A recognized industry thought leader and honored listee in Who’s Who in America, Ms. Ramesh has spoken at global forums and served as a guest speaker at academic institutions, mentoring future leaders.
Ms. Ramesh holds an MBA from NYU Leonard N. Stern School of Business and a Master of Science (MS) in Information Systems and Applications.
David Ayanoglou
Mr. Ayanoglou, age 47, has a distinguished career of over 23 years in corporate finance, with a focus around software M&A and financial reporting. Mr. Ayanoglou had been, prior to joining the Company, for over four years consulting variety of clients on several critical M&A transactions, corporate reporting and CFO related matters in the technology and healthcare spaces. Prior to that, Mr. Ayanoglou was a Director of Valuations and Transaction Support at Open Text where he served for over 13 years and participated in the execution of over 43 transactions where the deal sizes ranged from $5M to $1.62B (including acquisition of divisions of Dell/EMC). Three of the deals that Mr. Ayanoglou executed on were greater than $1B, increasing over time Open Text’s valuation to over $11 billion (during their tenure). Mr. Ayanoglou also has held senior finance roles in external reporting for a large SEC filer, and audit & assurance at KPMG LLP.
Mr. Ayanoglou is a graduate of the University of Toronto (Rotman School of Business), a CPA, Chartered Accountant and a Chartered Business Valuator.
Board of Directors
Our business and affairs are managed under the direction of our board of directors. Our board of directors currently consists of four (4) members, three (3) of whom qualify as “independent” under the listing standards of Nasdaq.
Directors serve until the next annual meeting and until their successors are elected and qualified. Officers are appointed to serve for one year until the meeting of the Board following the annual meeting of shareholders and until their successors have been elected and qualified.
Board Leadership Structure and Risk Oversight
The Board oversees our business and considers the risks associated with our business strategy and decisions. The Board currently implements its risk oversight function as a whole. Each of the Board committees, as set forth below, will also provide risk oversight in respect of its areas of concentration and reports material risks to the board for further consideration.
Director Independence
Our board of directors are composed of a majority of “independent directors” as defined under the rules of Nasdaq. Nasdaq Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Under such definition, our Board has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment and affiliations, our Board has determined that Mr. Dave Rosa, Mr. Ronald McClurg, and Mr. Jainal Bhuiyan, are all independent directors of the Company.
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Board Committees
Our board of directors has established three standing committees, audit committee, compensation committee and nominating and corporate governance committee, each of which operate under a charter that has been approved by our board of directors. We have appointed persons to the board of directors and committees of the board of directors as required meeting the corporate governance requirements of the Nasdaq Listing Rules.
Audit Committee
We have established an Audit Committee consisting of Mr. Ronald McClurg, Mr. Jainal Bhuiyan, and Mr. Dave Rosa. Mr. McClurg is the Chairman of the audit committee. In addition, our Board has determined that Mr. McClurg is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended, or the Securities Act. The Audit Committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:
| ● | reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our annual disclosure report; |
| ● | discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; |
| ● | discussing with management major risk assessment and risk management policies; |
| ● | monitoring the independence of the independent auditor; |
| ● | verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
| ● | reviewing and approving all related-party transactions; |
| ● | inquiring and discussing with management our compliance with applicable laws and regulations; |
| ● | pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; |
| ● | appointing or replacing the independent auditor; |
| ● | determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
| ● | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and |
| ● | approving reimbursement of expenses incurred by our management team in identifying potential target businesses. |
The Audit Committee is composed exclusively of “independent directors” who are “financially literate” as defined under the Nasdaq listing standards. The Nasdaq listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement.
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Compensation Committee
We have established a Compensation Committee of the board of directors to consist of Mr. Dave Rosa, and Mr. Ronald McClurg each of whom is an independent director. Mr. Rosa is the Chairman of the Compensation Committee. Each member of our compensation committee is also a non-employee director, as defined under Rule 16b-3 promulgated under the Exchange Act, and an outside director, as defined pursuant to Section 162(m) of the Code. Mr. Dave Rosa is the chairman of the compensation committee. The Compensation Committee’s duties, which are specified in our Compensation Committee Charter, include, but are not limited to:
| ● | reviews, approves and determines, or makes recommendations to our board of directors regarding, the compensation of our executive officers; |
| ● | administers our equity compensation plans; |
| ● | reviews and approves, or makes recommendations to our board of directors, regarding incentive compensation and equity compensation plans; and |
| ● | establishes and reviews general policies relating to compensation and benefits of our employees. |
Nominating and Corporate Governance Committee
We have established a Nominating and Corporate Governance Committee consisting of Mr. Jainal Bhuiyan and Mr. Ronald McClurg. Mr. Bhuiyan is the Chairman of the Nominating and Corporate Governance Committee. The committee’s duties, which are specified in our Nominating and Corporate Governance Committee Charter, include, but are not limited to:
| ● | identifying, reviewing and evaluating candidates to serve on our board of directors consistent with criteria approved by our board of directors; |
| ● | evaluating director performance on our board of directors and applicable committees of our board of directors and determining whether continued service on our board of directors is appropriate |
| ● | evaluating nominations by stockholders of candidates for election to our board of directors; and |
| ● | corporate governance matters |
Code of Ethics
Our Board has adopted a written code of business conduct and ethics (“Code”) that applies to our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. The Code is applicable to all of our directors, officers and employees and is available on our corporate website, https://www.healthcaretriangle.com/. We intend to disclose any amendments to our code of business conduct and ethics, or waivers of its requirements, on our website or in filings under the Exchange Act to the extent required by applicable rules and exchange requirements.
Family Relationships
There are no family relationships among the officers and directors, nor are there any arrangements or understanding between any of the Directors or Officers of our Company or any other person pursuant to which any officer or director was, or, is to be selected as an officer or director.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and persons who own more than 10% of our outstanding shares of common stock (“Ten Percent Holders”) to file with the SEC reports of their share ownership and changes in their share ownership of our common stock. Directors, executive officers and Ten Percent Holders are also required to furnish us with copies of all ownership reports they file with the SEC. To our knowledge, none of our directors, executive officers and Ten Percent Holders failed to comply with any Section 16(a) filing requirements during fiscal 2025.
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Item 11. Executive Compensation
Summary Compensation Table
The following summary compensation table provides information regarding the compensation paid during our fiscal years ended December 31, 2025, and 2024, to our Chief Financial Officer, ex-Chief Financial Officer, Chief Operating Officer and our ex-Head of M&A. We refer to these individuals as our “named executive officers” for the respective years presented:
| Option | |||||||||||||||||||
| Name and Principal Position | Year | (Salary $) | (Bonus $) | Awards ($) | Total ($) | ||||||||||||||
David Ayanoglou, Chief Financial Officer(1) | 2025 | 256,958 | - | - | 256,958 | ||||||||||||||
Thyagarajan Ramachandran, Ex-Chief Financial Officer(1) | 2025 | 78,054 | - | - | 78,054 | ||||||||||||||
| 2024 | 277,600 | - | - | 277,600 | |||||||||||||||
Sujatha Ramesh, Chief Operating Officer(2) | 2025 | 229,167 | - | - | 229,167 | ||||||||||||||
Shibu Kizhakevilayil, Ex-Head of M&A(3) | 2025 | 24,312 | - | - | 24,312 | ||||||||||||||
| 2024 | 157,884 | - | - | 157,884 | |||||||||||||||
| (1) | David Ayanoglou was appointed as Chief Financial Officer of the Company effective April 9, 2025, in place of Thyagarajan Ramachandran, who was the previous Chief Financial Officer until April 8, 2025. |
| (2) | Shibu Kizhakevilayal is a former Board Executive Director, who ceased to be a Director effective April 10, 2025. |
| (3) | Sujatha Ramesh was appointed as Chief Operating Officer of the Company effective March 18, 2025, and as the Board Executive Director effective April 10, 2025. |
Employment and Consulting Agreements
Sujatha Ramesh, Chief Operating Officer and Director
On March 18, 2025, the Board of Directors (the “Board”) of the Healthcare Triangle, Inc. (the “Company”) appointed Ms. Sujatha Ramesh to serve as the Company’s Chief Operating Officer, effective immediately.
In connection with her appointment, on March 18, 2025, Ms. Ramesh and the Company entered into a contract for employment (the “Employment Agreement”), effective March 18, 2025, for Ms. Ramesh’s service as the Company’s Chief Operating Officer on an at-will basis. Pursuant to her Employment Agreement, Ms. Ramesh is entitled to an annual base salary of $250,000 per annum, with a one-time signing bonus of 100,000 restricted shares of the Company payable within 180 days from the date of the Employment Agreement, and $25,000 in cash as guaranteed bonus to be paid at the end of 12th month from the date of the Employment Agreement. Ms. Ramesh would be eligible for the Company’s bonus program, based upon the performance goals and bonus plan (agreed upon by and between Ms. Ramesh and the Company), along with being eligible for Company’s equity incentive plan, and other employee benefit programs (as then applicable, and available). If Ms. Ramesh violates the terms of her Employment Agreement, the Company may terminate her employment without notice and without payment of any compensation or accelerated vesting of options, subject to any over-dues. Ms. Ramesh’s Employment Agreement also provides for certain non-compete and non-solicitation covenants. The term of Ms. Ramesh’s Employment Agreement began immediately and automatically renews for successive one-year periods, unless otherwise terminated by either party.
On April 10, 2025, the Board appointed Ms. Sujatha Ramesh as an executive director of the Company, along with their current role as the Chief Operating Officer of the Company.
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David Ayanoglou, Chief Financial Officer
On April 10, 2025, the Board of Directors (the “Board”) of the Company appointed Mr. David Ayanoglou to serve as the Company’s Chief Financial Officer, effective immediately.
In connection with their appointment, on April 10, 2025, Mr. Ayanoglou and the Company entered into a contract for employment (the “Employment Agreement”), effective immediately, for Mr. Ayanoglou’s service as the Company’s Chief Financial Officer on an at-will basis. Pursuant to his Employment Agreement, Mr. Ayanoglou is entitled to an annual base salary of $278,000 per annum, and would be eligible for the Company’s bonus program, based upon the performance goals and bonus plan (to be agreed upon by and between Mr. Ayanoglou and the Company), along with being eligible for Company’s equity incentive plan, and other employee benefit programs (as then applicable, and available). If Mr. Ayanoglou violates the terms of their Employment Agreement, the Company may terminate their employment without notice and without payment of any compensation or accelerated vesting of options, subject to any over-dues. Mr. Ayanoglou’s Employment Agreement also provides for certain non-compete and non-solicitation covenants. The term of Mr. Ayanoglou’s Employment Agreement began immediately and renews for an indefinite period, unless otherwise terminated by either party.
Director Compensation Table
The following table provides information concerning compensation paid to our directors during fiscal year ended December 31, 2025.
| Name | Fee Earned / Paid in Cash ($) | Options ($) | Others | Total ($) | ||||||||||||
| Dave Rosa | 120,000 | 208,000 | — | 328,000 | ||||||||||||
| Mohammad Jainal Bhuiyan | 50,000 | 104,000 | — | 154,000 | ||||||||||||
| Ronald McClurg | 50,000 | 104,000 | — | 154,000 | ||||||||||||
Equity Incentive Plan
On April 27, 2020, our Board of Directors adopted the 2020 Stock Incentive Plan, or the Plan, which was approved by our shareholders on April 27, 2020, and became effective on such date. The following is a summary of certain significant features of the Plan. The information which follows is subject to, and qualified in its entirety by reference to, the Plan document itself, which is filed as an exhibit to the registration statement of which this prospectus forms a part.
Purposes: The purpose of the Plan is to provide a means whereby employees, directors and consultants of our company, its subsidiaries and affiliates develop a sense of proprietorship and personal involvement in the development and financial success of our company, and to encourage them to devote their best efforts to the business of our company, thereby advancing the interests of our company and its shareholders. A further purpose of the Plan is to provide a means through which we may attract able individuals to provide services to or for the benefit of our company and to provide a means for such individuals to acquire and maintain share ownership in our company, thereby strengthening their concern for the welfare of our Company.
Types of Awards: Awards that may be granted include incentive share options, non-qualified share options, share appreciation rights and restricted awards. These awards offer our officers, employees, consultants and directors the possibility of future value, depending on the long-term price appreciation of our Common Stock and the award holder’s continuing service with our company.
Eligible Recipients: Persons eligible to receive awards under the Plan will be those officers, employees, directors and consultants of our Company and its subsidiaries who are selected by the administrator.
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Administration: The Plan is administered by our compensation committee. Among other things, the administrator has the authority to select persons who will receive awards, determine the types of awards and the number of shares to be covered by awards, and to establish the terms, conditions, performance criteria, restrictions and other provisions of awards. The administrator has authority to establish, amend and rescind rules and regulations relating to the Plan.
Shares Available: The maximum number of Common Stocks that may be delivered to participants under the Plan is 4,000,000, subject to adjustment for certain corporate changes affecting the shares, such as share splits, if applicable. Shares subject to an award under the Plan for which the award is canceled, forfeited or expires again become available for grants under the Plan. Shares subject to an award that is settled in cash will not again be made available for grants under the Plan.
Share Options:
General. Share options give the option holder the right to acquire from us a designated number of Common Stock at a purchase price that is fixed upon the grant of the option. Share options granted may be either tax-qualified share options (so-called “incentive share options”) or non-qualified share options. Subject to the provisions of the Plan, the administrator has the authority to determine all grants of share options. That determination will include: (i) the number of shares subject to any option; (ii) the exercise price per share; (iii) the expiration date of the option; (iv) the manner, time and date of permitted exercise; (v) other restrictions, if any, on the option or the shares underlying the option; and (vi) any other terms and conditions as the administrator may determine.
Option Price. The exercise price for share options will be determined at the time of grant. Normally, the exercise price will not be less than the fair market value on the date of grant. As a matter of tax law, the exercise price for any incentive share option awarded may not be less than the fair market value of the shares on the date of grant. However, incentive share option grants to any person owning more than 10% of our voting power must have an exercise price of not less than 110% of the fair market value on the grant date.
Exercise of Options. An option may be exercised only in accordance with the terms and conditions for the option agreement as established by the administrator at the time of the grant. The option must be exercised by notice to us, accompanied by payment of the exercise price. Payments may be made either: (i) in cash or its equivalent; (ii) by tendering (either by actual delivery or attestation) previously acquired shares having an aggregate fair market value at the time of exercise equal to the exercise price; (iii) a cashless exercise (broker-assisted exercise) through a “same day sale” commitment; (iv) by a combination of (i), (ii), and (iii); or (v) any other method approved or accepted by the administrator in its sole discretion.
Expiration or Termination. Options, if not previously exercised, will expire on the expiration date established by the administrator at the time of grant. In the case of incentive stock options, such term cannot exceed ten years provided that in the case of holders of more than 10% of our voting power, such term cannot exceed five years. Options will terminate before their expiration date if the holder’s service with our company or a subsidiary terminates before the expiration date. The option may remain exercisable for specified periods after certain terminations of employment, including terminations as a result of death, disability or retirement, with the precise period during which the option may be exercised to be established by the administrator and reflected in the grant evidencing the award.
Incentive and Non-Qualified Options. As described elsewhere in this summary, an incentive share option is an option that is intended to qualify under certain provisions of the Code for more favorable tax treatment than applies to non-qualified share options. Any option that does not qualify as an incentive share option will be a non-qualified share option. Under the Code, certain restrictions apply to incentive share options. For example, the exercise price for incentive share options may not be less than the fair market value of the shares on the grant date and the term of the option may not exceed ten years. In addition, an incentive share option may not be transferred, other than by will or the laws of descent and distribution, and is exercisable during the holder’s lifetime only by the holder. In addition, no incentive share options may be granted to a holder that is first exercisable in a single year if that option, together with all incentive share options previously granted to the holder that also first become exercisable in that year, relate to shares having an aggregate fair market value in excess of $100,000, measured at the grant date.
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Share Appreciation Rights: Share appreciation rights, or SARs, which may be granted alone or in tandem with options, have an economic value similar to that of options. When an SAR for a particular number of shares is exercised, the holder receives a payment equal to the difference between the market price of the shares on the date of exercise and the exercise price of the shares under the SAR. Again, the exercise price for SARs normally is the market price of the shares on the date the SAR is granted. Under the Plan, holders of SARs may receive this payment - the appreciation value - either in cash or shares valued at the fair market value on the date of exercise. The form of payment will be determined by us.
Restricted Awards: Restricted awards are shares awarded to participants at no cost. Restricted awards can take the form of awards of restricted share, which represent issued and outstanding shares subject to vesting criteria, or restricted share units, which represent the right to receive shares subject to satisfaction of the vesting criteria. Restricted share awards are forfeitable and non-transferable until the shares vest. The vesting date or dates and other conditions for vesting are established when the shares are awarded. These awards will be subject to such conditions, restrictions and contingencies as the administrator shall determine at the date of grant. Those may include requirements for continuous service and/or the achievement of specified performance goals.
Performance Criteria: Under the Plan, one or more performance criteria will be used by the administrator in establishing performance goals. Any one or more of the performance criteria may be used on an absolute or relative basis to measure the performance of our company, as the administrator may deem appropriate, or as compared to the performance of a group of comparable companies, or published or special index that the administrator deems appropriate.
Other Material Provisions: Awards will be evidenced by a written agreement, in such form as may be approved by the administrator. In the event of various changes to the capitalization of our company, such as share splits, share dividends and similar re-capitalizations, an appropriate adjustment will be made by the administrator to the number of shares covered by outstanding awards or to the exercise price of such awards. The administrator is also permitted to include in the written agreement provisions that provide for certain changes in the award in the event of a change of control of our company, including acceleration of vesting. Except as otherwise determined by the administrator at the date of grant, awards will not be transferable, other than by will or the laws of descent and distribution. Prior to any award distribution, we are permitted to deduct or withhold amounts sufficient to satisfy any employee withholding tax requirements. Our board of directors also has the authority, at any time, to discontinue the granting of awards. The board of directors also has the authority to alter or amend the Plan or any outstanding award or may terminate the Plan as to further grants, provided that no amendment will, without the approval of our shareholders, to the extent that such approval is required by law or the rules of an applicable exchange, increase the number of shares available under the Plan, change the persons eligible for awards under the Plan, extend the time within which awards may be made, or amend the provisions of the Plan related to amendments. No amendment that would adversely affect any outstanding award made under the Plan can be made without the consent of the holder of such award.
Pension Benefits
Our named executive officers did not participate in, or otherwise receive any benefits under, any pension or retirement plan sponsored by us during the year ended December 31, 2025.
Nonqualified Deferred Compensation
Our named executive officers did not participate in, or earn any benefits under, any nonqualified deferred compensation plan sponsored by us during the year ended December 31, 2025.
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401(k) Plan
We maintain a 401(k) plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to make pre-tax and after-tax contributions of eligible compensation up to certain Code limits, which are updated annually. We have the ability to make matching and discretionary contributions to the 401(k) plan. The 401(k) plan is intended to be qualified under Section 401(a) Internal Revenue Code of 1986, as amended, or the Code, with the related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan are deductible by us when made and pre-tax contributions and earnings on pre-tax and after-tax contributions are not generally taxable to the employees until withdrawn or distributed from the 401(k) plan.
Clawback Policy
We maintain a compensation recovery policy that is compliant with the SEC rules and applicable stock exchange listing rules, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The table below sets forth information regarding the beneficial ownership of the common stock by (i) our directors and named executive officers; (ii) all the named executives and directors as a group and (iii) any other person or group that to our knowledge beneficially owns more than five percent of our outstanding shares of common stock.
We have determined beneficial ownership in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days of April 15, 2026 are deemed to be outstanding and beneficially owned by the person holding the options. Shares issuable pursuant to stock options or warrants are deemed outstanding for computing the percentage ownership of the person holding such options or warrants, but are not deemed outstanding for computing the percentage ownership of any other person. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below will have sole voting and investment power with respect to all shares of common stock that they will beneficially own, subject to applicable community property laws.
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The information contained in this table is as of April 15, 2026. At that date 1,967,588 shares of our common stock were outstanding.
| Number of Shares Beneficially Owned |
Beneficial Ownership Percentages | ||||||||||||||||||||
| Name and Address of Beneficial Owner (1) | Title | Common Stock |
Series A Super Voting Preferred Stock(2) |
Percent of Common Stock |
Percent of Series A Super Voting Preferred Stock |
Percent of Voting Stock (3) |
|||||||||||||||
| Officers and Directors | |||||||||||||||||||||
| Ronald McClurg | Director | — | — | * | — | * | |||||||||||||||
| Jainal Bhuiyan | Director | — | — | * | — | * | |||||||||||||||
| Dave Rosa | Director | — | — | * | — | * | |||||||||||||||
| Suresh Venkatachari | Founder | 5 | 20,000 | 0.67 | % | 100 | % | 96.35 | % | ||||||||||||
| * | Less than 1%. |
| (1) | The principal address of the named officers, directors and 5% stockholders of the Company is c/o Healthcare Triangle, Inc., 7901 Stoneridge Drive, Suite # 210, Pleasanton, CA 94588. |
| (2) | Entitles the holder to 1,000 votes per share and votes with the common stocks as a single class. |
| (3) | Represents total ownership percentage with respect to all shares of common stock, options and Series A Super Voting Preferred Stock, as a single class. |
Item 13. Certain Relationships and Related Party Transactions, and Director Independence
A. Identification of related parties
The following entities and individuals are considered related parties, along with the nature of the relationship:
| Name of the related party | Nature of relationship |
| SecureKloud Technologies Limited (“SKL”) | Common control and ownership by the Company’s Series A preferred stockholder, and a resources and service provider to the Company |
| SecureKloud Technologies Inc. (“SKI”) | Wholly owned subsidiary of SecureKloud Technologies Limited and a resources and service provider to the Company |
| Blockedge Technologies Inc. (“Blockedge”) | Wholly owned subsidiary of SecureKloud Technologies Limited, and a resources and service provider to the Company |
| Suresh Venkatachari(1) | Founder, and the Company’s Series A preferred stockholder, and President & CEO of SecureKloud Technologies Limited with ~42% voting rights of SecureKloud Technologies Limited |
| Dave Rosa | Chairman, and Independent Board Director (also the Chairman of the Compensation Committee and a member of the Audit Committee) |
| Jainal Bhuiyan | Independent Board Director (also a member of the Audit Committee and Chairman of the Nominating and Corporate Governance Committee) |
| Ron McClurg | Independent Board Director (also the Chairman of the Audit Committee, and member of the Compensation Committee and Nominating and Corporate Governance Committee) |
| Shibu Kizhakevilayal (2) | Executive Board Director and Ex-Head of M&A |
| Sujatha Ramesh(3) | Executive Board Director and Chief Operating Officer (key management personnel and chief operating decision maker) |
| David Ayanoglou(4) | Chief Financial Officer (key management personnel and chief operating decision maker) |
| Thyagarajan Ramachandran(4) | Chief Financial Officer (key management personnel and chief operating decision maker) |
| Lakshmanan Kannappan(5) | Chief Information and Security Officer |
| (1) | Refer note 3.10 in the financial statements for the year ended December 31, 2025, for details. |
| (2) | Shibu Kizhakevilayal is a former Board Executive Director, who ceased to be a Director, effective April 10, 2025. |
| (3) | Sujatha Ramesh was appointed as Chief Operating Officer of the Company effective March 18, 2025, and as the Board Executive Director effective April 10, 2025. |
| (4) | David Ayanoglou was appointed as Chief Financial Officer of the Company effective April 9, 2025, in place of Thyagarajan Ramachandran, who was the previous Chief Financial Officer until April 8, 2025. |
| (5) | Lakshmanan Kannappan was Principal Executive Officer during the year ended December 31, 2024, and was appointed as Chief Information and Security Officer from January 1, 2025, until his resignation effective December 31, 2025. |
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B. Transactions details:
On January 1, 2025, the Company entered into a Master Service Agreement with SecureKloud Technologies Inc. (“SKI”) and Securekloud Technologies Limited (“SKL). The initial term of the agreement is twenty-four months, which is extendable based on mutual consent. As per the Master Services Agreement, SKI and SKL provide technical resources according to the statement of work from the Company. Pricing is determined using a cost-plus model, with a markup of 18% on cost, to ensure that the transactions comply with the arm’s length principle in accordance with the applicable transfer pricing regulations.
In accordance with the Master Services Agreement, the Company provides resources to Blockedge Technologies, Inc. relating to technical services according to the statement of work from the Company. The Company also receives management and administrative services from Blockedge Technologies, Inc.
In addition, on January 1, 2025, the Company entered into a Rental Sublease Agreement with SecureKloud Technologies Inc. (“SKI”), The initial term of the agreement between SKI and the principal lessor is twenty-four months, which is extendable based on mutual consent. As per the terms of the Rental Sublease Agreement, the cost incurred by SKI on behalf of the Company are settled at cost.
The advance as of December 31, 2025, is $3.8 million as compared to $0.5 million as of December 31, 2024. The advance is unsecured, non-interest bearing and is expected to be settled in the ordinary course of business, (see also note 9, Subsequent Events) as outlined below:
| - | SecureKloud Technologies Limited(*) (a public company in India) advance as of December 31, 2025, is $3.8 million (including the balance previously owed by SecureKloud Technologies Inc.,(*) as of December 31, 2024, and advance paid to Blockedge during the year ended December 31, 2025) as compared to nil as of December 31, 2024, and |
| - | SecureKloud Technologies, Inc.(*), advance as of December 31, 2025, is nil as compared to $0.5 million as of December 31, 2024. |
| (*) | During the year ended December 31, 2025, the Company, together with SecureKloud Technologies Limited and SecureKloud Technologies, Inc., entered into a tripartite agreement dated March 25, 2025, pursuant to which, SecureKloud Technologies Limited took over all the contractual obligations, outstanding balance and transactions between the Company and SecureKloud Technologies, Inc. Accordingly, the balance receivable from SecureKloud Technologies Inc., has since been novated to SecureKloud Technologies, Limited as of the effective date of the novation. No consideration was exchanged as part of the novation. |
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C. Related party transactions:
Following are the transactions with related parties during the periods presented:
| Year ended December 31, | ||||||||||
| Related Parties | Nature of transactions | 2025 | 2024** | |||||||
| Amounts in ‘000 | ||||||||||
| SecureKloud Technologies Limited (“SKL”) | Services received | $ | (2,128 | ) | $ | - | ||||
| Amount collected from customers on behalf of the related party | (4 | ) | ||||||||
| Amounts advanced | 3,173 | - | ||||||||
| SecureKloud Technologies, Inc. (“SKI”) | Services received | (269 | ) | (3,603 | ) | |||||
| Amounts advanced(***) | 1,666 | 3,796 | ||||||||
| Services rendered | 138 | - | ||||||||
| Amounts collected by related party on behalf of the Company | 407 | - | ||||||||
| Rent expenses paid | (177 | ) | (135 | ) | ||||||
| Blockedge Technologies, Inc. (“Blockedge”) | Services received | (70 | ) | - | ||||||
| Amounts advanced(****) | 415 | - | ||||||||
| Revenue earned | 9 | - | ||||||||
| Accounts receivable | 9 | - | ||||||||
| Dave Rosa | Remuneration (including stock options) | 120 | 120 | |||||||
| Jainal Bhuiyan | Remuneration (including stock options) | 50 | 50 | |||||||
| Ron McClurg | Remuneration (including stock options) | 50 | 50 | |||||||
| Sujatha Ramesh | Remuneration | 229 | - | |||||||
| David Ayanoglou | Remuneration | 257 | - | |||||||
| Thyagarajan Ramachandran | Remuneration | 78 | 278 | |||||||
| Suresh Venkatachari | Remuneration | 300 | 300 | |||||||
| Shibu Kizhakevilayal | Remuneration | 24 | 158 | |||||||
| Lakshmanan Kannappan | Remuneration | $ | 367 | $ | - | |||||
| (**) | Prior year figures have been reclassified for the purpose of comparison. |
| (***) | Advance given to SKI was novated to SKL as mentioned in “B” above. |
| (****) | Advance given to Blockedge was transferred to SKL as mentioned in note 3.5 to the consolidated financial statements. |
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Item 14. Principal Accountant Fees and Services
Audit and Non-Audit Fees
The table below presents the aggregate fees billed for professional services rendered by M/s. SRCO Professional Corporation - Chartered Professional Accountants, and M/s. M&K CPAS LLC for the years ended December 31, 2025, and 2024, respectively.
| 2025 | 2024 | |||||||
| Audit fees | $ | 303,180 | $ | 228,000 | ||||
| Administrative fees | $ | 30,320 | $ | 22,800 | ||||
| All other fees | - | - | ||||||
| Total fees | $ | 333,500 | $ | 250,800 | ||||
In the above table, “audit fees” are fees billed for services provided related to the audit of our annual financial statements, quarterly reviews of our interim financial statements, and services normally provided by the independent accountant in connection with regulatory filings or engagements for those fiscal periods. “Administrative fees” are fees not included in audit fees that are billed by the independent accountant for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements. These audit-related fees also consist of the review of our registration statements filed with the SEC and related services normally provided in connection with regulatory filings or engagements. “All other fees” are fees billed by the independent accountant for products and services not included in the foregoing categories.
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PART IV
Item 15. Exhibits, Financial Statement Schedules.
| (a) | The following documents are filed as part of this Annual Report: |
| (1) | The financial statements are filed as part of this Annual Report under “Item 8. Financial Statements and Supplementary Data.” |
| (2) | The financial statement schedules are omitted because they are either not applicable or the information required is presented in the financial statements and notes thereto under “Item 8. Financial Statements and Supplementary Data.” |
| (3) | The exhibits listed in the following Exhibit Index are filed, furnished or incorporated by reference as part of this Annual Report. |
| (b) | Exhibits |
See the Exhibit Index immediately preceding the signature page of this Annual Report.
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EXHIBIT INDEX
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| * | Filed herewith. |
| ** | Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Healthcare Triangle, Inc. | ||
Date: April 15, 2026 |
By: | /s/ Sujatha Ramesh |
| Sujatha Ramesh | ||
Chief Operating Officer, Board Executive Director and Principal Executive Officer (SEC) | ||
| Healthcare Triangle, Inc. | ||
Date: April 15, 2026 |
By: | /s/ David Ayanoglou |
| David Ayanoglou | ||
| Chief Financial Officer (Principal | ||
| Financial and Accounting Officer) | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on April 15, 2026.
| Signature | Title | |
| /s/ Dave Rosa | Chairman of the Board and Director | |
| Dave Rosa | ||
| /s/ Sujatha Ramesh | Chief Operating Officer, Board Executive Director and Principal Executive Officer (SEC) | |
| Sujatha Ramesh | ||
| /s/ David Ayanoglou | Chief Financial Officer (principal financial and accounting officer) | |
| David Ayanoglou | ||
| /s/ Ronald McClurg | Director | |
| Ronald McClurg | ||
| /s/ Jainal Bhuiyan | Director | |
| Jainal Bhuiyan |
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