[10-Q] Healthcare Triangle, Inc. Quarterly Earnings Report
Healthcare Triangle, Inc. reported Q3 results with net revenue of $3,489 (up 45% year over year) and a net loss of $1,906. For the nine months, revenue was $10,752 (up 13%), with a net loss of $4,973. Segment mix shifted toward Software Services, while Managed Services declined.
Liquidity and the balance sheet changed markedly. Cash and cash equivalents were $1,629 as of September 30, 2025. Net cash used in operating activities was $9,689, offset by $12,587 of net financing cash inflows primarily from equity issuance. Total assets rose to $13,838 from $1,961 at year‑end, reflecting the June 16 acquisition of Niyama Healthcare/Ezovion (purchase price $5,700, including cash, 1,388,041 restricted shares valued at $3,000, and up to $1,200 earn‑out). Stockholders’ equity improved to $8,726 from a deficit.
The company effected a 1‑for‑249 reverse stock split on August 1, 2025. Short‑term borrowing under the Seacoast facility was $1,530, and convertible notes were eliminated through conversion and repayment. As of November 13, 2025, 7,261,344 common shares were outstanding.
- None.
- None.
Insights
Equity raised and balance sheet rebuilt; losses persist.
HCTI absorbed operating cash outflows of
The reverse split (1‑for‑249) and cleanup of convertibles reduce capital structure complexity. Actual dilution impact depends on prior and current issuances disclosed, and future warrant or earn‑out activity tied to the acquisition.
Cash at period end was
Revenue up 45% in Q3; acquisition lifts assets and intangibles.
Quarter revenue rose to
Operating expense growth and cost of revenue kept profitability negative despite higher sales. Segment data show strength in Software Services and softness in Managed Services, suggesting mix and margin monitoring as integration proceeds.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from ___________ to ___________
Commission file number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| (Address of principal executive officer) | (Zip Code) | |
| (Registrant’s telephone number, including area code) | ||
| Title of each class | Ticker Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | Smaller reporting company ☒ | Emerging growth company |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☐ No
As of November 13, 2025,
Table of Contents
| Note About Forward-Looking Statements | ii | |
| PART I – FINANCIAL INFORMATION | 1 | |
| Item 1. Financial statements | 1 | |
| Unaudited Condensed Consolidated Balance sheets | 1 | |
| Unaudited Condensed Consolidated Statements of Operations | 2 | |
| Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) | 3 | |
| Unaudited Condensed Consolidated Statements of Cash Flows | 4 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | 5 | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 44 | |
| Item 4. Controls and Procedures | 44 | |
| PART II - OTHER INFORMATION | 45 | |
| Item 1. Legal Proceedings | 45 | |
| Item 1A. Risk Factors | 45 | |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 45 | |
| Item 3. Defaults Upon Senior Securities | 45 | |
| Item 4. Mine Safety Disclosures | 45 | |
| Item 5. Other Information | 45 | |
| Item 6. Exhibits | 46 | |
| Signatures | 47 |
i
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, 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; |
| ● | sufficiency of cash and cash equivalents to meet our needs for at least the next 12 months; |
ii
| ● | beliefs and objectives for future operations; |
| ● | 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 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; |
| ● | the length and severity of the coronavirus (COVID-19) pandemic and its 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,” “company,” “we,” “us” and “our” refer to Healthcare Triangle Inc. and its consolidated subsidiaries.
iii
PART I
FINANCIAL INFORMATION
Item 1. Financial statements (In thousands of US $, unless otherwise noted)
HEALTHCARE TRIANGLE, INC.
Interim Condensed Consolidated Balance Sheets
| September 30, | December 31, | |||||||||
| Note | 2025 | 2024 | ||||||||
| (Unaudited) | (Audited) | |||||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | $ | ||||||||
| Accounts receivable, net | 3.1 | |||||||||
| Due from affiliates | 3.6 | |||||||||
| Other current assets | 3.5 | |||||||||
| Total current assets | ||||||||||
| Furniture and equipment, net | 3.2 | |||||||||
| Goodwill and other intangibles, net | 3.3 | - | ||||||||
| Total current and non-current assets | $ | $ | ||||||||
| Liabilities and stockholders’ equity (deficit) | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable | 3.3 | $ | $ | |||||||
| Short term borrowing | 3.9 | |||||||||
| Other current liabilities | 3.10 | |||||||||
| Total current liabilities | ||||||||||
| Long-term liabilities | ||||||||||
| Contingent consideration | 3.7 | |||||||||
| Total current and long-term liabilities | $ | $ | ||||||||
| Stockholders’ equity | ||||||||||
| Series B Preferred Stock, par value $ | 3.8 | $ | $ | |||||||
| Series A, Super Voting Preferred Stock - | - | - | ||||||||
| Common
stock, par value $ | - | |||||||||
| Equity to be issued | - | |||||||||
| Additional paid-in capital | ||||||||||
| Noncontrolling interest | ( | ) | - | |||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Total stockholders’ equity / (deficit) | ( | ) | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
HEALTHCARE TRIANGLE, INC.
Unaudited Condensed Consolidated Statements of Operations
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| Note | 2025 | 2024 | 2025 | 2024 | ||||||||||||||
| Net revenue | $ | $ | $ | $ | ||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization, shown separately below) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Operating expenses | ||||||||||||||||||
| General and administrative | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Sales and marketing | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Research and development | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Depreciation and amortization | 3.2 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| (Allowance)/Reversal for current expected credit loss | 3.1 | - | - | |||||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income | - | - | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Foreign exchange loss | ( | ) | - | ( | ) | - | ||||||||||||
| Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Provision for income tax | - | ( | ) | - | ( | ) | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Other comprehensive income (OCI) | ||||||||||||||||||
| Foreign currency translation gain | - | - | ||||||||||||||||
| Comprehensive loss | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| Comprehensive loss attributable to: | ||||||||||||||||||
| Stockholders | ( | ) | ( | ) | - | |||||||||||||
| Noncontrolling interest | ( | ) | ( | ) | - | |||||||||||||
| Net loss per common share - basic and diluted, attributable to: | ||||||||||||||||||
| Stockholders | 7 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| Noncontrolling interest | 7 | ( | ) | - | ( | ) | - | |||||||||||
| Weighted average shares outstanding used in per common share computations: | ||||||||||||||||||
| Basic and diluted | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
2
HEALTHCARE TRIANGLE, INC.
Unaudited Condensed Consolidated Statements of Changes in Stockholder’s Equity
| Preferred stock (Series A) | Preferred stock (Series B) | Common stock | Additional paid-in | Equity to be | Non- controlling |
Retained | Total stockholders’ | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | capital | issued | interest | earnings | equity | ||||||||||||||||||||||||||||||||||
| Three months ended September 30,2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | - | $ | $ | |
$ | $ | - | $ | - | $ | ( |
) | $ | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Effects of exchange translation reserve (OCI) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Issue of Options (ISO/NSO) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Cancellation of shares | - | - | - | - | ( |
) | ( |
) | ( |
) | - | - | - | ( |
) | |||||||||||||||||||||||||||||
| Shares to be issued | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Balance at Sept 30, 2025 | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at 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 | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Conversion of Debt to Equity | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Shares issued for acquisition (Contingent Consideration) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Stock based compensation | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Cancellation of shares | - | - | - | - | ( |
) | ( |
) | ( |
) | - | - | - | ( |
) | |||||||||||||||||||||||||||||
| Shares to be issued | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | - | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||||||||
| Three months ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | - | - | - | $ | - | $ | $ | - | $ | - | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
| Issue of stock option (ISO/NSO) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Shares issued for services | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Conversion of debt to equity | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | - | - | - | $ | - | $ | $ | - | $ | - | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||||||||
| Nine months ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | - | - | - | - | $ | $ | - | $ | - | $ | ( |
) | $ | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||
| Issue of stock option (ISO/NSO) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Conversion of debt to equity | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Stock based compensation | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Shares issued for cash | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | - | - | - | - | $ | $ | - | $ | - | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
HEALTHCARE TRIANGLE, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
| Nine Months Ended September 30, | ||||||||||
| Note | 2025 | 2024 | ||||||||
| Cash flows from operating activities | ||||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | ||||
| Adjustment to reconcile net (loss) to net cash provided by / (used in) operating activities | ||||||||||
| Depreciation & amortization | ||||||||||
| Reversal for current expected credit loss | ( | ) | - | |||||||
| Change in fair value of warrants | - | |||||||||
| Net unrealized exchange loss | - | |||||||||
| Common stock issued for services | ||||||||||
| Amortization of debt discount | ||||||||||
| Other income | ( | ) | - | |||||||
| Stock compensation expenses | 6 | |||||||||
| Interest expenses | - | |||||||||
| Interest expenses settled by equity | - | |||||||||
| Changes in working capital: | ||||||||||
| (Increase) / decrease in: | ||||||||||
| Accounts receivable | ( | ) | ||||||||
| Other current assets | ( | ) | ||||||||
| Due from affiliates | 3.6 | ( | ) | |||||||
| Accounts payable | ( | ) | ||||||||
| Other current liabilities | ( | ) | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||||
| Cash flows from investing activities | ||||||||||
| Purchase of furniture and equipment | ( | ) | - | |||||||
| Acquisition of intangible assets | 3.3 | ( | ) | - | ||||||
| Net cash used in investing activities | ( | ) | - | |||||||
| Cash flows from financing activities | ||||||||||
| Decrease in short term borrowing | 3.9 | ( | ) | ( | ) | |||||
| Interest paid | ( | ) | - | |||||||
| Net proceeds from equity issuance | ||||||||||
| Net cash provided by / (used in) financing activities | ( | ) | ||||||||
| Net changes in cash and cash equivalents | ( | ) | ||||||||
| Cash and cash equivalents | ||||||||||
| Cash and cash equivalents at the beginning of the period | $ | $ | ||||||||
| Cash and cash equivalents at the end of the period | $ | $ | ||||||||
| Non-cash investing and financing activities | ||||||||||
| Supplementary disclosure of cash flows information | ||||||||||
| Interest | - | |||||||||
| Income taxes | - | |||||||||
| Equity to be issued | - | |||||||||
| Conversion of convertible note | - | |||||||||
| Acquisition of assets | - | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
1) Organization and Description of Business
Healthcare Triangle Inc. (“the
Company”) was incorporated under the laws of the State of Nevada on October 29, 2019, and then converted into a Delaware
corporation on
On June 16, 2025, Healthcare Triangle, Inc. through
its wholly owned subsidiary Quantum Nexus Inc. (the “Company”) 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, the Company agreed to purchase from the Seller
the Transferred Assets (comprising of contracts, intellectual property and related assets), and (ii) the Seller’s
Company reinforces healthcare progress through breakthrough technology and extensive industry know-how. Company 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 Company for expertise in digital transformation on the cloud, security and compliance, develops, data lifecycle management, healthcare interoperability, clinical and business performance optimization.
Company concentrates on accelerating value to the three healthcare sectors:
| 1. | Pharmaceutical companies, which require improved efficiencies in the clinical trial process. Company 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. Company’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 Company addresses and manages for its customers. |
As an organization with the deep-rooted cloud expertise, Company’s technology significantly relies on Big Data, Analytics, DevOps, Security/Compliance, Identity Access Management (IAM), Machine Learning (ML), Artificial Intelligence (AI), Internet of Things (IoT) and Blockchain.
5
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
2) Summary of Significant Accounting Policies
Basis of consolidated financial statements
The accompanying condensed consolidated financial
statements include the accounts of Healthcare Triangle, Inc., and its wholly owned subsidiaries Devcool, Inc., and QuantumNexis, Inc.,
which also owns
The accompanying statements of operations include expenses for certain functions historically performed by the Parent company, including general corporate services, such as legal, accounting, treasury, information technology, human resources and administration. These expenses are based primarily on direct usage when identifiable, direct capital expenditures or other relevant allocations during the respective periods. We believe the assumptions underlying the accompanying condensed consolidated financial statements, are reasonable. Actual results may differ from these expenses, assumptions and estimates. The amounts recorded in the accompanying condensed consolidated financial statements are not necessarily indicative of the actual amount of such indirect expenses that would have been recorded had we been a separate independent entity.
Unaudited Interim Financial Information
The accompanying unaudited condensed consolidated financial statements and the related footnote disclosures have been prepared by us in accordance with GAAP for interim financial reporting and as required by Rule 10-01 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The year-end December 31, 2024 condensed consolidated balance sheet data included herein was derived from audited financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly our financial position as of September 30, 2025, the results of operations, comprehensive loss, stockholders’ deficit, and cash flows for the nine months ended September 30, 2025 and 2024. The results of operations for the nine months ended September 30, 2025 and 2024 are not necessarily indicative of the results to be expected for the full year. The information contained herein should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. Management considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements.
6
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
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 standalone selling price for each distinct performance obligation; |
| ● | the fair value of assets acquired, and liabilities assumed for business combinations; |
| ● | the expected credit loss relating to accounts receivable; |
| ● | the determination of contingent consideration amount; and |
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
21, 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 at least $
Segment Information
The management has chosen to organize the Company around differences in products and services and segregated the reporting segments as Software Services and Managed Services and Support.
Operating segments are defined as components
of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision
maker in deciding how to allocate resources and assessing performance.
7
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
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 a variety of factors including the customer’s historical payment experience.
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.
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 comprise of distinct performance obligations, and is recognized on time-and-material or fixed-price project basis. Revenue related to time-and-material is recognized over the period the services are provided using labor hours. Revenue related to fixed-price contracts is recognized as the service is performed using the cost-to-cost method, under which the total value of revenue 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.
8
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
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 SSP (standalone selling price), 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 a principal or an agent. Payment for managed services and support is due monthly.
Platform Services
The Company has 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.
Our contractual terms and conditions for Software Services, Managed Services and Support and Platform Services 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 Condensed 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.
9
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
Cash and Cash Equivalents
The Company considers all highly liquid investments (including money market funds) with an 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 creditworthiness on an unsecured basis. Trade accounts receivable 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.
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
10
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(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.
We account for business combinations using the acquisition method, which requires the identification of the acquirer, the determination of the acquisition date and the allocation of the purchase price paid by the acquirer to the identifiable tangible and intangible assets acquired, the liabilities assumed, including any contingent consideration and any noncontrolling interest in the acquiree at their acquisition date fair values.
Goodwill represents the excess of the purchase price over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets. 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 condensed 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. 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.
11
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
Earnings (Loss) Per Share
Earnings 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.
Fair Value Measurements
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 |
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.
12
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
Stock-Based Compensation
The Company accounts for stock-based awards to employees and consultants in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options over the instruments vesting period. Options awarded to purchase shares of common stock issued to non-employees do not need to be remeasured as per ASU 2018-07 principles.
The Company adopted the “2020 Stock Incentive
Plan” (Plan), and the Company has reserved
Income taxes
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.
Concentrations
Financial instruments that potentially subject
the Company to concentrations of credit risk consist principally of cash and trade receivables. Credit risks associated with trade receivables
is minimal due to the Company’s customer base which consist of large customer base and ongoing procedures, which monitor the credit
worthiness of its customers. For the quarter ended September 30, 2025 and 2024 revenue from the top five customers accounted for approximately
The Company maintains cash balances in various
financial institutions. The balances are generally insured by the Federal Deposit Insurance Corporation up to $
As of September 30, 2025, and December 31, 2024,
the Company had $
13
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
3) Balance sheet schedules
3.1) Accounts Receivable, net
| September 30, 2025 | December 31, 2024 | |||||||
| Accounts receivable, gross | $ | $ | ||||||
| Less: Allowance for doubtful accounts (current expected credit loss) | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
As at September 30, 2025, the Company remeasured
its allowance for current expected credit loss to $
3.2) Furniture and Equipment
Furniture and equipment consisted of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| Furniture and equipment, at cost | $ | $ | (1) | |||||
| Less: Accumulated depreciation | ( | ) | ( | )(1) | ||||
| Furniture and equipment, net | $ | $ | ||||||
| (1) |
During the period ended September 30, 2025, the
Company purchased furniture and equipment amounting to $
14
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
3.3) Goodwill and Other Intangibles
| A) | On June 16, 2025 (the “Closing date”), Healthcare Triangle,
Inc. through its wholly owned subsidiary Quantum Nexus Inc. (the “Company”) 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”). Pursuant to the Agreement, the Company agreed to purchase
from the Seller the Transferred Assets (comprising of contracts, intellectual property and related assets), and (ii) the Seller’s
|
The final determination of the fair values, purchase consideration, related income tax impacts and residual goodwill will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP. Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined.
| B) | Other intangible assets |
| September 30, 2025 | December 31, 2024 | |||||||
| Other intangible assets* | $ | $ | - | |||||
| Accumulated amortization* | ( | ) | - | |||||
| Total | $ | $ | - | |||||
| * |
3.4) Leases
The Company is currently operating from two office
locations leased by SecureKloud. 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 three months ended September 30, 2025,
and 2024 were $
15
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
3.5) Other current assets
| September 30, 2025 | December 31, 2024 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Advance to employee | - | |||||||
| Project work-in-progress | * | |||||||
| Others | * | |||||||
| Total | $ | $ | ||||||
| * | Prior year figures have been reclassified for the purpose of comparison. |
3.6) Related Party Transactions
| A. | 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 | |
| SecureKloud Technologies Inc. | |
| Blockedge Technologies Inc. |
| B. | Due from related parties: |
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 additition, 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
16
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
The balance outstanding from the affiliates as of September 30, 2025
is $
| - | SecureKloud Technologies Limited (*) (public
company in India) balance outstanding as of September 30, 2025 is $ |
| - | SecureKloud Technologies, Inc., (*) balance
outstanding as of September 30, 2025 is nil as compared to $ |
| - | Blockedge Technologies, Inc., balance outstanding as
of September 30, 2025 is $ |
| (*) | During the period ended September 30, 2025, the Company, together with SecureKloud Technologies Limited and SecureKloud Technologies, Inc., entered into a tripartite agreement, pursuant to which, SecureKloud Technologies Limited took over 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. |
| C. | Related party transactions: |
Following are the transactions with related parties during the periods presented:
| Related Parties | Nature of transactions | Quarter ended September 30, 2025 | Quarter ended September 30, 2024 | Nine-months ended September 30, 2025 | Nine-months ended September 30, 2024 | |||||||||||||
| SecureKloud Technologies Limited, India | Services received | $ | - | $ | - | |||||||||||||
| Amounts advanced | $ | - | $ | - | ||||||||||||||
| SecureKloud Technologies, Inc. | Services received | - | $ | $ | $ | |||||||||||||
| Amounts advanced | - | $ | $ | $ | ||||||||||||||
| Services rendered | - | - | $ | - | ||||||||||||||
| Amounts collected | $ | - | $ | - | ||||||||||||||
| Rent expenses paid | $ | $ | $ | $ | ||||||||||||||
| Blockedge Technologies, Inc. | Services received | $ | - | $ | - | |||||||||||||
| Amounts advanced | $ | - | $ | - | ||||||||||||||
| Revenue | $ | - | $ | - | ||||||||||||||
| Accounts receivable | $ | - | $ | - | ||||||||||||||
| Key management personnel | Remuneration | $ | $ | $ | $ | |||||||||||||
17
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
3.7) 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. (the “Company”) 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”). Please refer to note 3.3 for details.
3.8) Stockholder Equity
The Company effected a 1-for-249 reverse split of its issued and outstanding common stock on August 01, 2025. The reverse split 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.
On August 28, 2025, the Company amended the acquisition agreement as reflected in note 3.3a, to condition the issuance of the share consideration upon shareholder approval. Accordingly, the shares previously issued were cancelled and have since been re-issued subsequent to quarter end. Refer to subsequent event note 9 for details.
Equity Transactions
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
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 nine months ended September 30, 2025, all of 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 dividend, rights offerings and pro rata distributions.
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 (the “Agreement”). Please refer to note 3.3 for further details.
18
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
Black Scholes warrant fair value:
| Instrument | Shares/ Warrants | Fair value | Gross Proceeds | Expenses on fund raising | Net Proceeds | |||||||||||||||
| Common Stock | ( | ) | ||||||||||||||||||
| Pre-funded Warrants | ( | ) | ||||||||||||||||||
| Series A Warrants (1) | - | - | - | - | ||||||||||||||||
| Series B Warrants | ( | ) | ||||||||||||||||||
| ( | ) | |||||||||||||||||||
| (1) |
Preferred Stock
The Company’s Certificate of Incorporation
provides for a class of its authorized stock known as preferred stock, comprised of
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.
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 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 B Convertible Preferred Stock shall not be entitled to receive dividends paid on the Corporation’s Common Stock.
Series A Preferred Stock
On
March 12, 2025, the Board of Directors of the Company approved the issuance of
19
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
Series B Preferred 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
3.9) Short Term Borrowing
| Particulars | September 30, 2025 | December 31, 2024 | ||||||
| Short Term Borrowing | ||||||||
| Seacoast Business Funding | $ | | $ | |||||
| Convertible note | - | |||||||
| 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 subsidiary.
The SBF facility incurred an interest rate of
The balance of this funding was $
20
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
B. Convertible Notes
| Convertible Note | September 30, 2025 | December 31, 2024 | ||||||
| Convertible notes payable | $ | - | $ | |||||
| Less: discount | - | ( | ) | |||||
| Notes payable, net of discount | - | |||||||
| Notes payable, current portion, net of discount | - | |||||||
| Notes payable, long-term portion, net of discount | $ | - | $ | - | ||||
During the nine months ended September 30, 2025, the Company settled the entire balance of convertible note as shown below and there were no gain or losses upon settlement.
| 1. | L1 Capital |
During
the nine months ended September 30, 2025, the Company converted the entire outstanding principal of $
| Date | Loan | Interest Accrual | Total repayment | Conversion price | No of shares | |||||||||||||||
| 1/7/2025 | ||||||||||||||||||||
| 2/3/2025 | ||||||||||||||||||||
| 2/14/2025 | ||||||||||||||||||||
| 2/18/2025 | ||||||||||||||||||||
| 2/21/2025 | ||||||||||||||||||||
| Total | ||||||||||||||||||||
| 2. | Pioneer Garage |
During the nine months ending September 30, 2025,
the Company repaid convertible note amounting to $
| Convertible Note | Principal | Interest | ||||||
| Opening balance as of January 1, 2025 | $ | $ | ||||||
| Repayment during the period | ( | ) | ( | ) | ||||
| Closing balance as of September 30, 2025 | $ | - | $ | - | ||||
| Convertible Note | Principal | Interest | ||||||
| Opening balance as of January 1, 2024 | $ | - | $ | - | ||||
| Loan obtained during the year | ||||||||
| Closing balance as of December 31, 2024 | $ | $ | ||||||
21
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
C. Common Stock Warrants
On December 28, 2023, the Company issued a convertible
note to the investor in the principal amount of $
| Weighted | Average | |||||||||||
| Average | Remaining | |||||||||||
| Number of | Exercise | Contractual | ||||||||||
| Warrants | Warrants | price | Term | |||||||||
| Outstanding on January 1, 2025 | $ | |||||||||||
| Granted | - | - | - | |||||||||
| Outstanding on September 30, 2025 | ||||||||||||
| Exercisable on September 30, 2025 | $ | |||||||||||
| Weighted | ||||||||||||
| Weighted | Average | |||||||||||
| Average | Remaining | |||||||||||
| Number of | Exercise | Contractual | ||||||||||
| Warrants | Warrants | price | Term | |||||||||
| Outstanding on January 1, 2024 | $ | |||||||||||
| Outstanding on September 30, 2024 | ||||||||||||
| Exercisable on September 30, 2024 | $ | |||||||||||
The following table summarizes the activities for our unvested warrants for the nine months ended September 30, 2025.
| Weighted average Grant Date Fair | ||||||||
| Number of Warrants | Value Per warrant | |||||||
| Unvested on January 1, 2025 | $ | |||||||
| Granted | - | - | ||||||
| Vested | ( | ) | $ | |||||
| Unvested on September 30, 2025 | $ | |||||||
22
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
| Weighted average Grant Date Fair | ||||||||
| Number of Warrants | Value Per warrant | |||||||
| Unvested on January 1, 2024 | $ | |||||||
| Granted | - | - | ||||||
| Vested | ( | ) | ||||||
| Unvested on September 30, 2024 | $ | |||||||
3.10) Other current liability
| Particulars | September 30, 2025 |
December 31, 2024 |
||||||
| Accrued payroll | $ | $ | ||||||
| Accrued audit fees | ||||||||
| Acquisition of intangible asset (refer note 3.3b) | - |
|||||||
| Insurance | - |
|||||||
| Commission accrual | - |
|||||||
| Other | $ | |||||||
| Total | $ | $ | ||||||
4) Segment Information
Expenses included in determining the segment operating results 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 not allocated to individual segments in internal management reports used by the Chief Operating Decision Makers (CODM). Accordingly, such expenses are excluded from segment operating results and are included below as “unallocated costs” and adjusted against our total income or loss from operations.
Additionally, management has determined that it is not practical to allocate identifiable assets by segment, since such assets are used interchangeably among the segments.
23
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
Schedule of operating segment
| Three months ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Software services | $ | % | ||||||||||||||
| Managed services and support | ( | ) | ( | )% | ||||||||||||
| Platform services (*) | % | |||||||||||||||
| Revenue | $ | $ | $ | % | ||||||||||||
| Nine months ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Software services | $ | % | ||||||||||||||
| Managed services and support | ( | ) | ( | )% | ||||||||||||
| Platform services (*) | ( | )% | ||||||||||||||
| Revenue | $ | $ | $ | % | ||||||||||||
| (*) |
Operating Results by Operating Segment
| Three months ended September 30, 2025 | ||||||||||||||||
| Particulars | Software Services | Managed Services | Corporate and others | Total | ||||||||||||
| Revenue from customers | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Segmental gross profit | $ | $ | $ | $ | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
24
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
| Nine months ended September 30, 2025 | ||||||||||||||||
| Particulars | Software Services | Managed Services | Corporate and others | Total | ||||||||||||
| Revenue from customers | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Segmental gross profit | $ | $ | $ | $ | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Three months ended September 30, 2024 | ||||||||||||||||
| Particulars | Software Services | Managed Services | Corporate and others | Total | ||||||||||||
| Revenue from customers | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Segmental gross profit | $ | $ | $ | $ | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
25
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
| Nine months ended September 30, 2024 | ||||||||||||||||
| Particulars | Software Services | Managed Services | Corporate and others | Total | ||||||||||||
| Revenue from customers | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Segmental gross profit | $ | $ | $ | $ | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Revenue from top 5 customers
Schedule of concentration
| Three months ended September 30, 2025 | Nine months ended September 30, 2025 | |||||||||||||||
| Customer | Amount | % of Revenue | Amount | % of Revenue | ||||||||||||
| Customer 1 | $ | % | $ | % | ||||||||||||
| Customer 2 | % | % | ||||||||||||||
| Customer 3 | % | % | ||||||||||||||
| Customer 4 | % | % | ||||||||||||||
| Customer 5 | $ | % | $ | % | ||||||||||||
| Three months ended September 30, 2024 |
Nine months ended September 30, 2024 |
|||||||||||||||
| Customer | Amount | % of Revenue |
Amount | % of Revenue |
||||||||||||
| Customer 1 | $ | % | $ | % | ||||||||||||
| Customer 2 | % | % | ||||||||||||||
| Customer 3 | % | % | ||||||||||||||
| Customer 4 | % | % | ||||||||||||||
| Customer 5 | $ | % | $ | % | ||||||||||||
26
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
5) 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 cost is expensed as incurred.
6) Stock 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, other than the fair value of our common stock, are estimated as follows:
| ● | Expected volatility. Since a public market for our common stock did not exist prior to our IPO in October 2021 and, therefore, we do not have an extensive trading history of our common stock, we estimated the expected volatility based on the volatility of similar publicly-held entities (guideline companies) over a period equivalent to the expected term of the awards. In evaluating the similarity of guideline companies to us, we considered factors such as industry, stage of life cycle, size, and financial leverage. We intend to continue to consistently apply this process using the same or similar guideline companies to estimate the expected volatility until sufficient historical information regarding the volatility of the share price of our common stock becomes available. |
| ● | 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. |
We are required to estimate the fair value of the common stock underlying our stock-based awards when performing fair value calculations
27
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
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 |
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.
A summary of option activity under the employee share option plan as of September 30, 2025, and changes during the period are presented below.
Schedule of stock option activity
| Options | Shares of Stock | |||||||||||||||||||
| No. of Options | Weighted Average Price | No. of Shares | Weighted Average Price | Total | ||||||||||||||||
| Balance available under the plan as at January 1, 2025 | — | — | — | |||||||||||||||||
| Additions to the plan | ||||||||||||||||||||
| Granted (1) | ( | ) | — | — | ( | ) | ||||||||||||||
| Cancelled/expired/exercised | — | — | ||||||||||||||||||
| Balance available under the plan as of September 30, 2025 | — | — | — | |||||||||||||||||
| (1) |
28
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
The weighted-average grant date fair value of
options granted during the quarter ended September 30, 2025, was
The following table summarizes the activities for our unvested options for the year ended September 30, 2025
| Number of | Weighted average Grant Date Fair Value | |||||||
| Shares | Per Share | |||||||
| Unvested on January 1, 2025 | $ | |||||||
| Vested | ( | ) | ||||||
| Unvested on September 30, 2025 | - | $ | - | |||||
As of September 30, 2025, there was no unrecognized share-based compensation expense related to unvested options.
A summary of option activity under the employee share option plan as of September 30, 2024, and changes during the year then ended is presented below.
| Options | Shares of Stock | |||||||||||||||||||
| No. of Options | Weighted Average Price | No. of Shares | Weighted Average Price | Total | ||||||||||||||||
| Balance available under the plan on January 1, 2024 | — | — | — | |||||||||||||||||
| Granted | ( | ) | ( | ) | ||||||||||||||||
| Cancelled/expired | ||||||||||||||||||||
| Issued | — | — | — | — | — | |||||||||||||||
| Balance available under the plan on September 30, 2024 | ||||||||||||||||||||
The following table summarizes the activities for our unvested options for the period ended September 30, 2024
| Number of | Weighted average Grant Date Fair Value | |||||||
| Shares | Per Share | |||||||
| Unvested on January 1, 2024 | $ | |||||||
| Vested | ( | ) | ||||||
| Forfeited | ( | ) | ||||||
| Unvested on September 30, 2024 | $ | |||||||
Schedule of assumptions
| Fair value assumptions | 2025 | 2024 | ||||||
| Expected volatility | % | % | ||||||
| Expected terms (in years) | ||||||||
| Risk-free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
29
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
7) Net Income per share
The Company presents basic and diluted earnings 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 dilutive potential common stocks, 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 equally net income less net income attributable to participating
securities.
Schedule of earning per share
| Three Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding – basic and diluted(#) | ||||||||
| Basic and diluted EPS - Stockholders | ( | ) | ( | ) | ||||
| Basic and diluted EPS - NCI | $ | ( | ) | $ | - | |||
| Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding – basic and diluted(#) | ||||||||
| Basic and diluted EPS - Stockholders | ( | ) | ( | ) | ||||
| Basic and diluted EPS - NCI | $ | ( | ) | $ | - | |||
| # |
8) Advertising and marketing
Included within sales and marketing expenses are
the marketing and advertising expenses for the quarters ended September 30, 2025 and 2024, which were $
30
HEALTHCARE TRIANGLE, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)
(In thousands except share and per share data)
9) Subsequent Events
| i. | On August 28, 2025, the Company amended the acquisition agreement (see note 3.3a) to condition the issuance of the share consideration (as adjusted for the reverse stock split) upon shareholder approval. Accordingly, these shares were cancelled and have since been re-issued subsequent to the quarter end. |
| ii. | Subsequent to the quarter ended September 30, 2025, the Series A Warrants holders were provided with an option to exercise their warrants at a reduced price of $ |
10) New Accounting Pronouncements
In March 2024, the FASB issued ASU No. 2024-01, “Compensation—Stock Compensation (Topic 718): Scope Applications of Profits Interests and Similar Awards” (“ASU 2024-01”). ASU 2024-01 adds an example to Topic 718 which illustrates how to apply the scope guidance to determine whether profits interests and similar awards should be accounted for as share-based payment arrangements under Topic 718 or under other U.S. GAAP. ASU 2024-01 is effective for annual periods beginning after December 15, 2025, although early adoption is permitted. Upon adoption, ASU 2024-01 is not expected to have an impact on the Company’s consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).” This standard requires disclosure of specific information about costs and expenses and becomes effective January 1, 2027. The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-04, “Debt - Debt with Conversions and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” (“ASU 2024-04”). ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. The requirements of ASU 2024-04 are effective for the Company for fiscal years beginning after December 15, 2025, and interim periods within those periods. The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
31
Item 2. 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 condensed consolidated financial statements and the related notes thereto, and the consolidated financial statements and the related notes thereto all included elsewhere in this prospectus. 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” contained in the Company’s final prospectus for its initial public offering filed with the Securities and Exchange Commission (“SEC”).
Overview
Healthcare Triangle, Inc. (the “Company”) 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 Technologies Inc, transferred its Life Sciences business to us. As of September 30, 2025, we had a total of 59 full time employees and 32 sub-contractors, including 42 certified cloud engineers, 21 Epic Certified EHR experts, 12 MEDITECH Certified EHR experts and 3 Admin 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 the field of technology, investment banking and public markets.
During the period ended September 30, 2025, the Company effected a 1-for 249 reverse split of its issued and outstanding common stock on August 01, 2025. The reverse split 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.
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.
32
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, 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 technology 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 technology innovation.
Our Business Model
The majority of our revenue is generated by our full-time employees 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, and Managed Services and Support include post implementation support and cloud hosting.
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 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 over time because of such investments.
On June 16, 2025 (the “Closing date”), Healthcare Triangle, Inc. through its wholly owned subsidiary Quantum Nexus Inc. (the “Company”) 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”). Pursuant to the Agreement, the Company agreed to purchase from the Seller the Transferred Assets (comprising of contracts, intellectual property and related assets), and (ii) the Seller’s 100% shareholder equity interest in Ezovion Solutions Private Limited, Chennai, India - Hospital Information Systems SaaS Provider as Seller’s Equity (the “Transferred Equity”), as a whole and as a going concern in exchange for the Purchase Price (as defined below).
The total consideration for the acquisition, which is referred to herein as the “Purchase Price”, is $5,700 which includes: (1) $1,500 in cash, of which $1,200 is due on the Closing Date and $300 to be paid at the later of the satisfaction of certain withholding requirements or within 120 days of the Closing Date; during the period ended September 30, 2025, the Company made payments amounting to $1,045 out of the $1,500 obligation. The remaining balance of $455 is recognized as payable as at September 30, 2025. (2) 1,388,041 shares of restricted common stock of the Company equal to $3,000 divided by $2.16, issued on the Closing Date; and (3) up to $1,200 in earn-out payments contingent on first-year financial performance targets to be agreed upon mutually.
The final determination of the fair values, purchase consideration, related income tax impacts and residual goodwill will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP. Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined.
33
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 successfully market and persuade 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, 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 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
During the quarter ended September 30, 2025, the Company generated revenues of approximately $3.49 million compared to revenue of $2.40 million for the quarter ended September 30, 2024 which represents an increase of $1.09 million or 45% compared to the previous year comparative quarter. Similarly, the Company generated revenues of approximately $10.8 million during the nine months ended September 30, 2025, compared to a revenue of $9.5 million for the nine months ended September 30, 2024, which represents an increase of $1.3 million or 13.7%.
We provide our services and manage our business under these operating segments:
| ● | Software services |
| ● | Managed services and support |
34
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 upon 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.
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.
Gross Margin
In the current period, the gross margin generated by the Company has been reduced to 18% and 13% in the 3 months and 9 months ended September 30, 2025, as compared to 30% and 27% in the 3 months and 9 months ended September 30, 2024, respectively. This is 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 profit margins to increase materially over the next few quarters.
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 future research and development expense to increase in absolute dollars, although it may vary from period to period as a percentage of revenue.
35
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 future 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 capitalized software development costs, and amortization of intangible assets. We expect our depreciation and amortization expense to increase as we continue to invest and expand our business organically and through acquisitions.
Other Income (Expense), Net
Other income (expense), net consists of finance cost and gains or losses on foreign currency.
Deferred Revenues
Advanced billings to clients in excess of revenue earned are recorded as deferred revenue until the revenue recognition criteria are met.
36
Results of Operations
The following tables set forth selected consolidated statements of operations data and such data as a percentage of total revenues for each of the periods indicated:
| Three Months Ended September 30, | ||||||||||||||||
| 2025 | % Sales | 2024 | % Sales | |||||||||||||
| Revenue | $ | 3,489 | 100 | % | $ | 2,413 | 100 | % | ||||||||
| Cost of revenue (exclusive of depreciation /amortization) | 2,871 | 82 | % | 1,691 | 70 | % | ||||||||||
| (Reversal)/Allowance for current expected credit loss | (20 | ) | 0 | % | - | 0 | % | |||||||||
| Research and development | 59 | 2 | % | 175 | 7 | % | ||||||||||
| Sales and marketing | 1,022 | 29 | % | 294 | 12 | % | ||||||||||
| General and administrative | 2,085 | 60 | % | 1,077 | 45 | % | ||||||||||
| Depreciation and amortization | 63 | 2 | % | 343 | 14 | % | ||||||||||
| Other income | (731 | ) | (21 | )% | - | 0 | % | |||||||||
| Interest expense | 32 | 1 | % | 80 | 3 | % | ||||||||||
| Forex loss | 14 | 0 | % | - | 0 | % | ||||||||||
| Provision for income tax | - | 0 | % | 2 | 0 | % | ||||||||||
| Net loss | $ | (1,906 | ) | (55 | )% | $ | (1,249 | ) | (52 | )% | ||||||
Revenue from operations
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Revenue | $ | 3,489 | $ | 2,413 | $ | 1,076 | 45 | % | ||||||||
Revenue increased by $1.07 million, or 45% to $3.48 million for the quarter ended September 30, 2025, as compared to $2.41 million for the quarter ended September 30, 2024. The Software Services are typically short-term engagements to provide software consulting and development services, which do not require continual third-party maintenance. Managed Services and Support such as cloud hosting, and cloud disaster recovery requires continuous monitoring.
Our top 5 customers accounted for 56% of the revenue in quarter ended September 30, 2025, and 61% during quarter ended September 30, 2024, respectively.
The following table has the breakdown of our revenues for the quarter ended September 30, 2025, and 2024 for each of our top 5 customers.
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Top Five Customers Revenue for three months ended September 30, 2025 and 2024.
(In thousands, except percentages)
| Three months ended September 30, 2025 |
Three months ended September 30, 2024 |
|||||||||||||||
| Customer | Amount | % of Revenue | Amount | % of Revenue | ||||||||||||
| Customer 1 | $ | 689 | 20 | % | $ | 500 | 21 | % | ||||||||
| Customer 2 | 583 | 17 | % | 300 | 12 | % | ||||||||||
| Customer 3 | 296 | 8 | % | 261 | 11 | % | ||||||||||
| Customer 4 | 235 | 7 | % | 236 | 10 | % | ||||||||||
| Customer 5 | 133 | 4 | % | $ | 174 | 7 | % | |||||||||
The following table provides details of Customer 1 revenue by operating segments:
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Software services | $ | - | $ | 283 | $ | (283 | ) | 100 | % | |||||||
| Managed services and support | 689 | 217 | 472 | 218 | % | |||||||||||
| Total Revenue | $ | 689 | $ | 500 | $ | 189 | 38 | % | ||||||||
Total revenue from Customer 1 increased by $0.2 million, or 38% to $0.68 million for the quarter ended September 30, 2025, as compared to $0.50 million for the quarter ended September 30, 2024. Software Services revenue decreased by $0.28 million or 100% to nil for the quarter ended September 30, 2025, as compared to $0.28 million for the quarter ended September 30, 2024. Managed Services and Support revenue increased by $0.47 million, or 218% to $0.68 million for the quarter ended September 30, 2025, as compared to $0.21 million for the quarter ended September 30, 2024.
Cost of Revenue (exclusive of depreciation/amortization)
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Cost of revenue (exclusive of depreciation/amortization) | $ | 2,871 | $ | 1,691 | $ | 1,180 | 70 | % | ||||||||
Cost of revenue, excluding depreciation and amortization increased by $1.18 million, or 70%, to $2.87 million for the quarter ended September 30, 2025, as compared to $1,69 million for the quarter ended September 30, 2024.
Research and Development
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Research and development | $ | 59 | $ | 175 | $ | (116 | ) | (66 | )% | |||||||
Research and Development expenses decreased by $0.11 million, or 66% to $0.05 million for the quarter ended September 30, 2025, as compared to $0.17 million for the quarter ended September 30, 2024.
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Sales and Marketing
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Sales and marketing | $ | 1,022 | $ | 294 | $ | 728 | 248 | % | ||||||||
Sales and Marketing expenses increased by $0.72 million, or 248% to $1.02 million for the quarter ended September 30, 2025, as compared to $0.29 million for the quarter ended September 30, 2024.
General and Administrative
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| General and administrative | $ | 2,085 | $ | 1,077 | $ | 1,008 | 94 | % | ||||||||
General and Administrative expenses increased by $1.00 million, or 94% to $2.08 million for the quarter ended September 30, 2025, as compared to $1.07 million for the quarter ended September 30, 2024.
Depreciation and Amortization
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Depreciation and amortization | $ | 63 | $ | 343 | $ | (280 | ) | (82 | )% | |||||||
Depreciation and Amortization expenses decreased by $0.28 million, or 82% to $0.06 million for the quarter ended September 30, 2025, as compared to $0.34 million for the quarter ended September 30, 2024.
Interest Expense
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Interest expense | $ | 32 | $ | 80 | $ | (48 | ) | (60 | )% | |||||||
Interest expenses decreased by $0.04 million, or 60% to $0.03 million for the quarter ended September 30, 2025, as compared to $0.08 million for the quarter ended September 30, 2024.
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Other income
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Other income | $ | 731 | $ | - | $ | 731 | 100 | % | ||||||||
Other income increased by $0.73 million, or 100% to $0.73 million for the quarter ended September 30, 2025, as compared to nil for the quarter ended September 30, 2024.
Revenue, Cost of Revenue and Operating Profit by Operating Segment
We manage and report our business under two operating segments which are Software services and Managed services and support.
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Software services | $ | 1,977 | 775 | 1,202 | 155 | % | ||||||||||
| Managed services and Support | 1,379 | 1,571 | (192 | ) | (12 | )% | ||||||||||
| Corporate and others | 133 | 67 | 66 | 99 | % | |||||||||||
| Revenue | $ | 3,489 | $ | 2,413 | $ | 1,076 | 45 | % | ||||||||
Revenue from Software services increased by $1.20 million, or 155% to $1.97 million for the quarter ended September 30, 2025, as compared to $0.77 million for the quarter ended September 30, 2024. Revenue from Managed services and support decreased by $0.19 million, or 12% to $1.37 million for the quarter ended September 30, 2025, as compared to $1.57 million for the quarter ended September 30, 2024. Revenue from Corporate and others increased by $0.06 million, or 99% to $0.13 million for the quarter ended September 30, 2025, as compared to $0.07 million for the quarter ended September 30, 2024.
Factors affecting revenues of Software Services, and Managed Services and Support
Our strategy is to achieve meaningful long-term revenue growth through sales of Managed Services and Support to existing and new clients within our target market. In order to increase our cross-selling opportunity between our operating segments and realize long time revenue growth, our focus has shifted more towards Managed Services and Support which is of recurring nature when compared to Software Services segment which is of non-recurring nature. This also helps in retaining existing customers by leveraging our Managed Services and Support and Platform Services as a growth agent. This renewed focus on driving demand for subscription and platform-based model will help us in expanding our customer base and enhance customer retention which is a challenge for our existing Software Services segment. Software Services contracts are driven by Time and Material and on-site employees delivering services at customers location.
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Cost of Revenue
| Three Months Ended September 30, | Changes | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Software services | $ | 1,667 | $ | 531 | $ | 1,136 | 214 | % | ||||||||
| Managed services and support | 1,092 | 1,117 | (25 | ) | (2 | )% | ||||||||||
| Corporate and others | 112 | 43 | 69 | 160 | % | |||||||||||
| Cost of revenue | $ | 2,871 | $ | 1,691 | $ | 1,180 | 70 | % | ||||||||
Cost of revenue from Software services increased by $1.13 million, or 214% to $1.66 million for the quarter ended September 30, 2025, as compared to $0.53 million for the quarter ended September 30, 2024. Cost of revenue from Managed Services and Support decreased by $0.02 million, or 2% to $1.09 million for the quarter ended September 30, 2025, as compared to $1.11 million for the quarter ended September 30, 2024. Cost of revenue from corporate and others increased by $0.07 million, or 160% to $0.11 million for the quarter ended September 30, 2025, as compared to $0.04 million for the quarter ended September 30, 2024.
Segment operating results by reportable segments were as follows:
Operating results by Operating Segment
| Three months ended September 30, 2025 | ||||||||||||||||
| Particulars | Software Services | Managed Services | Corporate and others | Total | ||||||||||||
| Revenue from customers | $ | 1,977 | $ | 1,379 | $ | 133 | $ | 3,489 | ||||||||
| Cost of revenue | (1,667 | ) | (1,092 | ) | (112 | ) | (2,871 | ) | ||||||||
| Segmental gross profit | $ | 310 | $ | 287 | $ | 21 | $ | 618 | ||||||||
| Net loss | $ | (1,050 | ) | $ | (662 | ) | $ | (194 | ) | $ | (1,906 | ) | ||||
Due from related parties:
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.
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.
41
The balance outstanding from the affiliates as of September 30, 2025 is $3,502 as compared to $497 as of December 31, 2024. The balance as at September 30, 2025 is unsecured, non-interest bearing and is expected to be settled within six months from the balance sheet date, as outlined below
| - | SecureKloud Technologies Limited(*) (public company in India) balance outstanding as of September 30, 2025 is $3,287 (including the balance previously owed by SecureKloud Technologies Inc.) as compared to nil as of December 31, 2024, |
| - | SecureKloud Technologies, Inc.,(*) balance outstanding as of September 30, 2025 is nil as compared to $497 as of December 31, 2024, and |
| - | Blockedge Technologies, Inc., balance outstanding as of September 30, 2025 is $215 as compared to nil as of December 31, 2024 |
| (*) | During the period ended September 30, 2025, the Company, together with SecureKloud Technologies Limited and SecureKloud Technologies, Inc., entered into a tripartite agreement, pursuant to which, SecureKloud Technologies Limited took over 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. |
Related party transactions:
Following are the transactions with the above related parties during the period:
| Related Parties | Nature of transactions | Quarter ended September 30, 2025 | Quarter ended September 30, 2024 | Nine-months ended September 30, 2025 | Nine-months ended September 30, 2024 | |||||||||||||
| SecureKloud Technologies Limited, India | Services received | $ | 470 | - | $ | 1,945 | - | |||||||||||
| Amounts advanced | $ | 525 | - | $ | 2,793 | - | ||||||||||||
| SecureKloud Technologies, Inc. | Services received | - | $ | 547 | $ | 269 | $ | 2,793 | ||||||||||
| Amounts advanced | - | $ | 184 | $ | 1,666 | $ | 2,489 | |||||||||||
| Services rendered | - | - | $ | 138 | - | |||||||||||||
| Amounts collected | $ | 27 | - | $ | 407 | - | ||||||||||||
| Rent expenses paid | $ | 90 | $ | 34 | $ | 135 | $ | 101 | ||||||||||
| Blockedge Technologies, Inc. | Services received | $ | 40 | - | $ | 70 | - | |||||||||||
| Amounts advanced | $ | 140 | - | $ | 285 | - | ||||||||||||
| Revenue | $ | 9 | - | $ | 9 | - | ||||||||||||
| Accounts receivable | $ | 9 | - | $ | 9 | - | ||||||||||||
| Key management personnel | Remuneration | $ | 133 | $ | 70 | $ | 385 | $ | 209 | |||||||||
42
Liquidity and Capital Resources
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 upto 2 times more current assets than liabilities to covers its debts. The Company’s current ratio, as at September 30, 2025 is 1.13 compared to 0.22 as at December 31, 2024.
The Company’s current debt equity ratio, as at September 30, 2025 financial statement is 0.14, compared to (0.10) as at December 31, 2024.
The Company does not have inventory and hence the quick ratio is the same as the current ratio.
Sources of Liquidity
| As of September 30, 2025 | As of September 30, 2024 | |||||||
| Cash and cash equivalents | $ | 1,629 | $ | 28 | ||||
As of September 30, 2025, our principal sources of liquidity consisted of cash and cash equivalents of $1.63 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 working capital over the next 12 months. Our future capital requirements will depend on many factors including our growth rate, subscription renewal activity, the expansion of sales and marketing activities and the ongoing investments in platform development.
Cash Flows
The following table presents a summary of our consolidated cash flows provided by / (used in) operating, investing, and financing activities for the periods indicated:
| As of September 30, 2025 | As of September 30, 2024 | |||||||
| Cash flows used in operating activities | $ | (9,689 | ) | $ | (33 | ) | ||
| Cash flows used in investing activities | (1,289 | ) | — | |||||
| Cash flows provided by / (used in) financing activities | 12,587 | (1,174 | ) | |||||
| Net increase / (decrease) in cash and cash equivalents | $ | 1,609 | $ | (1,206 | ) | |||
43
Operating Activities
Net cash used in operating activities during the nine months ended September 30, 2025, was $(9.69) million compared to $(0.03) million for the nine months ended September 30, 2024.
Investing Activities
Net cash used in investing activities was $(1.29) million for the nine months ended September 30, 2025 mainly representing partial payment of the acquisition cost (see note 3.3), compared to nil for the nine months ended September 30, 2024.
Financing Activities
Cash inflow from financing activities was $12.58 million for the nine months ended September 30, 2025, compared to a net outflow of $(1.17) million for the nine months ended September 30, 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 September 30, 2025.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
We did not have investments and do not utilize derivative financial instruments to manage our interest rate risks.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures and Changes in Internal Control over Financial Reporting
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the appropriate time periods, and that such information is accumulated and communicated to the Chief Operating Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. We, under the supervision of and with the participation of our management, including our Chief Operating Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Operating Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective as of September 30, 2025.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting during the nine months ended September 30, 2025, that have materially affected, or are reasonable likely to materially effect, our internal controls over financial reporting.
44
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be involved in routine litigation that arises in the ordinary course of business. We are not currently involved in any claim outside the ordinary course of business that is material to our financial condition or results of operations.
Item 1A. Risk Factors.
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K , filed with the SEC on March 31, 2025. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On February 27, 2025, we entered into Securities Purchase Agreements dated February 27, 2025 with institutional investors for the private placement of 145,344 units (each a, “Unit”), each Unit consisting of one share of the our common stock or one pre-funded warrant to purchase one share of common stock, one Series A Warrant (a “Series A Warrant”) to purchase one share of common stock and one Series B Warrant to purchase one share of common stock at an offering price of $104.58 per Unit (or $104.57 per Unit in the case of Units that include pre-funded warrants).
Item 3. Defaults Upon Senior Securities.
Not applicable
Item 4. Mine Safety Disclosures.
Not applicable
Item 5. Other Information
45
Item 6. Exhibits
| Exhibit No. | Description | |
| 3.1 | Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement No. 333-259180, initially filed on August 30, 2021) | |
| 3.2 | Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement No. 333-259180, initially filed on August 30, 2021) | |
| 3.3 | Amendment to Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement No. 333-259180, initially filed on August 30, 2021) | |
| 3.4 | Series A Preferred Stock Certificate of Designation (incorporated by reference to Exhibit 3.4 to the Company’s Registration Statement No. 333-259180, initially filed on August 30, 2021) | |
| 3.5 | Series A Preferred Stock Amended and Restated Certificate of Designations (incorporated by reference to Exhibit 3.5 to the Company’s Registration Statement No. 333-259180, initially filed on August 30, 2021) | |
| 4.1 | Form of Series A Warrant (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K, filed with the SEC on February 28, 2025) | |
| 4.2 | Form of Series B Warrant (incorporated by reference to Exhibit 4.2 to the Company’s current report on Form 8-K, filed with the SEC on February 28, 2025) | |
| 4.3 | Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.3 to the Company’s current report on Form 8-K, filed with the SEC on February 28, 2025) | |
| 4.4 | Form of New Warrant (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K, filed with the SEC on October 8, 2025) | |
| 4.5 | Form of Advisor Warrant (incorporated by reference to Exhibit 4.2 to the Company’s current report on Form 8-K, filed with the SEC on October 8, 2025) | |
| 10.1 | Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K, filed with the SEC on February 28, 2025) | |
| 10.2 | Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K, filed with the SEC on February 28, 2025) | |
| 10.3 | Employment Agreement between Healthcare Triangle, Inc. and Ms. Sujatha Ramesh, dated March 18, 2025. (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K, filed with the SEC on March 24, 2025) | |
| 10.4 | Employment Agreement between Healthcare Triangle, Inc. and Mr. David Ayanoglou, dated April 10, 2025. incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K, filed with the SEC on April 11, 2025) | |
| 10.5 | Form of Warrant Inducement Letter (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K, filed with the SEC on October 8, 2025) | |
| 10.6 | Asset and Stock Transfer Agreement, dated June 16, 2025, by and among Healthcare Triangle, Inc., through its wholly owned subsidiary QuantumNexis Inc., and Niyama Healthcare, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K, filed with the SEC on June 23, 2025) | |
| 10.7 | Amendment No. 1 to Asset Transfer Agreement, dated August 28, 2025, by and between Healthcare Triangle, Inc. and Niyama Healthcare, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K, filed with the SEC on August 29, 2025) | |
| 21.1* | List of Subsidiaries of the Company | |
| 31.1* | Certification of the Chief Operating Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1+ | Certification of the Chief Operating Officer pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2+ | Certification of the Chief Financial Officer pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith |
| + | Furnished herewith. |
46
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| HEALTHCARE TRIANGLE, INC. | |
| Date: November 13, 2025 | /s/ Sujatha Ramesh |
| Sujatha Ramesh | |
| Board Director and Chief Operating Officer | |
| (Principal executive officer) | |
| Date: November 13, 2025 | /s/ David Ayanoglou |
| David Ayanoglou | |
| Chief Financial Officer | |
| (Principal financial officer) |
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FAQ
What were HCTI’s Q3 2025 results?
How did HCTI’s year-to-date performance look in 2025?
What changed on HCTI’s balance sheet?
What were HCTI’s cash flows in 2025 year-to-date?
What are the details of HCTI’s acquisition in June 2025?
Did HCTI change its capital structure?
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