Healthcare Triangle, Inc.

Previous wording

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 the Parent transferred its s Life Sciences business to us. As of December 31, 2023, we had a total of 33 full time employees, 164 sub-contractors, including 95 certified cloud engineers, 66 Epic Certified EHR experts and 21 MEDITECH Certified EHR experts. Many of the senior management team and the members of our board of directors hold advanced degrees and some are leading experts in software development, regulatory science, and market access. During the twelve months ended December 31, 2023, we generated revenues of approximately $33.2 million compared to revenue of $45.9 million for the twelve months ended December 31, 2022, which represents a decrease of $12.7 million or 28% compared to the previous year.

Current wording

The Company was formed on October 29, 2019, as a Nevada corporation and then converted into a Delaware corporation on April 24, 2020, to provide IT and data services to the Healthcare and Life Sciences (“HCLS”) industry. The business commenced on January 1, 2020, after SecureKloud transferred its Life Sciences business to us. As of December 31, 2024, we had a total of 36 full-time employees, 24 sub-contractors. Many of the senior management team and the members of our board of directors hold advanced degrees and some are leading experts in software development, regulatory science, and market access. During the twelve months ended December 31, 2024, we generated revenues of approximately $11.7 million compared to revenue of $33.2 million for the twelve months ended December 31, 2023, which represents a decrease of $21.6 million or 65% compared to the previous year.

Previous wording

Our deep expertise in healthcare allows us to reinforce our clients’ progress by accelerating their innovation. Our healthcare IT services include Electronic Health Records (EHR) and software implementation, optimization, extension to community partners, as well as application managed services, and backup and disaster recovery capabilities on public cloud. Our 24x7 managed services are used by hospitals and health systems, payers, Life Sciences, and biotech organizations in their effort to improve health outcomes and deliver deeper, more meaningful patient and consumer experiences. Through our services, our customers achieve a return on investment in their technology by delivering measurable improvements. Combined with our software and solutions, our services provide clients with an end-to-end partnership for their technology innovation.

Current wording

Our deep expertise in healthcare allows us to reinforce our clients’ progress by accelerating their innovation. Our healthcare IT services include Electronic Health Records (EHR) and software implementation, optimization, extension to community partners, as well as application managed services, and backup and disaster recovery capabilities on public cloud. Our 24x7 managed services are used by hospitals and health systems, payers, Life Sciences, and biotech organizations in their effort to improve health outcomes and deliver deeper, more meaningful patient and consumer experiences. Through our services, our customers achieve a return on investment in their technology by delivering measurable improvements. Combined with our software and solutions, our services provide clients with an end-to-end partnership for their technological innovation.

Previous wording

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.

Current wording

The Company earns revenue primarily through the sale of software services that is generated from providing strategic advisory, implementation, and development services. The Company enters into Statement of Work (SOW) which provides for service obligations that need to be fulfilled as agreed with the customer. The majority of our software services arrangements are billed on a time and materials basis and revenues are recognized over time based on time incurred and contractually agreed rates. Certain software services revenues are billed on a fixed fee basis and revenues are typically recognized over time as the services are delivered based on time incurred and customer acceptance. We recognize revenue when we have the right to invoice the customer using the allowable practical expedient under ASC 606-10-55-18 since the right to invoice the customer corresponds with the performance obligations completed.

Previous wording

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 rateably over the life of the contract.

Current wording

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.

Previous wording

SaaS revenues will be recognized rateably over the respective non-cancellable subscription term because of the continuous transfer of control to the customer. Our subscription arrangements will be considered service contracts, and the customer will not have the right to take possession of the software Segment wise revenue breakup.

Current wording

SaaS revenues will be recognized ratably over the respective non-cancellable subscription term because of the continuous transfer of control to the customer. Our subscription arrangements will be considered service contracts, and the customer will not have the right to take possession of the software Segment wise revenue breakup.

Previous wording

Revenue decreased by $12.7 million, or 28% to $33.2 million for the twelve months ended December 31, 2023, as compared to $45.9 million for the twelve months ended December 31, 2022. Revenue from Software Services, Managed Services and Support and Platform Services revenue have decreased in the current year.

Current wording

Revenue decreased by $21.51 million, or 65% to $11.7 million for the twelve months ended December 31, 2024, as compared to $33.2 million for the twelve months ended December 31, 2023. Revenue from Software Services, Managed Services and Support and Platform Services revenue have decreased in the current year.

Previous wording

Our top 5 customers accounted for 77% of revenue during the twelve months ended December 31, 2023 and 72% during the twelve months ended December 31, 2022, respectively.

Current wording

Our top 5 customers accounted for 58% of revenue during the twelve months ended December 31, 2024, and 79% during the twelve months ended December 31, 2023, respectively.

Previous wording

Top Five Customers’ Revenue for Twelve months ended December 31, 2022

Current wording

Top Five Customers’ Accounts receivable for Twelve months ended December 31, 2024

Previous wording

Revenue from Customer 1 decreased by $0.5 million, or 3% to $17.3 million for the twelve months ended December 31, 2023, as compared to $17.8 million for the twelve months ended December 31, 2022. Software Services revenue increased by $1 million or 8% to $15.6 million for the twelve months ended December 31, 2023, as compared to $14.5 million for the twelve months ended December 31, 2022. Managed Services and Support revenue decreased by $1.5 million, or 47% to $1.7 million for the twelve months ended December 31, 2023, as compared to $3.3 million for the twelve months ended December 31, 2022.

Current wording

Revenue from Customer 1 decreased by $1.2 million, or 38% to $1.9 million for the twelve months ended December 31, 2024, as compared to $3.1 million for the twelve months ended December 31, 2023. Software Services revenue increased by $0.09 million or 100% to $0.09 million for the twelve months ended December 31, 2024, as compared to $0 million for the twelve months ended December 31, 2023. Managed Services and Support revenue decreased by $1.3 million, or 41% to $1.8 million for the twelve months ended December 31, 2024, as compared to $3.1 million for the twelve months ended December 31, 2023.

Previous wording

Research and development expenses decreased by $5.2 million, or 87% to $0.8 million for the twelve months ended December 31, 2023, as compared to $5.9. million for the twelve months ended December 31, 2022.

Current wording

Research and development decreased by $0.37 million, or 46 % to $0.43 million for the twelve months ended December 31, 2024 as compared to $0.8 million for the twelve months ended December 31,2023

Previous wording

Cost of revenue, excluding depreciation and amortization decreased by $8.2 million, or 24%, to $26.4 million for the twelve months ended December 31, 2023, as compared to $34.6 million for the twelve months ended December 31, 2022.

Current wording

Depreciation and amortization decreased by $0.68 million, or 43 % to $0.89 million for the twelve months ended December 31, 2024 as compared to $1.57 million for the twelve months ended December 31,2023

Previous wording

Income tax decreased by $0.03 million, or 44% to $0.04 million for the twelve months ended December 31, 2023, as compared to $0.06 million for the twelve months ended December 31, 2022, this represents state taxes.

Current wording

Provision for income taxes decreased by $0.02 million, or 65 % to $0.01 million for the twelve months ended December 31, 2024, as compared to $0.03 million for the twelve months ended December 31, 2023, this represents state taxes.

Previous wording

We currently provide our services and manage our business under three operating segments which are Software Services, Managed Services and Support and Platform Services.

Current wording

We manage our business under three operating segments, which are Software Services, Managed Services and Support and Platform Services.

Previous wording

Revenue from Software Services decreased by $4.8 million, or 18% to $21.1 million for the twelve months ended December 31, 2023, as compared to $25.9 million for the twelve months ended December 31, 2022. Revenue from Managed Services and Support decreased by $4.7 million, or 31% to $10.5 million for the twelve months ended December 31, 2023, as compared to $15.2 million for the twelve months ended December 31, 2022. Revenue from Platform Services decreased by $3.2 million, or 66% to $1.6 million for the twelve months ended December 31, 2023, as compared to $4.8 million for the twelve months ended December 31, 2022.

Current wording

Revenue from Software Services decreased by $16.4 million, or 78% to $4.7 million for the twelve months ended December 31, 2024, as compared to $21.1 million for the twelve months ended December 31, 2023. Revenue from Managed Services and Support decreased by $3.7 million, or 36% to $6.7 million for the twelve months ended December 31, 2024, as compared to $10.5 million for the twelve months ended December 31, 2023. Revenue from Platform Services decreased by $1.3 million, or 82% to $0.3 million for the twelve months ended December 31, 2024, as compared to $1.6 million for the twelve months ended December 31, 2023.

Previous wording

As of December 31, 2023, our principal sources of liquidity for working capital purposes were cash, cash equivalents and short-term investments totaling $1.2 million.

Current wording

As of December 31, 2024, our principal sources of liquidity for working capital purposes were cash, cash equivalents and short-term investments totaling $0.002 million.

Previous wording

The current ratio measures a company’s ability to pay off its current liabilities (payable within one year) with its total current assets such as cash, accounts receivable, and inventories. The higher the ratio, the better the company’s liquidity position. A good current ratio is between 1.2 to 2, which means that a business has 2 times more current assets than liabilities to covers its debts. The Company’s current ratio, as of December 31, 2023 is 0.7 compared to 1.3 as of December 31, 2022.

Current wording

The current ratio measures a company’s ability to pay off its current liabilities (payable within one year) with its total current assets such as cash, accounts receivable, and inventories. The higher the ratio, the better the company’s liquidity position. A good current ratio is between 1.2 to 2, which means that a business has 2 times more current assets than liabilities to covers its debts. The Company’s current ratio, as of December 31, 2024, is 0.33 compared to 0.74 as of December 31, 2023.

Previous wording

The Company’s current debt equity ratio, as on December 31, 2023 is 9.8, compared to 0.2 as on December 31, 2022. A debt-to-equity ratio below 1 means that a company has lower exposure to debts than equity.

Current wording

The Company’s current debt equity ratio, as on December 31, 2024, is (0.50), compared to (3.2) as on December 31, 2023. A debt-to-equity ratio below 1 means that a company has lower exposure to debts than equity.

Previous wording

The Company does not have inventory and hence the quick ratio is the same as current ratio.

Current wording

The Company does not have inventory and hence the quick ratio is the same as the current ratio.

Previous wording

As of December 31, 2023, our principal sources of liquidity consisted of cash and cash equivalents of $1.2 million. We believe that our cash and cash equivalents as of December 31, 2023, and the future operating cash flows of the entity will provide adequate resources to fund ongoing cash requirements for the next twelve months. If sources of liquidity are not available or if we cannot generate sufficient cash flow from operations during the next twelve months, we may be required to obtain additional sources of funds through additional operational improvements, capital market transactions, asset sales or financing from third parties, a combination thereof or otherwise. We cannot provide assurance that these additional sources of funds will be available or, if available, would have reasonable terms.

Current wording

As of December 31, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $0.002 million. We believe that the fund raise of $15.20 million in February, 2025 will be sufficient to meet our working capital requirements over the next 12 months. If sources of liquidity are not available or if we cannot generate sufficient cash flow from operations during the next twelve months, we may be required to obtain additional sources of funds through additional operational improvements, capital market transactions, asset sales or financing from third parties, a combination thereof or otherwise. We cannot provide assurance that these additional sources of funds will be available or, if available, would have reasonable terms.

Previous wording

Net cash used in operating activities was $1.6 million for the twelve months ended December 31, 2023, and net cash used in operations was $2.6 million for the twelve months ended December 31, 2022.

Current wording

Net cash used in operating activities was $1.08 million for the twelve months ended December 31, 2024, and net cash used in operations was $2.1 million for the twelve months ended December 31, 2023.

Previous wording

Net cash used in investing activities was $0.01 million for the twelve months ended December 31, 2023, and $3.3 million for the twelve months ended December 31, 2022.

Current wording

Net cash used in investing activities was $0 million for the twelve months ended December 31, 2024, and $0.013 million for the twelve months ended December 31, 2023.

Previous wording

Cash flows from financing activities was $1.5 million for the twelve months ended December 31, 2023, and $5.5 million for the twelve months ended December 31, 2022. During the year 2023, the company raised an aggregate gross amount of $5.2 million through Senior Secured 15% Original Issue Discount Convertible Promissory Note. The first tranche of $2 million was received during the period ended December 31, 2023.

Current wording

Cash flows from financing activities was $0.135 million for the twelve months ended December 31, 2024, and $2 million for the twelve months ended December 31, 2023.