Healthcare Triangle, Inc.

1) Basis of Preparation of Unaudited Condensed Consolidated Financial Statements

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The December 31, 2025, consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. 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 March 31, 2026, the results of operations, comprehensive loss, stockholders’ deficit, and cash flows for the three months ended March 31, 2026 and 2025. The results of operations for the periods presented are not necessarily indicative of the results to be expected for any future period. 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, 2025 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 condensed consolidated financial statements.

All intercompany balances and transactions have been eliminated upon consolidation.

Certain balances from the prior fiscal year have been reclassified to conform to the current period presentation.

Organization and Description of Business

Healthcare Triangle Inc. (“HTI” or “the Company”) was incorporated under the laws of the State of Nevada on October 29, 2019, and then converted into a Delaware corporation on April 24, 2020, to provide IT and data services to the Healthcare and Life Sciences (‘HCLS”) industry. On January 1, 2020, the Company acquired the Life Sciences Business of SecureKloud Technologies Inc. and on May 8, 2020, the Company acquired Cornerstone Advisors Group LLC (Healthcare Business) from SecureKloud.

Effective January 1, 2026, the Company, through its wholly owned subsidiaries, Teyame 360 S.L. (“Teyame”) and Datono Mediacion S.L. (“Datono”) (see note 5[B] for details), operate together as an integrated platform providing AI-powered omnichannel customer experience, marketing, and financial/insurance distribution services.

Teyame leverages its technology solutions to provide customer engagement services that combine artificial intelligence, telemarketing, and contact center operations to support customer acquisition, retention, and service. Its platform enables enterprises particularly in financial services, insurance, and healthcare to manage end-to-end customer interactions across multiple channels.

Datono complements this platform as an insurance brokerage entity, facilitating the marketing and sales of insurance products. Together, the companies form a vertically integrated model combining customer acquisition technology with distribution capabilities, particularly in regulated sectors such as insurance.

Liquidity Risk

The Company incurred loss from operations of $3,623, had negative operating cash flows of $6,864, and accumulated deficits of $49,339 for the quarter ended March 31, 2026. Management evaluated these conditions and concluded that they have been sufficiently mitigated by the Company’s net assets of $52,697 (including cash and cash equivalents of $4,315) at March 31, 2026, and gross proceeds of $484 raised through equity issuance subsequent to the quarter-end. Accordingly, management has concluded that the Company has sufficient resources to fund operations and meet its obligations as they become due for a period of at least twelve months from the date these unaudited condensed consolidated financial statements are issued.

2) Summary of Significant Accounting Policies

Revenue Recognition

We recognize revenues as we transfer control of deliverables (services, solutions, and platform) to our clients in an amount reflecting the consideration to which we expect to be entitled. To recognize revenues, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. We account for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We apply judgment in determining the customer’s ability and intention to pay based on factors including historical payment experience, credit profile, and geographic and industry risk factors. For customers acquired through business combinations, collectability is assessed using the acquired entity’s collection history with those customers, supplemented by post-acquisition payment performance. A contract is recognized only where collectability of substantially all consideration is probable.

For performance obligations where control is transferred over time, revenues are recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the deliverables to be provided.

The Company accounts for revenue from a contract after it is approved by the customer, and after ensuring that the rights of each party regarding the services to be transferred, the payment terms, the commercial substance, and the collectability is ascertained. In assessing collectability, the company applies judgment and considers factors such as the customer’s credit profile, past payment behavior, and the nature and geography of the customer relationship

Contract modifications, such as changes in scope, rates, or duration, are assessed to determine whether they should be accounted for as a separate contract or as part of the existing contract. A modification is treated as a separate contract when it adds services at a price that reflects their standalone selling price. Otherwise, the modification is combined with the existing contract, and the transaction price is updated on a prospective or cumulative catch-up basis, as appropriate.

When it becomes probable that total costs to satisfy a contract will exceed the transaction price, the expected loss is recognized in full in the period in which the loss becomes probable and can be reasonably estimated, regardless of whether work has commenced under the contract.

Revenue is earned and recognized in the following segments:

A. Software Services

The Company enters into contractual obligations with the customers to perform (i) Strategic advisory services which include assessment of the enterprise network, applications environment and advise on the design and tools; (ii) Implementation services which include deployment, upgrades, enhancements, migration, training, documentation and maintenance of various electronic health record systems and (iii) Development services which include customization of network and applications in the public cloud environment.

Revenue from Strategic advisory, Implementation and Development services are distinct performance obligation and is recognized on time-and-material or fixed-price project basis. Revenues related to time-and-material are recognized over the period the services are provided using labor hours. Revenues related to fixed-price contracts are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized based on the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information; such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately, where appropriate.

We may enter into contracts that consist of multiple performance obligations. Such contracts may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For contracts with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we estimate standalone selling price by using the expected cost plus a margin approach. We establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change.

Contract modifications, such as extensions of statement of work duration or changes in resources and rates, are evaluated under ASC 606 and accounted for prospectively as a separate contract or modification of the existing contract, based on whether the modification adds distinct performance obligations at standalone selling prices.

When the estimated costs to complete a performance obligation exceed the expected transaction price, the full amount of the anticipated loss is recognized immediately in the period in which the loss becomes probable and estimable.

Certain contracts include variable consideration such as rate adjustments, which is estimated using the most likely amount method and included in the transaction price only to the extent that a significant revenue reversal is not probable. Estimates are reassessed at each reporting date.

B. Managed Services and Support

The Company has standard contracts for its Managed Services and Support, however the statement of work contained in such contracts is unique for each customer. A typical Managed Services and Support contract would provide for some or all of the following types of services being provided to the customer: Cloud hosting, Continuous monitoring of applications, security and compliance and support.

Revenue from Managed services and support is a distinct performance obligation and recognized based on Standalone Selling Price (SSP), ratably on a straight-line basis over the period in which the services are rendered. Contract with customers includes subcontractor services or third-party cloud infrastructure services in certain integrated services arrangements. In these types of arrangements, revenue is recognized net of costs when the Company is acting as an agent between the customer and the vendor, and gross when the Company is the principal for the transaction. In doing so, the Company first evaluates whether it controls the platform or service before it is transferred to the customer. The Company considers whether it has the primary obligation to fulfil the contract, pricing discretion and other factors to determine whether it controls the platform or service and therefore is acting as principal or agent.

C. Customer Engagement Services

The Customer Engagement Services segment includes services rendered to financial institutions in connection with the promotion and distribution of banking and credit products; services provided as an external collaborator to insurance intermediaries in the distribution of insurance products; outbound and inbound telemarketing; customer acquisition campaigns; appointment setting; customer service and satisfaction surveys; and technology-enabled digital marketing and customer-interaction services that support customers’ digital customer-acquisition and customer-care strategies.

Under these arrangements, the company typically acts as an intermediary or service provider, identifying and contacting potential customers or insureds, explaining product features, collecting and submitting applications or leads, and performing related administrative tasks and customer-care activities in accordance with the instructions, scripts and quality standards agreed with each customer. Consideration may be in the form of commissions based on approved and issued banking or credit products or concluded or renewed insurance policies, or service fees based on time-and-effort, unit-based pricing, fixed price per completed output, or milestone-based pricing, as specified in the contract.

Commission revenue is recognized when the company’s services under the relevant transaction have been performed and the specified conditions have been met under the contract. Revenue from time-based or unit-based services is recognized as the underlying services are performed and the corresponding measurable outputs are delivered in accordance with the contract. Revenue under fixed-price or milestone-based arrangements is recognized over time as the related services are performed and contractual milestones are achieved.

D. Corporate and Others

This segment includes Platform Services revenue, alongside unallocated corporate head office costs. A typical Platform Services contract would provide for some or all of the following types of services being provided to the customer: Data Analytics, Backup and Recovery, through our Platform with contract terms unique to each customer. The Company delivers Platform Services through its proprietary platform. Where third-party technology or infrastructure is included in the arrangement, the Company evaluates whether it is acting as principal or agent based on whether it controls the service before transfer to the customer.

The revenue from Platform Services is a distinct performance obligation and recognized based on SSP. During the periods presented the Company generated revenue from Platform Services on a fixed-price solutions delivery model. Revenues related to fixed-price contracts are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized based on the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information; such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized in full in the period in which the loss becomes probable and estimable.

Our contractual terms and conditions for revenue mandate that our services are documented and subject to inspection, testing at the time of delivery to customer. In addition, the Company needs to integrate seamlessly into the customers’ systems. Also, the customer has a right to cancel all, or part of the services rendered if it is not in accordance with statement of work and within the stipulated time.

Fair Value Measurements

Concentration

The Company monitors the credit worthiness of its customers through various factors, including review of their financial statements and other associated information. For the quarters ended March 31, 2026, and 2025, sales to five major customers accounted for approximately 49% and 57% of total revenue respectively. For the quarters ended March 31, 2026, and 2025, accounts receivable from five major customers accounted for approximately 57% and 59% of the total accounts receivable.

As of March 31, 2026, and December 31, 2025, the Company had $3,129 and $6,503 respectively, of uninsured cash balances. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

3) Accounts Receivable, net

As at March 31, 2026, the Company remeasured its allowance for current expected credit loss to $327, showing a net increase of $125 from the balance as at December 31, 2025.

Current Expected Credit Loss movement:*

4) Other current assets

5) Goodwill and Other Intangible Assets

(1) $1,494 in cash, (2) $4,601 in equity consideration; and (3) up to $1,200 (having a fair value ofnil as of March 31, 2026, and December 31, 2025) in earn-out payments contingent on first-year financial performance targets to be agreed mutually.

The transaction resulted in recognition of goodwill with a carrying value of $2,946, as of March 31, 2026, and December 31, 2025. There are no impairment indicators as at March 31, 2026, and December 31, 2025.

The cash consideration includes: (i) $3,000 paid during 2025 pursuant to an advance agreement dated December 3, 2025, (ii) $6,000 paid during January, 2026 (iii) $3,200 paid on April 20, 2026, and (iv) $2,800 payable on the earlier of the conditions being met as outlined in the Share Purchase Agreement, or six months from the date of the Share Purchase Agreement (but in no event prior to April 29, 2026).

The equity consideration includes (a) restricted shares or pre-funded warrants of the Company’s common stock with an agreed value of $12,000 and (b) a series of the Company’s preferred stock with an agreed value of $18,000 that is convertible into the Company’s common stock, subject to Shareholders’ approval. As of March 31, 2026,55,482 restricted shares of common stock and 424,856 pre-funded warrants convertible to common stocks were issued towards the $12,000 common stock issuance, whereas preferred stocks are yet to be issued. The number of shares of common stock issued as part of the equity consideration, and the number of shares of common stock underlying the preferred stock, are determined by reference to a “Base Price” equal to the average of the volume-weighted average prices (“VWAPs”) of the Company’s common stock for thefive trading days immediately prior to the Closing Date, as further defined in the Share Purchase Agreement. The preferred stock is not convertible into common stock until applicable shareholder approval is obtained as contemplated by the Share Purchase Agreement. The Share Purchase Agreement also includes a mechanism intended to limit issuance in excess of 19.99% of the Company’s outstanding common stock immediately prior to issuance, including the issuance of a pre-funded warrant for any excess shares in lieu of issuing shares in excess of such limitation at closing, and provides that the pre-funded warrant would have a nominal exercise price and be exercisable on a cashless basis, subject to the terms of the Share Purchase Agreement.

The Share Purchase Agreement also provides for an earnout payable in the Company’s Series C preferred stock to certain key management employees of the Acquired Companies, with an aggregate value of up to $5,000, subject to achievement of specified annual targets as outlined in the Share Purchase Agreement.

The Company is in the process of determining the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date in accordance with ASC 805, Business Combinations. As the initial accounting for the business combination is incomplete as of the date of these financial statements, the Company has not yet finalized the purchase price allocation. The provisional amounts recognized reflect management’s best estimates based on information available at this time. The final purchase price allocation, including the determination of fair values of identifiable intangible assets, property and equipment, deferred tax assets and liabilities, and any resulting 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 ASC 805-10-25-15. Any adjustments to the provisional amounts identified during the measurement period will be recognized in the reporting period in which the adjustment is determined, with a corresponding adjustment to goodwill.

C) Other intangible assets

6) Furniture and Equipment

Furniture and equipment consisted of the following:

During the quarter ended March 31, 2026, the Company purchased furniture and equipment amounting to $22. In addition, the Company acquired furniture and equipment with a cost of $5,209 and accumulated depreciation of $3,742 as part of the business combination (see note 5[B] for details). Depreciation expenses for the quarters ended March 31, 2026, and 2025 were $163 and $12 respectively. There were no disposals during the current or prior periods presented.

7) Right-of-use Assets

The Company determines if an arrangement contains a lease at inception. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

The Company utilized a portfolio approach in determining the discount rate. The portfolio approach takes into consideration the range of the term, the range of the lease payments, the category of the underlying asset and the Company’s estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company also considered its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating the incremental borrowing rates.

Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient noted above. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred.

The Company’s principal facility is located in Pleasanton, CA. Lease rental for the quarter ended March 31, 2026, was $19 and whereas rent expenses for the quarter ended March 31, 2025 were $43. Depreciation expense for the ROU asset for the quarter ended March 31, 2026 was $5.

In addition, the Company acquired right-of-use assets and lease liability as part of the business combination (see note 5[B] for details). The Company acquired right-of-use assets with a cost of $3,879 and accumulated depreciation of $2,747 as part of the business combination (see note 5[B] for details). The lease relates to an office building located at Calle Rufino González 21, 28037 Madrid and a vehicle. The lease terms are 84 months for the building and 48 months for the vehicle. The leases were measured using discount rates of 1.50% for building and 6.99% for vehicle, resulting in lease liabilities of**$**3,823 and $64, respectively as of March 31, 2026. Lease rental and depreciation expense for the quarter ended March 31, 2026, were $114 and $137 respectively.

ROU Asset:

*Includes operating right-of-use assets acquired as part of business combination as explained in the note above.

Lease liability:

Future minimum lease obligations under our non-cancellable lease agreement as of March 31, 2026, are as follows:

8) Advances

The balance outstanding from SecureKloud Technologies Limited as of March 31, 2026, and December 31, 2025, is $3,826. The balance is unsecured, non-interest bearing and is expected to be settled in the ordinary course of business, as outlined below:

Following are the transactions with related parties during the periods presented:

9) Short-Term Borrowing

A. Recourse Financing

During 2022, the Company obtained a credit facility from Seacoast Business Funding (SBF), a division of Seacoast National Bank. The funding is against the accounts receivable of the Company and one of its subsidiaries. The maximum amount of advance under the arrangement is $10,000 and the bank may advance upto 90% of the unpaid domestic outstanding accounts under the recourse agreement.

The SBF facility incurred a factoring interest cost of 8.5% during the quarter ended March 31, 2026, amounting to $10 and 8.5% for the quarter ended March 31, 2025, amounting to $16. The gross receivables against which advances were received from such arrangement as at March 31, 2026, and December 31, 2025, were $2,463 and $2,225 respectively.

The carrying amount of associated recourse financing liability was $24 and $161, as of March 31, 2026, and December 31, 2025, respectively.

In addition, a recently acquired subsidiary with an acquisition date of January 1, 2026, of the Company utilizes recourse-based accounts receivable financing arrangement with a number of banks, whereby the subsidiary receives cash against the customer invoices. Under this arrangement, the maximum advance amount available to the subsidiary is $4,038, subject to invoice ageing and related terms. As the arrangement is with recourse, the subsidiary retains the credit risk associated with the underlying receivables and accordingly continues to recognize the related accounts receivable on its balance sheet. Amounts advanced by the bank are recognized as current liability at fair value, which approximates the actual proceeds received due to the short-term nature of the advances, generally ranging from 60 to 120 days. Interest incurred on the advances is recognized as finance expense in the period incurred. Since the arrangement does not constitute a transfer of receivables under applicable accounting standards, no gain or loss is recognized on the transaction.

This facility incurred a factoring interest rate ranging from 2.77% to 3.52% during the quarter ended March 31, 2026, whereas the interest cost amounted to $31. The gross receivables against which advances were received from such arrangement as at March 31, 2026, was $6,170.

The carrying amount of associated recourse financing liability was $3,734 as at March 31, 2026.

B. 2025 Convertible Notes

The following table represents changes in the fair value of the 2025 Debentures for the periods presented:

As of March 31, 2026, the significant assumptions used by an independent third party valuer in the valuation included the Company’s common stock price of $2.69 per share ($37.95 per share as of December 31, 2025), expected volatility of 87% (90.7% as of December 31, 2025), a risk-free rate of 3.5% (3.53% as of December 31, 2025), and a remaining contractual term of approximately 0.7 years (0.89 years as of December 31, 2025). The valuation also reflected assumptions regarding expected conversion behavior and settlement outcomes over the remaining life of the instruments. In addition, the model was calibrated to observed transaction proceeds. No financing below the contractual floor price is expected in 2026, and accordingly no floor-reset event was incorporated into the March 31, 2026, valuation.

C. Debt from credit institutions

Teyame and Datono have secured various credit facilities across multiple financial institutions. As of March 31, 2026, the total available credit facilities and loans amounted to $9,989, and the amount withdrawn and utilized as of that date was $8,467, of which $7,838 is due within a period of 12 months from the balance sheet date, whereas $629 is classified as long-term debt with maturity dates falling due beyond 1 year. These loans and facilities carry interest rates ranging from 1.3% -5.24% and are obtained to cover the working capital and liquidity needs.

The debt with credit institutions was acquired as part of the Teyame and Datono business combination on January 1, 2026, and represents liabilities assumed at the acquisition date. No new facilities have been entered into by the consolidated group subsequent to the acquisition date during the quarter ended March 31, 2026.

10) Other current liability

11) Contingent consideration

On January 22, 2026, Healthcare Triangle, Inc. entered into a share purchase agreement to acquire Teyame 360 S.L. (“Teyame”) and Datono Mediacion S.L. (“Datono”) through its wholly owned subsidiary Teyame AI Holdings Inc., effective January 1, 2026. The aggregate purchase price for the Acquired Companies is up to $50,000, subject to the terms and conditions set forth in the Share Purchase Agreement. The consideration consists of a cash component and equity component, with an additional earnout component payable in the Company’s preferred stock upon achievement of specified post-closing performance targets. The Share Purchase Agreement also provides for an earnout payable in the Company’s preferred stock to certain key management employees of the Acquired Companies, with an aggregate value of up to $5,000, subject to achievement of specified annual targets as outlined in the Share Purchase Agreement. See note 5(B) for details.

12) Stockholder Equity

All references to the number of common shares and price per Common Stock, for all periods presented, have been adjusted to reflect the following:

These reverse splits reduced the number of issued and outstanding shares of common stock in proportion to the split ratio, without changing the total authorized shares or the par value per share. The basic and diluted earnings consider the effect of reverse split across the reporting periods.

Accordingly, unless indicated otherwise, all the current period and historical per share data, number of shares issued and outstanding, stock awards, and other common stock equivalents for the periods presented in this Report on Form 10-Q have been adjusted retroactively, where applicable, to reflect the Reverse Stock Split. There was no change to the shares authorized or in the par value per share of common stock of $0.00001.

The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity. The Company issued fractional shares at the participant level in connection with the Reverse Stock Split.

A. Common Stock

On January 22, 2026, Healthcare Triangle, Inc. entered into a share purchase agreement to acquire Teyame 360 S.L. (“Teyame”) and Datono Mediacion S.L. (“Datono”) through its wholly owned subsidiary Teyame AI Holdings Inc. The aggregate purchase price for the Acquired Companies is up to $50,000, subject to the terms and conditions set forth in the Share Purchase Agreement. The consideration consists of a cash component and equity component, split between common stock amounting to $12,000 and preferred stock amounting to $18,000 (to be issued), with an additional earnout component payable in the Company’s preferred stock upon achievement of specified post-closing performance targets. As of March 31, 2026,55,482 restricted shares of common stock and 424,856 pre-funded warrants convertible to common stocks were issued towards the $12,000 common stock issuance, whereas preferred stocks are yet to be issued. See note 5(B) for further details.

The Company effected a 1-for-60 reverse split of its issued and outstanding common stock on February 10, 2026. 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.** **

The movement of warrants during the quarters ended March 31 2026, and 2025, is shown below:

B. Preferred Stock Series C

On January 22, 2026, Healthcare Triangle, Inc. entered into a share purchase agreement to acquire Teyame 360 S.L. (“Teyame”) and Datono Mediacion S.L. (“Datono”) through its wholly owned subsidiary Teyame AI Holdings Inc. The aggregate purchase price for the Acquired Companies is up to $50,000, of which upto $23,000 (including $5,000 contingent earn-out consideration) is payable through issuance of Series C preferred stocks. These preferred stocks are subject to conversion to common stock in the ratio of 1:1 (one common stock forone preferred stock) at the discretion of the issuer (the Company), in accordance with the terms and conditions set forth in the Share Purchase Agreement. See note 5(B) for details.

C. Conversion of Debt to Equity

During the quarter ended March 31, 2026, the holders of the 2025 Debentures converted a portion of the Debentures into 27,086,245 shares of common stock (451,437 shares post reverse-split of one-for-sixty, effective February 10, 2026). See note 9(B) for details.

D. Equity Financing

During the three months ended March 31, 2026, the Company completed several equity financing activities designed to strengthen liquidity, support working capital needs, and fund general corporate and strategic initiatives.

The pre-funded warrants were deemed cashless, and were issued in lieu of common stock to certain investors and are exercisable immediately for an aggregate of 260,000 shares of common stock, subject to customary anti-dilution adjustments, and remain exercisable until exercised in full. The pre-funded warrants also provide for cashless exercise in certain circumstances, including if an effective registration statement or current prospectus is not available for the issuance of the underlying shares.

The Company received net proceeds of approximately $3,563 after deducting commissions and other offering expenses of approximately $397. Consistent with U.S. GAAP, the commissions and offering costs are recorded as a reduction of additional paid-in capital within stockholders’ equity.

13) Segment Information

Schedule of operating segment

Operating Results by Operating Segment

Revenue from top 5 customers

Schedule of concentration

14) Legal Matters

The Company is not involved in any action, arbitration and/or other legal proceedings that it expects to have a material adverse effect on the business, financial condition, results of operations or liquidity of the Company. All legal costs are expensed as incurred.

15) Stock Based Compensation

Schedule of stock option activity

The employee options balance available under the plan (for issuance) was 3,997,290 and 3,138,276 as of March 31, 2026, and March 31, 2025, respectively.

The following table summarizes the activities for our unvested options for the quarter ended March 31, 2026.

The following table summarizes the activities for our unvested options for the quarter ended March 31, 2025.

16) Loss per share

17) Subsequent Events

18) New Accounting Pronouncements

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. We adopted this ASU on a prospective basis effective January 1, 2026. While this ASU was adopted, we did not elect practical expedient permitted under this ASU. Therefore, the adoption has no impact on our consolidated financial statements.

Recent accounting pronouncements adopted or pending adoption not discussed above are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows.