Healthcare Triangle, Inc.

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 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 6[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 $7,696, had negative operating cash flows of $7,697, and accumulated deficits of $53,489 as of June 30, 2026. Management evaluated these conditions and concluded that they have been sufficiently mitigated by the Company’s net assets of $49,099 (including cash and cash equivalents of $1,906) at June 30, 2026, and the subsequent stockholders’ approval of an Equity Line of Credit pursuant to which the Company can elect to issue shares of its common stock up to a value of $50,000 (see notes 12(D)[iii] and 17). In addition, the Company continues to have access to At-the-Market Sales Agreement dated November 18, 2025, pursuant to which the Company can issue its common stock at market prices. 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.

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 June 30, 2026, the results of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for the six months ended June 30, 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.

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 are 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, acquired through business combination (see note 6), provides customer search, marketing, telemarketing and customer-support services to financial institutions, insurance companies and intermediaries, and other customers. These services include the promotion and distribution of banking, credit and insurance products; outbound and inbound telemarketing; lead generation and customer-search campaigns; appointment setting; customer service and satisfaction surveys; and technology-enabled digital marketing and customer-interaction services supporting customers’ digital search and customer-care strategies.

The Company recognizes revenue from Customer Engagement Services in accordance with ASC 606,Revenue from Contracts with Customers. Revenue is recognized when or as the Company satisfies its performance obligations by transferring the promised services to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services.

Under these arrangements, the Company generally performs the customer-engagement services using its own personnel, processes, systems and operational infrastructure and is primarily responsible for fulfilling the promised services in accordance with contractual requirements and applicable quality standards. The Company has determined that it controls the specified services before they are transferred to the customer and, accordingly, acts as the principal in these arrangements and recognizes revenue on a gross basis.

Consideration under Customer Engagement Services arrangements is generally based on either a fee for each completed and validated outcome or an agreed hourly rate for services provided.

For success-based arrangements, revenue is recognized at a point in time when the applicable contractual outcome has been completed and validated by the customer in accordance with contractual terms. To the extent such consideration is variable, revenue is recognized only to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur.

For hourly service arrangements, revenue is recognized over time as the services are performed because the customer simultaneously receives and consumes the benefits of the Company’s performance. Revenue is measured based on the contracted hourly rate and the actual hours of service provided during the applicable reporting period.

Revenue is presented net of estimated cancellations, penalties and other adjustments to the extent such amounts represent adjustments to the transaction price under the applicable customer contracts.

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 June 30, 2026, and 2025, sales to five major customers accounted for approximately 55% and 58% of total revenue respectively. For the quarters ended June 30, 2026, and 2025, accounts receivable from five major customers accounted for approximately 55% and 52% of the total accounts receivable.

As of June 30, 2026, and December 31, 2025, the Company had $721 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

3.1) Current Expected Credit Loss movement*:

4. Advances

4.1) Provision during the period:

As of June 30, 2026 and December 31, 2025, the balances outstanding are $3,260, and $3,826 respectively. The balances are unsecured, non-interest bearing and are expected to be settled in the ordinary course of business, as outlined below:

On June 24, 2026, the Company entered into a Securities Exchange Agreement with SecureKloud pursuant to which certain preferred equity securities held by SecureKloud were exchanged for shares of the Company’s common stock following receipt of stockholder approval subsequent to June 30, 2026. As part of the consideration under the Securities Exchange Agreement, advance amounting to $626 due from SecureKloud was included in the transaction. Accordingly, the Company recorded a full provision against the advance of $626 during the six months ended June 30, 2026. See also Note 17, Subsequent Events.

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

5. Other current assets

6. 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 June 30, 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 June 30, 2026, and December 31, 2025. There areno impairment indicators as at June 30, 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 during April, 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 stockholders’ approval. As of June 30, 2026,55,482 restricted shares of common stock and 424,856 pre-funded warrants convertible to common stock were issued towards the $12,000 common stock issuance, whereas consideration in the form of preferred stocks, convertible to common stock at the Company’s discretion, have been issued subsequent to June 30, 2026 (see Subsequent Events note 17). 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 stockholder 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.

During the period ended June 30, 2026, the Company purchased intangible assets amounting to $3. Amortization expense for the quarter ended June 30, 2026 and 2025, were 376 and $0 respectively.

7. Furniture and Equipment

Furniture and equipment consisted of the following:

During the period ended June 30, 2026, the Company purchased furniture and equipment amounting to $50 and disposed-off furniture and equipment having a net book value of nil, for $6. In addition, the Company acquired furniture and equipment with a cost of $5,169 and accumulated depreciation of $3,717 as part of the business combination (see note 6[B] for details).

Depreciation expenses for the quarters ended June 30, 2026, and 2025, were $153 and $0 respectively and for the six months ended June 30, 2026, and 2025, were $323 and $12 respectively.

8. 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.

ROU Asset:

The Company’s principal facility is located in Pleasanton, CA. Lease rental for the quarter and six months ended June 30, 2026, were $17 and $36 respectively, whereas rental expenses for the quarter and six months ended June 30, 2025, were $45 and $89 respectively. The amortization of the ROU asset for the quarter and six months ended June 30, 2026, remained $11 and $15 respectively.

In addition, the Company acquired right-of-use assets and lease liability as part of the business combination (see note 6[B] for details). The Company acquired right-of-use assets with a cost of $4,096 and accumulated depreciation of $3,065 as part of the business combination (see note 6[B] for details). The lease relates to an office building located at Calle Rufino González 21, 28037 Madrid, a vehicle and a parking space. The lease terms are 84 months for the building,48 months for the vehicle and 15 months for the parking space. The leases were measured using discount rates of 1.50% for building 6.99% for vehicle and 5.24% for parking space, resulting in lease liabilities of $796 for the building, $47 for vehicle and $152 for the parking space as of June 30, 2026. Lease rental expense for the quarter ended and six months ended June 30, 2026, were $223 and $426 respectively.

Lease liability:

Future minimum lease obligations under our non-cancellable lease agreement as of June 30, 2026, and December 31, 2025, are as follows:

9. Short-Term Debt

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 up to 90% of the unpaid domestic outstanding accounts under the recourse agreement.

The SBF facility incurred a factoring interest cost of 8.5% during the six months ended June 30, 2026, amounting to $16 and 8.5% for the period ended December 31, 2025, amounting to $81. The gross receivables against which advances were received from such arrangement as at June 30, 2026, and December 31, 2025, were $5,555 and $9,633 respectively.

The carrying amount of associated recourse financing liability was nil and $161, as of June 30, 2026, and December 31, 2025, respectively.

In addition, a recently acquired subsidiary of the Company with an acquisition date of January 1, 2026, 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 $4,004, 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 3.51% to 4.05% during six months ended June 30, 2026, whereas the interest cost during the six months ended June 30, 2026, amounting to $37. The gross receivables against which advances were received from such arrangement as at June 30, 2026, were $6,082.

The carrying amount of associated recourse financing liability was $3,935 as at June 30, 2026.

B. 2025 Convertible Notes

As of December 31, 2025, the 2025 Convertible Notes had a fair value of $10,543. During the period ended June 30, 2026, the Company repaid $3,340, converted $10,167 of the notes to common stock, and recognized a loss of $2,964 from changes in fair value.

On June 12, 2026, the Company used a portion of the proceeds from the issuance of the 2026 Convertible Notes (see note 9[C]) to settle the remaining obligations under the 2025 Convertible Notes. The remaining liability was remeasured to fair value immediately prior to settlement, and derecognized upon payment of the settlement consideration.

As a result of the repayments, conversions and changes in fair value during the six months ended June 30, 2026, the Company had no outstanding obligations under the 2025 Convertible Notes as of June 30, 2026.

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

C. 2026 Convertible Notes

On June 12, 2026, the Company completed a private placement to unrelated institutional investors of 15% original issue discount senior convertible promissory notes (“2026 Debentures”) with an aggregate principal amount of approximately $4,235 for aggregate gross cash proceeds of $3,600. The difference between the aggregate face value of $4,235 and the proceeds of $3,600 represents an original issue discount of $635, which is reflected in the initial fair value measurement of the debentures. The notes mature on December 12, 2026. The 2026 Debentures are convertible into shares of the Company’s common stock at the holders’ option after the applicable contractual conversion date at a conversion price equal to 85% of the volume-weighted average price of the Company’s common stock for thethree trading days immediately preceding conversion, subject to a floor price of $0.452 per share and certain adjustments.

The Company has the option to prepay the 2026 Debentures at 102.5% of the principal amount being prepaid plus accrued interest and other amounts owing. In addition, the Company is generally required to apply 25% of the net proceeds from specified subsequent financing transactions toward repayment of the notes unless waived by the applicable holder. The 2026 Debentures bear interest at 10% per annum upon the occurrence and continuation of an event of default. The Company may extend the maturity date for three months, in which case the outstanding principal amount is increased by 10%.

The Company elected the fair value option for these debentures under ASC 825, Financial Instruments, at initial recognition. Accordingly, the 2026 Debentures are recorded at fair value and remeasured at each reporting date, with changes in fair value recognized in earnings.

The fair value of these debentures is classified within Level 3 of the fair value hierarchy because the valuation uses significant unobservable inputs and management judgment. The Company engaged an independent third-party valuation specialist to estimate the fair value of the debentures using a Monte Carlo simulation model. The valuation model simulated multiple potential future stock-price paths and expected settlement outcomes and incorporated the contractual terms of the instruments, including the variable conversion feature, floor price, maturity, and other debt-specific provisions.

The following table represents changes in the fair value of the 2026 Debentures for the periods presented:

As of June 30, 2026, significant assumptions used by an independent third-party valuer in the valuation included the Company’s common stock price of $1.81 per share, expected volatility of 90.07%, a risk-free rate of 3.98%, and a remaining contractual term of approximately 0.45 years. 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 observe transaction proceeds. No financing below the contractual floor price is expected in 2026, and accordingly no floor-reset event was incorporated into the June 30, 2026, valuation.

D. Debt from credit institutions

Teyame and Datono have secured various credit facilities across multiple financial institutions. As of June 30, 2026, the total available credit facilities and loans amounted to $8,763, and the amount withdrawn and utilized as of that date was $8,103, of which $5,441 is due within a period of 12 months from the balance sheet date, whereas $2,662 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.

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 6(B) for details.

12. Stockholders’ 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. During the period ended June 30, 2026,55,482 restricted shares of common stock and 424,856 pre-funded warrants convertible to common stock were issued towards the $12,000 common stock issuance, whereas preferred stock is yet to be issued. See note 6(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 periods ended June 30 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 up to $23,000 (including $5,000 contingent earn-out consideration) is payable through issuance of Series C preferred stock. This preferred stock is subject to conversion to common stock in the ratio of 1:1 (one common stock forone preferred stock) at the discretion of the issuer, in accordance with the terms and conditions set forth in the Share Purchase Agreement. See note 6(B) and 17 for details.

C. Conversion of Debt to Equity

During the period ended June 30, 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 period ended June 30, 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) were 3,997,292 and 3,138,280 as of June 30, 2026, and June 30, 2025, respectively.

The following table summarizes the activities for our unvested options for the period ended June 30, 2026.

The following table summarizes the activities for our unvested options for the period ended June 30, 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.