For the quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during th ...

Group 1 - The U.S. stock market showed mixed results with the Dow Jones down by 0.7%, while the Nasdaq rose by 0.18% and the S&P 500 increased by 0.07%. This was influenced by former President Trump's visit to the Federal Reserve, where he urged Chairman Powell to lower interest rates, marking the first visit by a sitting president in 20 years [1] - The Healthcare Triangle (HCTI.US) stock became a focal point in the U.S. market with a trading volume of 30.6 billion shares, accounting for approximately 15% of the total trading volume that day. The stock surged by 138% at the open and closed with a 115% increase at $0.051, with a total trading volume of $150 million, nearly seven times its current market capitalization [1] Group 2 - The Swift report indicated that in June 2025, the Renminbi ranked as the sixth most active global payment currency, with a share of 2.88%. The payment amount in Renminbi increased by 2.57% compared to May 2025, while the overall payment amount for all currencies rose by 2.85% [2] - The Shanghai Pudong New Area government released a plan to enhance the biopharmaceutical industry park from 2025 to 2027, focusing on attracting foreign investment and supporting the local production of innovative drugs [2] - The National Healthcare Security Administration reported that over 100 drug varieties have been submitted for inclusion in the innovative drug directory through single and dual directory applications [3] - The stock market index continued to show strong upward momentum with a trading volume around 1.9 trillion, indicating a robust trend that is likely to recover quickly even after adjustments [3] - The market is experiencing rapid sector rotation, with a recommendation to focus on the pharmaceutical and healthcare sectors for stability, while also considering rare earths, military, and technology sectors [3] - The main board stocks are facing high volatility, making it challenging for participation, thus suggesting a focus on the ChiNext and STAR Market based on trends [3]

Group 1 - Healthcare Triangle (HCTI.US) stock became a focal point in the U.S. stock market with a trading volume of 3.06 billion shares, accounting for approximately 15% of the total trading volume on that day [1] - The stock surged 138% at the opening and closed with a 115% increase at $0.051, with a total trading volume of $150 million, nearly seven times its current market capitalization [1] - This unusual volatility is seen as the latest case of the "Meme stock" craze, which has spread to several companies, including KSS.US, GPRO.US, DNUT.US, and OPEN.US, indicating a growing enthusiasm among retail traders for high-risk stocks [4] Group 2 - Market analysts note that retail investors are increasingly influenced by online opinion leaders rather than company fundamentals or long-term value, highlighting the role of social media in driving investment decisions [4] - The number of stocks involved in this speculative trading and the frequency of volatility are increasing, raising questions about whether these companies can replicate the capital-raising success seen by AMC.US and GME.US in 2021 [4] - Healthcare Triangle has not yet responded to the unusual market activity, which continues to test the boundaries of traditional market rules driven by social media [5]

[PART I – FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20statements) This section presents the unaudited condensed consolidated financial statements for Healthcare Triangle, Inc. for the quarterly period ended March 31, 2025, including Balance Sheets, Statements of Operations, Statements of Changes in Stockholders' Equity, Statements of Cash Flows, and accompanying notes [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of March 31, 2025, compared to December 31, 2024 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $6,826 | $20 | +$6,806 | | Total current assets | $9,840 | $1,452 | +$8,388 | | Total assets | $11,785 | $1,961 | +$9,824 | | **Liabilities & Equity** | | | | | Total current liabilities | $3,208 | $6,575 | -$3,367 | | Total liabilities | $3,208 | $7,075 | -$3,867 | | Total stockholders' equity (deficit) | $8,577 | $(5,114) | +$13,691 | - The company's financial position significantly improved, moving from a stockholders' deficit of **$(5.1) million** to a positive equity of **$8.6 million**, primarily driven by a substantial increase in cash from financing activities[20](index=20&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over the quarter, detailing revenues, costs, and net loss for Q1 2025 compared to Q1 2024 Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net revenue | $3,704 | $4,109 | -9.9% | | Cost of revenue | $3,375 | $3,095 | +9.0% | | Loss from operations | $(1,398) | $(1,713) | +18.4% | | Net loss | $(1,700) | $(1,862) | +8.7% | | Net loss per share (basic and diluted) | $(0.17) | $(0.42) | +59.5% | - Despite a **9.9% decrease** in net revenue and a **9.0% increase** in cost of revenue, the company reduced its net loss by **8.7%** year-over-year, primarily due to a significant reduction in total operating expenses from **$2.7 million** to **$1.7 million**[22](index=22&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20%28Deficit%29) This section details the changes in the company's equity position, including the impact of net loss, stock issuances, and debt conversions - Stockholders' equity turned from a deficit of **$(5.1) million** at the end of 2024 to a positive **$8.6 million** at the end of Q1 2025[25](index=25&type=chunk) - Key activities impacting equity in Q1 2025 included a net loss of **$(1.7) million**, issuance of common stock and warrants for cash (raising **$15.2 million** gross), and conversion of debt to equity (**$1.2 million**)[25](index=25&type=chunk)[111](index=111&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities, highlighting the net change in cash for the period Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,557) | $(50) | | Net cash provided by/ (used in) investing activities | $0 | $0 | | Net cash provided by/ (used in) financing activities | $12,363 | $(883) | | **Net increase (decrease) in cash** | **$6,806** | **$(933)** | - The company's cash position increased significantly due to **$12.4 million** in net cash from financing activities, which included **$13.7 million** from an equity issuance, offsetting a **$5.6 million** cash use in operations[30](index=30&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures regarding the accounting policies, significant transactions, and financial data presented in the consolidated financial statements - The company provides IT and data services to the Healthcare and Life Sciences (HCLS) industry, focusing on digital transformation, security, data lifecycle management, and interoperability[32](index=32&type=chunk)[33](index=33&type=chunk) Revenue by Segment (Q1 2025 vs Q1 2024, in thousands) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | Change % | | :--- | :--- | :--- | :--- | | Software services | $1,652 | $2,025 | (18)% | | Managed services and support | $1,982 | $1,996 | (1)% | | Platform services | $70 | $88 | (20)% | | **Total Revenue** | **$3,704** | **$4,109** | **(10)%** | - The company has significant customer concentration, with the top 5 customers accounting for **57%** of total revenue in Q1 2025, down from **70%** in Q1 2024[87](index=87&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - On February 27, 2025, the company entered into a securities purchase agreement for a private placement, raising gross proceeds of approximately **$15.2 million** (**$13.68 million** net)[106](index=106&type=chunk)[108](index=108&type=chunk) - During Q1 2025, the company converted **$875,000** of principal from the L1 Capital convertible note into **2,629,039 shares** and repaid a **$1,500,000** convertible note to Pioneer Garage[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the first quarter of 2025 compared to 2024, covering revenue changes, operating expenses, segment performance, and an improved liquidity position due to significant financing activities [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's revenue, cost of revenue, and operating expenses, explaining the factors contributing to the financial results for the quarter Overall Performance (Q1 2025 vs Q1 2024, in thousands) | Metric | Q1 2025 | Q1 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | $3,704 | $4,109 | $(405) | (10)% | | Cost of Revenue | $3,375 | $3,095 | $280 | 9% | | Sales and Marketing | $373 | $883 | $(510) | (58)% | | Depreciation and Amortization | $12 | $536 | $(524) | (98)% | | Interest Expense | $413 | $149 | $264 | 177% | - Revenue decreased by **10%** YoY, driven by declines across all segments: Software Services (**-14%**), Managed Services and Support (**-5%**), and Platform Services (**-20%**)[215](index=215&type=chunk) - The company is strategically shifting focus from non-recurring Software Services to recurring Managed Services and Platform Services to enhance long-term growth and customer retention[216](index=216&type=chunk) - Cost of revenue for Managed Services and Support increased by **29%** YoY, while it decreased for Software Services (**-5%**) and Platform Services (**-84%**)[217](index=217&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations, detailing cash flow activities and the impact of recent financing on its liquidity position - The company's liquidity position has significantly improved, with cash and cash equivalents increasing to **$6.8 million** as of March 31, 2025, from **$0.3 million** a year prior[223](index=223&type=chunk)[224](index=224&type=chunk) - The current ratio improved to **3.0** as of March 31, 2025, compared to **0.7** at the end of 2024, indicating a much stronger ability to meet short-term obligations[220](index=220&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash flows used in operating activities | $(5,557) | $(50) | | Cash flows provided by / (used in) financing activities | $12,363 | $(883) | - Management believes existing cash will be sufficient to meet working capital needs for the next 12 months[225](index=225&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that it does not have investments and does not use derivative financial instruments, indicating minimal exposure to market risks such as interest rate fluctuations - The company does not utilize derivative financial instruments to manage interest rate risks[231](index=231&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms management's evaluation of the company's disclosure controls and procedures, concluding their effectiveness as of March 31, 2025, with no material changes to internal control over financial reporting identified - Management, including the COO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025[232](index=232&type=chunk) - There were no changes to internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[233](index=233&type=chunk) [PART II - OTHER INFORMATION](index=48&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently involved in any material legal proceedings outside the ordinary course of business - The company is involved in routine litigation that arises in the ordinary course of business but is not currently involved in any claims expected to be material to its financial condition or results[236](index=236&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K filed on March 31, 2025 - As of the filing date, there have been no material changes to the risk factors disclosed in the company's most recent Annual Report on Form 10-K[237](index=237&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section discloses a private placement of equity securities that occurred on February 27, 2025, where the company sold 36,190,485 units to institutional investors, each unit comprising common stock or a pre-funded warrant, a Series A Warrant, and a Series B Warrant - On February 27, 2025, the company entered into agreements with institutional investors for a private placement of **36,190,485 units** at a price of **$0.42** per unit[238](index=238&type=chunk) [Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports that this item is not applicable - Not applicable[239](index=239&type=chunk) [Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports that this item is not applicable - Not applicable[239](index=239&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) The company reports that there is no other information to disclose for this item - None[239](index=239&type=chunk) [Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists all the exhibits filed with the Form 10-Q, including corporate governance documents, forms of warrants and securities purchase agreements related to the February 2025 financing, employment agreements, and Sarbanes-Oxley certifications - Lists exhibits filed with the report, including forms of Series A/B Warrants, the Securities Purchase Agreement, and officer certifications[240](index=240&type=chunk)

New York, NY, March 04, 2025 (GLOBE NEWSWIRE) -- Spartan Capital Securities, LLC, a premier investment banking firm, is pleased to announce the successful completion of a $15.2 million private placement for Healthcare Triangle, Inc. (Nasdaq: HCTI). Spartan Capital Securities, LLC acted as Co-Placement Agent in this private offering, supporting Healthcare Triangle’s continued expansion and digital transformation initiatives in the healthcare and life sciences industries. The proceeds from this offering will ...

Financial Performance - Net revenue for the three months ended September 30, 2024, was $2,413,000, a decrease of 69.0% compared to $7,779,000 for the same period in 2023[13]. - Net loss for the three months ended September 30, 2024, was $1,249,000, compared to a net loss of $1,943,000 for the same period in 2023, representing a 35.7% improvement[13]. - Total revenue for the three months ended September 30, 2024, was $2,413 thousand, a decrease of 69% compared to $7,779 thousand in the same period of 2023[39]. - For the nine months ended September 30, 2024, total revenue was $9,506 thousand, down 64% from $26,143 thousand in the same period of 2023[39]. - The company reported a net loss of $1,247 thousand for the three months ended September 30, 2024, an improvement of 36% compared to a net loss of $1,939 thousand in 2023[40]. - Net income for the nine months ended September 30, 2024, was a loss of $4,621,000, an improvement from a loss of $7,007,000 in the same period of 2023, representing a 34.5% reduction in losses[16]. Assets and Liabilities - Total current assets decreased to $1,784,000 as of September 30, 2024, down from $5,294,000 as of December 31, 2023, a decline of 66.3%[12]. - Total liabilities decreased to $6,584,000 as of September 30, 2024, from $9,076,000 as of December 31, 2023, a reduction of 27.5%[12]. - Cash and cash equivalents significantly decreased to $28,000 as of September 30, 2024, from $1,234,000 as of December 31, 2023[12]. - Total stockholders' equity (deficit) as of September 30, 2024, was $(1,818,000), compared to $538,000 as of December 31, 2023[12]. Operating Expenses - Operating expenses for the three months ended September 30, 2024, were $1,889,000, down from $3,231,000 for the same period in 2023, a decrease of 41.6%[13]. - Research and development expenses for the three months ended September 30, 2024, were $175,000, compared to $1,101,000 for the same period in 2023, a decrease of 84.1%[13]. - General and Administrative expenses decreased by $0.3 million, or 21%, to $1.1 million for the quarter ended September 30, 2024, compared to $1.4 million for the same period in 2023[178]. - Interest expenses decreased by $0.3 million, or 81%, to $0.08 million for the quarter ended September 30, 2024, compared to $0.42 million for the same period in 2023[180]. Revenue Breakdown - Software Services revenue for the three months ended September 30, 2024, was $775 thousand, a decline of 84% from $4,918 thousand in 2023[39]. - Managed Services and Support revenue decreased by 36% to $1,571 thousand for the three months ended September 30, 2024, compared to $2,456 thousand in 2023[39]. - Platform Services revenue fell 83% to $67 thousand for the three months ended September 30, 2024, down from $405 thousand in 2023[39]. - Revenue from Software Services decreased by $4.1 million, or 84%, to $0.8 million for the quarter ended September 30, 2024, compared to $5.0 million for the same period in 2023[183]. - Cost of Revenue decreased by $4.4 million, or 72%, to $1.7 million for the quarter ended September 30, 2024, compared to $6.1 million for the same period in 2023[174]. Customer Concentration - The top five customers contributed 61% of total revenue for the three months ended September 30, 2024, with the largest customer accounting for 21% of revenue[41]. - Revenue from the top five customers accounted for approximately 61% of total revenue for the quarter ended September 30, 2024, down from 78% in the same quarter of 2023[84]. Cash Flow and Financing - Net cash used in operating activities was $(270,000) for the nine months ended September 30, 2024, compared to $(2,750,000) in the same period of 2023, indicating a significant improvement in cash flow[16]. - Cash outflow from financing activities was $(1.1) million for the six months ended September 30, 2024, compared to an inflow of $1.5 million for the same period in 2023[194]. - The company issued senior secured convertible promissory notes totaling $5,200,000, resulting in gross proceeds of up to $4,420,000 due to the original issue discount[27]. Corporate Governance and Compliance - The Chief Financial Officer has certified compliance with the Securities Exchange Act of 1934, ensuring financial reporting accuracy[31.2]. - The certifications by the Chief Executive Officer and Chief Financial Officer demonstrate a commitment to corporate governance and accountability[31.1][32.2]. - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements, including ASU 2021-08 and ASU 2021-10[118][119]. Strategic Focus - The company emphasizes its focus on digital transformation in the healthcare sector, leveraging technologies such as AI, ML, and IoT to enhance operational efficiency[21]. - The company aims to shift focus towards Managed Services and Support and Platform Services to drive long-term revenue growth and enhance customer retention[184]. - The company expects to increase its research and development expenses as it focuses on developing new product offerings and enhancing existing ones[158]. - The company anticipates that its sales and marketing expenses will continue to increase in absolute dollar terms as it strategically invests to expand its business[160]. Employee and Operational Metrics - The company has a total of 22 full-time employees and 114 sub-contractors, including 90 certified cloud engineers as of September 30, 2024[137]. - The company operates from two office locations leased by the parent and has paid rent of $34 for the quarter ended September 30, 2024, down from $67 for the same quarter in 2023[97]. Taxation - The Company's total income tax expense for the quarter ended September 30, 2024, was $8,000, compared to $28,000 for the same quarter in 2023, reflecting a decrease of 71.43%[115]. - The effective tax rate for the quarter ended September 30, 2024, was 0%, consistent with the rate for the same quarter in 2023[116]. Shareholder Information - The company issued 50,000 shares for services during the three months ended September 30, 2024[14]. - The weighted average shares outstanding used in per common share computations for the three months ended September 30, 2024, was 5,666,781[13]. - The company has a Warrant liability of $1,333 at fair value as of September 30, 2024[108]. Legal and Regulatory Matters - The company is not involved in any legal proceedings that are expected to have a material adverse effect on its business or financial condition[120]. - The company has not experienced major impacts from COVID-19 during the quarter ended September 30, 2024, and has managed to service its debt and obligations on time[144].

Core Viewpoint - Zacks Investment Research has initiated coverage of Healthcare Triangle, Inc. (HCTI) with an "Underperform" recommendation due to significant financial challenges and concerns about future growth prospects and liquidity [1] Company Overview - Healthcare Triangle, based in Pleasanton, CA, operates in the healthcare information technology sector, providing cloud services, data science, and managed services to healthcare and life sciences industries [2] Financial Performance - In Q2 2024, Healthcare Triangle's revenues fell by 65% year over year to $2.9 million, driven by an 87% decline in its Software Services segment [3] - The company reported a net loss of $1.5 million in Q2 2024, an improvement from a loss of $1.8 million in the previous year, but still presents ongoing risks to investor confidence [3] Liquidity and Financial Risks - As of June 2024, HCTI's cash reserves have dwindled to $29,000, with short-term borrowings of $1.7 million and total liabilities of $6.2 million, indicating severe liquidity issues [4] - The company relies heavily on external funding, which may lead to shareholder dilution and additional downward pressure on the stock [4] Customer Concentration and Growth Risks - HCTI's revenue is heavily dependent on a few large clients, with 68% of Q2 revenues coming from its top five customers, creating vulnerability to potential contract losses [5] - The financial statements include a going concern warning, raising significant investor concerns about the company's long-term viability [5] Potential Growth Opportunities - Healthcare Triangle's expertise in cloud services and artificial intelligence solutions presents growth potential, especially as the healthcare sector prioritizes digital transformation [6] - The company's Software-as-a-Service offerings, such as CloudEz and DataEz, are scalable and generate recurring revenues, which could enhance financial stability [6] - Efforts to diversify the customer base from reliance on a few large clients to a broader range of mid-size healthcare organizations may reduce individual customer risks [6] Market Performance - HCTI's stock has underperformed compared to industry peers and the broader market over the past year, reflecting investor concerns about its financial health and growth prospects [7]

Financial Performance - Net revenue for the three months ended June 30, 2024, was $2,984 thousand, compared to $8,526 thousand for the six months ended June 30, 2024, representing a decrease of approximately 65% year-over-year[12]. - The cost of revenue for the three months ended June 30, 2024, was $2,086 thousand, while for the six months it was $6,579 thousand, indicating a significant increase in costs[12]. - Total operating expenses for the three months ended June 30, 2024, were $2,276 thousand, down from $3,542 thousand for the six months, reflecting a reduction of about 36%[12]. - The net loss for the three months ended June 30, 2024, was $1,510 thousand, compared to a net loss of $1,786 thousand for the six months, showing a slight improvement[12]. - The company reported a loss from operations of $1,378 thousand for the three months ended June 30, 2024, compared to a loss of $1,595 thousand for the six months, indicating a narrowing of losses[12]. - Net income for June 2024 was a loss of $3,372,000, an improvement from a loss of $5,064,000 in 2023, indicating a reduction in losses[15]. - The weighted average shares outstanding used in calculating net loss per common share for the three months ended June 30, 2024, was 5,616,781 shares, resulting in a net loss per share of $(0.28)[12]. - Basic and diluted earnings per share (EPS) for the quarter ended June 30, 2024, were $(0.28), an improvement from $(0.42) in the prior year[118]. Revenue Breakdown - Total revenue for the three months ended June 30, 2024, was $2,984,000, a decrease of 65% compared to $8,526,000 in the same period of 2023[34]. - Software Services revenue for the six months ended June 30, 2024, was $2,235,000, down 81% from $11,643,000 in the same period of 2023[34]. - Managed Services and Support revenue for the three months ended June 30, 2024, was $2,253,000, a decrease of 21% from $2,865,000 in the same period of 2023[34]. - Revenue from the top five customers accounted for approximately 68% of total revenue for the quarter ended June 30, 2024, down from 81% in the same quarter of 2023[73]. - The top customer contributed 31% of revenue for the three months ended June 30, 2024, amounting to $925,000, down from 53% and $4,519,000 in the same period of 2023[36][38]. Cash Flow and Liquidity - Cash flows from operating activities showed a net cash used of $985,000 in June 2024, compared to $2,750,000 in the same period of 2023, reflecting improved cash management[15]. - The company reported cash and cash equivalents at the end of the period of $29,000, down from $132,000 in 2023, indicating a significant decrease in liquidity[15]. - The total short-term borrowing as of June 30, 2024, is $1,726, a decrease from $3,429 as of December 31, 2023[98]. - The company has a substantial level of indebtedness, which poses risks to its financial stability and ability to repay debt[6]. Investments and Future Prospects - Future growth prospects depend on the company's ability to attract and retain customers, develop new solutions, and manage competition effectively[6]. - The company is focused on maintaining high customer retention rates and enhancing its brand presence in the market[6]. - The parent company, SecureKloud Technologies, Inc., is willing to invest an additional $5 million in equity to support the company's working capital and investment requirements[25]. - The company anticipates gross proceeds of up to $4,420,000 from the issuance of senior secured convertible promissory notes, with an initial tranche of $2,000,000 already issued[24]. - The company has sold $956,000 of shares through its ATM Sales Agreement and plans to utilize an additional capacity of $1,444,000 in the near future[23]. Operational Efficiency - Research and development expenses for the three months ended June 30, 2024, were $207 thousand, while sales and marketing expenses were $631 thousand, highlighting ongoing investment in these areas[12]. - The company is focused on digital transformation in the healthcare sector, leveraging technologies such as AI, ML, and IoT to improve operational efficiencies[18]. - The impact of COVID-19 has not materially affected the company's financial condition, but it has accelerated the adoption of digital solutions in the healthcare sector[20]. Acquisitions and Goodwill - The company has consolidated financials from its acquisition of Devcool, Inc., which enhances its capabilities in solving complex technology problems in the healthcare industry[19]. - The aggregate purchase price for the acquisition of Devcool Inc was $7,773, including $4,500 in cash and $700 in equity[85]. - The Company recorded $1,289 of goodwill from the acquisition of Devcool, which is not tax deductible[88]. - The Company fully impaired goodwill in Q4 FY 2023 due to the loss of a major customer[59]. Shareholder Information - The company has issued warrants convertible into common stock at a price of $7.99 per share, with none exercised as of June 30, 2024[92]. - As of June 30, 2024, the company has 967,256 outstanding warrants with a weighted average exercise price of $7.99 and an aggregate intrinsic value of $3,785[95]. - The company reported a warrant liability of $1,333 at fair value as of June 30, 2024, with the estimated fair value of common stock warrants at $3.91[97]. - The company has not declared or paid any dividends and does not plan to do so in the foreseeable future[109]. Tax and Compliance - The company's effective tax rate is 0% for the quarter ended June 30, 2024, consistent with the previous year[102]. - The company has no uncertain tax positions requiring recognition as of the date of these financial statements[100]. - The company is currently evaluating the impact of new accounting pronouncements on its consolidated financial statements[105]. Internal Controls and Risk Management - There were no changes to internal control over financial reporting during the three months ended June 30, 2024, that materially affected the company's controls[178]. - The company did not utilize derivative financial instruments to manage interest rate risks, indicating a conservative approach to market risk[177].

Financial Performance - Net revenue for Q1 2024 was $4,109,000, a decrease of 58% compared to $9,838,000 in Q1 2023[21] - Net loss for Q1 2024 was $1,862,000, compared to a net loss of $3,278,000 in Q1 2023, representing a 43.2% improvement[21] - Revenue for the quarter ended March 31, 2024, was approximately $4.1 million, a decrease of $5.7 million or 58% compared to $9.8 million for the quarter ended March 31, 2023[159] - Basic and diluted EPS for the quarter ended March 31, 2024, were $(0.42) and $(0.42) respectively, compared to $(0.79) for the same period in 2023[154] - The total segment operating loss improved by 89% to $(115,000) from $(1,046,000) in the prior year[52] Revenue Breakdown - Software services revenue decreased by 33% to $2,025,000, managed services and support revenue decreased by 69% to $1,996,000, and platform services revenue decreased by 74% to $88,000[51] - Revenue from Software Services decreased by $3.6 million, or 82%, to $0.79 million for the quarter ended March 31, 2024, compared to $4.4 million for the same period in 2023[196] - Revenue from the top five customers accounted for approximately 70% of total revenue for the quarter ended March 31, 2024, down from 80% in the same quarter of 2023[90] - Revenue concentration from the top five customers for the three months ended March 31, 2024, shows Customer 1 contributing 20% and Customer 2 contributing 18%[53] Expenses and Cost Management - Operating expenses decreased by 43.3% from $4,802,000 in Q1 2023 to $2,722,000 in Q1 2024[21] - Research and development expenses were $127,000 in Q1 2024, down from $539,000 in Q1 2023, a reduction of 76.5%[21] - Marketing and advertising expenses for the quarters ended March 31, 2024, and March 31, 2023, were $268,000 and $214,000 respectively[89] - General and administrative expenses decreased by $0.4 million, or 28%, to $1.2 million for the quarter ended March 31, 2024, compared to $1.6 million for the same period in 2023[200] - Sales and marketing expenses decreased by $0.9 million, or 50%, to $0.88 million for the quarter ended March 31, 2024, compared to $1.7 million for the same period in 2023[199] Assets and Liabilities - Total current assets decreased by 44.6% from $5,729,000 as of December 31, 2023, to $3,169,000 as of March 31, 2024[19] - Total liabilities decreased by 22.4% from $9,511,000 as of December 31, 2023, to $7,383,000 as of March 31, 2024[19] - The company has a total outstanding debt of $1,250,000 as of March 31, 2024, down from $2,000,000 as of December 31, 2023, after repaying $787,000 of convertible promissory notes during the quarter[113][114] - Cash and cash equivalents decreased from $1,234,000 at the beginning of Q1 2024 to $301,000 at the end of the period[25] Financing and Investment - The company issued 417,395 shares during Q1 2024, increasing additional paid-in capital to $26,256,000[23] - An institutional investor has agreed to purchase convertible promissory notes totaling up to $5,200,000, resulting in gross proceeds of up to $4,420,000 for the Company[37] - The Parent Company, SecureKloud Technologies, Inc., is willing to invest an additional $5 million in equity to support the Company's working capital and investment requirements[38] - The Company has sold $956,000 of shares through the ATM Sales Agreement and plans to sell an additional capacity of approximately $500,000[36] Operational Insights - The company continues to focus on digital transformation solutions for the healthcare sector, leveraging technologies such as AI and Big Data[28] - The Company operates in three distinct reportable segments: Software Services, Managed Services and Support, and Platform Services[47] - The company aims to shift focus towards Managed Services and Support and Platform Services to drive long-term revenue growth and enhance customer retention[206] Future Outlook - The company plans to continue investing in sales and marketing to promote its solutions, anticipating an increase in employee strength due to these investments[168] - Research and development expenses are expected to increase in absolute dollars as the company focuses on developing new product offerings and enhancing existing ones[181] - General and administrative expenses are anticipated to increase to support business growth, although they are expected to decrease as a percentage of revenue over the long term[186] - The company expects that the recent financing transactions will positively impact stockholders' equity by Q4 2024[37]

PLEASANTON, Calif., April 04, 2024 (GLOBE NEWSWIRE) -- Healthcare Triangle, Inc. (NASDAQ:HCTI) ("Healthcare Triangle," "HCTI" or the "Company"), a leading provider of healthcare IT solutions, is thrilled to announce its partnership with Cynomi, a pioneer vCISO platform vendor. This collaboration introduces an innovative Virtual Chief Information Security Officer (vCISO) service tailored specifically for the healthcare provider market, setting a new standard in cybersecurity and compliance. The vCISO platfor ...