Company: HCTI
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001213900-25-109581
Chunk: 85

Company: Healthcare Triangle, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 85
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 when a performance obligation is satisfied. We account for a contract when it has approval
and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial
substance and collectability of consideration is probable. We apply judgment in determining the customer’s ability and intention
to pay based on a variety of factors including the customer’s historical payment experience.

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

Software Services

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

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

We may enter into contracts that consist of multiple
performance obligations. Such contracts may include any combination of our deliverables. To the extent a contract includes multiple promised
deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context
of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For
contracts with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their
relative standalone selling price. Standalone selling price is the