Company: HCTI
Filing Date: 2025-02-18
Form Type: 10-K/A
Source: 0001213900-25-014503
Chunk: 105

Company: Healthcare Triangle, Inc.
Filing Date: 2025-02-18
Form: 10-K/A
Chunk 105
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| Federal income tax               |     | $              |  — |     | $            | 443 |
| State income tax                 |     |                | 35 |     |              |  63 |
| Total Income expenses/ (benefit) |     | $              | 35 |     | $            | 506 |

The Company’s effective tax rate is % for
the year ended December 31, 2023 and % and for the year ended December 31, 2022. The future effective income tax rate depends on various
factors, such as the Company’s income / (loss) before taxes, tax legislation and the geographic composition of pre-tax income.

The Company files a consolidated federal tax return with its parent
and records its share of the consolidated federal tax expense on a separate return basis.

The Company’s current tax expense is $. There is no liability
in 2023 on account of losses.

The Company’s federal and state income tax
returns are generally subject to possible examination by the taxing authorities until the expiration of the related statute of limitations
on those tax returns which is generally three years from the original filing deadline. The Company regularly reviews its deferred tax
assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of
existing taxable temporary differences and tax planning strategies. The Company’s judgment regarding future profitability may change
due to many factors, including future market conditions and the ability to successfully execute the business plans and/or tax planning
strategies. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax provision would increase
or decrease in the period in which the assessment is changed.

12 A) New Accounting Pronouncements implemented

| Adoption of ASU 2020-06 |

| Effective December 31, 2023, the Company adopted ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Under the previous guidance, we accounted for the liability and equity components of our convertible notes separately, which resulted in a debt discount amortized as interest expense over the period of the Debt. The Company adopted ASU 2020-06 in financial year 2023 using the relative fair value method. The Company recorded $435,000 as debt discount and an allocation of $355,943 towards warrant was recorded as additional paid-in capital using the relative fair value method for the period ending