Company: HCTI
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001213900-25-045994
Chunk: 71

Company: Healthcare Triangle, Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 71
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 (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 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 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.