Company: HCTI
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001213900-25-109581
Chunk: 12

Company: Healthcare Triangle, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 and within
the stipulated time. 

Contract Balances 

The timing of revenue recognition, billings,
and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deferred
revenue (contract liabilities) on the Condensed Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with
agreed-upon contractual terms, generally monthly, upon achievement of contractual milestones. Typically, billing occurs after revenue
recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers, particularly on our
international contracts, before revenue is recognized, resulting in contract liabilities. These advances or deposits are liquidated when
revenue is recognized.

9

HEALTHCARE TRIANGLE, INC.

Notes To Condensed Consolidated Financial Statements

(Unaudited)

(In thousands except share and per share data)

Cash and Cash Equivalents

The Company considers all highly liquid investments
(including money market funds) with an original maturity at acquisition of three months or less to be cash equivalents. The Company maintains
cash balances, which may exceed federally insured limits. The Company does not believe that this results in any significant credit risk.

Accounts Receivable

The Company extends credit to clients based upon
the management’s assessment of their creditworthiness on an unsecured basis. Trade accounts receivable are stated at the amount
the Company expects to collect and do not bear interest. The Company includes any balances that are determined to be uncollectible in
its allowance for doubtful accounts.

Allowance
for Doubtful Accounts - (current expected credit loss)  

The Company provides an allowance for uncollectible accounts (current
expected credit loss) based on historical experience and management evaluation of trend analysis. The collectability of trade receivable
balances is regularly evaluated based on a combination of factors such as customer creditworthiness, past transaction history with the
customer, current economic industry trends and changes in customer payment pattern. Additionally, if it is determined that a customer
will be unable to fully meet its financial obligation, such as in the case of a bankruptcy filing or other material event impacting its
business, a specific allowance for doubtful accounts may be recorded to reduce the related receivable to the amount expected to be recovered.

Although we believe that our approach to significant
estimates and judgments regarding our allowance for doubtful accounts is reasonable, actual results could differ and we may be exposed
to increases or decreases in required allowances that could be material.

F