Company: HCTI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076686
Chunk: 102

Company: Healthcare Triangle, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 102
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 arbitration
and/or other legal proceedings that it expects to have a material adverse effect on the business, financial condition, results of operations
or liquidity of the Company. All legal cost is expensed as incurred.

15) Stock Based Compensation

We estimate the fair value of our stock options
using the Black-Scholes option pricing model. This requires the input of subjective assumptions, including the fair value of our underlying
common stock, the expected term of stock options, the expected volatility of the price of our common stock, risk-free interest rates,
and the expected dividend yield of our common stock, the most critical of which, prior to our IPO, was the estimated fair value of common
stock. The assumptions used in our option pricing model represent our best estimates. These estimates involve inherent uncertainties and
the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense
could be materially different in the future. The resulting fair value, net of actual forfeitures, is recognized on a straight-line basis
over the period during which an employee is required to provide service in exchange for the award.

These assumptions used in the Black-Scholes option
pricing model, other than the fair value of our common stock, are estimated as follows:

●Expected
volatility. Since a public market for our common stock did not exist prior to our IPO in October 2021 and, therefore, we do not have
an extensive trading history of our common stock, we estimated the expected volatility based on the volatility of similar publicly-held
entities (guideline companies) over a period equivalent to the expected term of the awards. In evaluating the similarity of guideline
companies to us, we considered factors such as industry, stage of life cycle, size, and financial leverage. We intend to continue to
consistently apply this process using the same or similar guideline companies to estimate the expected volatility until sufficient historical
information regarding the volatility of the share price of our common stock becomes available.

●Expected
term. We estimate the expected term using the simplified method, as we do not have sufficient historical exercise activity to develop
reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The simplified method calculates
the average period the stock options are expected to remain outstanding as the midpoint between the vesting date and the contractual
expiration date of the award.

●Risk-free
interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant