8) Equity Transactions

On February 27, 2025, Healthcare Triangle, Inc. (the “Company”) entered into Securities Purchase Agreements dated February 27, 2025 (the “Purchase Agreement”) with institutional investors (the “Investors”) for the private placement of 36,190,485 units (each a, “Unit”), each Unit consisting of one share of the Company’s common stock (“Common Stock”) or one pre-funded warrant (a “Pre-Funded Warrant”) to purchase one share of common stock, one Series A Warrant (a “Series A Warrant”) to purchase one share of common stock and one Series B Warrant (a “Series B Warrant” and together with the Series A Warrant, the “Purchase Warrants”) to purchase one share of common stock at an offering price of $0.42 per Unit (or $0.41999 per Unit in the case of Units that include pre-funded warrants). The Common Stock, the Pre-Funded Warrants and the Purchase Warrants included in the Units and the Common Stock underlying the Pre-Funded Warrants and the Purchase Warrants are collectively referred to herein as the “Securities” and the Securities, other than the Pre-Funded Warrants, and the Purchase Warrants shall be referred to herein as the “Registrable Securities.” The entire transaction has been priced at the market under Nasdaq rules and closed on February 28, 2025. 

The initial exercise price for both the Series A Warrants and Series B Warrants is $0.84 per share and both terminate on the fifth anniversary of the later of (x) effective date of stockholder approval and (y) the earlier of (i) the effective date of the registration statement (the “Registration Statement”) filed by the Company to register the Registerable Securities or (ii) the date that the Registerable Securities can be sold, assigned or transferred without restriction or limitation pursuant to Rule 144 promulgated under the 1933 Act, as amended. The Purchase Warrants may not be exercised until stockholder approval of the exercise of the Purchase Warrants is effective (“Stockholder Approval”). The Company has agreed in the Purchase Agreement to obtain Stockholder Approval within 60 days of the closing date of the offering.

The Company received gross proceeds of approximately $15.2 million. Net proceeds to the Company were approximately $13.68 million, after deducting placement agent fees and other expenses payable by the Company.

The Company allocated the proceeds between the Common Stock, Pre-Funded Warrants, and Common Warrants on a relative fair value basis and recorded the amount allocated to the Common Warrants within additional paid-in capital on the accompanying consolidated balance sheet as the Common Warrants met all the criteria for equity classification. As the Common Warrants were equity classified, they do not require subsequent remeasurement after the issuance.

The Common Warrants contain standard adjustments to the exercise price including for stock splits, stock dividend, rights offerings and pro rata distributions.

Black Scholes warrant fair value:

Preferred Stock

The Company’s Certificate of Incorporation provides for a class of its authorized stock known as preferred stock, comprised of 10,000,000 shares, $0.00001 par value per share (the “Preferred Stock”), issuable from time to time in one or more series.

With respect to payment of dividends and distribution of assets upon liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, the Series A Convertible Preferred Stock will rank: (i) senior to all other classes or series of capital stock of the Corporation now existing or hereafter authorized, classified or reclassified, and (ii) junior to all Indebtedness of the Corporation now existing or hereafter authorized (including Indebtedness convertible into Common Stock).

The holders of the Series A Convertible Preferred Stock shall not be entitled to receive dividends paid on the Corporation's Common Stock.

With respect to payment of dividends and distribution of assets upon liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, the Series B Convertible Preferred Stock will rank: (i) senior to all other classes or series of capital stock of the Corporation now existing or hereafter authorized, classified or reclassified, and (ii) junior to all Indebtedness of the Corporation now existing or hereafter authorized (including Indebtedness convertible into Common Stock).

The holders of the Series B Convertible Preferred Stock shall not be entitled to receive dividends paid on the Corporation's Common Stock.

Series A Preferred Stock

On March 12, 2025, the Board of Directors of the Company approved the issuance of 14,000 Series A Preferred Stock to Mr Suresh Venkatachari.

Series B Preferred Stock

On October 21, 2024, the Company acquired the customer contracts from SecureKloud Technologies, Inc (an affiliate) and in consideration for the acquired assets, issued 1,600,000 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”) which is/are convertible each into 10 common shares at the holder’s option. The Series B Preferred Stock were valued at USD 7.44 million.