Healthcare Triangle, Inc. Debt Disclosure
9) Debt Securities
A. Convertible Note
On December 28, 2023, the Company entered into the Securities Purchase Agreement with the selling stockholder, pursuant to which the Company agreed to issue to the selling stockholder, in a private placement (the “Private Placement”), Senior Secured 15% Original Issue Discount Convertible Promissory Notes (the “Notes”) in the aggregate principal amount of up to $5,200,000 which will result in gross proceeds to the Company in the amount of up to $4,420,000 due to the original issue discount, and warrants (the “Warrants”) to purchase a number of shares of the Company’s common stock (the “Warrant Shares”) equal to 50% of the face value of the Notes divided by the volume weighted average price, in three tranches.
Under the first tranche of funding, which closed upon signing of the Purchase Agreement on December 28, 2023, the Company issued a Note to the Investor in the principal amount of $2,000,000 which resulted in gross proceeds to the Company of $1,700,000 and Warrants to purchase up to an aggregate of 357,500 Warrant Shares. The Note and Warrants issued in the first tranche of funding have an initial fixed conversion and exercise price of $3.44688 per share, subject to adjustment. The Warrants carry a 5-year term and, if not exercised, will terminate on December 28, 2028. The Company received the first tranche of $1,700,000 on December 29, 2023.
Each Note matures 18 months after issuance, does not bear any interest unless an event of default occurs, in which case the Note will bear interest at an annual rate of 18%, and is convertible into shares of the Company’s common stock (the “Conversion Shares”) at an initial conversion price equal to $3.44688, provided that if an event of default has occurred and is continuing without cure, the conversion price will be the lesser of (i) $3.44688, (ii) 95% of the average of the three lowest daily volume weighted average prices of the common stock during the 20 trading days immediately preceding the notice of conversion of the Note, and (iii) 80% of the lowest daily volume weighted average price in the 10 trading days immediately preceding the applicable conversion date, subject to adjustment as further specified in the Note.
Each Note is fully repayable in cash upon maturity. In addition, the Investor has the option of requiring prepayment of up to 25% of the issuance amount of a subsequent financing. In addition, as to each Note, beginning on the earlier of (i) 60 days from issuance and (ii) the date on which the resale registration statement registering the Conversion Shares issuable under the Note and the Warrant Shares issuable under the corresponding Warrants has been declared effective by the Securities and Exchange Commission, the Company must make monthly payments equal to 105% of the total principal amount multiplied by the quotient determined by dividing one by the number of months remaining until the maturity date as of the initial payment date (the “Monthly Payments”), until the principal amount has been paid in full prior to or on the maturity date or, if earlier, upon acceleration, conversion or redemption of the Note in accordance with its terms.
The Monthly Payments are payable in cash; provided that subject to certain limitations the Company may elect to pay all or part of a Monthly Payment in Conversion Shares in lieu of a cash payment based on a price per share equal to the lower of (i) conversion price then in effect, and (ii) 95% of the average of the three lowest daily volume weighted average prices of the common stock during the 20 trading days immediately preceding the applicable payment date, subject to adjustment and to the floor price set forth in the applicable Note. If for any Monthly Payment the number of Conversion Shares issued as payment is limited by the floor price, the Company is required to pay the economic difference in cash.
On December 28, 2023, the Company issued Senior Secured 15% Original Issue Discount Convertible Promissory Note for an initial amount of $2,000,000 of convertible notes with an annual interest rate of 18% and a maturity term of 18 months. In connection with this issuance, the Company also issued 357,500 warrants, each allowing the holder to purchase shares of the Company’s common stock at an exercise price of $3.44688, exercisable until December 28, 2028.
The Company recorded $0 for the year ended December 31, 2024 and $435,000 as debt discount and $356,000 using the relative fair value method for the period December 31, 2023.
The Company has amortized $702,000 of debt discount during the period ended December 31, 2024 and $0 for the year ended December 31, 2023.
(i)
| Date | Installment | Loan | Conversion fees | Total repayment | Conversion price | No
of shares | Equity | APIC | |||||||||||||||||||||||
| 2/14/2024 | 1 | $ | 125,000 | $ | 6,250 | $ | 131,250 | 1.93 | 68,005 | 1 | $ | 131,249 | |||||||||||||||||||
| 2/14/2024 | 2 | $ | 125,000 | $ | 6,250 | $ | 131,250 | 1.93 | 68,005 | 1 | $ | 131,249 | |||||||||||||||||||
| 3/1/2024 | 3 | $ | 125,000 | $ | 6,250 | $ | 131,250 | 1.92 | 68,359 | 1 | $ | 131,249 | |||||||||||||||||||
| 3/1/2024 | 4 | $ | 125,000 | $ | 6,250 | $ | 131,250 | 1.92 | 68,359 | 1 | $ | 131,249 | |||||||||||||||||||
| 3/1/2024 | 5 | $ | 125,000 | $ | 6,250 | $ | 131,250 | 1.92 | 68,359 | 1 | $ | 131,249 | |||||||||||||||||||
| 3/19/2024 | 6 | $ | 125,000 | $ | 6,250 | $ | 131,250 | 1.72 | 76,308 | 1 | $ | 131,249 | |||||||||||||||||||
| 4/23/2024 | 7 | $ | 125,000 | $ | 6,250 | $ | 131,250 | 1.27 | 103,346 | 1 | $ | 131,249 | |||||||||||||||||||
| 5/9/2024 | 8 | $ | 125,000 | $ | 6,250 | $ | 131,250 | 1.15 | 114,130 | 1 | $ | 131,249 | |||||||||||||||||||
| 5/9/2024 | 9 | $ | 125,000 | $ | 6,250 | $ | 131,250 | 1.15 | 114,130 | 1 | $ | 131,249 | |||||||||||||||||||
During the year ending December 31, 2024, the Company converted $1,125,000 principal and $56,250 towards conversion fees on the L1 Capital convertible note. There was no gain or loss recorded on the conversions as they were consummated within the terms of the original agreement. As of December 31, 2024, the L1 Capital note was outstanding at $875,000.
| (ii) | During the year, the Company and an investor entered an agreement on October 9, 2024, to issue to the investor 20% OID Promissory note for proceeds of $1,000,000. The original agreement contained the terms to mutually extend the maturity date of the note up to January 31, 2025. The Company renegotiated the extension of the original maturity of the note by three months from December 8, 2024, to March 8, 2025 and increased the maturity value of the note to $1,500,000 as per the terms of the note. The Company recorded an amount of $500,000 as an OID and repaid the note value of $1,500,000 on March 7, 2025. |
The Company has amortized $277,000 of debt discount during the period ended December 31, 2024, and $0 for the year ended December 31, 2023. The debt discount is being amortized over the life of the loan.
| Convertible Note | 2024 | 2023 | ||||||
| Short-term borrowing | $ | 2,061 | 1,112 | |||||
| Long-term borrowing | 97 | |||||||
| Convertible note outstanding | $ | 2,061 | 1,209 | |||||
The long-term portion of this convertible debt was as of December 31, 2024, and $97 as of December 31, 2023.
Aggregate maturities of convertible notes payable are as follows:
For the twelve months ended, December 31,
| 2024 | $ | 2,061 | ||
| 2025 | $ | |||
| Total | $ | 2,061 |
| Convertible Note | 2024 | 2023 | ||||||
| Convertible notes payable 1 | $ | 2,375 | $ | 2,000 | ||||
| Less: discount | 314 | 791 | ||||||
| Notes payable, net of discount 1-2 | 2,061 | 1,209 | ||||||
| Notes payable, current portion, net of discount | 2,061 | 1,112 | ||||||
| Notes payable, long-term portion, net of discount | $ | $ | 97 | |||||
B. Common Stock Warrants
On December 28, 2023, the Company issued Senior Secured 15% Original Issue Discount Convertible Promissory Note for an initial amount of $2,000,000 of convertible notes with an annual interest rate of 18% and a maturity term of 18 months. In connection with this issuance, the Company also issued 357,500 warrants, each allowing the holder to purchase shares of the Company’s common stock at an exercise price of $3.44688, exercisable until December 28, 2028.
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 December 31, 2023.
As of December 31, 2024, there is a debt discount balance relating to convertible debt in the amount of $313,841. This balance will be amortized over the life of the note.
On December 28, 2023, the Company issued a convertible note to the investor in the principal amount of $2.0 million which resulted in gross proceeds to the Company of $1.7 million (the “First Tranche Note”) and Warrants to purchase up to an aggregate of 357,500 Warrant Shares (the “First Tranche Warrants”). The First Tranche Note, and the First Tranche Warrants have an initial fixed conversion and exercise price of $3.44688 per share, respectively, subject to adjustment. The First Tranche Warrants carry a 5-year term and, if not exercised, will terminate on December 28, 2028.
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Contractual | Intrinsic | |||||||||||||
| Warrants | Warrants | price | Term | value | ||||||||||||
| Outstanding on January 1, 2024 | 967,256 | $ | 7.99 | 4.05 | 3,785 | |||||||||||
| Granted | ||||||||||||||||
| Excised | ||||||||||||||||
| Forfeited or expired | ||||||||||||||||
| Outstanding on December 31, 2024 | 967,256 | 7.99 | 3.05 | 3,785 | ||||||||||||
| Exercisable on December 31, 2024 | 376,378 | $ | 7.99 | 2.78 | 1,472 | |||||||||||
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Contractual | Intrinsic | |||||||||||||
| Warrants | Warrants | price | Term | value | ||||||||||||
| Outstanding on January 1, 2023 | 683,935 | $ | 12.71 | 4.50 | 3,812 | |||||||||||
| Granted | 357,500 | 3.45 | 4.99 | 604 | ||||||||||||
| Excised | — | |||||||||||||||
| Forfeited or expired | 74,179 | 631 | ||||||||||||||
| Outstanding on December 31, 2023 | 967,256 | 7.99 | 4.05 | 3,785 | ||||||||||||
| Exercisable on December 31, 2023 | 182,927 | $ | 10.66 | 3.50 | 954 | |||||||||||
The following table summarizes the activities for our unvested warrants for the year ended December 31, 2024.
| Weighted average Grant Date Fair | ||||||||
| Number of Warrants | Value Per warrant | |||||||
| Unvested on January 1, 2024 | 784,329 | $ | 3.61 | |||||
| Granted | ||||||||
| Vested | (193,451 | ) | 3.91 | |||||
| Forfeited | ||||||||
| Unvested on December 31, 2024 | 590,878 | $ | 3.51 | |||||
| Weighted average Grant Date Fair | ||||||||
| Number of Warrants | Value Per warrant | |||||||
| Unvested on January 1, 2023 | 622,960 | $ | 5.61 | |||||
| Granted | 357,500 | 1.69 | ||||||
| Vested | (121,952 | ) | 5.21 | |||||
| Forfeited | (74,179 | ) | 8.51 | |||||
| Unvested on December 31, 2023 | 784,329 | $ | 3.61 | |||||
The Company has recognized cost of $0 for the year ended December 31, 2024, and $0 for the year ended December 31, 2023.
C. Short term borrowing
| Particulars | 2024 | 2023 | ||||||
| Short Term Borrowing | ||||||||
| Seacoast Business Funding | $ | 589 | $ | 2,676 | ||||
| Convertible note | 2,061 | 1,112 | ||||||
| Total | $ | 2,650 | $ | 3,788 | ||||
(i) Seacoast Business Funding
The Company has obtained a credit facility from Seacoast business funding (SBF) a division of Seacoast National Bank during the year ended December 31, 2022. The funding is against the accounts receivables of the company and its subsidiary. The SBF facility charges an interest of prime rate plus 1% on a floating basis. The balance as of December 31,2024, is $589 and $ 2,676 for the period ended December 31, 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 31, 2025 | Showing above |
| 2023 | Mar 18, 2024 | |
| 2022 | Mar 28, 2023 | |
| 2021 | Mar 8, 2022 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.