Healthcare Triangle, Inc. Income Taxes Disclosure

4) Provision for income taxes

 

The Company recognizes the tax benefit from uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters as other expense in the statement of income. Based on management’s evaluations, there are no uncertain tax positions requiring recognition as of the date of these financial statements.

 

The components of the Company’s net deferred tax assets as of December 31, 2025, and 2024, were as follows (in thousands):

 

		As of December 31,
		2025				2024
Deferred tax assets:
Net operating loss carry-forward		$	4,000			$	1,667
Add back:
Stock-based compensation			(126	)			(24	)
Acquisition related cost			(8	)			-
Depreciation and amortization			(197	)			(249	)
Bad debt			(5	)			(48	)
Gain on revaluation			11				-
Other income			191				2
Total deferred tax asset			3,866				1,348
Less: valuation allowance		$	(3,866	)		$	(1,348	)
Deferred tax asset, net of valuation allowance			—				—
Deferred tax liabilities			—				—
Net deferred tax asset			—				—

Income tax expense was computed as follows:

 

		As of December 31,
		2025				2024
Federal income tax		$	—			$	—
State income tax			—				12
Total Income expenses		$	—			$	12

 

The Company’s effective tax rate is 0% for the year ended December 31, 2025, and 2024. The future effective income tax rate depends on various factors, such as the Company’s income/(loss) before taxes, tax legislation and the geographic composition of pre-tax income.

 

The Company’s current tax expense is $0. There is no liability in 2024 on account of losses.

 

The Company’s federal and state income tax returns are generally subject to possible examination by the taxing authorities until the expiration of the related statute of limitations on those tax returns which is generally three years from the original filing deadline. The Company regularly reviews its deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing taxable temporary differences and tax planning strategies. The Company’s judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute the business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax provision would increase or decrease in the period in which the assessment is changed.