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Healthcare Triangle , Inc. (NASDAQ:HCTI), a computer systems design services company, announced on Monday that its financial statements for the year ended December 31, 2023, should not be relied upon and will be restated. The decision, recommended by the Audit Committee and approved by the Board of Directors on February 12, 2025, follows the identification of several errors during a re-audit by the company's independent accounting firm, M&K CPAS, PLLC.
The restatement includes a write-down of intangible assets by up to $2,185,000, revisions to goodwill and intangible assets write-offs from the acquisition of Devcool Inc., and adjustments to warrant liability and debt discount due to the non-application of ASU 2020-06.
Additionally, errors in reported collections by a third-party and accrued costs have led to changes in accounts receivable, short-term borrowings, current liabilities, and additional paid-in capital.
The company also recognized revaluation gains on contingent consideration and deferred tax expenses related to the prior year. The company's current ratio stands at 0.29, reflecting significant liquidity challenges, while its stock has declined 51.45% year-to-date.
These amendments will be reflected in an amended Annual Report on Form 10-K/A for the fiscal year ended December 31, 2023, which the company plans to file later today. M&K CPAS, PLLC has been requested to provide a letter to the SEC regarding their agreement with the statements made in this restatement.
The restatement highlights the importance of accurate financial reporting and the ongoing efforts to maintain compliance with applicable accounting standards. Investors are advised to consider the revised information for a more accurate representation of the company's financial position. The information for this article is based on a press release statement.
In other recent news, Healthcare Triangle, Inc. has been navigating compliance issues with Nasdaq's listing requirements. The company was notified of non-compliance due to the absence of an annual shareholder meeting within the twelve-month period after the fiscal year-end.
This development follows the dismissal of Healthcare Triangle's previous auditor, BF Borgers CPA PC, which led to delays in filing the Annual Report on Form 10-K. Despite these challenges, the company has announced plans to conduct its 2024 Annual Meeting of Stockholders by March 31, 2025.
In addition, Healthcare Triangle has regained compliance with Nasdaq's minimum bid price requirement. The company had previously been warned about its stock price falling below the $1.00 threshold, violating Nasdaq Listing Rule 5550(a)(2). However, the firm confirmed that its common stock maintained a closing bid price of $1.00 or higher for at least 20 consecutive business days, thus addressing the concerns raised by Nasdaq.
These are the recent developments for Healthcare Triangle, Inc. The company believes it has regained compliance with the stockholders’ equity requirement, but there is no guarantee that the Nasdaq Hearings Panel will grant continued listing. While the company's common stock continues to trade on the Nasdaq Capital Market, investors are reminded that statements regarding compliance timelines are subject to various risks and uncertainties.
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