Healthcare Triangle, Inc.

Healthcare Triangle, Inc. Announces Reverse Stock Split Authorization

1. Event Description

Healthcare Triangle, Inc. shareholders have authorized the Board of Directors to carry out a reverse stock split. This corporate action means the company will combine existing shares into a smaller number of proportionally more valuable shares. Shareholders granted the Board flexibility to determine the exact split ratio, which can range from 1-for-2 up to 1-for-100.

Companies primarily undertake reverse stock splits to meet stock exchange listing requirements. For example, the Nasdaq exchange mandates a minimum bid price of $1.00 per share. Failure to meet this minimum can lead to delisting, which significantly reduces a stock's liquidity and investor appeal. Beyond preventing delisting, a higher stock price can also make the company more attractive to institutional investors and mutual funds. Many of these investors have policies against investing in "penny stocks" (shares trading below a certain price threshold). Ultimately, this move aims to improve the company's market perception and broaden its investor base.

The Board of Directors now holds the authority to decide the precise reverse split ratio within the approved 1-for-2 to 1-for-100 range, as well as the effective date. This decision typically involves filing an amendment to the company's certificate of incorporation. The Board usually has a specific timeframe (often up to one year from the shareholder approval date) to execute the split. Investors should watch for an official announcement from Healthcare Triangle detailing these plans. It is also possible, though less common, for the Board to decide not to proceed with the split if the stock price naturally recovers above the minimum listing requirement.

2. Event Date/Timeline

Shareholders voted at a special meeting held on February 2, 2026. Official results, confirming the reverse stock split's authorization, were reported on February 6, 2026.

3. Impact Assessment

For current shareholders, a reverse stock split directly affects the number of shares you own and their per-share price. For instance, if you owned 100 shares at $0.50 each, a 1-for-10 reverse split would result in you owning 10 shares, with each share now valued at $5.00. Crucially, the total market value of your investment remains the same immediately after the split. If the chosen ratio results in fractional shares (e.g., you own 15 shares and the split is 1-for-10, leaving you with 1.5 shares), the company typically cashes these out at the post-split price instead of issuing partial shares.

While a reverse split can prevent delisting and improve market perception, many view it as a "cosmetic" change. It does not inherently alter the company's underlying business operations, financial health, or intrinsic value.

Key Risks for Investors:

• Negative Perception: Reverse splits can signal underlying financial struggles, potentially deterring new investors and leading to further stock price declines after the split.
• Reduced Liquidity: With fewer shares outstanding, trading volume might decrease, making it harder to buy or sell shares at desired prices.
• Failure to Address Root Causes: The split addresses a symptom (low stock price) but not necessarily the underlying business issues (such as declining revenues, profitability challenges, or competitive pressures) that caused the price to fall.
• Continued Price Decline: Historically, many companies undergoing reverse splits see their stock price eventually return to pre-split levels or lower if fundamental business performance does not improve.

4. Financial Impact

The reverse stock split, alone, does not immediately change the company's total market capitalization or the total value of shareholders' equity. Instead, it proportionally reduces the number of outstanding shares and increases the par value per share (if applicable). Consequently, per-share metrics like earnings per share (EPS) and book value per share will proportionally increase after the split. This corporate action does not directly affect the company's underlying assets, liabilities, and operational results.

5. Key Takeaways for Investors

For investors, understanding this event requires looking beyond the immediate share price adjustment:

• Review Financials: This event highlights the importance of reviewing Healthcare Triangle's recent financial reports (10-K, 10-Q filings). Focus on revenue trends, profitability, cash flow, and debt levels to understand the fundamental business health that led to the low stock price.
• Assess Business Strategy: A reverse split is a tactical move. Investors should seek clear communication from management regarding their long-term strategy to improve operational performance, drive growth, and achieve sustainable profitability. What are their plans for market expansion, product development, or cost efficiencies?
• Monitor Post-Split Performance: Observe how the stock performs in the weeks and months following the split. Does it maintain the higher price, or does it drift downwards? This can indicate market confidence in the company's future prospects.
• Consider Your Investment Thesis: Re-evaluate your reasons for investing in Healthcare Triangle. Does the company's current situation and strategic response align with your investment goals and risk tolerance?

This reverse stock split is a significant corporate action that addresses a critical listing requirement. However, its long-term impact on shareholder value will ultimately depend on Healthcare Triangle's ability to improve its underlying business fundamentals.