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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 14, 2023
SYRA HEALTH CORP.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41822 | 85-4027995 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I. R. S. Employer Identification No.) |
1119 Keystone Way N. #201
Carmel, IN 46032
(Address of principal executive offices, including zip code)
(463) 345-8950
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Class A Common Stock, $0.001 par value | SYRA | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Conditions.
On November 14, 2023, Syra Health Corp. issued a press release announcing its financial results for the third quarter of 2023 for the period ended September 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.
The information in this report, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. In addition, the exhibit furnished herewith contain statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in such exhibit.
Item 9.01 Financial Statements and Exhibit
(d) Exhibits.
The following exhibits are filed with this Current Report on Form 8-K:
|
Exhibit Number |
Description | |
| 99.1 | Press Release dated November 14, 2023 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SYRA HEALTH CORP. | ||
| Date: November 14, 2023 | By: | /s/ Deepika Vuppalanchi |
| Deepika Vuppalanchi | ||
| Chief Executive Officer | ||
Exhibit 99.1
Syra Health Announces Third Quarter 2023 Financial Results
Conference call will be held today, Tuesday, November 14 at 9:00am ET
Carmel, IN, November 14, 2023 /PRNewswire/ —Syra Health Corp. (NASDAQ: SYRA), (“Syra Health” or the “Company”) a healthcare company addressing some of healthcare’s most significant challenges by providing innovative services and technology solutions, today announced its financial results for the third quarter of 2023 for the period ended September 30, 2023.
Q3 2023 Financial Highlights
| ● | Revenue of $1.58 million, compared to $1.51 million in Q3 2022, an increase of 4%. | |
| ● | Digital Health, driven by sales of the Company’s SyraBot product, had revenue of $131,356, marking its first period of revenues. | |
| ● | Population Health and Health Education, driven by epidemiology and reporting services, saw revenues of $328,750, a 400% increase, compared to $66,000 in Q3 2022. | |
| ● | Healthcare Workforce had revenue of $1.1 million in Q3 2023, in line with previous quarters. | |
| ● | Gross profit margin of 35.1%, compared to 27.3% in Q3 2022. | |
| ● | Net loss of $(354,376), compared to $(354,435) in Q3 2022. | |
| ● | Adjusted EBITDA (see table A) was $(329,580), versus $(341,760) in Q3 2022. |
Recent Operational Highlights
| ● | Secured a five-year $4.75 million contract with the District of Columbia’s Department of Behavioral Health (DBH), to support DBH’s mental health initiatives, including its Supported Employment Program and Comprehensive Psychiatric Emergency Program. | |
| ● | Received a two-year contract extension, worth up to $636,000, with the Indiana Division of Mental Health and Addiction and Family and Social Services Administration to chair and manage the State of Indiana’s Epidemiological Outcomes Workgroup. | |
| ● | Formed a strategic agreement with Maricopa County Department of Public Health in Arizona to train over 100 public health staff in the county. | |
| ● | Launched Syrenity, a mental health product that proactively identifies the negative factors impacting mental health and integrates telehealth for mental health prevention and treatment. | |
| ● | Announced a strategic agreement with E&I Cooperative Services (E&I). Syra’s goal is to provide mental health services, including telehealth via Syrenity to E&I’s 6,000 plus college and university members nationwide. |
| - |
| ● | Launched CarePlus, an electronic medical record (EMR) system designed specifically for small to mid-sized healthcare organizations. CarePlus is an easy-to-use, secure, and scalable platform that allows for streamlining clinical workflows and integrating labs, radiology, and telehealth. | |
| ● | In October 2023, closed on $6.7 million IPO financing and began trading on the NASDAQ. |
Management Commentary
Dr. Deepika Vuppalanchi, CEO of Syra Health, said, “Our current and future pipeline of contracts is expanding, and we expect to announce contract wins as they are solidified. I look forward to building upon our recent successes to fulfill our promise of improving healthcare while driving value for our shareholders.”
Sandeep Allam, Executive Chairman and President of Syra Health, said, “We completed our successful initial public offering in October 2023. During the third quarter, we also saw our first revenues from our Digital Health business unit and expect revenue growth to continue as several products are launched. We also saw growth in our Population Health and Health Education Business Units. We are pleased with our third quarter performance and all that we have accomplished. We look forward to our continued growth and innovation next quarter and beyond.”
Q3 2023 Financial Results
Revenue for the quarter ended September 30, 2023, was $1.58 million, compared to the $1.51 million reported in the third quarter of 2022. Strong growth in the Digital Health, Population Health, and Health Education business units was offset by our Healthcare Workforce.
Gross profit for the quarter ended September 30, 2023, was $554,541, reflecting a gross profit margin of 35.1%, compared to $413,809 million, or a gross profit margin of 27.3%, in the third quarter of 2022. The increase in gross margins was due to a slight shift from healthcare staffing services to medical communication and digital health services that carry better margins.
Total operating expenses for the third quarter of 2023 increased 18% to $897,557, compared to $760,600 in the third quarter of 2022. Salaries and benefits expenses increased 31%, compared to the third quarter of 2022 due to increased operations and added office personnel to support the Company’s IPO process. Professional fees declined 62%, compared to the third quarter of 2022 due to decreased reliance on outsourced professional fees in connection with the prior period audit in preparation for the Company’s IPO. Selling, general and administrative expenses increased 56%, compared to the third quarter of 2022 due to increased operations. Depreciation expense was $14,180 in the third quarter of 2023, compared to $3,880 for the same period last year, reflecting expanded office space.
| - |
Net Loss for the quarter ended September 30, 2023, was $(354,376), compared to $(354,535) in the third quarter of 2022.
Adjusted EBITDA (see Table A) for the quarter ended September 30, 2023, was $(329,580), compared to $(341,760) in the third quarter of 2022.
Cash on hand September 30, 2023, was $18,010. Upon the closing of its IPO on October 3, 2023, the Company collected net proceeds of $4.7M.
Conference Call
Management will hold a conference call to discuss the quarter’s financial results at 9:00am ET on November 14, 2023.
Interested parties can listen via a live webcast, from the link available in the Investor Relations section of the Company’s website at https://ir.syrahealth.com/presentations or via https://app.webinar.net/QnrqX7vAKVL.
A replay will be available after the call, in the Investor Relations section of the Company’s website at https://ir.syrahealth.com/presentations .
Non-GAAP Financial Measures
In addition to financial results reported in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we have provided the following non-GAAP financial measure in this release and the accompanying tables: adjusted EBITDA. We use these non-GAAP financial measures internally to facilitate period-to-period comparisons and analysis of our operating performance and liquidity, and believe it is useful to investors as a supplement to GAAP measures in analyzing, trending and benchmarking the performance and value of our business. However, this measure is not intended to be a substitute for those reported in accordance with GAAP. We define Adjusted EBITDA as net earnings (loss) before (i) interest income, (ii) interest expense, (iii) change in allowance for doubtful accounts, (iv) depreciation, and (v) non-cash expenses relating to share-based payments recognized under ASC Topic 718. These measures may be different from non-GAAP financial measures used by other companies, even when similar terms are used to identify such measures. For reconciliations of historical non-GAAP financial measures to the most comparable financial measures under GAAP, see Table A accompanying this release.
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SYRA HEALTH CORP.
RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net loss | $ | (354,376 | ) | $ | (354,535 | ) | $ | (1,943,068 | ) | $ | (1,505,533 | ) | ||||
| Add back: | ||||||||||||||||
| Interest income | (2,820 | ) | (35 | ) | (2,826 | ) | (54 | ) | ||||||||
| Interest expense | 14,180 | 7,779 | 44,449 | 16,641 | ||||||||||||
| Change in allowance for doubtful accounts | - | - | 986 | - | ||||||||||||
| Depreciation | 12,357 | 3,880 | 36,413 | 4,791 | ||||||||||||
| Stock based compensation | 1,079 | 1,151 | 3,669 | 511,151 | ||||||||||||
| Adjusted EBITDA | $ | (329,580 | ) | $ | (341,760 | ) | $ | (1,860,377 | ) | $ | (973,004 | ) | ||||
ABOUT SYRA HEALTH
Syra Health is a healthcare company addressing some of healthcare’s most significant challenges by providing innovative services and technology solutions. Syra Health specializes in behavioral and mental health, digital health, and population health. Syra Health’s solutions are centered on prevention, improved access, and affordable care. For more information, please visit www.syrahealth.com.
Forward-Looking Statements
Statements in this press release about future expectations, plans, and prospects, as well as any other statements regarding matters that are not historical facts, may constitute ‘forward-looking statements.’ The words ‘anticipate,’ ‘believe,’ ‘continue,’ ‘could,’ ‘estimate,’ ‘expect,’ ‘intend,’ ‘may,’ ‘plan,’ ‘potential,’ ‘predict,’ ‘project,’ ‘should,’ ‘target,’ ‘will,’ ‘would’ and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Investors should read the risk factors set forth in our Form 10-Q for the quarter ended September 30, 2023, and in our registration statement on Form S-1 and other periodic reports filed with the Securities and Exchange Commission. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the uncertainties related to market conditions. Any forward-looking statements contained in this press release speak only as of the date hereof, and Syra Health specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
For more information, please contact:
Media:
Syra Health
Communications & Marketing Director
Christine Drury
317-385-9227
christined@syrahealth.com
Investors:
Ben Shamsian
Vice President
Lytham Partners, LLC
646-829-9701
shamsian@lythampartners.com
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SYRA HEALTH CORP.
CONDENSED BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 18,010 | $ | 3,344 | ||||
| Accounts receivable, net | 1,054,851 | 1,201,097 | ||||||
| Other current assets | 163,323 | 222,302 | ||||||
| Total current assets | 1,236,184 | 1,426,743 | ||||||
| Deferred offering costs | 1,185,177 | 596,118 | ||||||
| Property and equipment, net | 91,331 | 112,493 | ||||||
| Right-of-use asset | 94,126 | 184,288 | ||||||
| Total assets | $ | 2,606,818 | $ | 2,319,642 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 932,779 | $ | 432,388 | ||||
| Accounts payable, related parties | 21,421 | 3,200 | ||||||
| Accrued expenses | 274,596 | 239,117 | ||||||
| Deferred revenue | 141,644 | - | ||||||
| Current portion of operating lease liability, related party | 94,126 | 121,089 | ||||||
| Revolving line of credit | 300,154 | 750,551 | ||||||
| Advances from related party | 616,399 | - | ||||||
| Total current liabilities | 2,381,119 | 1,546,345 | ||||||
| Operating lease liability, related party | - | 63,199 | ||||||
| Convertible notes payable | 1,455,000 | - | ||||||
| Total liabilities | 3,836,119 | 1,609,544 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares designated, issued and outstanding | - | - | ||||||
| Class A common stock, $0.001 par value, 100,000,000 shares authorized, 3,527,092 and 3,568,758 | ||||||||
| shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 3,527 | 3,569 | ||||||
| Convertible class B common stock, $0.001 par value, 5,000,000 shares authorized, 833,334 shares issued and outstanding | 833 | 833 | ||||||
| Additional paid-in capital | 2,836,019 | 2,832,308 | ||||||
| Accumulated deficit | (4,069,680 | ) | (2,126,612 | ) | ||||
| Total stockholders’ equity (deficit) | (1,229,301 | ) | 710,098 | |||||
| Total liabilities and stockholders’ equity (deficit) | $ | 2,606,818 | $ | 2,319,642 | ||||
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SYRA HEALTH CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net revenues: | ||||||||||||||||
| Healthcare staffing services | $ | 1,121,238 | $ | 1,447,979 | $ | 3,103,940 | $ | 3,366,667 | ||||||||
| Medical communication services | 328,750 | 66,000 | 513,647 | 285,311 | ||||||||||||
| Digital health services | 131,356 | - | 131,356 | - | ||||||||||||
| Net revenues | 1,581,344 | 1,513,979 | 3,748,943 | 3,651,978 | ||||||||||||
| Cost of services | 1,026,803 | 1,100,170 | 2,919,087 | 2,881,142 | ||||||||||||
| Gross profit | 554,541 | 413,809 | 829,856 | 770,836 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Salaries and benefits | 592,241 | 451,771 | 1,612,605 | 1,021,627 | ||||||||||||
| Professional services | 58,875 | 154,457 | 424,379 | 863,297 | ||||||||||||
| Selling, general and administrative expenses | 234,084 | 150,492 | 657,904 | 370,067 | ||||||||||||
| Depreciation | 12,357 | 3,880 | 36,413 | 4,791 | ||||||||||||
| Total operating expenses | 897,557 | 760,600 | 2,731,301 | 2,259,782 | ||||||||||||
| Operating loss | (343,016 | ) | (346,791 | ) | (1,901,445 | ) | (1,488,946 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 2,820 | 35 | 2,826 | 54 | ||||||||||||
| Interest expense | (14,180 | ) | (7,779 | ) | (44,449 | ) | (16,641 | ) | ||||||||
| Total other income (expense) | (11,360 | ) | (7,744 | ) | (41,623 | ) | (16,587 | ) | ||||||||
| Net loss | $ | (354,376 | ) | $ | (354,535 | ) | $ | (1,943,068 | ) | $ | (1,505,533 | ) | ||||
| Weighted average common shares outstanding - basic and diluted | 4,360,426 | 4,107,164 | 4,380,267 | 2,337,915 | ||||||||||||
| Net loss per common share - basic and diluted | $ | (0.08 | ) | $ | (0.09 | ) | $ | (0.44 | ) | $ | (0.64 | ) | ||||
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