UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 2.02. Results of Operations and Financial Conditions.
On March 25, 2024, Syra Health Corp. issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 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 March 25, 2024 | |
| 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: March 25, 2024 | By: | /s/ Deepika Vuppalanchi |
Deepika Vuppalanchi Chief Executive Officer | ||
Exhibit 99.1
Syra Health Announces Fourth-Quarter and Full-Year 2023 Financial Results. Projects 2024 Revenue Growth of 64% to 100%.
Conference call will be held today, Monday, March 25 at 9:00am ET
Carmel, IN, March 25, 2024 /PRNewswire/ —Syra Health Corp. (NASDAQ: SYRA), (“Syra Health” or the “Company”) a healthcare consulting company with a mission to improve healthcare by providing innovative services and technology solutions, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2023.
2023 Financial Highlights
| ● | 2023 revenue of $5.5 million compared to $5.6 million in 2022. | |
| ● | Business units excluding Healthcare Workforce grew 250% and comprised 23% of total revenues in 2023, versus only 6% in 2022. | |
| ● | Population Health, driven by demand for epidemiology services, had revenues of $715,499, an increase of more than 125% compared to 2022. | |
| ● | Digital Health, driven by sales of the Company’s SyraBot product, had revenues of $515,250 marking its first year of revenues. | |
| ● | Gross profit margin increased 670 bps to 25.6% compared to 18.9% in 2022. | |
| ● | December 31, 2023 ending cash balance of $3.3 million and no long-term debt. |
2024 Financial Outlook
| ● | The Company expects full-year 2024 revenue of $9 to $11 million, representing a growth of 64%-100% versus 2023. | |
| ● | Guidance does not include any potential revenues from Caduceus Healthcare with regards to the recently announced Federal Influx Care Facilities contract. |
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. | |
| ● | Secured a one-year contract with a national healthcare organization worth $660,000 to provide Healthcare Effectiveness Data and Information Set (HEDIS®) outreach and support services essential for fostering positive health outcomes and reducing costs. | |
| ● | Secured a one-year $450,000 contract for epidemiology services with the Shelby County Health Department in Tennessee, with two additional one-year renewal options, bringing the total potential value of the contract to $1.35 million. | |
| ● | Announced that it has been selected as a subcontractor for a contract awarded to Caduceus Healthcare, Inc. by the federal Department of Health and Human Services (HHS), Administration for Families and Children (ACR), Office of Refugee Resettlement (ORR) Medical Staffing and Support, valued at $75 billion. | |
| ● | Launched Syrenity, a mental health product that proactively identifies the negative factors impacting mental health and integrates telehealth for mental health treatment. | |
| ● | 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 September 2023, successfully closed on its IPO and began trading on the NASDAQ. |
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Management Commentary
Dr. Deepika Vuppalanchi, CEO of Syra Health, said “We are continuing to make progress on our growth objectives. The demand for our services remains strong and we believe we are properly positioned to take advantage. Our financial guidance reflects the growth of our business. We are continuing to diversify our revenues in terms of geography and business units. Our burgeoning business units of Population Health, Behavioral and Mental Health, Digital Health, and Health Education are seeing solid growth. These higher margin business units are becoming a larger portion of our revenue base. We are currently operating in 17 states, and we anticipate securing new business from both the private sector and ongoing federal project bids.”
Sandeep Allam, Executive Chairman and President of Syra Health, said, “We are excited about our growth prospects in 2024 and beyond. We are at the early stages of accelerating growth, which has been made possible by the investments we have made in recent years in technology and our people. Our Digital Health business unit is poised for growth, driven by our innovative SyraBot and our CarePlus solutions, which we launched in 2023. In 2023 we also launched Syrenity, our evidence-based and AI-backed product focused on the prevention of behavioral and mental health concerns. Anchoring these nascent businesses units is our legacy Healthcare Workforce business unit, which continues to generate solid revenues.”
2023 Financial Results
Revenue in 2023, was $5.5 million, compared to the $5.6 million reported in 2022. Strong growth in the Digital Health, Population Health, Behavioral and Mental Health, and Health Education business units were driven by new contracts as well as the launch of SyraBot. Healthcare Workforce revenue declined due to the subsiding of the COVID-19 pandemic.
Gross profit margin in 2023 was 25.6%, compared to 18.9% in 2022. The increase in gross margins was due to the mix shift from Healthcare Workforce to Population Health and Digital Health that carry better margins.
Total operating expenses in 2023 increased 36% to $4.3 million compared to $3.1 million in 2022. Salaries and benefits expenses increased 50% due to increased operations and added office personnel to support the Company’s IPO process and Company growth. Professional fees declined 43% due to a decrease in stock-based compensation related to outsourced professionals engaged in 2022. Selling, general and administrative expenses increased 97% due to increased operations. Depreciation expense was $48,771 compared to $14,849 in 2022, reflecting expanded office space. R&D expenses were $240,048, reflecting the development of technology-based solutions.
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Net Loss for 2023 was $(2.94 million) compared to $(2.12 million) in 2022.
Adjusted EBITDA for 2023 was $(2.8 million) compared to $(2.1 million) in 2022.
Cash on hand on December 31, 2023 was $3.3 million.
Conference Call
Management will hold a conference call to discuss the fiscal year’s financial results at 9:00am ET on March 25, 2024.
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/q4-and-full-year-2023-earnings-call
A replay will be available after the call, in the Investor Relations section of the Company’s website at https://ir.syrahealth.com/presentations/q4-and-full-year-2023-earnings-call.
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 this 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. 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 the table below.
SYRA HEALTH CORP.
RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS
| FY 2023 | FY 2022 | |||||||
| Net Loss | $ | (2,938,343 | ) | $ | (2,118,165 | ) | ||
| Interest | $ | 53,686 | $ | 28,533 | ||||
| Depreciation | $ | 48,771 | $ | 14,849 | ||||
| Taxes | $ | 32,985 | $ | 14,849 | ||||
| EBITDA | $ | (2,802,901 | ) | $ | (2,059,934 | ) | ||
| Adjusted EBITDA | $ | (2,802,901 | ) | $ | (2,059,934 | ) | ||
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ABOUT SYRA HEALTH
Syra Health is a healthcare technology company addressing some of healthcare’s most significant challenges in areas such as behavioral and mental health, digital health, and population health, by providing innovative services and technology solutions. Syra Health’s products and services are centered on prevention, improved access, and affordable care. Syra Health supplies its solutions to payers, providers, life sciences organizations, academic institutions, and government. 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. 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.
BALANCE SHEETS
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 3,280,075 | $ | 3,344 | ||||
| Accounts receivable, net | 1,060,634 | 1,201,097 | ||||||
| Accounts receivable related party | 50,644 | |||||||
| Other current assets | 389,787 | 222,302 | ||||||
| Total current assets | 4,781,110 | 1,426,743 | ||||||
| Deferred offering costs | - | 596,118 | ||||||
| Property and equipment, net | 78,974 | 112,493 | ||||||
| Right-of-use asset | 63,199 | 184,288 | ||||||
| Total assets | $ | 4,923,283 | $ | 2,319,642 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 462,991 | $ | 432,388 | ||||
| Accounts payable, related parties | - | 3,200 | ||||||
| Accrued expenses | 198,978 | 239,117 | ||||||
| Current portion of operating lease liability, related party | 63,199 | 121,089 | ||||||
| Notes payable | 184,904 | - | ||||||
| Revolving line of credit | - | 750,551 | ||||||
| Total current liabilities | 910,072 | 1,546,345 | ||||||
| Operating lease liability, related party | - | 63,199 | ||||||
| Total liabilities | 910,072 | 1,609,544 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock, $0.001 par value, 1,000,000 shares authorized, no shares designated, issued and outstanding | - | - | ||||||
| Class A common stock, $0.001 par value, 100,000,000 shares authorized, 5,588,298 and 3,568,758 shares issued and outstanding at December 31, 2023 and 2022, respectively | 5,588 | 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 | 9,071,745 | 2,832,308 | ||||||
| Accumulated deficit | (5,064,955 | ) | (2,126,612 | ) | ||||
| Total stockholders’ equity (deficit) | 4,013,211 | 710,098 | ||||||
| Total liabilities and stockholders’ equity (deficit) | $ | 4,923,283 | $ | 2,319,642 | ||||
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SYRA HEALTH CORP.
STATEMENTS OF OPERATIONS
| For the Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Net revenues | $ | 5,515,144 | $ | 5,617,706 | ||||
| Cost of services | 4,103,244 | 4,555,924 | ||||||
| Gross profit | 1,411,900 | 1,061,782 | ||||||
| Operating expenses: | ||||||||
| Salaries and benefits | 2,292,295 | 1,524,971 | ||||||
| Professional services | 586,463 | 1,035,902 | ||||||
| Research and development expenses | 240,048 | - | ||||||
| Selling, general and administrative expenses | 1,131,922 | 575,755 | ||||||
| Depreciation | 48,771 | 14,849 | ||||||
| Total operating expenses | 4,299,499 | 3,151,477 | ||||||
| Operating loss | (2,887,599 | ) | (2,089,695 | ) | ||||
| Other income (expense): | ||||||||
| Interest income | 2,942 | 63 | ||||||
| Interest expense | (53,686 | ) | (28,533 | ) | ||||
| Total other income (expense) | (50,744 | ) | (28,470 | ) | ||||
| Net loss | $ | (2,938,343 | ) | $ | (2,118,165 | ) | ||
| Weighted average common shares outstanding – basic and diluted | 4,877,861 | 3,041,085 | ||||||
| Net loss per common share – basic and diluted | $ | (0.60 | ) | $ | (0.70 | ) | ||
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SYRA HEALTH CORP.
STATEMENTS OF CASH FLOWS
| For the Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (2,938,343 | ) | $ | (2,118,165 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Non-cash lease expense | - | 95,563 | ||||||
| Depreciation | 48,771 | 14,849 | ||||||
| Amortization of debt discounts | - | 14,076 | ||||||
| Common stock issued for services | - | 510,000 | ||||||
| Stock-based compensation | 32,831 | 2,910 | ||||||
| Decrease (increase) in assets: | ||||||||
| Accounts receivable | (59,547 | ) | (940,470 | ) | ||||
| Accounts receivable, related party | (50,614 | ) | - | |||||
| Other current assets | 203,110 | (200,798 | ) | |||||
| Right-of-use asset | 121,089 | - | ||||||
| Increase (decrease) in liabilities: | ||||||||
| Accounts payable | 30,603 | 392,276 | ||||||
| Accounts payable, related parties | (3,200 | ) | (82,418 | ) | ||||
| Accrued expenses | (22,679 | ) | 163,675 | |||||
| Operating lease liability | (121,089 | ) | (95,563 | ) | ||||
| Net cash used in operating activities | (2,759,068 | ) | (2,244,065 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | (15,251 | ) | (121,260 | ) | ||||
| Net cash used in investing activities | (15,251 | ) | (121,260 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Payments on deferred offering costs | - | (596,118 | ) | |||||
| Repayment of notes payable | (185,692 | ) | - | |||||
| Proceeds received on sale of Class A common stock | 5,332,283 | 2,322,500 | ||||||
| Proceeds received from line of credit | 300,000 | 2,819,275 | ||||||
| Repayments on line of credit | (1,050,551 | ) | (2,082,800 | ) | ||||
| Advances received from related party | 1,295,010 | 94,000 | ||||||
| Repayments on advances from related party | (1,095,000 | ) | (288,200 | ) | ||||
| Proceeds received from convertible notes payable | 1,455,000 | - | ||||||
| Net cash provided by financing activities | 6,051,050 | 2,268,657 | ||||||
| NET CHANGE IN CASH | 3,276,731 | (96,668 | ) | |||||
| CASH AT BEGINNING OF PERIOD | 3,344 | 100,012 | ||||||
| CASH AT END OF PERIOD | $ | 3,280,075 | $ | 3,344 | ||||
| SUPPLEMENTAL INFORMATION: | ||||||||
| Interest paid | $ | 36,226 | $ | 11,651 | ||||
| Income taxes paid | $ | - | $ | - | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Initial recognition of right-of-use asset and lease liability | $ | - | $ | 131,187 | ||||
| Class A common stock issued for debt and interest conversion | $ | 1,472,460 | $ | - | ||||
| Cancellation of Class A common stock | $ | 42 | $ | - | ||||
| Non-cash application of invoices to STLogics loan | $ | 200,010 | $ | - | ||||
| Prepaid asset financed with notes payable | $ | 370,596 | $ | - | ||||
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Cover |
Mar. 25, 2024 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Mar. 25, 2024 |
| Entity File Number | 001-41822 |
| Entity Registrant Name | SYRA HEALTH CORP. |
| Entity Central Index Key | 0001922335 |
| Entity Tax Identification Number | 85-4027995 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 1119 Keystone Way N. #201 |
| Entity Address, City or Town | Carmel |
| Entity Address, State or Province | IN |
| Entity Address, Postal Zip Code | 46032 |
| City Area Code | (463) |
| Local Phone Number | 345-8950 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Class A Common Stock, $0.001 par value |
| Trading Symbol | SYRA |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | true |
| Elected Not To Use the Extended Transition Period | false |