Syra Health Delivers Third Quarter 2024 Financial Results

Achieved Net Revenue of $2.3 million, ~42% Growth Over the Prior Year Quarter

Gross Margins Increased Following Shift in Operational Strategy

Net Loss Narrowed to $417,535 ($0.06 per share), a Significant Improvement from the $1.39 million ($0.21 per share) Net Loss in Q2 of 2024

Aiming to Attain Profitability in 2025 through Targeted Revenue Growth and Cost-Efficiency Measures

Conference call will be held today, Tuesday, October 29(th) at 9:00 AM ET

CARMEL, Ind., Oct. 29, 2024 /PRNewswire/ -- Syra Health Corp. (NASDAQ: SYRA), ("Syra Health" or the "Company") a healthcare technology company driving better health through impactful, innovative solutions, announced today its financial results for the third quarter ended September 30, 2024.

Financial Highlights - 2024 Fiscal Third Quarter

Year over Year - Q3 2024 vs. Q3 2023

    --  Achieved Net Revenue of $2.3 million, ~42% growth compared to 3Q23.
    --  Population Health continues to grow, driven by demand for our public
        health services with revenues up 36%, alongside strong contributions
        from legacy Healthcare Workforce services with revenues up 54% compared
        to 3Q23.
    --  Gross profit margin was 30% in 3Q24, compared to 35% in 3Q23, reflecting
        a milestone-based revenue recognition from our first digital health
        product in 3Q23.
    --  Cash balance of $2.7 million at end of 3Q24 with no long-term debt,
        providing an estimated capital runway of approximately two years.

Third Quarter 2024 vs. Second Quarter 2024

    --  Total Revenue increased 14.4% compared to 2Q24.
    --  Gross profit margin was 29.7% in 3Q24 compared to 17.8% in 2Q24, an
        increase of 1190 bps.
    --  Net loss for 3Q24 showed a 69% reduction compared to 2Q24 demonstrating
        a consistent move toward profitability.
    --  Net loss per share decreased to $(0.06) in 3Q24 from $(0.21) in 2Q24.
    --  Total operating expenses in 3Q24 decreased 37% compared to 2Q24.

Recent Operational Highlights

    --  Successfully implemented cost-saving initiatives for sustainable impact
        --  Achieved a 37% overall reduction in operating expenses in 3Q24
            compared to 2Q24.
        --  SG&A expenses decreased by 37% in 3Q24 compared to 2Q24.
        --  Realized a 30% decrease in salaries and benefits costs in 3Q24
            compared to 2Q24.


    --  Launched Syrenity, a mental health app built on clinically proven
        practices and ethical, compliant AI technology. Targeting a broad
        customer base--including large employers, academic institutions, health
        plans, and direct consumers--Syrenity taps into national and global
        markets. This product diversifies revenue streams and bolsters the
        Company's standing in the growing mental health tech sector, driving
        sustainable growth.


    --  Several government projects across multiple states are advancing into
        active implementation within high-margin business units. Launched the
        implementation of a four-year, $5.8 million training contract for
        healthcare professionals throughout Indiana, with revenue expected to
        start in 4Q24.


    --  Secured healthcare workforce contracts across several states, including
        Delaware, Florida, and Kansas adding revenues to our legacy service
        line.
    --  Completed a capital raise, generating gross proceeds of $2.1 million to
        bolster our financial flexibility and further support growth
        initiatives, including the product roadmap and the development of Syra's
        ethical, explainable, and responsible AI solutions in healthcare.

Management Commentary

Dr. Deepika Vuppalanchi, CEO of Syra Health, said, "We are excited to report year-over-year growth of 42%. Our commitment to increasing revenue and improving profit margins is driven by our strong team and a track record of success stories. We are laser-focused on expanding our portfolio of high-revenue clients in high-margin business units by delivering compelling value propositions tailored to meet their specific needs. Looking ahead, we anticipate that our mental health product, Syrenity, will attract new customers in the robust national and global mental and behavioral health markets, further diversifying our revenue streams.

Additionally, our extensive cost-saving strategy has yielded significant reductions in expenses across the board with a 69% decrease in net loss quarter-over-quarter. With our strong revenue growth, a robust sales pipeline spanning both public and private sectors, effective cost optimization strategies, and a steadfast commitment to innovative solutions, we are confident in our growth trajectory. We are determined to achieve profitability in 2025 and capitalize on the exciting opportunities ahead."

Q3 2024 Financial Results

Revenue for the quarter ended September 30, 2024, was $2.3 million, compared to the $1.6 million reported in the third quarter of 2023. Strong growth was driven by Population Health which grew 36% year over year, and Healthcare Workforce, which increased 54% year over year.

Gross profit margin was 30% in the third quarter of 2024, compared to 35% the previous year, attributed to revenue recognition in the third quarter of 2023 from our first milestone-based digital health product, Syrabot. With maintenance and operations for this project continuing for an additional three years, we believe we are well-positioned for future growth as we expand our digital health offerings and optimize our revenue streams.

Total operating expenses for the third quarter of 2024 were $1.1 million compared to $0.9 million in the third quarter of 2023, an increase of 22.2%.

Net loss for the third quarter of 2024 was $(417,535) compared to $(354,376) in the third quarter of 2023.

Total Revenue in the third quarter of 2024 was $2.3 million representing a 14.4% increase compared to the second quarter of 2024.

Gross profit margin in the third quarter of 2024 was 29.7%, compared to 17.8% in the second quarter of 2024. The 1190-basis point increase in gross margins quarter-over-quarter was primarily driven by cost-saving initiatives and enhanced operational efficiency, achieved by adopting a lean approach and reducing redundancies.

Total operating expenses in the third quarter of 2024 decreased 37% to $1.1 million compared to $1.74 million in the second quarter of 2024 due to a strategic focus on streamlining our operations and optimizing our workforce with a determination to reduce our cost structure.

Net loss for the third quarter of 2024 was $(417,535), a decrease of 69% from the net loss of $(1.4 million) in the second quarter of 2023. This improvement was due to restructuring efforts that reduced redundancies and increased operational efficiencies, providing a solid foundation to support ongoing business operations.

Cash on hand on September 30, 2024, was $2.7 million.

Conference Call

Management will hold a conference call to discuss the fiscal year's financial results at 9:00 am ET on October 29, 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/q3-2024-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/q3-2024-earnings-call.

ABOUT SYRA HEALTH

Syra Health leads the charge in addressing the toughest challenges in healthcare, from behavioral and mental health to population health, digital transformation, health education, and workforce development. Our technology-driven solutions focus on prevention, accessibility, and affordability, ensuring that every patient and provider gets the support they need. We proudly partner with payers, providers, life sciences organizations, academic institutions, and government entities to advance healthcare and improve outcomes. Learn more about our mission and services at 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." These statements include but are not limited to, statements relating to the expected use of proceeds, the Company's operations and business strategy, and the Company's expected financial results. 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. The forward-looking statements contained in this press release are based on management's current expectations and are subject to substantial risks, uncertainty, and changes in circumstances. Investors should read the risk factors set forth in our Form 10-K for the year ended December 31, 2023, and other periodic reports filed with the Securities and Exchange Commission. Any forward-looking statements contained in this press release speak only as of the date hereof, and, except as required by federal securities laws, the Company specifically disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.


                                                                                 
      
             SYRA HEALTH CORP.
                                                                                  
       CONDENSED BALANCE SHEETS


                                                                                                                            September 30,                   December 31,


                                                                                                                          2024                     2023


                                                                                                                            (Unaudited)



            ASSETS



            Current assets:



            Cash                                                                                               $
         2,697,459          $
          3,280,075



            Accounts receivable, net                                                                                    884,445                  1,060,634



            Accounts receivable related party                                                                                                      50,614





            Other current assets                                                                                        482,990                    389,787



            Total current assets                                                                                      4,064,894                  4,781,110





            Property and equipment, net                                                                                  34,625                     78,974



            Right-of-use asset                                                                                          325,491                     63,199





            Total assets                                                                                       $
         4,425,010          $
          4,923,283





            LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)





            Current liabilities:



            Accounts payable                                                                                     $
         212,931            $
          462,991



            Accrued expenses                                                                                            309,606                    198,978



            Deferred revenue                                                                                              6,108



            Current portion of operating lease liability, related party                                                 108,939                     63,199



            Notes payable                                                                                               240,221                    184,904



            Total current liabilities                                                                                   877,805                    910,072





            Non-current portion of operating lease liability, related party                                             216,552





            Total liabilities                                                                                         1,094,357                    910,072





            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                                                    8,974                      5,588
    authorized, 8,973,774 and 5,588,298 shares issued and outstanding
    at September 30, 2024 and December 31, 2023, respectively



            Convertible class B common stock, $0.001 par value, 5,000,000                                                   833                        833
    shares authorized, 833,334 shares issued and outstanding





            Additional paid-in capital                                                                               11,640,642                  9,071,745



            Accumulated deficit                                                                                     (8,319,796)               (5,064,955)



            Total stockholders' equity (deficit)                                                                      3,330,653                  4,013,211





            Total liabilities and stockholders' equity (deficit)                                               $
         4,425,010          $
          4,923,283


                                                              
      
                SYRA HEALTH CORP.
                                                            
       CONDENSED STATEMENTS OF OPERATIONS
                                                                     (Unaudited)




                                                                                               For the Three Months Ended                    For the Nine Months Ended


                                                                                         2024                               2023               2024                            2023





              Net revenues                                               $
              2,253,336                 $
             1,581,344    $
          5,975,357                 $
          3,748,943



              Cost of services                                                       1,585,038                            1,026,803            4,777,765                         2,919,087



              Gross profit                                                             668,298                              554,541            1,197,592                           829,856





              Operating expenses:



              Salaries and benefits                                                    594,738                              592,241            2,178,105                         1,612,605



              Professional services                                                    153,803                               58,875              489,839                           424,379



              Research and development expenses                                         34,821                                                  590,263



              Selling, general and administrative expenses                             288,305                              234,084            1,147,142                           657,904



              Depreciation                                                              25,541                               12,357               55,460                            36,413



              Total operating expenses                                               1,097,208                              897,557            4,460,809                         2,731,301





              Operating loss                                                         (428,910)                           (343,016)         (3,263,217)                      (1,901,445)





              Other income (expense):



              Interest income                                                           13,641                                2,820               18,448                             2,826



              Interest expense                                                         (2,266)                            (14,180)            (10,072)                         (44,449)



              Total other income (expense)                                              11,375                             (11,360)               8,376                          (41,623)





              Net loss                                                   $
              (417,535)                $
             (354,376)  $
         (3,254,841)                $
        (1,943,068)





              Weighted average common shares                                         7,264,768                            4,360,426            6,789,209                         4,380,267
     outstanding - basic and diluted



              Net loss per common share - basic and                         $
              (0.06)                   $
             (0.08)      $
          (0.48)                   $
          (0.44)
    diluted


                                                                                 
      
                SYRA HEALTH CORP.
                                                                               
       CONDENSED STATEMENTS OF CASH FLOWS
                                                                                        (Unaudited)


                                                                                                                                       2024                   2023



              CASH FLOWS FROM OPERATING ACTIVITIES



              Net loss                                                                                                   $
          (3,254,841)       $
        (1,943,068)



              Adjustments to reconcile net loss to net cash used in operating
    activities:



              Depreciation                                                                                                            55,460                   36,413



              Bad debt expense                                                                                                                                 9,922



              Common stock issued for services                                                                                        74,647



              Non-cash lease expense                                                                                                  63,199                   90,162



              Stock-based compensation, stock options                                                                                 28,486                    3,669



              Changes in operating assets and liabilities:



              Accounts receivable                                                                                                    176,189                  136,324



              Accounts receivable, related party                                                                                      50,614



              Other current assets                                                                                                   285,456                   58,979



              Accounts payable                                                                                                     (250,060)                 500,391



              Accounts payable, related parties                                                                                                               18,221



              Deferred revenue                                                                                                         6,108                  141,644



              Accrued expenses                                                                                                       110,628                   35,479



              Operating lease liability                                                                                             (63,199)                (90,162)



              Net cash used in operating activities                                                                              (2,717,313)             (1,002,026)





              CASH FLOWS FROM INVESTING ACTIVITIES



              Purchase of property and equipment                                                                                    (11,111)                (15,251)



              Net cash used in investing activities                                                                                 (11,111)                (15,251)





              CASH FLOWS FROM FINANCING ACTIVITIES



              Proceeds from sale of common stock and exercise of warrants                                                          2,469,150



              Payment of deferred offering costs                                                                                                           (589,059)



              Proceeds received from line of credit                                                                                                          300,000



              Repayments on line of credit                                                                                                                 (750,397)



              Proceeds received from advances, related party                                                                                               1,295,010



              Repayments on advances, related party                                                                                                        (678,611)



              Repayments on notes payable                                                                                          (323,342)



              Proceeds received from convertible notes payable                                                                                             1,455,000



              Net cash provided by financing activities                                                                            2,145,808                1,031,943





              NET CHANGE IN CASH AND CASH EQUIVALENTS                                                                              (582,616)                  14,666



              CASH AND CASH EQUIVALENTS AT BEGINNING OF                                                                            3,280,075                    3,344
    PERIOD



              CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                                   $
          2,697,459          $
           18,010





              SUPPLEMENTAL INFORMATION:



              Interest paid                                                                                                   $
          10,072          $
           28,533



              Income taxes paid                                                                                      
     $                     
      $





              NON-CASH INVESTING AND FINANCING ACTIVITIES:



              Initial recognition of right-of-use asset and lease liability                                                  $
          325,491  
      $



              Prepaid asset financed with note payable                                                                       $
          378,659  
      $

Contacts:

For Investor or Media Inquiries:
Priya Prasad
COO & CFO
Syra Health Corp.
463-345-8963
priyap@syrahealth.com

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SOURCE Syra Health