Form 8-K - Current report

 

 

 

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): May 9, 2024

 

SYRA HEALTH CORP.

(Exact name of registrant as specified in its charter)

 

Delaware		001-41822		85-4027995
(State or other jurisdiction		(Commission		(I. R. S. Employer
of incorporation)		File Number)		Identification No.)

 

1119 Keystone Way N. #201

Carmel, IN 46032

(Address of principal executive offices, including zip code)

 

[phone]

(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 May 9, 2024, Syra Health Corp. issued a press release announcing its financial results for the first quarter ended March 31, 2024. 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 May 9, 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: May 9, 2024	By:	/s/ Deepika Vuppalanchi
		Deepika Vuppalanchi Chief Executive Officer

 

 

 

Exhibit 99.1

 

Syra Health Announces First Quarter 2024 Financial Results, Led By Strong Revenue Growth of 47%.

 

Conference call will be held today, Thursday, May 9 at 9:00 am ET

 

Carmel, IN, May 9, 2024 /PRNewswire/ —Syra Health Corp. (NASDAQ: SYRA), (“Syra Health” or the “Company”) a healthcare technology company with a mission to improve healthcare by providing innovative services and technology solutions, announced today its financial results for the first quarter ended March 31, 2024.

 

Q1 2024 Financial Highlights

 

	●	Revenue of $1.7 million in 1Q24 compared to $1.2 million in 1Q23.
	●	Business units excluding Healthcare Workforce grew 333% and comprised 19% of total revenues in 1Q24, versus only 7% in 1Q23.
	●	Population Health, driven by demand for epidemiology services, saw an increase of 212% compared to 1Q23.
	●	Cash balance of $3.2 million as of March 31, 2024, and no long-term debt.

 

2024 Financial Outlook

 

The Company anticipates full-year 2024 revenue of $9 to $11 million, representing growth of 64%-100% versus 2023. Due to the implementation cycle of customers, the Company expects the majority of its contract revenues to be realized in the second half of 2024.

 

Recent Operational Highlights

 

	●	Currently has active contracts in 19 states across the nation.
	●	Secured a one-year renewable 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.
	●	Announced a one-year, $480,000 contract from the Indiana Department of Health to administer public health and healthcare readiness assessments.
	●	Awarded 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.
	●	Secured a one-year contract with Washington D.C.’s Department of Behavioral Health worth approximately $250,000. The Company will conduct an epidemiological study aimed at identifying the prevalence and types of behavioral health conditions that exist among D.C. youth.
	●	Won multiple healthcare workforce contracts in states including Missouri, Nebraska, and Virginia.

 

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	●	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, Administration for Families and Children, Office of Refugee Resettlement, Medical Staffing and Support, valued at $75 billion. Revenues will be realized after the receipt of task orders.
	●	The Company’s research study protocol for “Syrenity,” Syra Health’s prevention-focused mental and behavioral health platform, was approved by Pearl Institutional Review Board. The research study will be conducted by renowned university researchers and practicing psychologists who will enroll approximately 300 people with moderate or worse depression severity.

 

Management Commentary

 

Dr. Deepika Vuppalanchi, CEO of Syra Health, said “We are proud of our impressive growth in 2024, as our revenues in the first quarter grew 47% versus last year. As such, we are confident in our 2024 revenue guidance of $9 million to $11 million, based on contracts in hand and pending implementation. The demand for our services remains strong and we believe we are properly positioned to take advantage. We are currently doing business in 19 states, and we anticipate securing new business from both the private and public sectors. We are excited about our Population Health business unit, which grew over 200% in the first quarter, driven by strong demand for our epidemiology services. Our growth remains strong in our newest business units of Digital Health and Health Education, and we are excited that our Healthcare Workforce business unit has returned to growth in 2024. Syrenity, our mental and behavioral health platform, which is focused on prevention, also holds great promise in terms of revenue for 2024 and beyond. We believe we are at the early stages of accelerating growth, which has been made possible by recent investments in our people and our technology.”

 

Q1 2024 Financial Results

 

Revenue for the quarter ended March 31, 2024, was $1.7 million, compared to the $1.2 million reported in the first quarter of 2023. Strong growth was driven by Population Health which grew 212% year over year, and Healthcare Workforce, which grew 28% year over year. Digital Health had revenues of $92,250, compared to zero last year.

Gross profit margin in the first quarter of 2024 was 10.2%, compared to 12.4% in the first quarter of 2023. The decrease in gross margins was due to the mix shift to Healthcare Workforce.

 

Total operating expenses for the first quarter of 2024 were $1.6 million compared to $921,781 in the first quarter of 2023. Salaries and benefits expenses increased 61% to support general business growth and sales. Professional fees declined 18% due to decreased legal and other professional costs as the Company completed its IPO process in the fourth quarter of 2023. Selling, general and administrative expenses increased 87% due to increased operations. Depreciation expense was $12,545 compared to $11,763 in the first quarter of 2023, reflecting expanded office space. R&D expenses were $277,548, reflecting the development of technology-based solutions.

 

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Net Loss for the third quarter of 2024 was $(1.4 million) compared to $(785,892) in the first quarter of 2023. Adjusted EBITDA for the first quarter 2024 was $(1.4 million) compared to $(762,710) in the first quarter 2023. Cash on hand on March 31, 2024, was $3.2 million.

 

Conference Call

 

Management will hold a conference call to discuss the fiscal year’s financial results at 9:00 am ET on May 9, 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/q1-2024-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/q1-2024-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

 

		Three Months Ended
		March 31, 2024				March 31, 2023
net loss		$	(1,447,050	)		$	(785,892	)
interest			4,077				11,419
depreciation			12,545				11,763
taxes			-				-
EBITDA		$	(1,430,428	)		$	(762,710	)

 

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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.” 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.

For more information, please contact:

 

Media:

 

Syra Health

Communications & Marketing Director

Christine Drury

317-385-9227

[e-mail]

 

Investors:

 

Ben Shamsian

Vice President

Lytham Partners, LLC

646-829-9701

[e-mail]

 

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SYRA HEALTH CORP.

CONDENSED BALANCE SHEETS

(UNAUDITED)

 

		March 31,				December 31,
		2024				2023
ASSETS			(Unaudited)
Current assets:
Cash		$	3,237,957			$	3,280,075
Accounts receivable, net			745,683				1,060,634
Accounts receivable related party			82,124				50,614
Other current assets			381,887				389,787
Total current assets			4,447,651				4,781,110
Property and equipment, net			72,048				78,974
Right-of-use asset			31,826				63,199
Total assets		$	4,551,525			$	4,923,283
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	645,567			$	462,991
Accrued expenses			319,698				198,978
Deferred revenue			6,108				-
Current portion of operating lease liability, related party			31,826				63,199
Notes payable			99,021				184,904
Total current liabilities			1,102,220				910,072
Total liabilities			1,102,220				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 authorized, 5,769,087 and 5,588,298 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively			5,769				5,588
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			9,954,708				9,071,745
Accumulated deficit			(6,512,005	)			(5,064,955	)
Total stockholders’ equity (deficit)			3,449,305				4,013,211
Total liabilities and stockholders’ equity (deficit)		$	4,551,525			$	4,923,283

 

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SYRA HEALTH CORP.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

		For the Three Months Ended
		March 31,
		2024				2023
Net revenues		$	1,752,340			$	1,188,351
Cost of services			1,573,053				1,041,195
Gross profit			179,287				147,156
Operating expenses:
Salaries and benefits			736,303				457,745
Professional services			194,580				236,660
Research and development expenses			277,548				-
Selling, general and administrative expenses			402,265				215,463
Depreciation			12,545				11,763
Total operating expenses			1,623,241				921,631
Operating loss			(1,443,954	)			(774,475	)
Other income (expense):
Interest income			981				2
Interest expense			(4,077	)			(11,419	)
Total other income (expense)			(3,096	)			(11,417	)
Net loss		$	(1,447,050	)		$	(785,892	)
Weighted average common shares outstanding - basic and diluted			6,495,213				4,353,717
Net loss per common share - basic and diluted		$	(0.22	)		$	(0.18	)

 

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SYRA HEALTH CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

		For the Three Months Ended
		March 31,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(1,447,050	)		$	(785,892	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			12,545				11,763
Common stock issued for services			18,875				-
Non-cash lease expense			31,373				29,624
Stock-based compensation, stock options			14,140				1,367
Changes in operating assets and liabilities:
Accounts receivable			314,951				835,456
Accounts receivable, related party			(31,510	)			-
Other current assets			7,900				(103,025	)
Accounts payable			182,576				31,775
Accounts payable, related parties			-				(1,600	)
Deferred revenue			6,108				-
Accrued expenses			120,720				(34,906	)
Operating lease liability			(31,373	)			(29,624	)
Net cash used in operating activities			(800,745	)			(45,062	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment			(5,619	)			(9,659	)
Net cash used in investing activities			(5,619	)			(9,659	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds received on exercise of warrants			850,129				-
Payment of deferred offering costs			-				(155,260	)
Proceeds received from line of credit			-				300,000
Repayments on line of credit			-				(751,952	)
Repayments on notes payable			(85,883	)			-
Proceeds received from convertible notes payable			-				1,255,000
Net cash provided by financing activities			764,246				647,788
NET CHANGE IN CASH AND CASH EQUIVALENTS			(42,118	)			593,067
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			3,280,075				3,344
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	3,237,957			$	596,411
SUPPLEMENTAL INFORMATION:
Interest paid		$	4,077			$	9,850
Income taxes paid		$	-			$	-

 

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Cover	May 09, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 09, 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
Entity Information, Former Legal or Registered Name	Not Applicable

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