Financial Performance - The company generated approximately 5.5 million in revenues for the years ended December 31, 2024 and 2023, respectively, indicating a year-over-year revenue growth of 45.5%[45] - The net losses for the company were 2,938,343 for the years ended December 31, 2024 and 2023, respectively, reflecting an increase in losses of 28.0%[45] - The accumulated deficit as of December 31, 2024 and 2023 was 5,064,955, respectively, showing a significant increase in the deficit of 74.5%[45] - As of December 31, 2024 and 2023, the company had cash reserves of 3,280,075, respectively, indicating a decrease in cash of 27.0%[46] Going Concern and Risks - The independent registered public accounting firm expressed substantial doubt about the company's ability to continue as a going concern due to recurring losses from operations[50] - The company faces significant competition in the healthcare services markets, which may adversely affect its business and financial condition[51] - The company is exposed to risks associated with government contracting, including audits and compliance obligations that could result in penalties or contract terminations[85] - Legal and regulatory proceedings could lead to unexpected adverse outcomes, affecting the company's operations and financial condition[87] - The company faces risks from unstable market conditions, including liquidity risks and potential adverse effects from geopolitical events, which could impact financial performance and stock price[112] Customer and Market Dynamics - The ability to retain existing customers and attract new ones is critical for the company's success, with potential impacts from pricing pressures and changing business models[52] - The healthcare industry is consolidating, which could intensify competition and pressure pricing for the company's products and services[80] - The company relies on a small number of large customers, and the loss of one or more major customers could materially adversely affect its financial condition[103] Operational Challenges - The company must continually improve existing solutions and develop new ones to respond to regulatory developments and customer demands[57] - Achieving market acceptance for new or updated solutions may require substantial marketing efforts and expenditures[59] - The company may experience increased operating costs if it fails to recruit and retain sufficient quality healthcare professionals, which could negatively affect profitability[81] - Competition for healthcare professionals remains intense due to low unemployment rates, which may increase recruitment costs and impact service execution[83] - The company may face challenges in recruiting and retaining skilled personnel, which could impact its business objectives[91] Cybersecurity and Data Risks - The company relies on information systems to manage data, and failures in these systems could adversely affect business operations and results[65] - The company faces significant risks related to unauthorized access to data and potential breaches, which could lead to substantial financial costs and reputational damage[66] - There have been high-profile security breaches in the healthcare industry, resulting in lawsuits and significant fines, which could impact the company's operations and financial condition[67] - The company must continuously invest in its systems and processes to keep pace with evolving cybersecurity threats and regulatory standards[68] - Interruptions in internal and vendor systems could lead to security issues and prevent customer access to solutions, impacting overall business performance[69] Financial and Tax Considerations - The company has incurred net operating losses (NOLs) during its history, which may limit its ability to offset future taxable income[92] - Federal NOLs generated in taxable years ending after December 31, 2017 may be carried forward indefinitely but are limited to 80% of taxable income annually for tax years beginning after December 31, 2020[93] - Changes in U.S. tax laws, including the Inflation Reduction Act of 2022, may adversely affect the company's future profitability[96] Corporate Governance and Structure - The dual-class structure of the common stock concentrates voting control, with Class B common stock holders having 16.5 votes per share compared to 1 vote per share for Class A common stock, resulting in Class B holders controlling approximately 60.5% of the voting power[113] - As of December 31, 2024, there were 833,334 shares of Class B common stock outstanding, representing 79.6% of total voting securities[113] - Significant stockholders, including the CEO and CFO, beneficially own 51.0% of Class B common stock and 30.9% of outstanding voting securities, influencing corporate actions and board elections[117] - Anti-takeover provisions in the company's governance documents may impair takeover attempts, affecting stockholder opportunities for premium share prices[119] - The exclusive forum provision in the Certificate of Incorporation may limit stockholders' ability to bring claims in favorable judicial forums, potentially increasing costs[122] Market and Trading Considerations - The market price of Class A common stock may experience rapid fluctuations unrelated to actual operating performance, making it difficult for investors to assess value[111] - The company may be excluded from certain stock indices due to its dual-class structure, potentially affecting the attractiveness of Class A common stock to investors[116] - Future adverse developments in financial institutions could lead to market-wide liquidity shortages, impacting the company's ability to access working capital[112] - The trading market for the company's Class A common stock is influenced by the research and reports published by securities or industry analysts, with potential declines in market price if coverage is inadequate or unfavorable[129] - There is a risk that the attractiveness of the company's Class A common stock may decline due to reliance on exemptions from certain reporting requirements, potentially leading to a less active trading market and increased share price volatility[132] Emerging Growth Company Status - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to take advantage of reduced reporting requirements until it meets certain thresholds, such as total annual gross revenue of at least 700 million[130] - The company may delay adopting new or revised accounting standards until they apply to private companies, which could impact its financial reporting practices[131]
Syra Health (SYRA) - 2024 Q4 - Annual Report