Healthcare Triangle(US:HCTI)2024-11-14 22:04Financial Performance - Net revenue for the three months ended September 30, 2024, was $2,413,000, a decrease of 69.0% compared to $7,779,000 for the same period in 2023[13]. - Net loss for the three months ended September 30, 2024, was $1,249,000, compared to a net loss of $1,943,000 for the same period in 2023, representing a 35.7% improvement[13]. - Total revenue for the three months ended September 30, 2024, was $2,413 thousand, a decrease of 69% compared to $7,779 thousand in the same period of 2023[39]. - For the nine months ended September 30, 2024, total revenue was $9,506 thousand, down 64% from $26,143 thousand in the same period of 2023[39]. - The company reported a net loss of $1,247 thousand for the three months ended September 30, 2024, an improvement of 36% compared to a net loss of $1,939 thousand in 2023[40]. - Net income for the nine months ended September 30, 2024, was a loss of $4,621,000, an improvement from a loss of $7,007,000 in the same period of 2023, representing a 34.5% reduction in losses[16]. Assets and Liabilities - Total current assets decreased to $1,784,000 as of September 30, 2024, down from $5,294,000 as of December 31, 2023, a decline of 66.3%[12]. - Total liabilities decreased to $6,584,000 as of September 30, 2024, from $9,076,000 as of December 31, 2023, a reduction of 27.5%[12]. - Cash and cash equivalents significantly decreased to $28,000 as of September 30, 2024, from $1,234,000 as of December 31, 2023[12]. - Total stockholders' equity (deficit) as of September 30, 2024, was $(1,818,000), compared to $538,000 as of December 31, 2023[12]. Operating Expenses - Operating expenses for the three months ended September 30, 2024, were $1,889,000, down from $3,231,000 for the same period in 2023, a decrease of 41.6%[13]. - Research and development expenses for the three months ended September 30, 2024, were $175,000, compared to $1,101,000 for the same period in 2023, a decrease of 84.1%[13]. - General and Administrative expenses decreased by $0.3 million, or 21%, to $1.1 million for the quarter ended September 30, 2024, compared to $1.4 million for the same period in 2023[178]. - Interest expenses decreased by $0.3 million, or 81%, to $0.08 million for the quarter ended September 30, 2024, compared to $0.42 million for the same period in 2023[180]. Revenue Breakdown - Software Services revenue for the three months ended September 30, 2024, was $775 thousand, a decline of 84% from $4,918 thousand in 2023[39]. - Managed Services and Support revenue decreased by 36% to $1,571 thousand for the three months ended September 30, 2024, compared to $2,456 thousand in 2023[39]. - Platform Services revenue fell 83% to $67 thousand for the three months ended September 30, 2024, down from $405 thousand in 2023[39]. - Revenue from Software Services decreased by $4.1 million, or 84%, to $0.8 million for the quarter ended September 30, 2024, compared to $5.0 million for the same period in 2023[183]. - Cost of Revenue decreased by $4.4 million, or 72%, to $1.7 million for the quarter ended September 30, 2024, compared to $6.1 million for the same period in 2023[174]. Customer Concentration - The top five customers contributed 61% of total revenue for the three months ended September 30, 2024, with the largest customer accounting for 21% of revenue[41]. - Revenue from the top five customers accounted for approximately 61% of total revenue for the quarter ended September 30, 2024, down from 78% in the same quarter of 2023[84]. Cash Flow and Financing - Net cash used in operating activities was $(270,000) for the nine months ended September 30, 2024, compared to $(2,750,000) in the same period of 2023, indicating a significant improvement in cash flow[16]. - Cash outflow from financing activities was $(1.1) million for the six months ended September 30, 2024, compared to an inflow of $1.5 million for the same period in 2023[194]. - The company issued senior secured convertible promissory notes totaling $5,200,000, resulting in gross proceeds of up to $4,420,000 due to the original issue discount[27]. Corporate Governance and Compliance - The Chief Financial Officer has certified compliance with the Securities Exchange Act of 1934, ensuring financial reporting accuracy[31.2]. - The certifications by the Chief Executive Officer and Chief Financial Officer demonstrate a commitment to corporate governance and accountability[31.1][32.2]. - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements, including ASU 2021-08 and ASU 2021-10[118][119]. Strategic Focus - The company emphasizes its focus on digital transformation in the healthcare sector, leveraging technologies such as AI, ML, and IoT to enhance operational efficiency[21]. - The company aims to shift focus towards Managed Services and Support and Platform Services to drive long-term revenue growth and enhance customer retention[184]. - The company expects to increase its research and development expenses as it focuses on developing new product offerings and enhancing existing ones[158]. - The company anticipates that its sales and marketing expenses will continue to increase in absolute dollar terms as it strategically invests to expand its business[160]. Employee and Operational Metrics - The company has a total of 22 full-time employees and 114 sub-contractors, including 90 certified cloud engineers as of September 30, 2024[137]. - The company operates from two office locations leased by the parent and has paid rent of $34 for the quarter ended September 30, 2024, down from $67 for the same quarter in 2023[97]. Taxation - The Company's total income tax expense for the quarter ended September 30, 2024, was $8,000, compared to $28,000 for the same quarter in 2023, reflecting a decrease of 71.43%[115]. - The effective tax rate for the quarter ended September 30, 2024, was 0%, consistent with the rate for the same quarter in 2023[116]. Shareholder Information - The company issued 50,000 shares for services during the three months ended September 30, 2024[14]. - The weighted average shares outstanding used in per common share computations for the three months ended September 30, 2024, was 5,666,781[13]. - The company has a Warrant liability of $1,333 at fair value as of September 30, 2024[108]. Legal and Regulatory Matters - The company is not involved in any legal proceedings that are expected to have a material adverse effect on its business or financial condition[120]. - The company has not experienced major impacts from COVID-19 during the quarter ended September 30, 2024, and has managed to service its debt and obligations on time[144].