Financial Performance - Net revenue for Q3 2022 was $11,950,000, representing a 48.5% increase from $8,078,000 in Q3 2021[20] - Net loss for Q3 2022 was $2,339,000, compared to a net loss of $1,992,000 in Q3 2021[20] - For the nine months ended September 30, 2022, the net loss was $4,747,000 compared to a net loss of $2,504,000 in the same period of 2021, indicating a deterioration in financial performance[25] - Total revenue for the nine months ended September 30, 2022, was $34,594,000, representing a 33% increase from $26,081,000 in the same period of 2021[43] - The company reported a net loss before income tax of $2,302,000 for the three months ended September 30, 2022, compared to a loss of $1,991,000 in the same period of 2021, reflecting a 16% increase in losses[44] Assets and Liabilities - Total assets as of September 30, 2022, increased to $24,864,000 from $24,613,000 as of December 31, 2021[18] - Cash and cash equivalents rose to $4,144,000 from $1,770,000, indicating a significant liquidity improvement[18] - Total current liabilities decreased to $5,060,000 from $6,251,000, reflecting a reduction of 19.1%[18] - Total stockholders' equity increased to $17,577,000 as of September 30, 2022, from $16,135,000 at the end of 2021[18] - The balance of short-term borrowing as of September 30, 2022, was $2,453, compared to nil for the period ended December 31, 2021[120] Revenue Segmentation - The company operates in three distinct segments: Software Services, Managed Services and Support, and Platform Services, allowing for targeted resource allocation and performance assessment[39][40] - Software Services revenue for the three months ended September 30, 2022, increased to $6,177,000, a 168% increase from $2,307,000 in the same period of 2021[43] - Managed Services and Support revenue decreased by 21% to $3,708,000 for the three months ended September 30, 2022, compared to $4,673,000 in the same period of 2021[43] - Platform Services revenue increased by 88% to $2,065,000 for the three months ended September 30, 2022, compared to $1,098,000 in the same period of 2021[43] Expenses - Operating expenses totaled $5,675,000 in Q3 2022, an increase from $4,496,000 in Q3 2021[20] - Research and development expenses for Q3 2022 were $1,471,000, down from $2,204,000 in Q3 2021[20] - Sales and marketing expenses increased by $0.49 million, or 37%, to $1.82 million for the quarter ended September 30, 2022, compared to $1.33 million for the same quarter in 2021[195] - General and administrative expenses increased by $0.73 million, or 97%, to $1.48 million for the quarter ended September 30, 2022, compared to $0.75 million for the same quarter in 2021[196] - Depreciation and amortization expenses increased by $0.70 million, or 331%, to $0.91 million for the quarter ended September 30, 2022, compared to $0.21 million for the same quarter in 2021[198] Cash Flow and Investments - Cash flows from operating activities showed a net cash used of $372,000 for the nine months ended September 30, 2022, compared to $3,878,000 used in the same period of 2021, reflecting an improvement in operational cash flow[25] - The company invested $3,279,000 in intangible assets during the nine months ended September 30, 2022, compared to no investments in the same period of 2021, highlighting a focus on growth and development[25] - The company reported an increase in additional paid-in capital of $5,888,000 during the nine months ended September 30, 2022, compared to no increase in the same period of 2021, indicating strong investor confidence[25] Customer Concentration - The top five customers contributed 76% of total revenue for the three months ended September 30, 2022, with Customer 1 alone accounting for 38% at $4,562,000[45] - For the quarter ended September 30, 2022, sales to the top five customers accounted for approximately 76% of total revenue, down from 79% in the same quarter of 2021[89] - Accounts receivable from the five major customers accounted for approximately 62% of total accounts receivable as of September 30, 2022, compared to 88% in the prior year[89] Acquisitions and Growth Strategy - The Company acquired Cornerstone Advisory Services LLC for a total consideration of $7,000, allocated to net working capital of $4,700 and intangibles of $2,300[106] - The acquisition of Devcool, Inc. had an aggregate purchase price of $7,773, with $1,289 recorded as goodwill[108] - The company is in the early stages of marketing its CloudEz, DataEz, and Readabl.AI platforms as SaaS offerings, which are expected to provide recurring revenues[157] Tax and Legal Matters - The effective tax rate for the quarter ended September 30, 2022 was 2%, compared to 0% for the same quarter in 2021[126] - The Company’s federal and state income tax returns are subject to examination for three years from the original filing deadline[128] - The Company has no ongoing legal proceedings that are expected to materially affect its financial condition[131]
Healthcare Triangle(HCTI) - 2022 Q3 - Quarterly Report