[10-Q] Syra Health Corp Quarterly Earnings Report
Syra Health (SYRA) filed its Q3 2025 10‑Q, showing a smaller loss alongside a shift in revenue mix and a going concern warning. For the nine months ended September 30, 2025, net revenues were $5,491,944 versus $5,975,357 a year ago, as Healthcare Workforce declined and Population Health grew. Gross profit was $1,896,592 with a gross margin near 35%, up from roughly 22% last year, driven by mix toward higher‑margin project work.
Operating loss was $768,663 and net loss was $761,763, improving from $3,254,841 last year. Cash and cash equivalents were $1,976,545 as of September 30, 2025, with working capital of $2,156,762. The company disclosed substantial doubt about its ability to continue as a going concern and may need additional capital. Customer concentration remained high; Indiana FSSA accounted for approximately 37% of year‑to‑date revenue.
Corporate updates noted an April 11, 2025 voluntary delisting from Nasdaq to OTC QB and leadership changes in June, including appointment of an interim CEO. Class A shares outstanding were 11,339,169 as of November 11, 2025.
- None.
- Going concern warning: management disclosed substantial doubt about the company’s ability to continue without additional capital.
- Delisted from Nasdaq: voluntary move to OTC QB on April 11, 2025 reduces market visibility and potential liquidity.
Insights
Improved margins and smaller loss, but going concern dominates.
Syra Health reported nine‑month revenue of
Liquidity remains tight with cash of
The filing also notes an
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________to ___________
Commission
File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| OTC QB |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| 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.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The
number of shares of registrant’s common stock outstanding as of November 11, 2025 was
| Page No. | ||
| PART I. FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | F-1 |
| Condensed Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 | F-1 | |
| Condensed Statements of Operations for the Three and Nine Months ended September 30, 2025 and 2024 (Unaudited) | F-2 | |
| Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Nine Months ended September 30, 2025 and 2024 (Unaudited) | F-3 | |
| Condensed Statements of Cash Flows for the Nine Months ended September 30, 2025 and 2024 (Unaudited) | F-5 | |
| Notes to the Condensed Financial Statements (Unaudited) | F-6 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 11 |
| Item 4. | Controls and Procedures | 11 |
| PART II. OTHER INFORMATION | 12 | |
| Item 1. | Legal Proceedings | 12 |
| Item 1A. | Risk Factors | 12 |
| Item 2. | Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities | 12 |
| Item 3. | Defaults Upon Senior Securities | 12 |
| Item 5. | Other Information | 12 |
| Item 6. | Exhibits | 13 |
| Signatures | 14 | |
| 2 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:
| ● | our projected financial position and estimated cash burn rate; | |
| ● | our estimates regarding expenses, future revenues and capital requirements; | |
| ● | our ability to continue as a going concern; | |
| ● | our need to raise substantial additional capital to fund our operations; | |
| ● | our ability to compete in the healthcare industry; | |
| ● | the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; | |
| ● | competitive pressures including offerings and pricing; | |
| ● | our ability to establish and maintain strategic relationships; | |
| ● | undetected errors or similar problems in our software products; | |
| ● | compliance with existing laws, regulations and industry initiatives and future changes in laws or regulations in the healthcare industry; | |
| ● | the possibility of services-related liabilities; | |
| ● | our ability to obtain, maintain and protect our intellectual property rights and the potential for us to incur substantial costs from lawsuits to enforce or protect our intellectual property rights; | |
| ● | our reliance on third-party content providers; | |
| ● | the success of competing products or services that are or become available; | |
| ● | our ability to expand our organization to accommodate potential growth and our ability to retain and attract key personnel; and | |
| ● | the successful development of our sales and marketing capabilities. |
All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.
This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.
| 3 |
ITEM 1. FINANCIAL STATEMENTS
SYRA HEALTH CORP.
CONDENSED BALANCE SHEETS
| September 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use asset | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable, related parties | - | |||||||
| Accounts payable | - | |||||||
| Accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Current portion of operating lease liability, related party | ||||||||
| Notes payable | ||||||||
| Total current liabilities | ||||||||
| Non-current portion of operating lease liability, related party | - | |||||||
| Total liabilities | ||||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ | - | - | ||||||
| Class A common stock, $ | ||||||||
| Convertible class B common stock, $ | ||||||||
| Common stock, value | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to condensed unaudited financial statements.
| F-1 |
SYRA HEALTH CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net revenues | $ | $ | $ | $ | ||||||||||||
| Cost of services | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Salaries and benefits | ||||||||||||||||
| Professional services | ||||||||||||||||
| Research and development expenses | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( |
) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( |
) | ||||||||
| Total other income (expense) | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( |
) | ||||
| Weighted average common shares outstanding - basic and diluted | ||||||||||||||||
| Net loss per common share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( |
) | ||||
See accompanying notes to condensed unaudited financial statements.
| F-2 |
SYRA HEALTH CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||||||||||||||
| Class A | Convertible Class B | Additional | Total | |||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
| Warrants exercised for cash | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Conversion of Class B common stock to Class A common stock | - | - | ( | ) | ( | ) | ( | ) | - | - | ||||||||||||||||||||||||||
| Class A common stock issued for services | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Amortization of Stock options issued to employees and consultants | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Amortization of Stock options issued for directors’ fees | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance, March 31, 2025 | - | - | $ | ( | ) | |||||||||||||||||||||||||||||||
| Amortization of Stock options issued to employees and consultants | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Amortization of Stock options issued for directors’ fees | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance, June 30, 2025 | - | - | ( | ) | ||||||||||||||||||||||||||||||||
| Amortization of stock options issued to employees and consultants | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Amortization of stock options issued for directors’ fees | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance, September 30, 2025 | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
| F-3 |
| Class A | Convertible Class B | Additional | Total | |||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2023 | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
| Class A common stock issued for services | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Warrants exercised for cash | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Class A common stock options issued for services | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance, March 31, 2024 | - | - | $ | ( | ) | |||||||||||||||||||||||||||||||
| Amortization of Class A common stock issued for services | ||||||||||||||||||||||||||||||||||||
| Amortization of Class A common stock options issued for services | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance, June 30, 2024 | - | - | $ | ( | ) | |||||||||||||||||||||||||||||||
| Balance | - | - | $ | ( | ) | |||||||||||||||||||||||||||||||
| Class A common stock and Warrants issued for cash | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Class A common stock issued for services | ||||||||||||||||||||||||||||||||||||
| Amortization of Class A common stock options issued for services | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance, September 30, 2024 | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
| Balance | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
See accompanying notes to condensed unaudited financial statements.
| F-4 |
SYRA HEALTH CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| 2025 | 2024 | |||||||
| For the Nine Months Ended | ||||||||
| June 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Common stock issued for services | ||||||||
| Non-cash lease expense | - | |||||||
| Stock-based compensation, stock options | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Accounts receivable, related party | - | |||||||
| Other current assets | ||||||||
| Right-of-use asset | - | |||||||
| Accounts payable | ( | ) | ||||||
| Accounts payable, related parties | - | |||||||
| Accounts payable | - | |||||||
| Deferred revenue | ||||||||
| Accrued expenses | ( | ) | ||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | - | ( | ) | |||||
| Net cash used in investing activities | - | ( | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds received on exercise of warrants | ||||||||
| Repayments on notes payable | ( | ) | ( | ) | ||||
| Net cash provided by/(used in) financing activities | ( | ) | ||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | ( | ) | ( | ) | ||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL INFORMATION: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | - | $ | - | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Conversion of Class B common stock to Class A common stock | $ | $ | - | |||||
| Initial recognition of right-of-use asset and lease liability | $ | - | $ | |||||
| Amendment of of right-of-use asset and lease liability | $ | - | ||||||
| Prepaid asset financed with note payable | $ | $ | ||||||
See accompanying notes to condensed unaudited financial statements.
| F-5 |
SYRA HEALTH CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1 – Nature of Business and Significant Accounting Policies
Nature of Business
Syra Health Corp. (“Syra” or the “Company”) was incorporated in the state of Indiana on November 20, 2020 to provide workforce staffing solutions, health education and healthcare research consulting services to mental health hospitals and organizations, including government agencies, integrated health networks, managed care entities and pharmaceutical manufacturers. On March 11, 2022, the Company redomiciled to Delaware. The Company’s corporate office is located in Carmel, Indiana.
Basis of Presentation
The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission (“SEC”) on March 11, 2025. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been omitted from this report on Form 10-Q pursuant to the rules and regulations of the SEC.
Results for the interim periods in this report are not necessarily indicative of future financial results and have not been audited by our independent registered public accounting firm. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly our interim financial statements as of September 30, 2025, and for the three and nine months ended September 30, 2025 and 2024. These adjustments are of a normal recurring nature and consistent with the adjustments recorded to prepare the annual audited financial statements as of December 31, 2024.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Concentrations of Credit Risk
The
Company maintains cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. Accounts are guaranteed
by the Federal Deposit Insurance Corporation (“FDIC”) up to $
Fair Value of Financial Instruments
Accounting Standards Codification (“ASC”) 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
| - | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| - | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
| - | Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. |
| F-6 |
The carrying value of the Company’s financial assets and liabilities, such as cash, accounts receivable and accounts payable are estimated by management to approximate fair value primarily due to the short-term nature of the instruments. The Company’s advances from related party approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at September 30, 2025 and December 31, 2024.
Cash and Cash Equivalents
Cash
equivalents include money market accounts which have maturities of three months or less when acquired. For the purpose of the statements
of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.
Cash equivalents are stated at cost plus accrued interest, which approximates market value. There were $
Accounts Receivable
Accounts
receivable is carried at their estimated collectible amounts. Accounts receivable is periodically evaluated for collectability based
on past credit history with customers and their current financial condition. The Company had an allowance of $
Property and Equipment
Property
and equipment is stated at cost, less accumulated depreciation. The cost of office equipment is depreciated using the straight-line method
based on a five
Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation are eliminated and any resulting gain or loss is reflected in operations.
Impairment of Long-Lived Assets
In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.
Leases
The Company accounts for its leases under ASC 842 - Leases. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of obligations under operating leases, and obligations under operating leases, non-current on the Company’s balance sheets.
Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date, adjusted by the deferred rent liabilities at the adoption date. As the Company’s lease does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term.
| F-7 |
Segment Reporting
ASC Topic 280, “Segment Reporting,” requires annual and interim reporting for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and expenses, and about which separate financial information is regularly evaluated by the chief operating decision maker in deciding how to allocate resources. In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure.” The ASU updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. The amendments do not change how segments are determined, aggregated, or how thresholds are applied to determine reportable segments. The Company adopted ASU No. 2023-07 during the year ended December 31, 2024.
Segment information is prepared on the same basis that our CEO, who is our Chief Operating Decision Maker (“CODM”), manages our segments, evaluates financial results, and makes key operating decisions. We have one reportable operating segment, Healthcare services. The reportable segment derives its revenue from a variety of services primarily to state and federal health authorities. Our CODM uses net income to evaluate and make key operating decisions. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation.
The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Payment terms vary by client and the services offered.
The Company has the following main forms of revenue:
| – | Healthcare Workforce | |
| – | Population Health | |
| – | Behavioral and Mental Health Services |
The
Company primarily provides its services to state health and social service agencies and universities. Healthcare Workforce, Behavioral
Mental Health Service contracts are primarily accounted for as a single performance obligation satisfied over time because the customer
simultaneously receives and consumes the benefits of our medical staffing on an hourly or daily basis. Population Health contracts generally
consist of multiple performance obligations that are distinct, such as to provide data analytics and reporting, training, or develop
technology for implementation and maintenance with the customer. The Company allocates the transaction price across the performance obligations
based on the estimated fair value of the distinct performance obligations. Depending on the performance obligation, revenue is recognized
at a point in time when the customer obtains the benefit of the services are provide, or over time in the case of digital health revenue
where the customer simultaneously receives and consumes benefits of the contract, such as ongoing performance of our technology product.
As of September 30, 2025 and December 31, 2024, the Company had remaining performance obligations of $
The contracts generally stipulate bi-weekly or monthly billing, and the Company has elected the “ as invoiced” practical expedient to recognize revenue based on the hours incurred at the contractual rate as the Company has the right to payment in an amount that corresponds directly with the value of performance completed to date. The Company may also be subject to penalties for violations of certain ethical standards and non-performance measures within these state contracts. The Company recognizes revenue net of penalties.
| F-8 |
Disaggregated revenue data
The Company’s revenue consists of the following revenue services within its industry:
Schedule of Disaggregation of Revenue
September 30, 2025 | September 30, 2024 | |||||||
| Nine Months Ended | ||||||||
September 30, 2025 | September 30, 2024 | |||||||
| Net revenues: | ||||||||
| Healthcare workforce | $ | $ | ||||||
| Population health | ||||||||
| Behavioral and mental services | - | |||||||
| Net revenues | $ | $ | ||||||
September 30, 2025 | September 30, 2024 | |||||||
| Three Months Ended | ||||||||
September 30, 2025 | September 30, 2024 | |||||||
| Net revenues: | ||||||||
| Healthcare workforce | $ | $ | ||||||
| Population health | ||||||||
| Behavioral and mental services | - | |||||||
| Net revenues | $ | $ | ||||||
Cost of Services
The cost of services includes wages and related payroll taxes, employee benefits and certain other employee-related costs of the Company’s contract service employees, while the employees work on contract assignments.
Significant Concentrations
The
majority of accounts receivable and revenue contracts are between the Company and different divisions within the Indiana Family and Social
Services Administration (“ FSSA”). Most contracts require monthly payments as the projects progress. The Company generally
does not require collateral or advance payments. For the nine months ended September 30, 2025 and 2024, FSSA accounted for approximately
Stock-Based Compensation
The Company accounts for equity instruments issued to employees and non-employees in accordance with the provisions of ASC 718 Stock Compensation (“ASC 718”). All transactions in which the consideration provided in exchange for the purchase of goods or services consists of the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
Basic and Diluted Loss Per Share
Basic earnings per share (“ EPS”) are computed by dividing net income (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Weighted average shares for basic EPS are calculated based on weighted average Class B shares outstanding. Diluted EPS is computed by dividing net income by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options, warrants, conversion of Class B shares and restricted stock. The number of potential common shares outstanding relating to stock options, warrants, conversion of Class B shares and restricted stock is computed using the treasury stock method. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
| F-9 |
Income Taxes
The Company accounts for income taxes under the Financial Accounting Standards Board (“ FASB”) ASC 740 Income Taxes (“ASC 740”), which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations.
Uncertain Tax Positions
In accordance with ASC 740, the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.
Various taxing authorities may periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities. The Company recognizes interest and penalties related to uncertain tax positions, if any, as an income tax expense.
The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.
Reclassifications
Certain prior period amounts have been reclassified to conform to current period presentation. These reclassifications had no effect on the reported results of operations.
Recent Accounting Standards
From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date.
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
Note 2 – Going Concern
As
shown in the accompanying financial statements, as of September 30, 2025, the Company had a cash balance of $
| F-10 |
The
Company continues to pursue sources of additional capital through debt and financing transactions or arrangements, including equity financing
or other means. The Company may not be successful in identifying suitable funding transactions in a sufficient time period or at all,
and may not obtain the required capital by other means. If the Company does not succeed in raising additional capital, resources may
not be sufficient to fund its business. The Company’s ability to scale production and distribution capabilities and further increase
the value of its brands, is largely dependent on its success in raising additional capital. From January through April of 2023, the Company
raised a total of $
On
September 11, 2024, the Company completed a public offering and received net proceeds of $
The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. These financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 3 – Related Party Transactions
Director Fees
As
of September 30, 2025, the Company owed a total of $
Office Lease
The
Company leases its current corporate headquarters under a nine months lease from STVentures, LLC (“ STVentures”),
an entity beneficially owned by the principal owners and the management team of Syra and their affiliates.
The lease commenced on July 1, 2021 and as amended on May 1, 2022, provided for a base monthly rent of $
Information Technology (“ IT”) Services
The
Company incurred a total of $
Recruitment and Human Resource Services
For
the nine months ended September 30, 2025, the Company paid a total of $
For
the nine months ended September 30, 2024, the Company paid a total of $
| F-11 |
Note 4 – Basic and Diluted Earnings per Share
During the three and nine months ended September 30, 2025, the Company used the two-class method to compute net loss per common share because it had issued securities, other than a single class of common stock, that contractually entitled the holders to participate in dividends and earnings. These participating securities included the Company’s Class A common stock, which was authorized pursuant to the Company’s amendment to its Certificate of Incorporation on May 2, 2022, and convertible Class B common stock which are entitled to share equally, on a per share basis, in all assets of the Company of whatever kind available for distribution to the holders of common stock. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings.
Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses.
The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
Common shares consisting of shares potentially dilutive that are excluded from the calculated of diluted earnings per share because they are anti-dilutive as of September 30, 2025 and 2024 are as follows:
Schedule of Diluted Earnings Per Share
September 30, 2025 | September 30, 2024 | |||||||
| Warrants | ||||||||
| Stock options | ||||||||
| Total | ||||||||
Note 5 – Other Current Assets
Other current assets included the following as of September 30, 2025 and December 31, 2024:
Schedule of Other Current Assets
| September 30, 2025 | December 31, 2024 | |||||||
| Prepaid expenses and other current assets | ||||||||
| Total other current assets | $ | $ | ||||||
Note 6 – Property and Equipment
Property and equipment at September 30, 2025 and December 31, 2024, consisted of the following:
Schedule of Property and Equipment
| September 30, 2025 | December 31, 2024 | |||||||
| Office equipment – | $ | $ | ||||||
| Leasehold improvements – | ||||||||
| Furniture and fixtures – | ||||||||
| Property and equipment, gross | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation
of property and equipment was $
| F-12 |
Note 7 – Accrued Expenses
Accrued expenses at September 30, 2025 and December 31, 2024, consisted of the following:
Schedule of Accrued Expenses
| September 30, 2025 | December 31, 2024 | |||||||
| Accrued payroll and taxes | $ | $ | ||||||
| Accrued expenses | ||||||||
| Total accrued expenses | $ | $ | ||||||
The
Company provides postretirement benefits pursuant to IRS code section 401(k) for employees meeting specified criteria. The Company matches
Note 8 – Lease
The
Company leases its current corporate headquarters under a nine month lease from STVentures, a related party. The lease, as amended on
May 1, 2022 to expand its office space from
The components of lease expense were as follows:
Schedule of Lease Expenses
| 2025 | 2024 | |||||||
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease cost: | ||||||||
| Amortization of ROU asset | $ | $ | ||||||
| Interest on lease liability | ||||||||
| Total operating lease cost | $ | $ | ||||||
| 2025 | 2024 | |||||||
For the Three Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease cost: | ||||||||
| Amortization of ROU asset | $ | $ | ||||||
| Interest on lease liability | - | |||||||
| Total operating lease cost | $ | $ | ||||||
Supplemental balance sheet information related to leases was as follows:
Schedule of Supplemental Balance Sheet Information
| September 30, 2025 | December 31, 2024 | |||||||
| Operating lease: | ||||||||
| Operating lease assets | $ | $ | ||||||
| Current portion of operating lease liability, related party | $ | |||||||
| Noncurrent operating lease liability, related party | - | |||||||
| Total operating lease liability | $ | $ | ||||||
| Weighted average remaining lease term: | ||||||||
| Operating leases | ||||||||
| Weighted average discount rate: | ||||||||
| Operating lease | % | % | ||||||
| F-13 |
Note 9 – Notes Payable
Insurance Notes Payable
In
2024, the Company entered into two insurance policy financing arrangements to purchase various insurance policies. The total principal
of these arrangements was $
In
2025, the Company entered into two insurance policy financing arrangements to purchase various insurance policies. The total principal
of this arrangement was $
The
Company recognized interest expense on notes payable of $
Note 10 – Commitments and Contingencies
Legal Contingencies
From time to time, the Company may be involved in various disputes and litigation matters that arise in the ordinary course of business. The Company is currently not a party to any material legal proceedings.
In January 2024, a former employee filed a wrongful termination lawsuit against the Company in the U.S. District Court, Southern District of Indiana. In January 2025, the Company entered into a settlement agreement with the former employee for an immaterial amount and the case is dismissed.
Commitments
On
July 1, 2025, the Company entered into a consulting agreement with a former member of the Board of Directors for services related to
developing a new strategic plan for the Company and identifying and hiring a new CEO. The agreement is in effect through September 30,
2025, and allows for a monthly cash fee of $
Note 11 – Changes in Stockholders’ Equity
Class A Common Stock
The
Company has
During
the nine months ended September 30, 2025, two investors exercised
| F-14 |
On
January 15, 2025, a total of
During
the nine months ended September 30, 2024, two investors exercised
During
the nine months ended September 30, 2024, the Company issued
On
October 18, 2024, the Company received a Notice from Nasdaq Stock Market LLC (“Nasdaq”) indicating that the bid price for
its Class A common stock, for the last 30 consecutive business days for the last thirty consecutive business days, had closed below the
minimum $
On April 11, 2025, the Company voluntarily delisted its Class A common stock from the Nasdaq Capital Market.
On June 13, 2025, the Board of Directors of Syra Health Corp. (the “Company”) approved the termination for cause of the employment agreement between Deepika Vuppalanchi, the Company’s CEO, and the Company dated April 5, 2021, as amended.
On
June 16, 2025, the Board of Directors of the Company appointed Priya Prasad, the Company’s CFO and COO, as interim CEO. The Company
agreed to pay Ms. Prasad an interim CEO allowance of $
On
July 1, 2025, the Company entered into a consulting agreement with a former member of the Board of Directors for services related to
developing a new strategic plan for the Company and identifying and hiring a new CEO. The agreement is in effect through September 30,
2025, and the Company awarded
On
August 13, 2025, the Company appointed a new director to the Board of Directors of the Company.
Class A Common Stock Warrants
The following is a summary of activity of outstanding stock warrants:
Schedule of Activity of Outstanding Stock Warrants
| Weighted Average | ||||||||
| Number of Shares | Exercise Prices | |||||||
| Balance, December 31, 2024 | $ | |||||||
| Warrants granted | - | - | ||||||
| Warrants exercised | ( | ) | ||||||
| Warrants cancelled | - | - | ||||||
| Balance, September 30, 2025 | $ | |||||||
| Exercisable, September 30, 2025 | $ | |||||||
| F-15 |
The
warrants had a weighted average remaining life of
Convertible Class B Common Stock
The
Company has
On
January 15, 2025, a total of
Note 12 – Common Stock Options
Omnibus Equity Incentive Plan
On
April 11, 2022, the Company’s board of directors adopted, and the Company’s stockholders approved, the Syra Health Corp.
2022 Omnibus Equity Incentive Plan, as amended on April 19, 2023 (as amended, the “2022 Plan”). No more than
Class A Common Stock Option Awards
During
the year ended December 31, 2024, the Company granted options to purchase an aggregate
On
January 7, 2025, the Company granted options to purchase an aggregate
On
July 1, 2025, the Company entered into a consulting agreement with a former member of the Board of Directors for services related to
developing a new strategic plan for the Company and identifying and hiring a new CEO. The agreement is in effect through September 30,
2025, and the Company awarded
On
August 13, 2025, the Company appointed a new director to the Board of Directors of the Company.
The following is a summary of activity of outstanding stock options:
Schedule of Share-Based Compensation, Stock Options Activity
| Weighted Average | ||||||||
| Number of Shares | Exercise Prices | |||||||
| Balance, December 31, 2024 | $ | |||||||
| Options granted | ||||||||
| Options forfeited | ( | ) | ||||||
| Balance, September 30, 2025 | $ | |||||||
| Exercisable, September 30, 2025 | - | $ | - | |||||
The
options had a weighted average remaining life of
Note 13 – Subsequent Events
The Company evaluates events that have occurred after the balance sheet date through the date these financial statements were issued.
| F-16 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited interim condensed financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “ Risk Factors” included in this Quarterly Report on Form 10-Q, as may be amended, supplemented or superseded from time to time by other reports we file with the SEC. All amounts in this report are in U.S. dollars, unless otherwise noted.
Throughout this Quarterly Report on Form 10-Q, references to “we,” “our,” “us,” the “Company,” or “Syra,” refer to Syra Health Corp.
Overview
We are a healthcare services company promoting preventative health, holistic wellness, health education, and equitable healthcare for all patient demographics. We leverage deep scientific and healthcare expertise to create strategic frameworks and develop patient-centric solutions for the betterment of patient lives and health outcome linked to developing a healthier population. We are developing comprehensive end-to-end solutions in population health, behavioral and mental health, and healthcare workforce. During the current quarter, we reclassified our digital health and health education revenues into our population health division.
On October 18, 2024, we received a Notice from Nasdaq Stock Market LLC (“Nasdaq”) indicating that the bid price for its Class A common stock, for the last 30 consecutive business days for the last thirty consecutive business days, had closed below the minimum $1.00 per share and, as a result, the Company was not in compliance with the $1.00 minimum bid price requirement (the “Minimum Bid Price Requirement”) for the continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2).
On April 11, 2025, we voluntarily delisted our Class A common stock from the Nasdaq Capital Market.
On June 13, 2025, the Board of Directors of Syra Health Corp. (the “Company”) approved the termination for cause of the employment agreement between Deepika Vuppalanchi, the Company’s CEO, and the Company dated April 5, 2021, as amended.
On June 16, 2025, the Board of Directors of the Company appointed Priya Prasad, the Company’s CFO and COO, as interim CEO.
On July 1, 2025, the Company entered into a consulting agreement with a former member of the Board of Directors for services related to developing a new strategic plan for the Company and identifying and hiring a new CEO.
On July 28, 2025, Deepika Vuppalanchi resigned from the Board of Directors of the Company for personal reasons.
On August 13, 2025, the Company appointed Radhika Mereddy to its Board of Directors.
| 4 |
Results of Operations for the Three Months Ended September 30, 2025 and 2024
The following table summarizes selected items from the statements of operations for the three months ended September 30, 2025 and 2024.
| For the Three Months Ended | ||||||||||||
| September 30, | September 30, | Increase / | ||||||||||
| 2025 | 2024 | (Decrease) | ||||||||||
| Net revenues | ||||||||||||
| Healthcare workforce | $ | 407,960 | $ | 1,577,788 | $ | (1,169,828 | ) | |||||
| Population health | 1,280,011 | 652,298 | 627,713 | |||||||||
| Behavioral and mental health | - | 23,250 | (23,250 | ) | ||||||||
| Net revenues | 1,687,971 | 2,253,336 | (565,365 | ) | ||||||||
| Cost of services | 1,133,430 | 1,585,038 | (451,608 | ) | ||||||||
| Gross profit | 554,541 | 668,298 | (113,757 | ) | ||||||||
| Operating expenses: | ||||||||||||
| Salaries and benefits | 336,390 | 594,738 | (258,348 | ) | ||||||||
| Professional fees | 191,726 | 153,803 | 37,923 | |||||||||
| Research and development expenses | 816 | 34,821 | (34,005 | ) | ||||||||
| Selling, general and administrative expenses | 252,384 | 288,305 | (35,921 | ) | ||||||||
| Depreciation | 5,396 | 25,541 | (20,145 | ) | ||||||||
| Total operating expenses: | 786,712 | 1,097,208 | (310,496 | ) | ||||||||
| Operating loss | (232,171 | ) | (428,910 | ) | 196,739 | |||||||
| Total other income (expense) | 6,269 | 11,375 | (5,106 | ) | ||||||||
| Net loss | $ | (225,902 | ) | $ | (417,535 | ) | $ | 191,633 | ||||
Net Revenues
Net revenue during the three months ended September 30, 2025 was comprised of $407,960 of healthcare staffing services revenue, $1,280,011 of population health revenue, and $0 of behavioral and mental health revenue, compared to net revenue during the three months ended September 30, 2024 comprised of $1,577,788 of healthcare staffing services revenue, $652,298 of population health revenue, and $23,250 of behavioral and mental health revenue, an overall revenue decrease of $565,365, or 25%. The decrease in healthcare workforce revenue was due to fewer new customer acquisitions and lower renewal value on our FSSA (NeuroDiagnostic Institute contract in January 2025, which runs through June 2026 and has a ceiling value of approximately $1,480,000). Population health revenues increased in 2025 due to additional services provided to state health departments and other customers. We depend heavily on state, local and county government budgets for our revenue. In 2025, the United States federal government began pausing or terminating numerous spending programs that potentially fund those programs and institutions that are our customers. As such, we have begun to see delays in new contract awards, or cancellations of previous requests for proposals. These factors, and the possibility of further spending reviews and cancellations are expected to negatively affect the quantity and time of our revenue, results of operations and cash flows in the near term.
Cost of Services
Our cost of services included wages and related payroll taxes, employee benefits and certain other employee-related costs of our contract service employees while they worked on contract assignments. We incurred $1,133,430 of cost of services for the three months ended September 30, 2025, compared to $1,585,038 for the three months ended September 30, 2024, a decrease of $451,608, or 9%. Our gross profit was approximately 33% for the three months ended September 30, 2025, compared to approximately 30% for the three months ended September 30, 2024, an increase of approximately 3%. Our cost of services decreased primarily due to a decrease in labor costs from lower workforce contracts, and decreased consulting costs associated with a change in service mix from healthcare workforce services to project-based population health and digital health services that carry better margins.
Operating Expenses
Salaries and Benefits
Our salaries and benefits include wages and related payroll taxes, employee benefits and certain other employee-related costs of our management and office personnel. We incurred $336,390 of salaries and benefits during the three months ended September 30, 2025, compared to $594,738 for the three months ended September 30, 2024, a decrease of $258,348, or 43%. Salaries and benefits decreased as our headcount decreased in 2025, and due to a strategic focus on streamlining our operations by reducing redundancies and optimizing our workforce.
| 5 |
Professional Fees
Professional fees primarily consisted of expenses incurred from business development, accounting, legal fees, and consulting activities. We incurred $191,726 of professional fees for the three months ended September 30, 2025, compared to $153,803 for the three months ended September 30, 2024, an increase of $37,923, or 25%. Professional fees increased in 2025 due to increased legal related costs from a settlement of an employment claim in the current period, and increased accounting and audit fees.
Research and Development Expenses
Research and development expenses primarily consist of consulting expenses incurred to develop our technology-based solutions. We incurred $816 and $34,821 of research and development expenses for the three months ended September 30, 2025 and 2024, respectively, a decrease of $34,005, or 98%, due to a decrease in consulting expenses incurred to develop our technology-based solutions.
Selling, General and Administrative Expenses
SG&A primarily consisted of marketing, rent, office, insurance, travel and repair and maintenance expenses incurred. We incurred $252,384 of SG&A expenses during the three months ended September 30, 2025, compared to $288,305 for the three months ended September 30, 2024, a decrease of $35,921, or 12%. Our SG&A expenses decreased primarily due to our efforts to reduce overhead in 2025. SG&A included $22,369 and $33,626 of rent incurred in both periods from STVentures, LLC, an entity beneficially owned by our principal owners, our management team and their affiliates, $26,013 and $41,699 of software expense, $115,900 and $112,248 of insurance, $4,337 and $28,639 of investor relations, and $25,071 and $19,281 of subscription and membership fees for the three months ended September 30, 2025 and 2024, respectively.
Depreciation
We incurred $5,396 of depreciation expense for the three months ended September 30, 2025, compared to $25,541 of depreciation expense for the three months ended September 30, 2024, a decrease of $20,145, or 79%.
Other Income (Expense)
Other expense, on a net basis, consisted of $1,905 of interest incurred on insurance finance charges, as partially offset by $8,174 of interest income, for the three months ended September 30, 2025. Other income, on a net basis, consisted of $2,266 of interest incurred on insurance finance charges, offset by $13,941 of interest income, for the three months ended September 30, 2024. Other income, on a net basis, decreased by $5,106, or 45%, primarily due to decreased interest income compared to the prior period.
Net Loss
Our net loss for the three months ended September 30, 2025 was $225,902, compared to a net loss of $417,535 for the three months ended September 30, 2024, a decrease of $191,633.
| 6 |
Results of Operations for the Nine Months Ended September 30, 2025 and 2024
The following table summarizes selected items from the statements of operations for the nine months ended September 30, 2025 and 2024.
| For the Nine Months Ended | ||||||||||||
| September 30, | September 30, | Increase / | ||||||||||
| 2025 | 2024 | (Decrease) | ||||||||||
| Net revenues | ||||||||||||
| Healthcare workforce | $ | 1,425,624 | $ | 4,411,683 | $ | (2,986,059 | ) | |||||
| Population health | 4,066,320 | 1,518,329 | 2,547,991 | |||||||||
| Behavioral and mental health | - | 45,345 | (45,345 | ) | ||||||||
| Net revenues | 5,491,944 | 5,975,357 | (483,413 | ) | ||||||||
| Cost of services | 3,595,352 | 4,657,273 | (1,061,921 | ) | ||||||||
| Gross profit | 1,896,592 | 1,318,084 | 578,508 | |||||||||
| Operating expenses: | ||||||||||||
| Salaries and benefits | 1,169,951 | 2,178,105 | (1,008,154 | ) | ||||||||
| Professional fees | 580,691 | 489,839 | 90,852 | |||||||||
| Research and development expenses | 67,701 | 590,263 | (522,562 | ) | ||||||||
| Selling, general and administrative expenses | 828,741 | 1,267,634 | (438,893 | ) | ||||||||
| Depreciation | 18,171 | 55,460 | (37,289 | ) | ||||||||
| Total operating expenses: | 2,665,255 | 4,581,301 | (1,916,046 | ) | ||||||||
| Operating loss | (768,663 | ) | (3,263,217 | ) | 2,494,554 | |||||||
| Total other income (expense) | 6,900 | 8,376 | (1,476 | ) | ||||||||
| Net loss | $ | (761,763 | ) | $ | (3,254,841 | ) | $ | 2,493,078 | ||||
Net Revenues
Net revenue during the nine months ended September 30, 2025 was comprised of $1,425,624 of healthcare staffing services revenue, $4,066,320 of population health revenue, and $0 of behavioral and mental health revenue, compared to net revenue during the nine months ended September 30, 2024 comprised of $4,411,683 of healthcare staffing services revenue, $1,518,329 of population health revenue, and $45,345 of behavioral and mental health revenue, an overall revenue decrease of $483,413, or 8%. The decrease in healthcare workforce revenue was due to fewer new customer acquisitions and lower renewal value on our FSSA (NeuroDiagnostic Institute contract in January 2025, which runs through June 2026 and has a ceiling value of approximately $1,480,000). Population health revenues increased in 2025 due to additional services provided to state departments and other customers. We depend heavily on state, local and county government budgets for our revenue. In 2025, the United States federal government began pausing or terminating numerous spending programs that potentially fund those programs and institutions that are our customers. As such, we have begun to see delays in new contract awards, or cancellations of previous requests for proposals. These factors, and the possibility of further spending reviews and cancellations are expected to negatively affect the quantity and time of our revenue, results of operations and cash flows in the near term.
Cost of Services
Our cost of services included wages and related payroll taxes, employee benefits and certain other employee-related costs of our contract service employees while they worked on contract assignments. We incurred $3,595,352 of cost of services for the nine months ended September 30, 2025, compared to $4,657,273 for the nine months ended September 30, 2024, a decrease of $1,061,921, or 23%. Our gross profit was approximately 35% for the nine months ended September 30, 2025, compared to approximately 22% for the nine months ended September 30, 2024, an increase of approximately 13%. Our cost of services decreased primarily due to a decrease in labor costs, and decreased consulting costs associated with a change in service mix from healthcare workforce services to project-based population health and digital health services that carry better margins. In addition, the cost of services for the nine months ended September 30, 2024 above compared to as reported in the prior period reflects a $120,000 reclassification of expenses from cost of services to selling, general, and administrative (SG&A) expenses. This reclassification was made to more accurately align vendor-related costs with their functional purpose and streamlining the categorization of expenses.
Operating Expenses
Salaries and Benefits
Our salaries and benefits include wages and related payroll taxes, employee benefits and certain other employee-related costs of our management and office personnel. We incurred $1,169,951 of salaries and benefits during the nine months ended September 30, 2025, compared to $2,178,105 for the nine months ended September 30, 2024, a decrease of $1,008,154, or 46%. Salaries and benefits decreased as our headcount decreased in 2025, and due to a strategic focus on streamlining our operations by reducing redundancies and optimizing our workforce.
| 7 |
Professional Fees
Professional fees primarily consisted of expenses incurred from business development, accounting, legal fees, and consulting activities. We incurred $580,691 of professional fees for the nine months ended September 30, 2025, compared to $489,839 for the nine months ended September 30, 2024, an increase of $90,852, or 19%. Professional fees increased in 2025 due to increased legal related costs from a settlement of an employment claim in the current period, and increased accounting and audit fees.
Research and Development Expenses
Research and development expenses primarily consist of consulting expenses incurred to develop our technology-based solutions. We incurred $67,701 and $590,263 of research and development expenses for the nine months ended September 30, 2025 and 2024, respectively, a decrease of $522,562, or 89%, due to a decrease in consulting expenses incurred to develop our technology-based solutions.
Selling, General and Administrative Expenses
SG&A primarily consisted of marketing, rent, office, insurance, travel and repair and maintenance expenses incurred. We incurred $828,741 of SG&A expenses during the nine months ended September 30, 2025, compared to $1,267,634 for the nine months ended September 30, 2024, a decrease of $438,893, or 35%. Our SG&A expenses decreased primarily due to our efforts to reduce overhead in 2025. SG&A included $89,621 and $97,890 of rent incurred in both periods from STVentures, LLC, an entity beneficially owned by our principal owners, our management team and their affiliates, $104,117 and $136,007 of software expense, $345,152 and $443,233 of insurance, $24,558 and $119,322 of investor relations, and $77,234 and $83,489 of subscription and membership fees for the nine months ended September 30, 2025 and 2024, respectively.
Depreciation
We incurred $18,171 of depreciation expense for the nine months ended September 30, 2025, compared to $55,460 of depreciation expense for the nine months ended September 30, 2024, a decrease of $37,289, or 67%.
Other Income (Expense)
Other income, on a net basis, consisted of $8,992 of interest incurred on insurance finance charges, offset by $15,892 of interest income, for the nine months ended September 30, 2025. Other expense, on a net basis, consisted of $10,072 of interest incurred on insurance finance charges, offset by $18,448 of interest income, for the nine months ended September 30, 2024. Other expense, on a net basis, decreased by $1,476, or 18%, primarily due to decreased interest income compared to the prior period.
Net Loss
Our net loss for the nine months ended September 30, 2025 was $761,763, compared to a net loss of $3,254,841 for the nine months ended September 30, 2024, a decrease of $2,493,078.
Liquidity and Capital Resources
We believe that our existing sources of liquidity, along with cash expected to be generated from sales and services, will not be sufficient to fund our operations, anticipated capital expenditures, working capital and other financing requirements for at least the next twelve months from the issuance of the financial statements included elsewhere in this annual report. In the event we are unable to achieve profitable operations in the near term, we may require additional equity and/or debt financing; however, we cannot provide assurance that such financing will be available to us on favorable terms, or at all. We will continue to monitor our expenditures and cash flow position.
The following table summarizes total current assets, liabilities, accumulated deficit and working capital (deficit) at September 30, 2025 and December 31, 2024.
| September 30, 2025 | December 31, 2024 | |||||||
| Current Assets | $ | 3,210,591 | $ | 3,352,795 | ||||
| Current Liabilities | $ | 1,053,829 | $ | 613,549 | ||||
| Accumulated Deficit | $ | (9,585,956 | ) | $ | (8,824,193 | ) | ||
| Working Capital | $ | 2,156,762 | $ | 2,739,246 | ||||
| 8 |
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. To date, we have funded our operations through equity and debt financings. Our primary uses of cash have been for the development of operations, compensation, and professional fees. All funds received have been expended in the furtherance of growing our business and establishing our services and solutions. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:
| ● | A substantial increase in working capital requirements to finance our operations; | |
| ● | Addition of administrative and professional personnel as our business continues to grow; | |
| ● | The cost of being a public company; and | |
| ● | Payments for seeking and securing quality staffing personnel. |
Cash Flow Activities for the Nine Months Ended September 30, 2025 and 2024
Net Cash Used in Operating Activities
Cash used provided by operating activities for the nine months ended September 30, 2025 was $158,554 and cash used in operating activities for the nine months ended September 30, 2024 was $2,717,313. The improvement in operating cash activities is a result of our efforts to reduce expenses and better working capital management.
Net Cash Used in Investing Activities
Cash used in investing activities for the nine months ended September 30, 2025 and 2024 was $0 and $11,111, respectively, which related entirely to the purchase of property and equipment during both periods.
Net Cash Provided by Financing Activities
Cash used in financing activities for the nine months ended September 30, 2025 was $260,306, which consisted of $14,800 of proceeds received from the exercise of Class A common stock warrants, offset by $275,106 of repayments on notes payable. Cash provided by financing activities for the nine months ended September 30, 2024 was $2,145,808, which consisted of $2,469,150 of proceeds received from the exercise of Class A common stock warrants, partially offset by $323,342 of repayments on notes payable.
Critical Accounting Policies and Estimates
The preparation of the financial statements included elsewhere in this Quarterly Report on Form 10-Q requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.
The critical accounting estimates, assumptions and judgments that we believe have the most significant impact on our financial statements are described below.
Accounts Receivable
Accounts receivable is carried at their estimated collectible amounts. Accounts receivable is periodically evaluated for collectability based on past credit history with customers and their current financial condition. We had an allowance of $5,520 at September 30, 2025 and December 31, 2024, respectively.
Impairment of Long-Lived Assets
In accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 360, “Impairment or Disposal of Long-Lived Assets,” all long-lived assets such as property and equipment held and used by us are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.
| 9 |
Leases
We account for our leases under ASC 842 - Leases. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of obligations under operating leases, and obligations under operating leases, non-current on our balance sheets.
Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date, adjusted by the deferred rent liabilities at the adoption date. As our lease does not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term.
Revenue Recognition
We recognize revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as we satisfy a performance obligation.
We account for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Payment terms vary by client and the services offered.
We have the following main forms of revenue:
| – | Healthcare Workforce Services | |
| – | Behavioral and Mental Health Services | |
| – | Population Health |
The Company primarily provides its services to state health and social service agencies and universities. Healthcare Workforce, Behavioral Mental Health Service contracts are primarily accounted for as a single performance obligation satisfied over time because the customer simultaneously receives and consumes the benefits of our medical staffing on an hourly or daily basis. Population Health contracts generally consist of multiple performance obligations that are distinct, such as to provide data analytics and reporting, training, or develop technology for implementation and maintenance with the customer. The Company allocates the transaction price across the performance obligations based on the estimated fair value of the distinct performance obligations. Depending on the performance obligation, revenue is recognized at a point in time when the customer obtains the benefit of the services are provide, or over time in the case of digital health revenue where the customer simultaneously receives and consumes benefits of the contract, such as ongoing performance of our technology product.
The contracts generally stipulate bi-weekly or monthly billing, and we have elected the “ as invoiced” practical expedient to recognize revenue based on the hours incurred at the contractual rate as we have the right to payment in an amount that corresponds directly with the value of performance completed to date. We may also be subject to penalties for violations of certain ethical standards and non-performance measures within these state contracts. We recognize revenue net of penalties.
| 10 |
Significant Concentrations
The majority of accounts receivable and revenue contracts are between the Company and different divisions within the Indiana Family and Social Services Administration (“FSSA”). Most contracts require monthly payments as the projects progress. The Company generally does not require collateral or advance payments. For the nine months ended September 30, 2025 and 2024, FSSA accounted for approximately 59% and 61% of revenues, respectively, which was derived through a combination of divisions within the State of Indiana, including the FSSA-NeuroDiagnostic Institute, representing $837,703 and $3,398,761 of the Company’s Healthcare Workforce revenue for nine months ended September 30, 2025 and 2024, respectively, and the FSSA-Division of Mental Health and Addiction and FSSA-HSCP, representing $1,211,568 and $248,000 of the Company’s Population Health revenues for the nine months ended September 30, 2025 and 2024, respectively. Additionally, for the nine months ended September 30, 2025, Humana, Inc accounted for approximately 24% of the Company’s Population Health revenue. In addition, the combined divisions of the FSSA, Coordinated Care Corporation (doing business as Managed Health Services, owed 30% of the Company’s accounts receivable, respectively, at September 30, 2025, and FSSA represented 11% of outstanding accounts receivable as of December 31, 2024. Two other customers owed 43% and 10% of the Company’s accounts receivable at September 30, 2025.
JOBS Act
On April 5, 2012, the Jumpstart Our Business Startups Act (the “JOBS Act”) was enacted. Section 107 of the JOBS Act provides that an “ emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “ emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We have chosen to take advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards until those standards would otherwise apply to private companies provided under the JOBS Act. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards.
Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including, without limitation, (i) providing an auditor’s attestation report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and (ii) complying with the requirement adopted by the Public Company Accounting Oversight Board regarding the communication of critical audit matters in the auditor’s report on financial statements. We will remain an “ emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our IPO; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.
ITEM 4. CONTROLS AND PROCEDURES.
Our principal executive officer and principal financial officer evaluated the effectiveness of our “ disclosure controls and procedures” as of September 30, 2025 the end of the period covered by this Quarterly Report on Form 10-Q. The term “ disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is accumulated and communicated to a company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our disclosure controls and procedures as of September 30, 2025, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective. Effective internal control contemplates an appropriate level of review to ensure timely preparation and completeness and accuracy of the financial statements and disclosures.
Changes in Internal Control
There were no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 11 |
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.
ITEM 1A. RISK FACTORS.
In addition to other information set forth in this report, readers should carefully consider the risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Any of the risk factors disclosed in the Annual Report or our reports could materially affect our business, financial condition or future results. The risks described in the Prospectus are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
(a) Sales of Unregistered Securities.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
| 12 |
ITEM 6. EXHIBITS.
| Exhibit No. | Description | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2** | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 is formatted in Inline XBRL included in the Exhibit 101 Inline XBRL Document Set |
| * | Filed herewith. |
| ** | Furnished herewith. |
| 13 |
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 thereunto duly authorized.
| SYRA HEALTH CORP. | ||
| Date: November 12, 2025 | By: | /s/ Priya Prasad |
| Priya Prasad | ||
| Interim Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: November 12, 2025 | By: | /s/ Priya Prasad |
| Priya Prasad | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
| 14 |
FAQ
What was Syra Health (SYRA) revenue for the nine months ended September 30, 2025?
Did Syra Health report a profit in Q3 2025 year-to-date?
How much cash did Syra Health have as of September 30, 2025?
What segments drove Syra Health’s results in 2025?
Does Syra Health have a going concern warning?
Where is Syra Health’s stock listed now?
How concentrated are Syra Health’s customers?
