Healthcare Triangle, Inc.: Form 10-Q for the period ended Jun 30, 2024
Filed with the SEC on Aug 19, 2024 and accepted by EDGAR at Aug 19, 2024, 16:10 ET.
Management's discussion and analysis
As filed, 32,279 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
The following discussion summarizes the significant factors affecting the operating results, financial condition, liquidity, and cash flows of our Company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the related notes thereto, and the consolidated financial statements and the related notes thereto all included elsewhere in this prospectus. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity, and capital resources, and all other non-historical statements in this discussion are forward-looking statements and are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward looking statements as a result of various factors, including those discussed below and elsewhere in this report, and in the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” contained in the Company’s final prospectus for its initial public offering filed with the Securities and Exchange Commission (“SEC”).
Overview
Healthcare Triangle, Inc. (the “Company”) is a leading healthcare information technology company focused on advancing innovative, industry-transforming solutions in the areas of cloud services, data science, professional and managed services for the Healthcare and Life Sciences industry.
The Company was formed on October 29, 2019, as a Nevada corporation and then converted into a Delaware corporation on April 24, 2020, to provide IT and data services to the Healthcare and Life Sciences (“HCLS”) industry. The business commenced on January 1, 2020, after the Parent transferred its Life Sciences business to us. As of June 30, 2024, we had a total of 22 full time employees, 114 sub-contractors, including 90 certified cloud engineers, 19 Epic Certified EHR experts and 16 MEDITECH Certified EHR experts. Many of the senior management team and the members of our board of directors hold advanced degrees and some are leading experts in software development, regulatory science, and market access. During the quarter ended June 30, 2024, we generated revenues of approximately $ 2.9 million compared to revenue of $ 8.5 million for the quarter ended June 30, 2023 which represents decrease of $ 5.6 million or 65% compared to the previous year.
Our approach leverages our proprietary technology platforms, extensive industry knowledge, and healthcare domain expertise to provide solutions and services that reinforce healthcare progress. Through our platform, solutions, and services, we support healthcare delivery organizations, healthcare insurance companies, pharmaceutical, and Life Sciences, biotech companies, and medical device manufacturers in their efforts to improve data management, develop analytical insights into their operations, and deliver measurable clinical, financial, and operational improvements.
We offer a comprehensive suite of software, solutions, platforms, and services that enables some of the world’s leading healthcare and pharma organizations to deliver personalized healthcare, precision medicine, advances in drug discovery, development and efficacy, collaborative research and development, respond to real-world evidence, and accelerate their digital transformation. We combine our expertise in the healthcare technology domain, cloud technologies, DevOps and automation, data engineering, advanced analytics, AI/ML, IoT, security, compliance, and governance to deliver platforms and solutions that drive improved results in the complex workflows of Life Sciences, biotech, healthcare providers, and payers. Our differentiated solutions, enabled by our intellectual property and delivered as a service, provide advanced analytics, data science applications, and data aggregation in these highly regulated environments in a more compliant, secure, and cost-effective manner to our customers.
Our deep expertise in healthcare allows us to reinforce our clients’ progress by accelerating their innovation. Our healthcare IT services include Electronic Health Records (EHR) and software implementation, optimization, extension to community partners, as well as application managed services, and backup and disaster recovery capabilities on public cloud. Our 24x7 managed services are used by hospitals and health systems, payers, Life Sciences, and biotech organizations in their effort to improve health outcomes and deliver deeper, more meaningful patient and consumer experiences. Through our services, our customers achieve a return on investment in their technology by delivering measurable improvements. Combined with our software and solutions, our services provide clients with an end-to-end partnership for their technology innovation.
Our Business Model
The majority of our revenue is generated by our full-time employees who provide software services and Managed Services and Support to our clients in the Healthcare and Life Sciences industry. Our software services include strategic advisory, implementation and development services and Managed Services and Support include post implementation support and cloud hosting.
Impacts of the COVID-19 Pandemic
The COVID-19 pandemic has had, and is likely to continue to have, a severe and unprecedented impact on the world and on our business. Measures to prevent its spread, including government-imposed restrictions on large gatherings, closures of face-to-face events, “shelter in place” health orders and travel restrictions have had a significant effect on certain of our business operations. In response to these business disruptions, which include a transition to remote working, reducing certain of our discretionary expenditures and eliminating non-essential travel particularly with respect to COVID-19 impacted operation and complying with health and safety guidelines to protect employees, contractors, and customers.
There has been no major impact on account of COVID19 during the quarter ended June 30, 2024.
The Company has obtained necessary funding to manage our short-term working capital requirements. The Company has not altered any credit terms with its customers and the realization from the customers have generally been on time. The Company has been able to service its debt and other obligations on time. There has been no material impact on the operational liquidity and capital resources on account of COVID-19.
Key Factors of Success
We believe that our future growth, success, and performance are dependent on many factors, including those mentioned below. While these factors present significant opportunities for us, they also represent the challenges that we must successfully address in order to grow our business and improve our results of operations.
Investment in scaling the business
We need to continuously invest in sales, and marketing to promote our solutions to new and existing customers in various geographies, and other operational and administrative functions in systems, controls and governance to support our expected growth and our transition to a public company. We anticipate that our employee strength will increase because of these investments.
Adoption of our solutions by new and existing customers
We believe that our ability to increase our customer base will enable us to drive growth. Most of our customers initially deploy our solutions within a division or geography and may only initially deploy a limited set of our available solutions. Our future growth is dependent upon our existing customers’ continued success and renewals of our solutions agreements, deployment of our solutions to additional divisions or geographies and the purchase of subscriptions to additional solutions. Our growth is also dependent on the adoption of our solutions by new customers. Our customers are large organizations who typically have long procurement cycles which may lead to declines in the pace of our new customer additions.
Subscription services adoption
The key factor to our success in generating substantial recurring subscription revenues in future will be our ability to successfully market and persuade new customers to adopt our SaaS offerings. We are in the early stages of marketing our SaaS offerings such as DataEz, CloudEz and Readabl.AI, and do not yet have enough information about our competition or customer acceptance to determine whether or not recurring subscription revenue from these offerings will have a material impact on our revenue growth.
Mix of solutions and software services revenues
Another factor to our success is the ability to sell our solutions to the existing software services customers. During the initial period of deployment by a customer, we generally provide a greater number of services including advisory, implementation and training. At the same time, many of our customers have historically purchased our solutions after the deployment. Hence, the proportion of total revenues for a customer associated with software services is relatively high during the initial deployment period. While our software services help our customers achieve measurable improvements and make them stickier, they have lower gross margins than solution-based revenue. Over time, we expect the revenues to shift towards recurring and subscription-based revenues.
Components of Results of Operations
Revenues
We provide our services and manage our business under these operating segments:
- Software Services
- Managed Services and Support
- Platform Services
Software Services
The Company earns revenue primarily through the sale of software services that is generated from providing strategic advisory, implementation, and development services. The Company enters into Statement of Work (SOW) which provides for service obligations that need to be fulfilled as agreed with the customer. The majority of our software services arrangements are billed on a time and materials basis and revenues are recognized over time based on time incurred and contractually agreed upon rates. Certain software services revenues are billed on a fixed fee basis and revenues are typically recognized over time as the services are delivered based on time incurred and customer acceptance. We recognize revenue when we have the right to invoice the customer using the allowable practical expedient under ASC 606-10-55-18 since the right to invoice the customer corresponds with the performance obligations completed.
Managed Services and Support
Managed Services and Support include post implementation support and cloud hosting. Managed Services and Support are a distinct performance obligation. Revenue for Managed Services and Support is recognized ratably over the life of the contract.
Platform Services
Platform Services from CloudEz, DataEz are offered both as a solution delivery model and as Software as a Service (SaaS) on a subscription model. readbl.ai is offered only as Software as a Service (SaaS) on a subscription model.
The revenue from solutions delivery model contains a series of separately identifiable and distinct services that represent performance obligations that are satisfied over time. During the periods presented the company generated Platform revenue on SaaS, which is recurring revenue.
Our SaaS agreements are generally non-cancellable during the term, although customers typically will have the right to terminate their agreements for cause in the event of material breach.
SaaS revenues will be recognized ratably over the respective non-cancellable subscription term because of the continuous transfer of control to the customer. Our subscription arrangements will be considered service contracts, and the customer will not have the right to take possession of the software Segment wise revenue breakup.
Cost of Revenue
Cost of revenue consists primarily of employee-related costs associated with the rendering of our services, including salaries, benefits and stock-based compensation expense, the cost of subcontractors, travel costs, cloud hosting charges and allocated overhead the cost of providing professional services is significantly higher as a percentage of the related revenues than for our subscription services due to the direct labor costs and costs of subcontractors. Our business and operational models are designed to be highly scalable and leverage variable costs to support revenue-generating activities.
While we may grow our headcount overtime to capitalize on our market opportunities, we believe our increased investment in automation, electronic health record integration capabilities, and economies of scale in our operating model, will position us to grow our platform solutions revenue at a greater rate than our cost of revenue.
Operating Expenses
Research and Development
Research and development expense (majorly our investment in innovation) consists primarily of employee-related expenses, including salaries, benefits, incentives, employment taxes, severance, and equity compensation costs for our software developers, engineers, analysts, project managers, and other employees engaged in the development and enhancement of our cloud-based platform applications. Research and development expenses also include certain third-party consulting fees. Our research and development expense excludes any depreciation and amortization.
We expect to continue our focus on developing new product offerings and enhancing our existing product offerings. As a result, we expect our research and development expense to increase in absolute dollars, although it may vary from period to period as a percentage of revenue.
Sales and Marketing
Sales and marketing expense consists primarily of employee-related expenses, including salaries, benefits, commissions, travel, discretionary incentive compensation, employment taxes, severance, and equity compensation costs for our employees engaged in sales, sales support, business development, and marketing. Sales and marketing expense also includes operating expenses for marketing programs, research, trade shows, and brand messages, and public relations costs.
We expect our sales and marketing expenses to continue to increase in absolute dollar terms as we strategically invest to expand our business, although it may vary from period to period as a percentage of total revenues.
General and Administrative
Our general and administrative expenses consist primarily of employee-related expenses including salaries, benefits, discretionary incentive compensation, employment taxes, severance, and stock-based compensation expenses, for employees who are responsible for management information systems, administration, human resources, finance, legal, and executive management. The general and administrative expenses also include occupancy expenses (including rent, utilities, and facilities maintenance), professional fees, consulting fees, insurance, travel, contingent consideration, transaction costs, integration costs, and other expenses. Our general and administrative expenses exclude depreciation and amortization.
In the nearest future, we expect our general and administrative expenses to continue to increase to support business growth. Over the long term, we expect general and administrative expenses to decrease as a percentage of revenue.
Depreciation and Amortization Expenses
Our depreciation and amortization expense consists primarily of depreciation of fixed assets, amortization of Customer relationship and capitalized software development costs, and amortization of intangible assets. We expect our depreciation and amortization expense to increase as we expand our business organically and through acquisitions.
Other Income (Expense), Net
Other income (expense), net consists of finance cost and gains or losses on foreign currency.
Deferred revenues
Advanced billings to clients in excess of revenue earned are recorded as deferred revenue until the revenue recognition criteria are met.
Unbilled accounts receivable
Unbilled accounts receivable is a contract asset related to the delivery of our professional services for which the related billings will occur in a future period. Unbilled receivables are classified as accounts receivable on the consolidated balance sheet. Although we believe that our approach to estimates and judgments regarding revenue recognition is reasonable, actual results could differ and we may be exposed to increases or decreases in revenue that could be material.
Provision for Income Taxes
Provision for income taxes consists of federal and state income taxes in the United States, including deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes.
Results of Operations
The following tables set forth selected consolidated statements of operations data and such data as a percentage of total revenues for each of the periods indicated:
| Three Months Ended June 30, | ||
|---|---|---|
| 2024 % Sales | 2023 % Sales | |
| (In thousands) | (In thousands) | |
| Revenue | $2,984 100% | $8,526 100% |
| Cost of Revenue (exclusive of depreciation /amortization) | 2,086 70% | 6,579 77% |
| Research and Development | 207 7% | 102 1% |
| Sales and Marketing | 631 21% | 1,026 12% |
| General and Administrative | 904 30% | 1,612 19% |
| Depreciation and Amortization | 534 18% | 802 9% |
| Other Income | — 0% | — 0% |
| Interest expense | 131 4% | 186 2% |
| Income tax | 1 0% | 5 0% |
| Net income (loss) | $(1,510) (51)% | $(1,786) (21)% |
Three Months Ended June 30, 2024 and June 30, 2023
Revenue from operations
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| Revenue | $2,984 | $8,526 | $(5,542) | (65)% |
Revenue decreased by $5.5 million, or 65% to $2.9 million for the quarter ended June 30, 2024, as compared to $8.5 million for the quarter ended June 30, 2023. Revenue from Software Services, Managed Services and support and Platform services have reduced resulting in net decrease in revenue. The major revenue reduction is due to a reduction in revenue from a major customer.
Our top 5 customers accounted for 68% of the revenue in quarter ended June 30, 2024, and 81% during quarter ended June 30, 2023, respectively.
The following table has the breakdown of our revenues for the quarter ended June 30, 2024, and 2023 for each of our top 5 customers. Two of the top 5 customers in 2024 are not the same for 2023.
Top Five Customers Revenue for three months ended June 30, 2024 and 2023.
2024
(In thousands, except percentages)
| Customer | Amount | % of Revenue |
|---|---|---|
| Customer 1 | $925 | 31% |
| Customer 2 | 486 | 16% |
| Customer 3 | 221 | 7% |
| Customer 4 | 215 | 7% |
| Customer 5 | $193 | 7% |
2023
(In thousands, except percentages)
| Customer | Amount | % of Revenue |
|---|---|---|
| Customer 1 | $4,519 | 53% |
| Customer 2 | 912 | 11% |
| Customer 3 | 622 | 7% |
| Customer 4 | 539 | 6% |
| Customer 5 | $319 | 4% |
The following table provides details of Customer 1 revenue by operating segments:
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| Software Services | $64 | $4,087 | (4,023) | (98)% |
| Managed Services and Support | 861 | 432 | 429 | 99% |
| Platform Services | — | — | — | 0% |
| Total Revenue | $925 | $4,519 | (3,594) | (80)% |
Revenue from Customer 1 has decreased by $3.6 million, or 80% to $0.9 million for the quarter ended June 30, 2024, as compared to $4.5 million for the quarter ended June 30, 2023.
Cost of Revenue (exclusive of depreciation /amortization)
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| Cost of Revenue (exclusive of depreciation /amortization) | $2,086 | $6,579 | $(4,493) | (68)% |
Cost of revenue, excluding depreciation and amortization decreased by $4.5 million, or 68%, to $2.1 million for the quarter ended June 30, 2024, as compared to $6.6 million for the quarter ended June 30, 2023. The reduction is in proportion to reduction to revenue.
Research and Development
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| Research and Development | $207 | $102 | $105 | 103% |
Research and Development expenses increased by $0.11 million, or 103% to $0.21 million for the quarter ended June 30, 2024, as compared to $0.1 million for the quarter ended June 30, 2023. The cost has increased on account of new research being done on readabl.ai.
Sales and Marketing
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| Sales and Marketing | $631 | $1,026 | $(395) | (38)% |
Sales and Marketing expenses decreased by $0.4 million, or 38% to $0.6 million for the quarter ended June 30, 2024, as compared to $1 million for the quarter ended June 30, 2023, this is primarily due to reduction in headcount and stock compensation expenses.
General and Administrative
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| General and Administrative | $904 | $1,612 | $(708) | (44)% |
General and Administrative expenses decreased by $0.7 million, or 44% to $0.9 million for the quarter ended June 30, 2024, as compared to $1.6 million for the quarter ended June 30, 2023, this is primarily due to reduction in headcount.
Depreciation and amortization
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| Depreciation and amortization | $534 | $802 | $(268) | (33)% |
Depreciation and amortization expenses decreased by $0.2 million, or 33% to $0.5 million for the quarter ended June 30, 2024, as compared to $0.8 million for the quarter ended June 30, 2023, this primarily due to completion of useful life for Customer relationships and Product Development.
Interest expense
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| Interest expense | $131 | $186 | $(55) | (30)% |
Interest expenses increased by $0.05 million, or 30% to $0.13 million for the quarter ended June 30, 2024, as compared to $0.19 million for the quarter ended June 30, 2023, the decrease was due to repayment of funding acquired.
Provision for Income Taxes
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| Income taxes | $1 | $5 | $(4) | (80)% |
Income tax increased by $0.004 million, or 80% to $0.001 million for the quarter ended June 30, 2024, as compared to $0.005 million for the quarter ended June 30, 2023.
Revenue, Cost of Revenue and Operating Profit by Operating Segment
We manage and report our business under three operating segments which are Software Services, Managed Services and Support and Platform Services.
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| Software Services | $663 | $5,185 | $(4,522) | (87)% |
| Managed Services and Support | 2,253 | 2,865 | (612) | (21)% |
| Platform Services | 68 | 476 | (408) | (86)% |
| Revenue | $2,984 | $8,526 | $(5,542) | (65)% |
Revenue from Software Services decreased by $4.5 million, or 87% to $0.7 million for the quarter ended June 30, 2024, as compared to $5.2 million for the quarter ended June 30, 2023. Revenue from Managed Services and Support decreased by $0.6 million, or 21% to $2.3 million for the quarter ended June 30, 2024, as compared to $2.9 million for the quarter ended June 30, 2023. Revenue from Platform Services decreased by $0.4 million, or 86% to $0.07 million for the quarter ended June 30, 2024, as compared to $0.5 million for the quarter ended June 30, 2023.
Factors affecting revenues of Software Services, Managed Services and Support and Platform Services
Our strategy is to achieve meaningful long-term revenue growth through sales of Managed Services and Support and Platform Services to existing and new clients within our target market. In order to increase our cross-selling opportunity between our operating segments and realize long time revenue growth, our focus has shifted more towards Managed Services and Support and Platform Services which is of recurring nature when compared to Software Services segment which is of non-recurring nature. This also helps in retaining existing customers by leveraging our Managed Services and Support and Platform Services as a growth agent. This renewed focus on driving demand for subscription and platform-based model will help us in expanding our customer base and enhance customer retention which is a challenge for our existing Software Services segment. Software Services contracts are driven by Time and Material and on-site employees delivering services at customers location.
Cost of Revenue
(In thousands, except percentages)
| Three Months Ended June 30, 2024 | 2023 | Changes Amount% | ||
|---|---|---|---|---|
| Software Services | $497 | $4,245 | $(3,748) | (88)% |
| Managed Services and Support | 1,547 | 2,044 | (497) | (24)% |
| Platform Services | 42 | 290 | (248) | (86)% |
| Cost of Revenue | $2,086 | $6,579 | $(4,493) | (68)% |
Cost of Revenue from Software Services decreased by $3.7 million, or 88% to $0.5 million for the quarter ended June 30, 2024, as compared to $4.2 million for the quarter ended June 30, 2023. Cost of Revenue from Managed Services and Support decreased by $0.5 million, or 24% to $1.5 million for the quarter ended June 30, 2024, as compared to $2 million for the quarter ended June 30, 2023. Cost of Revenue from Platform Services decreased by $0.2 million, or 85% to $0.04 million for the quarter ended June 30, 2024, as compared to $0.29 million for the quarter ended June 30, 2023.
Segment operating profits by reportable segment were as follows:
(In thousands)
| Operating profit by Operating Segment | Three months Ended June 30, 2024 | 2023 | Changes Amount% | |
|---|---|---|---|---|
| Software Services | $(170) | $(644) | $474 | 74% |
| Managed Services and Support | 706 | 822 | (116) | (14)% |
| Platform Services | (181) | 84 | (265) | 315% |
| Total segment operating (loss) profit | 355 | 262 | 93 | 35% |
| Less: unallocated costs | 1,733 | 1,858 | (125) | (7)% |
| Income (loss) from operations | (1,378) | (1,596) | 218 | 14% |
| Other Income | — | — | — | 0% |
| Interest expense | (131) | (186) | 55 | 30% |
| Net income (loss) before income tax expenses | $(1,509) | $(1,782) | $273 | 15% |
Operating loss from Software Services decreased by $0.5 million, or 74% to $0.2 million for the quarter ended June 30, 2024, as compared to operating loss of $0.64 million for the quarter ended June 30, 2023. Operating profit from Managed Services and Support decreased by $0.1 million, or 14% to $0.7 million for the quarter ended June 30, 2024, as compared to $0.8 million for the quarter ended June 30, 2023. Operating loss from Platform Services increased by $0.3 million, or 315% to $0.2 million for the quarter ended June 30, 2024, as compared to $ 0.08 million for the quarter ended June 30, 2023.
Liquidity and Capital Resources
Liquidity
The current ratio measures a company’s ability to pay off its current liabilities (payable within one year) with its total current assets such as cash, accounts receivable, and inventories. The higher the ratio, the better the company’s liquidity position. A good current ratio is between 1.2 to 2, which means that a business has 2 times more current assets than liabilities to covers its debts. The Company’s current ratio, based on the three months ended June 30, 2024, financial statement is 0.5 compared to 0.7 for the financial year ended December 31, 2023.
The Company’s current debt equity ratio, based on the three months ended June 30, 2024, financial statement is -3.54, for the quarter ended June 30, 2024, compared to 9.80 for the quarter ended December 31, 2023. A debt-to-equity ratio below 1 means that a company has lower exposure to debts than equity.
The Company does not have inventory and hence the quick ratio is the same as current ratio.
Sources of Liquidity
As of June 30, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $0.03 million. We believe that our cash and cash equivalents as of June 30, 2024, and the future operating cash flows of the entity will provide adequate resources to fund ongoing cash requirements. If sources of liquidity are not available or if we cannot generate sufficient cash flow from operations during the next twelve months, we may be required to obtain additional sources of funds through additional operational improvements, capital market transactions, asset sales or financing from third parties, a combination thereof or otherwise. We cannot provide assurance that these additional sources of funds will be available or, if available, would have reasonable terms.
(In thousands)
| As of June 30, 2024 | As of June 30, 2023 | |
|---|---|---|
| Cash and cash equivalents | $29 | $132 |
| Short-term investments | — | — |
| Total cash, cash equivalents and short-term investments | $29 | $132 |
As of June 30, 2024, our principal sources of liquidity for working capital purposes were cash, cash equivalents and short-term investments totaling $0.03 million.
We have financed our operations primarily through financing activity and operating cash flows. We believe our existing cash, cash equivalents and short-term investments generated from operations will be sufficient to meet our working capital over the next 12 months. Our future capital requirements will depend on many factors including our growth rate, subscription renewal activity, the expansion of sales and marketing activities and the ongoing investments in platform development.
Cash Flows
The following table presents a summary of our consolidated cash flows provided by (used in) operating, investing, and financing activities for the periods indicated:
(In thousands)
| As of June 30, 2024 | As of June 30, 2023 | |
|---|---|---|
| Cash flows provided by operating activities | $(985) | $2,750) |
| Cash flows used in investing activities | — | (2) |
| Cash flows provided by financing activities | (220) | 1,543 |
| Net increase in cash and cash equivalents | $(1,205) | $(1,209) |
Operating Activities
Net Cash generated (used) by operating activities during the six months ended June 30, 2024, was $ (0.99) million compared to $(2.75) million for the six months ended June 30, 2023.
Investing Activities
Net cash used in investing activities was $0 for the six months ended June 30, 2024, and $ (0.002) million for the six months ended June 30, 2023.
Financing Activities
Cash (outflow)/inflow from financing activities was $(0.22) million for the six months ended June 30, 2024, and $1.5 million for the six months ended June 30, 2023.
Off-Balance Sheet Arrangements
We do not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes as defined by Item 303(a)(4) of SEC Regulation S-K, as of June 30, 2024.
Controls and procedures
As filed, 1,371 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Evaluation of Disclosure Controls and Procedures and Changes in Internal Control over Financial Reporting
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the appropriate time periods, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. We, under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective as of June 30, 2023.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting during the three months ended June 30, 2024, that have materially affected, or are reasonable likely to materially effect, our internal controls over financial reporting.
PART II
OTHER INFORMATION
Risk factors
As filed, 318 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K , filed with the SEC on March 18, 2024. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2024-06-30. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2024-04-01 to 2024-06-30 | $3.0m | us-gaap:Revenues |
| Revenue | 6 months2024-01-01 to 2024-06-30 | $7.1m | us-gaap:Revenues |
| Cost of revenue | 3 months2024-04-01 to 2024-06-30 | $2.1m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months2024-01-01 to 2024-06-30 | $5.2m | us-gaap:CostOfRevenue |
| Gross profit | 6 months2024-01-01 to 2024-06-30 | $1.07bn | us-gaap:GrossProfit |
| Research and development | 3 months2024-04-01 to 2024-06-30 | $207.0k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months2024-01-01 to 2024-06-30 | $334.0k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months2024-04-01 to 2024-06-30 | −$1.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months2024-01-01 to 2024-06-30 | −$3.1m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months2024-04-01 to 2024-06-30 | −$131.0k | us-gaap:InterestExpense |
| Interest expense | 6 months2024-01-01 to 2024-06-30 | −$279.0k | us-gaap:InterestExpense |
| Income tax | 3 months2024-04-01 to 2024-06-30 | $1.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months2024-01-01 to 2024-06-30 | $6.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months2024-04-01 to 2024-06-30 | −$1.5m | us-gaap:NetIncomeLoss |
| Net income | 6 months2024-01-01 to 2024-06-30 | −$3.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2024-04-01 to 2024-06-30 | −$0.28 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months2024-01-01 to 2024-06-30 | −$0.69 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2024-04-01 to 2024-06-30 | −$0.28 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months2024-01-01 to 2024-06-30 | −$0.69 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2024-04-01 to 2024-06-30 | 5,316,376 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months2024-01-01 to 2024-06-30 | 4,885,810 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months2024-01-01 to 2024-06-30 | −$985.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | At period end2024-06-30 | $29.0k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | At period end2024-06-30 | $2.3m | us-gaap:AssetsCurrent |
| Total assets | At period end2024-06-30 | $6.0m | us-gaap:Assets |
| Current liabilities | At period end2024-06-30 | $6.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | At period end2024-06-30 | $6.7m | us-gaap:Liabilities |
| Short-term borrowings | At period end2024-06-30 | $1.7m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | At period end2024-06-30 | −$646.0k | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0001213900-24-070692. Last ingested by Listed: Oct 27, 2026, 17:16 ET. Listed shows no prices and gives no investment advice.