| Nature of Business and Significant Accounting Policies | 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, 2023, which was filed with the Securities and Exchange Commission
(“SEC”) on March 25, 2024. 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, 2024, and for the three and nine months
ended September 30, 2024 and 2023. 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, 2023. 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 $ 250,000 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. 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, 2024 and December 31, 2023. 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 no 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 $ 5,520 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 Leases The
Company accounts for its leases under ASC 842 - Leases 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. Segment
Reporting ASC
Topic 280, “ Segment Reporting 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
– Digital
Health
– Behavioral
and Mental Health Services
– Health
Education The
Company primarily provides its services to state health and social service agencies and universities. Healthcare Workforce, Health Education
and 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
and Digital 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 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. Disaggregated
revenue data The
Company’s revenue consists of the following revenue services within its industry: Schedule
of Disaggregation of Revenue
Nine Months Ended
September 30, 2024 September 30, 2023
Net revenues:
Healthcare workforce $ 4,411,683 $ 2,989,962
Population health 1,241,579 606,789
Digital health 276,750 131,356
Behavioral and mental services 15,345 9,055
Health education 30,000 11,781
Net revenues $ 5,975,357 $ 3,748,943 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, 2024 and 2023, FSSA accounted for approximately
61 76 3,398,761 2,832,638 248,000 240,000 58 17 30 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 A
and 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. 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. 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. |
