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spk00: Good morning, everyone, and thank you for joining us for CIRA Health's first quarter 2024 financial results conference call. Joining us on today's call is Dr. Deepika Phupalanchi, CEO of CIRA Health, and Priya Prasad, CIRA's Chief Financial Officer. At the conclusion of today's prepared remarks, management will answer some questions that were sent to us by investors and other questions we think are relevant to investors as well. Today's event is being recorded and will be available for replay through the webcast information provided in the press release. I'd also like to call your attention to the customary safe harbor disclosure regarding forward-looking information. The conference call today will contain certain forward-looking statements, including statements regarding the goals, strategies, beliefs, expectations, and future potential operating results of CIRA Health. Although management believes these statements are reasonable based on estimates, assumptions, and projections as of today, these statements are not guarantees of future performance. Time-sensitive information may no longer be accurate at the time of any telephonic or webcast replay. Actual results may differ materially as a result of risks, uncertainties, and other factors, including but not limited to factors set forth in the company's filings with the SEC. CIRA undertakes no obligations to update or revise any of these forward-looking statements. With that said, I would like to turn the event over to Dr. Deepika Vupalanchi, Chief Executive Officer of CIRA Health. Deepika, please proceed.
spk02: Thank you, Christine, and welcome, everyone. I'm pleased to discuss with you our first quarter 2024 financial results and the 2024 outlook. We are off to a great start in 2024 as we return to a strong top-line growth. Revenues in the first quarter increased 47%, and we exhibited growth across majority of our business units. The multiple contract wins that we announced in recent months are translating into revenues in 2024. As such, we are confident in our 2024 revenue guidance of $9 million to $11 million which is largely based on contracts in hand and pending implementation. Strong growth in 2024 is expected to come from our population health and healthcare workforce business units, coupled with continual growth from our behavior and mental health, digital health, and health education business units. We have been successful in securing sizable contracts in these areas in recent months and expect further opportunities going forward. This is an exciting time for SIDA Health as we embark on fulfilling our promise to continually push the boundaries of mental health solutions, explore new frontiers in digital health, and remain dedicated to our pursuit of a healthier population. Our goal is to become a leader in healthcare solutions and to expand our operations by leveraging our established structures, which we have achieved in key geographical areas to drive growth nationwide. The areas of mental and behavioral health are gaining a lot of attention, and the public and private sectors are allocating increased resources in solving this crisis. We are pleased to offer meaningful solutions to this crisis. We remain on track to significantly grow our business units and diversify our customer geography. We are currently operating in 19 states, a major achievement since the inception of the company just three years ago. We also diversified our revenues beyond our legacy healthcare workforce to include digital health, population health, and health education, which grew over 330% and accounted for 19% of our total revenues in the first quarter of 2024 versus just 7% in the first quarter of 2023. In late 2023, we announced our expansion into the federal government space with the launch of our government solutions business unit. We continue active engagement with Caduceus Healthcare and anticipate providing case management services, healthcare staffing, along with behavioral health services and education in support of the federal influx care facilities. We have a growing pipeline of federal government business opportunities as we continue to grow our federal sales team and nurture partnerships with business entities focused on delivering and implementing federal government projects. Looking out beyond the immediate timeframe, we are most excited about a suite of technology products, namely Serenity, Syrobot, and Fair Plus. Semnity is a flagship and proprietary healthcare product that can be securely deployed to customers for the prevention and treatment of mental and behavioral health issues. Semnity is available for use by universities and colleges, large employers, payer organizations, and provider networks. Cyrobot is a human-centric, conversational, AI-backed chatbot that offers 24-7 customer support. CyraBot provides personalized health information and benefit and treatment information for individuals to stay informed and involved in their care. We are currently deploying CyraBot to a large managed care organization in Indiana, and we anticipate similar customers in the near future. CarePlus is an easy-to-use and affordable electronic medical record system tailored to small to mid-sized healthcare organizations to enhance operational efficiency, minimize errors, and elevate patient care. We believe that these products can be catalysts for leverageable revenue and margin growth for CHIRA. I would like to now speak about our business unit in more detail. I'll begin with our population health business unit. In this business unit, our solutions help our customers create healthcare improvements for entire populations of individuals at the state and county levels. We conduct data analysis and develop solutions from a health equity lens to help improve health equality and access to care. Utilizing advanced and predictive analytics, we help stakeholders create new health programs and public policies. We also conduct health readiness assessments and ensure emergency response preparedness. Since population health is experiencing very strong growth in the near term, growing 213% in the first quarter. In the recent month, we have won contracts with public and private organizations in multiple states, including Maine, New Jersey, Tennessee, and Indiana. We were recently awarded a contract worth $660,000 per year with a national healthcare organization to provide healthcare effectiveness data and information set, commonly known as HEDIS, Outreach and support services essential for fostering positive health outcomes and reducing healthcare costs. We also announced a one-year $480,000 contract from the Indiana Department of Health to administer public health and healthcare readiness assessments. Under the agreement, SIRA Health public health experts will be evaluating how existing hazards and risks impact public health, public health infrastructure, and behavior health within the state of Indiana. Part of the agreement also includes identifying the greatest risk to public health care system of Indiana, as well as identifying where the Department of Health and its local partners should focus their resources to create a health care network for all Indiana residents. Moving on to health care workforce, we continue to expand this business unit with contracts in additional states by providing experienced physicians, nurses, and allied health professionals at government and private provider networks, peer organizations, and other healthcare facilities across the country. Our healthcare staff ensures continuity of care and helps fill gaps left by healthcare burnout. Healthcare workforce grew 28% in the first quarter, and we expect this business unit to continue strong growth in 2024, driven by strategic collaborations and adaptive staffing approaches. In recent months, we have been successful in securing contracts with state and local organizations in states including Arizona, Indiana, Missouri, Nebraska, and Virginia. For example, we secured a healthcare workforce contract in Missouri for providing temporary medical services across the entire state. Revenue from the contract will be determined based on the number of positions filled and the duration. Moving on to digital health, This business unit is our most innovative, where we blend technology and innovation to develop a range of digital health solutions, which are centered on prevention, improved access, and affordable care. Digital health generated revenues of $92,000 in the first quarter of 2024, driven by sales of a CyraBot product, which was launched in the third quarter of 2023. CyraBot is a human-centric chatbot solution that offers 24-7 AI-powered conversational customer support. CyraBot provides high-quality responses in up to 200 different languages and holds a large knowledge base for customers with a large volume of data or information. All of our digital health tools utilize AI technology for predictive analysis, and we continue to use AI to shape articles for greater efficiency and personalization. Now on to behavior and mental health. We deem this business unit as the area with the highest potential for revenue in the long term. The statistics provided by the National Institute of Mental Health paint the star reality of the mental health landscape in America. It's not just numbers. It's a reflection of the millions of people's lives impacted by mental illness. With more than one in five adults in the United States living with a mental illness, It's evident that mental health concerns affect a significant portion of our population. In this business unit, we focus on preventative mental health and treatment. We offer a variety of products and services to promote mental and behavioral well-being, including telehealth and our own licensed therapist. In 2023, we launched Serenity, an AI-backed mental health product for employers, payers, colleges, universities, offering support for the mental health of their employees, health plan benefits, and students. Developed to fill the gap in behavior and mental health care, Serenity focuses on preventing a mental health crisis by providing psychological evaluations and AI-backed diaries for continual monitoring of mood, mental health assessments, personalized wellness plans, cognitive behavior therapy, guided meditation sessions, and real-time reporting for tracking of progress or for providing insights to a therapist. We recently hosted Syrah's Mental Health Solutions Day to spotlight serenity and her commitment to working with nonprofits that are destigmatizing mental health. We are currently negotiating contracts with private organizations that are interested in utilizing serenity for their workforces. Last month, our research study protocol for serenity was approved by Pearl Institutional Review Board. The research study will be conducted by third-party university researchers and practicing psychologists who will enroll approximately 300 people with moderate to severe depression. From the services side of behavior and mental health, in late December, We announced that we had been awarded a contract with the Mississippi Department of Human Services to provide behavior and mental health services for the Oakley Youth Development Center and other locations as directed by the Mississippi Department of Human Services. We have a similar contract in Camden County, New Jersey, where we provide behavior and mental health assessments for police officers in support of their fitness for duty. We also continue to provide competency attainment services to the Indiana Department of Child Services for vulnerable youth charged with delinquent acts. Our Health Education Business Unit continues to win new and repeat business. We were just recently awarded our third training by Maricopa County, Arizona. Our journey in Maricopa County began with health equity training, followed by foundations in public health training, and soon we will be delivering cultural and community training to their public health officials and community members. We were also awarded a five-year contract from the Sedgwick County Health Department in Kansas. As part of the agreement, Stata Health will provide overdose data to actions trainings to first responders, and faith-based community organizations in Sedgwick County. And finally, I want to speak about our newest business unit, Federal Government Solutions. Our business began with state government contracts, and we now expect to offer these services to federal agencies as well. Earlier this year, we announced that we had been selected as a subcontractor for a contract awarded to Caduceus Healthcare by the Federal Department of Health and Human Services Administration for Families and Children, Office of Refugee Resettlement Medical Staffing and Support. With our federal team in place, we are anticipating more awards in the federal government space. With that, let me turn it over to our CFO, Priya Prasad, who will walk through the financial details.
spk01: Priya? Thank you, Deepika, and let me add my welcome to everyone joining us on this call. The financial results for the full year are provided in detail within our press release, which will be issued earlier this morning and in our 10-Q. Total revenue for the first quarter of 2024 were 1.7 million compared to 1.2 million in the first quarter of last year, representing a 47% growth. Growth was driven by healthcare workforce, population health, and digital health. We will now go through each business unit. Within our digital health business unit, revenues were 92,000 during the first quarter driven by sales of CyraBot. Within our population health business unit, revenues were 232,000 in the first quarter versus 74,000 in the same period last year, growth of more than 213% driven by demand for our epidemiology services. Within our healthcare workforce business unit, we returned to growth in the first quarter, posting revenue growth of 28% to $1.4 million. The increase in healthcare workforce revenue was driven by new customer acquisitions and additions to our existing contracts. Based on contracts on hand, we expect healthcare workforce to continue strong growth in 2024. Behavioral and mental health and health education business units combined had revenues of $11,000 in the first quarter versus $3,000 in the first quarter last year. Gross margins for the first quarter of 2024 were 10.2% compared to 12.4% in the same period last year. The decrease in gross margins were due to the mixed shift as healthcare workforce, which carries lower margins returned to growth. Total operating expenses for the first quarter increased 76% to $1.6 million compared to $921,000 in the first quarter of 2023. Salaries and benefits expenses increased 61% year-over-year to support general business growth and sales. Professional fees declined 18% compared year-over-year due to the decrease in legal and other professional costs as the company completed its IPO process in the fourth quarter of 2023. Selling, general, and administrative expenses increased 87% year-over-year due to increased operations. Research and development expenses were $277,000, reflecting the development of technology-based solutions. Depreciation expense was $13,000 in the first quarter of 2024 compared to $12,000 in the first quarter of 2023, reflecting expanded office space. The net loss was $1.4 million for the first quarter compared to a loss of $786,000 in the same period last year. Adjusted EBITDA for the quarter was negative 1.4 million compared to a negative 763,000 in the first quarter of 2023. Again, full reconciliations are provided in the tables included in today's press release. Our cash balance as of March 31st, 2023 was 3.2 million. During the first quarter, we received roughly 815,000 as some warrants were exercised. We are maintaining our outlook and expect revenues in 2024 to be in the range of 9 to 11 million, representing a 64 to 100% growth versus 2023. As a reminder, this guidance does not include any potential revenues from any federal government contracts. With that, let me turn the call back over to Deepika.
spk02: Thank you, Priya. Our technologically advanced and innovative solutions are primed to meet the unmet needs of the healthcare industry in key areas of behavior and mental health, digital health, and population health. As we chart our goals for 2024, our priority remains to drive growth across all our business units by prudently managing our cost structure and balance sheet. The evolving needs of healthcare coupled with the transformative potential of the solution positions us favorably to capitalize on emerging opportunities and deliver sustained value to our shareholders. Our pipeline of future contracts has expanded in recent months, and we continue to bid for multiple opportunities across state and federal governments and the private sector. We expect to continue to announce contracts with us as they are solidified. Utilizing a strong balance sheet, we are expanding our RFP and business development teams as we intend to replicate our current projects with similar customers across the country. I appreciate everyone's participation on the call today and will now be happy to answer any questions.
spk00: Christine? Thank you to the entire management team. We have some questions for you. With regards to the outlook of 9 to 11 million in 2024, can you speak about the timing of these revenues? Are they mostly back half-weighted, Priya?
spk01: We are happy to reiterate our financial guidance of a 9 to 11 million for 2024, which is about 64 to 100% increase. over our 2023 revenues. We do expect the majority of those revenues to be reflected in the last half of this year due to the implementation cycle of our customers.
spk00: Thank you. You've been successful in winning a lot of contracts. What do you attribute this success to, Deepika?
spk02: CytoHealth has an experienced team of scientifically driven healthcare and technology professionals. Their dedication to excellence is illustrated by our comprehensive suite of innovative services and technology solutions. Our success is evident in the number of contracts we have successfully secured and the continued revenue growth.
spk00: Thank you. The growth in population health has been strong. What is driving that business? Deepika?
spk02: Yes, we are skilled at conducting gap analysis to determine what our customers are seeking. Driven by our accomplished team of epidemiologists and research scientists, we are experiencing strong demand for our epidemiology services. Through this work, we are shaping the strategic framework of organizations for improving healthcare, and we are evaluating state and county programs to improve the health outcomes of the entire communities.
spk00: Thank you. It looks like we are now out of time. My thanks to everyone for participating in today's call. We look forward to speaking with each of you again.
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