HEALTHCARE TRIANGLE, INC. Management’s discussion and analysis of financial condition and results of operations. (form 10-Q) – marketscreener.com

The following discussion summarizes the significant factors affecting theoperating results, financial condition, liquidity, and cash flows of our Companyas of and for the periods presented below. The following discussion and analysisshould be read in conjunction with the condensed consolidated financialstatements and the related notes thereto, and the consolidated financialstatements and the related notes thereto all included elsewhere in thisprospectus. The statements in this discussion regarding industry outlook, ourexpectations regarding our future performance, liquidity, and capital resources,and all other non-historical statements in this discussion are forward-lookingstatements and are based on the beliefs of our management, as well asassumptions made by, and information currently available to, our management.Actual results could differ materially from those discussed in or implied byforward-looking statements as a result of various factors, including thosediscussed below and elsewhere in this report, and in the sections entitled"Special Note Regarding Forward-Looking Statements" and "Risk Factors" containedin the Company's final prospectus for its initial public offering filed with theSecurities and Exchange Commission ('SEC").

Overview

Impacts of the COVID-19 Pandemic

Investment in scaling the business

Adoption of our solutions by new and existing customers

Subscription services adoption

Mix of solutions and software services revenues.

The Company does not have inventory and hence the quick ratio is the same ascurrent ratio.

We provide our services and manage our business under these operating segments:

Managed Services and Support

The revenue from solutions delivery model contains a series of separatelyidentifiable and distinct services that represent performance obligations thatare satisfied over time. During the periods presented the company generatedPlatform revenue on solution delivery model only, which is non-recurringrevenue.

Sales and Marketing

In the nearest future, we expect our general and administrative expenses tocontinue to increase to support business growth. Over the long term, we expectgeneral and administrative expenses to decrease as a percentage of revenue.

Depreciation and Amortization Expenses

Other Income (Expense), Net

Other income (expense), net consists of finance cost and gains or losses onforeign currency.

Deferred revenues

Advanced billings to clients in excess of revenue earned are recorded asdeferred revenue until the revenue recognition criteria are met.

Unbilled accounts receivable

Unbilled accounts receivable is a contract asset related to the delivery of ourprofessional services for which the related billings will occur in a futureperiod. Unbilled receivables are classified as accounts receivable on theconsolidated balance sheet.

Although we believe that our approach to estimates and judgments regardingrevenue recognition is reasonable, actual results could differ and we may beexposed to increases or decreases in revenue that could be material.

Provision for Income Taxes

Paycheck Protection Program

Results of Operations

Three Months Ended September 30, 2021 and 2020

Revenue from operations

Our top 5 customers accounted for 79% in quarter ended September 30, 2021 and88% in during quarter ended September 30, 2020, respectively.

Terms of Customer 1 Agreements

The summaries of the MSA and SOW are not complete descriptions of the provisionsof the MSA and any particular SOW and are qualified in their entirety byreference to the MSA and form of SOW, each filed as an exhibit to theregistration statement of which this prospectus is a part.

Cost of Revenue (exclusive of depreciation /amortization)

Cost of revenue, excluding depreciation and amortization decreased by $0.01million, or 0%, to $5.3 million for the quarter ended September 30, 2021, ascompared to $5.3 million for the quarter ended September 30, 2020..

Research and Development

Research & Development $ 2,204,030 $ 550,167 $ 1,653,863 301 %

Research & Development expenses increased by $1.6 million, or 301% to $2.2million for the quarter ended September 30, 2021, as compared to $0.6 millionfor the quarter ended September 30, 2020, this is primarily due to higherinvestments in Platform Development.

Depreciation and amortization

Depreciation and amortization $ 211,328 $ 200,864 $ 10,464 5 %

Interest expense

Interest expense $ 220,634 $ 1,161 $ 219,473 18903 %

Revenue, Cost of Revenue and Operating Profit by Operating Segment

Factors affecting revenues of Software Services, Managed Services and Supportand Platform Services

Our CloudEz and DataEz platforms are getting more traction, and this led toincrease in Managed Services and Support revenue. We have made additionalinvestments in Sales & Marketing and Research & Development to grow ManagedServices & Support and Platform Services revenue. We expect this trend tocontinue and have a net positive impact on overall results of operations.

Segment operating profits by reportable segment were as follows:

(2,181,277 ) (1147 %)

Nine Months Ended September 30, 2021 and 2020

Revenue from operations

Our top 5 customers accounted for 75% of revenue during the nine months endedSeptember 30, 2021 and 80% during the nine months ended September 30, 2020,respectively.

Top Five Customers' Revenue for nine months ended September 30, 2021

Top Five Customers' Revenue for nine months ended September 30, 2020

Cost of Revenue (exclusive of depreciation /amortization)

Cost of Revenue (exclusive ofdepreciation /amortization) $ 17,828,791 $ 16,162,776 $ 1,666,015

Research & Development expenses increased by $2.3 million, or 157% to $3.8million for the nine months ended September 30, 2021, as compared to $1.5million for the nine months ended September 30, 2020, this is primarily due toadditional investments in Platform Development.

Depreciation and amortization

Depreciation and amortization $ 633,290 $ 603,567 $ 29,723 5 %

Depreciation and amortization expenses increased by $0.03 million, or 5% to$0.63 million for the nine months ended September 30, 2021, as compared to $0.60million for the nine months ended September 30, 2020.

Interest expense

Interest expense $ 479,849 $ 24,920 $ 454,929 1,826 %

Income tax expense $ 4,759 $ 176,605 $ (171,846 ) (97 %)

Revenue, Cost of Revenue and Operating Profit by Operating Segment

Factors affecting revenues of Software Services, Managed Services and Supportand Platform Services

Our CloudEz and DataEz platforms are getting more traction, and this led toincrease in Managed Services and Support revenue. We have made additionalinvestments in Sales & Marketing and Research & Development to grow ManagedServices & Support and Platform Services revenue. We expect this trend tocontinue and have a net positive impact on overall results of the operations.

(1,021,374 ) (165 %)Total segment operating profit 3,224,287 3,420,276 (195,989 )

(3,152,288 ) (482 %)

Liquidity and Capital Resources

(254,271 ) $ (799,877 )

As of September 30, 2021, our principal sources of liquidity for working capitalpurposes were cash, cash equivalents and short-term investments totaling$1.1 million.

Sources of Liquidity

Operating Activities

Investing Activities

Net cash used in investing activities was $0.05 million for the nine monthsended September 30, 2021, and $0.01 million for the nine months ended September30, 2020.

Off-Balance Sheet Arrangements

Edgar Online, source Glimpses

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HEALTHCARE TRIANGLE, INC. Management's discussion and analysis of financial condition and results of operations. (form 10-Q) - marketscreener.com

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