Plantation, FL, Nov. 14, 2013 (GLOBE NEWSWIRE) -- Health Revenue Assurance Holdings, Inc. (OTCBB: HRAA), the leading provider of revenue integrity solutions for healthcare organizations, announced its financial results for the third quarter and first nine months ended September 30, 2013.
Third Quarter and First Nine Months of 2013 Highlights:
- Total revenues for the first nine months of 2013 were $6,075,437, an increase of 67.9% as compared to $3,619,611 for the prior year's first nine months; HRAA was selected to provide an ICD-10 Curriculum to and manage an Internship program for the Latter-Day Saints Business College Medical Coding Certificate Program;
- HRAA's ICDVisualizerTM Business Intelligence Solution was selected by Otsego Memorial Hospital to support ICD-10 transition;
- HRAA was chosen to perform ICD-10 Transition Services for Kirby Medical Center;
- Company was selected to provide ICD-10 Educational Services to Marshall Browning Hospital;
- Chairman and CEO Andrea Clark named one of top 10 CEOs in Broward County by South Florida Business Journal's 2013 Broward Ultimate CEO Awards.
Andrea Clark, HRAA's Chairman, CEO and Founder stated, "We continue to see great demand for our coding and education services as well as our technology platforms by health care organizations that include Otsego Memorial Hospital, Kirby Medical Center and Marshall Browning Hospital. Educational institutions are seeking out our services to help revamp their coding curriculum, as coders will need to be fully prepared to work under ICD-10 in less than a year. Also, we recently received a strategic investment of $5.4 million from Great Point Partners that will help us to fuel the expansion of our Medical Coding and ICD-10 Transition Solutions. Great Point's recent capital infusion is validation of our business model and product suite and we look forward to utilizing their vast knowledge, experience and deep industry relationships."
Ms. Clark added, "These customer wins, partnerships and the strategic investment from Great Point Partners further validate the revenue potential of our best-of-breed solutions as we continue to execute on our growth strategy while driving shareholder value. As a leader in ICD-10 transition services, we continue to set the bar in training, coding and technology while identifying major factors that will impact healthcare organizations during this shift."
Commenting on the financial results, CEO Andrea Clark, stated, "On a GAAP basis, our net loss for the quarter widened substantially due to a number of non-cash charges including a one-time, non-cash charge of almost $1 million related to R&D and significantly higher operating expenses. The increase in operating expenses during the quarter was in-line with our internal expectations as we made planned investments in the build-up of staff to meet the growing demand for our coding services as well as the development and market launch of our suite of business technology solutions. During the quarter, we converted a substantial amount of outstanding notes to equity, reducing our debt by $402,000. By extinguishing this debt, we strengthened our balance sheet and reduced our debt service obligations going forward. With much of our planned investments having been deployed during the first nine months of the year, and this large one-time non-cash charge behind us, we expect our bottom line to show a marked and steady improvement going into the current fourth quarter and into 2014."
Third Quarter 2013 Financial Results
For the third quarter of 2013, total revenues were $1,851,377, a decrease of $134,139 or 6.7%, from revenues of $1,985,516 for the third quarter of 2012. The decrease in revenues was primarily due to customer fiscal budget restraints for education services as management focused its resources on the development and market launch of HRAA's business intelligence Visualizer software products.
Adjusted EBITDA loss was $(868,951) for the quarter ended September 30, 2013 compared to adjusted EBITDA of $161,812 for the same quarter in 2012.
Operating expenses were $2,865,142 for the third quarter of 2013, increasing 164% from operating expenses of $1,084,803 for the prior year's third quarter, primarily due to the addition of extra staff and infrastructure to support the build-up of the Company's anticipated rapid growth throughout its business. The Company had an operating loss in the third quarter of 2013 of $(2,102,207), compared to an operating income of $142,446 for the prior year's third quarter.
The Company recorded a net loss of $(2,561,475), or $(0.05) per basic and diluted share, for the third quarter of 2013, as compared to a net loss of $(230,149), or $(0.01) per basic and diluted share, for the third quarter of 2012. The net loss in the third quarter of 2013 includes an interest expense of $357,127 primarily due to the amortization of debt financing fees, a write off unamortized debt discount fees related to a conversion of promissory notes to common stock and interest on debt obligations. In addition, the Company incurred a one-time non-cash charge to operating expenses of $946,931 related to the impairment of research and development costs previously capitalized. The Company also recorded a $112,583 non-cash charge related to the conversion of promissory notes into common stock and a non-cash charge of $192,130 for stock based compensation expense.
Nine Month Results
For the nine months ended September 30, 2013, total revenues were $6,075,437, an increase of $2,455,826 or 67.9%, from revenues of $3,619,611 for the first nine months of 2012.
Adjusted EBITDA loss was $(1,893,508) for the nine months ended September 30, 2013 compared to adjusted EBITDA loss of $(794,091) for the same period in 2012.
Operating expenses were $6,295,788 for the first nine months of 2013, compared to operating expenses of $2,817,292 for the same period in 2012, primarily due to increased personnel and business development costs. The Company had an operating loss for the nine months ended September 30, 2013 of $(3,269,745), compared to an operating loss of $(840,300) for the same period in 2012.
The Company recorded a net loss of $(4,093,364), or $(0.09) per basic and diluted share, for the nine months ended September 30, 2013 as compared to a net loss of $(1,223,737) or $(0.04) per basic and diluted share, for the same period in 2012. The net loss for the nine months ending September 30, 2013 includes an interest expense of $721,829 primarily due to the amortization of debt financing fees, a write off unamortized debt discount fees related to a conversion of promissory notes to common stock and interest on debt obligations. In addition, the Company incurred a non-cash charge of $946,931 related to the impairment of research and development costs previously capitalized. The Company also recorded a $112,583 non-cash charge related to the conversion of promissory notes into common stock and a non-cash charge of $290,162 for stock based compensation expense.
HRAA (OTCQB: HRAA) interprets data to ensure that healthcare is efficient and effective for everyone by pulling medical data together to create a predictive window to understand cost and revenues looking back and going forward. Founded in 2001 and based out of Plantation, FL, HRAA combines years of industry expertise with best-in-breed technology to create market leading business intelligence products and consulting services to ensure hospitals are reimbursed for every pill they prescribe, every procedure they perform and every test they administer. HRAA both trains and supplies the high tech workforce to hospitals to generate the predictive data used by the whole healthcare system and offers a full suite of solutions needed to keep up with the ever-changing healthcare industry including data analytics software, business intelligence technology, medical coding, auditing, education, revenue cycle consulting, and ICD-10 transition solutions. For more information please visit: http://www.hraa.com
Caution Regarding Forward Looking Statements
Certain statements in this news release and such conference call are forward-looking, including (without limitation) expectations or guidance respecting customer contract expansion, growing revenues and profits through organic growth and acquisitions, attracting new business that will increase HRAA's revenues, continuing to maintain costs and consummating any transactions. Undue reliance should not be placed on such forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the Company's control. The Company's actual results, performance and trends could differ materially from those indicated or implied by such statements as a result of various factors, including (without limitation) the continued strengthening of HRAA's selling and marketing functions, continued customer satisfaction and contract renewal, new product development, continued availability of capable dedicated personnel, continued cost management, the success and availability of acquisitions, availability of financing and other factors, as well as by factors applicable to most companies such as general economic, competitive and other business and civil conditions. Information regarding certain of those and other risk factors and cautionary statements that could affect future results, performance or trends are discussed in HRAA's most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings made with the Securities and Exchange Commission from time to time. All of the Company's forward-looking statements are expressly qualified by all such risk factors and other cautionary statements.
HEALTH REVENUE ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|September 30,||December 31,|
|Accounts receivable - Related Party, net of allowance $117,632 and $0, respectively||--||--|
|Other current assets||70,020||688|
|Total Current Assets||2,448,870||2,144,560|
|Property and Equipment, net||400,126||365,017|
|Finance costs, net||2,232||2,477|
|Total Other Assets||11,097||270,281|
|Liabilities and Stockholders' Equity (Deficit)|
|Due to officers||115,000||75,000|
|Loan payable to factor||443,648||827,075|
|Line of credit, current portion||46,166||25,000|
|Capital Leases, current portion||32,768||16,923|
|Notes payable, current portion, net of discount||372,161||202,557|
|Long term debt, current portion||43,956||37,513|
|Other current liabilities||51,257||--|
|Total Current Liabilities||2,421,978||1,987,874|
|Capital Leases (net of current portion)||34,300||23,974|
|Line of credit (net of current portion)||--||125,000|
|Notes payable (net of current portion), net of discount||124,054||273,751|
|Long term debt (net of current portion)||286,549||181,457|
|Commitments and Contingencies|
|Stockholders' Equity (Deficit):|
|Preferred stock ($0.001 par value, 25,000,000 shares authorized, none issued or outstanding)||$||--||$||--|
|Common stock ($0.001 par value, 500,000,000 shares authorized, 54,577,294 shares and 39,054,867 issued and outstanding at September 30, 2013 and December 31, 2012, respectively)||54,577||39,055|
|Additional paid-in capital||6,616,797||2,738,545|
|Total Stockholders' Equity (Deficit)||(6,788||)||187,802|
|Total Liabilities and Stockholders' Equity (Deficit)||$||2,860,093||$||2,779,858|
The accompanying unaudited notes are an integral part of these unaudited consolidated financial statements.
|HEALTH REVENUE ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES|
|CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)|
|(For the three months ended)||(For the nine months ended)|
|September 30,||September 30,||September 30,||September 30,|
|Revenue - Related Party||60,552||--||287,626||--|
|Cost of Revenues||1,088,442||758,267||3,049,394||1,642,619|
|Selling and administrative expenses (includes stock compensation of $290,162 and $0 as of September 30, 2013 and 2012, respectively)||1,898,595||1,069,870||5,284,354||2,726,475|
|Research and development||--||926||289||54,059|
|Depreciation and amortization||19,616||14,007||64,214||36,758|
|Total Operating Expenses||2,865,142||1,084,803||6,295,788||2,817,292|
|Operating Income (Loss)||(2,102,207||)||142,446||(3,269,745||)||(840,300||)|
|Other Income (Expense)|
|Loss on extinguishment of debt||(112,583||)||--||(112,583||)||-|
|Total Other Income (Expense), net||(459,268||)||(372,595||)||(823,619||)||(383,437||)|
|(Loss) before provision for income taxes||(2,561,475||)||(230,149||)||(4,093,364||)||(1,223,737||)|
|Net Loss Per Share|
|basic and diluted||$||(0.05||)||$||(0.01||)||$||(0.09||)||$||(0.04||)|
|Weighted Average Number of Shares Outstanding|
|basic and diluted||49,438,329||32,843,413||46,239,643||31,468,471|
The accompanying unaudited notes are an integral part of these unaudited consolidated financial statements.
CONTACT: Investor Contacts: KCSA Strategic Communications Philip Carlson +1 212.896.1233 firstname.lastname@example.org
Source:Health Revenue Assurance Associates, Inc.