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Health Revenue Assurance Holdings, Inc. Reports Financial Results for the Third Quarter and First Nine Months of 2012

Wednesday, November 14, 2012 5:41 PM


Plantation, FL, Nov. 14, 2012 (GLOBE NEWSWIRE) -- Health Revenue Assurance Holdings, Inc. (OTCBB: HRAA), a provider of revenue integrity solutions for healthcare organizations, announced its financial results for the third quarter and nine months ended September 30, 2012.

Third Quarter 2012 Financial Highlights:

  • Total quarterly revenue of $1,985,516, increased 369% as compared to $423,325 for the prior year's third quarter;
  • Adjusted EBITDA of $161,812 compared to adjusted EBITDA of $98,993 in same period in 2011;
  • Net loss of $230,149 or $0.01 per basic and diluted share that included a one-time $297,000 non-cash expense related to the amortization of a $300,000 beneficial conversion feature which was expensed during the three months ended September 30, 2012.

Andrea Clark, HRAA's Chairman, CEO and Founder stated, "This was a record quarter for HRAA. Our strong revenue growth was driven by new customer wins in our healthcare coding business including the addition of 7 new hospitals in one of the nation's leading hospital groups. We are currently providing outsourced coding services to more than 20 hospitals and expect to see continued strong momentum in this business as hospital groups increasingly turn to outsourced providers to address their coding needs."

Clark concluded, "During the quarter we launched our flagship ICD-10 software product, ICD Visualizerä. This product provides hospitals with a powerful application that uncovers the financial and coding impact of the mandated transition from its current coding standard, ICD-9, to the new, more comprehensive ICD-10 standard in October 2014. Having provided auditing, education and consulting services and more recently, outsourced coding services to over 900 hospitals over the years, HRAA was in a unique position to develop and commercialize a business intelligence software solution that improves the healthcare delivery experience for doctors, nurses and patients. We will continue to invest in and develop IP and new technology products that leverage our expertise in healthcare consulting and revenue integrity."

Third Quarter 2012 Financial Results

For the third quarter of 2012, total revenues were $1,985,516, an increase of $1,562,191 or 369%, from revenues of $423,325 for the third quarter of 2011. 

Adjusted EBITDA was $161,812 for the quarter ended September 30, 2012 compared to adjusted EBITDA of $98,993 for the same quarter in 2011.

Operating expenses were $1,084,803 for the third quarter of 2012, increasing 123% from operating expenses of $486,733 for the prior year's third quarter, primarily due to the addition of extra staff to support the Company's rapid growth in medical coding. The Company had operating income in the third quarter of 2012 of $142,446, compared to an operating loss of $164,701 for the prior year's third quarter.

The Company recorded a net loss of $230,149, or $0.01 per basic and diluted share, for the third quarter of 2012, as compared to a net loss of $171,167, or $0.01 per basic and diluted share, for the third quarter of 2011. The net loss in the third quarter of 2012 includes an interest expense of $377,954 due to the factoring fees experienced in the quarter along with interest on outstanding debt obligations and a one-time $297,000 non-cash expense related to the amortization of a $300,000 beneficial conversion feature which was expensed during the three months ended September 30, 2012.

Nine Month Results

For the nine months ended September 30, 2012, total revenues were $3,619,611, an increase of $2,606,333 or 257%, from revenues of $1,013,278 for the first nine months of 2011. 

Adjusted EBITDA loss was $794,091 for the nine months ended September 30, 2012 compared to adjusted EBITDA of $189,112 for the same period in 2011.

Operating expenses were $2,726,475 for the first nine months of 2012, increasing 257% from operating expenses of $764,757 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, 2012 of $840,300, compared to an operating loss of $89,461 for the same period in 2011.

The Company recorded a net loss of $1,223,737, or $0.04 per basic and diluted share, for the nine months ended September 30, 2012 as compared to a net loss of $108,536 or $0.01 per basic and diluted share, for the same period in 2011. The net loss for the first nine months of 2012 includes an interest expense of $377,954 due to the factoring fees experienced in the third quarter along with interest on outstanding debt obligations and a one-time $300,000 non-cash expense related to the amortization of a $300,000 beneficial conversion feature which was expensed during the nine month period ended September 30, 2012.

Conference Call

The Company will be holding a conference call on Thursday, November 15, 2012, at 10:00am ET (7:00am Pacific Time) to review the third quarter of 2012 results. Robert Rubinowitz, President and Chief Operating Officer of Health Revenue Assurance Holdings, Inc., will be on-line to discuss these results.

To listen in, please call one of the following teleconferencing numbers at least 5 minutes before the conference call commences.

Toll-Free:          1-800-343-0821

Toll:                  1-785-830-1978

Passcode:        4280626

A telephone replay of the call will be available by contacting HRAA's office at 1-954-472-2340.

About HRAA

HRAA is a trusted source of critical resources, technology and information that supports the performance of revenue integrity in assuring the existence of healthcare organizations. HRAA's products and services include business intelligence technology solutions, contract coding, billing, coding and compliance audits, education, revenue cycle consulting, physician services and ICD-10 transition services.

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.

-Tables Follow-

HEALTH REVENUE ASSURANCE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
             
    September 30,     December 31,  
    2012     2011  
    (Unaudited)        
Assets            
Cash   $ 57,182     $ 198,500  
Accounts receivable     348,523       143,557  
Due from factor     127,638       --  
Prepaid expenses     6,515       24,512  
Other current assets     9,053       5,842  
   Total Current Assets     548,911       372,411  
                 
Property and Equipment, net     377,059       352,499  
                 
Software     92,727       --  
Other assets     8,866       8,865  
Finance costs, net     2,558       2,803  
   Total Other Assets     104,151       11,668  
                 
   Total Assets   $ 1,030,121     $ 736,578  
                 
Liabilities and Stockholders' Deficit                
Accounts payable   $ 161,050     $ 195,901  
Accounts payable Related Party     75,000       --  
Accrued expenses     41,886       23,266  
Accrued payroll     380,545       73,685  
Line of credit     150,000       98,500  
Capital Leases (current obligation)     16,923       --  
Current maturities of long term debt     35,380       283,640  
Advances on convertible promissory notes     --       170,000  
Settlement Payable     207,500       --  
Unearned revenue     --       32,988  
   Total Current Liabilities     1,068,284       877,980  
Capital Leases (net of current portion)     28,205       --  
Long term debt (net of current portion)     191,197       218,417  
   Total Liabilities   $ 1,287,686     $ 1,096,397  
                 
Stockholders' Deficit:                
Common stock ($0.001 par value, 75,000,000 shares authorized,                
35,191,080  shares and 16,499,021 issued and outstanding at          
September 30, 2012 and December 31, 2011, respectively)     35,191       16,499  
Additional paid-in capital     2,058,309       751,010  
Accumulated deficit     (2,351,065 )     (1,127,328 )
   Total Stockholders' Deficit     (257,565 )     (359,819 )
              --  
   Total Liabilities and Stockholders' Deficit   $ 1,030,121     $ 736,578  
HEALTH REVENUE ASSURANCE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
                         
    (for the three months ended)     (for the nine months ended)  
    September 30,     September 30,     September 30,     September 30,  
    2012     2011     2012     2011  
                         
Revenues   $ 1,985,516     $ 423,325     $ 3,619,611     $ 1,013,278  
                                 
Cost of Revenues     758,267       101,293       1,642,619       252,391  
Gross Profit     1,227,249       322,032       1,976,992       760,887  
                                 
Operating Expenses                                
Selling and administrative expenses (includes stock compensation of $0 and $256,284 as of September 30, 2012 and 2011, respectively)     1,069,870       454,685       2,726,475       764,757  
Research and development     926       24,637       54,059       63,302  
Depreciation and amortization     14,007       7,410       36,758       22,289  
Total Operating Expenses     1,084,803       486,733       2,817,292       850,348  
                                 
Operating Income (Loss)     142,446       (164,701 )     (840,300 )     (89,461 )
                                 
Other Income (Expense)                                
Other income     5,359       --       9,451       --  
Interest expense     (377,954 )     (6,466 )     (392,888 )     (19,075 )
Total Other Income (Expense), net     (372,595 )     (6,466 )     (383,437 )     (19,075 )
              --                  
Income (Loss) before provision for income taxes     (230,149 )     (171,167 )     (1,223,737 )     (108,536 )
                                 
Provision for income taxes     --       --       --       --  
                                 
Net Loss   $ (230,149 )   $ (171,167 )   $ (1,223,737 )   $ (108,536 )
                                 
Net Loss Per Share                                
basic and diluted   $ (0.01 )   $ (0.01 )   $ (0.04 )   $ (0.01 )
Weighted Average Number of Shares Outstanding                                
basic and diluted     32,843,413       14,867,244       31,468,471       13,757,263  

###

CONTACT: Investor Contacts:
         KCSA Strategic Communications
         Philip Carlson / Alex Woodbury
         +1 212.896.1233 / +1 212.896.1267
         pcarlson@kcsa.com / awoodbury@kcsa.com

HRAA

(Source: PrimeZone )
(Source: Quotemedia)

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