NEW YORK, Nov. 13, 2023 /PRNewswire/ — Marpai, Inc. (“Marpai” or the “Company”) (Nasdaq: MRAI), an independent national Third-Party Administrator (TPA) company transforming the $22 billion TPA market supporting self-funded employer health plans, today reported financial results for the third quarter ended September 30, 2023.
The Company’s consolidated results of operations include the results of operations of Marpai and its wholly owned subsidiaries, Marpai Health, Inc. and Marpai Administrators, LLC (formerly Continental Benefits, LLC) for all periods presented, and the results of Maestro Health, LLC (“Maestro Health”) since its acquisition on November 1, 2022.
Third Quarter 2023 Highlights:
“I believe that our third quarter results reflect continued momentum towards sustainable profitability,” said Marpai’s new CEO Damien Lamendola. “The pace of improvement achieved and the continued cash burn rate with the volatility of the capital markets drove us to make some rapid changes which we look forward to discussing in our upcoming investors presentation.”
Other Highlights:
Withdrawal of Registration Statement on Form S-1
The Company has withdrawn its Form S-1 Registration Statement due to adverse market conditions. The Company is currently evaluating its financing opportunities.
Suspending Financial Guidance
The Company is suspending further financial guidance for full-year 2023 operating results and will not be providing specific financial guidance moving forward.
Webcast and Conference Call Information
Marpai will host an Investor call and webcast on Wednesday, November 29, 2023 at 8:00 a.m. EST to introduce the new Executive Team members and to provide an overview of the Company’s strategic vision and initiatives in place. Please refer to our Investor Relations website at: https://ir.marpaihealth.com for updates and details.
About Marpai, Inc.
Marpai, Inc. (Nasdaq: MRAI) is a leading, national TPA (Third Party Administrator) company bringing value oriented health plan services to employers that directly pay for employee health benefits. Primarily competing in the $22 billion TPA sector serving self-funded employer health plans representing over $1 trillion in annual claims. Marpai works to deliver the healthiest member population for the health plan budget. Operating nationwide, Marpai offers access to leading provider networks including Aetna and Cigna and all TPA services. For more information, visit www.marpaihealth.com, the content of which is not incorporated by reference into this press release.
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements, as that term is defined in the Private Litigation Reform Act of 1995, that involve significant risks and uncertainties. Forward-looking statements can be identified through the use of words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “guidance,” “may,” “can,” “could”, “will”, “potential”, “should,” “goal” and variations of these words or similar expressions. For example, the Company is using forward looking statements when it discusses its belief that the third quarter results reflect continued momentum towards sustainable profitability. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Marpai’s current expectations and speak only as of the date of this release. Actual results may differ materially from Marpai’s current expectations depending upon a number of factors. These factors include, among others, adverse changes in general economic and market conditions, competitive factors including but not limited to pricing pressures and new product introductions, uncertainty of customer acceptance of new product offerings and market changes, risks associated with managing the growth of the business. Except as required by law, Marpai does not undertake any responsibility to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.
More detailed information about Marpai and the risk factors that may affect the realization of forward-looking statements is set forth in Marpai’s filings with the Securities and Exchange Commission. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov.
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MARPAI, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (in thousands,, except share and per share data) (UNAUDITED) |
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September 30, 2023 |
December 31, 2022 |
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(Unaudited) |
|||||
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ASSETS: |
|||||
|
Current assets: |
|||||
|
Cash and cash equivalents |
$ 3,018 |
$ 13,764 |
|||
|
Restricted cash |
11,234 |
9,353 |
|||
|
Accounts receivable, net of allowance for credit losses of $23,458 and $23,458 |
977 |
1,438 |
|||
|
Unbilled receivable |
595 |
350 |
|||
|
Prepaid expenses and other current assets |
961 |
1,602 |
|||
|
Other receivables |
32 |
31 |
|||
|
Total current assets |
16,817 |
26,538 |
|||
|
Property and equipment, net |
663 |
1,506 |
|||
|
Capitalized software, net |
2,743 |
4,589 |
|||
|
Operating lease right-of-use assets |
2,520 |
3,842 |
|||
|
Goodwill |
6,035 |
5,837 |
|||
|
Intangible assets, net |
5,502 |
6,323 |
|||
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Security deposits |
1,309 |
1,293 |
|||
|
Other long-term asset |
22 |
22 |
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|
Total assets |
$ 35,611 |
$ 49,950 |
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LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |
|||||
|
Current liabilities: |
|||||
|
Accounts payable |
$ 3,101 |
$ 1,458 |
|||
|
Accrued expenses |
4,660 |
5,275 |
|||
|
Accrued fiduciary obligations |
9,878 |
9,024 |
|||
|
Deferred revenue |
1,261 |
289 |
|||
|
Current portion of operating lease liabilities |
600 |
1,311 |
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|
Other short-term liabilities |
947 |
— |
|||
|
Due to related party |
— |
3 |
|||
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Total current liabilities |
20,447 |
17,360 |
|||
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Other long-term liabilities |
19,113 |
20,203 |
|||
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Operating lease liabilities, net of current portion |
3,813 |
4,772 |
|||
|
Deferred tax liabilities |
1,480 |
1,480 |
|||
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Total liabilities |
44,853 |
43,815 |
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COMMITMENTS AND CONTINGENCIES |
|||||
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STOCKHOLDERS’ (DEFICIT) EQUITY |
|||||
|
Common stock, $0.0001 par value, 227,791,050 |
1 |
1 |
|||
|
Additional paid-in capital |
62,476 |
54,128 |
|||
|
Accumulated deficit |
(71,719) |
(47,993) |
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Total stockholders’ (deficit) equity |
(9,242) |
6,135 |
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|
Total liabilities and stockholders’ (deficit) equity |
$ 35,611 |
$ 49,950 |
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(1) Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements. |
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MARPAI, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except share and per share data) (Unaudited) |
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Three Months Ended |
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|
September 30, 2023 |
September 30, 2022 |
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|
Revenue |
$ 8,729 |
$ 4,938 |
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|
Costs and expenses |
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|
Cost of revenue (exclusive of depreciation and amortization shown separately below) |
5,691 |
3,626 |
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|
General and administrative |
4,986 |
2,718 |
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|
Sales and marketing |
1,842 |
1,054 |
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|
Information technology |
1,269 |
1,538 |
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Research and development |
267 |
782 |
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Depreciation and amortization |
927 |
842 |
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Loss on disposal of assets |
7 |
— |
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|
Facilities |
768 |
193 |
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Total costs and expenses |
15,757 |
10,753 |
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Operating loss |
(7,028) |
(5,815) |
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|
Other income (expenses) |
||||
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Other income |
130 |
56 |
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|
Interest expense, net |
(384) |
(3) |
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Foreign exchange (loss) gain |
(14) |
(19) |
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|
Loss before provision for income taxes |
(7,296) |
(5,781) |
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|
Income tax expense |
— |
— |
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|
Net loss |
$ (7,296) |
$ (5,781) |
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|
Net loss per share, basic & fully diluted (1) |
$ (0.98) |
$ (1.14) |
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|
Weighted average common shares outstanding, basic and |
7,479,401 |
5,087,164 |
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(1) Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements. |
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MARPAI, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except share and per share data) (Unaudited) |
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|
Nine Months Ended |
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|
September 30, 2023 |
September 30, 2022 |
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Revenue |
$ 28,448 |
$ 16,713 |
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Costs and expenses |
|||||
|
Cost of revenue (exclusive of depreciation and amortization shown separately below) |
18,530 |
12,324 |
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|
General and administrative |
15,938 |
7,940 |
|||
|
Sales and marketing |
5,494 |
4,830 |
|||
|
Information technology |
4,775 |
3,862 |
|||
|
Research and development |
1,291 |
2,684 |
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|
Depreciation and amortization |
2,974 |
2,444 |
|||
|
Loss on disposal of assets |
350 |
60 |
|||
|
Facilities |
1,918 |
586 |
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Total costs and expenses |
51,270 |
34,730 |
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|
Operating loss |
(22,822) |
(18,017) |
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|
Other income (expenses) |
|||||
|
Other income |
231 |
95 |
|||
|
Interest expense, net |
(1,102) |
(7) |
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|
Foreign exchange (loss) gain |
(32) |
(5) |
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|
Loss before provision for income taxes |
(23,725) |
(17,934) |
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|
Income tax expense |
— |
— |
|||
|
Net loss |
$ (23,725) |
$ (17,934) |
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|
Net loss per share, basic & fully diluted (1) |
$ (3.62) |
$ (3.58) |
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|
Weighted average common shares outstanding, basic and |
6,552,575 |
5,004,779 |
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|
(1) Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements. |
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MARPAI, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, except share and per share data) (Unaudited) |
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|
Nine Months Ended |
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|
September 30, 2023 |
September 30, 2022 |
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|
Cash flows from operating activities: |
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|
Net loss |
$ (23,725) |
$ (17,934) |
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|
Adjustments to reconcile net loss to net cash used in operating activities: |
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|
Depreciation and amortization |
2,974 |
2,444 |
|||
|
Loss on disposal of assets |
350 |
60 |
|||
|
Share-based compensation |
1,837 |
2,433 |
|||
|
Shares issued to vendors in exchange for services |
79 |
31 |
|||
|
Amortization of right-of-use asset |
1,289 |
517 |
|||
|
Gain on termination of lease |
33 |
— |
|||
|
Non-cash interest |
1,204 |
— |
|||
|
Changes in operating assets and liabilities: |
|||||
|
Accounts receivable and unbilled receivable |
641 |
16 |
|||
|
Prepaid expense and other assets |
216 |
377 |
|||
|
Other receivables |
(2) |
35 |
|||
|
Security deposit |
(16) |
— |
|||
|
Accounts payable |
336 |
(433) |
|||
|
Accrued expenses |
(693) |
(436) |
|||
|
Accrued fiduciary obligations |
853 |
(1,642) |
|||
|
Operating lease liabilities |
(1,670) |
(512) |
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|
Due To related party |
(3) |
— |
|||
|
Other liabilities |
973 |
(295) |
|||
|
Net cash used in operating activities |
(15,324) |
(15,339) |
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|
Cash flows from investing activities: |
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|
Capitalization of software development costs |
— |
(810) |
|||
|
Disposal of property and equipment |
27 |
— |
|||
|
Purchase of property and equipment |
— |
(70) |
|||
|
Net cash provided by (used in) investing activities |
27 |
(880) |
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|
Cash flows from financing activities: |
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|
Proceeds from stock options exercises |
0 |
— |
|||
|
Proceeds from issuance of common stock in a public offering, net |
6,432 |
— |
|||
|
Net cash provided by financing activities |
6,432 |
— |
|||
|
Net decrease in cash, cash equivalents and restricted cash |
(8,865) |
(16,219) |
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|
Cash, cash equivalents and restricted cash at beginning of |
23,117 |
25,934 |
|||
|
Cash, cash equivalents and restricted cash at end of period |
$ 14,252 |
$ 9,715 |
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|
Reconciliation of cash, cash equivalents, and restricted cash |
|||||
|
Cash and cash equivalents |
$ 3,018 |
$ 4,748 |
|||
|
Restricted cash |
11,234 |
4,966 |
|||
|
Total cash, cash equivalents and restricted cash shown in the |
$ 14,252 |
$ 9,714 |
|||
|
Supplemental disclosure of non-cash activity |
|||||
|
Measurement period adjustment to Goodwill |
$ 198 |
$ — |
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SOURCE Marpai
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