- Continued year over year growth related to our acquisition
of Maestro Health
- Further identification and implementation of synergies and
opportunities continue as a result of the acquisition
- Veteran industry executive leadership announced along with
the addition of a seasoned health care leader to strengthen the
Board of Directors
- Focus on acceleration of operating efficiencies and customer
growth
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:
- Total revenue for the three months ended September 30, 2023 was $8.7 million, representing an increase of
$3.8 million, or nearly 77%, over the
same period in 2022. The primary reason for this increase was due
to the revenue from the acquisition of Maestro Health.
- The addition of Maestro Health, and organic sales closed by
Marpai Administrators, drove a nearly 126% increase in the number
of our customers' employees. As of the end of the third quarter of
2023, the total was approximately 37,000 compared to the same
period last year of approximately 16,000.
- The Company had an operating loss of approximately $7.0 million for the three months ended
September 30, 2023, compared to an
operating loss of approximately $5.8
million during the same period in 2022, as the Company
continued to focus on closing the gap to profitability.
- Net loss was nearly $7.3 million
for the three months ended September 30,
2023, compared to net loss of approximately $5.8 million for the three months ended
September 30, 2022.
- Net loss per share for the three months ended September 30, 2023 was ($0.98) compared to ($1.14) per share from the same period last
year.
"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.
MARPAI, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET
(in thousands,, except
share and per share data)
(UNAUDITED)
|
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
|
(Unaudited)
|
|
|
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
|
Security
deposits
|
|
1,309
|
|
1,293
|
Other long-term
asset
|
|
22
|
|
22
|
Total
assets
|
|
$
35,611
|
|
$
49,950
|
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
|
Other short-term
liabilities
|
|
947
|
|
—
|
Due to related
party
|
|
—
|
|
3
|
Total current
liabilities
|
|
20,447
|
|
17,360
|
|
|
|
|
|
Other long-term
liabilities
|
|
19,113
|
|
20,203
|
Operating lease
liabilities, net of current portion
|
|
3,813
|
|
4,772
|
Deferred tax
liabilities
|
|
1,480
|
|
1,480
|
Total
liabilities
|
|
44,853
|
|
43,815
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
STOCKHOLDERS'
(DEFICIT) EQUITY
|
|
|
|
|
Common stock, $0.0001
par value, 227,791,050
shares authorized; 7,810,625 and 5,319,758 issued and
outstanding at September 30, 2023 and December 31,
2022, respectively (1)
|
|
1
|
|
1
|
Additional paid-in
capital
|
|
62,476
|
|
54,128
|
Accumulated
deficit
|
|
(71,719)
|
|
(47,993)
|
Total stockholders'
(deficit) equity
|
|
(9,242)
|
|
6,135
|
Total liabilities
and stockholders' (deficit) equity
|
|
$
35,611
|
|
$
49,950
|
|
|
|
|
|
|
(1)
Reflects 1-for-4 reverse stock split that became effective
June 29, 2023. See Note 1 to the unaudited condensed consolidated
financial statements.
|
MARPAI, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except
share and per share data)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2023
|
|
September 30,
2022
|
Revenue
|
|
$
8,729
|
|
$
4,938
|
Costs and
expenses
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization
shown separately
below)
|
|
5,691
|
|
3,626
|
General and
administrative
|
|
4,986
|
|
2,718
|
Sales and
marketing
|
|
1,842
|
|
1,054
|
Information
technology
|
|
1,269
|
|
1,538
|
Research and
development
|
|
267
|
|
782
|
Depreciation and
amortization
|
|
927
|
|
842
|
Loss on disposal of
assets
|
|
7
|
|
—
|
Facilities
|
|
768
|
|
193
|
Total costs and
expenses
|
|
15,757
|
|
10,753
|
Operating
loss
|
|
(7,028)
|
|
(5,815)
|
Other income
(expenses)
|
|
|
|
|
Other
income
|
|
130
|
|
56
|
Interest expense,
net
|
|
(384)
|
|
(3)
|
Foreign exchange
(loss) gain
|
|
(14)
|
|
(19)
|
Loss before
provision for income taxes
|
|
(7,296)
|
|
(5,781)
|
Income tax
expense
|
|
—
|
|
—
|
Net
loss
|
|
$
(7,296)
|
|
$
(5,781)
|
Net loss per share,
basic & fully diluted (1)
|
|
$
(0.98)
|
|
$
(1.14)
|
Weighted average
common shares outstanding, basic and
diluted (1)
|
|
7,479,401
|
|
5,087,164
|
|
(1)
Reflects 1-for-4 reverse stock split that became effective
June 29, 2023. See Note 1 to the unaudited condensed consolidated
financial statements.
|
MARPAI, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except
share and per share data)
(Unaudited)
|
|
|
|
|
Nine Months
Ended
|
|
|
|
September 30,
2023
|
|
September 30,
2022
|
Revenue
|
|
|
$ 28,448
|
|
$ 16,713
|
Costs and
expenses
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and
amortization shown
separately below)
|
|
|
18,530
|
|
12,324
|
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
|
Depreciation and
amortization
|
|
|
2,974
|
|
2,444
|
Loss on disposal of
assets
|
|
|
350
|
|
60
|
Facilities
|
|
|
1,918
|
|
586
|
Total costs and
expenses
|
|
|
51,270
|
|
34,730
|
Operating
loss
|
|
|
(22,822)
|
|
(18,017)
|
Other income
(expenses)
|
|
|
|
|
|
Other
income
|
|
|
231
|
|
95
|
Interest expense,
net
|
|
|
(1,102)
|
|
(7)
|
Foreign exchange
(loss) gain
|
|
|
(32)
|
|
(5)
|
Loss before
provision for income taxes
|
|
|
(23,725)
|
|
(17,934)
|
Income tax
expense
|
|
|
—
|
|
—
|
Net
loss
|
|
|
$
(23,725)
|
|
$
(17,934)
|
Net loss per share,
basic & fully diluted (1)
|
|
|
$
(3.62)
|
|
$
(3.58)
|
Weighted average
common shares outstanding, basic and
diluted (1)
|
|
|
6,552,575
|
|
5,004,779
|
|
(1)
Reflects 1-for-4 reverse stock split that became effective
June 29, 2023. See Note 1 to the unaudited condensed consolidated
financial statements.
|
MARPAI, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except
share and per share data)
(Unaudited)
|
|
|
|
Nine Months
Ended
|
|
|
September 30,
2023
|
|
September 30,
2022
|
Cash flows from
operating activities:
|
|
|
|
|
Net loss
|
|
$
(23,725)
|
|
$
(17,934)
|
Adjustments to
reconcile net loss to net cash used in
operating
activities:
|
|
|
|
|
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)
|
Due To related
party
|
|
(3)
|
|
—
|
Other
liabilities
|
|
973
|
|
(295)
|
Net cash used in
operating activities
|
|
(15,324)
|
|
(15,339)
|
Cash flows from
investing activities:
|
|
|
|
|
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)
|
Cash flows from
financing activities:
|
|
|
|
|
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)
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
|
23,117
|
|
25,934
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
14,252
|
|
$
9,715
|
|
|
|
|
|
Reconciliation of
cash, cash equivalents, and restricted cash
reported in the condensed consolidated balance sheet
|
|
|
|
|
Cash and cash
equivalents
|
|
$
3,018
|
|
$
4,748
|
Restricted
cash
|
|
11,234
|
|
4,966
|
Total cash, cash
equivalents and restricted cash shown in the
condensed consolidated statement of cash flows
|
|
$
14,252
|
|
$
9,714
|
Supplemental
disclosure of non-cash activity
|
|
|
|
|
Measurement period
adjustment to Goodwill
|
|
$
198
|
|
$
—
|
|
|
|
|
|
|
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SOURCE Marpai