MARPAI REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS

Reduces Operating Expense by over $5 million and Net Loss by over 50% compared to 2023

TAMPA, Fla., May 9, 2024 /PRNewswire/ -- Marpai, Inc. ("Marpai" or the "Company") (Nasdaq: MRAI), an independent national Third-Party Administration (TPA) company transforming the $22 billion TPA market supporting self-funded employer health plans with affordable, intelligent, healthcare, today announced financial results for the first quarter of 2024. The Company expects to hold a webcast to discuss the results on May 10, 2024.

Q1 2024 Financial Highlights:

  • Net revenues were approximately $7.4 million for the three months ended March 31, 2024, down $2.3 million, or 24% lower year over year, compared to the three months ended March 31, 2023.
  • Gross profit was $2.5 million for the three months ended March 31, 2024, down $0.7 million, or 23% lower year over year compared to the three months ended March 31, 2023.
  • Operating expenses were $6.6 million for the three months ended March 31, 2024, an improvement of $5.2 million, or 44% lower year over year compared to the three months ended March 31, 2023.
  • Operating loss was $4.1 million for the three months ended March 31, 2024, an improvement of $4.5 million, or 52% lower year over year compared to the three months ended March 31, 2023.
  • Net loss was $4.3 million for the three months ended March 31, 2024, an improvement of $4.5 million, or 51% lower year over year compared to the three months ended March 31, 2023.
  • Basic and diluted earnings per share were ($0.46) for the three months ended March 31, 2024, an improvement of $1.22 per share year over year compared to the three months ended March 31, 2023.

"The market is evolving, and we're adapting our approach to better serve our clients' needs. While we saw some client turnover in the first quarter, we are confident that our new initiatives will lead to long-term revenue growth and profitability," said Damien Lamendola, Chief Executive Officer of Marpai. "We are very pleased to have added a new "off cycle" client in Q1 and the expansion of our sales team with two highly successful industry executives."

John Powers, Marpai President commented, "Marpai is delivering on its promise to save! Our focus on operational efficiency has significantly reduced operating expenses. Building on this success, as previously announced, we implemented an additional cost-reduction program expected to generate $3 million in annual savings. Marpai remains dedicated to its core mission: reducing client costs and improving member care through continuous operational and financial improvements."

Webcast and Conference Call Information

Marpai expects to host a conference call and webcast on Friday, May 10, 2024, at 8:30 a.m. ET to answer questions about the Company's operational and financial highlights for its first quarter ended March 31, 2024.

Investors interested in listening to the conference call may do so by dialing (800)-836-8184 for domestic callers or +1-646-357-8785 for international callers, or via webcast: https://app.webinar.net/MVqDW74kNpl

About Marpai, Inc.

Marpai, Inc. (Nasdaq: MRAI) is a leading, national TPA 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. Through its Marpai Saves initiative, the Company 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. Investors are invited to visit https://www.ir.marpaihealth.com.

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 that it is confident that its new initiatives will lead to long-term revenue growth and profitability and that its additional cost-reduction program is expected to generate $3 million in annual savings. 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)

 
   

March 31, 2024

 

December 31, 2023

         

ASSETS:

       

Current assets:

       

Cash and cash equivalents

 

$                851

 

$                    1,147

Restricted cash

 

12,761

 

12,345

Accounts receivable, net of allowance for credit losses of $25 and $25

 

366

 

1,124

Unbilled receivable

 

727

 

768

Due from buyer for sale of business unit

 

800

 

800

Prepaid expenses and other current assets

 

1,000

 

901

Total current assets

 

16,505

 

17,085

         

Property and equipment, net

 

579

 

611

Capitalized software, net

 

1,512

 

2,127

Operating lease right-of-use assets

 

2,311

 

2,373

Goodwill

 

3,018

 

3,018

Intangible assets, net

 

4,874

 

5,177

Security deposits 

 

1,267

 

1,267

Other long-term asset

 

22

 

22

Total assets

 

$           30,088

 

$                  31,680

LIABILITIES AND STOCKHOLDERS'  (DEFICIT) EQUITY

       

Current liabilities:

       

Accounts payable

 

$             3,824

 

$                    4,649

Accrued expenses

 

3,076

 

2,816

Accrued fiduciary obligations

 

9,510

 

11,573

Deferred revenue

 

1,481

 

661

Current portion of operating lease liabilities

 

523

 

512

Other short-term liabilities

 

1,709

 

632

Total current liabilities

 

20,123

 

20,843

         

Other long-term liabilities

 

19,724

 

19,401

Operating lease liabilities, net of current portion

 

3,547

 

3,684

Deferred tax liabilities

 

1,190

 

1,190

Total liabilities

 

44,584

 

45,118

COMMITMENTS AND CONTINGENCIES

       

STOCKHOLDERS' (DEFICIT) EQUITY

       

Common stock, $0.0001 par value, 227,791,050 shares authorized; 10,308,038 shares
   and 7,960,938 shares issued and outstanding at March 31, 2024 and
   December 31, 2023, respectively (1)

 

1

 

1

Additional paid-in capital

 

66,595

 

63,307

Accumulated deficit

 

(81,092)

 

(76,746)

Total stockholders' (deficit) equity

 

(14,496)

 

(13,438)

Total liabilities and stockholders' (deficit) equity

 

$           30,088

 

$                  31,680

 
 

(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 

   

March 31, 2024

 

March 31, 2023

Revenue

 

$             7,385

 

$                    9,672

Costs and expenses

       

Cost of revenue (exclusive of depreciation and amortization
   shown separately below)

 

4,871

 

6,409

General and administrative

 

3,421

 

5,226

Sales and marketing

 

602

 

2,179

Information technology

 

1,124

 

2,187

Research and development

 

7

 

500

Depreciation and amortization

 

951

 

1,044

Facilities

 

474

 

650

Total costs and expenses

 

11,450

 

18,195

Operating loss

 

(4,065)

 

(8,523)

Other income (expenses)

       

Other income

 

120

 

50

Interest expense, net

 

(398)

 

(385)

Foreign exchange (loss) gain

 

(3)

 

(15)

Loss before provision for income taxes

 

(4,346)

 

(8,873)

Income tax expense

 

 

Net loss

 

$            (4,346)

 

$                  (8,873)

Net loss per share, basic & fully diluted (1)

 

$              (0.46)

 

$                    (1.68)

Weighted average common shares outstanding, basic and
   diluted (1)

 

9,405,775

 

5,290,661

 
 

(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)

 
   

Three Months Ended

   

March 31, 2024

 

March 31, 2023

Cash flows from operating activities:

       

Net loss

 

$            (4,346)

 

$                  (8,873)

Adjustments to reconcile net loss to net cash used in operating activities:

       

Depreciation and amortization

 

951

 

1,044

Share-based compensation

 

561

 

623

Common stock issued to vendors in exchange for services

 

 

79

Amortization of right-of-use asset

 

62

 

252

Non-cash interest

 

423

 

388

Changes in operating assets and liabilities:

       

Accounts receivable and unbilled receivable

 

800

 

(239)

Prepaid expense and other assets

 

(99)

 

162

Accounts payable

 

(825)

 

653

Accrued expenses

 

215

 

(1,416)

Accrued fiduciary obligations

 

(2,063)

 

Operating lease liabilities

 

(126)

 

(363)

Other liabilities

 

862

 

1,149

Net cash used in operating activities

 

(3,585)

 

(6,541)

Cash flows from investing activities:

       

Disposal of property and equipment

 

 

3

Net cash provided by investing activities

 

 

3

Cash flows from financing activities:

       

Proceeds from sale of future cash receipts on accounts receivable

 

1,509

 

Payments to buyer of receivables

 

(57)

 

Payments to seller for acquisition

 

(474)

 

Proceeds from issuance of common stock in a public offering, net

 

2,727

 

Net cash provided by financing activities

 

3,705

 

         

Net increase (decrease) in cash, cash equivalents and restricted cash

 

120

 

(6,538)

         

Cash, cash equivalents and restricted cash at beginning of period

 

13,492

 

23,117

Cash, cash equivalents and restricted cash at end of period

 

$           13,612

 

$                  16,579

         

Reconciliation of cash, cash equivalents, and restricted cash reported in
   the condensed consolidated balance sheet

       

Cash and cash equivalents

 

$                851

 

$                    6,174

Restricted cash

 

12,761

 

10,405

Total cash, cash equivalents and restricted cash shown in the condensed
   consolidated statement of cash flows

 

$           13,612

 

$                  16,579

Supplemental disclosure of non-cash activity

       

Measurement period adjustment to Goodwill

 

$                  —

 

$                         36

 

 

 

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SOURCE Marpai