Exhibit 99.1

FOR IMMEDIATE RELEASE img155121336_0.jpg

 

 

 

 

MARPAI, INC. REPORTS THIRD QUARTER 2022 RESULTS

 

 

New York, November 9, 2022—Marpai, Inc. (“Marpai” or the “Company”) (Nasdaq: MRAI), an AI-technology company transforming the $22 billion Third-Party Administrator (TPA) market supporting self-funded employer health plans, today reported financial results for the third quarter ended September 30, 2022.

 

The Company’s consolidated results of operations include the results of operations of Marpai and its wholly owned subsidiary, Marpai Health, Inc., for all periods presented, and the results of Marpai Administrators, LLC (formerly Continental Benefits, LLC) since its acquisition on April 1, 2021.

 

Financial Highlights

 

 

 

 

 

 

 

Net revenue of approximately $4.9 million for the three months ended September 30, 2022, compared to net revenue of approximately $5.6 million for the three months ended June 30, 2022, representing a sequential decrease of approximately $619,000, or 11.1%. This decline was caused by the third quarter decline in the number of our customers’ employees covered under our plans.

 

 

 

 

The number of our customers’ employees covered under the Company’s administered health plans was 16,357, 21,074 and 21,139 on September 30, 2022, June 30, 2022, and March 31, 2022, respectively. As we explained on our second quarter earnings conference call, effective September 1, 2022, we decided not to renew the contracts of three customers who in our opinion were failing to fullfil their contractual obligations. These three customers accounted for more than 4,000 employees.

 

 

 

Operating expenses (including cost of revenues) were approximately $10.8 million for the three months ended September 30, 2022, as compared to approximately $12.2 million for the three months ended June 30, 2022, and approximately $11.8 million for the three months ended March 31, 2022.
Operating expenses (including cost of revenues) excluding stock based compensation expenses were approximately $10.1 million for the three months ended September 30, 2022 compared to approximately $11.1 million for the three months ended June 30, 2022, and approximately $11.1 million for the three months ended December 31, 2021.

 

 

 

 

 

Net loss was approximately $5.8 million for the three months ended September 30, 2022, compared to net loss of approximately $6.7 million for the three months ended June 30, 2022, and a net loss of approximately $5.5 million for the three months ended March 31, 2022.

 

 


 

 

 

 

Adjusted negative EBITDA was approximately $4.3 million for the three months ended September 30, 2022 compared to adjusted negative EBITDA of approximately $4.7 million for the three months ended June 30, 2022 and compared to adjusted negative EBITDA of approximately $4.0 million for the three months ended March 31, 2022. A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

 

 

 

Other Highlights

 

On November 1, 2022, the Company announced the closing of the acquisition of Maestro Health, LLC (“Maestro Health”) in a deal that more than doubles the size of the Company. Maestro Health is a leading TPA based in Chicago, Illinois that serves over 80 self-insured employers. Together, the joint company brings AI-powered health plan services to over 40,000 employees nationwide, making it the leading technology player in the market. The acquisition is expected to more than double the number of customers and members that Marpai serves.

 

“Having closed the Maestro acquisition on October 31, we are now laser focused on the intergration of the two companies, as well as our January 1, 2023 sales,” said Edmundo Gonzalez, Chief Executive Officer of Marpai.

 

Financial Guidance

 

Due to the Maestro Health acquisition, which closed on October 31, 2022, we are not providing financial guidance for the fourth quarter at this time.

 

Webcast and Conference Call Information

 

Marpai will host a conference call and webcast tomorrow, on November 10, 2022 at 8:30 a.m. ET to answer questions about the Company's operational and financial highlights for its third quarter of 2022 as well as on the previously announced acquisition of Marpai Health.

 

Investors interested in listening to the conference call may do so by dialing 1-800-289-0459 for domestic callers or +1-929-477-0443 for international callers, or by dialing 1-647-484-0473 for Canadian callers.

The participant passcode to be used by the dialers is : 404193.

 

Investors can also listen via webcast: https://app.webinar.net/0EJIBnd6mVz.

 

For interested individuals unable to join the conference call, a recording of the webcast will also be available on the Marpai, Inc. investor relations website: https://ir.marpaihealth.com.

 

About Marpai, Inc.

 

Marpai, Inc. (Nasdaq: MRAI) is a technology company bringing AI-powered health plan services to employers that directly pay for employee health benefits. Primarily competing in the $22 billion TPA (Third Party Administrator) sector serving self-funded employer health plans representing over $1 trillion in annual claims, Marpai maximizes the value of the health plan as measured in health outcomes. Marpai takes a member-centric approach that uses AI and big data to connect members to health solutions predicted to have a high probability of positive outcomes, and aims to bring value-based care to the self-insured market. With effective early intervention, disease management, claims processing and proactive member outreach, Marpai works to deliver the healthiest member population for the health plan budget. Operating nationwide, Marpai offers access to 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, including statements regarding anticipated future results. 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 the expected integration of Maestro Health and that the acquisition of Maestro Health is expected to double the size of the company and double the number of customers and members that Marpai serves.. 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 (the “SEC”). Investors and security holders are urged to read these documents free of charge on the SEC's website at http://www.sec.gov.

 

Media contact:
Jane Cavalier

Jane@brightmarkconsulting.com

203-858-3801

 

Investor Relations contact:
Simon Li

Simonli@marpaihealth.com

813-822-3950

 

 

###

 

Use of Non-GAAP Financial Measures and Their Limitations

 

In addition to our results and measures of performance determined in accordance with U.S. GAAP presented in this press release, we believe that certain non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions.

 

Adjusted EBITDA is a key performance measure that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes.

 

We believe that Adjusted EBITDA, together with a reconciliation to net loss, helps identify underlying trends in our business and helps investors make comparisons between our company and other companies that may have different capital structures, tax rates, or different forms of employee compensation. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to a key financial metric used by our management in its financial and operational decision-making. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these potential limitations include:

 

 


 

 

 

·

other companies, including companies in our industry which have similar business arrangements, may report Adjusted EBITDA, or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures;

 

 

·

although depreciation and amortization expenses are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditures for such replacements or for new capital expenditure requirements;

 

 

·

Adjusted EBITDA also does not reflect changes in, or cash requirements for, our working capital needs or the potentially dilutive impact of stock-based compensation; and

 

 

·

Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur.

 

Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to other GAAP-based financial measures.

 

 

 

 


 

 

 

MARPAI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(UNAUDITED)

 

 

 

September 30, 2022

 

 

December 31, 2021

 

 

 

(Unaudited)

 

 

 

 

ASSETS:

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,748

 

 

$

19,183

 

Restricted cash

 

 

4,967

 

 

 

6,751

 

Accounts receivable

 

 

191

 

 

 

209

 

Unbilled receivable

 

 

16

 

 

 

15

 

Prepaid expenses and other current assets

 

 

366

 

 

 

743

 

Other receivables

 

 

57

 

 

 

91

 

Total current assets

 

 

10,345

 

 

 

26,992

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

737

 

 

 

890

 

Capitalized software, net

 

 

5,411

 

 

 

6,305

 

Operating lease right-of-use assets

 

 

1,526

 

 

 

2,044

 

Goodwill

 

 

2,383

 

 

 

2,383

 

Intangible assets, net

 

 

4,930

 

 

 

5,508

 

Security deposits

 

 

52

 

 

 

52

 

Other long-term asset

 

 

28

 

 

 

28

 

Total assets

 

$

25,412

 

 

$

44,202

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

693

 

 

$

1,126

 

Accrued expenses

 

 

2,339

 

 

 

2,525

 

Accrued fiduciary obligations

 

 

3,899

 

 

 

5,541

 

Deferred revenue

 

 

871

 

 

 

1,165

 

Current portion of operating lease liabilities

 

 

846

 

 

 

784

 

Due to related party

 

 

3

 

 

 

4

 

Total current liabilities

 

 

8,651

 

 

 

11,145

 

 

 

 

 

 

 

 

Other long-term liabilities

 

 

45

 

 

 

45

 

Operating lease liabilities, net of current portion

 

 

728

 

 

 

1,302

 

Deferred tax liabilities

 

 

2,001

 

 

 

2,001

 

Total liabilities

 

 

11,425

 

 

 

14,493

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Common stock, $0.0001 par value, 227,791,050 shares authorized; 20,937,901
   and 20,299,727 issued and outstanding at September 30, 2022 and
   December 31, 2021,respectively

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

53,445

 

 

 

51,233

 

Accumulated deficit

 

 

(39,460

)

 

 

(21,526

)

Total stockholders’ equity

 

 

13,987

 

 

 

29,709

 

Total liabilities and stockholders’ equity

 

$

25,412

 

 

$

44,202

 

 

 

 


 

 

MARPAI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(Unaudited)

 

 

 

 

3 Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

Revenue

 

$

4,938

 

 

$

4,799

 

Costs and expenses

 

 

 

 

 

 

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

 

 

3,625

 

 

 

3,343

 

General and administrative

 

 

2,718

 

 

 

2,230

 

Sales and marketing

 

 

1,054

 

 

 

1,589

 

Information technology

 

 

1,538

 

 

 

770

 

Research and development

 

 

782

 

 

 

569

 

Depreciation and amortization

 

 

842

 

 

 

802

 

Facilities

 

 

193

 

 

 

232

 

Loss on disposal of assets

 

 

 

 

 

 

Total costs and expenses

 

 

10,752

 

 

 

9,535

 

 

 

 

 

 

 

 

Operating loss

 

 

(5,814

)

 

 

(4,736

)

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

Other income

 

 

(3

)

 

 

(109

)

Interest expense

 

 

56

 

 

 

55

 

Foreign exchange loss

 

 

(19

)

 

 

(3

)

Loss before provision for income taxes

 

 

(5,780

)

 

 

(4,793

)

 

 

 

 

 

 

 

Income tax benefit

 

 

 

 

 

 

Net loss

 

$

(5,780

)

 

$

(4,793

)

 

 

 

 

 

 

 

Net loss per share, basic & fully diluted

 

$

(0.28

)

 

$

(0.47

)

 

 

 

 

 

 

 

Weighted average number shares of common stock, basic and fully
   diluted

 

 

20,348,655

 

 

 

10,261,001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

MARPAI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(Unaudited)

 

 

9 Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

Revenue

 

$

16,713

 

 

$

8,331

 

Costs and expenses

 

 

 

 

 

 

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

 

 

12,324

 

 

 

6,064

 

General and administrative

 

 

7,940

 

 

 

5,045

 

Sales and marketing

 

 

4,830

 

 

 

3,033

 

Information technology

 

 

3,862

 

 

 

1,501

 

Research and development

 

 

2,684

 

 

 

1,118

 

Depreciation and amortization

 

 

2,444

 

 

 

1,223

 

Facilities

 

 

586

 

 

 

459

 

Loss on disposal of assets

 

 

60

 

 

 

 

Total costs and expenses

 

 

34,730

 

 

 

18,443

 

 

 

 

 

 

 

 

Operating loss

 

 

(18,017

)

 

 

(10,112

)

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

Other income

 

 

(7

)

 

 

(385

)

Interest expense

 

 

95

 

 

 

110

 

Foreign exchange loss

 

 

(5

)

 

 

(19

)

Loss before provision for income taxes

 

 

(17,934

)

 

 

(10,406

)

 

 

 

 

 

 

 

Income tax benefit

 

 

 

 

 

150

 

Net loss

 

$

(17,934

)

 

$

(10,256

)

 

 

 

 

 

 

 

Net loss per share, basic & fully diluted

 

$

(0.90

)

 

$

(1.31

)

 

 

 

 

 

 

 

Weighted average number shares of common stock, basic and fully
   diluted

 

 

20,019,116

 

 

 

7,846,348

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

MARPAI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

9 Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(17,934

)

 

$

(10,256

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

2,444

 

 

 

1,224

 

Loss on disposal of assets

 

 

60

 

 

 

 

Share-based compensation

 

 

2,464

 

 

 

962

 

Amortization of right-of-use asset

 

 

517

 

 

 

43

 

Amortization of debt discount

 

 

 

 

 

27

 

Non-cash interest

 

 

 

 

 

352

 

Marketing services performed in exchange for convertible note

 

 

 

 

 

75

 

Deferred taxes

 

 

 

 

 

(150

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable and unbilled receivable

 

 

16

 

 

 

(245

)

Prepaid expense and other assets

 

 

377

 

 

 

(381

)

Other receivables

 

 

35

 

 

 

50

 

Accounts payable

 

 

(433

)

 

 

1,566

 

Accrued expenses

 

 

(436

)

 

 

397

 

Accrued fiduciary obligations

 

 

(1,642

)

 

 

993

 

Operating lease liabilities

 

 

(512

)

 

 

(74

)

Other liabilities

 

 

(295

)

 

 

(109

)

Net cash used in operating activities

 

 

(15,339

)

 

 

(5,526

)

Cash flows from investing activities:

 

 

 

 

 

 

Cash and restricted cash acquired as part of acquisitions (See Note 5)

 

 

 

 

 

11,384

 

Capitalization of software development costs

 

 

(810

)

 

 

(1,211

)

Purchase of property and equipment

 

 

(70

)

 

 

(67

)

Net cash (used in) provided by investing activities

 

 

(880

)

 

 

10,106

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from stock options exercises

 

 

 

 

 

 

Proceeds from convertible notes

 

 

 

 

 

550

 

Proceeds from short-term loan

 

 

 

 

 

2,000

 

Proceeds from issuance of warrants

 

 

 

 

 

53

 

Net cash provided by financing activities

 

 

 

 

 

2,603

 

 

 

 

 

 

 

 

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

 

 

(16,219

)

 

 

7,183

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

25,933

 

 

 

1,818

 

Cash, cash equivalents and restricted cash at end of period

 

$

9,714

 

 

$

9,001

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,748

 

 

$

1,191

 

Restricted cash

 

 

4,966

 

 

 

7,810

 

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

 

$

9,714

 

 

$

9,001

 

 

 

 

 

 

 

 


 

 

MARPAI, INC. AND SUBSIDIARIES

RECONCILIATION OF NET LOSS TO NON-GAAP ADJUSTED EBITDA

(in thousands)

(unaudited)

 

 

 

3 Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

Net loss

 

$

(5,780

)

 

$

(4,793

)

Interest expense and foreign exchange loss, net

 

 

(34

)

 

 

57

 

Income tax benefit

 

 

 

 

 

 

Loss on disposal of asset

 

 

 

 

 

 

Depreciation and amortization expense

 

 

842

 

 

 

802

 

Stock based compensation expense

 

 

697

 

 

 

256

 

Adjusted EBITDA

 

$

(4,275

)

 

$

(3,678

)

 

 

 

 

 

 

 

 

 

9 Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

Net loss

 

$

(17,934

)

 

$

(10,257

)

Interest expense and foreign exchange loss, net

 

 

(82

)

 

 

295

 

Income tax benefit

 

 

 

 

 

(150

)

Loss on disposal of asset

 

 

60

 

 

 

 

Depreciation and amortization expense

 

 

2,444

 

 

 

1,223

 

Stock based compensation expense

 

 

2,464

 

 

 

962

 

Adjusted EBITDA

 

$

(13,048

)

 

$

(7,927

)