|
Delaware
|
| |
6411
|
| |
86-1916231
|
|
|
(State or Other Jurisdiction of
Incorporation or Organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number) |
|
|
Mitchell Nussbaum, Esq.
Angela Dowd, Esq. Jane Tam, Esq. Loeb & Loeb LLP 345 Park Avenue New York, New York 10154 Phone: (212) 407-4000 Fax: (212) 407-4990 |
| |
Brad L. Shiffman, Esq.
Blank Rome LLP The Chrysler Building 405 Lexington Ave, New York, NY 10174 Phone: (212) 885-5000 Fax: (212) 885-5001 |
|
|
Large accelerated filer
☐
|
| |
Accelerated filer
☐
|
|
|
Non-accelerated filer
☒
|
| |
Smaller reporting company
☒
|
|
| | | |
Emerging growth company
☒
|
|
| | ||||||||||||||
Title of Each Class of Security
Being Registered |
| | |
Proposed
Maximum Aggregate offering Price(1)(2) |
| | |
Amount of
Registration Fee(3) (6) |
| ||||||
Class A common stock, $0.0001 par value (2)
|
| | | | $ | 28,750,000 | | | | | | $ | 3,136.63 | | |
Representative’s Warrants(4)
|
| | | | | | | | | | | | | | |
Common stock issuable upon exercise of Representative’s Warrants(5)
|
| | | | | 1,796,875 | | | | | | | 196.04 | | |
Total
|
| | | | $ | 30,546,875 | | | | | | $ | 3,332.67 | | |
| | |
Per Share
|
| |
Total
|
| ||||||
Public offering price
|
| | | $ | | | | | $ | | | ||
Underwriting discounts and commissions(1)
|
| | | $ | | | | | $ | | | ||
Proceeds, before expenses, to us
|
| | | $ | | | | | $ | | | |
| | | | | 1 | | | |
| | | | | 13 | | | |
| | | | | 16 | | | |
| | | | | 18 | | | |
| | | | | 21 | | | |
| | | | | 25 | | | |
| | | | | 57 | | | |
| | | | | 59 | | | |
| | | | | 60 | | | |
| | | | | 61 | | | |
| | | | | 62 | | | |
| | | | | 64 | | | |
| | | | | 72 | | | |
| | | | | 78 | | | |
| | | | | 97 | | | |
| | | | | 105 | | | |
| | | | | 109 | | | |
| | | | | 113 | | | |
| | | | | 115 | | | |
| | | | | 119 | | | |
| | | | | 121 | | | |
| | | | | 127 | | | |
| | | | | 127 | | | |
| | | | | 127 | | | |
| | | | | F-1 | | |
| | |
Year Ended
December 31, 2020 |
| |
Six Months
Ended June 30, 2021 |
| ||||||
Net revenue
|
| | | $ | 18,388,192 | | | | | $ | 7,746,593 | | |
Operating loss
|
| | | | (17,131,684) | | | | | | (7,447,870) | | |
Net loss
|
| | | $ | (17,620,431) | | | | | $ | (7,591,285) | | |
Net loss per ordinary share basic and diluted
|
| | | $ | (1.58) | | | | | $ | (0.673) | | |
| | |
For the Year Ended
December 31, |
| |
For the Six Months Ended
June 30, |
| ||||||||||||
| | |
2020
|
| |
2021
|
| |
2020
|
| |||||||||
Net revenue
|
| | | $ | — | | | | | $ | 3,531,512 | | | | | $ | — | | |
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
| | | | — | | | | | | (2,720,483) | | | | | | — | | |
General and administrative
|
| | | | 1,499,376 | | | | | | 2,814,950 | | | | | | 773,223 | | |
Research and development
|
| | | | 1,840,772 | | | | | | 549,374 | | | | | | 1,025,986 | | |
Sales and marketing
|
| | | | 27,583 | | | | | | 1,443,785 | | | | | | 5,623 | | |
Information and technology
|
| | | | | | | | | | 731,230 | | | | | | — | | |
Facilities
|
| | | | | | | | | | 226,892 | | | | | | — | | |
Depreciation and amortization
|
| | | | | | | | | | 420,967 | | | | | | 37,885 | | |
Other expense
|
| | | | (500,253) | | | | | | (237,419) | | | | | | (215,785) | | |
Loss from operations
|
| | | | (3,867,984) | | | | | | (5,613,588) | | | | | | (2,058,502) | | |
Income tax provision
|
| | | | — | | | | | | (150,000) | | | | | | — | | |
Net loss
|
| | | $ | (3,867,984) | | | | | $ | (5,463,588) | | | | | | (2,058,502) | | |
Net loss per share | | | | | | | | | | | | | | | | | | | |
Basic and fully diluted
|
| | | $ | (1.59) | | | | | $ | (0.84) | | | | | | (0.93) | | |
Weighted average number of common shares | | | | | | | | | | | | | | | | | | | |
Basic and fully diluted
|
| | | | 2,428,877 | | | | | | 6,528,888 | | | | | | 2,211,683 | | |
| | |
As of December 31, 2020
|
| |
As of June 30, 2021
|
| ||||||
Current assets
|
| | | $ | 2,180,181 | | | | | $ | 8,621,723 | | |
Total assets
|
| | | | 6,531,860 | | | | | | 26,413,689 | | |
Current liabilities
|
| | | | 2,649,207 | | | | | | 9,001,133 | | |
Long term liabilities
|
| | | | 7,379,152 | | | | | | 8,261,383 | | |
Common stock
|
| | | | 3 | | | | | | 245 | | |
Total stockholders’ (deficit) equity
|
| | | $ | (3,496,499) | | | | | $ | 9,151,173 | | |
| | |
Year Ended
December 31, 2020 |
| |||
Net sales
|
| | | $ | 18,388,192 | | |
Cost of revenue | | | | | | | |
Service fees
|
| | | | 10,507,319 | | |
Direct expense – claims
|
| | | | 1,871,683 | | |
Direct expense – member services
|
| | | | 1,552,006 | | |
Total cost of revenue
|
| | | | 13,931,008 | | |
Gross profit
|
| | | | 4,457,184 | | |
Operating expenses | | | | | | | |
Administrative
|
| | | | 8,700,352 | | |
Information technology
|
| | | | 4,223,350 | | |
Sales and marketing
|
| | | | 2,724,368 | | |
Facilities
|
| | | | 762,649 | | |
Depreciation
|
| | | | 596,152 | | |
Total operating expenses
|
| | | | 17,006,871 | | |
Operating loss
|
| | | | (12,549,687) | | |
Other non operating income | | | | | | | |
Interest income
|
| | | | 11,506 | | |
Other income
|
| | | | — | | |
Total non operating income
|
| | | | 11,506 | | |
Net loss
|
| | | $ | (12,538,181) | | |
| | |
As of December 31, 2020
|
| |||
Current assets
|
| | | $ | 14,143,967 | | |
Total assets
|
| | | | 17,327,171 | | |
Current liabilities
|
| | | | 10,608,167 | | |
Long term liabilities
|
| | | | 1,281,362 | | |
Total member’s equity
|
| | | $ | 5,437,642 | | |
| | |
Marpai
Inc(1) (Historical) |
| |
Continental
Benefits(2) (Historical) |
| |
Pro Forma
Adjustments |
| |
Notes
|
| |
Pro Forma
Combined |
| |||||||||||||||
Net revenue
|
| | | $ | 3,531,512 | | | | | $ | 4,215,081 | | | | | $ | — | | | | | | | | | | | $ | 7,746,593 | | |
Costs and expenses
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
| | | | 2,720,483 | | | | | | 3,096,275 | | | | | | — | | | | | | | | | | | | 5,816,758 | | |
General and administrative
|
| | | | 2,814,950 | | | | | | 1,045,397 | | | | | | — | | | | | | | | | | | | 3,860,347 | | |
Information technology
|
| | | | 731,230 | | | | | | 865,966 | | | | | | — | | | | | | | | | | | | 1,597,196 | | |
Research and development
|
| | | | 549,374 | | | | | | — | | | | | | — | | | | | | | | | | | | 549,374 | | |
Sales and marketing
|
| | | | 1,443,785 | | | | | | 628,487 | | | | | | — | | | | | | | | | | | | 2,072,272 | | |
Facilities
|
| | | | 226,892 | | | | | | 184,718 | | | | | | — | | | | | | | | | | | | 411,610 | | |
Depreciation and amortization
|
| | | | 420,967 | | | | | | 162,373 | | | | | | 23,716 | | | | | | (a) | | | | | | 886,906 | | |
| | | | | | | | | | | | | | | | | 279,850 | | | | | | (b) | | | | | | | | |
Total costs and expenses
|
| | | | 8,907,681 | | | | | | 5,983,216 | | | | | | 303,566 | | | | | | | | | | | | 15,194,463 | | |
Operating loss
|
| | | | (5,376,169) | | | | | | (1,768,135) | | | | | | (303,566) | | | | | | | | | | | | (7,447,870) | | |
Other expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income (expense)
|
| | | | (276,033) | | | | | | — | | | | | | — | | | | | | | | | | | | (276,033) | | |
Other income
|
| | | | 54,398 | | | | | | 16,004 | | | | | | — | | | | | | | | | | | | 70,402 | | |
Foreign exchange loss
|
| | | | (15,784) | | | | | | — | | | | | | — | | | | | | | | | | | | (15,784) | | |
Loss before provision for income taxes
|
| | | | (5,613,588) | | | | | | (1,752,131) | | | | | | (303,566) | | | | | | | | | | | | (7,669,285) | | |
Income tax benefit
|
| | | | (150,000) | | | | | | — | | | | | | — | | | | | | | | | | | | (150,000) | | |
Net loss
|
| | | | (5,463,588) | | | | | | (1,752,131) | | | | | | (303,566) | | | | | | | | | | | | (7,519,285) | | |
Net loss per share, basic & fully diluted
|
| | | | (0.84) | | | | | | | | | | | | | | | | | | | | | | | | (0.67) | | |
Weighted average number of
common shares |
| | | | 6,528,888 | | | | | | | | | | | | | | | | | | (c) | | | | | | 11,147,302 | | |
| | |
Marpai
Health(3) (Historical) |
| |
Continental
Benefits(4) (Historical) |
| |
Pro Forma
Adjustments |
| |
Notes
|
| |
Pro Forma
Combined |
| |||||||||||||||
Net revenue
|
| | | $ | — | | | | | $ | 18,388,192 | | | | | $ | — | | | | | | | | | | | $ | 18,388,192 | | |
Costs and expenses
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue (exclusive of
depreciation and amortization shown separately below) |
| | | | — | | | | | | 13,931,008 | | | | | | — | | | | | | | | | | | | 13,931,008 | | |
General and administrative
|
| | | | 1,499,376 | | | | | | 8,700,352 | | | | | | | | | | | | | | | | | | 10,199,728 | | |
Information technology
|
| | | | — | | | | | | 4,223,350 | | | | | | — | | | | | | | | | | | | 4,223,350 | | |
Research and development
|
| | | | 1,840,772 | | | | | | — | | | | | | — | | | | | | | | | | | | 1,840,772 | | |
Sales and marketing
|
| | | | 27,583 | | | | | | 2,724,368 | | | | | | — | | | | | | | | | | | | 2,751,951 | | |
Facilities
|
| | | | — | | | | | | 762,649 | | | | | | | | | | | | | | | | | | 762,649 | | |
Depreciation and amortization
|
| | | | — | | | | | | 596,152 | | | | | | 94,866 | | | | | | (a) | | | | | | 1,810,418 | | |
| | | | | | | | | | | | | | | | | 1,119,400 | | | | | | (b) | | | | | | | | |
Total costs and expenses
|
| | | | 3,367,731 | | | | | | 30,937,879 | | | | | | 1,214,266 | | | | | | | | | | | | 35,519,876 | | |
Operating loss
|
| | | | (3,367,731) | | | | | | (12,549,687) | | | | | | (1,214,266) | | | | | | | | | | | | (17,131,684) | | |
Other expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income (expense)
|
| | | | (521,140) | | | | | | 11,506 | | | | | | — | | | | | | | | | | | | (509,634) | | |
Other income
|
| | | | 25,846 | | | | | | — | | | | | | — | | | | | | | | | | | | 25,846 | | |
Foreign exchange gain
|
| | | | (4,959) | | | | | | — | | | | | | — | | | | | | | | | | | | (4,959) | | |
Loss before provision for income taxes
|
| | | | (3,867,984) | | | | | | (12,538,181) | | | | | | (1,214,266) | | | | | | | | | | | | (17,620,431) | | |
Income tax expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Net loss
|
| | | | (3,867,984) | | | | | | (12,538,181) | | | | | | (1,214,266) | | | | | | | | | | | | (17,620,431) | | |
Net loss per share, basic & fully
diluted |
| | | | (1.59) | | | | | | | | | | | | | | | | | | | | | | | | (1.58) | | |
Weighted average number of common shares
|
| | | | 2,428,877 | | | | | | | | | | | | | | | | | | (c) | | | | | | 11,147,302 | | |
| | |
Three months
ended March 31, 2021 |
| |
Year ended
December 31, 2020 |
| ||||||
Estimated depreciation expense
|
| | | $ | 186,089 | | | | | $ | 691,378 | | |
Historical depreciation expense
|
| | | | 162,373 | | | | | | 596,512 | | |
Pro forma adjustments to depreciation expense
|
| | | $ | 23,716 | | | | | $ | 94,866 | | |
| | |
Estimated
Fair Value |
| |
Estimated
Useful Life in Years |
| |
Amortization
Three Months ended March 31, 2021 |
| |
Amortization
Year ended December 31, 2020 |
| |||||||||
Trademarks
|
| | | $ | 1,860,000 | | | |
10.00
|
| | | $ | 46,712 | | | | | $ | 186,848 | | |
Patent and patent applications
|
| | | | 700,000 | | | |
Work in
Process |
| | | | — | | | | | | — | | |
Customer relationships
|
| | | | 3,370,000 | | | |
7.00
|
| | | | 120,907 | | | | | | 483,628 | | |
Capitalized software
|
| | | | 1,230,000 | | | |
5.00
|
| | | | 61,500 | | | | | | 246,000 | | |
Intangible assets
|
| | | | 1,010,000 | | | |
5.00
|
| | | | 50,731 | | | | | | 202,924 | | |
Total
|
| | | | 8,170,000 | | | | | | | | | 279,850 | | | | | | 1,119,400 | | |
Pro forma adjustments to
amortization expense |
| | | | | | | | | | | | $ | 279,850 | | | | | $ | 1,119,400 | | |
| | |
As of June 30, 2021
|
| |||||||||
| | |
Actual
|
| |
Pro Forma
|
| ||||||
Cash and cash equivalents
|
| | | $ | 2,339,223 | | | | | | 23,673,746 | | |
Convertible notes
|
| | | $ | 5,720,161 | | | | | | 3,254,146 | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Common stock, $0.0001 par value; 50,000,000 authorized shares,
2,446,826 issued and outstanding |
| | | | 245 | | | | | | 1,433 | | |
Additional paid-in capital
|
| | | | 20,155,391 | | | | | | 23,908,309 | | |
Accumulated deficit
|
| | | | (11,004,463) | | | | | | (11,004,463) | | |
Total stockholders’ equity
|
| | | | 9,151,173 | | | | | | 12,905,279 | | |
Total capitalization
|
| | | $ | 14,871,334 | | | | | | 16,159,425 | | |
|
Assumed public offering price per share
|
| | | | | | | | | $ | 9.00 | | |
|
Historical net tangible book value per share as of June 30, 2021
|
| | | $ | (0.55) | | | | | | | | |
|
Pro forma net tangible book value per share after giving effect to this offering
|
| | | $ | 1.24 | | | | | | | | |
|
Dilution in as adjusted net tangible book value per share to new investors participating in this offering
|
| | | | | | | | | $ | 7.76 | | |
| | |
Six Months Ends June 30,
|
| | | | | | | | | | | | | |||||||||
| | |
2021
|
| |
2020
|
| |
Change
|
| |
%
|
| ||||||||||||
Revenue | | | | | | | | | | | | | | | | | | | | | | | | | |
Net revenue
|
| | | | 3,531,512 | | | | | | — | | | | | | 3,531,512 | | | | | | n/a | | |
Costs and Expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
| | | | 2,720,483 | | | | | | — | | | | | | 2,720,483 | | | | | | n/a | | |
Research and development
|
| | | | 549,374 | | | | | | 1,025,986 | | | | | | (476,612) | | | | | | -46.5% | | |
General and administrative
|
| | | | 2,814,950 | | | | | | 773,223 | | | | | | 2,041,727 | | | | | | 264.1% | | |
Sales and marketing
|
| | | | 1,443,785 | | | | | | 5,623 | | | | | | 1,438,162 | | | | | | 25576.4% | | |
Information technology
|
| | | | 731,230 | | | | | | — | | | | | | 731,230 | | | | | | n/a | | |
Facilities
|
| | | | 226,892 | | | | | | — | | | | | | 226,892 | | | | | | n/a | | |
Depreciation and amortization
|
| | | | 420,967 | | | | | | 37,885 | | | | | | 383,082 | | | | | | 1011.2% | | |
Total Costs and Expenses
|
| | | | 8,907,681 | | | | | | 1,842,717 | | | | |
|
7,064,964
|
| | | | | 383.4% | | |
Operating Loss
|
| | | | (5,376,169) | | | | | | (1,842,717) | | | | | | (3,533,452) | | | | | | 191.8% | | |
Other income and (expenses) | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense, net
|
| | | | (276,033) | | | | | | (226,330) | | | | | | (49,703) | | | | | | 22.0% | | |
Other income
|
| | | | 54,398 | | | | | | 12,733 | | | | | | 41,665 | | | | | | 327.2% | | |
Foreign exchange gain (loss)
|
| | | | (15,784) | | | | | | (2,188) | | | | | | (13,596) | | | | | | 621.4% | | |
Total other income (expense)
|
| | | | (237,419) | | | | | | (215,785) | | | | | | (21,634) | | | | | | 10.0% | | |
Loss before income taxes
|
| | | | (5,613,588) | | | | | | (2,058,502) | | | | | | (3,355,086) | | | | | | 172.7% | | |
Income tax expense
|
| | | | (150,000) | | | | | | — | | | | | | (150,000) | | | | | | n/a | | |
Net Loss
|
| | | | (5,463,588) | | | | | | (2,058,502) | | | | | | (3,405,086) | | | | | | 165.4% | | |
Comprehensive Loss
|
| | | | (5,463,588) | | | | | | (2,058,502) | | | | | | (3,405,086) | | | | | | 165.4% | | |
| | |
Six Months Ended June 30
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net cash used in operating activities
|
| | | | (4,875,909) | | | | | | (1,051,181) | | |
Net cash used in investing activities
|
| | | | 10,385,665 | | | | | | (31,137) | | |
Net cash provided by financing activities
|
| | | | 553,333 | | | | | | 1,600,000 | | |
Net increase in cash and cash equivalents
|
| | | $ | 6,063,089 | | | | | $ | 517,682 | | |
| | |
For the year ended
Dec 31 2020 |
| |
For the period from
Feb 14, 2019 (inception) to Dec 31 2019 |
| |
Change
|
| |
%
|
| ||||||||||||
Revenue | | | | | | | | | | | | | | | | | | | | | | | | | |
Net revenue
|
| | | | — | | | | | | — | | | | | | — | | | | | | n/a | | |
Cost of revenue
|
| | | | — | | | | | | — | | | | | | — | | | | | | n/a | | |
Gross Profit
|
| | | | — | | | | | | — | | | | | | — | | | | | | n/a | | |
| | | | | n/a | | | | | | n/a | | | | | | | | | | | | | | |
Operating Expense | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 1,840,772 | | | | | | 674,857 | | | | | | 1,165,915 | | | | | | 172.8% | | |
General and administrative
|
| | | | 1,499,376 | | | | | | 890,035 | | | | | | 609,341 | | | | | | 68.5% | | |
Sales and marketing
|
| | | | 27,583 | | | | | | 21,610 | | | | | | 5,973 | | | | | | 27.6% | | |
Total Operating Expense
|
| | | | 3,367,731 | | | | | | 1,586,502 | | | | | | 1,781,229 | | | | | | 112.3% | | |
Operating Loss
|
| | | | (3,367,731) | | | | | | (1,586,502) | | | | | | (1,781,229) | | | | | | 112.3% | | |
Other income and (expenses) | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense, net
|
| | | | (521,140) | | | | | | (106,933) | | | | | | (414,207) | | | | | | 387.4% | | |
Other income
|
| | | | 25,846 | | | | | | 16,902 | | | | | | 8,944 | | | | | | 52.9% | | |
Foreign exchange gain (loss)
|
| | | | (4,959) | | | | | | 3,642 | | | | | | (8,601) | | | | | | -236.2% | | |
Total other income (expense)
|
| | | | (500,253) | | | | | | (86,389) | | | | | | (413,864) | | | | | | 479.1% | | |
Loss before income taxes
|
| | | | (3,867,984) | | | | | | (1,672,891) | | | | | | (2,195,093) | | | | | | 131.2% | | |
Income tax expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | n/a | | |
Net Loss
|
| | | | (3,867,984) | | | | | | (1,672,891) | | | | | | (2,195,093) | | | | | | 131.2% | | |
Comprehensive Loss
|
| | | | (3,867,984) | | | | | | (1,672,891) | | | | | | (2,195,093) | | | | | | 131.2% | | |
| | |
Year Ended
December 31, 2020 |
| |
Period from Feb 14,
2019 (inception) to December 31, 2019 |
| ||||||
Net cash used in operating activities
|
| | | | (1,949,279) | | | | | | (875,639) | | |
Net cash used in investing activities
|
| | | | (554,065) | | | | | | (378,085) | | |
Net cash provided by financing activities
|
| | | | 4,075,000 | | | | | | 1,500,000 | | |
Net increase in cash and cash equivalents
|
| | | $ | 1,571,656 | | | | | $ | 246,276 | | |
| | |
Years Ended December 31,
|
| | | | | | | | | | | | | |||||||||
| | |
2020
|
| |
2019
|
| |
Increase/(Decrease)
|
| |
% Var
|
| ||||||||||||
Net Sales
|
| | | $ | 18,388,192 | | | | | $ | 20,327,320 | | | | | $ | (1,939,128) | | | | | | (9.5)% | | |
Cost of Revenue
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Service Fees
|
| | | | 10,507,319 | | | | | | 10,960,684 | | | | | | (453,365) | | | | | | (4.1)% | | |
Direct Expense – Claims
|
| | | | 1,871,683 | | | | | | 2,641,375 | | | | | | (769,692) | | | | | | (29.1)% | | |
Direct Expense – Member Services
|
| | | | 1,552,006 | | | | | | 1,860,983 | | | | | | (308,977) | | | | | | (16.6)% | | |
Total Cost of Revenue
|
| | | | 13,931,008 | | | | | | 15,463,042 | | | | | | (1,532,034) | | | | | | (9.9)% | | |
Gross Profit
|
| | | | 4,457,184 | | | | | | 4,864,278 | | | | | | (407,094) | | | | | | (8.4)% | | |
Gross Margin
|
| | | | 24% | | | | | | 24% | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Administrative
|
| | | | 8,700,352 | | | | | | 6,314,695 | | | | | | 2,385,657 | | | | | | 37.8% | | |
Information Technology
|
| | | | 4,223,350 | | | | | | 5,440,224 | | | | | | (1,216,874) | | | | | | (22.4)% | | |
Sales and Marketing
|
| | | | 2,724,368 | | | | | | 3,562,888 | | | | | | (838,520) | | | | | | (23.5)% | | |
Facilities
|
| | | | 762,649 | | | | | | 659,006 | | | | | | 103,643 | | | | | | 15.7% | | |
Depreciation
|
| | | | 596,152 | | | | | | 505,719 | | | | | | 90,433 | | | | | | 17.9% | | |
Total Operating Expenses
|
| | | | 17,006,871 | | | | | | 16,482,532 | | | | | | 524,339 | | | | | | 3.2% | | |
Operating Loss
|
| | | $ | (12,549,687) | | | | | $ | (11,618,254) | | | | | $ | (931,433) | | | | | | 8.0% | | |
Other Non Operating Income | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Income
|
| | | | 11,506 | | | | | | 129,085 | | | | | | (117,579) | | | | | | (91.1)% | | |
Other Income
|
| | | | — | | | | | | 2,600 | | | | | | (2,600) | | | | | | (100.0)% | | |
Total Non Operating Income
|
| | | | 11,506 | | | | | | 131,685 | | | | | | (120,179) | | | | | | (91.3)% | | |
Net Loss
|
| | | $ | (12,538,181) | | | | | $ | (11,486,569) | | | | | $ | (1,051,612) | | | | | | 9.2% | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Total Current Assets
|
| | | $ | 14,143,967 | | | | | $ | 13,890,771 | | |
Total Current Liabilities
|
| | | | 10,608,167 | | | | | | 6,439,772 | | |
Working Capital
|
| | | $ | 3,535,800 | | | | | $ | 7,450,999 | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net loss
|
| | | $ | (12,538,181) | | | | | $ | (11,486,569) | | |
Net cash provided by (used in) operating activities
|
| | | $ | 5,713,453 | | | | | $ | (1,444,029) | | |
Net cash used in investing activities
|
| | | | (234,126) | | | | | | (226,670) | | |
Net cash provided by financing activities
|
| | | | 8,830,295 | | | | | | 9,323,253 | | |
Net increase (decrease) in cash and restricted cash
|
| | | $ | 1,771,441 | | | | | $ | (3,834,015) | | |
Name
|
| |
Combined Company Position(s)
|
| |
Position(s) at Marpai Health
|
|
Edmundo Gonzalez | | | Chief Executive Officer, Secretary, and Director | | | Co-founder, CEO, and Director of Marpai Health | |
Name
|
| |
Age
|
| |
Position
|
| |||
Edmundo Gonzalez
|
| | | | 48 | | | | Chief Executive Officer, Secretary and Director | |
Yoram Bibring
|
| | | | 64 | | | | Chief Financial Officer | |
Ronnie Brown
|
| | | | 68 | | | | Chief Operating Officer | |
Arthur Hoath, IV
|
| | | | 52 | | | | Chief Revenue Officer | |
Alice Roth
|
| | | | 60 | | | | President (Marpai Labs) | |
Yaron Eitan
|
| | | | 64 | | | | Chairman of the Board of Directors | |
Damien Lamendola
|
| | | | 65 | | | | Director | |
Gonen Antebi(1)(2)
|
| | | | 48 | | | | Director Nominee | |
Jane Cavalier Lucas
|
| | | | 60 | | | | Director Nominee | |
Vincent Kane(1)(2)
|
| | | | 48 | | | | Director Nominee | |
Colleen DiClaudio(1)(2)
|
| | | | 43 | | | | Director Nominee | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Stock
Awards ($)(1) |
| |
Total
($) |
| |||||||||||||||
Edmundo Gonzalez, Chief Executive Officer and Director
|
| | | | 2019 | | | | | $ | 180,000(2) | | | | | | — | | | | | $ | 1,162,764(3) | | | | | $ | 1,342,764 | | |
| | | | | 2020 | | | | | $ | 240,000 | | | | | | — | | | | | | | | | | | $ | 240,000 | | |
Mordechai Geva, Former Chief Technology Officer
|
| | | | 2019 | | | | | $ | 160,078(4) | | | | | | — | | | | | $ | 643,991(5) | | | | | $ | 803,989 | | |
| | | | | 2020 | | | | | $ | 226,427 | | | | | | — | | | | | | | | | | | $ | 226,427 | | |
Arthur Hoath, IV, Chief Revenue Officer(6)
|
| | | | 2019 | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | $ | — | | |
| | | | | 2020 | | | | | $ | — | | | | | | — | | | | | | — | | | | | $ | — | | |
Yoram Bibring, Chief Financial Officer(7)
|
| | | | 2019 | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | $ | — | | |
| | | | | 2020 | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | $ | — | | |
| | |
Shares Beneficially Owned
Prior to this Offering(1) |
| |
Shares Beneficially Owned
After this Offering(2) |
| ||||||||||||||||||
|
Shares
|
| |
%
|
| |
Shares
|
| |
%
|
| ||||||||||||||
Name and Address of Beneficial Owner(3) | | | | | | | | | | | | | | | | | | | | | | | | | |
Edmundo Gonzalez(4)†
|
| | | | 1,498,810 | | | | | | 13.0% | | | | | | 1,498,810 | | | | | | 10.5% | | |
Yaron Eitan(5)†
|
| | | | 809,719 | | | | | | 7.0% | | | | | | 809,719 | | | | | | 5.6% | | |
Ronnie Brown(6)
|
| | | | 36,065 | | | | | | * | | | | | | 36,065 | | | | | | * | | |
Yoram Bibring
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Alice Roth
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Art Hoath(7)
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Damien Lamendola(8)†
|
| | | | 5,971,863 | | | | | | 51.7% | | | | | | 5,971,863 | | | | | | 41.7% | | |
Gonen Antebi
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Colleen DiClaudio
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Vincent Kane
|
| | | | 54,670 | | | | | | * | | | | | | 54,670 | | | | | | * | | |
Jane Cavalier Lucas
|
| | | | 12,246 | | | | | | * | | | | | | 12,246 | | | | | | * | | |
All Directors, Director Nominees and Officers as a Group (eleven persons)
|
| | | | 8,383,373 | | | | | | 72.5% | | | | | | 8,383,373 | | | | | | 58.5% | | |
Other Greater than 5% Beneficial Owners | | | | | | | | | | | | | | | | | | | | | | | | | |
Dr. Eli David(9)†
|
| | | | 913,273 | | | | | | 7.9% | | | | | | 913,273 | | | | | | 6.4% | | |
Midwood 43 Trust(10)
|
| | | | 685,482 | | | | | | 5.9% | | | | | | 685,482 | | | | | | 4.8% | | |
Underwriter
|
| |
Number of
Units |
| |||
ThinkEquity LLC
|
| | | | | | |
Total
|
| | | | | | |
| | |
Per Unit
|
| |
Without
Over- allotment |
| |
With
Over- allotment |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discounts and commissions(1)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds, before expenses, to us(2)
|
| | | $ | | | | | $ | | | | | $ | | | |
| | |
Page(s)
|
|
| | | ||
Condensed Consolidated Financial Statements | | | | |
| | | ||
| | | ||
| | | ||
| | | ||
| | |
| | |
June 30, 2021
(Unaudited) |
| |
December 31, 2020
|
| ||||||
ASSETS: | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 2,339,223 | | | | | $ | 1,754,569 | | |
Restricted cash
|
| | | | 5,541,798 | | | | | | 63,363 | | |
Accounts receivable
|
| | | | 60,699 | | | | | | — | | |
Unbilled receivable
|
| | | | 45,054 | | | | | | — | | |
Prepaid expenses and other current assets
|
| | | | 603,762 | | | | | | 262,211 | | |
Other receivables
|
| | | | 31,187 | | | | | | 100,038 | | |
Total current assets
|
| | | | 8,621,723 | | | | | | 2,180,181 | | |
Property and equipment, net
|
| | | | 738,708 | | | | | | 195,404 | | |
Capitalized software, net
|
| | | | 6,903,397 | | | | | | 3,818,959 | | |
Operating lease right-of-use assets
|
| | | | 1,699,695 | | | | | | 337,316 | | |
Goodwill
|
| | | | 1,676,239 | | | | | | — | | |
Intangible assets, net
|
| | | | 6,721,650 | | | | | | — | | |
Security deposits
|
| | | | 52,277 | | | | | | — | | |
Total assets
|
| | | $ | 26,413,689 | | | | | $ | 6,531,860 | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 517,514 | | | | | $ | 159,168 | | |
Accounts payable – related party
|
| | | | — | | | | | | 15,725 | | |
Accrued expenses
|
| | | | 1,605,885 | | | | | | 267,967 | | |
Accrued fiduciary obligations
|
| | | | 5,195,939 | | | | | | — | | |
Deferred revenue
|
| | | | 261,843 | | | | | | — | | |
Current portion of operating lease liabilities
|
| | | | 699,379 | | | | | | 96,472 | | |
Current portion of convertible notes payable
|
| | | | 716,936 | | | | | | 1,866,237 | | |
Due to related party
|
| | | | 3,637 | | | | | | 243,638 | | |
Total current liabilities
|
| | | | 9,001,133 | | | | | | 2,649,207 | | |
Convertible notes payable, net of current portion
|
| | | | 5,003,225 | | | | | | 7,095,887 | | |
Other long-term liabilities
|
| | | | 45,000 | | | | | | — | | |
Operating lease liabilities, net of current portion
|
| | | | 1,212,146 | | | | | | 283,265 | | |
Deferred tax liabilities
|
| | | | 2,001,012 | | | | | | — | | |
Total liabilities
|
| | | | 17,262,516 | | | | | | 10,028,359 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | |
STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | |
Common stock, $0.0001 par value, 50,000,000 shares authorized; 2,446,826 issued and outstanding at June 30, 2021 and 31,250 issued and outstanding at December 31, 2020
|
| | | | 245 | | | | | | 3 | | |
Additional paid-in capital
|
| | | | 20,155,391 | | | | | | 2,044,373 | | |
Accumulated deficit
|
| | | | (11,004,463) | | | | | | (5,540,875) | | |
Total stockholders’ equity (deficit)
|
| | | | 9,151,173 | | | | | | (3,496,499) | | |
Total liabilities and stockholders’ equity (deficit)
|
| | | $ | 26,413,689 | | | | | $ | 6,531,860 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Revenue
|
| | | $ | 3,531,512 | | | | | $ | — | | |
Costs and expenses | | | | | | | | | | | | | |
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
| | | | 2,720,483 | | | | | | — | | |
General and administrative
|
| | | | 2,814,950 | | | | | | 773,223 | | |
Research and development
|
| | | | 549,374 | | | | | | 1,025,986 | | |
Sales and marketing
|
| | | | 1,443,785 | | | | | | 5,623 | | |
Information technology
|
| | | | 731,230 | | | | | | — | | |
Facilities
|
| | | | 226,892 | | | | | | — | | |
Depreciation and amortization
|
| | | | 420,967 | | | | | | 37,885 | | |
Total costs and expenses
|
| | | | 8,907,681 | | | | | | 1,842,717 | | |
Operating loss
|
| | | | (5,376,169) | | | | | | (1,842,717) | | |
Other income (expenses) | | | | | | | | | | | | | |
Interest income
|
| | | | 28 | | | | | | 5 | | |
Other income
|
| | | | 54,398 | | | | | | 12,733 | | |
Interest expense
|
| | | | (276,061) | | | | | | (226,335) | | |
Foreign exchange loss
|
| | | | (15,784) | | | | | | (2,188) | | |
Loss before provision for income taxes
|
| | | | (5,613,588) | | | | | | (2,058,502) | | |
Income tax benefit
|
| | | | (150,000) | | | | | | — | | |
Net loss
|
| | | $ | (5,463,588) | | | | | $ | (2,058,502) | | |
Net loss per share, basic & fully diluted
|
| | | $ | (3.81) | | | | | $ | (4.24) | | |
Weighted average number of common shares
|
| | | | 1,433,087 | | | | | | 485,463 | | |
| | |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total Stockholders’
Equity (Deficit) |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balance, January 1, 2020
|
| | | | 31,250 | | | | | $ | 3 | | | | | $ | 799,743 | | | | | $ | (1,672,891) | | | | | $ | (873,145) | | |
Fair value of warrants issued with convertible note
|
| | | | — | | | | | | — | | | | | | 213,828 | | | | | | — | | | | | | 213,828 | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 641,510 | | | | | | — | | | | | | 641,510 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (2,058,502) | | | | | | (2,058,502) | | |
Balance, June 30, 2020 (Unaudited)
|
| | | | 31,250 | | | | | $ | 3 | | | | | $ | 1,655,081 | | | | | $ | (3,731,393) | | | | | $ | (2,076,309) | | |
Balance, January 1, 2021
|
| | | | 31,250 | | | | | $ | 3 | | | | | $ | 2,044,373 | | | | | $ | (5,540,875) | | | | | $ | (3,496,499) | | |
Exchange of common shares of Marpai Health, Inc. (see Note 1)
|
| | | | (31,250) | | | | | | (3) | | | | | | — | | | | | | — | | | | | | (3) | | |
Issuance of common shares of Marpai, Inc.
(see Note 1) |
| | | | 2,446,826 | | | | | | 245 | | | | | | 17,351,679 | | | | | | — | | | | | | 17,351,924 | | |
Warrants issued for cash
|
| | | | — | | | | | | — | | | | | | 53,333 | | | | | | — | | | | | | 53,333 | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 705,006 | | | | | | — | | | | | | 706,006 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (5,463,588) | | | | | | (5,463,588) | | |
Balance, June 30, 2021 (Unaudited)
|
| | | | 2,446,826 | | | | | $ | 245 | | | | | $ | 20,155,391 | | | | | $ | (11,004,463) | | | | | $ | 9,151,173 | | |
| | |
Six Months Ended June 30
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (5,463,588) | | | | | $ | (2,058,502) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 420,967 | | | | | | 37,885 | | |
Share-based compensation
|
| | | | 706,006 | | | | | | 641,510 | | |
Amortization of right-of-use asset
|
| | | | 41,810 | | | | | | 38,079 | | |
Amortization of debt discount
|
| | | | 26,728 | | | | | | 48,571 | | |
Interest accrued on convertible notes payable
|
| | | | 246,230 | | | | | | 175,133 | | |
Convertible note issued for professional services
|
| | | | 75,000 | | | | | | — | | |
Deferred taxes
|
| | | | (150,000) | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
(Increase) decrease in prepaid expense and other assets
|
| | | | (210,138) | | | | | | 10,002 | | |
(Increase) in accounts receivable and unbilled receivable
|
| | | | (13,522) | | | | | | — | | |
Decrease (increase) in other receivable
|
| | | | 68,851 | | | | | | (6,229) | | |
Increase in security deposit
|
| | | | 2,592 | | | | | | — | | |
(Decrease) in accounts payable
|
| | | | (567,261) | | | | | | (1,326) | | |
(Decrease) in accounts payable – related party
|
| | | | (15,725) | | | | | | — | | |
Increase in accrued expenses
|
| | | | 70,210 | | | | | | 106,269 | | |
Increase in accrued fiduciary obligations
|
| | | | 1,125,031 | | | | | | — | | |
(Decrease) in operating lease liabilities
|
| | | | (55,722) | | | | | | (42,573) | | |
(Decrease) in due to related party
|
| | | | (240,001) | | | | | | — | | |
(Decrease) in other liabilities
|
| | | | (943,377) | | | | | | — | | |
Net cash used in operating activities
|
| | | | (4,875,909) | | | | | | (1,051,181) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Cash and restricted cash acquired as part of Acquisition (see Note 4)
|
| | | | 11,384,035 | | | | | | — | | |
Capitalization of software development costs
|
| | | | (972,181) | | | | | | — | | |
Purchase of property and equipment
|
| | | | (26,189) | | | | | | (31,137) | | |
Net cash provided by (used in) investing activities
|
| | | | 10,385,665 | | | | | | (31,137) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from issuance of convertible notes payable
|
| | | | 500,000 | | | | | | 1,600,000 | | |
Proceeds from issuance of warrants
|
| | | | 53,333 | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 553,333 | | | | | | 1,600,000 | | |
Net increase in cash, cash equivalents and restricted cash
|
| | | | 6,063,089 | | | | | | 517,682 | | |
Cash, cash equivalents and restricted cash at beginning of the year
|
| | | | 1,817,932 | | | | | | 246,276 | | |
Cash, cash equivalents and restricted cash at end of the year
|
| | | $ | 7,881,021 | | | | | $ | 763,958 | | |
Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet
|
| | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 2,339,223 | | | | | $ | 706,633 | | |
Restricted cash
|
| | | | 5,541,798 | | | | | | 57,325 | | |
Total cash, cash equivalents and restricted cash shown in the consolidated statement of
cash flows |
| | | $ | 7,881,021 | | | | | $ | 763,958 | | |
Supplemental disclosure of non-cash activity | | | | | | | | | | | | | |
Conversion of convertible notes into common stock at the closing of the Acquisition
|
| | | $ | 4,174,992 | | | | | $ | — | | |
Common stock issued as part of the Acquisition
|
| | | $ | 8,500,000 | | | | | $ | — | | |
| | |
Useful Lives
|
|
Equipment
|
| |
3 years
|
|
Furniture and fixtures
|
| |
5 years
|
|
Leasehold improvements
|
| |
Shorter of 5 years or lease term
|
|
| | |
2021
|
| |
2020
|
|
Risk-free interest rates
|
| |
0.912%
|
| |
1.026 – 1.399%
|
|
Expected life
|
| |
5 years
|
| |
6.25 years
|
|
Expected volatility
|
| |
40.81%
|
| |
34.60%
|
|
Expected dividend yield
|
| |
0.00%
|
| |
0.00%
|
|
| Purchase Price | | | | | | | |
|
Equity value
|
| | | $ | 13,262,000 | | |
|
Cash acquired
|
| | | | (4,762,000) | | |
|
Total purchase price paid, net of cash acquired
|
| | | $ | 8,500,000 | | |
| Purchase Price Allocation | | | | | | | |
|
Restricted cash
|
| | | $ | 6,622,035 | | |
|
Accounts receivable
|
| | | | 92,231 | | |
|
Prepaid expenses and other current assets
|
| | | | 131,413 | | |
|
Property and equipment
|
| | | | 1,601,990 | | |
|
Intangible assets
|
| | | | 1,010,000 | | |
|
Capitalized software
|
| | | | 1,230,000 | | |
|
Operating lease – right of use assets
|
| | | | 1,532,925 | | |
|
Goodwill
|
| | | | 1,676,239 | | |
|
Trademarks
|
| | | | 1,860,000 | | |
|
Patents and patent applications
|
| | | | 700,000 | | |
|
Customer relationships
|
| | | | 3,370,000 | | |
|
Security deposits
|
| | | | 54,869 | | |
|
Account payable
|
| | | | (925,608) | | |
|
Accrued expenses
|
| | | | (1,267,708) | | |
|
Accrued fiduciary obligations
|
| | | | (4,070,908) | | |
|
Operating lease liabilities
|
| | | | (1,716,246) | | |
|
Deferred tax liability
|
| | | | (2,151,012) | | |
|
Deferred revenue
|
| | | | (1,205,220) | | |
|
Other long-term liabilities
|
| | | | (45,000) | | |
|
Total fair value of net assets acquired and liabilities assumed
|
| | | $ | 8,500,000 | | |
| | |
Acquisition
Fair Value |
| |
Useful Life
in Years |
| |||
Trademarks
|
| | | $ | 1,860,000 | | | |
10 Years
|
|
Intangible assets
|
| | | | 1,010,000 | | | |
5 Years
|
|
Customer relationships
|
| | | | 3,370,000 | | | |
7 Years
|
|
Patents and patent applications
|
| | | | 700,000 | | | |
Work in process
|
|
| | |
Six Months
Ended June 30, 2021 (pro forma) |
| |
Year Ended
December 31, 2020 (pro forma) |
| ||||||
Revenue
|
| | | $ | 7,746,593 | | | | | $ | 18,388,192 | | |
Net loss
|
| | | | (7,479,835) | | | | | | (17,620,431) | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
Equipment
|
| | | $ | 195,691 | | | | | $ | 25,892 | | |
Furniture and fixtures
|
| | | | 341,769 | | | | | | 76,493 | | |
Leasehold improvements
|
| | | | 375,099 | | | | | | 190,806 | | |
Total cost
|
| | | | 912,559 | | | | | | 293,191 | | |
Accumulated depreciation
|
| | | | (173,851) | | | | | | (97,787) | | |
Property and equipment, net
|
| | | $ | 738,708 | | | | | $ | 195,404 | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
Capitalized software
|
| | | $ | 2,238,810 | | | | | $ | — | | |
Accumulated amortization
|
| | | | (126,553) | | | | | | — | | |
Net carrying amount
|
| | | | 2,112,257 | | | | | | — | | |
Capitalized software in-process
|
| | | | 4,791,140 | | | | | | 3,818,959 | | |
Capitalized software, net
|
| | | $ | 6,903,397 | | | | | $ | 3,818,959 | | |
Year Ended December 31,
|
| | | | | | |
2021 (six months)
|
| | | $ | 223,881 | | |
2022
|
| | | | 447,762 | | |
2023
|
| | | | 447,762 | | |
2024
|
| | | | 447,762 | | |
2025
|
| | | | 447,762 | | |
Thereafter
|
| | | | 97,328 | | |
| | | | $ | 2,112,257 | | |
| | |
June 30, 2021
|
| ||||||||||||||||||
| | |
Useful Life
|
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
Carrying Amount |
| |||||||||
Trademarks
|
| |
10 Years
|
| | | $ | 1,860,000 | | | | | $ | (46,712) | | | | | $ | 1,813,288 | | |
Intangible assets
|
| |
5 Years
|
| | | | 1,010,000 | | | | | | (50,731) | | | | | | 959,269 | | |
Customer relationships
|
| |
7 Years
|
| | | | 3,370,000 | | | | | | (120,907) | | | | | | 3,249,093 | | |
Patents and patent applications
|
| |
Work in process
|
| | | | 700,000 | | | | | | — | | | | | | 700,000 | | |
| | | | | | | $ | 6,940,000 | | | | | $ | (218,350) | | | | | $ | 6,721,650 | | |
Year Ended December 31,
|
| | | | | | |
2021 (six months)
|
| | | $ | 434,714 | | |
2022
|
| | | | 869,429 | | |
2023
|
| | | | 869,429 | | |
2024
|
| | | | 869,429 | | |
2025
|
| | | | 869,429 | | |
Thereafter
|
| | | | 2,809,220 | | |
| | | | $ | 6,721,650 | | |
Year Ended December 31,
|
| | | | | | |
2021(six months)
|
| | | $ | 416,064 | | |
2022
|
| | | | 827,607 | | |
2023
|
| | | | 785,908 | | |
2024
|
| | | | 83,683 | | |
2025
|
| | | | 12,661 | | |
Total lease payments
|
| | | | 2,125,923 | | |
Less: imputed interest
|
| | | | (214,398) | | |
Present value of lease liabilities
|
| | | | 1,911,525 | | |
Less: current lease liabilities
|
| | | | (699,379) | | |
Long-term lease liabilities
|
| | | $ | 1,212,146 | | |
Year Ended December 31,
|
| | | | | | |
2021(six months)
|
| | | $ | 108,663 | | |
2022
|
| | | | 222,083 | | |
2023
|
| | | | 178,409 | | |
2024
|
| | | | 13,527 | | |
2025
|
| | | | — | | |
Thereafter
|
| | | | — | | |
Total sublease income
|
| | | $ | 522,682 | | |
| | |
Number of
Options |
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Balance at January 1, 2021
|
| | | | 102,741 | | | | | $ | 0.64 | | | | | | 9.25 | | | | | $ | 1,315,512 | | |
Granted
|
| | | | 223,170 | | | | | | 15.12 | | | | | | | | | | | | | | |
Forfeited/Cancelled
|
| | | | (6,675) | | | | | | 0.01 | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Balance at June 30, 2021
|
| | | | 319,236 | | | | | | 10.78 | | | | | | 9.43 | | | | | $ | 317,567 | | |
Exercisable at June 30, 2021
|
| | | | 61,784 | | | | | $ | 6.34 | | | | | | 9.06 | | | | | $ | 335,243 | | |
| | |
Number of
Options |
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Balance at January 1, 2020
|
| | | | — | | | | | $ | — | | | | | | — | | | | | | — | | |
Granted
|
| | | | 102,741 | | | | | | 0.64 | | | | | | | | | | | | | | |
Forfeited/Cancelled
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Balance at June 30, 2020
|
| | | | 102,741 | | | | | | 0.64 | | | | | | 9.75 | | | | | | 932,288 | | |
Exercisable at June 30, 2020
|
| | | | — | | | | | $ | — | | | | | | — | | | | | | — | | |
| | |
Non-vested
Options Outstanding |
| |
Weighted-
Average Grant Date Fair Value |
| ||||||
At January 1, 2021
|
| | | | 93,734 | | | | | $ | 5.51 | | |
Options granted
|
| | | | 223,170 | | | | | | 3.71 | | |
Options forfeited/cancelled
|
| | | | (6,675) | | | | | | 6.96 | | |
Options exercised
|
| | | | — | | | | | | — | | |
Options vested
|
| | | | (52,777) | | | | | | 4.44 | | |
At June 30, 2021
|
| | | | 257,452 | | | | | $ | 4.24 | | |
| | |
Non-vested
Options Outstanding |
| |
Weighted-
Average Grant Date Fair Value |
| ||||||
At January 1, 2020
|
| | | | — | | | | | $ | — | | |
Options granted
|
| | | | 102,741 | | | | | | 5.58 | | |
Options forfeited/cancelled
|
| | | | — | | | | | | — | | |
Options exercised
|
| | | | — | | | | | | — | | |
Options vested
|
| | | | — | | | | | | — | | |
At June 30, 2020
|
| | | | 102,741 | | | | | $ | 5.58 | | |
| | |
Restricted
Stock Awards |
| |
Weighted-
Average Grant Date Fair Value Per Share |
| ||||||
Outstanding at January 1, 2021
|
| | | | 315,922 | | | | | $ | 6.70 | | |
Granted
|
| | | | — | | | | | | — | | |
Forfeited/cancelled
|
| | | | (23,546) | | | | | | 8.18 | | |
Vested
|
| | | | (88,280) | | | | | | 6.52 | | |
Outstanding at June 30, 2021
|
| | | | 204,096 | | | | | $ | 6.48 | | |
Outstanding at January 1, 2020
|
| | | | 467,685 | | | | | $ | 6.44 | | |
Granted
|
| | | | — | | | | | | — | | |
Forfeited/cancelled
|
| | | | — | | | | | | — | | |
Vested
|
| | | | (39,352) | | | | | | 6.44 | | |
Outstanding at June 30, 2020
|
| | | | 428,333 | | | | | $ | 6.44 | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
Convertible notes payable
|
| | | $ | 5,378,458 | | | | | $ | 8,555,000 | | |
Accrued interest
|
| | | | 341,703 | | | | | | 518,924 | | |
Less: unamortized debt discount
|
| | | | — | | | | | | (111,800) | | |
Total convertible notes payable, net
|
| | | | 5,720,161 | | | | | | 8,962,124 | | |
Less: current portion of convertible notes payable
|
| | | | (716,936) | | | | | | (1,866,237) | | |
Convertible notes payable, net of current portion
|
| | | $ | 5,003,225 | | | | | $ | 7,095,887 | | |
Year Ended December 31,
|
| | | | | | |
2021 (six months)
|
| | | $ | 268,851 | | |
2022
|
| | | | 2,982,750 | | |
2023
|
| | | | 1,662,008 | | |
2024
|
| | | | 806,552 | | |
| | | | $ | 5,720,161 | | |
|
Exercise price of the warrants
|
| |
$6.50
|
|
|
Contractual life of the warrants
|
| |
5 years
|
|
|
Current value of the underlying common stock
|
| |
$9.71
|
|
|
Expected volatility
|
| |
35.04%
|
|
|
Expected dividend yield
|
| |
0.00%
|
|
|
Risk-free interest rate
|
| |
1.693%
|
|
| | |
Number of
Common Shares Warrants |
| |
Exercise
Price Range Per Share |
| |
Weighted
Average Exercise Price |
| ||||||
Balance at January 1, 2021
|
| | | | 80,000 | | | |
$6.50
|
| | | $ | 6.50 | | |
Granted
|
| | | | 213,333 | | | |
36.00
|
| | | | 36.00 | | |
Forfeited
|
| | | | — | | | |
—
|
| | | | — | | |
Exercised
|
| | | | — | | | |
—
|
| | | | — | | |
Balance at June 30, 2021
|
| | | | 293,333 | | | |
$6.50 to 36.00
|
| | | $ | 27.95 | | |
Balance at January 1, 2020
|
| | | | — | | | |
$ —
|
| | | $ | — | | |
Granted
|
| | | | 80,000 | | | |
6.50
|
| | | | 6.50 | | |
Forfeited
|
| | | | — | | | |
—
|
| | | | — | | |
Exercised
|
| | | | — | | | |
—
|
| | | | — | | |
Balance at June 30, 2020
|
| | | | 80,000 | | | |
$ 6.50
|
| | | $ | 6.50 | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
United States
|
| | | $ | 15,512,493 | | | | | $ | 3,250,666 | | |
Israel
|
| | | | 2,010,396 | | | | | | 1,101,013 | | |
Total long-lived assets
|
| | | $ | 17,522,889 | | | | | $ | 4,351,679 | | |
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
ASSETS: | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,754,569 | | | | | $ | 187,340 | | |
Restricted cash
|
| | | | 63,363 | | | | | | 58,936 | | |
Prepaid expenses and other current assets
|
| | | | 262,211 | | | | | | 16,010 | | |
Other receivables
|
| | | | 100,038 | | | | | | 27,857 | | |
Total current assets
|
| | | | 2,180,181 | | | | | | 290,143 | | |
Property and equipment, net
|
| | | | 195,404 | | | | | | 284,683 | | |
Capitalized software
|
| | | | 3,818,959 | | | | | | 3,250,000 | | |
Operating lease right-of-use assets
|
| | | | 337,316 | | | | | | 415,299 | | |
Total assets
|
| | | $ | 6,531,860 | | | | | $ | 4,240,125 | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 159,168 | | | | | $ | 44,878 | | |
Accounts payable – related party
|
| | | | 15,725 | | | | | | — | | |
Accrued expenses
|
| | | | 44,955 | | | | | | 19,653 | | |
Employee and payroll accruals
|
| | | | 223,012 | | | | | | 47,762 | | |
Current portion of operating lease liabilities
|
| | | | 96,472 | | | | | | 86,971 | | |
Current portion of convertible notes payable
|
| | | | 1,866,237 | | | | | | — | | |
Due to related party
|
| | | | 243,638 | | | | | | — | | |
Total current liabilities
|
| | | | 2,649,207 | | | | | | 199,264 | | |
Convertible notes payable, net of current portion
|
| | | | 7,095,887 | | | | | | 4,534,270 | | |
Operating lease liabilities, net of current portion
|
| | | | 283,265 | | | | | | 379,736 | | |
Total liabilities
|
| | | | 10,028,359 | | | | | | 5,113,270 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | |
STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | |
Common stock, $0.0001 par value, 1,500,000 shares authorized; 31,250 issued and outstanding
|
| | | | 3 | | | | | | 3 | | |
Additional paid-in capital
|
| | | | 2,044,373 | | | | | | 799,743 | | |
Accumulated deficit
|
| | | | (5,540,875) | | | | | | (1,672,891) | | |
Total stockholders’ deficit
|
| | | | (3,496,499) | | | | | | (873,145) | | |
Total liabilities and stockholders’ deficit
|
| | | $ | 6,531,860 | | | | | $ | 4,240,125 | | |
| | |
Year Ended
December 31, 2020 |
| |
Period from
February 14, 2019 (Inception) to December 31, 2019 |
| ||||||
Revenue
|
| | | $ | — | | | | | $ | — | | |
Cost of revenue
|
| | | | — | | | | | | — | | |
Gross profit
|
| | | | — | | | | | | — | | |
Operating expenses | | | | | | | | | | | | | |
Research and development
|
| | | | 1,840,772 | | | | | | 674,857 | | |
General and administrative
|
| | | | 1,499,376 | | | | | | 890,035 | | |
Sales and marketing
|
| | | | 27,583 | | | | | | 21,610 | | |
Total operating expenses
|
| | | | 3,367,731 | | | | | | 1,586,502 | | |
Operating loss
|
| | | | (3,367,731) | | | | | | (1,586,502) | | |
Other income (expenses) | | | | | | | | | | | | | |
Other income
|
| | | | 25,846 | | | | | | 16,902 | | |
Interest expense
|
| | | | (521,140) | | | | | | (106,933) | | |
Foreign exchange (loss) gain
|
| | | | (4,959) | | | | | | 3,642 | | |
Loss before provision for income taxes
|
| | | | (3,867,984) | | | | | | (1,672,891) | | |
Income tax expense
|
| | | | — | | | | | | — | | |
Net loss
|
| | | $ | (3,867,984) | | | | | $ | (1,672,891) | | |
Loss per share, basic & fully diluted
|
| | | $ | (7.26) | | | | | $ | (5.28) | | |
Weighted average number of common shares
|
| | | | 533,137 | | | | | | 316,746 | | |
| | |
Common Stock
|
| | | | | | | | | | | | | | | | | | | |||||||||
| | |
Shares
|
| |
Amount
|
| |
Additional Paid-
In Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| |||||||||||||||
Balance, February 14, 2019 (Inception)
|
| | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Issuance of common shares in connection with asset purchase
|
| | | | 31,250 | | | | | | 3 | | | | | | 249,997 | | | | | | — | | | | | | 250,000 | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 549,746 | | | | | | — | | | | | | 549,746 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (1,672,891) | | | | | | (1,672,891) | | |
Balance, December 31, 2019
|
| | | | 31,250 | | | | | $ | 3 | | | | | $ | 799,743 | | | | | $ | (1,672,891) | | | | | $ | (873,145) | | |
Fair value of warrants issued with convertible note
|
| | | | — | | | | | | — | | | | | | 213,828 | | | | | | — | | | | | | 213,828 | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 1,030,802 | | | | | | — | | | | | | 1,030,802 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (3,867,984) | | | | | | (3,867,984) | | |
Balance, December 31, 2020
|
| | | | 31,250 | | | | | $ | 3 | | | | | $ | 2,044,373 | | | | | $ | (5,540,875) | | | | | $ | (3,496,499) | | |
| | |
Year Ended
December 31, 2020 |
| |
Period from
February 14, 2019 (Inception) to December 31, 2019 |
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (3,867,984) | | | | | $ | (1,672,891) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 74,384 | | | | | | 23,403 | | |
Shared-based compensation
|
| | | | 1,030,802 | | | | | | 549,746 | | |
Amortization of right-of-use asset
|
| | | | 77,983 | | | | | | 48,060 | | |
Amortization of debt discount
|
| | | | 102,028 | | | | | | — | | |
Interest accrued on convertible notes payable
|
| | | | 414,654 | | | | | | 104,269 | | |
Professional services performed in exchange for convertible notes
|
| | | | 50,000 | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
(Increase) in prepaid expense and other assets
|
| | | | (318,380) | | | | | | (43,867) | | |
Increase in accounts payable
|
| | | | 114,290 | | | | | | 44,878 | | |
Increase in accounts payable – related party
|
| | | | 15,725 | | | | | | — | | |
Increase in accrued expenses
|
| | | | 200,552 | | | | | | 67,415 | | |
(Decrease) increase in operating lease liabilities
|
| | | | (86,971) | | | | | | 3,348 | | |
Increase in due to related party
|
| | | | 243,638 | | | | | | — | | |
Net cash used in operating activities
|
| | | | (1,949,279) | | | | | | (875,639) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Capitalization of software development costs
|
| | | | (568,959) | | | | | | — | | |
Purchase of capitalized software
|
| | | | — | | | | | | (70,000) | | |
Purchase of property and equipment
|
| | | | (30,746) | | | | | | (308,085) | | |
Reimbursement of leasehold improvements from sublease
|
| | | | 45,640 | | | | | | — | | |
Net cash used in investing activities
|
| | | | (554,065) | | | | | | (378,085) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from issuance of convertible notes payable
|
| | | | 4,075,000 | | | | | | 1,500,000 | | |
Net cash provided by financing activities
|
| | | | 4,075,000 | | | | | | 1,500,000 | | |
Net increase in cash, cash equivalents and restricted cash
|
| | | | 1,571,656 | | | | | | 246,276 | | |
Cash, cash equivalents and restricted cash at beginning of the year
|
| | | | 246,276 | | | | | | — | | |
Cash, cash equivalents and restricted cash at end of the year
|
| | | $ | 1,817,932 | | | | | $ | 246,276 | | |
Supplemental disclosure of non-cash investing and financing activity | | | | | | | | | | | | | |
Convertible debt issued to purchase capitalized software
|
| | | $ | — | | | | | $ | 2,930,000 | | |
Purchase of capitalized software asset with issuance of common shares
|
| | | $ | — | | | | | $ | 250,000 | | |
Initial recognition of operating lease right-of-use assets, net of lease incentive
|
| | | $ | — | | | | | $ | 463,359 | | |
Initial recognition of operating lease liabilities
|
| | | $ | — | | | | | $ | 520,759 | | |
Issuance of warrants in connection with convertible debt
|
| | | $ | 213,828 | | | | | $ | — | | |
Professional services performed in exchange for convertible notes
|
| | | $ | 50,000 | | | | | $ | — | | |
Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet
|
| | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,754,569 | | | | | $ | 187,340 | | |
Restricted cash
|
| | | | 63,363 | | | | | | 58,936 | | |
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows
|
| | | $ | 1,817,932 | | | | | $ | 246,276 | | |
| | |
Useful Lives
|
|
Equipment
|
| |
3 years
|
|
Furniture and fixtures
|
| |
5 years
|
|
Leasehold improvements
|
| |
Shorter of 5 years or lease term
|
|
| | |
2020
|
| |
2019
|
|
Risk-free interest rates
|
| |
0.285 – 1.399%
|
| |
1.445%
|
|
Expected life
|
| |
5 – 6.25 years
|
| |
6.25 years
|
|
Expected volatility
|
| |
34.60 – 41.07%
|
| |
34.70%
|
|
Expected dividend yield
|
| |
0.00%
|
| |
0.00%
|
|
| | |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||
Equipment
|
| | | $ | 25,892 | | | | | $ | 11,200 | | |
Furniture and fixtures
|
| | | | 76,493 | | | | | | 76,493 | | |
Leasehold improvements
|
| | | | 190,806 | | | | | | 220,393 | | |
Total cost
|
| | | | 293,191 | | | | | | 308,086 | | |
Accumulated depreciation
|
| | | | (97,787) | | | | | | (23,403) | | |
Property and equipment, net
|
| | | $ | 195,404 | | | | | $ | 284,683 | | |
|
2021
|
| | | $ | 124,845 | | |
|
2022
|
| | | | 126,690 | | |
|
2023
|
| | | | 126,690 | | |
|
2024
|
| | | | 61,978 | | |
|
Total lease payments
|
| | | | 440,203 | | |
|
Less: imputed interest
|
| | | | (60,466) | | |
|
Present value of lease liabilities
|
| | | | 379,737 | | |
|
Less: current lease liabilities
|
| | | | (96,472) | | |
|
Long-term lease liabilities
|
| | | $ | 283,265 | | |
| | |
Number of
Options |
| |
Weighted Average
Exercise Price |
| |
Weighted Average
Remaining Contractual Term |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Balance at December 31, 2019
|
| | | | — | | | | | $ | — | | | | | | | | | | | | | | |
Granted
|
| | | | 102,741 | | | | | | 0.64 | | | | | | | | | | | | | | |
Forfeited/Expired
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Balance at December 31, 2020
|
| | | | 102,741 | | | | | | 0.64 | | | | | | 9.25 | | | | | $ | 1,315,512 | | |
Exercisable at December 31, 2020
|
| | | | 9,007 | | | | | $ | 0.01 | | | | | | 9.25 | | | | | $ | 120,966 | | |
| | |
Non-vested
Options Outstanding |
| |
Weighted-Average
Grant Date Fair Value |
| ||||||
At December 31, 2019
|
| | | | — | | | | | $ | — | | |
Options granted
|
| | | | 102,741 | | | | | | 5.59 | | |
Options forfeited/cancelled
|
| | | | — | | | | | | — | | |
Options exercised
|
| | | | — | | | | | | — | | |
Options vested
|
| | | | (9,007) | | | | | | 6.43 | | |
At December 31, 2020
|
| | | | 93,734 | | | | | $ | 5.51 | | |
| | |
Restricted Stock
Units |
| |
Weighted-Average
Grant Date Fair Value Per Share |
| ||||||
At February 14, 2019
|
| | | | — | | | | | $ | — | | |
Granted
|
| | | | 921,898 | | | | | | 6.44 | | |
Vested
|
| | | | (454,213) | | | | | | 6.44 | | |
Outstanding at December 31, 2019
|
| | | | 467,685 | | | | | | 6.44 | | |
Granted
|
| | | | 29,500 | | | | | | 9.71 | | |
Exercised
|
| | | | — | | | | | | — | | |
Vested
|
| | | | (141,911) | | | | | | 6.54 | | |
Outstanding at December 31, 2020
|
| | | | 355,274 | | | | | $ | 6.67 | | |
| | |
December 31 2020
|
| |
December 31, 2019
|
| ||||||
Convertible notes payable
|
| | | $ | 8,555,000 | | | | | $ | 4,430,000 | | |
Accrued interest
|
| | | | 518,924 | | | | | | 104,270 | | |
Less: unamortized debt discount
|
| | | | (111,800) | | | | | | — | | |
Total convertible notes payable, net
|
| | | $ | 8,962,124 | | | | | $ | 4,534,270 | | |
Less: current portion of convertible notes payable
|
| | | | (1,866,237) | | | | | | — | | |
Convertible notes payable, net of current portion
|
| | | $ | 7,095,887 | | | | | $ | 4,534,270 | | |
Year Ended December 31,
|
| | | | | | |
2021
|
| | | $ | 1,866,237 | | |
2022
|
| | | | 5,289,388 | | |
2023
|
| | | | 1,046,344 | | |
2024
|
| | | | 871,955 | | |
| | | | $ | 9,073,924 | | |
|
Exercise price of the warrants
|
| |
$6.50
|
|
|
Contractual life of the warrants
|
| |
5 years
|
|
|
Current value of the underlying common stock
|
| |
$9.71
|
|
|
Expected volatility
|
| |
35.04%
|
|
|
Expected dividend yield
|
| |
0.00%
|
|
|
Risk-free interest rate
|
| |
1.693%
|
|
| | |
Federal
|
| |
States
|
| ||||||
Expire in 2039
|
| | | $ | — | | | | | $ | 98,494 | | |
Expire in 2040
|
| | | | — | | | | | | 226,566 | | |
Indefinite life
|
| | | | 483,102 | | | | | | 192,825 | | |
Total
|
| | | $ | 483,102 | | | | | | 517,885 | | |
| | |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||
Startup costs
|
| | | | 463,690 | | | | | $ | 171,092 | | |
Stock compensation – RSAs
|
| | | | 434,384 | | | | | | 190,270 | | |
Net operating loss – Federal
|
| | | | 101,452 | | | | | | 20,684 | | |
Net operating loss – State
|
| | | | 46,209 | | | | | | 11,944 | | |
| | | | | 1,045,735 | | | | | | 393,990 | | |
Less: Valuation allowance
|
| | | | (1,045,735) | | | | | | (393,990) | | |
Net deferred tax asset
|
| | | $ | — | | | | | $ | — | | |
| | |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||
United States
|
| | | $ | 3,250,666 | | | | | $ | 3,250,000 | | |
Israel
|
| | | | 1,101,013 | | | | | | 699,981 | | |
Total long-lived assets
|
| | | $ | 4,351,679 | | | | | $ | 3,949,981 | | |
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
| | |
March 31, 2021
(Unaudited) |
| |
December 31, 2020
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 4,579,903 | | | | | $ | 6,982,163 | | |
Restricted cash
|
| | | | 6,622,035 | | | | | | 6,889,701 | | |
Accounts receivable – net
|
| | | | | | | | | | | | |
Trade
|
| | | | 56,703 | | | | | | 37,489 | | |
Unbilled
|
| | | | 35,528 | | | | | | 41,208 | | |
Prepaid expenses
|
| | | | 131,413 | | | | | | 193,406 | | |
Total current assets
|
| | | | 11,425,582 | | | | | | 14,143,967 | | |
Property and equipment – net
|
| | | | 1,338,195 | | | | | | 1,469,400 | | |
Operating lease right-of-use assets
|
| | | | 1,532,925 | | | | | | 1,658,935 | | |
Deposits
|
| | | | 54,869 | | | | | | 54,869 | | |
Total assets
|
| | | $ | 14,351,571 | | | | | $ | 17,327,171 | | |
LIABILITIES AND MEMBER’S EQUITY | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 925,608 | | | | | $ | 529,224 | | |
Deferred revenue
|
| | | | 1,606,960 | | | | | | 777,041 | | |
Accrued and other current liabilities:
|
| | | | | | | | | | | | |
Accrued compensation
|
| | | | 894,191 | | | | | | 985,220 | | |
Accrued fiduciary obligations
|
| | | | 4,070,908 | | | | | | 5,949,654 | | |
Accrued performance guarantees
|
| | | | 200,914 | | | | | | 207,916 | | |
Accrued penalties
|
| | | | 853,405 | | | | | | 1,532,185 | | |
Other accrued liabilities
|
| | | | 39,373 | | | | | | 56,615 | | |
Operating lease liabilities, current
|
| | | | 585,204 | | | | | | 570,312 | | |
Total current liabilities
|
| | | | 9,176,563 | | | | | | 10,608,167 | | |
Operating lease liabilities, non-current portion
|
| | | | 1,131,042 | | | | | | 1,281,362 | | |
Long term sublease deposit
|
| | | | 45,000 | | | | | | — | | |
Total liabilities
|
| | | | 10,352,605 | | | | | | 11,889,529 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | |
Member’s equity | | | | | | | | | | | | | |
General member’s interest
|
| | | | 62,393,788 | | | | | | 62,080,334 | | |
Accumulated deficit
|
| | | | (58,394,822) | | | | | | (56,642,692) | | |
Total member’s equity
|
| | | | 3,998,966 | | | | | | 5,437,642 | | |
Total liabilities and member’s equity
|
| | | $ | 14,351,571 | | | | | $ | 17,327,171 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net sales
|
| | | $ | 4,215,082 | | | | | $ | 5,274,224 | | |
Cost of revenue | | | | | | | | | | | | | |
Service fees
|
| | | | 2,306,355 | | | | | | 2,723,925 | | |
Direct expense – claims
|
| | | | 424,137 | | | | | | 571,245 | | |
Direct expense – member services
|
| | | | 365,783 | | | | | | 474,640 | | |
Total cost of revenue (exclusive of depreciation and amortization shown separately below)
|
| | | | 3,096,275 | | | | | | 3,769,810 | | |
Gross profit
|
| | | | 1,118,807 | | | | | | 1,504,414 | | |
Operating expenses | | | | | | | | | | | | | |
Administrative
|
| | | | 1,045,397 | | | | | | 1,889,382 | | |
Information technology
|
| | | | 865,966 | | | | | | 1,342,691 | | |
Sales and marketing
|
| | | | 628,487 | | | | | | 797,240 | | |
Facilities
|
| | | | 184,718 | | | | | | 199,360 | | |
Depreciation
|
| | | | 162,373 | | | | | | 144,709 | | |
Total operating expenses
|
| | | | 2,886,941 | | | | | | 4,373,382 | | |
Operating loss
|
| | | | (1,768,134) | | | | | | (2,868,968) | | |
Other non operating income | | | | | | | | | | | | | |
Interest income
|
| | | | — | | | | | | 11,221 | | |
Other income
|
| | | | 16,004 | | | | | | — | | |
Total non operating income
|
| | | | 16,004 | | | | | | 11,221 | | |
Net loss
|
| | | $ | (1,752,130) | | | | | $ | (2,857,747) | | |
| | |
Contributed
Capital |
| |
Accumulated
Deficit |
| |
Total
|
| |||||||||
Balance at December 31, 2019
|
| | | $ | 53,250,039 | | | | | $ | (44,104,511) | | | | | $ | 9,145,528 | | |
Distributions
|
| | | | (1,173,524) | | | | | | — | | | | | | (1,173,524) | | |
Net loss
|
| | | | — | | | | | | (2,857,747) | | | | | | (2,857,747) | | |
Balance at March 31, 2020 (Unaudited)
|
| | | $ | 52,076,515 | | | | | $ | (46,962,258) | | | | | $ | 5,114,257 | | |
Balance at December 31, 2020
|
| | | $ | 62,080,334 | | | | | $ | (56,642,692) | | | | | $ | 5,437,642 | | |
Contributions
|
| | | | 313,454 | | | | | | — | | | | | | 313,454 | | |
Net loss
|
| | | | — | | | | | | (1,752,130) | | | | | | (1,752,130) | | |
Balance at March 31, 2021 (Unaudited)
|
| | | $ | 62,393,788 | | | | | $ | (58,394,822) | | | | | $ | 3,998,966 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (1,752,130) | | | | | $ | (2,857,747) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | ||||||||||
Depreciation and amortization
|
| | | | 162,373 | | | | | | 144,709 | | |
Amortization of right-of-use asset
|
| | | | 126,010 | | | | | | 118,921 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (19,214) | | | | | | 158,642 | | |
Unbilled receivables
|
| | | | 5,680 | | | | | | 661,901 | | |
Prepaid expenses and other assets
|
| | | | 61,993 | | | | | | 8,161 | | |
Accounts payable
|
| | | | 396,384 | | | | | | (580,293) | | |
Deferred revenue
|
| | | | 829,919 | | | | | | 867,647 | | |
Operating lease liabilities
|
| | | | (135,428) | | | | | | (122,081) | | |
Other accrued liabilities
|
| | | | (2,672,799) | | | | | | (79,439) | | |
Net cash used in operating activities
|
| | | | (2,997,212) | | | | | | (1,679,579) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (31,168) | | | | | | (109,225) | | |
Deposits
|
| | | | 45,000 | | | | | | (3,500) | | |
Net cash provided by (used in) investing activities
|
| | | | 13,832 | | | | | | (112,725) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Capital contributions (distributions)
|
| | | | 313,454 | | | | | | (1,173,524) | | |
Net cash provided by (used in) financing activities
|
| | | | 313,454 | | | | | | (1,173,524) | | |
Net decrease in cash and restricted cash
|
| | | | (2,669,926) | | | | | | (2,965,828) | | |
Cash and restricted cash at beginning of period
|
| | | | 13,871,864 | | | | | | 12,100,423 | | |
Cash and restricted cash at ending of period
|
| | | $ | 11,201,938 | | | | | $ | 9,134,595 | | |
Reconciliation of cash and restricted cash to the balance sheets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 4,579,903 | | | | | $ | 4,165,579 | | |
Restricted cash
|
| | | | 6,622,035 | | | | | | 4,969,016 | | |
Total cash and restricted cash
|
| | | $ | 11,201,938 | | | | | $ | 9,134,595 | | |
| | |
March 31, 2021
|
| |
December 31, 2020
|
| ||||||
Software
|
| | | $ | 1,936,882 | | | | | $ | 1,932,534 | | |
Office equipment
|
| | | | 382,845 | | | | | | 382,119 | | |
Furniture and fixtures
|
| | | | 152,734 | | | | | | 159,331 | | |
Leasehold improvements
|
| | | | 269,846 | | | | | | 259,519 | | |
Total cost
|
| | | | 2,742,307 | | | | | | 2,733,503 | | |
Accumulated depreciation
|
| | | | 1,404,112 | | | | | | 1,264,103 | | |
Net property and equipment
|
| | | $ | 1,338,195 | | | | | $ | 1,469,400 | | |
Years Ending December 31,
|
| |
Amount
|
| |||
2021 (nine months)
|
| | | $ | 524,281 | | |
2022
|
| | | | 700,917 | | |
2023
|
| | | | 659,218 | | |
2024
|
| | | | 21,705 | | |
2025
|
| | | | 12,661 | | |
Total lease payments
|
| | | | 1,918,782 | | |
Less: imputed interest
|
| | | | (202,536) | | |
Present value of lease liabilities
|
| | | | 1,716,246 | | |
Less: current lease liabilities
|
| | | | (585,204) | | |
Long-term lease liabilities
|
| | | $ | 1,131,042 | | |
| Weighted average remaining lease term – operating lease: | | |
2.8 years
|
|
| Weighted-average discount rate – operating lease: | | |
8.0%
|
|
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets
|
| | | | | | | | | | | | |
Cash
|
| | | $ | 6,982,163 | | | | | $ | 8,314,591 | | |
Restricted cash
|
| | | | 6,889,701 | | | | | | 3,785,832 | | |
Accounts receivable – net
|
| | | | | | | | | | | | |
Trade
|
| | | | 37,489 | | | | | | 576,271 | | |
Unbilled
|
| | | | 41,208 | | | | | | 1,094,906 | | |
Prepaid expenses
|
| | | | 193,406 | | | | | | 119,171 | | |
Total current assets
|
| | | | 14,143,967 | | | | | | 13,890,771 | | |
Property and equipment – net
|
| | | | 1,469,400 | | | | | | 1,831,113 | | |
Operating lease right-of-use assets
|
| | | | 1,658,935 | | | | | | — | | |
Deposits
|
| | | | 54,869 | | | | | | 54,876 | | |
Total assets
|
| | | $ | 17,327,171 | | | | | $ | 15,776,760 | | |
LIABILITIES AND MEMBER’S EQUITY | | | | | | | | | | | | | |
Current liabilities
|
| | | | | | | | | | | | |
Accounts payable
|
| | | $ | 529,224 | | | | | $ | 1,115,928 | | |
Deferred revenue
|
| | | | 777,041 | | | | | | 1,124,569 | | |
Accrued and other current liabilities:
|
| | | | | | | | | | | | |
Accrued compensation
|
| | | | 985,220 | | | | | | 710,128 | | |
Accrued fiduciary obligations
|
| | | | 5,949,654 | | | | | | 2,930,309 | | |
Current portion of deferred rent
|
| | | | — | | | | | | 26,432 | | |
Accrued performance guarantees
|
| | | | 207,916 | | | | | | 256,000 | | |
Accrued penalties
|
| | | | 1,532,185 | | | | | | — | | |
Other accrued liabilities
|
| | | | 56,615 | | | | | | 276,406 | | |
Operating lease liabilities, current
|
| | | | 570,312 | | | | | | — | | |
Total current liabilities
|
| | | | 10,608,167 | | | | | | 6,439,772 | | |
Deferred rent – net of current portion
|
| | | | — | | | | | | 191,460 | | |
Operating lease liabilities, non-current portion
|
| | | | 1,281,362 | | | | | | — | | |
Total liabilities
|
| | | | 11,889,529 | | | | | | 6,631,232 | | |
COMMITMENTS AND CONTINGENCIES
|
| | | | | | | | | | | | |
MEMBER’S EQUITY | | | | | | | | | | | | | |
General members interest
|
| | | | 62,080,334 | | | | | | 53,250,039 | | |
Accumulated deficit
|
| | | | (56,642,692) | | | | | | (44,104,511) | | |
Total member’s equity
|
| | | | 5,437,642 | | | | | | 9,145,528 | | |
Total liabilities and member’s equity
|
| | | $ | 17,327,171 | | | | | $ | 15,776,760 | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net sales
|
| | | $ | 18,388,192 | | | | | $ | 20,327,320 | | |
Cost of revenue | | | | | | | | | | | | | |
Cost of sales
|
| | | | 10,507,319 | | | | | | 10,960,684 | | |
Direct expense – claims
|
| | | | 1,871,683 | | | | | | 2,641,375 | | |
Direct expense – member services
|
| | | | 1,552,006 | | | | | | 1,860,983 | | |
Total cost of revenue (exclusive of depreciation and amortization shown
separately below) |
| | | | 13,931,008 | | | | | | 15,463,042 | | |
Gross profit
|
| | | | 4,457,184 | | | | | | 4,864,278 | | |
Operating expenses | | | | | | | | | | | | | |
Administrative
|
| | | | 8,700,352 | | | | | | 6,314,695 | | |
Information technology
|
| | | | 4,223,350 | | | | | | 5,440,224 | | |
Sales and marketing
|
| | | | 2,724,368 | | | | | | 3,562,888 | | |
Facilities
|
| | | | 762,649 | | | | | | 659,006 | | |
Depreciation expense
|
| | | | 596,152 | | | | | | 505,719 | | |
Total operating expenses
|
| | | | 17,006,871 | | | | | | 16,482,532 | | |
Operating loss
|
| | | | (12,549,687) | | | | | | (11,618,254) | | |
Other nonoperating Income | | | | | | | | | | | | | |
Interest income
|
| | | | 11,506 | | | | | | 129,085 | | |
Gain on disposal of asset
|
| | | | — | | | | | | 2,600 | | |
Total nonoperating income
|
| | | | 11,506 | | | | | | 131,685 | | |
Net loss
|
| | | $ | (12,538,181) | | | | | $ | (11,486,569) | | |
| | |
Contributed
Capital |
| |
Accumulated
Deficit |
| |
Total
|
| |||||||||
Balance – December 31, 2018
|
| | | $ | 43,926,786 | | | | | $ | (32,617,942) | | | | | $ | 11,308,844 | | |
Contributions
|
| | | | 9,323,253 | | | | | | — | | | | | | 9,323,253 | | |
Net loss
|
| | | | — | | | | | | (11,486,569) | | | | | | (11,486,569) | | |
Balance – December 31, 2019
|
| | | $ | 53,250,039 | | | | | $ | (44,104,511) | | | | | $ | 9,145,528 | | |
Contributions
|
| | | | 8,830,295 | | | | | | — | | | | | | 8,830,295 | | |
Net loss
|
| | | | — | | | | | | (12,538,181) | | | | | | (12,538,181) | | |
Balance – December 31, 2020
|
| | | $ | 62,080,334 | | | | | $ | (56,642,692) | | | | | $ | 5,437,642 | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (12,538,181) | | | | | $ | (11,486,569) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 596,152 | | | | | | 505,719 | | |
Gain on disposal of property and equipment
|
| | | | — | | | | | | (2,600) | | |
Amortization of right-of-use asset
|
| | | | 485,417 | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | 538,572 | | | | | | 1,486,182 | | |
Unbilled receivables
|
| | | | 1,053,698 | | | | | | (594,500) | | |
Prepaid expenses and other assets
|
| | | | (74,231) | | | | | | (1,406) | | |
Accounts payable
|
| | | | (586,704) | | | | | | (410,368) | | |
Deferred revenue
|
| | | | (347,528) | | | | | | 1,030,151 | | |
Deferred rent
|
| | | | — | | | | | | (12,617) | | |
Operating lease liabilities
|
| | | | (510,670) | | | | | | — | | |
Other accrued liabilities
|
| | | | 4,558,747 | | | | | | (3,444,590) | | |
Net cash used in operating activities
|
| | | | (6,824,728) | | | | | | (12,930,598) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (234,126) | | | | | | (323,984) | | |
Proceeds from disposition of property and equipment
|
| | | | — | | | | | | 22,873 | | |
Deposits
|
| | | | — | | | | | | 74,441 | | |
Net cash used in investing activities
|
| | | | (234,126) | | | | | | (226,670) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Capital contributions
|
| | | | 8,830,295 | | | | | | 9,323,253 | | |
Net cash provided by financing activities
|
| | | | 8,830,295 | | | | | | 9,323,253 | | |
Net increase (decrease) in cash and restricted cash
|
| | | | 1,771,441 | | | | | | (3,834,015) | | |
Cash and restricted cash – beginning of year
|
| | | | 12,100,423 | | | | | | 15,934,438 | | |
Cash and restricted cash – end of year
|
| | | $ | 13,871,864 | | | | | $ | 12,100,423 | | |
Supplemental disclosure of non-cash investing and financing activity: | | | | | | | | | | | | | |
Initial recognition of operating lease right-of-use assets
|
| | | $ | 2,055,146 | | | | | $ | — | | |
Initial recognition of operating lease liabilities
|
| | | $ | 2,273,038 | | | | | $ | — | | |
Reconciliation of cash and restricted cash to the balance sheets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 6,982,163 | | | | | $ | 8,314,591 | | |
Restricted cash
|
| | | | 6,889,701 | | | | | | 3,785,832 | | |
Total cash and restricted cash
|
| | | $ | 13,871,864 | | | | | $ | 12,100,423 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Software
|
| | | $ | 1,932,534 | | | | | $ | 1,813,061 | | |
Office equipment
|
| | | | 382,119 | | | | | | 282,920 | | |
Furniture and fixtures
|
| | | | 159,331 | | | | | | 172,057 | | |
Leasehold improvements
|
| | | | 259,519 | | | | | | 259,519 | | |
Total cost
|
| | | | 2,733,503 | | | | | | 2,527,557 | | |
Accumulated depreciation
|
| | | | 1,264,103 | | | | | | 696,444 | | |
Net property and equipment
|
| | |
$
|
1,469,400
|
| | | |
$
|
1,831,113
|
| |
Years Ending December 31,
|
| |
Amount
|
| |||
2021
|
| | | $ | 695,843 | | |
2022
|
| | | | 700,917 | | |
2023
|
| | | | 659,218 | | |
2024
|
| | | | 21,705 | | |
2025
|
| | | | 12,661 | | |
Total lease payments
|
| | | | 2,090,344 | | |
Less: imputed interest
|
| | | | (238,670) | | |
Present value of lease liabilities
|
| | | | 1,851,674 | | |
Less: current lease liabilities
|
| | | | (570,312) | | |
Long-term lease liabilities
|
| | | $ | 1,281,362 | | |
| Weighted average remaining lease term – operating lease: | | | 3.1 years | |
| Weighted-average discount rate – operating lease: | | | 8.0% | |
Years Ending December 31,
|
| |
Amount
|
| |||
2020
|
| | | $ | 621,062 | | |
2021
|
| | | | 618,256 | | |
2022
|
| | | | 622,079 | | |
2023
|
| | | | 583,877 | | |
| | | | $ | 2,445,274 | | |
| | |
Amount to be
paid |
| |||
SEC registration fee
|
| | | $ | 3,333 | | |
FINRA filing fee
|
| | | $ | 5,082 | | |
NASDAQ Capital Market listing fee
|
| | | $ | 55,000 | | |
Printing and engraving expenses
|
| | | $ | 60,000 | | |
Legal fees and expenses
|
| | | $ | 1,000,000 | | |
Accounting fees and expenses
|
| | | $ | 100,000 | | |
Transfer agent and registrar fees and expenses
|
| | | $ | 12,300 | | |
Miscellaneous expenses
|
| | | $ | 300,000 | | |
Total
|
| | | $ | 1,535,715 | | |
Exhibit No.
|
| |
Description
|
|
4.37* | | | | |
4.38* | | | | |
4.39* | | | | |
4.40* | | | | |
4.41* | | | Convertible Promissory Note dated April 1, 2021, between Marpai Health, Inc. and Yuri Kokush | |
4.42* | | | | |
4.43* | | | | |
4.44* | | | | |
4.45* | | | | |
4.46* | | | | |
4.47* | | | | |
4.48* | | | Convertible Promissory Note dated April 1, 2021, between Marpai Health, Inc. and The Kadosh Family Irrevocable Trust — 2020 | |
4.49* | | | | |
4.50* | | | | |
4.51* | | | | |
4.52* | | | | |
4.53* | | | | |
4.54* | | | | |
4.55* | | | | |
4.56* | | | | |
4.57* | | | | |
4.58* | | | | |
4.59* | | | | |
4.60* | | | | |
4.61* | | | | |
4.62* | | | |
Exhibit No.
|
| |
Description
|
|
10.22* | | | | |
10.23* | | | | |
10.24* | | | | |
10.25* | | | | |
10.26* | | | | |
10.27* | | | | |
10.28* | | | | |
10.29* | | | | |
14.1* | | | | |
14.2* | | | | |
21.1* | | | | |
23.1 | | | | |
23.2 | | | | |
23.3 | | | | |
23.4** | | | Consent of Loeb & Loeb LLP (included in Exhibit 5.1) | |
24.1* | | | | |
99.1* | | | | |
99.2* | | | | |
99.3* | | | | |
99.4* | | | | |
99.5* | | | | |
99.6* | | | | |
99.7* | | | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Edmundo Gonzalez
Edmundo Gonzalez
|
| | Chief Executive Officer, Secretary and Director (Principal Executive Officer) | | |
September 22, 2021
|
|
|
*
Yoram Bibring
|
| | Principal Financial and Accounting Officer | | |
September 22, 2021
|
|
|
*
Damien Lamendola
|
| | Director | | |
September 22, 2021
|
|
|
*
Yaron Eitan
|
| | Director | | |
September 22, 2021
|
|
|
*/s/ By: Edmundo Gonzalez
Attorney-in-Fact
|
| | | |