23% INCREASE IN REVENUE IN THE FOURTH 2021 VERSUS
THIRD QUARTER 2021
NEW
YORK, March 30, 2022 /PRNewswire/ --
Marpai, Inc. ("Marpai" or the "Company") (Nasdaq:
MRAI), an AI-technology company transforming the $22B Third-Party Administrator (TPA) market
supporting self-funded employer health plans, today reported
financial results for the fourth quarter and year ended
December 31, 2021.
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 Continental Benefits, LLC ("Continental Benefit") since its
acquisition on April 1, 2021.
Financial Highlights
- Net revenue of approximately $5.9
million for the fourth quarter of 2021, compared to net
revenue of approximately $4.8 million
for the third quarter of 2021, representing a sequential increase
of approximately $1.1 million, or
23%.
- Net revenue for the year ended December
31, 2021 was approximately $14.2
million. The Company's revenues for the fourth quarter
and year ended December 31, 2020 were
zero since prior to the acquisition of Continental Benefit, it did
not have any revenues.
- The number of our customers' employees covered under the
Company's administered health plans was 25,195, 25,136 and 20,400
on December 31, 2021, September 30, 2021 and June 30 ,2021, respectively.
- Operating expenses (including cost of revenues) were
approximately $11.6 million for the
fourth quarter of 2021, as compared to approximately $9.5 million for the third quarter of 2021, and
approximately $0.7 million for the
fourth quarter of 2020, reflecting the acquisition of Continental
Benefit, which increased the overall level of activity of the
Company.
- Operating expenses (including cost of revenues) for the full
year 2021 were $30.1 million,
compared to approximately $3.4
million for 2020, reflecting the acquisition of Continental
Benefit.
- Net loss was approximately $5.7
million for the fourth quarter of 2021, compared to net loss
of approximately $4.8 million for the
third quarter of 2021, and a net loss of approximately $0.9 million for the fourth quarter of 2020.
- Adjusted negative EBITDA of approximately $4.7 million for the fourth quarter of 2021
compared to negative EBITDA of approximately $3.7 million in the third quarter of 2021 and
negative EBITDA of approximately $0.5
million for the fourth quarter of 2020. Adjusted
EBITDA for the full year 2021 was negative $12.7 million compared to adjusted negative
EBITDA of $2.3 million for full year
2020. 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."
- On October 29, 2021, the Company
closed its initial public offering on the Nasdaq Capital Market,
and issued 7,187,500 shares of Class A common stock, par value
$0.0001 per share (including the
exercise of the underwriters' over-allotment option shares) at a
price of $4.00 per share with gross
proceeds of $28.75 million and net
proceeds of approximately $24.5
million, after deducting underwriting commissions and
offering expenses.
"2021 has been a transformational year for Marpai and the recent
addition of our new president Lutz
Finger, who joined us from Google Health, a division of
Google Inc., is an important validation of our long term strategy
and prospects," stated Edmundo
Gonzalez, Chief Executive Officer of Marpai. "During 2021,
we acquired Continental Benefits, thus becoming a player in the
third party administrator (TPA) industry, we built a strong
management team and we completed a successful initial public
offering. I believe that we now have a strong basis from which we
can build the TPA of the future, and I am very excited about 2022
and beyond."
First Quarter 2022 Financial Guidance
The Company expects the first quarter 2022 revenue to be in a
range of $6 million to $6.2 million.
The foregoing forward-looking statements reflect our
expectations as of today's date. Given the number of risk factors,
uncertainties and assumptions discussed below, actual results may
differ materially. We do not intend to update our financial outlook
until our next quarterly results announcement.
Webcast and Conference Call Information
Marpai will host a conference call and webcast tomorrow, on
Thursday, March 31,
2022 at 8:30 a.m. ET to answer questions about
the Company's operational and financial highlights for
its fourth quarter and year ended December 31,
2021.
Investors interested in listening to the conference call may do
so by dialing (866)-652-5200 for domestic callers or
+1-412-902-4216 for international callers, or by dialing
1-855-669-9657 for Canadian callers ,or via webcast:
https://app.webinar.net/QWEo29q2pJj.
For interested individuals unable to join the conference call, a
recording of the webcast will also be available on the
Marpai, Inc. investor relations
site https://ir.marpaihealth.com.
About Marpai, Inc.
Marpai, Inc. (Nasdaq: MRAI) is a technology company bringing
AI-powered health plan services to employers providing health
benefits to employees. Primarily competing within the $22B TPA (Third Party Administrator) sector
serving self-funded health plans and representing over $1T in
annual health care claims, Marpai's SMART services focus on
reducing claims costs, lowering reinsurance premiums, and elevating
care quality for plan members. Marpai's proprietary deep learning
algorithms predict potential near-term health events for members to
prevent costly claims and improve health outcomes. Operating
nationwide, Marpai offers access to provider networks including
Aetna and Cigna, and partners with brokers and consultants. For
more information, visit www.marpaihealth.com.
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements, as that
term is defined in the Private Litigation Reform Act of 1995, that
involve significant risks and uncertainties, including statements
regarding anticipated first quarter 2022 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 that the hiring of Mr. Finger
is an important validation of its long term strategy and prospects,
that it has a strong basis to build the TPA of the future and its
first quarter revenue guidance. Readers are cautioned not to place
undue reliance on these forward-looking statements, which reflect
Marpai's current expectations and speak only as of the date of this
release. Actual results may differ materially from Marpai's current
expectations depending upon a number of factors. These factors
include, among others, adverse changes in general economic and
market conditions, competitive factors including but not limited to
pricing pressures and new product introductions, uncertainty of
customer acceptance of new product offerings and market changes,
risks associated with managing the growth of the business. Except
as required by law, Marpai does not undertake any responsibility to
revise or update any forward-looking statements whether as a result
of new information, future events or otherwise.
More detailed information about Marpai and the risk factors that
may affect the realization of forward-looking statements is set
forth in Marpai's filings with the Securities and Exchange
Commission. Investors and security holders are urged to read these
documents free of charge on the SEC's web site
at http://www.sec.gov.
Media contact:
Erika Beerbower for Marpai
erika@lightspeedpr.com
407-758-2727
Investor Relations contact:
Simon Li
813-822-3950
Simonli@marpaihealth.com
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
CONSOLIDATED
BALANCE SHEETS
(in thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
December 31, 2021
|
|
December 31, 2020
|
ASSETS:
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
19,183
|
|
$
|
1,755
|
Restricted
cash
|
|
|
6,751
|
|
|
63
|
Accounts
receivable
|
|
|
209
|
|
|
—
|
Unbilled
receivable
|
|
|
15
|
|
|
—
|
Prepaid expenses and
other current assets
|
|
|
743
|
|
|
262
|
Other
receivables
|
|
|
91
|
|
|
100
|
Total current
assets
|
|
|
26,992
|
|
|
2,180
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
890
|
|
|
195
|
Capitalized software,
net
|
|
|
6,305
|
|
|
3,819
|
Operating lease
right-of-use assets
|
|
|
2,044
|
|
|
337
|
Goodwill
|
|
|
2,383
|
|
|
—
|
Intangible assets,
net
|
|
|
5,508
|
|
|
—
|
Security
deposits
|
|
|
52
|
|
|
—
|
Other long-term
asset
|
|
|
28
|
|
|
|
Total
assets
|
|
$
|
44,202
|
|
$
|
6,531
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,126
|
|
$
|
159
|
Accounts payable –
related party
|
|
|
—
|
|
|
16
|
Accrued
expenses
|
|
|
2,525
|
|
|
268
|
Accrued fiduciary
obligations
|
|
|
5,541
|
|
|
—
|
Deferred
revenue
|
|
|
1,165
|
|
|
—
|
Current portion of
operating lease liabilities
|
|
|
784
|
|
|
96
|
Current portion of
convertible notes payable
|
|
|
—
|
|
|
1,866
|
Due to related
party
|
|
|
4
|
|
|
244
|
Total current
liabilities
|
|
|
11,145
|
|
|
2,649
|
|
|
|
|
|
|
|
Convertible notes
payable, net
|
|
|
—
|
|
|
7,096
|
Other long-term
liabilities
|
|
|
45
|
|
|
—
|
Operating lease
liabilities, net of current portion
|
|
|
1,302
|
|
|
283
|
Deferred tax
liabilities
|
|
|
2,001
|
|
|
—
|
Total
liabilities
|
|
|
14,493
|
|
|
10,028
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
(DEFICIT)
|
|
|
|
|
|
|
Common stock, $0.0001
par value, 227,791,050 shares authorized;
20,299,727 issued and outstanding at December 31, 2021 and
142,369
issued and outstanding at December 31, 2020
(1)
|
|
|
2
|
|
|
-
|
Additional paid-in
capital
|
|
|
51,232
|
|
|
2,044
|
Accumulated
deficit
|
|
|
(21,525)
|
|
|
(5,541)
|
Total stockholders'
equity (deficit)
|
|
|
29,709
|
|
|
(3,497)
|
Total liabilities
and stockholders' equity (deficit)
|
|
$
|
44,202
|
|
$
|
6,531
|
(1)
Reflects 4.555821‑for‑1 forward stock split that became effective
September 2, 2021.
MARPAI, INC. AND
SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except
share and per share data)
|
|
|
|
Year ended
December 31,
|
|
|
2021
|
|
2020
|
Revenue
|
|
$
|
14,227
|
|
$
|
—
|
Costs and
expenses
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and
amortization shown separately below)
|
|
|
10,290
|
|
|
—
|
General and
administrative
|
|
|
8,056
|
|
|
1,499
|
Sales and
marketing
|
|
|
4,965
|
|
|
28
|
Information
technology
|
|
|
2,492
|
|
|
—
|
Research and
development
|
|
|
1,734
|
|
|
1,767
|
Depreciation and
amortization
|
|
|
1,962
|
|
|
74
|
Facilities
|
|
|
589
|
|
|
—
|
Total costs and
expenses
|
|
|
30,088
|
|
|
3,368
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(15,861)
|
|
|
(3,368)
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
|
|
|
|
|
Other income,
net
|
|
|
172
|
|
|
26
|
Interest
expense
|
|
|
(427)
|
|
|
(521)
|
Foreign exchange
loss
|
|
|
(19)
|
|
|
(5)
|
Loss before
provision for income taxes
|
|
|
(16,135)
|
|
|
(3,868)
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
|
(150)
|
|
|
—
|
Net
loss
|
|
$
|
(15,985)
|
|
$
|
(3,868)
|
|
|
|
|
|
|
|
Net loss per share,
basic & fully diluted(1)
|
|
$
|
(1.59)
|
|
$
|
(1.60)
|
|
|
|
|
|
|
|
Weighted average
number of common shares,
basic and fully
diluted(1)
|
|
|
10,076,494
|
|
|
2,428,878
|
|
|
|
|
|
|
|
(1) Reflects
4.555821‑for‑1 forward stock split that became effective
September 2, 2021.
MARPAI, INC. AND
SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
|
Three Months ended
December 31,
|
|
|
2021
|
|
2020
|
Revenue
|
|
$
|
5,896
|
|
$
|
—
|
Costs and
expenses
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and
amortization shown separately below)
|
|
|
4,226
|
|
|
—
|
General and
administrative
|
|
|
2,914
|
|
|
445
|
Sales and
marketing
|
|
|
1,932
|
|
|
---
|
Information
technology
|
|
|
991
|
|
|
—
|
Research and
development
|
|
|
616
|
|
|
269
|
Depreciation and
amortization
|
|
|
739
|
|
|
19
|
Facilities
|
|
|
227
|
|
|
—
|
Total costs and
expenses
|
|
|
11,645
|
|
|
733
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(5,749)
|
|
|
(733)
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
|
|
|
|
|
Other income,
net
|
|
|
63
|
|
|
7
|
Interest
expense
|
|
|
(42)
|
|
|
(157)
|
Foreign exchange
loss
|
|
|
(1)
|
|
|
—
|
Loss before
provision for income taxes
|
|
|
(5,729)
|
|
|
(883)
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
|
--
|
|
|
—
|
Net
loss
|
|
$
|
(5,729)
|
|
$
|
(883)
|
|
|
|
|
|
|
|
Net loss per share,
basic & fully diluted(1)
|
|
$
|
(0.34)
|
|
$
|
(0.32)
|
|
|
|
|
|
|
|
Weighted average
number of common shares,
basic and fully
diluted(1)
|
|
|
16,694,213
|
|
|
2,766,415
|
|
|
|
|
|
|
|
Reflects 4.555821‑for‑1 forward stock split
that became effective September 2, 2021.
MARPAI, INC. AND
SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
Year ended December
31,
|
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(15,985)
|
|
$
|
(3,868)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
1,962
|
|
|
74
|
Share-based
compensation
|
|
|
1,231
|
|
|
1,031
|
Amortization of
right-of-use asset
|
|
|
100
|
|
|
78
|
Amortization of debt
discount
|
|
|
27
|
|
|
102
|
Non-cash
interest
|
|
|
366
|
|
|
415
|
Convertible note issued
for professional services
|
|
|
75
|
|
|
50
|
Deferred
taxes
|
|
|
(150)
|
|
|
—
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable and
unbilled receivable
|
|
|
(132)
|
|
|
—
|
Prepaid expense and
other assets
|
|
|
(349)
|
|
|
(318)
|
Other
receivable
|
|
|
6
|
|
|
—
|
Security
deposit
|
|
|
3
|
|
|
—
|
Accounts
payable
|
|
|
41
|
|
|
114
|
Accounts payable –
related party
|
|
|
(16)
|
|
|
16
|
Accrued
expenses
|
|
|
962
|
|
|
201
|
Accrued fiduciary
obligations
|
|
|
1,470
|
|
|
—
|
Operating lease
liabilities
|
|
|
(99)
|
|
|
(87)
|
Due to related
party
|
|
|
(240)
|
|
|
243
|
Other
liabilities
|
|
|
(40)
|
|
|
—
|
Other asset
|
|
|
(27)
|
|
|
—
|
Net cash used in
operating activities
|
|
|
(10,795)
|
|
|
(1,949)
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Cash and restricted
cash acquired as part of Acquisition (see Note 4)
|
|
|
11,384
|
|
|
—
|
Capitalization of
software development costs
|
|
|
(1,464)
|
|
|
(569)
|
Purchases of intangible
asset
|
|
|
(3)
|
|
|
—
|
Purchase of property
and equipment
|
|
|
(274)
|
|
|
(31)
|
Reimbursement of
leasehold improvements from sublease
|
|
|
—
|
|
|
46
|
Net cash provided by
(used in) investing activities
|
|
|
9,643
|
|
|
(554)
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Proceeds from initial
public offering, net
|
|
|
25,379
|
|
|
—
|
Proceeds from warrant
exercises
|
|
|
900
|
|
|
|
Repayment of
convertible note
|
|
|
(783)
|
|
|
—
|
Proceeds from stock
option exercises
|
|
|
—
|
|
|
—
|
Proceeds from
convertible notes
|
|
|
550
|
|
|
4,075
|
Proceeds from
short-term loan
|
|
|
3,000
|
|
|
—
|
Repayment of short-term
loan
|
|
|
(3,000)
|
|
|
—
|
Payment for initial
public offering costs
|
|
|
(831)
|
|
|
—
|
Proceeds from issuance
of warrants
|
|
|
53
|
|
|
—
|
Net cash provided by
financing activities
|
|
|
25,268
|
|
|
4,075
|
|
|
|
|
|
|
|
Net increase in
cash, cash equivalents and restricted cash
|
|
|
24,116
|
|
|
1,572
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
|
|
1,818
|
|
|
246
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
25,934
|
|
$
|
1,818
|
|
|
|
|
|
|
|
Reconciliation of
cash, cash equivalents, and restricted cash reported in the
consolidated balance sheet
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
19,183
|
|
$
|
1,755
|
Restricted
cash
|
|
|
6,751
|
|
|
63
|
Total cash, cash
equivalents and restricted cash shown in the consolidated
statement of cash flows
|
|
$
|
25,934
|
|
$
|
1,818
|
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash activity
|
|
|
|
|
|
|
Conversion of
convertible notes into common stock at the closing of the
Acquisition, net
|
|
$
|
4,090
|
|
$
|
—
|
Conversion of
convertible notes into common stock at the IPO
|
|
$
|
5,107
|
|
$
|
—
|
Write off loan
origination costs
|
|
$
|
85
|
|
$
|
—
|
Office improvements
paid in 2022
|
|
$
|
28
|
|
$
|
—
|
Common stock issued as
part of the Acquisition
|
|
$
|
8,500
|
|
$
|
—
|
MARPAI, INC.
AND SUBSIDIARIES
RECONCILIATION OF
NET LOSS TO NON-GAAP ADJUSTED EBITDA
(in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Net
loss
|
|
$
|
(5,729)
|
|
|
$
|
(883)
|
|
|
$
|
(15,985)
|
|
|
$
|
(3,868)
|
|
Interest expense and
foreign exchange loss, net
|
|
|
(21)
|
|
|
|
150
|
|
|
|
274
|
|
|
|
500
|
|
Income tax
(benefit)
|
|
|
-
|
|
|
|
-
|
|
|
|
(150)
|
|
|
|
-
|
|
Depreciation and
amortization expense
|
|
|
739
|
|
|
|
19
|
|
|
|
1,962
|
|
|
|
75
|
|
Stock based
compensation expense
|
|
|
269
|
|
|
|
195
|
|
|
|
1,231
|
|
|
|
1,031
|
|
Adjusted
EBITDA
|
|
$
|
(4,742)
|
|
|
$
|
(519)
|
|
|
$
|
(12,668)
|
|
|
$
|
(2,262)
|
|
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SOURCE Marpai Health