NEW
YORK, Aug. 10, 2022 /PRNewswire/
-- Marpai, Inc. ("Marpai" or the "Company") (Nasdaq:
MRAI), an AI-technology company transforming the $22 billion Third-Party Administrator (TPA)
market supporting self-funded employer health plans, today reported
financial results for the second quarter ended June 30, 2022.
The Company's consolidated results of operations include the
results of operations of Marpai and its wholly owned subsidiary,
Marpai Health, Inc., for all periods presented, and the
results of Marpai Administrators, LLC (formerly Continental
Benefits, LLC) since its acquisition on April 1, 2021.
Financial Highlights
- Net revenue of approximately $5.6
million for the three months ended June 30, 2022, compared to net revenue of
approximately $6.2 million for the
three months ended March 31, 2022,
representing a sequential decrease of approximately $700,000, or 10.6%. This decline was caused by
the first quarter decline in the number of our customers' employees
covered under our plans.
- The number of our customers' employees covered under the
Company's administered health plans was 21,074, 21,139 and 25,195
on June 30, 2022, March 31, 2022, and December 31, 2021, respectively.
- Operating expenses (including cost of revenues) were
approximately $12.2 million for the
three months ended June 30, 2022, as
compared to approximately $11.8
million for the three months ended March 31, 2022, and approximately $11.6 million for the three months ended
December 31, 2021.
- Operating expenses (including cost of revenues) excluding stock
based compensation expenses were approximately $11.1 million for the three months ended
June 30, 2022, approximately the same
as in three months ended March 31,
2022, and approximately $11.4
million for the three months ended December 31, 2021.
- Net loss was approximately $6.7
million for the three months ended June 30, 2022, compared to net loss of
approximately $5.5 million for the
three months ended March 31, 2022,
and a net loss of approximately $5.7
million for the three months ended December 31, 2021.
- Adjusted negative EBITDA was approximately $4.7 million for the three months ended
June 30, 2022 compared to negative
$4.0 million for the three months
ended March 31, 2022 and compared to
negative EBITDA of approximately $4.7
million for the three months ended December 31, 2021. 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."
"While the second quarter came in slightly higher than our
guidance, our future organic growth sales related activity
continues to be highly focused on January 1,
2023, when the large majority of the annual sales occur,"
said Edmundo Gonzalez, Chief
Executive Officer of Marpai. "In addition to our robust sales
activities over the next few months, we will be working hard on
completing the Maestro Health acquisition and starting to integrate
the two companies. These are very exciting times for Marpai and I
believe that we are now very well positioned to fullfil our
strategic goal of becoming the TPA of the future."
Financial Guidance
Due to the Maestro Health acquisition, which is expected to
close before the end of the quarter and therefore will impact the
operating results of the third quarter of 2022, we are not
providing financial guidance at this time.
Webcast and Conference Call
Information
Marpai will host a conference call and webcast tomorrow, on
August 11, 2022 at 8:30
a.m. ET to answer questions about the Company's
operational and financial highlights for its first
quarter of 2022 as well as on the previously announced
acquisition of Marpai Health.
Investors interested in listening to the conference call may do
so by dialing (866)-652-5200 for domestic callers or
+1-412-317-6060 for international callers, or by dialing
1-855-669-9657 for Canadian callers, or via
webcast: https://app.webinar.net/0EJIBnd6mVz.
For interested individuals unable to join the conference call, a
recording of the webcast will also be available on the
Marpai, Inc. investor relations
website: https://ir.marpaihealth.com.
About Marpai, Inc.
Marpai, Inc. (Nasdaq: MRAI) is a technology company bringing
AI-powered health plan services to employers that directly
pay for employee health benefits. Primarily competing in the
$22 billion TPA (Third Party
Administrator) sector serving self-funded employer health plans
representing over $1 trillion in
annual claims, Marpai maximizes the value of the health plan as
measured in health outcomes. Marpai takes a member-centric approach
that uses AI and big data to connect members to health solutions
predicted to have a high probability of positive outcomes, and aims
to bring value-based care to the self-insured market. With
effective early intervention, disease management, claims processing
and proactive member outreach, Marpai works to deliver the
healthiest member population for the health plan budget. Operating
nationwide, Marpai offers access to provider networks including
Aetna and Cigna and all TPA services. For more information,
visit www.marpaihealth.com, the content of which is not
incorporated by reference into this press release.
Forward-Looking Statement
Disclaimer
This press release contains forward-looking statements, as that
term is defined in the Private Litigation Reform Act of 1995, that
involve significant risks and uncertainties, including statements
regarding anticipated future results. Forward-looking statements
can be identified through the use of words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates,"
"guidance," "may," "can," "could," "will," "potential," "should,"
"goal" and variations of these words or similar expressions. For
example, the Company is using forward looking statements when it
discusses the expected timing of the acquisition and integration of
Maestro Health, that its future organic growth sales related
activity continues to be highly focused on January 1, 2023, when the large majority of the
annual sales occur, and the belief that it is now very well
positioned to fullfil its strategic goal of becoming the TPA of the
future. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect Marpai's current
expectations and speak only as of the date of this release. Actual
results may differ materially from Marpai's current expectations
depending upon a number of factors. These factors include, among
others, adverse changes in general economic and market conditions,
competitive factors including but not limited to pricing pressures
and new product introductions, uncertainty of customer acceptance
of new product offerings and market changes, risks associated with
managing the growth of the business. Except as required by law,
Marpai does not undertake any responsibility to revise or update
any forward-looking statements whether as a result of new
information, future events or otherwise.
More detailed information about Marpai and the risk factors that
may affect the realization of forward-looking statements is set
forth in Marpai's filings with the Securities and Exchange
Commission (the "SEC"). Investors and security holders are urged to
read these documents free of charge on the SEC's website
at http://www.sec.gov.
Use of Non-GAAP Financial Measures
and Their Limitations
In addition to our results and measures of performance
determined in accordance with U.S. GAAP presented in this press
release, we believe that certain non-GAAP financial measures are
useful in evaluating and comparing our financial and operational
performance over multiple periods, identifying trends affecting our
business, formulating business plans and making strategic
decisions.
Adjusted EBITDA is a key performance measure that our management
uses to assess our financial performance and is also used for
internal planning and forecasting purposes.
We believe that Adjusted EBITDA, together with a reconciliation
to net loss, helps identify underlying trends in our business and
helps investors make comparisons between our company and other
companies that may have different capital structures, tax rates, or
different forms of employee compensation. Accordingly, we believe
that Adjusted EBITDA provides useful information to investors and
others in understanding and evaluating our operating results,
enhancing the overall understanding of our past performance and
future prospects, and allowing for greater transparency with
respect to a key financial metric used by our management in its
financial and operational decision-making. Our use of Adjusted
EBITDA has limitations as an analytical tool, and you should not
consider these measures in isolation or as a substitute for
analysis of our financial results as reported under U.S. GAAP. Some
of these potential limitations include:
- other companies, including companies in our industry which have
similar business arrangements, may report Adjusted EBITDA, or
similarly titled measures but calculate them differently, which
reduces their usefulness as comparative measures;
- although depreciation and amortization expenses are non-cash
charges, the assets being depreciated and amortized may have to be
replaced in the future, and Adjusted EBITDA does not reflect cash
capital expenditures for such replacements or for new capital
expenditure requirements;
- Adjusted EBITDA also does not reflect changes in, or cash
requirements for, our working capital needs or the potentially
dilutive impact of stock-based compensation; and
- Adjusted EBITDA does not reflect the interest expense, or the
cash requirements necessary to service interest or principal
payments, on our debt that we may incur.
Because of these and other limitations, you should consider our
non-GAAP measures only as supplemental to other GAAP-based
financial measures.
MARPAI, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands,
except share and per share data)
|
(unaudited)
|
|
|
|
|
|
|
30-Jun
|
31-Dec
|
2022
|
2021
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
|
$
9,085
|
$
19,183
|
Restricted
cash
|
|
$
6,106
|
$
6,751
|
Accounts
receivable
|
|
27
|
209
|
Unbilled,
receivable
|
|
-
|
15
|
Prepaid expenses
and other current assets
|
|
504
|
743
|
Other current
assets
|
|
27
|
91
|
Total current assets
|
|
15,749
|
26,992
|
|
|
|
|
Property and equipment,
net
|
|
762
|
890
|
Capitalized software,
net
|
|
5,777
|
6,305
|
Operating lease
right-of-use assets
|
|
1,724
|
2,044
|
Goodwill
|
|
2,383
|
2,383
|
Intangible
assets,net
|
|
5,121
|
5,508
|
Security
deposits
|
|
52
|
52
|
Other long-term
asset
|
|
28
|
28
|
Total
assets
|
|
$
31,596
|
$
44,202
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
|
$
490
|
$
1,126
|
Accrued
expenses
|
|
2,321
|
2,525
|
Accrued fiduciary
obligations
|
|
5,064
|
5,541
|
Deferred
revenues
|
|
828
|
1,165
|
Current portion
of operating lease obligations
|
|
829
|
784
|
Due to related
party
|
|
3
|
4
|
Total current liabilities
|
|
9,535
|
11,145
|
|
|
|
|
Other long-term
liabilities
|
|
45
|
45
|
Operating lease
liabilities, net of current portion
|
|
945
|
1,302
|
Deferred tax
liabilities
|
|
2,001
|
2,001
|
Total liabilities
|
|
12,526
|
14,493
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
(DEFICIT)
|
|
|
|
Common stock,
$0.0001 par value, 227,791,050 shares authorized; 20,682,844
and
|
|
|
|
29,299,727 issued and outstanding at June 30, 2022 and December 31,
2021, respectively
|
2
|
2
|
Additional
paid-in-capital
|
|
52,748
|
51,232
|
Accumulated
deficit
|
|
(33,680)
|
(21,526)
|
Total stockholders'
equity (deficit)
|
|
19,070
|
29,708
|
Total
liabilities & stockholders' equity (deficit)
|
|
$
31,596
|
$
44,201
|
MARPAI, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except share and per share data)
|
(unaudited)
|
|
|
|
|
Three Months Ended
June 30,
|
|
2022
|
2021
|
Revenues
|
$
5,557
|
$
3,532
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and
|
|
|
amortization
shown separately below)
|
$
4,152
|
$
2,721
|
General and
Administrative
|
$
2,320
|
$
2,060
|
Sales and
Marketing
|
$
2,217
|
$
1,123
|
Information
Technology
|
$
1,190
|
$
731
|
Research
and development
|
$
1,309
|
$
285
|
Depreciation and
amortization
|
$
776
|
$
403
|
Facilities
|
$
196
|
$
180
|
Loss on Disposal
of Asset
|
$
60
|
$
-
|
Total costs and
expenses
|
$
12,220
|
$
7,503
|
Operating
Loss
|
$
(6,663)
|
$
(3,971)
|
Other income
(expenses)
|
|
|
Interest expense
, net
|
$
(1)
|
$
(93)
|
Other
income
|
$
(10)
|
$
48
|
Foreign exchange
loss
|
$
9
|
$
(6)
|
(Loss) income before
provision for income taxes
|
$
(6,665)
|
$
(4,022)
|
Income tax
benefit
|
$
-
|
$
150
|
Net
loss
|
$
(6,665)
|
$
(3,872)
|
|
|
|
Net loss per share,
basic & fully diluted (1)
|
$
(0.34)
|
$
(0.54)
|
|
|
|
Weighted average
number of common shares, basic
|
19,847,342
|
10,087,809
|
and fully
diluted (1)
|
|
|
(1)
|
Reflects 4.55821-for-1
forward split that became effective September 2, 2021. The
computation of basis and diluted net loss per share was
retroatively adjusted for all periods presented.
|
MARPAI, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except share and per share data)
|
(unaudited)
|
|
|
|
|
Six Months Ended
June 30,
|
|
2022
|
2021
|
Revenues
|
$
11,775
|
$
3,532
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and
|
|
|
amortization
shown separately below)
|
$
8,698
|
$
2,721
|
General and
Administrative
|
$
5,222
|
$
2,862
|
Sales and
Marketing
|
$
3,776
|
$
1,444
|
Information
Technology
|
$
2,324
|
$
731
|
Research
and development
|
$
1,902
|
$
549
|
Depreciation and
amortization
|
$
1,602
|
$
421
|
Facilities
|
$
393
|
$
180
|
Loss on Disposal
of Asset
|
$
60
|
$
-
|
Total costs and
expenses
|
$
23,977
|
$
8,908
|
Operating
Loss
|
$ (12,202)
|
$
(5,376)
|
Other income
(expenses)
|
|
|
Interest expense
, net
|
$
(4)
|
$
(276)
|
Other
income
|
$
39
|
$
54
|
Foreign exchange
loss
|
$
13
|
$
(16)
|
(Loss) income before
provision for income taxes
|
$ (12,154)
|
$
(5,614)
|
Income tax
benefit
|
$
-
|
$
150
|
Net
loss
|
$ (12,154)
|
$
(5,464)
|
|
|
|
Net loss per share,
basic & fully diluted (1)
|
$
(0.62)
|
$
(0.59)
|
|
|
|
Weighted average
number of common shares, basic
|
19,790,764
|
6,528,886
|
and fully
diluted (1)
|
|
|
(1)
|
Reflects 4.55821-for-1
forward split that became effective September 2, 2021. The
computation of basis and diluted net loss per share was
retroatively adjusted for all periods presented.
|
MARPAI, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
(unaudited)
|
|
Six Months
Ended June 30,
|
|
2022
|
2021
|
Cash flows (used in)
operating activities
|
|
|
Net loss
|
$ (12,154)
|
$
(5,464)
|
Adjustments to
reconcile net loss to net cash (used in) operating
activities:
|
|
|
Depreciation and
amortization
|
1,602
|
421
|
Share-based
compensation
|
1,767
|
706
|
Loss on disposal
of assets
|
60
|
-
|
Amortization of
right-to-use asset
|
68
|
42
|
Amortization of
debt discount
|
-
|
27
|
Non-cash
interest
|
-
|
246
|
Marketing
services performed in exchange for convertible note
|
-
|
75
|
Deferred
Taxes
|
-
|
(150)
|
Changes in
operating assets and liabilities:
|
|
|
Accounts
receivable and unbilled receivebles
|
239
|
(13)
|
Prepaid
expenses and other assets
|
197
|
(210)
|
Other
receivables
|
64
|
71
|
Accounts
payable
|
(636)
|
(583)
|
Accrued
expenses
|
(454)
|
70
|
Accrued
fiduciary obligations
|
(477)
|
1,125
|
Operating lease
liabilities
|
(61)
|
(56)
|
Other
liabilities
|
(337)
|
(1,183)
|
Net cash (used in )
operating activities
|
(10,122)
|
(4,876)
|
|
|
|
Cash flows from
investing activities
|
|
|
Cash and
restricted cash acquired as part of acquisition
|
-
|
11,384
|
Capitalization of
software development costs
|
(608)
|
(972)
|
Purchase of
property and equipment
|
(12)
|
(26)
|
Net cash (used in)
investing activities
|
(620)
|
10,386
|
|
|
|
Cash flows from
financing activities
|
|
|
Proceeds from
convertible notes
|
-
|
500
|
Proceeds from
issuance of warrants
|
-
|
53
|
Net
cash provided by financing activities
|
-
|
553
|
|
|
|
|
|
|
Net increase in
cash, cash equivalents and restricted cash
|
(10,742)
|
6,063
|
Cash, cash
equivalents and restricted cash at beginning of the
period
|
25,934
|
1,818
|
Cash, cash
equivalents and restricted cash at end of period
|
15,192
|
7,881
|
|
|
|
Reconciliation of
cash, cash equivalents and restricted cash reported in
the
|
|
|
condensed
consolidated balance sheet
|
|
|
Cash and cash
equivalents
|
$
9,085
|
$
2,339
|
Restricted
cash
|
6,106
|
5,542
|
Total cash, cash
equivalents and restricted cash as shown in
the
|
|
|
condensed
consolidated balance sheet
|
$ 15,191
|
$
7,881
|
MARPAI, INC. AND
SUBSIDIARIES
|
RECONCILIATION OF
NET LOSS TO NON-GAAP ADJUSTED EBITDA
|
(in
thousands)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
June
30,
|
June
30,
|
|
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
|
Net Income
(loss)
|
|
$
(6,664)
|
$ (3,872)
|
|
$
(12,154)
|
$
(5,464)
|
Interest expense
and foreign exchange loss, net
|
|
$
1
|
$
51
|
|
$
(48)
|
$
238
|
Income tax
benefit
|
|
$
-
|
$
(150)
|
|
$
-
|
$
(150)
|
Disposal of
asset
|
|
$
60
|
$
-
|
|
$
60
|
$
-
|
Depreciation and
amortization expense
|
|
$
776
|
$
403
|
|
$
1,602
|
$
421
|
Stock based
compensation expense
|
|
$ 1,101
|
$
475
|
|
$
1,767
|
$
706
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
(4,726)
|
$ (3,093)
|
|
$ (8,773)
|
$
(4,249)
|
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SOURCE Marpai