MARPAI REPORTS THIRD QUARTER 2024 FINANCIAL RESULTS
Turnaround continues to gain traction
TAMPA, Fla., Nov. 11, 2024 /PRNewswire/ -- Marpai, Inc. ("Marpai" or the "Company") (OTCQX:MRAI), a technology platform company, which operates as a national Third-Party Administrator (TPA) through its subsidiaries and is transforming the $22 billion TPA market by offering affordable, intelligent, healthcare solutions to self-funded employer health plans, announced financial results for the third quarter of 2024. The Company expects to hold a webcast to discuss the results on November 12, 2024.
Q3 2024 Financial Highlights:
- Net revenues were approximately $7.0 million for the three months ended September 30, 2024, down $1.7 million, or 20% lower year over year, compared to the three months ended September 30, 2023.
- Operating expenses were $10.1 million for the three months ended September 30, 2024, down $5.7 million, or 36% lower year over year compared to the three months ended September 30, 2023.
- Operating loss was $3.1 million for the three months ended September 30, 2024, lower by $4.0 million, or 57% lower year over year compared to the three months ended September 30, 2023.
- Net loss was $3.6 million for the three months ended September 30, 2024, lower by $3.7 million, or 51% lower year over year compared to the three months ended September 30, 2023.
- Basic and diluted earnings per share were ($0.30) for the three months ended September 30, 2024, up $0.68 per share year over year compared to the three months ended September 30, 2023.
"As you can see from our highlights, we continue to make strong progress with our turnaround efforts. Our goal remains profitability and positive cash flow," said Damien Lamendola, Chief Executive Officer of Marpai. "We have some exciting developments that we will be announcing in the fourth quarter."
Webcast and Conference Call Information
Marpai expects to host a conference call and webcast on Tuesday, November 12, 2024, at 8:30 a.m. ET to review the Company's operational and financial highlights for its third quarter ended September 30, 2024.
Investors interested in listening to the conference call may do so by dialing (800)-836-8184 for domestic callers or +1-646-357-8785 for international callers, or via webcast: https://app.webinar.net/Jd298rR8DBe
About Marpai, Inc.
Marpai, Inc. (OTCQX:MRAI) is a technology platform company which operates subsidiaries that provide TPA and value-oriented health plan services to employers that directly pay for employee health benefits. Primarily competing in the $22 billion TPA sector serving self-funded employer health plans representing over $1 trillion in annual claims. Through its Marpai Saves initiative, the Company works to deliver the healthiest member population for the health plan budget. Operating nationwide, Marpai offers access to leading provider networks including Aetna and Cigna and all TPA services. For more information, visit www.marpaihealth.com, the content of which is not incorporated by reference into this press release. Investors are invited to visit https://www.ir.marpaihealth.com.
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements, as that term is defined in the Private Litigation Reform Act of 1995, that involve significant risks and uncertainties. Forward-looking statements can be identified through the use of words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "guidance," "may," "can," "could", "will", "potential", "should," "goal" and variations of these words or similar expressions. For example, the Company is using forward-looking statements when it discusses that it continues to make strong progress with its turnaround efforts, that its goal remains profitability and positive cash flow and that it expects to have some exciting developments that it will be announcing in the fourth quarter. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Marpai's current expectations and speak only as of the date of this release. Actual results may differ materially from Marpai's current expectations depending upon a number of factors. These factors include, among others, adverse changes in general economic and market conditions, competitive factors including but not limited to pricing pressures and new product introductions, uncertainty of customer acceptance of new product offerings and market changes, risks associated with managing the growth of the business. Except as required by law, Marpai does not undertake any responsibility to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.
More detailed information about Marpai and the risk factors that may affect the realization of forward-looking statements is set forth in Marpai's filings with the Securities and Exchange Commission. Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov.
MARPAI, INC. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED BALANCE SHEET | ||||
(in thousands, except share and per share data) | ||||
(Unaudited) | ||||
September 30, 2024 | December 31, 2023 | |||
ASSETS: | ||||
Current assets: | ||||
Cash and cash equivalents | $ 830 | $ 1,147 | ||
Restricted cash | 10,978 | 12,345 | ||
Accounts receivable, net of allowance for credit losses of $0 and $25 | 1,228 | 1,124 | ||
Unbilled receivable | 579 | 768 | ||
Due from buyer for sale of business unit | 500 | 800 | ||
Prepaid expenses and other current assets | 771 | 901 | ||
Total current assets | 14,886 | 17,085 | ||
Property and equipment, net | 514 | 611 | ||
Capitalized software, net | 752 | 2,127 | ||
Operating lease right-of-use assets | 2,192 | 2,373 | ||
Goodwill | — | 3,018 | ||
Intangible assets, net | — | 5,177 | ||
Security deposits | 1,248 | 1,267 | ||
Other long-term asset | 15 | 22 | ||
Total assets | $ 19,607 | $ 31,680 | ||
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ 3,764 | $ 4,649 | ||
Accrued expenses | 2,957 | 2,816 | ||
Accrued fiduciary obligations | 7,969 | 11,573 | ||
Deferred revenue | 1,390 | 661 | ||
Current portion of operating lease liabilities | 559 | 512 | ||
Current portion of convertible debenture, net | 1,540 | — | ||
Other short-term liabilities | — | 632 | ||
Total current liabilities | 18,179 | 20,843 | ||
Other long-term liabilities | 20,467 | 19,401 | ||
Convertible debenture, net of current portion | 4,072 | — | ||
Operating lease liabilities, net of current portion | 3,257 | 3,684 | ||
Deferred tax liabilities | 1,190 | 1,190 | ||
Total liabilities | 47,165 | 45,118 | ||
COMMITMENTS AND CONTINGENCIES | ||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||
Common stock, $0.0001 par value, 227,791,050 shares authorized; 13,747,982 shares and 7,960,938 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively | 1 | 1 | ||
Additional paid-in capital | 70,119 | 63,307 | ||
Accumulated deficit | (97,678) | (76,746) | ||
Total stockholders' (deficit) equity | (27,558) | (13,438) | ||
Total liabilities and stockholders' (deficit) equity | $ 19,607 | $ 31,680 | ||
MARPAI, INC. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(in thousands, except share and per share data) | ||||
(Unaudited) | ||||
Three Months Ended | ||||
September 30, 2024 | September 30, 2023 | |||
Revenue | $ 7,008 | $ 8,729 | ||
Costs and expenses | ||||
Cost of revenue (exclusive of depreciation and amortization | 5,033 | 5,691 | ||
General and administrative | 2,813 | 4,986 | ||
Sales and marketing | 345 | 1,842 | ||
Information technology | 1,273 | 1,269 | ||
Research and development | 7 | 267 | ||
Depreciation and amortization | 213 | 927 | ||
Loss on disposal of assets | — | 7 | ||
Loss on sale of business unit | 73 | — | ||
Facilities | 311 | 769 | ||
Total costs and expenses | 10,068 | 15,758 | ||
Operating loss | (3,060) | (7,029) | ||
Other income (expenses) | ||||
Other income | 119 | 130 | ||
Interest expense, net | (620) | (383) | ||
Foreign exchange (loss) gain | 1 | (14) | ||
Loss before provision for income taxes | (3,560) | (7,296) | ||
Income tax expense | — | — | ||
Net loss | $ (3,560) | $ (7,296) | ||
Net loss per share, basic & fully diluted | $ (0.30) | $ (0.98) | ||
Weighted average common shares outstanding, basic and | 12,043,931 | 7,479,401 | ||
MARPAI, INC. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(in thousands, except share and per share data) | ||||
(Unaudited) | ||||
Nine Months Ended | ||||
September 30, 2024 | September 30, 2023 | |||
Revenue | $ 21,582 | $ 28,448 | ||
Costs and expenses | ||||
Cost of revenue (exclusive of depreciation and amortization | 15,078 | 18,530 | ||
General and administrative | 9,954 | 15,938 | ||
Sales and marketing | 1,383 | 5,494 | ||
Information technology | 3,608 | 4,775 | ||
Research and development | 22 | 1,291 | ||
Depreciation and amortization | 2,078 | 2,974 | ||
Impairment of goodwill and intangible assets | 7,588 | — | ||
Loss on disposal of assets | — | 350 | ||
Loss on sale of business unit | 73 | — | ||
Facilities | 1,197 | 1,918 | ||
Total costs and expenses | 40,981 | 51,270 | ||
Operating loss | (19,399) | (22,822) | ||
Other income (expenses) | ||||
Other income | 360 | 231 | ||
Interest expense, net | (1,890) | (1,102) | ||
Foreign exchange (loss) gain | (3) | (32) | ||
Loss before provision for income taxes | (20,932) | (23,725) | ||
Income tax expense | — | — | ||
Net loss | $ (20,932) | $ (23,725) | ||
Net loss per share, basic & fully diluted | $ (1.96) | $ (3.62) | ||
Weighted average common shares outstanding, basic and | 10,697,008 | 6,552,575 | ||
MARPAI, INC. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(in thousands, except share and per share data) | ||||
(Unaudited) | ||||
Nine Months Ended | ||||
September 30, 2024 | 30-Sep-23 | |||
Cash flows from operating activities: | ||||
Net loss | $ (20,932) | $ (23,725) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 2,078 | 2,974 | ||
Loss on disposal of assets | — | 350 | ||
Loss on sale of receivables | 306 | — | ||
Share-based compensation | 2,786 | 1,837 | ||
Loss on sale of business unit | 73 | — | ||
Common Stock issued to vendors in exchange for services | — | 79 | ||
Amortization of right-of-use asset | 181 | 1,289 | ||
Gain on termination of lease | — | 33 | ||
Impairment of goodwill and intangible assets | 7,588 | — | ||
Non-cash interest | 975 | 1,204 | ||
Amortization of debt discount and debt issuance costs | 128 | — | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable and unbilled receivable | 85 | 639 | ||
Prepaid expense and other assets | 136 | 216 | ||
Due from buyer for sale of business unit | 227 | — | ||
Security deposit | 19 | (16) | ||
Accounts payable | (885) | 336 | ||
Accrued expenses | 141 | (693) | ||
Accrued fiduciary obligations | (3,604) | 853 | ||
Operating lease liabilities | (380) | (1,670) | ||
Due To related party | — | (3) | ||
Other liabilities | 827 | 973 | ||
Net cash used in operating activities | (10,251) | (15,324) | ||
Cash flows from investing activities: | ||||
Disposal of property and equipment | — | 27 | ||
Net cash provided by (used in) investing activities | — | 27 | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of common stock in a public offering, net | — | 6,432 | ||
Proceeds from sale of future cash receipts on accounts receivable | 1,509 | — | ||
Proceeds from issuance of convertible debentures | 5,978 | — | ||
Payments of convertible debenture issuance costs | (499) | — | ||
Payments to buyer of receivables | (1,816) | — | ||
Payments to seller for acquisition | (631) | — | ||
Proceeds from issuance of common stock in a private offering, net | 4,026 | — | ||
Net cash provided by financing activities | 8,567 | 6,432 | ||
Net decrease in cash, cash equivalents and restricted cash | (1,684) | (8,865) | ||
Cash, cash equivalents and restricted cash at beginning of period | 13,492 | 23,117 | ||
Cash, cash equivalents and restricted cash at end of period | $ 11,808 | $ 14,252 | ||
Reconciliation of cash, cash equivalents, and restricted cash reported in | ||||
Cash and cash equivalents | $ 830 | $ 3,018 | ||
Restricted cash | 10,978 | 11,234 | ||
Total cash, cash equivalents and restricted cash shown in the condensed | $ 11,808 | $ 14,252 | ||
Supplemental disclosure of cash flow information | ||||
Cash paid for interest | $ 1,508 | $ — | ||
Supplemental disclosure of non-cash activity | ||||
Measurement period adjustment to Goodwill | $ — | $ 198 | ||
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SOURCE Marpai