MARPAI REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS


(MENAFN- PR Newswire) Full Year Benefit of Maestro Acquisition and Q4 Corrective Actions Driving Financial Improvement

TAMPA, Fla., March 26, 2024 /PRNewswire/ --
Marpai,
Inc. ("Marpai" or the "Company") (Nasdaq: MRAI ),
an independent national Third-Party Administration (TPA) company transforming the $22 billion TPA market supporting self-funded employer health plans with affordable, intelligent healthcare, today announced financial results for the fourth quarter and fiscal year 2023. The Company expects to hold a webcast to discuss the results on March 27, 2024.

Q4 2023 Financial Highlights:

  • Net revenues were $8.7 million for the three months ended December 31, 2023, an improvement of $1.1 million, or 14% higher year over year, for the three months ended December 31, 2022.
  • Gross profit was $3.0 million for the three months ended December 31, 2023, an improvement of $0.2 million, or 6.5% higher year over year for the three months ended December 31, 2022.
  • Operating expenses were $8.2 million for the three months ended December 31, 2022, an improvement of $3.6 million, or 30.6% lower year over year for the three months ended December 31, 2022.
  • Operating loss was $5.2 million for the three months ended December 31, 2022, an improvement of $3.8 million, or 42.3% lower year over year for the three months ended December 31, 2022.
  • Net loss was $5.0 million for the three months ended December 31, 2022, an improvement of $3.5 million, or 41.1% lower year over year for the three months ended December 31, 2022.
  • Basic and diluted earnings per share were ($0.65) an improvement of $1.00 per share year over year for the three months ended December 31, 2022.

Full Year 2023 Highlights:

  • Net revenues were $37.2 million for the year ended December 31, 2023, an improvement of $12.8 million, or 52.6% higher year over year compared to the year ended December 31, 2022.
  • Gross profit was $12.9 million for the year ended December 31, 2023, an improvement of $5.7 million, or 79.2% higher year over year compared to the year ended December 31, 2022.
  • Operating expenses were $40.9 million, for the year ended December 31, 2023, an increase of $6.7 million, or 19.7% higher year over year compared to the year ended December 31, 2022. The $1.3 million variance for the operating expenses and operating loss from our previously announced preliminary results was due to the reclassification of $3.0 million goodwill impairment and $1.7 million gain on sale of our non-core FSA business.
  • Operating loss was $28.0 million for the year ended December 31, 2023, or an increase of $1.0 million, or 3.8% higher year over year compared to the year ended December 31, 2022.
  • Net loss was $28.8 million for the year ended December 31, 2023, an increase of $2.3 million, or 8.6% higher, compared to the year ended December 31, 2022.
  • Basic and diluted earnings per share were ($4.14) for the year ended December 31, 2023, an improvement of $1.09 per share compared to the year ended December 31, 2022.

"The Company delivered on several actions identified when the new executive team joined in early November 2023," said Damien Lamendola, Chief Executive Officer of Marpai. "We are starting to gain the benefits of the Maestro Health acquisition. We remain committed to our overall vision that Marpai Saves, through operational and financial improvements, reduces costs for our clients and improves the quality of care for our members."

Webcast and Conference Call Information

Marpai expects to host a conference call and webcast on Wednesday, March 27, 2024, 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, 2023.

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:

About Marpai, Inc.

Marpai, Inc. (Nasdaq: MRAI ) is a leading, national TPA company bringing 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. Marpai 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
, 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. 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 its financial results and that it remains committed to its overall vision that
Marpai Saves, through operational and financial improvements, reduces cost for its clients and improving the quality of care for its members. 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
.

MARPAI, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)




December
31, 2023


December
31, 2022






ASSETS:





Current assets:





Cash and cash equivalents


$




1,147


$






13,765

Restricted cash


12,345


9,353

Accounts receivable, net of allowance for credit losses of $24,617 and $23,458


1,125


1,438

Unbilled receivable


768


350

Due from buyer for sale of business unit


800



Prepaid expenses and other current assets


892


1,602

Other receivables


8


31

Total current assets


17,085


26,538






Property and equipment, net


611


1,506

Capitalized software, net


2,128


4,589

Operating lease right-of-use assets


2,373


3,842

Goodwill


3,017


5,837

Intangible assets, net


5,177


6,323

Security deposits


1,267


1,293

Other long-term asset


21


22

Total assets


$




31,679


$






49,950

LIABILITIES AND STOCKHOLDERS'
(DEFICIT) EQUITY





Current liabilities:





Accounts payable


$




4,649


$






1,458

Accrued expenses


2,816


5,275

Accrued fiduciary obligations


11,573


9,024

Deferred revenue


661


288

Current portion of operating lease liabilities


512


1,311

Other short-term liabilities


632


-

Due to related party


-


3

Total current liabilities


20,843


17,360






Other long-term liabilities


19,401


20,204

Operating lease liabilities, net of current portion


3,684


4,772

Deferred tax liabilities


1,189


1,480

Total liabilities


45,117


43,815

COMMITMENTS AND CONTINGENCIES





STOCKHOLDERS' (DEFICIT) EQUITY





Common stock, $0.0001 par value, 227,791,050 shares authorized; 7,960,938 issued and
outstanding at December 31, 2023 and 5,319,758 issued and outstanding at December 31,
2022 (1)


1


1

Additional paid-in capital


63,307


54,128

Accumulated deficit


(76,746)


(47,994)

Total stockholders' (deficit) equity


(13,438)


6,134

Total liabilities and stockholders' (deficit) equity


$




31,679


$






49,950

MARPAI, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)








Twelve Months Ended



December
31, 2023


December
31, 2022

Revenue


$




37,155


$






24,342

Costs and expenses





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


24,239


17,136

General and administrative


19,177


12,319

Sales and marketing


6,597


6,939

Information technology


5,834


6,373

Research and development


1,312


3,708

Depreciation and amortization


3,897


3,538

Impairment of goodwill


3,018


-

Facilities


2,472


1,013

Loss on disposal of assets


335


273

Gain on sale of business unit


(1,749)


-


Total costs and expenses


65,132


51,299

Operating loss


(27,977)


(26,957)

Other expenses





Other income


489


235

Interest expense, net


(1,527)


(267)

Foreign exchange loss


(27)


-

Loss before provision for income taxes


(29,042)


(26,989)

Income tax benefit


(290)


(521)

Net loss


$




(28,752)


$





(26,468)

Net loss per share, basic & fully diluted


$





(4.14)


$






(5.23)

Weighted average common shares outstanding, basic and

diluted


6,951,669


5,059,959






MARPAI, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)








Three Months Ended



December
31, 2023


December
31, 2022

Revenue


$





8,707


$






7,628

Costs and expenses





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


5,709


4,813

General and administrative


3,239


4,379

Sales and marketing


1,103


2,109

Information technology


1,059


2,510

Research and development


21


1,024

Depreciation and amortization


923


1,034

Impairment of goodwill


3,018


-

Facilities


554


426

Loss on disposal of assets


(15)


213

Gain on sale of business unit


(1,749)


-


Total costs and expenses


13,862


16,508

Operating loss


(5,155)


(8,880)

Other expenses





Other income


258


107

Interest expense, net


(425)


(226)

Foreign exchange loss


6


5

Loss before provision for income taxes


(5,316)


(8,994)

Income tax benefit


(290)


(521)

Net loss


$




(5,026)


$






(8,473)

Net loss per share, basic & fully diluted


$





0.65


$







1.63

Weighted average common shares outstanding, basic and

diluted


7,738,879


5,186,573

MARPAI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)




Twelve Months Ended



December
31, 2023


December
31, 2022

Cash flows from operating activities:





Net loss


$



(28,752)


$





(26,468)

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





Depreciation and amortization


3,897


3,538

Loss on disposal of assets


335


273

Share-based compensation


2,099


3,105

Warrant expense


242


-

Shares issued to vendors in exchange for services


79


39

Amortization of right-of-use asset


1,502


599

Goodwill impairment


3,018


-

Gain on sale of business unit


(1,749)


-

Non-cash interest


1,527


259

Deferred taxes


(290)


(521)

Changes in operating assets and liabilities:





Accounts receivable and unbilled receivable


(105)


(597)

Prepaid expense and other assets


710


893

Other receivables


22


60

Security deposit


26


-

Accounts payable


3,191


181

Accrued expenses


(2,496)


(2,052)

Accrued fiduciary obligations


2,548


(12,823)

Operating lease liabilities


(1,887)


(661)

Due To related party


(3)


(3)

Other liabilities


337


(1,068)

Other asset


-


7


Net cash used in operating activities


(15,749)


(35,239)

Cash flows from investing activities:





Cash and restricted cash acquired as part of acquisitions


-


33,388

Capitalization of software development costs


-


(603)

Proceeds from sale of business unit


1,000


-

Disposal of property and equipment


27


-

Purchase of property and equipment


-


(363)

Net cash provided by (used in) investing activities


1,027


32,422

Cash flows from financing activities:





Proceeds from issuance of common stock in a public offering, net


6,432


-

Payments to seller for acquisition


(1,663)


-

Proceeds from issuance of warrants


32


-

Proceeds from issuance of common stock in a private offering, net


295


-

Proceeds from stock option exercises


-


-

Net cash provided by financing activities


5,096


-






Net decrease in cash, cash equivalents and restricted cash


(9,626)


(2,817)






Cash, cash equivalents and restricted cash at beginning of period


23,117


25,934

Cash, cash equivalents and restricted cash at end of period


$




13,491


$






23,117






Reconciliation of cash, cash equivalents, and restricted cash reported in

the condensed consolidated balance sheet





Cash and cash equivalents


$




1,147


$






13,764

Restricted cash


12,344


9,353

Total cash, cash equivalents and restricted cash shown in the condensed

consolidated statement of cash flows


$




13,491


$






23,117

Supplemental disclosure of non-cash activity





Measurement period adjustment to Goodwill


$





198


$







-

Long term liability incurred in connection with the acquisition of Maestro Health, LLC


$





-


$






19,900

SOURCE Marpai

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