MARPAI, INC. CONFIRMS IT HAS FILED AN APPEAL TO NASDAQ DELISTING LETTER
Delisting or suspension action stayed pending the issuance of a final decision
NEW YORK, Dec. 1, 2023 /PRNewswire/ — Marpai, Inc. (“Marpai” or the “Company”) (Nasdaq: MRAI), an independent national Third-Party Administrator (TPA) company transforming the $22 billion TPA market supporting self-funded employer health plans, today announced that it has requested and been granted a hearing before the Nasdaq Listing Qualifications Panel (“Panel”) to appeal the determination by the Listing Qualifications Department of The Nasdaq Stock Market (the “Staff”) and request a further extension of time and present its plan to regain compliance with Nasdaq Listing 5550(b)(2). The hearing is scheduled for March 24, 2024.
The requested appeal stays any delisting or suspension action pending the issuance of a final decision by the Panel. The Panel has broad discretionary public interest authority, which includes the discretion to grant the Company up to an additional 180 calendar days from November 28, 2023, to regain compliance. The Panel can also exercise that authority to apply additional or more stringent criteria for the continued listing of the Company’s common stock or suspend or delist securities. Ultimately, there is no guarantee that the Panel will grant an extension of the compliance period.
About Marpai, Inc.
Marpai, Inc. (Nasdaq: MRAI) is a leading, national TPA (Third Party Administrator) 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 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. 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 belief that the third quarter results reflect continued momentum towards sustainable profitability. 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, 2023
December 31, 2022
(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents
$ 3,018
$ 13,764
Restricted cash
11,234
9,353
Accounts receivable, net of allowance for credit
losses of $23,458 and $23,458
977
1,438
Unbilled receivable
595
350
Prepaid expenses and other current assets
961
1,602
Other receivables
32
31
Total current assets
16,817
26,538
Property and equipment, net
663
1,506
Capitalized software, net
2,743
4,589
Operating lease right-of-use assets
2,520
3,842
Goodwill
6,035
5,837
Intangible assets, net
5,502
6,323
Security deposits
1,309
1,293
Other long-term asset
22
22
Total assets
$ 35,611
$ 49,950
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable
$ 3,101
$ 1,458
Accrued expenses
4,660
5,275
Accrued fiduciary obligations
9,878
9,024
Deferred revenue
1,261
289
Current portion of operating lease liabilities
600
1,311
Other short-term liabilities
947
—
Due to related party
—
3
Total current liabilities
20,447
17,360
Other long-term liabilities
19,113
20,203
Operating lease liabilities, net of current portion
3,813
4,772
Deferred tax liabilities
1,480
1,480
Total liabilities
44,853
43,815
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ (DEFICIT) EQUITY
Common stock, $0.0001 par value, 227,791,050
shares authorized; 7,810,625 and 5,319,758 issued and
outstanding at September 30, 2023 and December 31,
2022, respectively (1)
1
1
Additional paid-in capital
62,476
54,128
Accumulated deficit
(71,719)
(47,993)
Total stockholders’ (deficit) equity
(9,242)
6,135
Total liabilities and stockholders’ (deficit) equity
$ 35,611
$ 49,950
(1) Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.
MARPAI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended
September 30, 2023
September 30, 2022
Revenue
$ 8,729
$ 4,938
Costs and expenses
Cost of revenue (exclusive of depreciation and amortization
shown separately below)
5,691
3,626
General and administrative
4,986
2,718
Sales and marketing
1,842
1,054
Information technology
1,269
1,538
Research and development
267
782
Depreciation and amortization
927
842
Loss on disposal of assets
7
—
Facilities
768
193
Total costs and expenses
15,757
10,753
Operating loss
(7,028)
(5,815)
Other income (expenses)
Other income
130
56
Interest expense, net
(384)
(3)
Foreign exchange (loss) gain
(14)
(19)
Loss before provision for income taxes
(7,296)
(5,781)
Income tax expense
—
—
Net loss
$ (7,296)
$ (5,781)
Net loss per share, basic & fully diluted (1)
$ (0.98)
$ (1.14)
Weighted average common shares outstanding, basic and
diluted (1)
7,479,401
5,087,164
(1) Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.
MARPAI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
Nine Months Ended
September 30, 2023
September 30, 2022
Revenue
$ 28,448
$ 16,713
Costs and expenses
Cost of revenue (exclusive of depreciation and
amortization shown separately below)
18,530
12,324
General and administrative
15,938
7,940
Sales and marketing
5,494
4,830
Information technology
4,775
3,862
Research and development
1,291
2,684
Depreciation and amortization
2,974
2,444
Loss on disposal of assets
350
60
Facilities
1,918
586
Total costs and expenses
51,270
34,730
Operating loss
(22,822)
(18,017)
Other income (expenses)
Other income
231
95
Interest expense, net
(1,102)
(7)
Foreign exchange (loss) gain
(32)
(5)
Loss before provision for income taxes
(23,725)
(17,934)
Income tax expense
—
—
Net loss
$ (23,725)
$ (17,934)
Net loss per share, basic & fully diluted (1)
$ (3.62)
$ (3.58)
Weighted average common shares outstanding, basic and
diluted (1)
6,552,575
5,004,779
(1) Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.
MARPAI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share and per share data)
(Unaudited)
Nine Months Ended
September 30, 2023
September 30, 2022
Cash flows from operating activities:
Net loss
$ (23,725)
$ (17,934)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization
2,974
2,444
Loss on disposal of assets
350
60
Share-based compensation
1,837
2,433
Shares issued to vendors in exchange for services
79
31
Amortization of right-of-use asset
1,289
517
Gain on termination of lease
33
—
Non-cash interest
1,204
—
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivable
641
16
Prepaid expense and other assets
216
377
Other receivables
(2)
35
Security deposit
(16)
—
Accounts payable
336
(433)
Accrued expenses
(693)
(436)
Accrued fiduciary obligations
853
(1,642)
Operating lease liabilities
(1,670)
(512)
Due To related party
(3)
—
Other liabilities
973
(295)
Net cash used in operating activities
(15,324)
(15,339)
Cash flows from investing activities:
Capitalization of software development costs
—
(810)
Disposal of property and equipment
27
—
Purchase of property and equipment
—
(70)
Net cash provided by (used in) investing activities
27
(880)
Cash flows from financing activities:
Proceeds from stock options exercises
0
—
Proceeds from issuance of common stock in a public
offering, net
6,432
—
Net cash provided by financing activities
6,432
—
Net decrease in cash, cash equivalents and restricted cash
(8,865)
(16,219)
Cash, cash equivalents and restricted cash at beginning of period
23,117
25,934
Cash, cash equivalents and restricted cash at end of period
$ 14,252
$ 9,715
Reconciliation of cash, cash equivalents, and restricted cash
reported in the condensed consolidated balance sheet
Cash and cash equivalents
$ 3,018
$ 4,748
Restricted cash
11,234
4,966
Total cash, cash equivalents and restricted cash shown in the
condensed consolidated statement of cash flows
$ 14,252
$ 9,714
Supplemental disclosure of non-cash activity
Measurement period adjustment to Goodwill
$ 198
$ —
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SOURCE Marpai
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