Marpai (MRAI) Q2 2025 Earnings Call August 14, 2025 08:30 AM ET Speaker0Good morning, and welcome to the Marpay Second Quarter twenty twenty five Earnings Webcast. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Steve Johnson, Chief Financial Officer.Please go ahead.Speaker1Thank you, and welcome this morning to our Marpay Second Quarter Earnings ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact Name of Registrant as Specified in Its Charter) (State or other jurisdiction of incorporation) Delaware 86-1916231 (IRS Employer Identification Number) For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commissi ...

Exhibit 99.1 MARPAI REPORTS SECOND QUARTER 2025 FINANCIAL RESULTS Marpai Slashes Losses by Two-Thirds in Q2 2025, Paving the Way to Profitability. Operating Expenses Cut 70% as Turnaround Gains Traction Tampa, August 13, 2025, Marpai, Inc. ("Marpai" or the "Company") (OTCQX: MRAI), a leader in innovative healthcare technology and Third-Party Administration (TPA) services, today announced second quarter 2025 results that mark a decisive step forward in its turnaround strategy. The Company delivered substanti ...

Marpai Slashes Losses by Two-Thirds in Q2 2025, Paving the Way to Profitability.Operating Expenses Cut 70% as Turnaround Gains TractionTAMPA, Fla., Aug. 13, 2025 /PRNewswire/ -- Marpai, Inc. ("Marpai" or the "Company") (OTCQX: MRAI), a leader in innovative healthcare technology and Third-Party Administration (TPA) services, today announced second quarter 2025 results that mark a decisive step forward in its turnaround strategy.The Company delivered substantial quarterly year-over-year improvements across ke ...

MarpaiRx Delivers a Win-Win for Health Plans and MembersTAMPA, Fla., July 24, 2025 /PRNewswire/ -- Marpai, Inc. ("Marpai" or the "Company") (OTCQX: MRAI), an independent national Third-Party Administration ("TPA") company transforming the $150 billion TPA market supporting self-funded employer health plans with affordable, intelligent, healthcare, today announced the comprehensive relaunch of MarpaiRx, a groundbreaking pharmacy benefit management ("PBM") solution designed to deliver superior member experien ...

Financial Data and Key Metrics Changes - Net revenues for Q1 2025 were $5.4 million, approximately 27% lower than Q1 2024 [3] - Operating expenses were $7.7 million, showing a 33% improvement over Q1 2024 [4] - Operating loss was $2.3 million, a 45% improvement over Q1 2024 [4] - Net loss was $3.1 million, representing a 29% improvement over Q1 2024 [4] - Basic and diluted earnings per share were a loss of $0.21, an improvement of $0.25 per share over Q1 2024 [4] Business Line Data and Key Metrics Changes - The company is focusing on margin-generating clients and managing lower-margin clients to drop off [3][4] - The TPA market in the U.S. is valued at $150 billion, with a forecasted annual growth of 12.1% through 2031 [8] Market Data and Key Metrics Changes - The company is positioned to partner with employers adopting self-funded health insurance, which is a growing trend due to rising healthcare inflation [5][6] - Employers can see savings of up to 10% by moving to a self-funded model managed by a TPA [6] Company Strategy and Development Direction - The core mission is to deliver affordable and intelligent healthcare solutions, with a strong pipeline of business for the second half of 2025 [10] - The company is focused on driving efficiencies and cost reductions to achieve profitability [11] - The appointment of Dallas Scripp as COO is part of the strategy to strengthen leadership and drive growth initiatives [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges faced in signing new business in Q1 but expects to win clients off-cycle and during the January cycle next year [14][18] - Confidence in achieving cash flow positivity by year-end is supported by ongoing cost reduction initiatives and operational efficiencies [20][21] Other Important Information - The rollout of the Empower member portal is on track to be completed by the end of Q2 2025, which aims to improve customer service and operational efficiency [10][24] Q&A Session Summary Question: Insights on new business sign-ups in Q1 - Management focused on turnaround efforts in 2024 and did not hire key sales personnel until May, impacting new business sign-ups [15][16] Question: Expectations for off-cycle client wins - Management confirmed expectations for off-cycle wins and a strong pipeline for the second half of 2025 [17][18] Question: Discussion on cash burn and cost reduction initiatives - Management highlighted ongoing rationalization of vendors and legacy contracts to reduce costs and improve operational efficiencies [20][21] Question: Details on the Empower portal - The Empower portal consolidates multiple applications into a single solution, enhancing user experience and reducing call center demands [22][24]

Financial Data and Key Metrics Changes - Net revenues for Q1 2025 were $5.4 million, approximately 27% lower than Q1 2024 [3] - Operating expenses were $7.7 million, showing a 33% improvement over Q1 2024 [4] - Operating loss was $2.3 million, a 45% improvement over Q1 2024 [4] - Net loss was $3.1 million, representing a 29% improvement over Q1 2024 [4] - Basic and diluted earnings per share were a loss of $0.21, an improvement of $0.25 per share over Q1 2024 [4] Business Line Data and Key Metrics Changes - The company is focusing on margin-generating clients and managing lower-margin clients to drop off [3][4] - The TPA market in the U.S. is valued at $150 billion, with a forecasted annual growth of 12.1% through 2031 [8] Market Data and Key Metrics Changes - The company is positioned to partner with employers adopting self-funded health insurance, which is a growing trend due to rising healthcare costs [5][6] - Employers can see savings of up to 10% by moving to a self-funded model managed by a TPA [6] Company Strategy and Development Direction - The company aims to deliver affordable and intelligent healthcare solutions, with a strong pipeline of business for the second half of 2025 [11] - The recent appointment of Dallas Scripp as COO is part of the strategy to strengthen leadership and drive growth initiatives [12] - The company is focused on achieving profitability and cash flow positivity within the year [12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges faced in signing new business in Q1 but emphasizes a strong pipeline for the second half of 2025 [15][19] - The company is working on cost reduction initiatives and operational efficiencies to reduce cash burn and improve profitability [21][22] - The rollout of the Empower member portal is expected to enhance customer experience and operational efficiency [23][25] Other Important Information - The company is rationalizing multiple portals into the Empara solution, which utilizes AI to improve member services [24][25] - The company is committed to reducing costs while enhancing customer service, creating a virtuous cycle for client acquisition [22] Q&A Session Summary Question: Why was new business not signed up as expected in Q1? - Management focused on turnaround efforts in 2024 and did not hire key sales personnel until May, impacting new business acquisition [16][17] Question: What are the potential for further cost reduction initiatives? - Management is working on rationalizing duplicative vendors and legacy contracts, which will provide additional savings [21][22] Question: Can you elaborate on the Empara portal and its benefits? - The Empara portal consolidates multiple applications and provides members with easy access to their benefit plans, improving efficiency and reducing call center demands [24][25]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The unaudited financial statements for Q1 2025 reveal decreased revenue, a reduced net loss, growing stockholders' deficit, and significant liquidity challenges raising going concern doubts [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $13.7 million, total liabilities $43.9 million, and stockholders' deficit $30.2 million, reflecting increased restricted cash and convertible debentures Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $729 | $764 | | Restricted cash | $10,780 | $8,468 | | **Total assets** | **$13,718** | **$12,878** | | Total current liabilities | $19,794 | $18,982 | | **Total liabilities** | **$43,922** | **$40,587** | | **Total stockholders' deficit** | **($30,204)** | **($27,709)** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 revenue decreased 26.6% to $5.4 million, while net loss improved to $3.1 million due to significant reductions in operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $5,418 | $7,385 | | Total costs and expenses | $7,668 | $11,450 | | Operating loss | ($2,250) | ($4,065) | | **Net loss** | **($3,069)** | **($4,346)** | | Net loss per share | ($0.21) | ($0.46) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw net cash used in operating activities significantly reduced to $115 thousand, with $500 thousand from investing and $1.9 million from financing, leading to a $2.3 million net cash increase Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($115) | ($3,585) | | Net cash provided by investing activities | $500 | $0 | | Net cash provided by financing activities | $1,892 | $3,705 | | **Net increase in cash, cash equivalents and restricted cash** | **$2,277** | **$120** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's TPA business, disclose substantial doubt about going concern due to accumulated deficit and negative working capital, and cover financing, revenue, compensation, and subsequent events - The company's operations are conducted through its wholly-owned subsidiaries, primarily providing third-party administrator (TPA) services to self-insured employer groups across the United States[19](index=19&type=chunk) - Management has determined that the company's liquidity condition raises substantial doubt about its ability to continue as a going concern for the next twelve months. The financial statements do not include any adjustments related to this uncertainty[28](index=28&type=chunk) - In January 2025, the company received **$3.0 million** in proceeds from an additional investment related to its Senior Secured Convertible Debentures[54](index=54&type=chunk) - Subsequent to the quarter end, on May 13, 2025, the company appointed a new Chief Operating Officer and issued **730,000 shares** of common stock in a private placement at **$1.00 per share**[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 26.6% revenue decline offset by a 44.6% operating loss reduction, while exploring strategic alternatives amidst critical liquidity concerns and a going concern warning - The company's Board of Directors is exploring strategic alternatives, which may include a strategic investment, a business combination like a merger, or a sale of the Company to maximize shareholder value[91](index=91&type=chunk) - The company's common stock was suspended from trading on Nasdaq and commenced trading on the OTCQX Market effective May 29, 2024[89](index=89&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q1 2025 revenue declined 26.6% to $5.4 million due to customer turnover, yet operating loss improved by $1.8 million to $2.3 million through significant expense reductions Comparison of Operations for Three Months Ended March 31 (in thousands) | Line Item | 2025 | 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | $5,418 | $7,385 | $(1,967) | (26.6)% | | Cost of revenue | $3,484 | $4,871 | $(1,387) | (28.5)% | | General and administrative | $2,283 | $3,421 | $(1,138) | (33.3)% | | Operating loss | $(2,250) | $(4,065) | $1,815 | (44.6)% | | Net loss | $(3,069) | $(4,346) | $1,277 | (29.4)% | - The decrease in revenue is primarily due to customer turnover, but the company is adapting its approach and expects new initiatives to drive long-term growth[96](index=96&type=chunk) - The decrease in Sales and Marketing expenses was due to strategic realignment and headcount reduction in Q2 2024[102](index=102&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces critical liquidity with $729 thousand unrestricted cash, a $101.9 million accumulated deficit, and negative working capital, raising substantial doubt about its going concern ability - As of March 31, 2025, the company had an accumulated deficit of approximately **$101.9 million**, unrestricted cash of **$729 thousand**, and negative working capital of **$6.9 million**[107](index=107&type=chunk) - The company has financed its operations primarily through loans, convertible notes, warrants, and equity sales. Recent financing includes receiving **$3.0 million** in January 2025 from an additional investment by JGB[108](index=108&type=chunk)[112](index=112&type=chunk) - Management determined that the company's liquidity condition raises substantial doubt about its ability to continue as a going concern, and it may be forced to scale back operations or divest assets if unable to raise additional capital[116](index=116&type=chunk)[117](index=117&type=chunk) [Cash Flows](index=27&type=section&id=Cash%20Flows) Q1 2025 net cash used in operating activities improved to $115 thousand, with $500 thousand from investing and $1.9 million from financing activities Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(115) | $(3,585) | | Net cash provided by investing activities | $500 | $0 | | Net cash provided by financing activities | $1,892 | $3,705 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company identifies market risks from foreign exchange, interest rates, and inflation, none of which are considered material for Q1 2025 - Foreign exchange risk exists due to operations in Israel, but a hypothetical **10% change** in the NIS/USD exchange rate is not expected to have a material impact[125](index=125&type=chunk) - Interest rate risk on cash and cash equivalents of **$729 thousand** is not considered a significant risk by management[126](index=126&type=chunk) - Inflation is not believed to have had a material effect on the business, financial condition, or results of operations during Q1 2025[127](index=127&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during Q1 2025 - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[128](index=128&type=chunk) - No changes in internal control over financial reporting occurred during the first quarter of 2025 that materially affected, or are reasonably likely to materially affect, internal controls[130](index=130&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) Key risks include significant customer concentration in accounts receivable and uncertainties surrounding the costly and potentially disruptive review of strategic alternatives - The company faces risk from customer concentration. As of March 31, 2025, two customers accounted for **35.4%** and **28.1%** of accounts receivable, respectively[134](index=134&type=chunk) - The ongoing review of strategic alternatives is costly, time-consuming, and disruptive. There is no assurance it will lead to a successful transaction or increase shareholder value, and the uncertainty could negatively impact the business and employee retention[136](index=136&type=chunk)[137](index=137&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information) On May 13, 2025, the company entered an agreement to sell **730,000 shares** of common stock in a private placement at **$1.00 per share** - On May 13, 2025, the company agreed to issue and sell **730,000 shares** of common stock in a private placement at **$1.00 per share**[138](index=138&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including the May 13, 2025 Securities Purchase Agreement and Sarbanes-Oxley Act certifications - Key exhibits filed include the May 13, 2025 Securities Purchase Agreement and Sarbanes-Oxley Act certifications by the CEO and CFO[139](index=139&type=chunk) [Signatures](index=31&type=section&id=SIGNATURES) The report was signed and authorized by Damien Lamendola, CEO, and Steve Johnson, CFO, on May 14, 2025 - The report was signed on May 14, 2025, by Damien Lamendola (CEO) and Steve Johnson (CFO)[144](index=144&type=chunk)

[Management Commentary and Business Outlook](index=1&type=section&id=Management%20Commentary%20and%20Business%20Outlook) Management emphasizes significant operational expense reductions, viewing it as an inflection point, with a strategic focus on new initiatives and achieving profitability by year-end 2025 - The company reports consistent **double-digit success** in cutting operating expenses and improving its bottom line, which management believes is a critical inflection point[3](index=3&type=chunk) - Key initiatives for Q2 2025 include launching the Healthcare Management tool with Empara, making advancements with MarpaiRx, and onboarding a new Chief Operating Officer[3](index=3&type=chunk) - Marpai's stated goal is to achieve **profitability and positive cash flow** by the end of 2025[3](index=3&type=chunk)[6](index=6&type=chunk) [Q1 2025 Financial Highlights](index=1&type=section&id=Q1%202025%20Financial%20Highlights) Despite a 27% year-over-year decrease in net revenues to $5.4 million, Q1 2025 saw significant operational improvements, reducing operating expenses by 33% and narrowing net loss by 29% to $3.1 million Q1 2025 vs Q1 2024 Financial Performance (in millions) | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Revenues | $5.4 | ~$7.4 | -27% | | Operating Expenses | $7.7 | ~$11.5 | -33% | | Operating Loss | ($2.3) | ~($4.1) | -45% | | Net Loss | ($3.1) | ~($4.3) | -29% | | Basic & Diluted EPS | ($0.21) | ($0.46) | +$0.25 | - The company held **$0.7 million** in unrestricted cash on hand as of March 31, 2025[5](index=5&type=chunk) [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2025 provide a comprehensive overview of the company's financial position, operational performance, and cash flow movements [Condensed Consolidated Balance Sheet](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEET) As of March 31, 2025, total assets were $13.7 million and total liabilities were $43.9 million, resulting in a widened stockholders' deficit of $30.2 million compared to year-end 2024 Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $729 | $764 | | Total Assets | $13,718 | $12,878 | | Total Liabilities | $43,922 | $40,587 | | Total Stockholders' Deficit | ($30,204) | ($27,709) | [Condensed Consolidated Statement of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q1 2025 revenue decreased to $5.4 million, but a 33% reduction in total costs and expenses led to a narrowed operating loss of $2.3 million and a net loss of $3.1 million Statement of Operations Summary (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $5,418 | $7,385 | | Total costs and expenses | $7,668 | $11,450 | | **Operating loss** | **($2,250)** | **($4,065)** | | **Net loss** | **($3,069)** | **($4,346)** | | Net loss per share, basic & diluted | ($0.21) | ($0.46) | [Condensed Consolidated Statement of Cash Flows](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash used in operating activities significantly improved to $0.1 million in Q1 2025, supplemented by cash from investing activities and $1.9 million from financing, primarily convertible debentures Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($115) | ($3,585) | | Net cash provided by investing activities | $500 | $0 | | Net cash provided by financing activities | $1,892 | $3,705 | | **Cash, cash equivalents and restricted cash at end of period** | **$11,509** | **$13,612** | - Key financing activities in Q1 2025 included **$3.0 million** in proceeds from issuing convertible debentures. In contrast, Q1 2024 financing included **$2.7 million** from a private stock offering and **$1.5 million** from the sale of future cash receipts[14](index=14&type=chunk) [About Marpai, Inc. and Other Information](index=1&type=section&id=About%20Marpai%2C%20Inc.%20and%20Other%20Information) Marpai, Inc. is a technology platform providing TPA services to self-funded employer health plans in a **$22 billion** market, with the report including standard forward-looking statement disclaimers - Marpai is a technology platform company providing TPA services to self-funded employer health plans, competing in a **$22 billion** sector[4](index=4&type=chunk) - The company offers nationwide access to leading provider networks, including Aetna and Cigna[4](index=4&type=chunk) - The press release includes a forward-looking statement disclaimer, cautioning that actual results may differ materially from current expectations due to various factors[6](index=6&type=chunk)[7](index=7&type=chunk)

Core Insights - Marpai, Inc. is experiencing a turnaround with a focus on reducing operating expenses and improving profitability, aiming for positive cash flow by the end of 2025 [2][8] Financial Performance - For Q1 2025, net revenues were approximately $5.4 million, a decrease of $2.0 million or 27% year-over-year compared to Q1 2024 [8] - Operating expenses were $7.7 million, down $3.8 million or 33% year-over-year [8] - The operating loss was $2.3 million, which is $1.8 million or 45% lower year-over-year [8] - The net loss was $3.1 million, a reduction of $1.3 million or 29% year-over-year [8] - Basic and diluted earnings per share improved to ($0.21), an increase of $0.25 per share year-over-year [8] Cash Position - At the end of Q1 2025, the company had $0.7 million in unrestricted cash, a decrease of $0.1 million from the previous year [8] - Total cash, cash equivalents, and restricted cash at the end of the period amounted to $11.5 million, down from $13.6 million year-over-year [12] Strategic Initiatives - The company is launching a Healthcare Management tool in collaboration with Empara, LLC and making advancements with MarpaiRx [2] - The onboarding of a new Chief Operating Officer, Dallas Scrip, is part of the company's strategic initiatives [2] Market Position - Marpai operates in the $22 billion Third-Party Administration (TPA) sector, serving self-funded employer health plans that represent over $1 trillion in annual claims [4]