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]

Core Insights - Marpai, Inc. has appointed Dallas Scrip as Chief Operating Officer and President of MarpaiRx, aiming to enhance operational excellence and accelerate profitable growth in the healthcare technology sector [1][3]. Company Overview - Marpai, Inc. operates in the $150 billion Third-Party Administration (TPA) sector, serving self-funded employer health plans that represent over $1.5 trillion in annual claims [4]. - The company focuses on providing value-oriented health plan services and aims to deliver the healthiest member population for health plan budgets through its Marpai Saves initiative [4]. Leadership Appointment - Dallas Scrip brings extensive experience in scaling private equity and venture capital-owned companies, with a strong background in servicing healthcare consumers, employers, providers, and payor markets [2]. - His process-oriented approach and expertise in identifying market needs are expected to drive organic growth initiatives within Marpai [2]. Strategic Vision - The CEO of Marpai, Damien Lamendola, emphasized that Scrip's addition is a pivotal step towards sustainable and profitable high growth, aligning with the company's vision for the future [3].

Group 1 - Marpai, Inc. is a leader in innovative healthcare technology and Third-Party Administration (TPA) services, planning to host a conference call on May 15, 2025, to present Q1 2025 operational and financial highlights [1][2] - The company operates in the $150 billion TPA sector, serving self-funded employer health plans that represent over $1.5 trillion in annual claims [3] - Marpai's initiative, Marpai Saves, aims to deliver the healthiest member population for health plan budgets, providing access to leading provider networks including Aetna and Cigna [3] Group 2 - The conference call will take place at 8:30 a.m. ET, with options for participants to join via phone or webcast [2] - A replay of the conference call will be available within 2 hours after the call ends, accessible until May 22, 2025 [2] - Investors can find more information about the company and its services on its investor relations website [3]

Company Overview - Marpai, Inc. operates as a technology platform company providing Third-Party Administrator (TPA) services to self-funded employer health plans, focusing on affordable and intelligent healthcare solutions [3] - The company competes in the $22 billion TPA sector, which serves self-funded employer health plans that represent over $1 trillion in annual claims [3] - Marpai offers access to leading provider networks, including Aetna and Cigna, and aims to deliver the healthiest member population for health plan budgets through its Marpai Saves initiative [3] Event Participation - Marpai will present at the Planet MicroCap Showcase: VEGAS 2025 in partnership with MicroCapClub on April 23, 2025, at 5:30 PM PST [1][2] - The presentation will be hosted by Marpai's CEO, Damien Lamendola, and CFO, Steve Johnson, who will also answer questions afterward [1] - Investors can access the live presentation via a webcast link provided in the announcement [2] Investor Engagement - The company is offering 1x1 investor meetings during the Planet MicroCap Showcase, which will be held at the Paris Hotel & Casino in Las Vegas, NV [2] - Interested investors are encouraged to register for the event to secure their meetings with Marpai [2]

Financial Data and Key Metrics Changes - Revenue declined by approximately 6% from Q3 2024, while operating expenses were cut by 5%, resulting in savings of approximately $300,000 [19] - Operating loss reduced from approximately $3.1 million to approximately $2.7 million for Q4 2024, and net loss decreased from $2.4 million in Q3 to $1.2 million in Q4 2024 [19] - Adjusted EBITDA loss for the year ended December 31, 2024, was $9.1 million, a significant improvement from a loss of $20.2 million for the year ended December 31, 2023 [21] Business Line Data and Key Metrics Changes - The company is focusing on profitable clients and has seen success in targeting industries with high labor costs and tight margins [7] - The Marpai Saves program is being expanded to provide value-added services to drive healthcare costs down for clients [12] Market Data and Key Metrics Changes - Healthcare costs continue to rise in the low-double-digits, which is driving demand for the company's services [7] - The company is leveraging strategic partnerships to enhance revenue generation and client acquisition [10][35] Company Strategy and Development Direction - The strategic focus remains on revenue growth, customer experience, and profitability, with plans to introduce high-impact benefit management services in the second half of 2025 [5] - The company is streamlining its service offerings to create a core package while allowing for customization at the right price [15] - The MarpaiRx program is anticipated to provide significant savings and a competitive advantage in the pharmacy benefit management space [42] Management's Comments on Operating Environment and Future Outlook - Management is committed to achieving profitability in 2025 and maximizing profitability thereafter, balancing purpose with profit [14] - The leadership team is focused on creating shareholder value and driving a culture of high performance [23] Other Important Information - The company ended the year with approximately $800,000 in cash, with plans in place to cover requirements until cash flow becomes positive in 2025 [33] - The company is actively recruiting high-caliber sales executives to enhance revenue growth [6] Q&A Session Summary Question: Is a lot of the churn now behind the company, or will there be more? - Management indicated that overall attrition is within industry averages and expects some attrition to flow through early in 2025, but remains optimistic due to a strong pipeline [31] Question: How does the company view its cash position and planned growth? - The company ended the year with approximately $800,000 in cash and has reduced cash burn significantly, aided by a $5 million drawdown from a strategic partner [33] Question: Can you provide more details on strategic partnerships? - Recent collaborations with Health fintech and Empara are expected to drive revenue and enhance sales cycles, with additional partnerships in the pipeline [35][36] Question: How should people think about Marpai's value proposition compared to competitors? - The company focuses on driving significant savings and providing a best-in-class member experience, differentiating itself from competitors who may offer less tangible benefits [38][39] Question: Why is the MarpaiRx program crucial for growth? - The program is expected to deliver significant savings and a competitive advantage, especially in light of upcoming legislation for transparency in the pharmacy benefit management space [42][44]

Financial Performance - Total revenue for the year ended December 31, 2024, was $28.2 million, a decrease of 24% from $37.2 million in 2023[151] - Net loss for 2024 was $22.1 million, a 23% improvement from a net loss of $28.8 million in 2023[168] - Adjusted EBITDA loss improved to $9.1 million in 2024 from a loss of $20.2 million in 2023, due to better resource utilization and expense reduction[171] Expenses - Cost of revenue for 2024 was $19.1 million, down 21% from $24.2 million in 2023, aligning with the decrease in revenue[153] - General and administrative expenses decreased by 33% to $12.8 million in 2024 from $19.2 million in 2023, resulting in savings of approximately $6.4 million[155] - Sales and marketing expenses dropped 73% to $1.8 million in 2024 from $6.6 million in 2023, reflecting a savings of about $4.8 million[156] - Research and development expenses fell by 98% to $29 thousand in 2024 from $1.3 million in 2023, due to a focus on eliminating certain development projects[158] Cash Flow and Financing - The company recognized a net cash used in operating activities of $15.2 million for the year ended December 31, 2024, compared to $15.7 million for 2023, reflecting a decrease of $591 thousand[191] - Net cash provided by financing activities increased to $10.7 million in 2024 from $5.1 million in 2023, primarily due to proceeds from private placements and the issuance of debentures[193] - The company financed its operations primarily through the sale of convertible notes, warrants, and common stock, as well as borrowing from various lenders[177] Impairments and Charges - The company recorded a goodwill and intangible asset impairment charge of $7.6 million in June 2024, reflecting a full impairment due to operational changes[160] - The company reported a net loss of $22.1 million for the year ended December 31, 2024, which was offset by non-cash items totaling $13.6 million and a decrease in net working capital items amounting to $6.7 million[191] Capital Transactions - The company entered into a securities purchase agreement on January 16, 2024, selling 1,322,100 shares at a price of $0.9201 per share, raising capital from insiders[183] - The company executed a debt reduction agreement on January 31, 2025, reducing the Base Purchase and Full Base Amount by $3 million, contingent on meeting specific criteria by December 31, 2024[179] - The company repaid $1.8 million to Libertas Funding, LLC in April 2024 to satisfy the Libertas Agreement, which involved selling future receipts totaling $2.2 million for a purchase price of $1.7 million[184] - The company issued Senior Secured Convertible Debentures for a principal sum of $11.83 million on April 15, 2024, with an option to redeem $5 million at its election[186] - The company recognized a gain of $3.0 million in its consolidated statements of operations as of December 31, 2024, following the fulfillment of reduction criteria under the AXA Amendment[179] Going Concern and Liquidity - The company has substantial doubt about its ability to continue as a going concern for the next twelve months due to liquidity concerns[182] Share-Based Compensation - The company accounts for share-based compensation in accordance with ASC Topic 718, recognizing expenses over the requisite service period, generally the vesting period of the grant[205] - The expected term of stock options granted to employees is estimated using the simplified method, averaging the vesting term and the original contractual term[207] - The fair value of share-based payment awards is calculated using the Black-Scholes option-pricing model, influenced by stock price, expected volatility, expected life, risk-free interest rate, and expected dividends[207] - The company evaluates convertible notes and debentures to determine if any embedded features require separate accounting as derivative financial instruments[209] - Changes in assumptions for share-based compensation may significantly impact future results of operations, with incremental costs recognized when incurred[208] - The company includes variable consideration in transaction prices only if it is probable that amounts will not be subject to significant reversals[204] - Share-based awards that vest based on performance conditions recognize expense when it is probable that the conditions will be met[208] - The company accounts for forfeitures of awards as they occur, impacting the share-based compensation expense[208] Accounting and Market Risk - Recent accounting pronouncements are discussed in Note 3 of the consolidated financial statements in the Annual Report[210] - There are no applicable quantitative and qualitative disclosures about market risk[211]

Financial Performance - Q4 2024 net revenues were $6.6 million, a decrease of $0.4 million, or 6.0% lower than Q3 2024[5] - Full year 2024 net revenues were $28.2 million, down $9.0 million, or 24.2% lower year over year[5] - Adjusted EBITDA for the year ended December 31, 2024 amounted to a loss of $9.1 million, an improvement from a loss of $20.2 million in 2023[4] - Net loss for the fiscal year was $22.1 million, an improvement of $6.7 million, or 23.2% lower year over year[5] - Basic and diluted earnings per share in Q4 2024 were ($0.08), an improvement of $0.22 per share compared to Q3 2024[5] - Net loss for the year ended December 31, 2024, was $22,088,000, an improvement from a net loss of $28,752,000 in 2023, representing a 23.3% reduction[22] - Adjusted EBITDA for the year ended December 31, 2024, was $(9,057,000), compared to $(20,181,000) in 2023, indicating a significant improvement of 55.1%[25] Operating Expenses and Cash Flow - Operating expenses for the fiscal year ended December 31, 2024 were $31.2 million, an improvement of $9.7 million, or 23.7% lower year over year[5] - Cash flows from operating activities resulted in a net cash used of $15,158,000 for 2024, slightly better than $15,749,000 in 2023[22] - Total cash, cash equivalents, and restricted cash at the end of the period decreased to $9,232,000 from $13,492,000 at the beginning of the period, reflecting a decrease of 31.7%[22] - Cash paid for interest in 2024 was $1,742,000, compared to no interest paid in 2023[23] Assets and Liabilities - Marpai's total current assets decreased to $11.9 million as of December 31, 2024, down from $17.1 million in 2023[18] - Total liabilities decreased to $40.6 million as of December 31, 2024, down from $45.1 million in 2023[18] Impairment and Depreciation - Impairment of goodwill and intangible assets increased to $7,588,000 in 2024 from $3,018,000 in 2023, indicating a rise of 151.5%[25] - Depreciation and amortization expenses decreased to $2,256,000 in 2024 from $3,897,000 in 2023, a reduction of 42.0%[25] Financing Activities - Proceeds from the issuance of convertible debentures amounted to $8,000,000 in 2024, with additional net cash provided by financing activities totaling $10,671,000[22] - The company reported a loss on debt extinguishment of $1,877,000 in 2024, with no such loss reported in 2023[25] Business Strategy - The company plans to introduce high-impact PBM-based products in the second half of 2025 to drive revenue growth[7] - The company is focused on streamlining costs while deploying innovative services, including the Empara Member Engagement Portal[7] Business Unit Sale - The company generated $227,000 from the sale of a business unit in 2024, down from $1,000,000 in 2023[22]