Marpai(MRAI) - 2024 Q4 - Annual Report

Financial Performance - Total revenue for the year ended December 31, 2024, was $28.2 million, a decrease of 24$37.2 million in 2023[151] - Net loss for 2024 was $22.1 million, a 23$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$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$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]