Form S-1/A Marpai, Inc.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
to
UNDER
THE SECURITIES ACT OF 1933
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Delaware
|
| |
6411
|
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86-1916231
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|
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(State or Other Jurisdiction of
Incorporation or Organization) |
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(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number) |
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Tampa, Florida 33610-5428
(646) 303-3483
Chief Executive Officer
Marpai, Inc.
5701 East Hillsborough Ave., Suite 1417
Tampa, Florida 33610-5428
(646) 303-3483
|
Mitchell Nussbaum, Esq.
Angela Dowd, Esq. Jane Tam, Esq. Loeb & Loeb LLP 345 Park Avenue New York, New York 10154 Phone: (212) 407-4000 Fax: (212) 407-4990 |
| |
Brad L. Shiffman, Esq.
Blank Rome LLP The Chrysler Building 405 Lexington Ave, New York, NY 10174 Phone: (212) 885-5000 Fax: (212) 885-5001 |
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Large accelerated filer
☐
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| |
Accelerated filer
☐
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Non-accelerated filer
☒
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Smaller reporting company
☒
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| | | |
Emerging growth company
☒
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Title of Each Class of Security
Being Registered |
| | |
Proposed
Maximum Aggregate offering Price(1)(2) |
| | |
Amount of
Registration Fee(3) (6) |
| ||||||
Class A common stock, $0.0001 par value (2)
|
| | | | $ | 28,750,000 | | | | | | $ | 3,136.63 | | |
Representative’s Warrants(4)
|
| | | | | | | | | | | | | | |
Common stock issuable upon exercise of Representative’s Warrants(5)
|
| | | | | 1,796,875 | | | | | | | 196.04 | | |
Total
|
| | | | $ | 30,546,875 | | | | | | $ | 3,332.67 | | |
| | |
Per Share
|
| |
Total
|
| ||||||
Public offering price
|
| | | $ | | | | | $ | | | ||
Underwriting discounts and commissions(1)
|
| | | $ | | | | | $ | | | ||
Proceeds, before expenses, to us
|
| | | $ | | | | | $ | | | |
| | | | | 1 | | | |
| | | | | 13 | | | |
| | | | | 16 | | | |
| | | | | 18 | | | |
| | | | | 21 | | | |
| | | | | 25 | | | |
| | | | | 57 | | | |
| | | | | 59 | | | |
| | | | | 60 | | | |
| | | | | 61 | | | |
| | | | | 62 | | | |
| | | | | 64 | | | |
| | | | | 72 | | | |
| | | | | 78 | | | |
| | | | | 97 | | | |
| | | | | 105 | | | |
| | | | | 109 | | | |
| | | | | 113 | | | |
| | | | | 115 | | | |
| | | | | 119 | | | |
| | | | | 121 | | | |
| | | | | 127 | | | |
| | | | | 127 | | | |
| | | | | 127 | | | |
| | | | | F-1 | | |
| | |
Year Ended
December 31, 2020 |
| |
Six Months
Ended June 30, 2021 |
| ||||||
Net revenue
|
| | | $ | 18,388,192 | | | | | $ | 7,746,593 | | |
Operating loss
|
| | | | (17,131,684) | | | | | | (7,447,870) | | |
Net loss
|
| | | $ | (17,620,431) | | | | | $ | (7,591,285) | | |
Net loss per ordinary share basic and diluted
|
| | | $ | (1.58) | | | | | $ | (0.673) | | |
| | |
For the Year Ended
December 31, |
| |
For the Six Months Ended
June 30, |
| ||||||||||||
| | |
2020
|
| |
2021
|
| |
2020
|
| |||||||||
Net revenue
|
| | | $ | — | | | | | $ | 3,531,512 | | | | | $ | — | | |
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
| | | | — | | | | | | (2,720,483) | | | | | | — | | |
General and administrative
|
| | | | 1,499,376 | | | | | | 2,814,950 | | | | | | 773,223 | | |
Research and development
|
| | | | 1,840,772 | | | | | | 549,374 | | | | | | 1,025,986 | | |
Sales and marketing
|
| | | | 27,583 | | | | | | 1,443,785 | | | | | | 5,623 | | |
Information and technology
|
| | | | | | | | | | 731,230 | | | | | | — | | |
Facilities
|
| | | | | | | | | | 226,892 | | | | | | — | | |
Depreciation and amortization
|
| | | | | | | | | | 420,967 | | | | | | 37,885 | | |
Other expense
|
| | | | (500,253) | | | | | | (237,419) | | | | | | (215,785) | | |
Loss from operations
|
| | | | (3,867,984) | | | | | | (5,613,588) | | | | | | (2,058,502) | | |
Income tax provision
|
| | | | — | | | | | | (150,000) | | | | | | — | | |
Net loss
|
| | | $ | (3,867,984) | | | | | $ | (5,463,588) | | | | | | (2,058,502) | | |
Net loss per share | | | | | | | | | | | | | | | | | | | |
Basic and fully diluted
|
| | | $ | (1.59) | | | | | $ | (0.84) | | | | | | (0.93) | | |
Weighted average number of common shares | | | | | | | | | | | | | | | | | | | |
Basic and fully diluted
|
| | | | 2,428,877 | | | | | | 6,528,888 | | | | | | 2,211,683 | | |
| | |
As of December 31, 2020
|
| |
As of June 30, 2021
|
| ||||||
Current assets
|
| | | $ | 2,180,181 | | | | | $ | 8,621,723 | | |
Total assets
|
| | | | 6,531,860 | | | | | | 26,413,689 | | |
Current liabilities
|
| | | | 2,649,207 | | | | | | 9,001,133 | | |
Long term liabilities
|
| | | | 7,379,152 | | | | | | 8,261,383 | | |
Common stock
|
| | | | 3 | | | | | | 245 | | |
Total stockholders’ (deficit) equity
|
| | | $ | (3,496,499) | | | | | $ | 9,151,173 | | |
CONTINENTAL BENEFITS, LLC PRE-ACQUISITION
| | |
Year Ended
December 31, 2020 |
| |||
Net sales
|
| | | $ | 18,388,192 | | |
Cost of revenue | | | | | | | |
Service fees
|
| | | | 10,507,319 | | |
Direct expense – claims
|
| | | | 1,871,683 | | |
Direct expense – member services
|
| | | | 1,552,006 | | |
Total cost of revenue
|
| | | | 13,931,008 | | |
Gross profit
|
| | | | 4,457,184 | | |
Operating expenses | | | | | | | |
Administrative
|
| | | | 8,700,352 | | |
Information technology
|
| | | | 4,223,350 | | |
Sales and marketing
|
| | | | 2,724,368 | | |
Facilities
|
| | | | 762,649 | | |
Depreciation
|
| | | | 596,152 | | |
Total operating expenses
|
| | | | 17,006,871 | | |
Operating loss
|
| | | | (12,549,687) | | |
Other non operating income | | | | | | | |
Interest income
|
| | | | 11,506 | | |
Other income
|
| | | | — | | |
Total non operating income
|
| | | | 11,506 | | |
Net loss
|
| | | $ | (12,538,181) | | |
| | |
As of December 31, 2020
|
| |||
Current assets
|
| | | $ | 14,143,967 | | |
Total assets
|
| | | | 17,327,171 | | |
Current liabilities
|
| | | | 10,608,167 | | |
Long term liabilities
|
| | | | 1,281,362 | | |
Total member’s equity
|
| | | $ | 5,437,642 | | |
| | |
Marpai
Inc(1) (Historical) |
| |
Continental
Benefits(2) (Historical) |
| |
Pro Forma
Adjustments |
| |
Notes
|
| |
Pro Forma
Combined |
| |||||||||||||||
Net revenue
|
| | | $ | 3,531,512 | | | | | $ | 4,215,081 | | | | | $ | — | | | | | | | | | | | $ | 7,746,593 | | |
Costs and expenses
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
| | | | 2,720,483 | | | | | | 3,096,275 | | | | | | — | | | | | | | | | | | | 5,816,758 | | |
General and administrative
|
| | | | 2,814,950 | | | | | | 1,045,397 | | | | | | — | | | | | | | | | | | | 3,860,347 | | |
Information technology
|
| | | | 731,230 | | | | | | 865,966 | | | | | | — | | | | | | | | | | | | 1,597,196 | | |
Research and development
|
| | | | 549,374 | | | | | | — | | | | | | — | | | | | | | | | | | | 549,374 | | |
Sales and marketing
|
| | | | 1,443,785 | | | | | | 628,487 | | | | | | — | | | | | | | | | | | | 2,072,272 | | |
Facilities
|
| | | | 226,892 | | | | | | 184,718 | | | | | | — | | | | | | | | | | | | 411,610 | | |
Depreciation and amortization
|
| | | | 420,967 | | | | | | 162,373 | | | | | | 23,716 | | | | | | (a) | | | | | | 886,906 | | |
| | | | | | | | | | | | | | | | | 279,850 | | | | | | (b) | | | | | | | | |
Total costs and expenses
|
| | | | 8,907,681 | | | | | | 5,983,216 | | | | | | 303,566 | | | | | | | | | | | | 15,194,463 | | |
Operating loss
|
| | | | (5,376,169) | | | | | | (1,768,135) | | | | | | (303,566) | | | | | | | | | | | | (7,447,870) | | |
Other expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income (expense)
|
| | | | (276,033) | | | | | | — | | | | | | — | | | | | | | | | | | | (276,033) | | |
Other income
|
| | | | 54,398 | | | | | | 16,004 | | | | | | — | | | | | | | | | | | | 70,402 | | |
Foreign exchange loss
|
| | | | (15,784) | | | | | | — | | | | | | — | | | | | | | | | | | | (15,784) | | |
Loss before provision for income taxes
|
| | | | (5,613,588) | | | | | | (1,752,131) | | | | | | (303,566) | | | | | | | | | | | | (7,669,285) | | |
Income tax benefit
|
| | | | (150,000) | | | | | | — | | | | | | — | | | | | | | | | | | | (150,000) | | |
Net loss
|
| | | | (5,463,588) | | | | | | (1,752,131) | | | | | | (303,566) | | | | | | | | | | | | (7,519,285) | | |
Net loss per share, basic & fully diluted
|
| | | | (0.84) | | | | | | | | | | | | | | | | | | | | | | | | (0.67) | | |
Weighted average number of
common shares |
| | | | 6,528,888 | | | | | | | | | | | | | | | | | | (c) | | | | | | 11,147,302 | | |
| | |
Marpai
Health(3) (Historical) |
| |
Continental
Benefits(4) (Historical) |
| |
Pro Forma
Adjustments |
| |
Notes
|
| |
Pro Forma
Combined |
| |||||||||||||||
Net revenue
|
| | | $ | — | | | | | $ | 18,388,192 | | | | | $ | — | | | | | | | | | | | $ | 18,388,192 | | |
Costs and expenses
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue (exclusive of
depreciation and amortization shown separately below) |
| | | | — | | | | | | 13,931,008 | | | | | | — | | | | | | | | | | | | 13,931,008 | | |
General and administrative
|
| | | | 1,499,376 | | | | | | 8,700,352 | | | | | | | | | | | | | | | | | | 10,199,728 | | |
Information technology
|
| | | | — | | | | | | 4,223,350 | | | | | | — | | | | | | | | | | | | 4,223,350 | | |
Research and development
|
| | | | 1,840,772 | | | | | | — | | | | | | — | | | | | | | | | | | | 1,840,772 | | |
Sales and marketing
|
| | | | 27,583 | | | | | | 2,724,368 | | | | | | — | | | | | | | | | | | | 2,751,951 | | |
Facilities
|
| | | | — | | | | | | 762,649 | | | | | | | | | | | | | | | | | | 762,649 | | |
Depreciation and amortization
|
| | | | — | | | | | | 596,152 | | | | | | 94,866 | | | | | | (a) | | | | | | 1,810,418 | | |
| | | | | | | | | | | | | | | | | 1,119,400 | | | | | | (b) | | | | | | | | |
Total costs and expenses
|
| | | | 3,367,731 | | | | | | 30,937,879 | | | | | | 1,214,266 | | | | | | | | | | | | 35,519,876 | | |
Operating loss
|
| | | | (3,367,731) | | | | | | (12,549,687) | | | | | | (1,214,266) | | | | | | | | | | | | (17,131,684) | | |
Other expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income (expense)
|
| | | | (521,140) | | | | | | 11,506 | | | | | | — | | | | | | | | | | | | (509,634) | | |
Other income
|
| | | | 25,846 | | | | | | — | | | | | | — | | | | | | | | | | | | 25,846 | | |
Foreign exchange gain
|
| | | | (4,959) | | | | | | — | | | | | | — | | | | | | | | | | | | (4,959) | | |
Loss before provision for income taxes
|
| | | | (3,867,984) | | | | | | (12,538,181) | | | | | | (1,214,266) | | | | | | | | | | | | (17,620,431) | | |
Income tax expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Net loss
|
| | | | (3,867,984) | | | | | | (12,538,181) | | | | | | (1,214,266) | | | | | | | | | | | | (17,620,431) | | |
Net loss per share, basic & fully
diluted |
| | | | (1.59) | | | | | | | | | | | | | | | | | | | | | | | | (1.58) | | |
Weighted average number of common shares
|
| | | | 2,428,877 | | | | | | | | | | | | | | | | | | (c) | | | | | | 11,147,302 | | |
| | |
Three months
ended March 31, 2021 |
| |
Year ended
December 31, 2020 |
| ||||||
Estimated depreciation expense
|
| | | $ | 186,089 | | | | | $ | 691,378 | | |
Historical depreciation expense
|
| | | | 162,373 | | | | | | 596,512 | | |
Pro forma adjustments to depreciation expense
|
| | | $ | 23,716 | | | | | $ | 94,866 | | |
| | |
Estimated
Fair Value |
| |
Estimated
Useful Life in Years |
| |
Amortization
Three Months ended March 31, 2021 |
| |
Amortization
Year ended December 31, 2020 |
| |||||||||
Trademarks
|
| | | $ | 1,860,000 | | | |
10.00
|
| | | $ | 46,712 | | | | | $ | 186,848 | | |
Patent and patent applications
|
| | | | 700,000 | | | |
Work in
Process |
| | | | — | | | | | | — | | |
Customer relationships
|
| | | | 3,370,000 | | | |
7.00
|
| | | | 120,907 | | | | | | 483,628 | | |
Capitalized software
|
| | | | 1,230,000 | | | |
5.00
|
| | | | 61,500 | | | | | | 246,000 | | |
Intangible assets
|
| | | | 1,010,000 | | | |
5.00
|
| | | | 50,731 | | | | | | 202,924 | | |
Total
|
| | | | 8,170,000 | | | | | | | | | 279,850 | | | | | | 1,119,400 | | |
Pro forma adjustments to
amortization expense |
| | | | | | | | | | | | $ | 279,850 | | | | | $ | 1,119,400 | | |
| | |
As of June 30, 2021
|
| |||||||||
| | |
Actual
|
| |
Pro Forma
|
| ||||||
Cash and cash equivalents
|
| | | $ | 2,339,223 | | | | | | 23,673,746 | | |
Convertible notes
|
| | | $ | 5,720,161 | | | | | | 3,254,146 | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Common stock, $0.0001 par value; 50,000,000 authorized shares,
2,446,826 issued and outstanding |
| | | | 245 | | | | | | 1,433 | | |
Additional paid-in capital
|
| | | | 20,155,391 | | | | | | 23,908,309 | | |
Accumulated deficit
|
| | | | (11,004,463) | | | | | | (11,004,463) | | |
Total stockholders’ equity
|
| | | | 9,151,173 | | | | | | 12,905,279 | | |
Total capitalization
|
| | | $ | 14,871,334 | | | | | | 16,159,425 | | |
|
Assumed public offering price per share
|
| | | | | | | | | $ | 9.00 | | |
|
Historical net tangible book value per share as of June 30, 2021
|
| | | $ | (0.55) | | | | | | | | |
|
Pro forma net tangible book value per share after giving effect to this offering
|
| | | $ | 1.24 | | | | | | | | |
|
Dilution in as adjusted net tangible book value per share to new investors participating in this offering
|
| | | | | | | | | $ | 7.76 | | |
| | |
Six Months Ends June 30,
|
| | | | | | | | | | | | | |||||||||
| | |
2021
|
| |
2020
|
| |
Change
|
| |
%
|
| ||||||||||||
Revenue | | | | | | | | | | | | | | | | | | | | | | | | | |
Net revenue
|
| | | | 3,531,512 | | | | | | — | | | | | | 3,531,512 | | | | | | n/a | | |
Costs and Expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
| | | | 2,720,483 | | | | | | — | | | | | | 2,720,483 | | | | | | n/a | | |
Research and development
|
| | | | 549,374 | | | | | | 1,025,986 | | | | | | (476,612) | | | | | | -46.5% | | |
General and administrative
|
| | | | 2,814,950 | | | | | | 773,223 | | | | | | 2,041,727 | | | | | | 264.1% | | |
Sales and marketing
|
| | | | 1,443,785 | | | | | | 5,623 | | | | | | 1,438,162 | | | | | | 25576.4% | | |
Information technology
|
| | | | 731,230 | | | | | | — | | | | | | 731,230 | | | | | | n/a | | |
Facilities
|
| | | | 226,892 | | | | | | — | | | | | | 226,892 | | | | | | n/a | | |
Depreciation and amortization
|
| | | | 420,967 | | | | | | 37,885 | | | | | | 383,082 | | | | | | 1011.2% | | |
Total Costs and Expenses
|
| | | | 8,907,681 | | | | | | 1,842,717 | | | | |
|
7,064,964
|
| | | | | 383.4% | | |
Operating Loss
|
| | | | (5,376,169) | | | | | | (1,842,717) | | | | | | (3,533,452) | | | | | | 191.8% | | |
Other income and (expenses) | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense, net
|
| | | | (276,033) | | | | | | (226,330) | | | | | | (49,703) | | | | | | 22.0% | | |
Other income
|
| | | | 54,398 | | | | | | 12,733 | | | | | | 41,665 | | | | | | 327.2% | | |
Foreign exchange gain (loss)
|
| | | | (15,784) | | | | | | (2,188) | | | | | | (13,596) | | | | | | 621.4% | | |
Total other income (expense)
|
| | | | (237,419) | | | | | | (215,785) | | | | | | (21,634) | | | | | | 10.0% | | |
Loss before income taxes
|
| | | | (5,613,588) | | | | | | (2,058,502) | | | | | | (3,355,086) | | | | | | 172.7% | | |
Income tax expense
|
| | | | (150,000) | | | | | | — | | | | | | (150,000) | | | | | | n/a | | |
Net Loss
|
| | | | (5,463,588) | | | | | | (2,058,502) | | | | | | (3,405,086) | | | | | | 165.4% | | |
Comprehensive Loss
|
| | | | (5,463,588) | | | | | | (2,058,502) | | | | | | (3,405,086) | | | | | | 165.4% | | |
| | |
Six Months Ended June 30
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net cash used in operating activities
|
| | | | (4,875,909) | | | | | | (1,051,181) | | |
Net cash used in investing activities
|
| | | | 10,385,665 | | | | | | (31,137) | | |
Net cash provided by financing activities
|
| | | | 553,333 | | | | | | 1,600,000 | | |
Net increase in cash and cash equivalents
|
| | | $ | 6,063,089 | | | | | $ | 517,682 | | |
AND RESULTS OF OPERATIONS OF MARPAI HEALTH
| | |
For the year ended
Dec 31 2020 |
| |
For the period from
Feb 14, 2019 (inception) to Dec 31 2019 |
| |
Change
|
| |
%
|
| ||||||||||||
Revenue | | | | | | | | | | | | | | | | | | | | | | | | | |
Net revenue
|
| | | | — | | | | | | — | | | | | | — | | | | | | n/a | | |
Cost of revenue
|
| | | | — | | | | | | — | | | | | | — | | | | | | n/a | | |
Gross Profit
|
| | | | — | | | | | | — | | | | | | — | | | | | | n/a | | |
| | | | | n/a | | | | | | n/a | | | | | | | | | | | | | | |
Operating Expense | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 1,840,772 | | | | | | 674,857 | | | | | | 1,165,915 | | | | | | 172.8% | | |
General and administrative
|
| | | | 1,499,376 | | | | | | 890,035 | | | | | | 609,341 | | | | | | 68.5% | | |
Sales and marketing
|
| | | | 27,583 | | | | | | 21,610 | | | | | | 5,973 | | | | | | 27.6% | | |
Total Operating Expense
|
| | | | 3,367,731 | | | | | | 1,586,502 | | | | | | 1,781,229 | | | | | | 112.3% | | |
Operating Loss
|
| | | | (3,367,731) | | | | | | (1,586,502) | | | | | | (1,781,229) | | | | | | 112.3% | | |
Other income and (expenses) | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense, net
|
| | | | (521,140) | | | | | | (106,933) | | | | | | (414,207) | | | | | | 387.4% | | |
Other income
|
| | | | 25,846 | | | | | | 16,902 | | | | | | 8,944 | | | | | | 52.9% | | |
Foreign exchange gain (loss)
|
| | | | (4,959) | | | | | | 3,642 | | | | | | (8,601) | | | | | | -236.2% | | |
Total other income (expense)
|
| | | | (500,253) | | | | | | (86,389) | | | | | | (413,864) | | | | | | 479.1% | | |
Loss before income taxes
|
| | | | (3,867,984) | | | | | | (1,672,891) | | | | | | (2,195,093) | | | | | | 131.2% | | |
Income tax expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | n/a | | |
Net Loss
|
| | | | (3,867,984) | | | | | | (1,672,891) | | | | | | (2,195,093) | | | | | | 131.2% | | |
Comprehensive Loss
|
| | | | (3,867,984) | | | | | | (1,672,891) | | | | | | (2,195,093) | | | | | | 131.2% | | |
| | |
Year Ended
December 31, 2020 |
| |
Period from Feb 14,
2019 (inception) to December 31, 2019 |
| ||||||
Net cash used in operating activities
|
| | | | (1,949,279) | | | | | | (875,639) | | |
Net cash used in investing activities
|
| | | | (554,065) | | | | | | (378,085) | | |
Net cash provided by financing activities
|
| | | | 4,075,000 | | | | | | 1,500,000 | | |
Net increase in cash and cash equivalents
|
| | | $ | 1,571,656 | | | | | $ | 246,276 | | |
AND RESULTS OF OPERATIONS OF CONTINENTAL BENEFITS
| | |
Years Ended December 31,
|
| | | | | | | | | | | | | |||||||||
| | |
2020
|
| |
2019
|
| |
Increase/(Decrease)
|
| |
% Var
|
| ||||||||||||
Net Sales
|
| | | $ | 18,388,192 | | | | | $ | 20,327,320 | | | | | $ | (1,939,128) | | | | | | (9.5)% | | |
Cost of Revenue
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Service Fees
|
| | | | 10,507,319 | | | | | | 10,960,684 | | | | | | (453,365) | | | | | | (4.1)% | | |
Direct Expense – Claims
|
| | | | 1,871,683 | | | | | | 2,641,375 | | | | | | (769,692) | | | | | | (29.1)% | | |
Direct Expense – Member Services
|
| | | | 1,552,006 | | | | | | 1,860,983 | | | | | | (308,977) | | | | | | (16.6)% | | |
Total Cost of Revenue
|
| | | | 13,931,008 | | | | | | 15,463,042 | | | | | | (1,532,034) | | | | | | (9.9)% | | |
Gross Profit
|
| | | | 4,457,184 | | | | | | 4,864,278 | | | | | | (407,094) | | | | | | (8.4)% | | |
Gross Margin
|
| | | | 24% | | | | | | 24% | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Administrative
|
| | | | 8,700,352 | | | | | | 6,314,695 | | | | | | 2,385,657 | | | | | | 37.8% | | |
Information Technology
|
| | | | 4,223,350 | | | | | | 5,440,224 | | | | | | (1,216,874) | | | | | | (22.4)% | | |
Sales and Marketing
|
| | | | 2,724,368 | | | | | | 3,562,888 | | | | | | (838,520) | | | | | | (23.5)% | | |
Facilities
|
| | | | 762,649 | | | | | | 659,006 | | | | | | 103,643 | | | | | | 15.7% | | |
Depreciation
|
| | | | 596,152 | | | | | | 505,719 | | | | | | 90,433 | | | | | | 17.9% | | |
Total Operating Expenses
|
| | | | 17,006,871 | | | | | | 16,482,532 | | | | | | 524,339 | | | | | | 3.2% | | |
Operating Loss
|
| | | $ | (12,549,687) | | | | | $ | (11,618,254) | | | | | $ | (931,433) | | | | | | 8.0% | | |
Other Non Operating Income | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Income
|
| | | | 11,506 | | | | | | 129,085 | | | | | | (117,579) | | | | | | (91.1)% | | |
Other Income
|
| | | | — | | | | | | 2,600 | | | | | | (2,600) | | | | | | (100.0)% | | |
Total Non Operating Income
|
| | | | 11,506 | | | | | | 131,685 | | | | | | (120,179) | | | | | | (91.3)% | | |
Net Loss
|
| | | $ | (12,538,181) | | | | | $ | (11,486,569) | | | | | $ | (1,051,612) | | | | | | 9.2% | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Total Current Assets
|
| | | $ | 14,143,967 | | | | | $ | 13,890,771 | | |
Total Current Liabilities
|
| | | | 10,608,167 | | | | | | 6,439,772 | | |
Working Capital
|
| | | $ | 3,535,800 | | | | | $ | 7,450,999 | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net loss
|
| | | $ | (12,538,181) | | | | | $ | (11,486,569) | | |
Net cash provided by (used in) operating activities
|
| | | $ | 5,713,453 | | | | | $ | (1,444,029) | | |
Net cash used in investing activities
|
| | | | (234,126) | | | | | | (226,670) | | |
Net cash provided by financing activities
|
| | | | 8,830,295 | | | | | | 9,323,253 | | |
Net increase (decrease) in cash and restricted cash
|
| | | $ | 1,771,441 | | | | | $ | (3,834,015) | | |
Name
|
| |
Combined Company Position(s)
|
| |
Position(s) at Marpai Health
|
|
Edmundo Gonzalez | | | Chief Executive Officer, Secretary, and Director | | | Co-founder, CEO, and Director of Marpai Health | |
Name
|
| |
Age
|
| |
Position
|
| |||
Edmundo Gonzalez
|
| | | | 48 | | | | Chief Executive Officer, Secretary and Director | |
Yoram Bibring
|
| | | | 64 | | | | Chief Financial Officer | |
Ronnie Brown
|
| | | | 68 | | | | Chief Operating Officer | |
Arthur Hoath, IV
|
| | | | 52 | | | | Chief Revenue Officer | |
Alice Roth
|
| | | | 60 | | | | President (Marpai Labs) | |
Yaron Eitan
|
| | | | 64 | | | | Chairman of the Board of Directors | |
Damien Lamendola
|
| | | | 65 | | | | Director | |
Gonen Antebi(1)(2)
|
| | | | 48 | | | | Director Nominee | |
Jane Cavalier Lucas
|
| | | | 60 | | | | Director Nominee | |
Vincent Kane(1)(2)
|
| | | | 48 | | | | Director Nominee | |
Colleen DiClaudio(1)(2)
|
| | | | 43 | | | | Director Nominee | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Stock
Awards ($)(1) |
| |
Total
($) |
| |||||||||||||||
Edmundo Gonzalez, Chief Executive Officer and Director
|
| | | | 2019 | | | | | $ | 180,000(2) | | | | | | — | | | | | $ | 1,162,764(3) | | | | | $ | 1,342,764 | | |
| | | | | 2020 | | | | | $ | 240,000 | | | | | | — | | | | | | | | | | | $ | 240,000 | | |
Mordechai Geva, Former Chief Technology Officer
|
| | | | 2019 | | | | | $ | 160,078(4) | | | | | | — | | | | | $ | 643,991(5) | | | | | $ | 803,989 | | |
| | | | | 2020 | | | | | $ | 226,427 | | | | | | — | | | | | | | | | | | $ | 226,427 | | |
Arthur Hoath, IV, Chief Revenue Officer(6)
|
| | | | 2019 | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | $ | — | | |
| | | | | 2020 | | | | | $ | — | | | | | | — | | | | | | — | | | | | $ | — | | |
Yoram Bibring, Chief Financial Officer(7)
|
| | | | 2019 | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | $ | — | | |
| | | | | 2020 | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | $ | — | | |
| | |
Shares Beneficially Owned
Prior to this Offering(1) |
| |
Shares Beneficially Owned
After this Offering(2) |
| ||||||||||||||||||
|
Shares
|
| |
%
|
| |
Shares
|
| |
%
|
| ||||||||||||||
Name and Address of Beneficial Owner(3) | | | | | | | | | | | | | | | | | | | | | | | | | |
Edmundo Gonzalez(4)†
|
| | | | 1,498,810 | | | | | | 13.0% | | | | | | 1,498,810 | | | | | | 10.5% | | |
Yaron Eitan(5)†
|
| | | | 809,719 | | | | | | 7.0% | | | | | | 809,719 | | | | | | 5.6% | | |
Ronnie Brown(6)
|
| | | | 36,065 | | | | | | * | | | | | | 36,065 | | | | | | * | | |
Yoram Bibring
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Alice Roth
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Art Hoath(7)
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Damien Lamendola(8)†
|
| | | | 5,971,863 | | | | | | 51.7% | | | | | | 5,971,863 | | | | | | 41.7% | | |
Gonen Antebi
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Colleen DiClaudio
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Vincent Kane
|
| | | | 54,670 | | | | | | * | | | | | | 54,670 | | | | | | * | | |
Jane Cavalier Lucas
|
| | | | 12,246 | | | | | | * | | | | | | 12,246 | | | | | | * | | |
All Directors, Director Nominees and Officers as a Group (eleven persons)
|
| | | | 8,383,373 | | | | | | 72.5% | | | | | | 8,383,373 | | | | | | 58.5% | | |
Other Greater than 5% Beneficial Owners | | | | | | | | | | | | | | | | | | | | | | | | | |
Dr. Eli David(9)†
|
| | | | 913,273 | | | | | | 7.9% | | | | | | 913,273 | | | | | | 6.4% | | |
Midwood 43 Trust(10)
|
| | | | 685,482 | | | | | | 5.9% | | | | | | 685,482 | | | | | | 4.8% | | |
Underwriter
|
| |
Number of
Units |
| |||
ThinkEquity LLC
|
| | | | | | |
Total
|
| | | | | | |
| | |
Per Unit
|
| |
Without
Over- allotment |
| |
With
Over- allotment |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discounts and commissions(1)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds, before expenses, to us(2)
|
| | | $ | | | | | $ | | | | | $ | | | |
| | |
Page(s)
|
|
| | | ||
Condensed Consolidated Financial Statements | | | | |
| | | ||
| | | ||
| | | ||
| | | ||
| | |
Stockholders of Marpai, Inc. and Subsidiaries
Melville, NY
August 25, 2021, except for Note 3 and Note 17, as to which the date is September 22, 2021
(UNAUDITED)
| | |
June 30, 2021
(Unaudited) |
| |
December 31, 2020
|
| ||||||
ASSETS: | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 2,339,223 | | | | | $ | 1,754,569 | | |
Restricted cash
|
| | | | 5,541,798 | | | | | | 63,363 | | |
Accounts receivable
|
| | | | 60,699 | | | | | | — | | |
Unbilled receivable
|
| | | | 45,054 | | | | | | — | | |
Prepaid expenses and other current assets
|
| | | | 603,762 | | | | | | 262,211 | | |
Other receivables
|
| | | | 31,187 | | | | | | 100,038 | | |
Total current assets
|
| | | | 8,621,723 | | | | | | 2,180,181 | | |
Property and equipment, net
|
| | | | 738,708 | | | | | | 195,404 | | |
Capitalized software, net
|
| | | | 6,903,397 | | | | | | 3,818,959 | | |
Operating lease right-of-use assets
|
| | | | 1,699,695 | | | | | | 337,316 | | |
Goodwill
|
| | | | 1,676,239 | | | | | | — | | |
Intangible assets, net
|
| | | | 6,721,650 | | | | | | — | | |
Security deposits
|
| | | | 52,277 | | | | | | — | | |
Total assets
|
| | | $ | 26,413,689 | | | | | $ | 6,531,860 | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 517,514 | | | | | $ | 159,168 | | |
Accounts payable – related party
|
| | | | — | | | | | | 15,725 | | |
Accrued expenses
|
| | | | 1,605,885 | | | | | | 267,967 | | |
Accrued fiduciary obligations
|
| | | | 5,195,939 | | | | | | — | | |
Deferred revenue
|
| | | | 261,843 | | | | | | — | | |
Current portion of operating lease liabilities
|
| | | | 699,379 | | | | | | 96,472 | | |
Current portion of convertible notes payable
|
| | | | 716,936 | | | | | | 1,866,237 | | |
Due to related party
|
| | | | 3,637 | | | | | | 243,638 | | |
Total current liabilities
|
| | | | 9,001,133 | | | | | | 2,649,207 | | |
Convertible notes payable, net of current portion
|
| | | | 5,003,225 | | | | | | 7,095,887 | | |
Other long-term liabilities
|
| | | | 45,000 | | | | | | — | | |
Operating lease liabilities, net of current portion
|
| | | | 1,212,146 | | | | | | 283,265 | | |
Deferred tax liabilities
|
| | | | 2,001,012 | | | | | | — | | |
Total liabilities
|
| | | | 17,262,516 | | | | | | 10,028,359 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | |
STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | |
Common stock, $0.0001 par value, 50,000,000 shares authorized; 2,446,826 issued and outstanding at June 30, 2021 and 31,250 issued and outstanding at December 31, 2020
|
| | | | 245 | | | | | | 3 | | |
Additional paid-in capital
|
| | | | 20,155,391 | | | | | | 2,044,373 | | |
Accumulated deficit
|
| | | | (11,004,463) | | | | | | (5,540,875) | | |
Total stockholders’ equity (deficit)
|
| | | | 9,151,173 | | | | | | (3,496,499) | | |
Total liabilities and stockholders’ equity (deficit)
|
| | | $ | 26,413,689 | | | | | $ | 6,531,860 | | |
(UNAUDITED)
| | |
Six Months Ended June 30,
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Revenue
|
| | | $ | 3,531,512 | | | | | $ | — | | |
Costs and expenses | | | | | | | | | | | | | |
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
| | | | 2,720,483 | | | | | | — | | |
General and administrative
|
| | | | 2,814,950 | | | | | | 773,223 | | |
Research and development
|
| | | | 549,374 | | | | | | 1,025,986 | | |
Sales and marketing
|
| | | | 1,443,785 | | | | | | 5,623 | | |
Information technology
|
| | | | 731,230 | | | | | | — | | |
Facilities
|
| | | | 226,892 | | | | | | — | | |
Depreciation and amortization
|
| | | | 420,967 | | | | | | 37,885 | | |
Total costs and expenses
|
| | | | 8,907,681 | | | | | | 1,842,717 | | |
Operating loss
|
| | | | (5,376,169) | | | | | | (1,842,717) | | |
Other income (expenses) | | | | | | | | | | | | | |
Interest income
|
| | | | 28 | | | | | | 5 | | |
Other income
|
| | | | 54,398 | | | | | | 12,733 | | |
Interest expense
|
| | | | (276,061) | | | | | | (226,335) | | |
Foreign exchange loss
|
| | | | (15,784) | | | | | | (2,188) | | |
Loss before provision for income taxes
|
| | | | (5,613,588) | | | | | | (2,058,502) | | |
Income tax benefit
|
| | | | (150,000) | | | | | | — | | |
Net loss
|
| | | $ | (5,463,588) | | | | | $ | (2,058,502) | | |
Net loss per share, basic & fully diluted
|
| | | $ | (3.81) | | | | | $ | (4.24) | | |
Weighted average number of common shares
|
| | | | 1,433,087 | | | | | | 485,463 | | |
| | |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total Stockholders’
Equity (Deficit) |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balance, January 1, 2020
|
| | | | 31,250 | | | | | $ | 3 | | | | | $ | 799,743 | | | | | $ | (1,672,891) | | | | | $ | (873,145) | | |
Fair value of warrants issued with convertible note
|
| | | | — | | | | | | — | | | | | | 213,828 | | | | | | — | | | | | | 213,828 | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 641,510 | | | | | | — | | | | | | 641,510 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (2,058,502) | | | | | | (2,058,502) | | |
Balance, June 30, 2020 (Unaudited)
|
| | | | 31,250 | | | | | $ | 3 | | | | | $ | 1,655,081 | | | | | $ | (3,731,393) | | | | | $ | (2,076,309) | | |
Balance, January 1, 2021
|
| | | | 31,250 | | | | | $ | 3 | | | | | $ | 2,044,373 | | | | | $ | (5,540,875) | | | | | $ | (3,496,499) | | |
Exchange of common shares of Marpai Health, Inc. (see Note 1)
|
| | | | (31,250) | | | | | | (3) | | | | | | — | | | | | | — | | | | | | (3) | | |
Issuance of common shares of Marpai, Inc.
(see Note 1) |
| | | | 2,446,826 | | | | | | 245 | | | | | | 17,351,679 | | | | | | — | | | | | | 17,351,924 | | |
Warrants issued for cash
|
| | | | — | | | | | | — | | | | | | 53,333 | | | | | | — | | | | | | 53,333 | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 705,006 | | | | | | — | | | | | | 706,006 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (5,463,588) | | | | | | (5,463,588) | | |
Balance, June 30, 2021 (Unaudited)
|
| | | | 2,446,826 | | | | | $ | 245 | | | | | $ | 20,155,391 | | | | | $ | (11,004,463) | | | | | $ | 9,151,173 | | |
(UNAUDITED)
| | |
Six Months Ended June 30
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (5,463,588) | | | | | $ | (2,058,502) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 420,967 | | | | | | 37,885 | | |
Share-based compensation
|
| | | | 706,006 | | | | | | 641,510 | | |
Amortization of right-of-use asset
|
| | | | 41,810 | | | | | | 38,079 | | |
Amortization of debt discount
|
| | | | 26,728 | | | | | | 48,571 | | |
Interest accrued on convertible notes payable
|
| | | | 246,230 | | | | | | 175,133 | | |
Convertible note issued for professional services
|
| | | | 75,000 | | | | | | — | | |
Deferred taxes
|
| | | | (150,000) | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
(Increase) decrease in prepaid expense and other assets
|
| | | | (210,138) | | | | | | 10,002 | | |
(Increase) in accounts receivable and unbilled receivable
|
| | | | (13,522) | | | | | | — | | |
Decrease (increase) in other receivable
|
| | | | 68,851 | | | | | | (6,229) | | |
Increase in security deposit
|
| | | | 2,592 | | | | | | — | | |
(Decrease) in accounts payable
|
| | | | (567,261) | | | | | | (1,326) | | |
(Decrease) in accounts payable – related party
|
| | | | (15,725) | | | | | | — | | |
Increase in accrued expenses
|
| | | | 70,210 | | | | | | 106,269 | | |
Increase in accrued fiduciary obligations
|
| | | | 1,125,031 | | | | | | — | | |
(Decrease) in operating lease liabilities
|
| | | | (55,722) | | | | | | (42,573) | | |
(Decrease) in due to related party
|
| | | | (240,001) | | | | | | — | | |
(Decrease) in other liabilities
|
| | | | (943,377) | | | | | | — | | |
Net cash used in operating activities
|
| | | | (4,875,909) | | | | | | (1,051,181) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Cash and restricted cash acquired as part of Acquisition (see Note 4)
|
| | | | 11,384,035 | | | | | | — | | |
Capitalization of software development costs
|
| | | | (972,181) | | | | | | — | | |
Purchase of property and equipment
|
| | | | (26,189) | | | | | | (31,137) | | |
Net cash provided by (used in) investing activities
|
| | | | 10,385,665 | | | | | | (31,137) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from issuance of convertible notes payable
|
| | | | 500,000 | | | | | | 1,600,000 | | |
Proceeds from issuance of warrants
|
| | | | 53,333 | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 553,333 | | | | | | 1,600,000 | | |
Net increase in cash, cash equivalents and restricted cash
|
| | | | 6,063,089 | | | | | | 517,682 | | |
Cash, cash equivalents and restricted cash at beginning of the year
|
| | | | 1,817,932 | | | | | | 246,276 | | |
Cash, cash equivalents and restricted cash at end of the year
|
| | | $ | 7,881,021 | | | | | $ | 763,958 | | |
Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet
|
| | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 2,339,223 | | | | | $ | 706,633 | | |
Restricted cash
|
| | | | 5,541,798 | | | | | | 57,325 | | |
Total cash, cash equivalents and restricted cash shown in the consolidated statement of
cash flows |
| | | $ | 7,881,021 | | | | | $ | 763,958 | | |
Supplemental disclosure of non-cash activity | | | | | | | | | | | | | |
Conversion of convertible notes into common stock at the closing of the Acquisition
|
| | | $ | 4,174,992 | | | | | $ | — | | |
Common stock issued as part of the Acquisition
|
| | | $ | 8,500,000 | | | | | $ | — | | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| | |
Useful Lives
|
|
Equipment
|
| |
3 years
|
|
Furniture and fixtures
|
| |
5 years
|
|
Leasehold improvements
|
| |
Shorter of 5 years or lease term
|
|
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| | |
2021
|
| |
2020
|
|
Risk-free interest rates
|
| |
0.912%
|
| |
1.026 – 1.399%
|
|
Expected life
|
| |
5 years
|
| |
6.25 years
|
|
Expected volatility
|
| |
40.81%
|
| |
34.60%
|
|
Expected dividend yield
|
| |
0.00%
|
| |
0.00%
|
|
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| Purchase Price | | | | | | | |
|
Equity value
|
| | | $ | 13,262,000 | | |
|
Cash acquired
|
| | | | (4,762,000) | | |
|
Total purchase price paid, net of cash acquired
|
| | | $ | 8,500,000 | | |
| Purchase Price Allocation | | | | | | | |
|
Restricted cash
|
| | | $ | 6,622,035 | | |
|
Accounts receivable
|
| | | | 92,231 | | |
|
Prepaid expenses and other current assets
|
| | | | 131,413 | | |
|
Property and equipment
|
| | | | 1,601,990 | | |
|
Intangible assets
|
| | | | 1,010,000 | | |
|
Capitalized software
|
| | | | 1,230,000 | | |
|
Operating lease – right of use assets
|
| | | | 1,532,925 | | |
|
Goodwill
|
| | | | 1,676,239 | | |
|
Trademarks
|
| | | | 1,860,000 | | |
|
Patents and patent applications
|
| | | | 700,000 | | |
|
Customer relationships
|
| | | | 3,370,000 | | |
|
Security deposits
|
| | | | 54,869 | | |
|
Account payable
|
| | | | (925,608) | | |
|
Accrued expenses
|
| | | | (1,267,708) | | |
|
Accrued fiduciary obligations
|
| | | | (4,070,908) | | |
|
Operating lease liabilities
|
| | | | (1,716,246) | | |
|
Deferred tax liability
|
| | | | (2,151,012) | | |
|
Deferred revenue
|
| | | | (1,205,220) | | |
|
Other long-term liabilities
|
| | | | (45,000) | | |
|
Total fair value of net assets acquired and liabilities assumed
|
| | | $ | 8,500,000 | | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| | |
Acquisition
Fair Value |
| |
Useful Life
in Years |
| |||
Trademarks
|
| | | $ | 1,860,000 | | | |
10 Years
|
|
Intangible assets
|
| | | | 1,010,000 | | | |
5 Years
|
|
Customer relationships
|
| | | | 3,370,000 | | | |
7 Years
|
|
Patents and patent applications
|
| | | | 700,000 | | | |
Work in process
|
|
| | |
Six Months
Ended June 30, 2021 (pro forma) |
| |
Year Ended
December 31, 2020 (pro forma) |
| ||||||
Revenue
|
| | | $ | 7,746,593 | | | | | $ | 18,388,192 | | |
Net loss
|
| | | | (7,479,835) | | | | | | (17,620,431) | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
Equipment
|
| | | $ | 195,691 | | | | | $ | 25,892 | | |
Furniture and fixtures
|
| | | | 341,769 | | | | | | 76,493 | | |
Leasehold improvements
|
| | | | 375,099 | | | | | | 190,806 | | |
Total cost
|
| | | | 912,559 | | | | | | 293,191 | | |
Accumulated depreciation
|
| | | | (173,851) | | | | | | (97,787) | | |
Property and equipment, net
|
| | | $ | 738,708 | | | | | $ | 195,404 | | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
Capitalized software
|
| | | $ | 2,238,810 | | | | | $ | — | | |
Accumulated amortization
|
| | | | (126,553) | | | | | | — | | |
Net carrying amount
|
| | | | 2,112,257 | | | | | | — | | |
Capitalized software in-process
|
| | | | 4,791,140 | | | | | | 3,818,959 | | |
Capitalized software, net
|
| | | $ | 6,903,397 | | | | | $ | 3,818,959 | | |
Year Ended December 31,
|
| | | | | | |
2021 (six months)
|
| | | $ | 223,881 | | |
2022
|
| | | | 447,762 | | |
2023
|
| | | | 447,762 | | |
2024
|
| | | | 447,762 | | |
2025
|
| | | | 447,762 | | |
Thereafter
|
| | | | 97,328 | | |
| | | | $ | 2,112,257 | | |
| | |
June 30, 2021
|
| ||||||||||||||||||
| | |
Useful Life
|
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
Carrying Amount |
| |||||||||
Trademarks
|
| |
10 Years
|
| | | $ | 1,860,000 | | | | | $ | (46,712) | | | | | $ | 1,813,288 | | |
Intangible assets
|
| |
5 Years
|
| | | | 1,010,000 | | | | | | (50,731) | | | | | | 959,269 | | |
Customer relationships
|
| |
7 Years
|
| | | | 3,370,000 | | | | | | (120,907) | | | | | | 3,249,093 | | |
Patents and patent applications
|
| |
Work in process
|
| | | | 700,000 | | | | | | — | | | | | | 700,000 | | |
| | | | | | | $ | 6,940,000 | | | | | $ | (218,350) | | | | | $ | 6,721,650 | | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
Year Ended December 31,
|
| | | | | | |
2021 (six months)
|
| | | $ | 434,714 | | |
2022
|
| | | | 869,429 | | |
2023
|
| | | | 869,429 | | |
2024
|
| | | | 869,429 | | |
2025
|
| | | | 869,429 | | |
Thereafter
|
| | | | 2,809,220 | | |
| | | | $ | 6,721,650 | | |
Year Ended December 31,
|
| | | | | | |
2021(six months)
|
| | | $ | 416,064 | | |
2022
|
| | | | 827,607 | | |
2023
|
| | | | 785,908 | | |
2024
|
| | | | 83,683 | | |
2025
|
| | | | 12,661 | | |
Total lease payments
|
| | | | 2,125,923 | | |
Less: imputed interest
|
| | | | (214,398) | | |
Present value of lease liabilities
|
| | | | 1,911,525 | | |
Less: current lease liabilities
|
| | | | (699,379) | | |
Long-term lease liabilities
|
| | | $ | 1,212,146 | | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
Year Ended December 31,
|
| | | | | | |
2021(six months)
|
| | | $ | 108,663 | | |
2022
|
| | | | 222,083 | | |
2023
|
| | | | 178,409 | | |
2024
|
| | | | 13,527 | | |
2025
|
| | | | — | | |
Thereafter
|
| | | | — | | |
Total sublease income
|
| | | $ | 522,682 | | |
| | |
Number of
Options |
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Balance at January 1, 2021
|
| | | | 102,741 | | | | | $ | 0.64 | | | | | | 9.25 | | | | | $ | 1,315,512 | | |
Granted
|
| | | | 223,170 | | | | | | 15.12 | | | | | | | | | | | | | | |
Forfeited/Cancelled
|
| | | | (6,675) | | | | | | 0.01 | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Balance at June 30, 2021
|
| | | | 319,236 | | | | | | 10.78 | | | | | | 9.43 | | | | | $ | 317,567 | | |
Exercisable at June 30, 2021
|
| | | | 61,784 | | | | | $ | 6.34 | | | | | | 9.06 | | | | | $ | 335,243 | | |
| | |
Number of
Options |
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Balance at January 1, 2020
|
| | | | — | | | | | $ | — | | | | | | — | | | | | | — | | |
Granted
|
| | | | 102,741 | | | | | | 0.64 | | | | | | | | | | | | | | |
Forfeited/Cancelled
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Balance at June 30, 2020
|
| | | | 102,741 | | | | | | 0.64 | | | | | | 9.75 | | | | | | 932,288 | | |
Exercisable at June 30, 2020
|
| | | | — | | | | | $ | — | | | | | | — | | | | | | — | | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| | |
Non-vested
Options Outstanding |
| |
Weighted-
Average Grant Date Fair Value |
| ||||||
At January 1, 2021
|
| | | | 93,734 | | | | | $ | 5.51 | | |
Options granted
|
| | | | 223,170 | | | | | | 3.71 | | |
Options forfeited/cancelled
|
| | | | (6,675) | | | | | | 6.96 | | |
Options exercised
|
| | | | — | | | | | | — | | |
Options vested
|
| | | | (52,777) | | | | | | 4.44 | | |
At June 30, 2021
|
| | | | 257,452 | | | | | $ | 4.24 | | |
| | |
Non-vested
Options Outstanding |
| |
Weighted-
Average Grant Date Fair Value |
| ||||||
At January 1, 2020
|
| | | | — | | | | | $ | — | | |
Options granted
|
| | | | 102,741 | | | | | | 5.58 | | |
Options forfeited/cancelled
|
| | | | — | | | | | | — | | |
Options exercised
|
| | | | — | | | | | | — | | |
Options vested
|
| | | | — | | | | | | — | | |
At June 30, 2020
|
| | | | 102,741 | | | | | $ | 5.58 | | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| | |
Restricted
Stock Awards |
| |
Weighted-
Average Grant Date Fair Value Per Share |
| ||||||
Outstanding at January 1, 2021
|
| | | | 315,922 | | | | | $ | 6.70 | | |
Granted
|
| | | | — | | | | | | — | | |
Forfeited/cancelled
|
| | | | (23,546) | | | | | | 8.18 | | |
Vested
|
| | | | (88,280) | | | | | | 6.52 | | |
Outstanding at June 30, 2021
|
| | | | 204,096 | | | | | $ | 6.48 | | |
Outstanding at January 1, 2020
|
| | | | 467,685 | | | | | $ | 6.44 | | |
Granted
|
| | | | — | | | | | | — | | |
Forfeited/cancelled
|
| | | | — | | | | | | — | | |
Vested
|
| | | | (39,352) | | | | | | 6.44 | | |
Outstanding at June 30, 2020
|
| | | | 428,333 | | | | | $ | 6.44 | | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
Convertible notes payable
|
| | | $ | 5,378,458 | | | | | $ | 8,555,000 | | |
Accrued interest
|
| | | | 341,703 | | | | | | 518,924 | | |
Less: unamortized debt discount
|
| | | | — | | | | | | (111,800) | | |
Total convertible notes payable, net
|
| | | | 5,720,161 | | | | | | 8,962,124 | | |
Less: current portion of convertible notes payable
|
| | | | (716,936) | | | | | | (1,866,237) | | |
Convertible notes payable, net of current portion
|
| | | $ | 5,003,225 | | | | | $ | 7,095,887 | | |
Year Ended December 31,
|
| | | | | | |
2021 (six months)
|
| | | $ | 268,851 | | |
2022
|
| | | | 2,982,750 | | |
2023
|
| | | | 1,662,008 | | |
2024
|
| | | | 806,552 | | |
| | | | $ | 5,720,161 | | |
|
Exercise price of the warrants
|
| |
$6.50
|
|
|
Contractual life of the warrants
|
| |
5 years
|
|
|
Current value of the underlying common stock
|
| |
$9.71
|
|
|
Expected volatility
|
| |
35.04%
|
|
|
Expected dividend yield
|
| |
0.00%
|
|
|
Risk-free interest rate
|
| |
1.693%
|
|
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| | |
Number of
Common Shares Warrants |
| |
Exercise
Price Range Per Share |
| |
Weighted
Average Exercise Price |
| ||||||
Balance at January 1, 2021
|
| | | | 80,000 | | | |
$6.50
|
| | | $ | 6.50 | | |
Granted
|
| | | | 213,333 | | | |
36.00
|
| | | | 36.00 | | |
Forfeited
|
| | | | — | | | |
—
|
| | | | — | | |
Exercised
|
| | | | — | | | |
—
|
| | | | — | | |
Balance at June 30, 2021
|
| | | | 293,333 | | | |
$6.50 to 36.00
|
| | | $ | 27.95 | | |
Balance at January 1, 2020
|
| | | | — | | | |
$ —
|
| | | $ | — | | |
Granted
|
| | | | 80,000 | | | |
6.50
|
| | | | 6.50 | | |
Forfeited
|
| | | | — | | | |
—
|
| | | | — | | |
Exercised
|
| | | | — | | | |
—
|
| | | | — | | |
Balance at June 30, 2020
|
| | | | 80,000 | | | |
$ 6.50
|
| | | $ | 6.50 | | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
United States
|
| | | $ | 15,512,493 | | | | | $ | 3,250,666 | | |
Israel
|
| | | | 2,010,396 | | | | | | 1,101,013 | | |
Total long-lived assets
|
| | | $ | 17,522,889 | | | | | $ | 4,351,679 | | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
Stockholders of Marpai Health, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
ASSETS: | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,754,569 | | | | | $ | 187,340 | | |
Restricted cash
|
| | | | 63,363 | | | | | | 58,936 | | |
Prepaid expenses and other current assets
|
| | | | 262,211 | | | | | | 16,010 | | |
Other receivables
|
| | | | 100,038 | | | | | | 27,857 | | |
Total current assets
|
| | | | 2,180,181 | | | | | | 290,143 | | |
Property and equipment, net
|
| | | | 195,404 | | | | | | 284,683 | | |
Capitalized software
|
| | | | 3,818,959 | | | | | | 3,250,000 | | |
Operating lease right-of-use assets
|
| | | | 337,316 | | | | | | 415,299 | | |
Total assets
|
| | | $ | 6,531,860 | | | | | $ | 4,240,125 | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 159,168 | | | | | $ | 44,878 | | |
Accounts payable – related party
|
| | | | 15,725 | | | | | | — | | |
Accrued expenses
|
| | | | 44,955 | | | | | | 19,653 | | |
Employee and payroll accruals
|
| | | | 223,012 | | | | | | 47,762 | | |
Current portion of operating lease liabilities
|
| | | | 96,472 | | | | | | 86,971 | | |
Current portion of convertible notes payable
|
| | | | 1,866,237 | | | | | | — | | |
Due to related party
|
| | | | 243,638 | | | | | | — | | |
Total current liabilities
|
| | | | 2,649,207 | | | | | | 199,264 | | |
Convertible notes payable, net of current portion
|
| | | | 7,095,887 | | | | | | 4,534,270 | | |
Operating lease liabilities, net of current portion
|
| | | | 283,265 | | | | | | 379,736 | | |
Total liabilities
|
| | | | 10,028,359 | | | | | | 5,113,270 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | |
STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | |
Common stock, $0.0001 par value, 1,500,000 shares authorized; 31,250 issued and outstanding
|
| | | | 3 | | | | | | 3 | | |
Additional paid-in capital
|
| | | | 2,044,373 | | | | | | 799,743 | | |
Accumulated deficit
|
| | | | (5,540,875) | | | | | | (1,672,891) | | |
Total stockholders’ deficit
|
| | | | (3,496,499) | | | | | | (873,145) | | |
Total liabilities and stockholders’ deficit
|
| | | $ | 6,531,860 | | | | | $ | 4,240,125 | | |
CONSOLIDATED STATEMENTS OF OPERATIONS
| | |
Year Ended
December 31, 2020 |
| |
Period from
February 14, 2019 (Inception) to December 31, 2019 |
| ||||||
Revenue
|
| | | $ | — | | | | | $ | — | | |
Cost of revenue
|
| | | | — | | | | | | — | | |
Gross profit
|
| | | | — | | | | | | — | | |
Operating expenses | | | | | | | | | | | | | |
Research and development
|
| | | | 1,840,772 | | | | | | 674,857 | | |
General and administrative
|
| | | | 1,499,376 | | | | | | 890,035 | | |
Sales and marketing
|
| | | | 27,583 | | | | | | 21,610 | | |
Total operating expenses
|
| | | | 3,367,731 | | | | | | 1,586,502 | | |
Operating loss
|
| | | | (3,367,731) | | | | | | (1,586,502) | | |
Other income (expenses) | | | | | | | | | | | | | |
Other income
|
| | | | 25,846 | | | | | | 16,902 | | |
Interest expense
|
| | | | (521,140) | | | | | | (106,933) | | |
Foreign exchange (loss) gain
|
| | | | (4,959) | | | | | | 3,642 | | |
Loss before provision for income taxes
|
| | | | (3,867,984) | | | | | | (1,672,891) | | |
Income tax expense
|
| | | | — | | | | | | — | | |
Net loss
|
| | | $ | (3,867,984) | | | | | $ | (1,672,891) | | |
Loss per share, basic & fully diluted
|
| | | $ | (7.26) | | | | | $ | (5.28) | | |
Weighted average number of common shares
|
| | | | 533,137 | | | | | | 316,746 | | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
| | |
Common Stock
|
| | | | | | | | | | | | | | | | | | | |||||||||
| | |
Shares
|
| |
Amount
|
| |
Additional Paid-
In Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| |||||||||||||||
Balance, February 14, 2019 (Inception)
|
| | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Issuance of common shares in connection with asset purchase
|
| | | | 31,250 | | | | | | 3 | | | | | | 249,997 | | | | | | — | | | | | | 250,000 | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 549,746 | | | | | | — | | | | | | 549,746 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (1,672,891) | | | | | | (1,672,891) | | |
Balance, December 31, 2019
|
| | | | 31,250 | | | | | $ | 3 | | | | | $ | 799,743 | | | | | $ | (1,672,891) | | | | | $ | (873,145) | | |
Fair value of warrants issued with convertible note
|
| | | | — | | | | | | — | | | | | | 213,828 | | | | | | — | | | | | | 213,828 | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 1,030,802 | | | | | | — | | | | | | 1,030,802 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (3,867,984) | | | | | | (3,867,984) | | |
Balance, December 31, 2020
|
| | | | 31,250 | | | | | $ | 3 | | | | | $ | 2,044,373 | | | | | $ | (5,540,875) | | | | | $ | (3,496,499) | | |
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | |
Year Ended
December 31, 2020 |
| |
Period from
February 14, 2019 (Inception) to December 31, 2019 |
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (3,867,984) | | | | | $ | (1,672,891) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 74,384 | | | | | | 23,403 | | |
Shared-based compensation
|
| | | | 1,030,802 | | | | | | 549,746 | | |
Amortization of right-of-use asset
|
| | | | 77,983 | | | | | | 48,060 | | |
Amortization of debt discount
|
| | | | 102,028 | | | | | | — | | |
Interest accrued on convertible notes payable
|
| | | | 414,654 | | | | | | 104,269 | | |
Professional services performed in exchange for convertible notes
|
| | | | 50,000 | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
(Increase) in prepaid expense and other assets
|
| | | | (318,380) | | | | | | (43,867) | | |
Increase in accounts payable
|
| | | | 114,290 | | | | | | 44,878 | | |
Increase in accounts payable – related party
|
| | | | 15,725 | | | | | | — | | |
Increase in accrued expenses
|
| | | | 200,552 | | | | | | 67,415 | | |
(Decrease) increase in operating lease liabilities
|
| | | | (86,971) | | | | | | 3,348 | | |
Increase in due to related party
|
| | | | 243,638 | | | | | | — | | |
Net cash used in operating activities
|
| | | | (1,949,279) | | | | | | (875,639) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Capitalization of software development costs
|
| | | | (568,959) | | | | | | — | | |
Purchase of capitalized software
|
| | | | — | | | | | | (70,000) | | |
Purchase of property and equipment
|
| | | | (30,746) | | | | | | (308,085) | | |
Reimbursement of leasehold improvements from sublease
|
| | | | 45,640 | | | | | | — | | |
Net cash used in investing activities
|
| | | | (554,065) | | | | | | (378,085) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from issuance of convertible notes payable
|
| | | | 4,075,000 | | | | | | 1,500,000 | | |
Net cash provided by financing activities
|
| | | | 4,075,000 | | | | | | 1,500,000 | | |
Net increase in cash, cash equivalents and restricted cash
|
| | | | 1,571,656 | | | | | | 246,276 | | |
Cash, cash equivalents and restricted cash at beginning of the year
|
| | | | 246,276 | | | | | | — | | |
Cash, cash equivalents and restricted cash at end of the year
|
| | | $ | 1,817,932 | | | | | $ | 246,276 | | |
Supplemental disclosure of non-cash investing and financing activity | | | | | | | | | | | | | |
Convertible debt issued to purchase capitalized software
|
| | | $ | — | | | | | $ | 2,930,000 | | |
Purchase of capitalized software asset with issuance of common shares
|
| | | $ | — | | | | | $ | 250,000 | | |
Initial recognition of operating lease right-of-use assets, net of lease incentive
|
| | | $ | — | | | | | $ | 463,359 | | |
Initial recognition of operating lease liabilities
|
| | | $ | — | | | | | $ | 520,759 | | |
Issuance of warrants in connection with convertible debt
|
| | | $ | 213,828 | | | | | $ | — | | |
Professional services performed in exchange for convertible notes
|
| | | $ | 50,000 | | | | | $ | — | | |
Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet
|
| | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,754,569 | | | | | $ | 187,340 | | |
Restricted cash
|
| | | | 63,363 | | | | | | 58,936 | | |
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows
|
| | | $ | 1,817,932 | | | | | $ | 246,276 | | |
| | |
Useful Lives
|
|
Equipment
|
| |
3 years
|
|
Furniture and fixtures
|
| |
5 years
|
|
Leasehold improvements
|
| |
Shorter of 5 years or lease term
|
|
| | |
2020
|
| |
2019
|
|
Risk-free interest rates
|
| |
0.285 – 1.399%
|
| |
1.445%
|
|
Expected life
|
| |
5 – 6.25 years
|
| |
6.25 years
|
|
Expected volatility
|
| |
34.60 – 41.07%
|
| |
34.70%
|
|
Expected dividend yield
|
| |
0.00%
|
| |
0.00%
|
|
| | |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||
Equipment
|
| | | $ | 25,892 | | | | | $ | 11,200 | | |
Furniture and fixtures
|
| | | | 76,493 | | | | | | 76,493 | | |
Leasehold improvements
|
| | | | 190,806 | | | | | | 220,393 | | |
Total cost
|
| | | | 293,191 | | | | | | 308,086 | | |
Accumulated depreciation
|
| | | | (97,787) | | | | | | (23,403) | | |
Property and equipment, net
|
| | | $ | 195,404 | | | | | $ | 284,683 | | |
|
2021
|
| | | $ | 124,845 | | |
|
2022
|
| | | | 126,690 | | |
|
2023
|
| | | | 126,690 | | |
|
2024
|
| | | | 61,978 | | |
|
Total lease payments
|
| | | | 440,203 | | |
|
Less: imputed interest
|
| | | | (60,466) | | |
|
Present value of lease liabilities
|
| | | | 379,737 | | |
|
Less: current lease liabilities
|
| | | | (96,472) | | |
|
Long-term lease liabilities
|
| | | $ | 283,265 | | |
| | |
Number of
Options |
| |
Weighted Average
Exercise Price |
| |
Weighted Average
Remaining Contractual Term |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Balance at December 31, 2019
|
| | | | — | | | | | $ | — | | | | | | | | | | | | | | |
Granted
|
| | | | 102,741 | | | | | | 0.64 | | | | | | | | | | | | | | |
Forfeited/Expired
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Balance at December 31, 2020
|
| | | | 102,741 | | | | | | 0.64 | | | | | | 9.25 | | | | | $ | 1,315,512 | | |
Exercisable at December 31, 2020
|
| | | | 9,007 | | | | | $ | 0.01 | | | | | | 9.25 | | | | | $ | 120,966 | | |
| | |
Non-vested
Options Outstanding |
| |
Weighted-Average
Grant Date Fair Value |
| ||||||
At December 31, 2019
|
| | | | — | | | | | $ | — | | |
Options granted
|
| | | | 102,741 | | | | | | 5.59 | | |
Options forfeited/cancelled
|
| | | | — | | | | | | — | | |
Options exercised
|
| | | | — | | | | | | — | | |
Options vested
|
| | | | (9,007) | | | | | | 6.43 | | |
At December 31, 2020
|
| | | | 93,734 | | | | | $ | 5.51 | | |
| | |
Restricted Stock
Units |
| |
Weighted-Average
Grant Date Fair Value Per Share |
| ||||||
At February 14, 2019
|
| | | | — | | | | | $ | — | | |
Granted
|
| | | | 921,898 | | | | | | 6.44 | | |
Vested
|
| | | | (454,213) | | | | | | 6.44 | | |
Outstanding at December 31, 2019
|
| | | | 467,685 | | | | | | 6.44 | | |
Granted
|
| | | | 29,500 | | | | | | 9.71 | | |
Exercised
|
| | | | — | | | | | | — | | |
Vested
|
| | | | (141,911) | | | | | | 6.54 | | |
Outstanding at December 31, 2020
|
| | | | 355,274 | | | | | $ | 6.67 | | |
| | |
December 31 2020
|
| |
December 31, 2019
|
| ||||||
Convertible notes payable
|
| | | $ | 8,555,000 | | | | | $ | 4,430,000 | | |
Accrued interest
|
| | | | 518,924 | | | | | | 104,270 | | |
Less: unamortized debt discount
|
| | | | (111,800) | | | | | | — | | |
Total convertible notes payable, net
|
| | | $ | 8,962,124 | | | | | $ | 4,534,270 | | |
Less: current portion of convertible notes payable
|
| | | | (1,866,237) | | | | | | — | | |
Convertible notes payable, net of current portion
|
| | | $ | 7,095,887 | | | | | $ | 4,534,270 | | |
Year Ended December 31,
|
| | | | | | |
2021
|
| | | $ | 1,866,237 | | |
2022
|
| | | | 5,289,388 | | |
2023
|
| | | | 1,046,344 | | |
2024
|
| | | | 871,955 | | |
| | | | $ | 9,073,924 | | |
|
Exercise price of the warrants
|
| |
$6.50
|
|
|
Contractual life of the warrants
|
| |
5 years
|
|
|
Current value of the underlying common stock
|
| |
$9.71
|
|
|
Expected volatility
|
| |
35.04%
|
|
|
Expected dividend yield
|
| |
0.00%
|
|
|
Risk-free interest rate
|
| |
1.693%
|
|
| | |
Federal
|
| |
States
|
| ||||||
Expire in 2039
|
| | | $ | — | | | | | $ | 98,494 | | |
Expire in 2040
|
| | | | — | | | | | | 226,566 | | |
Indefinite life
|
| | | | 483,102 | | | | | | 192,825 | | |
Total
|
| | | $ | 483,102 | | | | | | 517,885 | | |
| | |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||
Startup costs
|
| | | | 463,690 | | | | | $ | 171,092 | | |
Stock compensation – RSAs
|
| | | | 434,384 | | | | | | 190,270 | | |
Net operating loss – Federal
|
| | | | 101,452 | | | | | | 20,684 | | |
Net operating loss – State
|
| | | | 46,209 | | | | | | 11,944 | | |
| | | | | 1,045,735 | | | | | | 393,990 | | |
Less: Valuation allowance
|
| | | | (1,045,735) | | | | | | (393,990) | | |
Net deferred tax asset
|
| | | $ | — | | | | | $ | — | | |
| | |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||
United States
|
| | | $ | 3,250,666 | | | | | $ | 3,250,000 | | |
Israel
|
| | | | 1,101,013 | | | | | | 699,981 | | |
Total long-lived assets
|
| | | $ | 4,351,679 | | | | | $ | 3,949,981 | | |
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
Member of Continental Benefits LLC and Subsidiary
Consolidated Balance Sheets
| | |
March 31, 2021
(Unaudited) |
| |
December 31, 2020
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 4,579,903 | | | | | $ | 6,982,163 | | |
Restricted cash
|
| | | | 6,622,035 | | | | | | 6,889,701 | | |
Accounts receivable – net
|
| | | | | | | | | | | | |
Trade
|
| | | | 56,703 | | | | | | 37,489 | | |
Unbilled
|
| | | | 35,528 | | | | | | 41,208 | | |
Prepaid expenses
|
| | | | 131,413 | | | | | | 193,406 | | |
Total current assets
|
| | | | 11,425,582 | | | | | | 14,143,967 | | |
Property and equipment – net
|
| | | | 1,338,195 | | | | | | 1,469,400 | | |
Operating lease right-of-use assets
|
| | | | 1,532,925 | | | | | | 1,658,935 | | |
Deposits
|
| | | | 54,869 | | | | | | 54,869 | | |
Total assets
|
| | | $ | 14,351,571 | | | | | $ | 17,327,171 | | |
LIABILITIES AND MEMBER’S EQUITY | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 925,608 | | | | | $ | 529,224 | | |
Deferred revenue
|
| | | | 1,606,960 | | | | | | 777,041 | | |
Accrued and other current liabilities:
|
| | | | | | | | | | | | |
Accrued compensation
|
| | | | 894,191 | | | | | | 985,220 | | |
Accrued fiduciary obligations
|
| | | | 4,070,908 | | | | | | 5,949,654 | | |
Accrued performance guarantees
|
| | | | 200,914 | | | | | | 207,916 | | |
Accrued penalties
|
| | | | 853,405 | | | | | | 1,532,185 | | |
Other accrued liabilities
|
| | | | 39,373 | | | | | | 56,615 | | |
Operating lease liabilities, current
|
| | | | 585,204 | | | | | | 570,312 | | |
Total current liabilities
|
| | | | 9,176,563 | | | | | | 10,608,167 | | |
Operating lease liabilities, non-current portion
|
| | | | 1,131,042 | | | | | | 1,281,362 | | |
Long term sublease deposit
|
| | | | 45,000 | | | | | | — | | |
Total liabilities
|
| | | | 10,352,605 | | | | | | 11,889,529 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | |
Member’s equity | | | | | | | | | | | | | |
General member’s interest
|
| | | | 62,393,788 | | | | | | 62,080,334 | | |
Accumulated deficit
|
| | | | (58,394,822) | | | | | | (56,642,692) | | |
Total member’s equity
|
| | | | 3,998,966 | | | | | | 5,437,642 | | |
Total liabilities and member’s equity
|
| | | $ | 14,351,571 | | | | | $ | 17,327,171 | | |
Consolidated Statements of Operations
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net sales
|
| | | $ | 4,215,082 | | | | | $ | 5,274,224 | | |
Cost of revenue | | | | | | | | | | | | | |
Service fees
|
| | | | 2,306,355 | | | | | | 2,723,925 | | |
Direct expense – claims
|
| | | | 424,137 | | | | | | 571,245 | | |
Direct expense – member services
|
| | | | 365,783 | | | | | | 474,640 | | |
Total cost of revenue (exclusive of depreciation and amortization shown separately below)
|
| | | | 3,096,275 | | | | | | 3,769,810 | | |
Gross profit
|
| | | | 1,118,807 | | | | | | 1,504,414 | | |
Operating expenses | | | | | | | | | | | | | |
Administrative
|
| | | | 1,045,397 | | | | | | 1,889,382 | | |
Information technology
|
| | | | 865,966 | | | | | | 1,342,691 | | |
Sales and marketing
|
| | | | 628,487 | | | | | | 797,240 | | |
Facilities
|
| | | | 184,718 | | | | | | 199,360 | | |
Depreciation
|
| | | | 162,373 | | | | | | 144,709 | | |
Total operating expenses
|
| | | | 2,886,941 | | | | | | 4,373,382 | | |
Operating loss
|
| | | | (1,768,134) | | | | | | (2,868,968) | | |
Other non operating income | | | | | | | | | | | | | |
Interest income
|
| | | | — | | | | | | 11,221 | | |
Other income
|
| | | | 16,004 | | | | | | — | | |
Total non operating income
|
| | | | 16,004 | | | | | | 11,221 | | |
Net loss
|
| | | $ | (1,752,130) | | | | | $ | (2,857,747) | | |
Consolidated Statements of Changes in Member’s Equity
| | |
Contributed
Capital |
| |
Accumulated
Deficit |
| |
Total
|
| |||||||||
Balance at December 31, 2019
|
| | | $ | 53,250,039 | | | | | $ | (44,104,511) | | | | | $ | 9,145,528 | | |
Distributions
|
| | | | (1,173,524) | | | | | | — | | | | | | (1,173,524) | | |
Net loss
|
| | | | — | | | | | | (2,857,747) | | | | | | (2,857,747) | | |
Balance at March 31, 2020 (Unaudited)
|
| | | $ | 52,076,515 | | | | | $ | (46,962,258) | | | | | $ | 5,114,257 | | |
Balance at December 31, 2020
|
| | | $ | 62,080,334 | | | | | $ | (56,642,692) | | | | | $ | 5,437,642 | | |
Contributions
|
| | | | 313,454 | | | | | | — | | | | | | 313,454 | | |
Net loss
|
| | | | — | | | | | | (1,752,130) | | | | | | (1,752,130) | | |
Balance at March 31, 2021 (Unaudited)
|
| | | $ | 62,393,788 | | | | | $ | (58,394,822) | | | | | $ | 3,998,966 | | |
Consolidated Statements of Cash Flows
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (1,752,130) | | | | | $ | (2,857,747) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | ||||||||||
Depreciation and amortization
|
| | | | 162,373 | | | | | | 144,709 | | |
Amortization of right-of-use asset
|
| | | | 126,010 | | | | | | 118,921 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (19,214) | | | | | | 158,642 | | |
Unbilled receivables
|
| | | | 5,680 | | | | | | 661,901 | | |
Prepaid expenses and other assets
|
| | | | 61,993 | | | | | | 8,161 | | |
Accounts payable
|
| | | | 396,384 | | | | | | (580,293) | | |
Deferred revenue
|
| | | | 829,919 | | | | | | 867,647 | | |
Operating lease liabilities
|
| | | | (135,428) | | | | | | (122,081) | | |
Other accrued liabilities
|
| | | | (2,672,799) | | | | | | (79,439) | | |
Net cash used in operating activities
|
| | | | (2,997,212) | | | | | | (1,679,579) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (31,168) | | | | | | (109,225) | | |
Deposits
|
| | | | 45,000 | | | | | | (3,500) | | |
Net cash provided by (used in) investing activities
|
| | | | 13,832 | | | | | | (112,725) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Capital contributions (distributions)
|
| | | | 313,454 | | | | | | (1,173,524) | | |
Net cash provided by (used in) financing activities
|
| | | | 313,454 | | | | | | (1,173,524) | | |
Net decrease in cash and restricted cash
|
| | | | (2,669,926) | | | | | | (2,965,828) | | |
Cash and restricted cash at beginning of period
|
| | | | 13,871,864 | | | | | | 12,100,423 | | |
Cash and restricted cash at ending of period
|
| | | $ | 11,201,938 | | | | | $ | 9,134,595 | | |
Reconciliation of cash and restricted cash to the balance sheets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 4,579,903 | | | | | $ | 4,165,579 | | |
Restricted cash
|
| | | | 6,622,035 | | | | | | 4,969,016 | | |
Total cash and restricted cash
|
| | | $ | 11,201,938 | | | | | $ | 9,134,595 | | |
| | |
March 31, 2021
|
| |
December 31, 2020
|
| ||||||
Software
|
| | | $ | 1,936,882 | | | | | $ | 1,932,534 | | |
Office equipment
|
| | | | 382,845 | | | | | | 382,119 | | |
Furniture and fixtures
|
| | | | 152,734 | | | | | | 159,331 | | |
Leasehold improvements
|
| | | | 269,846 | | | | | | 259,519 | | |
Total cost
|
| | | | 2,742,307 | | | | | | 2,733,503 | | |
Accumulated depreciation
|
| | | | 1,404,112 | | | | | | 1,264,103 | | |
Net property and equipment
|
| | | $ | 1,338,195 | | | | | $ | 1,469,400 | | |
Years Ending December 31,
|
| |
Amount
|
| |||
2021 (nine months)
|
| | | $ | 524,281 | | |
2022
|
| | | | 700,917 | | |
2023
|
| | | | 659,218 | | |
2024
|
| | | | 21,705 | | |
2025
|
| | | | 12,661 | | |
Total lease payments
|
| | | | 1,918,782 | | |
Less: imputed interest
|
| | | | (202,536) | | |
Present value of lease liabilities
|
| | | | 1,716,246 | | |
Less: current lease liabilities
|
| | | | (585,204) | | |
Long-term lease liabilities
|
| | | $ | 1,131,042 | | |
| Weighted average remaining lease term – operating lease: | | |
2.8 years
|
|
| Weighted-average discount rate – operating lease: | | |
8.0%
|
|
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
Member of Continental Benefits, LLC and Subsidiary
Melville, NY
March 23, 2021
| | |
Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets
|
| | | | | | | | | | | | |
Cash
|
| | | $ | 6,982,163 | | | | | $ | 8,314,591 | | |
Restricted cash
|
| | | | 6,889,701 | | | | | | 3,785,832 | | |
Accounts receivable – net
|
| | | | | | | | | | | | |
Trade
|
| | | | 37,489 | | | | | | 576,271 | | |
Unbilled
|
| | | | 41,208 | | | | | | 1,094,906 | | |
Prepaid expenses
|
| | | | 193,406 | | | | | | 119,171 | | |
Total current assets
|
| | | | 14,143,967 | | | | | | 13,890,771 | | |
Property and equipment – net
|
| | | | 1,469,400 | | | | | | 1,831,113 | | |
Operating lease right-of-use assets
|
| | | | 1,658,935 | | | | | | — | | |
Deposits
|
| | | | 54,869 | | | | | | 54,876 | | |
Total assets
|
| | | $ | 17,327,171 | | | | | $ | 15,776,760 | | |
LIABILITIES AND MEMBER’S EQUITY | | | | | | | | | | | | | |
Current liabilities
|
| | | | | | | | | | | | |
Accounts payable
|
| | | $ | 529,224 | | | | | $ | 1,115,928 | | |
Deferred revenue
|
| | | | 777,041 | | | | | | 1,124,569 | | |
Accrued and other current liabilities:
|
| | | | | | | | | | | | |
Accrued compensation
|
| | | | 985,220 | | | | | | 710,128 | | |
Accrued fiduciary obligations
|
| | | | 5,949,654 | | | | | | 2,930,309 | | |
Current portion of deferred rent
|
| | | | — | | | | | | 26,432 | | |
Accrued performance guarantees
|
| | | | 207,916 | | | | | | 256,000 | | |
Accrued penalties
|
| | | | 1,532,185 | | | | | | — | | |
Other accrued liabilities
|
| | | | 56,615 | | | | | | 276,406 | | |
Operating lease liabilities, current
|
| | | | 570,312 | | | | | | — | | |
Total current liabilities
|
| | | | 10,608,167 | | | | | | 6,439,772 | | |
Deferred rent – net of current portion
|
| | | | — | | | | | | 191,460 | | |
Operating lease liabilities, non-current portion
|
| | | | 1,281,362 | | | | | | — | | |
Total liabilities
|
| | | | 11,889,529 | | | | | | 6,631,232 | | |
COMMITMENTS AND CONTINGENCIES
|
| | | | | | | | | | | | |
MEMBER’S EQUITY | | | | | | | | | | | | | |
General members interest
|
| | | | 62,080,334 | | | | | | 53,250,039 | | |
Accumulated deficit
|
| | | | (56,642,692) | | | | | | (44,104,511) | | |
Total member’s equity
|
| | | | 5,437,642 | | | | | | 9,145,528 | | |
Total liabilities and member’s equity
|
| | | $ | 17,327,171 | | | | | $ | 15,776,760 | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net sales
|
| | | $ | 18,388,192 | | | | | $ | 20,327,320 | | |
Cost of revenue | | | | | | | | | | | | | |
Cost of sales
|
| | | | 10,507,319 | | | | | | 10,960,684 | | |
Direct expense – claims
|
| | | | 1,871,683 | | | | | | 2,641,375 | | |
Direct expense – member services
|
| | | | 1,552,006 | | | | | | 1,860,983 | | |
Total cost of revenue (exclusive of depreciation and amortization shown
separately below) |
| | | | 13,931,008 | | | | | | 15,463,042 | | |
Gross profit
|
| | | | 4,457,184 | | | | | | 4,864,278 | | |
Operating expenses | | | | | | | | | | | | | |
Administrative
|
| | | | 8,700,352 | | | | | | 6,314,695 | | |
Information technology
|
| | | | 4,223,350 | | | | | | 5,440,224 | | |
Sales and marketing
|
| | | | 2,724,368 | | | | | | 3,562,888 | | |
Facilities
|
| | | | 762,649 | | | | | | 659,006 | | |
Depreciation expense
|
| | | | 596,152 | | | | | | 505,719 | | |
Total operating expenses
|
| | | | 17,006,871 | | | | | | 16,482,532 | | |
Operating loss
|
| | | | (12,549,687) | | | | | | (11,618,254) | | |
Other nonoperating Income | | | | | | | | | | | | | |
Interest income
|
| | | | 11,506 | | | | | | 129,085 | | |
Gain on disposal of asset
|
| | | | — | | | | | | 2,600 | | |
Total nonoperating income
|
| | | | 11,506 | | | | | | 131,685 | | |
Net loss
|
| | | $ | (12,538,181) | | | | | $ | (11,486,569) | | |
| | |
Contributed
Capital |
| |
Accumulated
Deficit |
| |
Total
|
| |||||||||
Balance – December 31, 2018
|
| | | $ | 43,926,786 | | | | | $ | (32,617,942) | | | | | $ | 11,308,844 | | |
Contributions
|
| | | | 9,323,253 | | | | | | — | | | | | | 9,323,253 | | |
Net loss
|
| | | | — | | | | | | (11,486,569) | | | | | | (11,486,569) | | |
Balance – December 31, 2019
|
| | | $ | 53,250,039 | | | | | $ | (44,104,511) | | | | | $ | 9,145,528 | | |
Contributions
|
| | | | 8,830,295 | | | | | | — | | | | | | 8,830,295 | | |
Net loss
|
| | | | — | | | | | | (12,538,181) | | | | | | (12,538,181) | | |
Balance – December 31, 2020
|
| | | $ | 62,080,334 | | | | | $ | (56,642,692) | | | | | $ | 5,437,642 | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (12,538,181) | | | | | $ | (11,486,569) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 596,152 | | | | | | 505,719 | | |
Gain on disposal of property and equipment
|
| | | | — | | | | | | (2,600) | | |
Amortization of right-of-use asset
|
| | | | 485,417 | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | 538,572 | | | | | | 1,486,182 | | |
Unbilled receivables
|
| | | | 1,053,698 | | | | | | (594,500) | | |
Prepaid expenses and other assets
|
| | | | (74,231) | | | | | | (1,406) | | |
Accounts payable
|
| | | | (586,704) | | | | | | (410,368) | | |
Deferred revenue
|
| | | | (347,528) | | | | | | 1,030,151 | | |
Deferred rent
|
| | | | — | | | | | | (12,617) | | |
Operating lease liabilities
|
| | | | (510,670) | | | | | | — | | |
Other accrued liabilities
|
| | | | 4,558,747 | | | | | | (3,444,590) | | |
Net cash used in operating activities
|
| | | | (6,824,728) | | | | | | (12,930,598) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (234,126) | | | | | | (323,984) | | |
Proceeds from disposition of property and equipment
|
| | | | — | | | | | | 22,873 | | |
Deposits
|
| | | | — | | | | | | 74,441 | | |
Net cash used in investing activities
|
| | | | (234,126) | | | | | | (226,670) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Capital contributions
|
| | | | 8,830,295 | | | | | | 9,323,253 | | |
Net cash provided by financing activities
|
| | | | 8,830,295 | | | | | | 9,323,253 | | |
Net increase (decrease) in cash and restricted cash
|
| | | | 1,771,441 | | | | | | (3,834,015) | | |
Cash and restricted cash – beginning of year
|
| | | | 12,100,423 | | | | | | 15,934,438 | | |
Cash and restricted cash – end of year
|
| | | $ | 13,871,864 | | | | | $ | 12,100,423 | | |
Supplemental disclosure of non-cash investing and financing activity: | | | | | | | | | | | | | |
Initial recognition of operating lease right-of-use assets
|
| | | $ | 2,055,146 | | | | | $ | — | | |
Initial recognition of operating lease liabilities
|
| | | $ | 2,273,038 | | | | | $ | — | | |
Reconciliation of cash and restricted cash to the balance sheets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 6,982,163 | | | | | $ | 8,314,591 | | |
Restricted cash
|
| | | | 6,889,701 | | | | | | 3,785,832 | | |
Total cash and restricted cash
|
| | | $ | 13,871,864 | | | | | $ | 12,100,423 | | |
December 31, 2020 and 2019
December 31, 2020 and 2019
December 31, 2020 and 2019
December 31, 2020 and 2019
December 31, 2020 and 2019
December 31, 2020 and 2019
December 31, 2020 and 2019
December 31, 2020 and 2019
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Software
|
| | | $ | 1,932,534 | | | | | $ | 1,813,061 | | |
Office equipment
|
| | | | 382,119 | | | | | | 282,920 | | |
Furniture and fixtures
|
| | | | 159,331 | | | | | | 172,057 | | |
Leasehold improvements
|
| | | | 259,519 | | | | | | 259,519 | | |
Total cost
|
| | | | 2,733,503 | | | | | | 2,527,557 | | |
Accumulated depreciation
|
| | | | 1,264,103 | | | | | | 696,444 | | |
Net property and equipment
|
| | |
$
|
1,469,400
|
| | | |
$
|
1,831,113
|
| |
Years Ending December 31,
|
| |
Amount
|
| |||
2021
|
| | | $ | 695,843 | | |
2022
|
| | | | 700,917 | | |
2023
|
| | | | 659,218 | | |
2024
|
| | | | 21,705 | | |
2025
|
| | | | 12,661 | | |
Total lease payments
|
| | | | 2,090,344 | | |
Less: imputed interest
|
| | | | (238,670) | | |
Present value of lease liabilities
|
| | | | 1,851,674 | | |
Less: current lease liabilities
|
| | | | (570,312) | | |
Long-term lease liabilities
|
| | | $ | 1,281,362 | | |
December 31, 2020 and 2019
| Weighted average remaining lease term – operating lease: | | | 3.1 years | |
| Weighted-average discount rate – operating lease: | | | 8.0% | |
Years Ending December 31,
|
| |
Amount
|
| |||
2020
|
| | | $ | 621,062 | | |
2021
|
| | | | 618,256 | | |
2022
|
| | | | 622,079 | | |
2023
|
| | | | 583,877 | | |
| | | | $ | 2,445,274 | | |
December 31, 2020 and 2019
| | |
Amount to be
paid |
| |||
SEC registration fee
|
| | | $ | 3,333 | | |
FINRA filing fee
|
| | | $ | 5,082 | | |
NASDAQ Capital Market listing fee
|
| | | $ | 55,000 | | |
Printing and engraving expenses
|
| | | $ | 60,000 | | |
Legal fees and expenses
|
| | | $ | 1,000,000 | | |
Accounting fees and expenses
|
| | | $ | 100,000 | | |
Transfer agent and registrar fees and expenses
|
| | | $ | 12,300 | | |
Miscellaneous expenses
|
| | | $ | 300,000 | | |
Total
|
| | | $ | 1,535,715 | | |
Exhibit No.
|
| |
Description
|
|
4.37* | | | | |
4.38* | | | | |
4.39* | | | | |
4.40* | | | | |
4.41* | | | Convertible Promissory Note dated April 1, 2021, between Marpai Health, Inc. and Yuri Kokush | |
4.42* | | | | |
4.43* | | | | |
4.44* | | | | |
4.45* | | | | |
4.46* | | | | |
4.47* | | | | |
4.48* | | | Convertible Promissory Note dated April 1, 2021, between Marpai Health, Inc. and The Kadosh Family Irrevocable Trust — 2020 | |
4.49* | | | | |
4.50* | | | | |
4.51* | | | | |
4.52* | | | | |
4.53* | | | | |
4.54* | | | | |
4.55* | | | | |
4.56* | | | | |
4.57* | | | | |
4.58* | | | | |
4.59* | | | | |
4.60* | | | | |
4.61* | | | | |
4.62* | | | |
Exhibit No.
|
| |
Description
|
|
10.22* | | | | |
10.23* | | | | |
10.24* | | | | |
10.25* | | | | |
10.26* | | | | |
10.27* | | | | |
10.28* | | | | |
10.29* | | | | |
14.1* | | | | |
14.2* | | | | |
21.1* | | | | |
23.1 | | | | |
23.2 | | | | |
23.3 | | | | |
23.4** | | | Consent of Loeb & Loeb LLP (included in Exhibit 5.1) | |
24.1* | | | | |
99.1* | | | | |
99.2* | | | | |
99.3* | | | | |
99.4* | | | | |
99.5* | | | | |
99.6* | | | | |
99.7* | | | |
Chief Executive Officer and Secretary
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Edmundo Gonzalez
Edmundo Gonzalez
|
| | Chief Executive Officer, Secretary and Director (Principal Executive Officer) | | |
September 22, 2021
|
|
|
*
Yoram Bibring
|
| | Principal Financial and Accounting Officer | | |
September 22, 2021
|
|
|
*
Damien Lamendola
|
| | Director | | |
September 22, 2021
|
|
|
*
Yaron Eitan
|
| | Director | | |
September 22, 2021
|
|
|
*/s/ By: Edmundo Gonzalez
Attorney-in-Fact
|
| | | |
Exhibit 23.1
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT
We consent to the inclusion in this Registration Statement of Marpai, Inc. on Amendment No. 2 to Form S-1 of our report dated July 9, 2021, with respect to our audit of the balance sheet of Marpai, Inc. as of March 31, 2021, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.
Melville, NY
September 22, 2021
An Independent Member of Urbach Hacker Young International
Exhibit 23.2
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT
We consent to the inclusion in this Registration Statement of Marpai, Inc. on Amendment No. 2 to Form S-1 of our report dated March 18, 2021, with respect to our audit of the consolidated financial statements of Marpai Health, Inc. and Subsidiary as of December 31, 2020 and 2019 and for the year ended December 31, 2020 and for the period from February 14, 2019 (inception) to December 31, 2019, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.
Melville, NY
September 22, 2021
An Independent Member of Urbach Hacker Young International
Exhibit 23.3
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT
We consent to the inclusion in this Registration Statement of Marpai, Inc. on Amendment No.2 to Form S-1 of our report dated March 23, 2021, with respect to our audits of the consolidated financial statements of Continental Benefits, LLC and Subsidiary as of December 31, 2020 and 2019 and for the years then ended, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.
Melville, NY
September 22, 2021
An Independent Member of Urbach Hacker Young International
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