MARPAI ANNOUNCES KEY FINANCIAL AGREEMENTS

Rhea-AI Summary

Marpai, Inc. (Nasdaq: MRAI) has announced two key financing agreements. The company executed an amendment with AXA S.A. delaying payment obligations and securing $1.7 million in revenue-based financing from Libertas Funding, LLC. The amendment with AXA extends payment terms, reduces the remaining payment in 2024 to $473,688, and delays further payments to 2025. AXA has also agreed to certain 'Reduction Criteria' that could potentially reduce the overall payment obligation by $3 million. Marpai also received $1.7 million in revenue-based financing from Libertas, which the company plans to use for short-term working capital needs.

Financial Analyst

The amendment of the Maestro Purchase Agreement with AXA S.A. and the deferral of Marpai's payment obligations represent a strategic financial maneuver that alleviates immediate cash outflows and provides the company with greater liquidity in the short term. By reducing the payment due in 2024 and deferring additional payments to 2025, Marpai can allocate more resources towards growth initiatives. The 'Reduction Criteria' linked to maintaining a stock exchange listing and the commitment from Mr. Lamendola to inject equity capital further bolster investor confidence, as they suggest a positive outlook on the company's ability to meet these conditions.

However, this restructured payment schedule could also indicate that Marpai is managing cash flow pressures, which investors should monitor closely. The terms of the agreement may also reflect AXA's assessment of Marpai's financial health and their willingness to support the company's long-term stability. Analysts should scrutinize the specifics of the 'Reduction Criteria' to evaluate the likelihood and impact of the potential $3 million reduction in payment obligations.

Market Research Analyst

Revenue-based financing from Libertas Funding, LLC introduces a non-dilutive capital infusion for Marpai, which is particularly appealing to existing shareholders as it avoids equity dilution. The $1.7 million in financing is earmarked for short-term working capital needs, which suggests that Marpai is seeking to bolster its operational capabilities and address immediate financial obligations. This type of financing is often used by companies that have stable revenue streams and can manage the repayments tied to incoming revenue, which may indicate confidence in Marpai's business model and revenue predictability.

From a market perspective, the partnership with Libertas, a firm known for empowering small and medium-sized businesses, could be seen as an endorsement of Marpai's potential for growth. The focus on using high-tech, high-touch funding solutions aligns with Marpai's positioning as a company at the intersection of healthcare and technology. The impact of this financing on Marpai's market position should be assessed in the context of the competitive landscape of the TPA market and the company's ability to capitalize on growth opportunities.

Healthcare Financial Analyst

In the broader context of the Third-Party Administration (TPA) market, Marpai's financial arrangements could be indicative of its strategic positioning. The TPA market, which is integral to supporting self-funded employer health plans, is highly competitive and sensitive to cost efficiencies and technological advancements. Marpai's focus on providing 'affordable, intelligent healthcare' suggests an investment in technology-driven solutions that could differentiate the company from its competitors.

Investors and stakeholders should consider the potential long-term cost savings and operational efficiencies that may arise from such technological investments. The financial flexibility gained from the amended payment terms with AXA and the revenue-based financing could be critical in supporting these investments. Additionally, the commitment from the company's largest shareholder to invest equity may be a signal of internal confidence in Marpai's strategic direction and future performance within the healthcare sector.

Marpai executes amendment with AXA delaying payment obligations and secures $1.7 million in revenue-based financing from Libertas Funding, LLC.  

NEW YORK, Feb. 8, 2024 /PRNewswire/ -- Marpai, Inc. ("Marpai" or the "Company") (Nasdaq: MRAI), an independent national Third-Party Administration company transforming the $22 billion TPA market supporting self-funded employer health plans with affordable, intelligent, healthcare, today announced two key financing agreements.  

The Company executed an amendment to the Maestro Purchase Agreement with AXA S.A. ("AXA"). The amendment provides an overall extension to the payment terms, significantly reduces the remaining payment in 2024 to $473,688 and delays any further payments to 2025. In addition, AXA has agreed to certain "Reduction Criteria" that would potentially reduce the overall payment obligation by $3 million once certain criteria are met, including the Company maintaining its Nasdaq (or other national securities exchange) listing. As a part of that criteria, Mr. Lamendola, as the Company's largest shareholder, has committed to investing at least $3 million in equity during 2024.

Damien Lamendola, Chief Executive Officer, commented, "We are very pleased to have the support of the team at AXA and this potentially removes a significant overhang for our business and allows the Company to push forward aggressively on our growth actions while demonstrating my continued commitment to the business."

Separately, Marpai received $1.7 million in revenue-based financing from Libertas Funding, LLC ("Libertas"). Libertas has provided access to over $2.6 billion in funding for small and medium-sized businesses since its inception in 2016. Libertas empowers businesses to grow with high-tech, high-touch access to funding that pairs best-in-class client service with top-of-line technology to ensure businesses have the capital to thrive. The Company expects to use the funds for short-term working capital needs.

"Libertas has provided Marpai with flexible capital that allows us to continue to execute our operating plan without diluting shareholders," said Steve Johnson, Chief Financial Officer.  

About Marpai, Inc.

Marpai, Inc. (Nasdaq: MRAI) is a leading, national TPA company bringing value-oriented health plan services to employers that directly pay for employee health benefits. Primarily competing in the $22 billion TPA sector serving self-funded employer health plans representing over $1 trillion in annual claims. Marpai works to deliver the healthiest member population for the health plan budget. Operating nationwide, Marpai offers access to leading provider networks including Aetna and Cigna and all TPA services. For more information, visit www.marpaihealth.com, the content of which is not incorporated by reference into this press release.

Forward-Looking Statement Disclaimer

This press release contains forward-looking statements, as that term is defined in the Private Litigation Reform Act of 1995, that involve significant risks and uncertainties. Forward-looking statements can be identified through the use of words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "guidance," "may," "can," "could", "will", "potential", "should," "goal" and variations of these words or similar expressions. For example, the Company is using forward looking statements when it discusses the potential decrease of payments to AXA if certain criteria are met. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Marpai's current expectations and speak only as of the date of this release. Actual results may differ materially from Marpai's current expectations depending upon a number of factors. These factors include, among others, adverse changes in general economic and market conditions, competitive factors including but not limited to pricing pressures and new product introductions, uncertainty of customer acceptance of new product offerings and market changes, risks associated with managing the growth of the business. Except as required by law, Marpai does not undertake any responsibility to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

More detailed information about Marpai and the risk factors that may affect the realization of forward-looking statements is set forth in Marpai's filings with the Securities and Exchange Commission. Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov.

 

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SOURCE Marpai

What financing agreements did Marpai announce?

Marpai announced an amendment with AXA delaying payment obligations and securing $1.7 million in revenue-based financing from Libertas Funding, LLC.

What is the ticker symbol for Marpai, Inc.?

The ticker symbol for Marpai, Inc. is MRAI.

What is the purpose of the $1.7 million in revenue-based financing from Libertas Funding, LLC?

The funds are expected to be used for Marpai's short-term working capital needs.

Who is the largest shareholder of Marpai, Inc.?

Mr. Lamendola is the largest shareholder of Marpai, Inc.

What are the 'Reduction Criteria' mentioned in the amendment with AXA?

The 'Reduction Criteria' could potentially reduce the overall payment obligation by $3 million once certain criteria are met, including the Company maintaining its Nasdaq (or other national securities exchange) listing.