Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40904

“

MARPAI, INC.

(Exact Name of Registrant as Specified in Its Charter)



Delaware		86-1916231
(State or other jurisdiction of incorporation)		(IRS Employer Identification Number)

615 Channelside Drive, Suite 207

Tampa, Florida 33602

(Address of principal executive offices)

(855) 389-7330

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	MRAI	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.



Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of May 9, 2024, there were 10,308,038 shares of the Company’s common stock, par value $0.0001 per share, outstanding.

MARPAI, INC.

TABLE OF CONTENTS



		Page
PART I. FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22
Item 4.	Controls and Procedures	22
PART II. OTHER INFORMATION
Item 1A.	Risk Factors	22
Item 6.	Exhibits	23
SIGNATURES		24

PART I — FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements.

MARPAI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	March 31, 2024			December 31, 2023
	(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents	$	851		$	1,147
Restricted cash		12,761			12,345
Accounts receivable, net of allowance for credit losses of $25 and $25		366			1,124
Unbilled receivable		727			768
Due from buyer for sale of business unit		800			800
Prepaid expenses and other current assets		1,000			901
Total current assets		16,505			17,085

Property and equipment, net		579			611
Capitalized software, net		1,512			2,127
Operating lease right-of-use assets		2,311			2,373
Goodwill		3,018			3,018
Intangible assets, net		4,874			5,177
Security deposits		1,267			1,267
Other long-term asset		22			22
Total assets	$	30,088		$	31,680
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	3,824		$	4,649
Accrued expenses		3,076			2,816
Accrued fiduciary obligations		9,510			11,573
Deferred revenue		1,481			661
Current portion of operating lease liabilities		523			512
Other short-term liabilities		1,709			632
Total current liabilities		20,123			20,843

Other long-term liabilities		19,724			19,401
Operating lease liabilities, net of current portion		3,547			3,684
Deferred tax liabilities		1,190			1,190
Total liabilities		44,584			45,118
COMMITMENTS AND CONTINGENCIES (Note 16)
STOCKHOLDERS’ DEFICIT
Common stock, $0.0001 par value, 227,791,050 shares authorized; 10,308,038 shares and 7,960,938 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively (1)		1			1
Additional paid-in capital		66,595			63,307
Accumulated deficit		(81,092	)		(76,746	)
Total stockholders’ deficit		(14,496	)		(13,438	)
Total liabilities and stockholders’ deficit	$	30,088		$	31,680

(1) Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MARPAI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except share and per share data)


	Three months ended March 31,
	2024			2023
Revenue	$	7,385		$	9,672
Costs and expenses
Cost of revenue (exclusive of depreciation and amortization shown separately below)		4,871			6,409
General and administrative		3,421			5,226
Sales and marketing		602			2,179
Information technology		1,124			2,187
Research and development		7			500
Depreciation and amortization		951			1,044
Facilities		474			650
Total costs and expenses		11,450			18,195
Operating loss		(4,065	)		(8,523	)
Other income (expenses)
Other income		120			50
Interest expense, net		(398	)		(385	)
Foreign exchange loss		(3	)		(15	)
Loss before provision for income taxes		(4,346	)		(8,873	)
Income tax expense		—			—
Net loss	$	(4,346	)	$	(8,873	)
Net loss per share, basic & fully diluted (1)	$	(0.46	)	$	(1.68	)
Weighted average shares of common stock outstanding, basic and diluted (1)		9,405,775			5,290,661

(1) Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MARPAI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

(in thousands, except share data)


	Common Stock
					Additional Paid-		Accumulated			Total Stockholders’
Three months ended March 31, 2024	Shares (1)		Amount		In Capital		Deficit			Deficit
Balance, January 1, 2024		7,960,938	$	1	$	63,307	$	(76,746	)	$	(13,438	)
Share-based compensation		-		-		561		-			561
Issuance of common stock upon vesting of restricted stock units		115,000		-		-		-			-
Issuance of common stock in connection with public offering, net		2,232,100		-		2,727		-			2,727
Net loss		-		-		-		(4,346	)		(4,346	)
Balance, March 31, 2024		10,308,038	$	1	$	66,595	$	(81,092	)	$	(14,496	)

Three months ended March 31, 2023
Balance, January 1, 2023		5,319,758	$	1	$	54,128	$	(47,994	)	$	6,135
Share-based compensation		-		-		748		-			748
Issuance of common stock upon vesting of restricted stock units		33,387		-		-		-			-
Shares issued to vendors in exchange for services		25,000		-		79		-			79
Issuance of common stock upon exercise of stock options		24,976		-		-		-			-
Net loss		-		-		-		(8,873	)		(8,873	)
Balance, March 31, 2023		5,403,121	$	1	$	54,955	$	(56,867	)	$	(1,911	)

(1) Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MARPAI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Three months ended March 31,
	2024			2023
Cash flows from operating activities:
Net loss	$	(4,346	)	$	(8,873	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		951			1,044
Share-based compensation		561			623
Common stock issued to vendors in exchange for services		—			79
Amortization of right-of-use asset		62			252
Non-cash interest		423			388
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivable		800			(239	)
Prepaid expense and other assets		(99	)		162
Accounts payable		(825	)		653
Accrued expenses		215			(1,416	)
Accrued fiduciary obligations		(2,063	)		—
Operating lease liabilities		(126	)		(363	)
Other liabilities		862			1,149
Net cash used in operating activities		(3,585	)		(6,541	)
Cash flows from investing activities:
Disposal of property and equipment		—			3
Net cash provided by investing activities		—			3
Cash flows from financing activities:
Proceeds from sale of future cash receipts on accounts receivable		1,509			—
Payments to buyer of receivables (Note 3)		(57	)		—
Payments to seller for acquisition (Note 3)		(474	)		—
Proceeds from issuance of common stock in a private offering, net		2,727			—
Net cash provided by financing activities		3,705			—

Net increase (decrease) in cash, cash equivalents and restricted cash		120			(6,538	)

Cash, cash equivalents and restricted cash at beginning of period		13,492			23,117
Cash, cash equivalents and restricted cash at end of period	$	13,612		$	16,579

Reconciliation of cash, cash equivalents, and restricted cash reported in the condensed consolidated balance sheet
Cash and cash equivalents	$	851		$	6,174
Restricted cash		12,761			10,405
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows	$	13,612		$	16,579
Supplemental disclosure of non-cash activity
Measurement period adjustment to goodwill	$	—		$	36

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization

Marpai, Inc.'s (“Marpai” or the “Company”) operations are principally conducted through its wholly-owned subsidiaries, Marpai Health, Inc. (“Marpai Health”), Marpai Administrators LLC (“Marpai Administrators”), and Maestro Health LLC (“Maestro”). Marpai Administrators and Maestro are our healthcare payer subsidiaries that provide administration services to self-insured employer groups across the United States. They act as a third-party administrator (“TPA”) handling all administrative aspects of providing healthcare to self-insured employer groups. The Company has combined these two businesses to create what it believes to be the Payer of the Future, which has not only the licenses, processes and know-how of a payer but also the latest technology. This combination allows the Company to differentiate itself in the TPA market by delivering a technology-driven service that it believes can lower the overall cost of healthcare while maintaining or improving healthcare outcomes. Marpai Captive, Inc. (“Marpai Captive”) was founded in March 2022 as a Delaware corporation. Marpai Captive engages in the captive insurance market and commenced operations in the first quarter of 2023.

Nature of Business

The Company’s mission is to positively change healthcare for the benefit of (i) its clients who are self-insured employers that pay for their employees’ healthcare benefits and engage the Company to administer members' healthcare claims, (ii) employees who receive these healthcare benefits from our clients, and (iii) healthcare providers including doctors, doctor groups, hospitals, clinics, and any other entities providing healthcare services or products.

The Company provides benefits outsourcing services to clients in the United States across multiple industries. The Company’s backroom administration and TPA services are supported by a customized technology platform and a dedicated benefits call center. Under its TPA platform, the Company provides health and welfare administration, dependent eligibility verification, Consolidated Omnibus Budget Reconciliation Act (“COBRA”) administration, and benefit billing services.

The Company continues to monitor the effects of the global macroeconomic environment, including increasing inflationary pressures; supply chain disruptions; social and political issues; regulatory matters, geopolitical tensions; and global security issues. The Company is also mindful of inflationary pressures on its cost base and is monitoring the impact on customer preferences.

Reverse Stock Split

On June 29, 2023 the Company effectuated a one-for-four reverse stock split of its outstanding shares of common stock. The number of authorized shares was not adjusted in connection with the reverse stock split. Throughout these unaudited condensed consolidated financial statements common stock share and per share information, including employee stock options, restricted stock awards, restricted stock units and warrants, have been revised for all periods presented to give effect to the reverse stock split.

NOTE 2 – UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements furnished reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. The unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for its year ended December 31, 2023.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – LIQUIDITY AND GOING CONCERN

As shown in the accompanying condensed consolidated financial statements as of March 31, 2024, the Company had an accumulated deficit of approximately $81.1 million and negative working capital of approximately $3.6 million. At March 31, 2024, the Company had long term debt of approximately $19.7 million and approximately $0.9 million of unrestricted cash on hand. For the three months ended March 31, 2024, the Company recognized a net loss of approximately $4.3 million and negative cash flows from operations of approximately $3.6 million. Since inception, the Company has met its cash needs through proceeds from issuing convertible notes, warrants as well as sales of its common stock.

The Company currently projects that it will need additional capital to fund its current operations and capital investment requirements until the Company scales to a revenue level that permits cash self-sufficiency. As a result, the Company needs to raise additional capital or secure debt funding to support on-going operations until such time. This projection is based on the Company’s current expectations regarding revenues, expenditures, cash burn rate and other operating assumptions. The sources of this capital are anticipated to be from the sale of equity and/or the issuance of debt. Alternatively, or in addition, the Company may seek to sell assets which it regards as non-strategic. Any of the foregoing may not be achievable on favorable terms, or at all. Additionally, any debt or equity transactions may cause significant dilution to existing stockholders.

If the Company is unable to raise additional capital moving forward, its ability to operate in the normal course and continue to invest in its product portfolio may be materially and adversely impacted and the Company may be forced to scale back operations or divest some or all of its assets.

As a result of the above, in connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern through twelve months from the date these unaudited condensed consolidated financial statements are issued. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

On December 14, 2023, the Company, through Maestro, entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Payflex Systems USA, Inc. (“Payflex”), pursuant to which the Company agreed to sell certain assets relating to the consumer directed benefits business. Pursuant to the Asset Purchase Agreement, Payflex agreed to pay the Company $1 million in cash as well as assume certain liabilities. In addition, provided that two customer agreements remain in place by September 1, 2024, and January 1, 2025, respectively, Payflex shall pay an additional contingent fee of $500 thousand per customer agreement. The Asset Purchase Agreement contains customary representations and warranties and covenants. The transaction contemplated by the Asset Purchase Agreement closed on December 14, 2023.

On January 16, 2024, the Company entered into a securities purchase agreement (the “Second SPA”) with certain Company insiders consisting of HillCour Investment Fund, LLC (“HillCour”), an entity controlled by the Company’s Chief Executive Officer, the Company’s Chairman, and one of the Company’s directors, pursuant to which the Company agreed to issue and sell 1,322,100 shares of Common Stock in a private placement, at a purchase price of $0.9201 per share (or the consolidated closing bid price of the Company’s Common Stock on Nasdaq as of January 16, 2024). The securities issued in the Second SPA are exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder. The securities have not been registered under the Securities Act and may not be sold in the United States absent registration or an exemption from registration.

On February 5, 2024, the Company entered into an Agreement of Sale of Future Receipts (the “Libertas Agreement”) with Libertas Funding LLC (“Libertas”). Under the Libertas Agreement, the Company sold to Libertas future receipts totaling $2.2 million for a purchase price of $1.7 million. At the closing of the Libertas Agreement, the Company received cash proceeds of $1.5 million, net of the first payment of $157 thousand.

Pursuant to the terms of the Libertas Agreement, the Company agreed to pay Libertas $57 thousand each week, including interest, based upon an anticipated 20% of its future receivables until such time as $2.2 million has been paid, a period Libertas and the Company

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

estimate to be approximately 11 months. The Libertas Agreement also contains customary affirmative and negative conventions, representations and warranties, and default and terminations provisions.

During the three months ended March 31, 2024, the Company paid $134 thousand of the original balance under the agreement, along with $70 thousand of interest.

On February 7, 2024, the Company entered into Amendment No. 1 to Purchase Agreement (the “AXA Amendment”) with AXA S.A., a French société anonyme (“AXA”). The AXA Amendment amends the Membership Interest Purchase Agreement, dated August 4, 2022 (the “AXA Agreement”), executed by and among the Company, XL America Inc., a Delaware corporation, Seaview Re Holdings Inc., a Delaware corporation and AXA, pursuant to which the Company acquired all the membership interests of Maestro.

Pursuant to the AXA Amendment, the parties agreed to reduce the Base Purchase and the Full Base Amount each Price (as defined in the AXA Agreement) by three million dollars in the aggregate, provided that by December 31, 2024, (i) the Company’s largest shareholder has contributed at least three million dollars in equity, (ii) the Company maintains a listing of its securities on Nasdaq or a nationally recognized stock exchange and (iii) between February 29, 2024 and April 15, 2024, the Company makes all timely payments owed under the AXA Agreement (collectively, the “Reduction Criteria”).

In addition, the AXA Amendment provides that the requirement by the Company to pay AXA an amount equal to thirty five percent of the net proceeds, shall be deferred for any such funds raised in calendar year 2024 such that any such payments shall be paid no later than January 15, 2025, and any amounts due as a result of private offerings of any officers or directors of the Company shall be due and payable no later than December 31, 2025.

The AXA Amendment also provides that the Company shall make three monthly payments of $158 thousand on or prior to February 29, 2024, March 31, 2024 and April 15, 2024 for the 2024 year, as well as make such total accumulated annual payments of $2.3 million, $5.3 million, $13.3 million and $22.3 million in years 2024, 2025, 2026 and 2027 if the Reduction Criteria are met or $2.3 million, $8.3 million, $16.3 million and $25.3 million in years 2024, 2025, 2026 and 2027, respectively. The Company made timely payments of $158 thousand for February, March and April 2024.

On March 7, 2024, the Company entered into a securities purchase agreement with HillCour pursuant to which the Company agreed to issue and sell 910,000 shares of Common Stock in a private placement, at a purchase price of $1.65 per share (or the consolidated closing bid price of the Company’s Common Stock on Nasdaq as of March 7, 2024).

NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses reported in those financial statements. Descriptions of the Company’s significant accounting policies are discussed in the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Management evaluates the related estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.

Restricted Cash

Restricted cash balances are composed of funds held on behalf of clients in a fiduciary capacity, cash held in a separate bank account pledged to a bank as collateral for a bank guarantee provided to the lessor to secure the Company’s obligations under a lease agreement,

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

cash in a money market account as required by a credit card company for collateral, and a certificate of deposit ("CD") held for collateral for a letter of credit. Fiduciary funds generally cannot be utilized for general corporate purposes and are not a source of liquidity for the Company. A corresponding fiduciary obligation, included in current liabilities in the accompanying condensed consolidated balance sheets, exists for disbursements to be made on behalf of the clients and may be more than the restricted cash balance if payment from customers has not been received.

Capitalized Software

The Company complies with the guidance of ASC Topic 350-40, “Intangibles—Goodwill and Other—Internal Use Software”, in accounting for its internally developed system projects that it utilizes to provide its services to customers. These system projects generally relate to software of the Company that is not intended for sale or otherwise marketed. Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Once a project has reached the development stage, the Company capitalizes direct internal and external costs until the software is substantially complete and ready for its intended use. Costs for upgrades and enhancements are capitalized, whereas costs incurred for maintenance are expensed as incurred. These capitalized software costs are amortized on a project-by-project basis over the expected economic life of the underlying software on a straight-line basis, which is generally three to five years. Amortization commences when the software is available for its intended use.

Goodwill

Goodwill is recognized and initially measured as any excess of the acquisition-date consideration transferred in a business combination over the acquisition-date amounts recognized for the net identifiable assets acquired. Goodwill is not amortized but is tested for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not result in an impairment of goodwill. The Company operates in one reporting segment and reporting unit; therefore, goodwill is tested for impairment at the consolidated level. First, the Company assesses qualitative factors to determine whether or not it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company conducts a quantitative goodwill impairment test comparing the fair value of the applicable reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, the Company recognizes an impairment loss in the consolidated statement of operations for the amount by which the carrying amount exceeds the fair value of the reporting unit. The Company performs its annual goodwill impairment test at December 31.

During the year ended December 31, 2023, the Company performed qualitative and quantitative analyses, assessing trends in market capitalization, current and future cash flows, revenue growth rates, and the impact of macroeconomic conditions on the Company and its performance. Based on the analysis performed in connection with its annual goodwill impairment test, and primarily due to changes in the Company’s stock price and market capitalization as well as changes in the Company’s executive management team and its overall operational and financial strategy in the fourth quarter of 2023, it was determined that goodwill was impaired. As a result, the Company recorded a goodwill impairment charge in the amount of $3.0 million for the year ended December 31, 2023. There was no goodwill impairment for the three months ended March 31, 2024 and 2023.

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets

Intangible assets consist of customer relationships, non-compete agreements, and amounts attributed to patent and patent applications that were acquired through an acquisition and are amortized on a straight-line basis over useful lives ranging from five to ten years. The Company’s intangible assets are reviewed for impairment when events or circumstances indicate their carrying amounts may not be recoverable. The Company reviews the recoverability of its intangible assets by comparing the carrying value of such assets to the related undiscounted value of the projected cash flows associated with the assets, or asset group. If the carrying value is found to be greater, the Company records an impairment loss for the excess of book value over fair value. No impairment of the Company’s intangible assets was recorded for the three months ended March 31, 2024 and 2023.

The continuation of operating losses, negative cash flows from operations, negative working capital, and inability to secure planned funding from capital raising activities could result in impairment to goodwill and/or intangible assets that could be material to the consolidated financial statements in future periods. The Company will continue to monitor these events and circumstances each reporting period.

Revenue Recognition

Third Party Administrator Revenue

Revenue is recognized when control of the promised services is transferred to the Company’s customers in an amount that reflects the consideration expected to be entitled to in exchange for those services. As the Company completes its performance obligations, it has an unconditional right to consideration, as outlined in the Company’s contracts.

The Company also provides certain performance guarantees under their contracts with customers. Customers may be entitled to receive compensation if the Company fails to meet the guarantees. Actual performance is compared to the contractual guarantee for each measure throughout the period. The Company had performance guarantee liabilities of $202 thousand, which is included in accrued expenses on the accompanying condensed consolidated balance sheet as of March 31, 2024.

Significant Payment Terms

Generally, the Company’s accounts receivable are expected to be collected in 30 days in accordance with the underlying payment terms. Invoices for services are typically sent to the customer on the 15th day of the month prior to the service month with a 10-day payment term. The Company does not offer discounts if the customer pays some or all of the invoiced amount prior to the due date.

Consideration paid for services rendered by the Company is nonrefundable. Therefore, at the time revenue is recognized, the Company does not estimate expected refunds for services.

The Company uses the practical expedient and does not account for significant financing components because the period between recognition and collection does not exceed one year for all of the Company’s contracts.

Timing of Performance Obligations

All of the Company’s contracts with customers obligate the Company to perform services. Services provided include health and welfare administration, dependent eligibility verification, COBRA administration, and benefit billing. Revenue is recognized over time as services are provided as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document, and report claims, and control of these services is transferred to the customer. The Company has the right to receive payment for all services rendered.

Determining and Allocating the Transaction Price

The transaction price of a contract is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer.

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

To determine the transaction price of a contract, the Company considers its customary business practices and the terms of the contract. For the purpose of determining transaction prices, the Company assumes that the services will be transferred to the customer as promised in accordance with existing contracts and that the contracts will not be canceled, renewed, or modified.

The Company’s contracts with customers have fixed fee prices that are denominated per covered employee per month. The Company includes amounts of variable consideration in a contract’s transaction price only to the extent that it is probable that the amounts will not be subject to significant reversals (that is, downward adjustments to revenue recognized for satisfied performance obligations). In determining amounts of variable consideration to include in a contract’s transaction price, the Company relies on its experience and other evidence that supports its qualitative assessment of whether revenue would be subject to a significant reversal. The Company considers all the facts and circumstances associated with both the risk of a revenue reversal arising from an uncertain future event and the magnitude of the reversal if that uncertain event were to occur.

Captive Revenue

All general insurance premiums pertain to annual policies and are reflected in income on a pro-rata basis.

Loss and Loss Adjustment Expenses

The establishment of loss reserves by the primary insurer is a reasonably complex and dynamic process influenced by numerous factors. These factors principally include past experience with like claims. Consequently, the reserves established are a reflection of the opinions of a large number of persons and the Company is exposed to the possibility of higher or lower than anticipated loss cost due to real expense.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of outstanding shares of common stock for the period, considering the effect of participating securities. Diluted earnings (loss) per share is calculated by dividing net earnings (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding. During the periods when they are anti-dilutive, shares of common stock equivalents, if any, are not considered in the computation. At March 31, 2024 and 2023, there were 1,583,723 and 1,048,351 common stock equivalents, respectively. For the three months ended March 31, 2024 and 2023, these potential shares were excluded from the shares used to calculate diluted net loss per share as their effect would have been antidilutive.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which will add required disclosures of significant expenses for each reportable segment, as well as certain other disclosures to help investors understand how the Chief Operating Decision Maker evaluates segment expenses and operating results. The new standard will also allow disclosure of multiple measures of segment profitability, if those measures are used to allocate resources and assess performance. The amendments will be effective for public companies for fiscal years beginning after December 15, 2023 and for interim reporting periods beginning after December 15, 2024. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The standard will be effective for public companies for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following at:

(in thousands)


	March 31, 2024			December 31, 2023
Equipment	$	141		$	141
Furniture and fixtures		621			621
Total cost		762			762
Accumulated depreciation		(183	)		(151	)
Property and equipment, net	$	579		$	611

Depreciation expense was $32 thousand and $154 thousand for the three months ended March 31, 2024 and 2023, respectively.

NOTE 6 – CAPITALIZED SOFTWARE

Capitalized software consists of the following at:

(in thousands)


	March 31, 2024			December 31, 2023
Capitalized software	$	8,094		$	8,094
Accumulated amortization		(6,582	)		(5,967	)
Capitalized software, net	$	1,512		$	2,127

Amortization expense was $615 thousand and $616 thousand for the three months ended March 31, 2024 and 2023, respectively.

NOTE 7 – INTANGIBLE ASSETS

Intangible assets consist of the following:

(in thousands)


	March 31, 2024
	Useful	Gross Carrying		Accumulated			Net			Net Carrying
	Life	Amount		Amortization			Disposal			Amount
Trademarks	5-10 Years	$	2,320	$	(683	)	$	—		$	1,637
Noncompete agreements	5 Years		990		(594	)		—			396
Customer relationships	5-7 Years		3,760		(1,485	)		(51	)		2,224
Patents and patent applications	5 Years		650		(33	)		—			617
		$	7,720	$	(2,795	)	$	(51	)	$	4,874


	December 31, 2023
Trademarks	5-10 Years	$	2,320	$	(605	)	$	—		$	1,715
Noncompete agreements	5 Years		990		(545	)		—			445
Customer relationships	5-7 Years		3,760		(1,342	)		(51	)		2,367
Patents and patent applications	(*)		650		—			—			650
		$	7,720	$	(2,492	)	$	(51	)	$	5,177

(*)

Patents have yet to be approved by the United States Patent and Trademark Office. Useful life is determined upon placement into service after approval.

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Amortization expense was $303 thousand and $274 thousand for the three months ended March 31, 2024 and 2023, respectively.

NOTE 8 – LOSS AND LOSS ADJUSTMENT EXPENSES

The following tables shows changes in aggregate reserves for the Company's loss and loss adjustment expenses:

(in thousands)


	2024		2023
Net reserves at January 1	$	266	$	—
Incurred loss and loss adjustment expenses
Provisions for insured events of the current year		5		84
Change in provision for insured events of prior year		89		—
Total incurred loss and loss adjustment expense		94		84
Payments
Loss and loss adjustment expenses attributable to insured events of the current year		5		—
Loss and loss adjustment expenses attributable to insured events of the prior year		119		—
Total payments		124		—
Net reserves at March 31	$	236	$	84

NOTE 9 – REVENUE

Disaggregation of Revenue

The following tables illustrates the disaggregation of revenue by similar products:

For the three months period

(in thousands)


	March 31, 2024		March 31, 2023
TPA services	$	7,364	$	9,583
Captive insurance		21		89
Total	$	7,385	$	9,672

NOTE 10 – SHARE-BASED COMPENSATION

Global Stock Incentive Plan

On May 31, 2023, the shareholders of the Company approved the Company’s Board of Directors proposal to increase the Company’s 2020 Global Incentive Plan (the “Plan”) by an additional 500,000 shares, thus bringing the total number of stock options, restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) that may be issued pursuant to the Plan to 2,450,855.

Under the term of the Plan, on the grant date, the Board of Directors determines the vesting schedule of each stock option and RSUs on an individual basis. All stock options expire ten (10) years from the date of the grant. Vested options expire 90 days after the termination of employment of the grantee.

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

There were no options granted for the three months ended March 31, 2024. The fair value of options granted under the Plan during the three months ended March 31, 2023 was estimated at the date of grant using the Black-Scholes option pricing model and the following assumptions for grants:


	2023
Risk-free interest rates		3.43	%
Expected life	5 years
Expected volatility		41.00	%
Expected dividend yield		0.00	%

The following table summarizes the stock option activity:

(in thousands except share and per share data)


						Weighted Average		Aggregate
	Number of			Weighted Average		Remaining		Intrinsic
	Options			Exercise Price		Contractual Term		Value
Balance at January 1, 2024		1,213,957		$	4.43		8.70	$	—
Granted		—			—
Forfeited/Cancelled		(78,325	)		7.11
Exercised		—			—
Balance at March 31, 2024		1,135,632			4.22		5.49	$	187
Exercisable at March 31, 2024		704,005		$	4.98		5.23	$	52

The following table summarizes the Company’s non-vested stock options:


				Weighted-Average
	Non-vested Options			Grant Date Fair
	Outstanding			Value
At January 1, 2024		506,522		$	1.67
Options granted		—			—
Options forfeited/cancelled		(7,830	)		2.75
Options exercised		—			—
Options vested		(67,065	)		1.70
At March 31, 2024		431,627		$	1.65

For the three months ended March 31, 2024 and 2023, the Company recognized $121 thousand and $216 thousand of stock compensation expense relating to stock options, respectively. As of March 31, 2024, there was $696 thousand of unrecognized stock compensation expense related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of approximately 2.5 years.

Restricted Stock Awards

In July 2019, the Board of Directors of the Company authorized grants of RSAs through a restricted stock award purchase agreement to certain founders, consultants, and advisors of the Company. Certain grants to the Company’s founders were fully vested at the date of incorporation, other grants vest over a four-year period on each anniversary of the grant date, based on continued employment, and other grants vest based on various milestones. The shares of common stock underlying the RSAs were issued upon grant.

For the three months ended March 31, 2024 and 2023, the Company recognized $0 and $121 thousand of stock compensation expense relating to RSAs, respectively. As of March 31, 2024, there was $0 of unrecognized compensation expense related to unvested restricted share awards.

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units

The following table summarizes the restricted stock units activity:


	Outstanding			Value
Outstanding at January 1, 2024		—		$	—
Granted		350,000			1.78
Forfeited/cancelled		—			—
Vested		(115,000	)		1.73
Outstanding at March 31, 2024		235,000		$	1.81

For the three months ended March 31, 2024 and 2023, the Company recognized $440 thousand and $286 thousand of stock compensation expense relating to RSUs, respectively. As of March 31, 2024, there was $2.6 million of unrecognized compensation expense remaining related to unvested restricted share units.

NOTE 11 – WARRANTS

The Company has issued warrants as part of equity offerings and severance packages.

The table below summarizes the Company’s warrant activities:


	Number of
	Warrants to		Exercise Price		Weighted
	Purchase Common		Range Per		Average
	Shares		Share		Exercise Price
Balance at January 1, 2024		644,718	$2.50 to 31.60		$	16.40
Granted		—		—		—
Forfeited		—		—		—
Exercised		—		—		—
Balance at March 31, 2024		644,718	$2.50 to 31.60		$	16.40

Balance at January 1, 2023		412,218	$5.72 to 31.60		$	16.40
Granted		—		—		—
Forfeited		—		—		—
Exercised		—		—		—
Balance at March 31, 2023		412,218	$5.72 to 31.60		$	16.40

NOTE 12 – SEGMENT INFORMATION

Research and development activities are conducted through the Company’s wholly owned subsidiary, EYME Technologies, Ltd., in Israel. Geographic long-lived asset information presented below is based on the physical location of the assets at the end of year. All of the Company’s revenues are derived from customers located in the United States.

Long-lived assets including goodwill, intangible assets, capitalized software, property and equipment and operating lease right-of-use, by geographic region, are as follows at:

(in thousands)


	March 31, 2024		December 31, 2023
United States	$	11,493	$	12,015
Israel		801		1,291
Total long-lived assets	$	12,294	$	13,306

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 – RELATED PARTY TRANSACTIONS

The Company receives consulting services and marketing services from various shareholders and directors. The total cost of these consulting services for the three months ended March 31, 2024, and 2023 was approximately $0 and $52 thousand, respectively. No amounts due to these certain shareholders were included in accounts payable of March 31, 2024 and December 31, 2023.

In January 2024 and March 2024, the Company entered into security purchase agreements with an entity controlled by the Company's Chief Executive Officer (see Note 3).

NOTE 14 – ACCRUED EXPENSES

Accrued expenses consisted of the following:

(in thousands)


	March 31, 2024		December 31, 2023

Employee compensation	$	961	$	1,202
Accrued bonuses		526		178
Performance guarantee liabilities		202		165
Other accrued expenses and liabilities		1,387		1,271
Accrued expenses	$	3,076	$	2,816

NOTE 15 – INCOME TAXES

The effective tax rate was 0% for the three months ended March 31, 2024 and 2023. The effective tax rate differs from the federal tax rate of 21% for the three months ended March 31, 2024 and 2023 due primarily to the full valuation allowance on deferred tax assets, and other discrete items.

At December 31, 2023, the Company had federal and state net operating losses (“NOLs”) in the amount of approximately $48.2 million and $39.7 million. While the federal NOLs carryforward indefinitely, the Tax Cuts & Jobs Act of 2017 limits the amount of federal net operating loss utilized each year after December 31, 2020, to 80% of taxable income. The state NOLs start expiring in 2031.

Income tax expense is recorded using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between amounts reported for income tax purposes and financial statement purposes, using current tax rates. A valuation allowance is recognized if it is anticipated that some or all of a deferred tax asset will not be realized. The Company must assess the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent that the Company believes that recovery is not likely, it must establish a valuation allowance. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets.

The Company and its subsidiaries’ income tax returns since 2019 remain subject to examination by tax jurisdictions.

NOTE 16 – LITIGATION AND LOSS CONTINGENCIES

From time to time, the Company may be subject to other legal proceedings, claims, investigations, and government inquiries (collectively, legal proceedings) in the ordinary course of business. It may receive claims from third parties asserting, among other things, infringement of their intellectual property rights, defamation, labor and employment rights, privacy, and contractual rights. There are no currently pending legal proceedings that the Company believes will have a material adverse impact on the Company’s business or condensed consolidated financial statements.

MARPAI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 – SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date the unaudited condensed consolidated financial statements were available for issuance.

On April 15, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with each of the purchasers that are parties thereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”) and JGB Collateral LLC, a Delaware limited liability company, as collateral agent for the Purchasers (the “Agent”). Pursuant to the Purchase Agreement, the Company agreed to sell to the Purchasers Senior Secured Convertible Debentures (the “Debentures”) in an aggregate principal amount of $11.8 million, for a total purchase price of $11.0 million. The Purchase Agreement contains customary representations, warranties and covenants. The transactions contemplated by the Purchase Agreement were consummated on April 15, 2024 (the “Closing Date”). On April 15, 2024, the Company received the first $6 million.

As of March 31, 2024, approximately $1.6 million was due to Libertas, which is included in other short-term liabilities on the condensed consolidated balance sheet. In April 2024, the balance was paid to Libertas.

On May 6, 2024, the Company held its 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”). At the 2024 Annual Meeting, the Company’s stockholders approved the Company's 2024 Global Stock Incentive Plan and the amendment to the Company's Certificate of Incorporation to include 2,000,000 shares of preferred stock.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF MARPAI, INC.

As used in this report, the terms “we”, “us”, “our”, the “Company”, and “Marpai” mean Marpai, Inc., and our wholly owned subsidiaries, Marpai Captive, Marpai Administrators, Maestro Health, and Marpai Health and its wholly owned Israeli subsidiary EYME Technologies, Ltd. (“EYME”), unless otherwise indicated or required by the context.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10‑Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements other than statements of historical fact included in this Form 10‑Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performances, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performances or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to Part II, Item 1A of this Quarterly report and the Risk Factors section of our Annual Report on Form 10-K, filed on March 26, 2024 with the SEC.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10‑Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.

The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Nasdaq Deficiency Letters

As we previously disclosed, on May 31, 2023, Nasdaq Listing Qualifications staff (“Staff”) notified us that the market value of our listed securities (“MVLS”) was below the minimum $35.0 million required for continued listing as set forth in Listing Rule 5550(b)(2). In accordance with Listing Rule 5810(c)(3)(C), we were provided 180 calendar days, or until November 27, 2023, to regain compliance. On November 28, 2023, the Staff notified us that it had determined to delist us as we did not comply with the MVLS requirement for listing on Nasdaq. On November 29, 2023, we requested a hearing. A hearing on the matter was held on February 22, 2024, where we presented our compliance plan. Subject to our meeting certain requirements by March 31, 2024, the Hearings Panel granted us an extension until May 28, 2024, to regain compliance with the MVLS requirement or satisfy any of the alternative requirements in Listing Rule 5550(b).

Notwithstanding the foregoing, there can be no assurance that we will be able to meet these deadlines or ultimately regain compliance with all applicable requirements for continued listing.

Overview

We are a national technology-driven healthcare third party administration (“TPA”), which uses AI and data analytics combined with cost containment programs to help our Clients lower their cost of healthcare by enabling better health outcomes for their employees and families. Our mission is to positively change healthcare for the benefit of (i) our Clients who are self-insured employers that pay for their employees’ healthcare benefits and engage us to administer the latter’s healthcare claims, and we refer to them as our “Clients”, (ii) employees and their family members who receive these healthcare benefits from our Clients, and we refer to them as our “Members”, and (iii) healthcare providers including, doctors, doctor groups, hospitals, clinics, and any other entities providing healthcare services or products, and we refer to them as the “Providers.” We provide affordable, intelligent, healthcare programs for self-insured employers in

the U.S. We provide administrative services, and act as TPA to self-insured employers who provide healthcare benefits to their employees. Most of our Clients are small and medium-sized companies as well as local government entities.

Representation in the Financial Statements of Marpai, Inc.

The unaudited condensed consolidated financial statements of Marpai, Inc and the discussion of the results of its operations in this quarterly report, reflect the results of the operations of Marpai for all periods presented. The results for the three months ended March 31, 2024, as applicable, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Results of Operations

Comparison of the Three Months Ended March 31, 2024 and 2023

The following tables set forth our consolidated results of operations for the periods indicated.

(dollars in thousands)


	Three Months Ended March 31,
	2024			2023			Change			%

Revenue	$	7,385		$	9,672		$	(2,287	)		(23.6	)%
Costs and expenses
Cost of revenue (exclusive of depreciation and amortization shown separately below)		4,871			6,409			(1,538	)		(24.0	)%
General and administrative		3,421			5,226			(1,805	)		(34.5	)%
Sales and marketing		602			2,179			(1,577	)		(72.4	)%
Information technology		1,124			2,187			(1,063	)		(48.6	)%
Research and development		7			500			(493	)		(98.6	)%
Depreciation and amortization		951			1,044			(93	)		(8.9	)%
Facilities		474			650			(176	)		(27.1	)%
Total costs and expenses		11,450			18,195			(6,745	)		(37.1	)%
Operating loss		(4,065	)		(8,523	)		4,458			(52.3	)%
Other income and (expenses)
Other income (expense), net		120			50			70			140.0	%
Interest expense		(398	)		(385	)		(13	)		3.4	%
Foreign exchange loss		(3	)		(15	)		12			(80.0	)%
Total other expense		(281	)		(350	)		69			(19.7	)%
Loss before income taxes		(4,346	)		(8,873	)		4,527			(51.0	)%
Income tax expense		—			—			—			—
Net loss	$	(4,346	)	$	(8,873	)	$	4,527			(51.0	)%
Net loss per share, basic and fully diluted	$	(0.46	)	$	(1.68	)	$	1.22			(72.4	)%

Comparison of the Three Months Ended March 31, 2024 and 2023

Revenues and Cost of Revenue

During the three months ended March 31, 2024 and 2023, our total revenue was $7.4 million and $9.7 million, respectively, representing a decrease in revenue of $2.3 million. The decline is primarily due to customer turnover. The market is evolving, and we are adapting our approach to better serve our customers' needs. While we have seen some customer turnover, we're confident that our new initiatives will lead to long-term revenue growth.

Total revenues consist of fees that we charge our customers in consideration for administering their self-insured healthcare plans as well as fees that we receive for ancillary services such as care management, case management, cost containment services, and other services provided to our customers by us or other vendors.

During the three months ended March 31, 2024 and 2023, our cost of revenue exclusive of depreciation and amortization was $4.9 million and $6.4 million, respectively, representing a decrease of $1.5 million, in line with the decrease in revenue.

Total cost of revenues consists of (i) service fees, which primarily include vendor fees associated with the client’s benefit program selections, (ii) the direct labor cost associated with claim management and processing services, and (iii) direct labor costs associated with providing customer support and services to the clients, members, and other external stakeholders.

General and Administrative Expenses

We incurred $3.4 million of general and administrative expenses for the three months ended March 31, 2024 compared to $5.2 million for the three months ended March 31, 2023, a decrease of $1.8 million. The reason for the decrease is due to (i) the actions taken throughout 2023 to aligning the two TPA companies into one amounting to approximately $1.4 million in savings and, (ii) the elimination of non-value added services amounting to approximately $225 thousand in savings.

Sales and Marketing Expenses

We incurred $602 thousand of sales and marketing expenses for the three months ended March 31, 2024 compared to $2.2 million for the three months ended March 31, 2023, a decrease of $1.6 million. The reason for the decrease is due to the actions taken throughout 2023 to aligning the two TPA companies into one amounting to approximately $1.6 million in savings.

Information Technology Expenses

We incurred $1.1 million of information technology expenses for the three months ended March 31, 2024 compared to $2.2 million for the three months ended March 31, 2023, a decrease of $1.1 million. The reason for the decrease is due to the actions taken throughout 2023 to aligning the two TPA companies into one amounting to approximately $1.0 million in savings.

Research and Development Expenses

We incurred $7 thousand of research and development expenses for the three months ended March 31, 2024 compared to $500 thousand for the three months ended March 31, 2023, a decrease of $493 thousand. The decrease is attributable to adapting our approach to better serve our customers' needs by elimination of non-value added development projects amounting to approximately $493 thousand.

Depreciation and Amortization

We incurred $1.0 million of depreciation and amortization expenses for the three months ended March 31, 2024 compared to $1.0 million for the three months ended March 31, 2023, a decrease of $93 thousand. This decrease was primarily due to a reduction by approximately $122 thousand in the depreciation of assets that were disposed of during the prior year, partially offset by the new patents placed into service during 2024 amounting to approximately $33 thousand.

Interest Expense, net

We incurred $398 thousand of interest expense for the three months ended March 31, 2024 compared to $385 thousand for the three months ended March 31, 2023, an increase of $13 thousand. Interest expense increased primarily due to the debt to Libertas Funding LLC (“Libertas”) which was offset by the decrease in interest due to AXA S.A., a French société anonyme (“AXA”) for the acquisition of Maestro being partially paid down in 2023.

Liquidity and Capital Resources

As of March 31, 2024, we had an accumulated deficit of approximately $81.1 million, unrestricted cash and cash equivalents of approximately $851 thousand and negative working capital of approximately $3.6 million. For the three months ended March 31, 2024, we recognized a net loss of approximately $4.3 million and negative cash flows from operations of approximately $3.6 million.

We have spent most of our cash resources on funding our operating activities. Through March 31, 2024, we have financed our operations primarily with the proceeds from the issuance of convertible promissory notes and warrants as well as sales of our equity securities.

On January 16, 2024, we entered into a securities purchase agreement (the “Second SPA”) with certain insiders consisting of HillCour Investment Fund, LLC (“HillCour”), an entity controlled by our Chief Executive Officer, our Chairman, and one of our directors, pursuant to which we agreed to issue and sell 1,322,100 shares of Common Stock in a private placement, at a purchase price of $0.9201 per share (or the consolidated closing bid price of our Common Stock on Nasdaq as of January 16, 2024). The securities issued in the Second SPA are exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant

to Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder. The securities have not been registered under the Securities Act and may not be sold in the United States absent registration or an exemption from registration.

On February 5, 2024, we entered into an Agreement of Sale of Future Receipts (the “Libertas Agreement”) with Libertas to sell future receipts totaling $2.2 million for a purchase price of $1.7 million. The sold amount of future receipts is to be delivered weekly to Libertas at predetermined amounts over a period of nine months. The Libertas Agreement contains an early delivery discount fee for delivering the future receivables before the end of the contract term and an origination fee. Our Chief Executive Officer provided a guarantee for the funding agreement through various entities the Chief Executive Officer controls.

On March 7, 2024, we entered into a securities purchase agreement with HillCour, pursuant to which we agreed to issue and sell 910,000 shares of Common Stock in a private placement, at a purchase price of $1.65 per share (or the consolidated closing bid price of out Common Stock on Nasdaq as of March 7, 2024).

On April 15, 2024, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with each of the purchasers that are parties thereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”) and JGB Collateral LLC, a Delaware limited liability company, as collateral agent for the Purchasers (the “Agent”). Pursuant to the Purchase Agreement, we agreed to sell to the Purchasers Senior Secured Convertible Debentures (the “Debentures”) in an aggregate principal amount of $11.8 million, for a total purchase price of $11.0 million. The Purchase Agreement contains customary representations, warranties and covenants. The transactions contemplated by the Purchase Agreement were consummated on April 15, 2024 (the “Closing Date”). The Debentures bear interest at a rate equal to the prime interest rate plus 5.75% per annum (subject to increase upon the occurrence and continuance of an Event of Default (as defined in the Debentures), require monthly principal payments of $140 thousand beginning on October 15, 2024, have a maturity date of April 15, 2027 and are convertible, in whole or in part, at any time after their issuance date at the option of the Purchasers, into shares of our Common Stock at a conversion price equal to $3.00 per share (the “Conversion Price”), subject to adjustment as set forth in the Debentures. The Conversion Price of the Debentures is subject to anti-dilution protection upon subsequent equity issuances, subject to certain exceptions, provided that the Conversion Price shall not be adjusted to a price less than $2.23 per share, the closing price of our Common Stock on The Nasdaq Stock Market LLC on the day immediately preceding the Closing Date. In addition, at any time within sixty days after the Closing Date, and provided that $5.0 million remains on deposit in a certain blocked account, the Company may elect to redeem up to an aggregate of $5.0 million of the Debentures.

In connection with the Purchase Agreement, on April 15, 2024, we, certain of our domestic subsidiaries (“Subsidiary Debtors”), the Purchasers and the Agent entered into a Security Agreement (the “Security Agreement”), pursuant to which we and the Subsidiary Debtors granted to the Agent, for the benefit of the Purchasers, to secure our and the Subsidiary Debtors’ obligations under the Purchase Agreement, the Debentures and the other transaction documents, first priority liens on certain assets (the “Collateral”), in each case subject to permitted liens described in the Security Agreement. In addition, on April 15, 2024, certain of our domestic subsidiaries, our Chairman and Chief Executive Officer, and Hillcour (collectively, the “Guarantors”) entered into Guarantees, pursuant to which they guaranteed all our obligations and each Guarantor under the Purchase Agreement, the Debentures and the other transaction documents.

In connection with the Purchase Agreement, on April 15, 2024, we and the Purchasers entered into a Registration Rights Agreement, pursuant to which we are obligated to register the shares of our Common Stock issuable upon exercise of the Debentures by May 30, 2024 (the “Registration Deadline”). If we fail to meet the Registration Deadline or maintain the effectiveness of the Registration Statement for the required effectiveness period, subject to certain permitted exceptions, we will be required to pay liquidated damages to the Purchasers. We also agreed, among other things, to indemnify the selling holders under the Registration Statement from certain liabilities and to pay all fees and expenses incident to our performance of or compliance with the Registration Rights Agreement.

Management continues to evaluate additional funding alternatives and is seeking to raise additional funds through the issuance of equity or debt securities.

If we are unable to raise additional capital moving forward, our ability to operate in the normal course and continue to invest in its product portfolio may be materially and adversely impacted and we may be forced to scale back operations or divest some or all of our assets.

As a result of the above, in connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date these condensed consolidated financial statements are available to be issued. The condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.

Cash Flows

The following tables summarizes selected information about our sources and uses of cash and cash equivalents for the three months ended March 31, 2024 and 2023:

Comparison of the Three Months Ended March 31, 2024 and 2023

(in thousands)


	Three Months Ended March 31,
	2024			2023
Net cash used in operating activities	$	(3,585	)	$	(6,541	)
Net cash provided by investing activities		—			3
Net cash provided by financing activities		3,705			—
Net increase (decrease) in cash and cash equivalents and restricted cash	$	120		$	(6,538	)

Net Cash Used in Operating Activities

Net cash used in operating activities totaled $3.6 million for the three months ended March 31, 2024, a decrease of $3.0 million as compared to $6.5 million for the three months ended March 31, 2023. The primary reason for the decrease was the reduction in our net loss from prior year. Net cash used in operating activities was primarily driven by our net loss for the period of $4.3 million, net of (i) non-cash items totaling $2.0 million and (ii) a decrease in net working capital items amounting to $1.2 million.

Net Cash Provided by Investing Activities

A total of $0 was provided by investing activities in the three months ended March 31, 2024 a decrease of $3 thousand as compared to $3 thousand for the three months ended March 31, 2023. The primary reason for the decrease was no disposal of property and equipment.

Net Cash Provided by Financing Activities

A total of $3.7 million was received from financing activities during the three months ended March 31, 2024, an increase of $3.7 million compared to $0 for the three months ended March 31, 2023. The increase is comprised of net proceeds provided from private offerings of common stock of $2.7 million, net proceeds from the sale of accounts receivable of $1.4 million offset by the repayment of the AXA loan of $474 thousand and payments to Libertas of $57 thousand.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the applicable periods. We evaluate our estimates, assumptions and judgments on an ongoing basis. Our estimates, assumptions and judgments are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our condensed consolidated financial statements, which, in turn, could change the results from those reported.

See Note 4 to our condensed consolidated financial statements included in this Form 10-Q for a description of the significant accounting policies that we use to prepare our consolidated financial statements.

New Accounting Pronouncements

We have considered recently issued accounting pronouncements and do not believe the adoption of such pronouncements will have a material impact on our condensed consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign exchange risk

The cash generated from revenue is denominated in U.S. Dollars. Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations, which are in the United States and Israel. Our results of current and future operations and cash flows are therefore subject to fluctuations due to changes in the exchange rate of the New Israeli Shekel (NIS). The effect of a hypothetical 10% change in the exchange rate of the NIS versus the U.S. Dollar would not have had a material impact on our historical condensed consolidated financial statements for the three months ended March 31, 2024. To date we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes or is expected to become more significant.

Interest rate risk

We had cash and cash equivalents balances of $851 thousand and $1.1 million on March 31, 2024 and December 31, 2023, respectively. Currently, management does not view this exposure to be a significant risk.

Inflation Risk

Inflation generally affects us by increasing our labor costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three months ended March 31, 2024.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial and Accounting Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act) as of the end of the fiscal quarter ended March 31, 2024. Based on this evaluation, our Chief Executive Officer and Chief Financial and Accounting Officer have concluded that, during the period covered by this Quarterly Report, our disclosure controls and procedures were effective.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer or persons performing similar functions, as appropriate, to allow timely decisions.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) under the Exchange Act) during the first quarter ended March 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

PART II – OTHER INFORMATION

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed below and in Part I, “Item 1A. Risk Factors” in our 2023 Annual Report, which could materially affect our business, financial condition or future results.

We have been notified by The Nasdaq Stock Market LLC of our failure to comply with certain continued listing requirements and, if we are unable to regain compliance with all applicable continued listing requirements and standards of Nasdaq, our common stock could be delisted from Nasdaq.

As we previously disclosed, on May 31, 2023, Nasdaq Listing Qualifications staff (“Staff”) notified us that the market value of our listed securities (“MVLS”) was below the minimum $35,000,000 required for continued listing as set forth in Listing Rule 5550(b)(2). In accordance with Listing Rule 5810(c)(3)(C), we were provided 180 calendar days, or until November 27, 2023, to regain compliance. On November 28, 2023, the Staff notified us that it had determined to delist us as we did not comply with the MVLS requirement for listing on Nasdaq. On November 29, 2023, we requested a hearing. A hearing on the matter was held on February 22, 2024, where we presented our compliance plan. Subject to our meeting certain requirements by March 31, 2024, the Hearings Panel granted us an extension until May 28, 2024, to regain compliance with the Market Value of Listed Securities (“MVLS”) requirement of $35,000,000 or satisfy any of the alternative requirements in Listing Rule 5550(b).

Notwithstanding the foregoing, there can be no assurance that we will be able to meet these deadlines or ultimately regain compliance with all applicable requirements for continued listing.

ITEM 6. Exhibits.



Exhibit No.		Description
4.1		Form of Debenture (incorporated by reference to Exhibit 4.1 filed with the Current Report on Form 8-K filed with the SEC on April 17, 2024).
10.1		Securities Purchase Agreement, dated April 15, 2024, by and among Marpai, Inc., its subsidiaries named therein, the purchasers named therein, and JGB Collateral, LLC (incorporated by reference to Exhibit 10.1 filed with the Current Report on Form 8-K filed with the SEC on April 17, 2024).
10.2		Registration Rights Agreement, dated April 15, 2024, by and among Marpai, Inc. and the purchasers named therein (incorporated by reference to Exhibit 10.2 filed with the Current Report on Form 8-K filed with the SEC on April 17, 2024).
10.3		Security Agreement, dated April 15, 2024, by and among Marpai, Inc., each of Marpai, Inc.’s specified subsidiaries named therein, the purchasers named therein and JGB Collateral, LLC (incorporated by reference to Exhibit 10.3 filed with the Current Report on Form 8-K filed with the SEC on April 17, 2024).
10.4		Form of Guarantee (incorporated by reference to Exhibit 10.4 filed with the Current Report on Form 8-K filed with the SEC on April 17, 2024).
31.1		Certification Statement of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
31.2		Certification Statement of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
32.1*		Certification Statement of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002
32.2*		Certification Statement of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002
101*		Interactive Data Files
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*Furnished herewith.

** Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	MARPAI, INC.

Date: May 9, 2024		/s/ Damien Lamendola
	Name:	Damien Lamendola
	Title:	Chief Executive Officer
		(Principal Executive Officer)

		/s/ Steve Johnson
	Name:	Steve Johnson
	Title	Chief Financial Officer
		(Principal Financial and Accounting Officer)

Table of Contents`

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Rule 13a-14(a)

I, Damien Lamendola, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Marpai, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2024


	/s/ Damien Lamendola
	Damien Lamendola
	Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Rule 13a-14(a)

I, Steve Johnson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Marpai, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2024


	/s/ Steve Johnson
	Steve Johnson
	Chief Financial Officer (Principal Financial Officer)

Table of Contents`

Exhibit 32.1

MARPAI, INC.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Marpai, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Damien Lamendola, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


	/s/ Damien Lamendola

	Damien Lamendola
	Chief Executive Officer (Principal Executive Officer)
	May 9, 2024

Table of Contents`

Exhibit 32.2

MARPAI, INC.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Marpai, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steve Johnson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


	/s/ Steve Johnson

	Steve Johnson
	Chief Financial Officer (Principal Financial Officer)

	May 9, 2024

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2024	May 09, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Entity File Number	001-40904
Entity Registrant Name	MARPAI, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	86-1916231
Entity Address, State or Province	FL
Entity Address, Address Line One	615 Channelside Drive, Suite 207
Entity Address, City or Town	Tampa
Entity Address, Postal Zip Code	33602
City Area Code	855
Local Phone Number	389-7330
Title of 12(b) Security	Class A Common Stock, par value $0.0001 per share
Trading Symbol	MRAI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,308,038
Entity Central Index Key	0001844392
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands

Mar. 31, 2024

Dec. 31, 2023

Current assets:

Cash and cash equivalents

$ 851

$ 1,147

Restricted cash

12,761

12,345

Accounts receivable, net

366

1,124

Unbilled receivable

727

768

Prepaid expenses and other current assets

1,000

901

Total current assets

16,505

17,085

Property and equipment, net

579

611

Capitalized software, net

1,512

2,127

Operating lease right-of-use assets

2,311

2,373

Goodwill

3,018

Intangible assets, net

4,874

5,177

Security deposits

1,267

Other long-term asset

Total assets

30,088

31,680

Current liabilities:

Accounts payable

3,824

4,649

Accrued expenses

3,076

2,816

Accrued fiduciary obligations

9,510

11,573

Deferred revenue

1,481

661

Current portion of operating lease liabilities

523

512

Total current liabilities

20,123

20,843

Other long-term liabilities

19,724

19,401

Operating lease liabilities, net of current portion

3,547

3,684

Deferred tax liabilities

1,190

Total liabilities

44,584

45,118

COMMITMENTS AND CONTINGENCIES (Note 16)

STOCKHOLDERS' DEFICIT

Common stock, $0.0001 par value, 227,791,050 shares authorized; 10,308,038 shares and 7,960,938 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

^[1]

Additional paid-in capital

66,595

63,307

Accumulated deficit

(81,092)

(76,746)

Total stockholders' deficit

(14,496)

(13,438)

Total liabilities and stockholders' deficit

30,088

31,680

Nonrelated Party

Current liabilities:

Other short-term liabilities

1,709

632

Related Party

Current assets:

Other receivables

$ 800

[1]	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares
Statement of Financial Position [Abstract]
Allowance for credit losses \| $	$ 25	$ 25
Common stock, par value \| $ / shares	$ 0.0001	$ 0.0001
Common stock, shares authorized	227,791,050	227,791,050
Common stock, shares issued	10,308,038	7,960,938
Common stock, shares outstanding	10,308,038	7,960,938
Reverse stock split ratio	0.25	0.25
Reverse stock split	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2024

Mar. 31, 2023

Income Statement [Abstract]

Revenue

$ 7,385

$ 9,672

Costs and expenses

Cost of revenue (exclusive of depreciation and amortization shown separately below)

4,871

6,409

General and administrative

3,421

5,226

Sales and marketing

602

2,179

Information technology

1,124

2,187

Research and development

500

Depreciation and amortization

951

1,044

Facilities

474

650

Total costs and expenses

11,450

18,195

Operating loss

(4,065)

(8,523)

Other income (expenses)

Other income

120

Interest expense net

(398)

(385)

Foreign exchange loss

(3)

(15)

Loss before provision for income taxes

(4,346)

(8,873)

Net loss

$ (4,346)

$ (8,873)

Net loss per share, basic

^[1]

$ (0.46)

$ (1.68)

Net loss per share, fully diluted

^[1]

$ (0.46)

$ (1.68)

Weighted average shares of common stock outstanding, basic

9,405,775

5,290,661

^[1]

Weighted average shares of common stock outstanding, diluted

9,405,775

5,290,661

^[1]

[1]	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical)		3 Months Ended	12 Months Ended
	Jun. 29, 2023	Mar. 31, 2024	Dec. 31, 2023
Income Statement [Abstract]
Reverse stock split	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.
Reverse stock split ratio	0.25	0.25	0.25

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($)
$ in Thousands

Total

Common Stock

Additional Paid-In Capital

Accumulated Deficit

Balance at the beginning at Dec. 31, 2022

$ 6,135

$ 1

$ 54,128

$ (47,994)

Balance at the beginning (in shares) at Dec. 31, 2022

^[1]

5,319,758

Share-based compensation

748

Issuance of common stock upon vesting of restricted stock units (in shares)

^[1]

33,387

Shares issued to vendors in exchange for services

Shares issued to vendors in exchange for services (in shares)

^[1]

25,000

Issuance of common stock upon exercise of stock options (in shares)

^[1]

24,976

Net loss

(8,873)

Balance at the end at Mar. 31, 2023

(1,911)

$ 1

54,955

(56,867)

Balance at the end (in shares) at Mar. 31, 2023

^[1]

5,403,121

Balance at the beginning at Dec. 31, 2023

$ (13,438)

$ 1

63,307

(76,746)

Balance at the beginning (in shares) at Dec. 31, 2023

7,960,938

^[1]

Share-based compensation

$ 561

561

Issuance of common stock upon vesting of restricted stock units (in shares)

^[1]

115,000

Issuance of common stock in connection with public offering, net

2,727

Issuance of common stock in connection with public offering, net (in shares)

^[1]

2,232,100

Net loss

(4,346)

Balance at the end at Mar. 31, 2024

$ (14,496)

$ 1

$ 66,595

$ (81,092)

Balance at the end (in shares) at Mar. 31, 2024

10,308,038

^[1]

[1]	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Parenthetical)		3 Months Ended	12 Months Ended
	Jun. 29, 2023	Mar. 31, 2024	Dec. 31, 2023
Statement of Stockholders' Equity [Abstract]
Reverse stock split	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.
Reverse stock split ratio	0.25	0.25	0.25

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (4,346)	$ (8,873)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	951	1,044
Share-based compensation	561	623
Common stock issued to vendors in exchange for services		79
Amortization of right-of-use asset	62	252
Non-cash interest	423	388
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivable	800	(239)
Prepaid expense and other assets	(99)	162
Accounts payable	(825)	653
Accrued expenses	215	(1,416)
Accrued fiduciary obligations	(2,063)
Operating lease liabilities	(126)	(363)
Other liabilities	862	1,149
Net cash used in operating activities	(3,585)	(6,541)
Cash flows from investing activities:
Disposal of property and equipment		3
Net cash provided by investing activities		3
Cash flows from financing activities:
Proceeds from sale of future cash receipts on accounts receivable	1,509
Payments to buyer of receivables (Note 3)	(57)
Payments to seller for acquisition (Note 3)	(474)
Proceeds from issuance of common stock in a private offering, net	2,727
Net cash provided by financing activities	3,705
Net increase (decrease) in cash, cash equivalents and restricted cash	120	(6,538)
Cash, cash equivalents and restricted cash at beginning of period	13,492	23,117
Cash, cash equivalents and restricted cash at end of period	13,612	16,579
Reconciliation of cash, cash equivalents, and restricted cash reported in the condensed consolidated balance sheet
Cash and cash equivalents	851	6,174
Restricted cash	12,761	10,405
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows	$ 13,612	16,579
Supplemental disclosure of non-cash activity
Measurement period adjustment to goodwill		$ 36

Organization and Description of Business

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization

Nature of Business

Reverse Stock Split

Unaudited Interim Condensed Consolidated Financial Statements

3 Months Ended

Mar. 31, 2024

Condensed Financial Statements [Abstract]

Unaudited Interim Condensed Consolidated Financial Statements

NOTE 2 – UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

Liquidity and Going Concern

3 Months Ended

Mar. 31, 2024

LIQUIDITY

Liquidity and Going Concern

NOTE 3 – LIQUIDITY AND GOING CONCERN

estimate to be approximately 11 months. The Libertas Agreement also contains customary affirmative and negative conventions, representations and warranties, and default and terminations provisions.

During the three months ended March 31, 2024, the Company paid $134 thousand of the original balance under the agreement, along with $70 thousand of interest.

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Mar. 31, 2024
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses reported in those financial statements. Descriptions of the Company’s significant accounting policies are discussed in the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Management evaluates the related estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. Restricted Cash Restricted cash balances are composed of funds held on behalf of clients in a fiduciary capacity, cash held in a separate bank account pledged to a bank as collateral for a bank guarantee provided to the lessor to secure the Company’s obligations under a lease agreement, cash in a money market account as required by a credit card company for collateral, and a certificate of deposit ("CD") held for collateral for a letter of credit. Fiduciary funds generally cannot be utilized for general corporate purposes and are not a source of liquidity for the Company. A corresponding fiduciary obligation, included in current liabilities in the accompanying condensed consolidated balance sheets, exists for disbursements to be made on behalf of the clients and may be more than the restricted cash balance if payment from customers has not been received. Capitalized Software The Company complies with the guidance of ASC Topic 350-40, “Intangibles—Goodwill and Other—Internal Use Software”, in accounting for its internally developed system projects that it utilizes to provide its services to customers. These system projects generally relate to software of the Company that is not intended for sale or otherwise marketed. Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Once a project has reached the development stage, the Company capitalizes direct internal and external costs until the software is substantially complete and ready for its intended use. Costs for upgrades and enhancements are capitalized, whereas costs incurred for maintenance are expensed as incurred. These capitalized software costs are amortized on a project-by-project basis over the expected economic life of the underlying software on a straight-line basis, which is generally three to five years. Amortization commences when the software is available for its intended use. Goodwill Goodwill is recognized and initially measured as any excess of the acquisition-date consideration transferred in a business combination over the acquisition-date amounts recognized for the net identifiable assets acquired. Goodwill is not amortized but is tested for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not result in an impairment of goodwill. The Company operates in one reporting segment and reporting unit; therefore, goodwill is tested for impairment at the consolidated level. First, the Company assesses qualitative factors to determine whether or not it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company conducts a quantitative goodwill impairment test comparing the fair value of the applicable reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, the Company recognizes an impairment loss in the consolidated statement of operations for the amount by which the carrying amount exceeds the fair value of the reporting unit. The Company performs its annual goodwill impairment test at December 31. During the year ended December 31, 2023, the Company performed qualitative and quantitative analyses, assessing trends in market capitalization, current and future cash flows, revenue growth rates, and the impact of macroeconomic conditions on the Company and its performance. Based on the analysis performed in connection with its annual goodwill impairment test, and primarily due to changes in the Company’s stock price and market capitalization as well as changes in the Company’s executive management team and its overall operational and financial strategy in the fourth quarter of 2023, it was determined that goodwill was impaired. As a result, the Company recorded a goodwill impairment charge in the amount of $3.0 million for the year ended December 31, 2023. There was no goodwill impairment for the three months ended March 31, 2024 and 2023. Intangible Assets Intangible assets consist of customer relationships, non-compete agreements, and amounts attributed to patent and patent applications that were acquired through an acquisition and are amortized on a straight-line basis over useful lives ranging from five to ten years. The Company’s intangible assets are reviewed for impairment when events or circumstances indicate their carrying amounts may not be recoverable. The Company reviews the recoverability of its intangible assets by comparing the carrying value of such assets to the related undiscounted value of the projected cash flows associated with the assets, or asset group. If the carrying value is found to be greater, the Company records an impairment loss for the excess of book value over fair value. No impairment of the Company’s intangible assets was recorded for the three months ended March 31, 2024 and 2023. The continuation of operating losses, negative cash flows from operations, negative working capital, and inability to secure planned funding from capital raising activities could result in impairment to goodwill and/or intangible assets that could be material to the consolidated financial statements in future periods. The Company will continue to monitor these events and circumstances each reporting period. Revenue Recognition Third Party Administrator Revenue Revenue is recognized when control of the promised services is transferred to the Company’s customers in an amount that reflects the consideration expected to be entitled to in exchange for those services. As the Company completes its performance obligations, it has an unconditional right to consideration, as outlined in the Company’s contracts. The Company also provides certain performance guarantees under their contracts with customers. Customers may be entitled to receive compensation if the Company fails to meet the guarantees. Actual performance is compared to the contractual guarantee for each measure throughout the period. The Company had performance guarantee liabilities of $202 thousand, which is included in accrued expenses on the accompanying condensed consolidated balance sheet as of March 31, 2024. Significant Payment Terms Generally, the Company’s accounts receivable are expected to be collected in 30 days in accordance with the underlying payment terms. Invoices for services are typically sent to the customer on the 15th day of the month prior to the service month with a 10-day payment term. The Company does not offer discounts if the customer pays some or all of the invoiced amount prior to the due date. Consideration paid for services rendered by the Company is nonrefundable. Therefore, at the time revenue is recognized, the Company does not estimate expected refunds for services. The Company uses the practical expedient and does not account for significant financing components because the period between recognition and collection does not exceed one year for all of the Company’s contracts. Timing of Performance Obligations All of the Company’s contracts with customers obligate the Company to perform services. Services provided include health and welfare administration, dependent eligibility verification, COBRA administration, and benefit billing. Revenue is recognized over time as services are provided as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document, and report claims, and control of these services is transferred to the customer. The Company has the right to receive payment for all services rendered. Determining and Allocating the Transaction Price The transaction price of a contract is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. To determine the transaction price of a contract, the Company considers its customary business practices and the terms of the contract. For the purpose of determining transaction prices, the Company assumes that the services will be transferred to the customer as promised in accordance with existing contracts and that the contracts will not be canceled, renewed, or modified. The Company’s contracts with customers have fixed fee prices that are denominated per covered employee per month. The Company includes amounts of variable consideration in a contract’s transaction price only to the extent that it is probable that the amounts will not be subject to significant reversals (that is, downward adjustments to revenue recognized for satisfied performance obligations). In determining amounts of variable consideration to include in a contract’s transaction price, the Company relies on its experience and other evidence that supports its qualitative assessment of whether revenue would be subject to a significant reversal. The Company considers all the facts and circumstances associated with both the risk of a revenue reversal arising from an uncertain future event and the magnitude of the reversal if that uncertain event were to occur. Captive Revenue All general insurance premiums pertain to annual policies and are reflected in income on a pro-rata basis. Loss and Loss Adjustment Expenses The establishment of loss reserves by the primary insurer is a reasonably complex and dynamic process influenced by numerous factors. These factors principally include past experience with like claims. Consequently, the reserves established are a reflection of the opinions of a large number of persons and the Company is exposed to the possibility of higher or lower than anticipated loss cost due to real expense. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of outstanding shares of common stock for the period, considering the effect of participating securities. Diluted earnings (loss) per share is calculated by dividing net earnings (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding. During the periods when they are anti-dilutive, shares of common stock equivalents, if any, are not considered in the computation. At March 31, 2024 and 2023, there were 1,583,723 and 1,048,351 common stock equivalents, respectively. For the three months ended March 31, 2024 and 2023, these potential shares were excluded from the shares used to calculate diluted net loss per share as their effect would have been antidilutive. Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which will add required disclosures of significant expenses for each reportable segment, as well as certain other disclosures to help investors understand how the Chief Operating Decision Maker evaluates segment expenses and operating results. The new standard will also allow disclosure of multiple measures of segment profitability, if those measures are used to allocate resources and assess performance. The amendments will be effective for public companies for fiscal years beginning after December 15, 2023 and for interim reporting periods beginning after December 15, 2024. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The standard will be effective for public companies for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Property and Equipment

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following at:

(in thousands)


	March 31, 2024			December 31, 2023
Equipment	$	141		$	141
Furniture and fixtures		621			621
Total cost		762			762
Accumulated depreciation		(183	)		(151	)
Property and equipment, net	$	579		$	611

Depreciation expense was $32 thousand and $154 thousand for the three months ended March 31, 2024 and 2023, respectively.

Capitalized Software

3 Months Ended

Mar. 31, 2024

Capitalized Computer Software, Net [Abstract]

Capitalized Software

NOTE 6 – CAPITALIZED SOFTWARE

Capitalized software consists of the following at:

(in thousands)


	March 31, 2024			December 31, 2023
Capitalized software	$	8,094		$	8,094
Accumulated amortization		(6,582	)		(5,967	)
Capitalized software, net	$	1,512		$	2,127

Amortization expense was $615 thousand and $616 thousand for the three months ended March 31, 2024 and 2023, respectively.

Intangible Assets

3 Months Ended

Mar. 31, 2024

Intangible Assets Disclosure [Abstract]

Intangible Assets

NOTE 7 – INTANGIBLE ASSETS

Intangible assets consist of the following:

(in thousands)


	March 31, 2024
	Useful	Gross Carrying		Accumulated			Net			Net Carrying
	Life	Amount		Amortization			Disposal			Amount
Trademarks	5-10 Years	$	2,320	$	(683	)	$	—		$	1,637
Noncompete agreements	5 Years		990		(594	)		—			396
Customer relationships	5-7 Years		3,760		(1,485	)		(51	)		2,224
Patents and patent applications	5 Years		650		(33	)		—			617
		$	7,720	$	(2,795	)	$	(51	)	$	4,874


	December 31, 2023
Trademarks	5-10 Years	$	2,320	$	(605	)	$	—		$	1,715
Noncompete agreements	5 Years		990		(545	)		—			445
Customer relationships	5-7 Years		3,760		(1,342	)		(51	)		2,367
Patents and patent applications	(*)		650		—			—			650
		$	7,720	$	(2,492	)	$	(51	)	$	5,177

(*)

Patents have yet to be approved by the United States Patent and Trademark Office. Useful life is determined upon placement into service after approval.

Amortization expense was $303 thousand and $274 thousand for the three months ended March 31, 2024 and 2023, respectively.

Loss and Loss Adjustment Expenses

3 Months Ended

Mar. 31, 2024

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

Loss and Loss Adjustment Expenses

NOTE 8 – LOSS AND LOSS ADJUSTMENT EXPENSES

The following tables shows changes in aggregate reserves for the Company's loss and loss adjustment expenses:

(in thousands)


	2024		2023
Net reserves at January 1	$	266	$	—
Incurred loss and loss adjustment expenses
Provisions for insured events of the current year		5		84
Change in provision for insured events of prior year		89		—
Total incurred loss and loss adjustment expense		94		84
Payments
Loss and loss adjustment expenses attributable to insured events of the current year		5		—
Loss and loss adjustment expenses attributable to insured events of the prior year		119		—
Total payments		124		—
Net reserves at March 31	$	236	$	84

Revenue

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Revenue

NOTE 9 – REVENUE

Disaggregation of Revenue

The following tables illustrates the disaggregation of revenue by similar products:

For the three months period

(in thousands)


	March 31, 2024		March 31, 2023
TPA services	$	7,364	$	9,583
Captive insurance		21		89
Total	$	7,385	$	9,672

Share-based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Share-based Compensation

NOTE 10 – SHARE-BASED COMPENSATION

Global Stock Incentive Plan

Stock Options


	2023
Risk-free interest rates		3.43	%
Expected life	5 years
Expected volatility		41.00	%
Expected dividend yield		0.00	%

The following table summarizes the stock option activity:

(in thousands except share and per share data)


						Weighted Average		Aggregate
	Number of			Weighted Average		Remaining		Intrinsic
	Options			Exercise Price		Contractual Term		Value
Balance at January 1, 2024		1,213,957		$	4.43		8.70	$	—
Granted		—			—
Forfeited/Cancelled		(78,325	)		7.11
Exercised		—			—
Balance at March 31, 2024		1,135,632			4.22		5.49	$	187
Exercisable at March 31, 2024		704,005		$	4.98		5.23	$	52

The following table summarizes the Company’s non-vested stock options:


				Weighted-Average
	Non-vested Options			Grant Date Fair
	Outstanding			Value
At January 1, 2024		506,522		$	1.67
Options granted		—			—
Options forfeited/cancelled		(7,830	)		2.75
Options exercised		—			—
Options vested		(67,065	)		1.70
At March 31, 2024		431,627		$	1.65

Restricted Stock Awards

Restricted Stock Units

The following table summarizes the restricted stock units activity:


	Outstanding			Value
Outstanding at January 1, 2024		—		$	—
Granted		350,000			1.78
Forfeited/cancelled		—			—
Vested		(115,000	)		1.73
Outstanding at March 31, 2024		235,000		$	1.81

Warrants

3 Months Ended

Mar. 31, 2024

Warrants and Rights Note Disclosure [Abstract]

Warrants

NOTE 11 – WARRANTS

The Company has issued warrants as part of equity offerings and severance packages.

The table below summarizes the Company’s warrant activities:


	Number of
	Warrants to		Exercise Price		Weighted
	Purchase Common		Range Per		Average
	Shares		Share		Exercise Price
Balance at January 1, 2024		644,718	$2.50 to 31.60		$	16.40
Granted		—		—		—
Forfeited		—		—		—
Exercised		—		—		—
Balance at March 31, 2024		644,718	$2.50 to 31.60		$	16.40

Balance at January 1, 2023		412,218	$5.72 to 31.60		$	16.40
Granted		—		—		—
Forfeited		—		—		—
Exercised		—		—		—
Balance at March 31, 2023		412,218	$5.72 to 31.60		$	16.40

Segment Information

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Information

NOTE 12 – SEGMENT INFORMATION

Long-lived assets including goodwill, intangible assets, capitalized software, property and equipment and operating lease right-of-use, by geographic region, are as follows at:

(in thousands)


	March 31, 2024		December 31, 2023
United States	$	11,493	$	12,015
Israel		801		1,291
Total long-lived assets	$	12,294	$	13,306

Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions

NOTE 13 – RELATED PARTY TRANSACTIONS

In January 2024 and March 2024, the Company entered into security purchase agreements with an entity controlled by the Company's Chief Executive Officer (see Note 3).

Accrued Expenses

3 Months Ended

Mar. 31, 2024

Accrued Liabilities, Current [Abstract]

Accrued Expenses

NOTE 14 – ACCRUED EXPENSES

Accrued expenses consisted of the following:

(in thousands)


	March 31, 2024		December 31, 2023

Employee compensation	$	961	$	1,202
Accrued bonuses		526		178
Performance guarantee liabilities		202		165
Other accrued expenses and liabilities		1,387		1,271
Accrued expenses	$	3,076	$	2,816

Income Taxes

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 15 – INCOME TAXES

The Company and its subsidiaries’ income tax returns since 2019 remain subject to examination by tax jurisdictions.

Litigation and Loss Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Litigation and Loss Contingencies

NOTE 16 – LITIGATION AND LOSS CONTINGENCIES

Subsequent Events

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

Subsequent Events

NOTE 17 – SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date the unaudited condensed consolidated financial statements were available for issuance.

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2024
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses reported in those financial statements. Descriptions of the Company’s significant accounting policies are discussed in the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Management evaluates the related estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.
Restricted Cash	Restricted Cash Restricted cash balances are composed of funds held on behalf of clients in a fiduciary capacity, cash held in a separate bank account pledged to a bank as collateral for a bank guarantee provided to the lessor to secure the Company’s obligations under a lease agreement, cash in a money market account as required by a credit card company for collateral, and a certificate of deposit ("CD") held for collateral for a letter of credit. Fiduciary funds generally cannot be utilized for general corporate purposes and are not a source of liquidity for the Company. A corresponding fiduciary obligation, included in current liabilities in the accompanying condensed consolidated balance sheets, exists for disbursements to be made on behalf of the clients and may be more than the restricted cash balance if payment from customers has not been received.
Capitalized Software	Capitalized Software The Company complies with the guidance of ASC Topic 350-40, “Intangibles—Goodwill and Other—Internal Use Software”, in accounting for its internally developed system projects that it utilizes to provide its services to customers. These system projects generally relate to software of the Company that is not intended for sale or otherwise marketed. Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Once a project has reached the development stage, the Company capitalizes direct internal and external costs until the software is substantially complete and ready for its intended use. Costs for upgrades and enhancements are capitalized, whereas costs incurred for maintenance are expensed as incurred. These capitalized software costs are amortized on a project-by-project basis over the expected economic life of the underlying software on a straight-line basis, which is generally three to five years. Amortization commences when the software is available for its intended use.
Goodwill	Goodwill Goodwill is recognized and initially measured as any excess of the acquisition-date consideration transferred in a business combination over the acquisition-date amounts recognized for the net identifiable assets acquired. Goodwill is not amortized but is tested for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not result in an impairment of goodwill. The Company operates in one reporting segment and reporting unit; therefore, goodwill is tested for impairment at the consolidated level. First, the Company assesses qualitative factors to determine whether or not it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company conducts a quantitative goodwill impairment test comparing the fair value of the applicable reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, the Company recognizes an impairment loss in the consolidated statement of operations for the amount by which the carrying amount exceeds the fair value of the reporting unit. The Company performs its annual goodwill impairment test at December 31. During the year ended December 31, 2023, the Company performed qualitative and quantitative analyses, assessing trends in market capitalization, current and future cash flows, revenue growth rates, and the impact of macroeconomic conditions on the Company and its performance. Based on the analysis performed in connection with its annual goodwill impairment test, and primarily due to changes in the Company’s stock price and market capitalization as well as changes in the Company’s executive management team and its overall operational and financial strategy in the fourth quarter of 2023, it was determined that goodwill was impaired. As a result, the Company recorded a goodwill impairment charge in the amount of $3.0 million for the year ended December 31, 2023. There was no goodwill impairment for the three months ended March 31, 2024 and 2023.
Intangible Assets	Intangible Assets Intangible assets consist of customer relationships, non-compete agreements, and amounts attributed to patent and patent applications that were acquired through an acquisition and are amortized on a straight-line basis over useful lives ranging from five to ten years. The Company’s intangible assets are reviewed for impairment when events or circumstances indicate their carrying amounts may not be recoverable. The Company reviews the recoverability of its intangible assets by comparing the carrying value of such assets to the related undiscounted value of the projected cash flows associated with the assets, or asset group. If the carrying value is found to be greater, the Company records an impairment loss for the excess of book value over fair value. No impairment of the Company’s intangible assets was recorded for the three months ended March 31, 2024 and 2023. The continuation of operating losses, negative cash flows from operations, negative working capital, and inability to secure planned funding from capital raising activities could result in impairment to goodwill and/or intangible assets that could be material to the consolidated financial statements in future periods. The Company will continue to monitor these events and circumstances each reporting period.
Revenue Recognition	Revenue Recognition Third Party Administrator Revenue Revenue is recognized when control of the promised services is transferred to the Company’s customers in an amount that reflects the consideration expected to be entitled to in exchange for those services. As the Company completes its performance obligations, it has an unconditional right to consideration, as outlined in the Company’s contracts. The Company also provides certain performance guarantees under their contracts with customers. Customers may be entitled to receive compensation if the Company fails to meet the guarantees. Actual performance is compared to the contractual guarantee for each measure throughout the period. The Company had performance guarantee liabilities of $202 thousand, which is included in accrued expenses on the accompanying condensed consolidated balance sheet as of March 31, 2024. Significant Payment Terms Generally, the Company’s accounts receivable are expected to be collected in 30 days in accordance with the underlying payment terms. Invoices for services are typically sent to the customer on the 15th day of the month prior to the service month with a 10-day payment term. The Company does not offer discounts if the customer pays some or all of the invoiced amount prior to the due date. Consideration paid for services rendered by the Company is nonrefundable. Therefore, at the time revenue is recognized, the Company does not estimate expected refunds for services. The Company uses the practical expedient and does not account for significant financing components because the period between recognition and collection does not exceed one year for all of the Company’s contracts. Timing of Performance Obligations All of the Company’s contracts with customers obligate the Company to perform services. Services provided include health and welfare administration, dependent eligibility verification, COBRA administration, and benefit billing. Revenue is recognized over time as services are provided as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document, and report claims, and control of these services is transferred to the customer. The Company has the right to receive payment for all services rendered. Determining and Allocating the Transaction Price The transaction price of a contract is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. To determine the transaction price of a contract, the Company considers its customary business practices and the terms of the contract. For the purpose of determining transaction prices, the Company assumes that the services will be transferred to the customer as promised in accordance with existing contracts and that the contracts will not be canceled, renewed, or modified. The Company’s contracts with customers have fixed fee prices that are denominated per covered employee per month. The Company includes amounts of variable consideration in a contract’s transaction price only to the extent that it is probable that the amounts will not be subject to significant reversals (that is, downward adjustments to revenue recognized for satisfied performance obligations). In determining amounts of variable consideration to include in a contract’s transaction price, the Company relies on its experience and other evidence that supports its qualitative assessment of whether revenue would be subject to a significant reversal. The Company considers all the facts and circumstances associated with both the risk of a revenue reversal arising from an uncertain future event and the magnitude of the reversal if that uncertain event were to occur. Captive Revenue All general insurance premiums pertain to annual policies and are reflected in income on a pro-rata basis. Loss and Loss Adjustment Expenses The establishment of loss reserves by the primary insurer is a reasonably complex and dynamic process influenced by numerous factors. These factors principally include past experience with like claims. Consequently, the reserves established are a reflection of the opinions of a large number of persons and the Company is exposed to the possibility of higher or lower than anticipated loss cost due to real expense.
Earnings (Loss) Per Share	Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of outstanding shares of common stock for the period, considering the effect of participating securities. Diluted earnings (loss) per share is calculated by dividing net earnings (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding. During the periods when they are anti-dilutive, shares of common stock equivalents, if any, are not considered in the computation. At March 31, 2024 and 2023, there were 1,583,723 and 1,048,351 common stock equivalents, respectively. For the three months ended March 31, 2024 and 2023, these potential shares were excluded from the shares used to calculate diluted net loss per share as their effect would have been antidilutive.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which will add required disclosures of significant expenses for each reportable segment, as well as certain other disclosures to help investors understand how the Chief Operating Decision Maker evaluates segment expenses and operating results. The new standard will also allow disclosure of multiple measures of segment profitability, if those measures are used to allocate resources and assess performance. The amendments will be effective for public companies for fiscal years beginning after December 15, 2023 and for interim reporting periods beginning after December 15, 2024. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The standard will be effective for public companies for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment

Property and equipment consist of the following at:

(in thousands)


	March 31, 2024			December 31, 2023
Equipment	$	141		$	141
Furniture and fixtures		621			621
Total cost		762			762
Accumulated depreciation		(183	)		(151	)
Property and equipment, net	$	579		$	611

Capitalized Software (Tables)

3 Months Ended

Mar. 31, 2024

Capitalized Software

Finite-Lived Intangible Assets [Line Items]

Summary of Intangible Assets

Capitalized software consists of the following at:

(in thousands)


	March 31, 2024			December 31, 2023
Capitalized software	$	8,094		$	8,094
Accumulated amortization		(6,582	)		(5,967	)
Capitalized software, net	$	1,512		$	2,127

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2024

Intangible Assets other than Capitalized Software

Finite-Lived Intangible Assets [Line Items]

Summary of Intangible Assets

Intangible assets consist of the following:

(in thousands)


	March 31, 2024
	Useful	Gross Carrying		Accumulated			Net			Net Carrying
	Life	Amount		Amortization			Disposal			Amount
Trademarks	5-10 Years	$	2,320	$	(683	)	$	—		$	1,637
Noncompete agreements	5 Years		990		(594	)		—			396
Customer relationships	5-7 Years		3,760		(1,485	)		(51	)		2,224
Patents and patent applications	5 Years		650		(33	)		—			617
		$	7,720	$	(2,795	)	$	(51	)	$	4,874


	December 31, 2023
Trademarks	5-10 Years	$	2,320	$	(605	)	$	—		$	1,715
Noncompete agreements	5 Years		990		(545	)		—			445
Customer relationships	5-7 Years		3,760		(1,342	)		(51	)		2,367
Patents and patent applications	(*)		650		—			—			650
		$	7,720	$	(2,492	)	$	(51	)	$	5,177

(*)

Patents have yet to be approved by the United States Patent and Trademark Office. Useful life is determined upon placement into service after approval.

Loss and Loss Adjustment Expenses (Tables)

3 Months Ended

Mar. 31, 2024

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

Schedule of Changes in Aggregate Reserves of Loss and Loss Adjustment Expenses

The following tables shows changes in aggregate reserves for the Company's loss and loss adjustment expenses:

(in thousands)


	2024		2023
Net reserves at January 1	$	266	$	—
Incurred loss and loss adjustment expenses
Provisions for insured events of the current year		5		84
Change in provision for insured events of prior year		89		—
Total incurred loss and loss adjustment expense		94		84
Payments
Loss and loss adjustment expenses attributable to insured events of the current year		5		—
Loss and loss adjustment expenses attributable to insured events of the prior year		119		—
Total payments		124		—
Net reserves at March 31	$	236	$	84

Revenue (Tables)

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following tables illustrates the disaggregation of revenue by similar products:

For the three months period

(in thousands)


	March 31, 2024		March 31, 2023
TPA services	$	7,364	$	9,583
Captive insurance		21		89
Total	$	7,385	$	9,672

Share-based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Fair Value of Options and Share Awards Granted Under the Plan


	2023
Risk-free interest rates		3.43	%
Expected life	5 years
Expected volatility		41.00	%
Expected dividend yield		0.00	%

Summary of Stock Option Activity

The following table summarizes the stock option activity:

(in thousands except share and per share data)


						Weighted Average		Aggregate
	Number of			Weighted Average		Remaining		Intrinsic
	Options			Exercise Price		Contractual Term		Value
Balance at January 1, 2024		1,213,957		$	4.43		8.70	$	—
Granted		—			—
Forfeited/Cancelled		(78,325	)		7.11
Exercised		—			—
Balance at March 31, 2024		1,135,632			4.22		5.49	$	187
Exercisable at March 31, 2024		704,005		$	4.98		5.23	$	52

Summary of Non-vested Stock Options Activity

The following table summarizes the Company’s non-vested stock options:


				Weighted-Average
	Non-vested Options			Grant Date Fair
	Outstanding			Value
At January 1, 2024		506,522		$	1.67
Options granted		—			—
Options forfeited/cancelled		(7,830	)		2.75
Options exercised		—			—
Options vested		(67,065	)		1.70
At March 31, 2024		431,627		$	1.65

Summary of Restricted Stock Units Activity

The following table summarizes the restricted stock units activity:


	Outstanding			Value
Outstanding at January 1, 2024		—		$	—
Granted		350,000			1.78
Forfeited/cancelled		—			—
Vested		(115,000	)		1.73
Outstanding at March 31, 2024		235,000		$	1.81

Warrants (Tables)

3 Months Ended

Mar. 31, 2024

Warrants and Rights Note Disclosure [Abstract]

Schedule of Warrant Activities

The table below summarizes the Company’s warrant activities:


	Number of
	Warrants to		Exercise Price		Weighted
	Purchase Common		Range Per		Average
	Shares		Share		Exercise Price
Balance at January 1, 2024		644,718	$2.50 to 31.60		$	16.40
Granted		—		—		—
Forfeited		—		—		—
Exercised		—		—		—
Balance at March 31, 2024		644,718	$2.50 to 31.60		$	16.40

Balance at January 1, 2023		412,218	$5.72 to 31.60		$	16.40
Granted		—		—		—
Forfeited		—		—		—
Exercised		—		—		—
Balance at March 31, 2023		412,218	$5.72 to 31.60		$	16.40

Segment Information (Tables)

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Schedule of Long-lived Assets by Geographic Region

Long-lived assets including goodwill, intangible assets, capitalized software, property and equipment and operating lease right-of-use, by geographic region, are as follows at:

(in thousands)


	March 31, 2024		December 31, 2023
United States	$	11,493	$	12,015
Israel		801		1,291
Total long-lived assets	$	12,294	$	13,306

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2024

Accrued Liabilities, Current [Abstract]

Schedule of Accrued Expenses

Accrued expenses consisted of the following:

(in thousands)


	March 31, 2024		December 31, 2023

Employee compensation	$	961	$	1,202
Accrued bonuses		526		178
Performance guarantee liabilities		202		165
Other accrued expenses and liabilities		1,387		1,271
Accrued expenses	$	3,076	$	2,816

Organization and Description of Business - Additional Information (Details)	Jun. 29, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reverse stock split	one-for-four

Liquidity and Going Concern - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands							1 Months Ended			3 Months Ended
	Apr. 15, 2024	Mar. 31, 2024	Mar. 07, 2024	Feb. 29, 2024	Feb. 05, 2024	Jan. 16, 2024	Apr. 30, 2024	Mar. 31, 2024	Feb. 29, 2024	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 14, 2023	Sep. 30, 2023
Liquidity [Line Items]
Accumulated deficit		$ 81,092						$ 81,092		$ 81,092		$ 76,746
Working capital		(3,600)						(3,600)		(3,600)
Long term debt		19,700						19,700		19,700
Cash and cash equivalents		851						851		851	$ 6,174	$ 1,147		$ 900
Net loss										(4,346)	(8,873)
Cash flows from operations										3,585	$ 6,541
Asset Purchase Agreement \| Payflex
Liquidity [Line Items]
Amount agreed to pay in cash													$ 1,000
Additional contingent fee receivable													$ 500
Libertas Agreement \| Libertas Funding LLC
Liquidity [Line Items]
Amount of future receipts agreed to sell					$ 2,200
Sale of future receipt purchase price					1,700
Received cash proceeds for future receipts					1,500
Received cash of first payment					157
Payment of future receipts each week					$ 57
Anticipated percentage of its future receivables					20.00%
Payment of future receipts on original balance					$ 2,200					134
Payment of interest on sale of future receipts										70
Maestro
Liquidity [Line Items]
Business combination, monthly payments		$ 158		$ 158
Accumulated Annual Payments 2024										2,300
Accumulated Annual Payments 2025										5,300
Accumulated Annual Payments 2026										13,300
Accumulated Annual Payments 2027										22,300
Accumulated annual payments reduction criteria amount 2024										2,300
Accumulated annual payments reduction criteria amount 2025										8,300
Accumulated annual payments reduction criteria amount 2026										16,300
Accumulated annual payments reduction criteria amount 2027										$ 25,300
Paid to seller								$ 158	$ 158
Private Placement [Member] \| Common Stock \| Second Securities Purchase Agreement \| HillCour Investment Fund, LLC
Liquidity [Line Items]
Common stock, shares issued						1,322,100
Purchase price						$ 0.9201
Private Placement [Member] \| Common Stock \| Securities Purchase Agreement \| HillCour Investment Fund, LLC
Liquidity [Line Items]
Common stock, shares issued			910,000
Purchase price			$ 1.65
Subsequent Event [Member] \| Second Securities Purchase Agreement
Liquidity [Line Items]
Amount of future receipts agreed to sell	$ 11,800
Sale of future receipt purchase price	11,000
Received cash proceeds for future receipts	6,000
Subsequent Event [Member] \| Maestro
Liquidity [Line Items]
Business combination, monthly payments	$ 158
Paid to seller							$ 158

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Summary of Significant Accounting Policies [Line Items]
Goodwill impairment charges	$ 0	$ 0	$ 3,000,000
Impairment of intangible assets	0	$ 0
Performance guarantee liabilities	$ 202,000
Accounts receivable, payments term	30 days
Number of shares excluded to calculate diluted net earnings per share as their effect would have been antidilutive	1,583,723	1,048,351
Minimum
Summary of Significant Accounting Policies [Line Items]
Useful Life	5 years
Maximum
Summary of Significant Accounting Policies [Line Items]
Useful Life	10 years
Capitalized Software \| Minimum
Summary of Significant Accounting Policies [Line Items]
Useful Life	3 years
Capitalized Software \| Maximum
Summary of Significant Accounting Policies [Line Items]
Useful Life	5 years

Acquisition - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended
	Mar. 31, 2024	Feb. 29, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Other long-term liabilities	$ 19,724		$ 19,401
Maestro
Business Acquisition [Line Items]
Paid to seller	$ 158	$ 158

Acquisition - Summary of Assets Acquired and Liabilities Assumed at their Acquisition Date Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Purchase Price Allocation
Goodwill	$ 3,018	$ 3,018

Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment, Net, by Type [Abstract]
Total cost	$ 762	$ 762
Accumulated depreciation	(183)	(151)
Property and equipment, net	579	611
Equipment
Property, Plant and Equipment, Net, by Type [Abstract]
Total cost	141	141
Furniture and Fixtures
Property, Plant and Equipment, Net, by Type [Abstract]
Total cost	$ 621	$ 621

Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 32	$ 154

Capitalized Software - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Capitalized Computer Software, Net [Abstract]
Capitalized software	$ 8,094	$ 8,094
Accumulated amortization	(6,582)	(5,967)
Capitalized software, net	$ 1,512	$ 2,127

Capitalized Software - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Capitalized Computer Software, Net [Abstract]
Amortization expense	$ 615	$ 616

Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life	5 years
Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life	10 years
Intangible Assets other than Capitalized Software
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	$ 7,720	$ 7,720
Accumulated Amortization	(2,795)	(2,492)
Net Disposal	(51)	(51)
Net Carrying Amount	4,874	5,177
Trademarks
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	2,320	2,320
Accumulated Amortization	(683)	(605)
Net Carrying Amount	$ 1,637	$ 1,715
Trademarks \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life	5 years	5 years
Trademarks \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life	10 years	10 years
Noncompete Agreements
Finite-Lived Intangible Assets [Line Items]
Useful Life	5 years	5 years
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	$ 990	$ 990
Accumulated Amortization	(594)	(545)
Net Carrying Amount	396	445
Customer Relationships
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	3,760	3,760
Accumulated Amortization	(1,485)	(1,342)
Net Disposal	(51)	(51)
Net Carrying Amount	$ 2,224	$ 2,367
Customer Relationships \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life	5 years	5 years
Customer Relationships \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life	7 years	7 years
Patents and Patent Applications
Finite-Lived Intangible Assets [Line Items]
Useful Life	5 years
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	$ 650	$ 650
Accumulated Amortization	(33)
Net Carrying Amount	$ 617	$ 650

Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Intangible Assets Disclosure [Abstract]
Amortization expense	$ 303	$ 274

Loss and Loss Adjustment Expenses - Schedule of Changes in Aggregate Reserves of Loss and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]
Net reserves at beginning of period	$ 266
Incurred loss and loss adjustment expenses
Provisions for insured events of the current year	5	$ 84
Change in provision for insured events of prior year	89
Total incurred loss and loss adjustment expense	94	84
Payments
Loss and loss adjustment expenses attributable to insured events of the current year	5
Loss and loss adjustment expenses attributable to insured events of the prior year	119
Total payments	124
Net reserves at end of period	$ 236	$ 84

Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Revenue	$ 7,385	$ 9,672
TPA Services
Disaggregation of Revenue [Line Items]
Revenue	7,364	9,583
Captive Insurance
Disaggregation of Revenue [Line Items]
Revenue	$ 21	$ 89

Share-Based Compensation - Stock Options (Details) - USD ($) $ in Thousands		3 Months Ended
	May 31, 2023	Mar. 31, 2024	Mar. 31, 2023
Stock Options
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expiration term of award		10 years
Options granted		0
Stock compensation expense		$ 121	$ 216
Unrecognized stock compensation expense		$ 696
Unrecognized stock compensation expense, expected to be recognized over a weighted-average period		2 years 6 months
Increase in number of shares authorized	500,000
Restricted Stock Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares authorized	2,450,855
Stock compensation expense		$ 440	$ 286
Termination term after the termination of employment of the grantee		90 days

Share-Based Compensation - Fair Value of Options (Details) - Stock Options	12 Months Ended
	Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Risk-free interest rates	3.43%
Expected life	5 years
Expected volatility	41.00%
Expected dividend yield	0.00%

Share-Based Compensation - Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Number of Options
Balance at the beginning	1,213,957
Granted	0
Forfeited/Cancelled	(78,325)
Exercised	0
Balance at the end	1,135,632	1,213,957
Exercisable at the end	704,005
Weighted Average Exercise Price
Balance at the beginning (in dollars per share)	$ 4.43
Granted (in dollars per share)	0
Forfeited/Cancelled (in dollars per share)	7.11
Balance at the end (in dollars per share)	4.22	$ 4.43
Exercisable at the end (in dollars per share)	$ 4.98
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value
Balance (in years)	5 years 5 months 26 days	8 years 8 months 12 days
Exercisable at the end (in years)	5 years 2 months 23 days
Aggregate Intrinsic Value, balance	$ 187	$ 0
Exercisable at the end (in dollars)	$ 52

Share-Based Compensation - Non-vested Stock Options (Details) - Stock Options	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Non-vested Options Outstanding
At the beginning \| shares	506,522
Options granted \| shares	0
Options forfeited/cancelled \| shares	(7,830)
Options exercised \| shares	(0)
Options vested \| shares	(67,065)
At the end \| shares	431,627
Weighted-Average Grant Date Fair Value
At the beginning (in dollars per share) \| $ / shares	$ 1.67
Options granted (in dollars per share) \| $ / shares	0
Options forfeited/cancelled (in dollars per share) \| $ / shares	2.75
Options exercised (in dollars per share) \| $ / shares	0
Options vested (in dollars per share) \| $ / shares	1.7
At the end (in dollars per share) \| $ / shares	$ 1.65

Share-Based Compensation - Restricted Stock Awards Activity (Details) - Restricted Stock Units	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Restricted Stock Awards
Outstanding at the beginning \| shares	0
Granted \| shares	350,000
Forfeited/cancelled \| shares	0
Vested \| shares	(115,000)
Outstanding at the end \| shares	235,000
Weighted-Average Grant Date Fair Value Per Share
Outstanding at the beginning (in dollars per share) \| $ / shares	$ 0
Granted (in dollars per share) \| $ / shares	1.78
Forfeited/cancelled (in dollars per share) \| $ / shares	0
Vested (in dollars per share) \| $ / shares	1.73
Outstanding at the end (in dollars per share) \| $ / shares	$ 1.81

Share-Based Compensation - Restricted Stock Awards (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Restricted Stock Awards
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock compensation expense	$ 0	$ 121,000
Unrecognized compensation expense related to unvested restricted share awards	0
Restricted Stock Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock compensation expense	440,000	$ 286,000
Unrecognized compensation expense related to unvested restricted share awards	$ 2,600,000

Warrants - Schedule of Warrant Activities (Details) - Marpai Warrants - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Class of Warrant or Right [Line Items]
Beginning balance	644,718	412,218
Granted	0	0
Forfeited	0	0
Exercised	0	0
Ending balance	644,718	412,218
Weighted Average Exercise Price
Beginning balance	$ 16.4	$ 16.4
Ending balance	16.4	16.4
Minimum
Exercise Price Range Per Share
Beginning balance	2.5	5.72
Ending balance	2.5	5.72
Maximum
Exercise Price Range Per Share
Beginning balance	31.6	31.6
Ending balance	$ 31.6	$ 31.6

Segment Information - Schedule of Long-lived Assets by Geographic Region (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Total long-lived assets	$ 12,294	$ 13,306
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Total long-lived assets	11,493	12,015
Israel
Revenues from External Customers and Long-Lived Assets [Line Items]
Total long-lived assets	$ 801	$ 1,291

Related Party Transactions - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Related Party Transaction [Line Items]
Accounts payable - related party	$ 3,824,000		$ 4,649,000
Consulting Services
Related Party Transaction [Line Items]
Related party transaction expense	0	$ 52,000
Marketing Services
Related Party Transaction [Line Items]
Accounts payable - related party	$ 0		$ 0

Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accrued Liabilities, Current [Abstract]
Employee compensation	$ 961	$ 1,202
Accrued bonuses	526	178
Performance guarantee liabilities	202	165
Other accrued expenses and liabilities	1,387	1,271
Accrued expenses	$ 3,076	$ 2,816

Stockholders' (Deficit) Equity - Addtional Information (Details)

3 Months Ended

12 Months Ended

Jun. 29, 2023

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2023

Subsidiary, Sale of Stock [Line Items]

Forward split ratio

0.25

Common Stock [Member]

Subsidiary, Sale of Stock [Line Items]

Number of shares issued

^[1]

2,232,100

Shares issued to vendors in exchange for services (in shares)

^[1]

25,000

[1]	Reflects 1-for-4 reverse stock split that became effective June 29, 2023. See Note 1 to the unaudited condensed consolidated financial statements.

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Operating Loss Carryforwards [Line Items]
Effective tax rate	0.00%	0.00%
Maximum percentage of taxable income can be utilized for operating losses			80.00%
Federal tax rate	21.00%	21.00%
Federal
Operating Loss Carryforwards [Line Items]
Net operating losses			$ 48.2
State
Operating Loss Carryforwards [Line Items]
Net operating losses			$ 39.7
Net operating losses, expiration year			2031

Subsequent Events - Additional Information (Details) - USD ($) $ in Millions	Apr. 15, 2024	May 06, 2024	Mar. 31, 2024
Libertas Funding LLC
Subsequent Event [Line Items]
Other short-term liabilities due			$ 1.6
Subsequent Event \| Second Securities Purchase Agreement
Subsequent Event [Line Items]
Aggregate principal amount	$ 11.8
Total purchase price	11.0
Received cash for future receipts	$ 6.0
Subsequent Event \| 2024 Annual Meeting \| Preferred Stock
Subsequent Event [Line Items]
Number of shares authorized		2,000,000

Marpai (NASDAQ:MRAI)
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Marpai (NASDAQ:MRAI)
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