OTC:MRAI
Marpai, Inc.
A high-risk OTC technology firm posting $28.2M in annual revenue but struggling with deep cumulative losses and significant debt obligations.
Key Metrics
Investment Thesis
Bull Case
Investors might consider MRAI as a speculative turnaround play given the revenue stabilization and reduction in net losses year-over-year. The substantial cash reserve of $9.2M could provide sufficient runway for restructuring or strategic acquisitions without immediate dilution. If management can transition to positive operating cash flow, the current negative equity position could be an undervalued asset.
Bear Case
The company's negative shareholders' equity and massive liability load create a high probability of default or forced bankruptcy proceedings. Persistent negative net income and deteriorating operating cash flow indicate that core business operations are not yet viable without constant capital injection. The significant drop in revenue from 2023 levels exacerbates the risk, making it difficult to service the $21.6M in long-term liabilities.
About Marpai, Inc.
Marpai, Inc. (OTC:MRAI) is a technology-focused entity operating with significant leverage, reporting $28.2M in revenue for the latest fiscal year. The company has accumulated substantial deferred revenue and maintains a large cash reserve relative to its current liabilities despite ongoing operational losses. Its financial profile suggests a capital-intensive business model heavily reliant on financing activities to sustain operations.
Analysis
Management Discussion
Management's ability to generate positive operating cash flow remains a critical challenge, evidenced by the -$15.2M outflow against $9.1M in non-cash adjustments. While revenue declined from 2023 levels, the company successfully reduced its net loss compared to previous years, suggesting potential operational efficiency gains or cost controls. However, the widening deficit in retained earnings and increasing interest expense pose long-term threats to financial stability.
Industry Overview
The technology sector often rewards high growth but penalizes prolonged losses, and Marpai operates within this volatile environment where cash flow conversion is paramount. Many OTC tech firms struggle with scaling operations without profitability, leading to a crowded market of distressed assets seeking restructuring opportunities. Success in this industry typically requires a shift from financing-dependent growth to organic operational self-sufficiency.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $24.3M | $37.2M | $28.2M |
| Cost of Revenue | $17.1M | $24.2M | $19.1M |
| Gross Profit | $7.2M | $12.9M | $9.1M |
| Operating Expenses | $34.2M | $40.9M | $31.2M |
| Operating Income | $-27.0M | $-28.0M | $-22.1M |
| R&D | $3.7M | $1.3M | $29.0K |
| G&A | $12.3M | $19.2M | $12.8M |
| Marketing | $6.9M | $6.6M | $1.8M |
| Stock-Based Comp | $3.1M | $2.1M | $3.2M |
| D&A | $3.5M | $3.9M | $2.3M |
| Depreciation | $397.5K | $340.7K | $118.0K |
| Amortization | $821.8K | $1.1M | $606.0K |
| Other OpEx | $11.2M | $13.8M | $16.6M |
| Non-Operating Income | $-32.7K | $-1.1M | $-1.2M |
| Interest Expense | $266.8K | $1.5M | $2.7M |
| Pre-Tax Income | $-27.0M | $-29.0M | $-23.3M |
| Income Tax | $-521.1K | $-290.1K | $-1.2M |
| Continuing Ops | $-26.5M | $-28.8M | $-22.1M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-26.5M | $-28.8M | $-22.1M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-26.5M | $-28.8M | $-22.1M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $26.5M | $17.1M | $11.9M |
| Cash & Equivalents | $13.8M | $1.1M | $764.0K |
| Accounts Receivable | $1.4M | $1.1M | $837.0K |
| Prepaid Expenses | $1.6M | $891.5K | $759.0K |
| Other Current Assets | $9.7M | $13.9M | $9.5M |
| Long-Term Assets | $23.4M | $14.6M | $981.0K |
| PP&E (Net) | $1.5M | $610.9K | — |
| Intangibles | $6.3M | $5.2M | — |
| Goodwill | $5.8M | $3.0M | — |
| Operating Leases | $3.8M | $2.4M | $296.0K |
| Other LT Assets | $5.9M | $3.4M | $685.0K |
| Total Assets | $49.9M | $31.7M | $12.9M |
| Current Liabilities | $17.4M | $20.8M | $19.0M |
| Accounts Payable | $1.5M | $4.6M | $3.1M |
| Current Leases | $1.3M | $512.4K | $244.0K |
| Deferred Revenue | — | — | $625.0K |
| Other Current Liab | $9.3M | $12.9M | $12.4M |
| Long-Term Liabilities | $26.5M | $24.3M | $21.6M |
| LT Operating Leases | $4.8M | $3.7M | $793.0K |
| Other LT Liab | $21.7M | $20.6M | $20.8M |
| Total Liabilities | $43.8M | $45.1M | $40.6M |
| Shareholders' Equity | $6.1M | $-13.4M | $-27.7M |
| Paid-In Capital | $54.1M | $63.3M | — |
| Retained Earnings | $-48.0M | $-76.7M | $-98.8M |
| Total L&E | $49.9M | $31.7M | $12.9M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-26.5M | $-28.8M | $-22.1M |
| Non-Cash Adjustments | $-4.2M | $14.6M | $9.1M |
| Working Capital Changes | $-4.6M | $-1.6M | $-2.2M |
| Cash from Operations | $-35.2M | $-15.7M | $-15.2M |
| Capital Expenditures | $362.8K | — | — |
| Cash from Investing | $32.4M | $1.0M | $227.0K |
| Cash from Financing | $196 | $5.1M | $10.7M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-2.8M | $-9.6M | $-4.3M |
| Beginning Cash | $25.9M | $23.1M | $13.5M |
| Ending Cash | $23.1M | $13.5M | $9.2M |
Frequently Asked Questions
How does Marpai, Inc. make money?
The company's revenue is derived from core operational services supported by substantial current deferred revenue of $625,000, indicating a subscription or service-based model. General and administrative expenses consume the majority of costs at $12.8M, while marketing spend remains relatively low at $1.8M. The balance sheet shows heavy reliance on long-term liabilities totaling $21.6M alongside operating lease obligations.
What are the main risks for MRAI?
The company faces severe solvency risk with total liabilities of $40.6M exceeding shareholders' equity of -$27.7M, resulting in negative net worth. Operating cash flow has turned highly negative at -$15.2M, indicating an inability to self-fund growth without continuous external financing. Revenue volatility is evident with a drop from 2023 highs, and the business relies heavily on interest expense coverage which is tight given current profits.
What is MRAI's competitive advantage?
The firm holds a strong liquidity position with ending cash balances of $9.2M, providing operational runway despite negative operating cash flow. Significant non-cash adjustments totaling $9.1M suggest the use of accounting methods like share-based compensation ($3.2M) to manage reported expenses. The company maintains a diversified asset base with other current assets at $9.5M, offering potential flexibility for strategic pivots.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.