Marpai, Inc 10-Q for FY2026 Q2
Marpai, Inc. (MRAI)
About this 10-Q
Marpai, Inc filed this 10-Q on August 13, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $4.17M
- down 10.5% from $4.66M a year earlier
- Net loss
- $4.58M
- compared with a net loss of $4.37M a year earlier
- Diluted EPS
- -$0.18
- compared with -$0.28 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from to
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As of August 13, 2026, there were
MARPAI, INC.
TABLE OF CONTENTS
| Page | ||
| PART I. FINANCIAL INFORMATION | 1 | |
| Item 1. | Unaudited Condensed Consolidated Financial Statements | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 26 |
| Item 4. | Controls and Procedures | 26 |
| PART II. OTHER INFORMATION | 27 | |
| Item 1. | Legal Proceedings | 27 |
| Item 1A. | Risk Factors | 27 |
| Item 5. | Other Information | 27 |
| Item 6. | Exhibits | 28 |
| SIGNATURES | 29 | |
i
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)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net of allowance for credit losses of $ | ||||||||
| Unbilled receivables | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Capitalized software, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Security deposits | ||||||||
| Other long-term assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Accrued fiduciary obligations | ||||||||
| Deferred revenue (including related party amounts of $ | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Current portion of convertible debentures, net | ||||||||
| Other short-term liabilities | ||||||||
| Vendor financing advance | ||||||||
| Due to related party | ||||||||
| Total current liabilities | ||||||||
| Other long-term liabilities | ||||||||
| Convertible debentures, net of current portion | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Total liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES (Note 16) | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
MARPAI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share and per share data)
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue (including related party amounts of $ | $ | $ | $ | $ | ||||||||||||
| Costs and expenses | ||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization shown separately below) | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Information technology | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Research and development | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Facilities | ||||||||||||||||
| Total costs and expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Other income | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expense | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share, basic and fully diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares of common stock outstanding, basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
MARPAI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)
(in thousands, except share data)
| Additional | Total | |||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Three months ended June 30, 2026 | ||||||||||||||||||||||||||||
| Balance, April 1, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | ||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units to vendors in exchange for services | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Three months ended June 30, 2025 | ||||||||||||||||||||||||||||
| Balance, April 1, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | ||||||||||||||||||||||||||||
| Issuance of common stock to vendors in exchange for services | ||||||||||||||||||||||||||||
| Issuance of privately placed shares | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Six months ended June 30, 2026 | ||||||||||||||||||||||||||||
| Balance, January 1, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | ||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units to vendors in exchange for services | ||||||||||||||||||||||||||||
| Issuance of common stock as part of settlement agreement | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Six months ended June 30, 2025 | ||||||||||||||||||||||||||||
| Balance, January 1, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | ||||||||||||||||||||||||||||
| Issuance of common stock to vendors in exchange for services | ||||||||||||||||||||||||||||
| Issuance of privately placed shares | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
MARPAI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
| Six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Share-based compensation | ||||||||
| Shares issued to vendors in exchange for services | ||||||||
| Amortization of right-of-use asset | ||||||||
| Non-cash interest | ||||||||
| Amortization of debt premium and debt issuance costs, net | ( | ) | ||||||
| Bad debt expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable and unbilled receivables | ( | ) | ( | ) | ||||
| Prepaid expenses and other assets | ||||||||
| Accounts payable | ||||||||
| Accrued expenses | ( | ) | ||||||
| Accrued fiduciary obligations | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Due to related party | ||||||||
| Other liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Proceeds from sale of business unit | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of related party promissory notes | ||||||||
| Payments on related party promissory notes | ( | ) | ||||||
| Proceeds from vendor financing advance | ||||||||
| Proceeds from related party advance (Note 13) | ||||||||
| Proceeds from issuance of convertible debentures (Note 7) | ||||||||
| Payments of debt issuance costs | ( | ) | ||||||
| Payments on convertible debentures (Note 7) | ( | ) | ( | ) | ||||
| Payments to seller for acquisition | ( | ) | ||||||
| Proceeds from issuance of common stock in a private placement offering, net | ||||||||
| Net cash provided by financing activities | ||||||||
| Net decrease in cash, cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
| Reconciliation of cash, cash equivalents, and restricted cash reported in the condensed consolidated balance sheets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Unless the context otherwise requires, throughout, the words “Marpai,” “Marpai, Inc.,” “we,” “our,” “us,” the “registrant,” or the “Company” refer to Marpai, Inc. and our subsidiaries (as applicable).
Organization
Marpai, Inc.’s (“Marpai”, “we”, or the “Company”) operations are principally conducted through our 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. We have combined these two businesses to create what we believe 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 us to differentiate ourselves in the TPA market by delivering a technology-driven service that we believe 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 and operated until the fourth quarter of 2025.
Nature of Business
Our mission is to improve 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 members’ healthcare claims, who we refer to as Clients, (ii) employees who receive these healthcare benefits from our clients, who we refer to as Members, and (iii) healthcare providers including doctors, doctor groups, hospitals, clinics, and any other entities providing healthcare services or products, who we refer to as Providers.
We provide outsourced benefits administration services to Clients in the United States across multiple industries. Our backroom administration and TPA services are supported by a technology platform and a dedicated benefits call center. Under our TPA platform, we provide health and welfare administration, dependent eligibility verification, Consolidated Omnibus Budget Reconciliation Act (“COBRA”) administration, benefit billing services, and Pharmacy Benefit Management (“PBM”).
We continue to monitor the effects of the global macroeconomic environment, including increasing inflationary pressures; supply chain disruptions; tariffs levied by the Trump Administration, social and political issues; regulatory matters, geopolitical tensions; and global security issues. We are also mindful of inflationary pressures on our cost base and are monitoring the impact on customer preferences.
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 herein 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 our Annual Report on Form 10-K for the year ended December 31, 2025.
The accompanying condensed consolidated financial statements include our accounts and those of our wholly owned subsidiaries.
NOTE 3 – LIQUIDITY AND GOING CONCERN
As shown in the accompanying unaudited interim condensed consolidated financial statements as of June 30, 2026, we had an accumulated deficit of approximately $
5
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
We currently project that we will need additional capital to fund our current operations and capital investment requirements until we scale to a revenue level that permits cash self-sufficiency. As a result, we need to raise additional capital or secure debt funding to support on-going operations until such time. This projection is based on our 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, we may seek to sell assets which we regard 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 we are unable to raise additional capital moving forward, our ability to operate in the normal course and continue to invest in our 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 Standards 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 our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date these unaudited interim condensed consolidated financial statements are issued. These unaudited interim 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.
On July 16, 2026, we entered into Amendment No. 2 (the “AXA Amendment”) to a purchase agreement with AXA S.A., a French société anonyme (“AXA”). The AXA Amendment amends a Membership Interest Purchase Agreement, dated August 4, 2022, as amended on February 7, 2024 (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 Health, LLC.
The AXA Amendment also provides that the Company shall make minimum annual payments of not less than $
Subsequent to June 30, 2026, on July 29, 2026, the Company entered into a securities purchase agreement for the issuance and sale of
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of the condensed consolidated 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 condensed consolidated financial statements and the reported amounts of revenues and expenses reported in those condensed consolidated financial statements. Descriptions of our significant accounting policies are discussed in the notes to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025. 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.
6
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Concentrations of Credit Risk
For the three and six month periods ended June 30, 2026 and June 30, 2025, we had no single customer that accounted for more than 10% of total revenue. At June 30, 2026, two customers accounted for
Restricted Cash
Restricted cash balances are composed of funds held on behalf of clients in a fiduciary capacity, 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 us. 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
We comply with the guidance of Accounting Standards Codification (“ASC”) Topic 350-40, “Intangibles—Goodwill and Other—Internal Use Software”, in accounting for our internally developed system projects that it utilizes to provide our services to customers. These system projects generally relate to our software 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, we capitalize 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
Revenue Recognition
Third Party Administrator Revenue
Revenue is recognized when control of the promised services is transferred to our customers in an amount that reflects the consideration expected to be entitled to in exchange for those services. As we complete our performance obligations, we have an unconditional right to consideration, as outlined in our contracts.
Contract Balances
At June 30, 2026 and December 31, 2025, the balances of our accounts receivable from contracts with customers, net of related allowances for credit losses, were $
We also provide certain performance guarantees under contracts with customers. Customers may be entitled to receive compensation if we fail to meet the guarantees. Actual performance is compared to the contractual guarantee for each measure throughout the period. We had performance guarantee liabilities of $
7
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Significant Payment Terms
Generally, our accounts receivable are expected to be collected within 30 days. Invoices for services are typically sent to the customer on the 15th day of the month prior to the service month with a 15-day payment term. We do 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 us is nonrefundable. Therefore, at the time revenue is recognized, we do not estimate expected refunds for services.
We use the practical expedient and do not account for significant financing components because the period between recognition and collection does not exceed one year for all of our contracts.
Timing of Performance Obligations
All of our contracts with customers obligate us 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. We have 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 we expect to be entitled in exchange for providing promised services to a customer.
To determine the transaction price of a contract, we consider our customary business practices and the terms of the contract. For the purpose of determining transaction prices, we assume that the services will be provided to the customer as promised in accordance with existing contracts and that the contracts will not be canceled, renewed, or modified.
Our contracts with customers have fixed fee prices that are denominated per covered employee per month. We include 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, we rely on our experience and other evidence that supports our qualitative assessment of whether revenue would be subject to a significant reversal. We consider 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 we are exposed to the possibility of higher or lower than anticipated loss cost due to real expense.
8
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Earnings (Loss) Per Share (“EPS”)
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. All securities that meet the definition of a participating security, irrespective of whether the securities are convertible, nonconvertible, or potential common stock securities, shall be included in the computation of basic EPS using the two-class method. However, when the different classes of units have identical rights and privileges except voting rights, whereby they share equally in dividends and residual net assets on a per unit basis, the classes can be combined and presented as one class for EPS purposes. As of June 30, 2026 and 2025, there were
At June 30, 2026 and 2025, there were
Recently Issued Accounting Pronouncements
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. As an Emerging Growth Company, the standard is effective for fiscal years beginning after December 15, 2025. The Company adopted ASU 2023-09 as of January 1, 2026, on a prospective basis and it did not have an impact on its financial position and results of operations.
In November 2024, the FASB issued ASU 2024-03, “Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires public entities to disclose additional information that disaggregates certain expense captions into specified categories in the notes to the consolidated financial statements. The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods after December 15, 2027, with early adoption permitted. The disclosure updates are required to be applied prospectively with the option for retrospective application. We are currently evaluating the impact the amended guidance will have on our disclosures.
In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversions and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. The requirements of ASU 2024-04 are effective for us for fiscal years beginning after December 15, 2025, and interim periods within those periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06 and can be applied on a prospective or retrospective basis. The Company adopted ASU 2024-04 as of January 1, 2026, on a prospective basis and it did not have an impact on its financial position and results of operations.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326) (“ASU 2025-05”) which provides optional guidance relating to the estimation of expected credit losses on current accounts receivable and current contract assets. This guidance permits entities to apply a practical expedient when estimating credit losses that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted, and should be applied prospectively. The Company adopted ASU 2025-05 as of January 1, 2026, electing the practical expedient method and it did not have a material impact on its financial position and results of operations.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), to modernize the accounting guidance for the costs to develop software for internal use. The standard applies to costs incurred to develop or obtain software for internal use. ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. Under the new standard, entities will commence capitalizing eligible costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The new standard also supersedes the guidance related to costs incurred to develop a website. ASU 2025-06 guidance is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The guidance can be applied on a prospective basis, a modified basis for in-process projects or on a retrospective basis. We are currently evaluating the impact of this accounting standard on our condensed consolidated financial statements.
In April 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. The amendments in this update require entities to initially measure paid-in-kind (“PIK”) dividends on equity-classified preferred stock using the PIK dividend rate stated in the preferred stock agreement, rather than at fair value. This ASU is effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of this accounting standard on our condensed consolidated financial statements.
9
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – CAPITALIZED SOFTWARE
Capitalized software consists of the following at:
(in thousands)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Capitalized software | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Capitalized software, net | $ | |||||||
Amortization expense was $
Amortization expense was $
NOTE 6 – LOSS AND LOSS ADJUSTMENT EXPENSES
The following tables show changes in aggregate reserves for our loss and loss adjustment expenses for the three and six month periods ending June 30, 2026 and June 30, 2025:
(in thousands)
| 2026 | 2025 | |||||||
| Net reserves at April 1, | $ | $ | ||||||
| Incurred loss and loss adjustment expenses | ||||||||
| Provisions for insured events of the current year | ||||||||
| Change in provision for insured events of prior year | - | |||||||
| Total incurred loss and loss adjustment expense | ||||||||
| Payments | ||||||||
| Loss and loss adjustment expenses attributable to insured events of the current year | ||||||||
| Loss and loss adjustment expenses attributable to insured events of the prior year | ||||||||
| Total payments | ||||||||
| Net reserves at June 30, | $ | $ | ||||||
| 2026 | 2025 | |||||||
| Net reserves at January 1, | $ | $ | ||||||
| Incurred loss and loss adjustment expenses | ||||||||
| Provisions for insured events of the current year | ||||||||
| Change in provision for insured events of prior year | ( | ) | ||||||
| Total incurred loss and loss adjustment expense | ( | ) | ||||||
| Payments | ||||||||
| Loss and loss adjustment expenses attributable to insured events of the current year | ||||||||
| Loss and loss adjustment expenses attributable to insured events of the prior year | ||||||||
| Total payments | ||||||||
| Net reserves at June 30, | $ | $ | ||||||
10
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – CONVERTIBLE DEBENTURES
On April 15, 2024, we entered into a Securities Purchase Agreement (the “JGB Purchase Agreement”) with each of the Purchasers thereto (the “Purchasers”) and JGB Collateral LLC (“JGB”), a Delaware limited liability company, as collateral agent for the Purchasers (the “Agent”). Pursuant to the terms of the JGB Purchase Agreement, on April 15, 2024, we issued the Senior Secured Convertible Debentures (the “Debentures”) due on
On December 30, 2024, we entered into amendments to the JGB Purchase Agreement (the “Amendment Agreement”) and the Debentures (each, a “Debenture Amendment” and collectively, the “Debenture Amendments”), with the Purchasers, the Agent and the other parties thereto, as applicable, to, among other things, sell Debentures up to an additional aggregate principal amount of $
Pursuant to the Debenture Amendments, the Debentures bear interest at an annual rate of
On May 13, 2026, we entered into a second amendment agreement (the “Second Amendment Agreement”) to the JGB Purchase Agreement with each of the Purchasers and the Agent. The Second Amendment Agreement, among other things, extended the maturity date of the Debentures issued pursuant to the JGB Purchase Agreement by one year to April 15, 2028, revised the amortization schedule set forth in the Debentures and provided for a restructuring payment of $
Our obligations under the Debentures may be accelerated, at the Purchasers’ election or upon the occurrence of certain customary events of default. The Debentures contain customary representations, warranties and covenants including among other things and subject to certain exceptions, covenants that restrict us from incurring additional indebtedness, creating or permitting liens on assets, amending our charter documents and bylaws, repurchasing or otherwise acquiring more than a de minimis number of our common stock or equivalents thereof, repaying outstanding indebtedness, paying dividends or distributions, assigning or selling certain assets, making or holding any investments, and entering into transactions with affiliates.
The Company evaluated the Second Amendment Agreement under ASC 470-50, “Debt - Modifications and Extinguishments”, and determined that the amended terms were not substantially different from the terms of the existing Debentures. Accordingly, the Second Amendment Agreement was accounted for as a debt modification, and no gain or loss on extinguishment was recognized. The restructuring payment and exit payment were included in the revised contractual cash flows, and the related discounts are being amortized to interest expense using the effective interest method over the remaining term of the Debentures.
As of June 30, 2026, the net carrying amount of the Debentures was $
11
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Our future loan payments, which are presented as current portion of convertible debentures, net and convertible debentures, net of current portion on our accompanying unaudited condensed consolidated balance sheet as of June 30, 2026, are as follows:
| June 30, 2026 | ||||
| Convertible debenture principal | $ | |||
| Restructuring and exit payment obligations | ||||
| Unamortized debt premium and issuance costs, net | ( | ) | ||
| Outstanding balance, net | ||||
| Less: current portion, net | ( | ) | ||
| Long-term portion, net | $ | |||
NOTE 8 – OTHER LIABILITIES
Other liabilities consisted of the following:
(in thousands)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Due to AXA (current and long-term) | $ | $ | ||||||
| Sublease security deposit | ||||||||
| Other liabilities | $ | $ | ||||||
As of June 30, 2026, we had $
Our future payments to AXA, which are included in other short-term liabilities and other long-term liabilities on our accompanying unaudited condensed consolidated balance sheet as of June 30, 2026, are as follows:
(in thousands)
| June 30, 2026 | ||||
| Outstanding balance | $ | |||
| Less: current portion | ||||
| Long-term portion | $ | |||
On July 16, 2026, we entered into Amendment No. 2 to Purchase Agreement (the “AXA Amendment”) with AXA. The AXA Amendment amends a Membership Interest Purchase Agreement, dated August 4, 2022, as amended on February 7, 2024 (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 Health, LLC.
The AXA Amendment provides that the requirement by us to pay AXA an amount equal to thirty five percent of the net proceeds was amended such that from the date of the AXA Amendment through December 31, 2026, such payments will only be required after $
The AXA Amendment also provides that the Company shall make minimum annual payments of not less than $
Subsequent to June 30, 2026, on July 29, 2026, we entered into a securities purchase agreement for the issuance and sale of
12
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On June 15, 2026, the Company entered into a second amendment to a certain client services agreement with a vendor. Under such amendment, the vendor paid an advance to the Company in the amount of $
NOTE 9 – REVENUE
Disaggregation of Revenue
The following tables illustrate the disaggregation of revenue by similar services:
For the six months ended:
(in thousands)
| June 30, 2026 | June 30, 2025 | |||||||
| TPA services | $ | $ | ||||||
| Captive insurance | ( | ) | ||||||
| Total | $ | $ | ||||||
For the three months ended:
(in thousands)
| June 30, 2026 | June 30, 2025 | |||||||
| TPA services | $ | $ | ||||||
| Captive insurance | ||||||||
| Total | $ | $ | ||||||
13
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 – SHARE-BASED COMPENSATION
Global Stock Incentive Plan
On May 31, 2023, our shareholders approved our board of directors (the “Board”) proposal to increase our 2020 Global Incentive Plan (the “2020 Plan”) by an additional
Under the terms of the 2020 Plan, on the grant date, the Board determines the vesting schedule of each stock option and RSU on an individual basis. All stock options expire ten (
On May 6, 2024, our shareholders approved our 2024 Global Incentive Plan (the “2024 Plan”), under which
Under the terms of the 2024 Plan, on the grant date, the Board determines the vesting schedule of each stock option and RSUs on an individual basis. All stock options expire ten (
Stock Options
There were no options granted for the six months ended June 30, 2026 and 2025.
The following table summarizes the stock option activity for the six months ended June 30, 2026:
(in thousands except share and per share data)
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Term | Aggregate Intrinsic Value | |||||||||||||
| Balance at January 1, 2026 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Forfeited/Cancelled | ( | ) | ||||||||||||||
| Exercised | ||||||||||||||||
| Balance at June 30, 2026 | $ | $ | ||||||||||||||
| Exercisable at June 30, 2026 | $ | $ | ||||||||||||||
14
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes our non-vested stock options:
| Non-vested Options Outstanding | Weighted- Average Grant Date Fair Value | |||||||
| Balance at January 1, 2026 | $ | |||||||
| Options granted | ||||||||
| Options forfeited/cancelled | ( | ) | ||||||
| Options exercised | ||||||||
| Options vested | ( | ) | ||||||
| Balance at June 30, 2026 | $ | |||||||
For the three months ended June 30, 2026 and 2025, we recognized $
Restricted Stock Units
On January 28, 2025, the compensation committee of the Board granted a director restricted stock unit (“RSU”) award pursuant to which the holder has the right to receive an aggregate of
On March 7, 2025, the compensation committee of the Board granted various employees RSU awards, under which the holders have the right to receive an aggregate of
On February 2, 2026, the compensation committee of the board of directors granted certain employees RSU awards, under which the holder has the right to receive an aggregate of
On February 2, 2026, we issued
On February 2, 2026, we issued
On March 5, 2026, we granted an RSU award to a board member under which the holder has the right to receive an aggregate of
On March 13, 2026, the compensation committee of the board of directors granted various employees inducement RSU awards, under which the holders have the right to receive an aggregate of
On March 13, 2026, we issued 6,345 shares of common stock to a vendor in consideration for services rendered.
On April 16, 2026, the compensation committee of the board of directors granted certain employees RSU awards, under which the holder has the right to receive an aggregate of
On April 16, 2026, we granted
On May 21, 2026, we granted an RSU award to a board member under which the holder has the right to receive an aggregate of
On May 29, 2026, the compensation committee of the board of directors granted certain board members and executives RSU awards, under which the holders have the right to receive an aggregate of up to
15
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the restricted stock units activity for the six months ended June 30, 2026:
Restricted | Weighted- | |||||||
| Outstanding at January 1, 2026 | $ | |||||||
| Granted | ||||||||
| Forfeited/cancelled | ( | ) | ||||||
| Vested | ( | ) | ||||||
| Outstanding at June 30, 2026 | $ | |||||||
For the three months ended June 30, 2026 and 2025, the Company recognized $
NOTE 11 – WARRANTS
We have issued warrants as part of equity offerings and severance packages.
The table below summarizes our warrant activities:
| Number of Warrants to Purchase Common Shares | Exercise Price Range Per Share | Weighted Average Exercise Price | ||||||||||
| Balance at January 1, 2026 | $ | | $ | |||||||||
| Granted | ||||||||||||
| Forfeited | ( | ) | ||||||||||
| Exercised | ||||||||||||
| Balance at June 30, 2026 | $ | | $ | |||||||||
| Balance at January 1, 2025 | $ | $ | ||||||||||
| Granted | ||||||||||||
| Forfeited | ( | ) | ||||||||||
| Exercised | ||||||||||||
| Balance at June 30, 2025 | $ | | $ | |||||||||
NOTE 12 – SEGMENT INFORMATION
Research and development activities were conducted through our 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 reporting date. All of our revenues are derived from customers located in the United States.
All of our long-lived assets including capitalized software, and operating lease right of use assets are located in the United States.
The Company operates as
The CODM reviews financial information on a consolidated basis and uses the segment performance measure of consolidated net loss to measure segment profit or loss. The accounting policies of our single reportable segment are the same as those for the consolidated financial statements. The level of disaggregation and amounts of significant segment expenses that are regularly provided to the CODM are the same as those presented in the consolidated statement of operations. Likewise, the measure of segment assets is reported on the consolidated balance sheets as total assets. The CODM does not regularly review asset information and therefore, we do not report asset information beyond what is presented in the consolidated balance sheets.
16
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 – RELATED PARTY TRANSACTIONS
On February 12, 2026, the Company issued a promissory note (“Note 1”) in the principal amount of $
On March 9, 2026, the Company issued a promissory note (“Note 2”) in the principal amount of $
On June 22, 2026, the Company satisfied all outstanding principal balances related to Note 1 and Note 2 through full repayment to the related party.
In connection with Note 1 and Note 2, accrued interest of $
For the three and six months ended June 30, 2026, we recorded interest expense of $
The Company provides third-party administrator services to an entity whose chief executive officer also serves as the Company’s Head of Sales. Financial arrangements with the related party are subject to approval by the Company’s Board and Chief Financial Officer.
On April 29, 2026, the Company received a $
On May 13, 2026, the Company received an additional refundable cash advance of $
17
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 – ACCRUED EXPENSES
Accrued expenses consisted of the following:
(in thousands)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accrued payables | $ | $ | ||||||
| Employee compensation | ||||||||
| Performance guarantee liabilities | ||||||||
| Accrued bonuses | ||||||||
| Settlement liability | ||||||||
| Accrued expenses | $ | $ | ||||||
NOTE 15 – INCOME TAXES
The effective tax rate was
At December 31, 2025, we had federal and state net operating losses (“NOLs”) in the amount of approximately $
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. We must assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent that we believe 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.
At June 30, 2026 and 2025, there were $
We and our subsidiaries’ income tax returns since 2022 remain subject to examination by tax jurisdictions.
In July 2025, the President of the United States signed into law budget reconciliation bill H.R.1, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) introducing tax reform measures that included changes to tax deductions for businesses, international tax rules, and foreign tax credit limitations that become effective in 2025 and 2026. As of enactment, these changes did not materially affect our deferred tax assets and liabilities or related valuation allowances. The impact on our income tax expense, effective income tax rate and cash tax payments for the year ended December 31, 2025 was not material. We will continue to evaluate the full impact of the legislation as additional guidance becomes available.
NOTE 16 – LITIGATION AND LOSS CONTINGENCIES
From time to time, we may be subject to other legal proceedings, claims, investigations, and government inquiries (collectively, legal proceedings) in the ordinary course of business. We 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.
18
MARPAI, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On January 30, 2025, the Company was served with a civil complaint by Messer Financial Group Inc. (“Messer”), a sublessee of the Company’s previously rented office space in Charlotte, NC, for breach of contract. On July 28, 2025, the Company and the plaintiff conducted a mediation session, which was unsuccessful in resolving the dispute. On September 22, 2025, the plaintiff commenced discovery proceedings in the litigation, and in September 2025, the Company was informed that the plaintiff’s expert indicated estimated damages in excess of $
After Messer received the Cash Consideration, Messer voluntarily dismissed the Lawsuit in its entirety as to all Defendants with prejudice.
NOTE 17 – SUBSEQUENT EVENTS
The Company evaluated subsequent events from June 30, 2026, the date of these condensed consolidated financial statements, through August 13, 2026, the issuance date of these condensed consolidated financial statements for events requiring recognition or disclosure in the condensed consolidated financial statements.
On July 16, 2026, we executed an amendment to the AXA agreement. See Note 8.
On July 29, 2026, we entered into securities purchase agreements (each, a “Securities Purchase Agreement”) with accredited investors relating to an offering (the “Offering”) and the sale of an aggregate of
In conjunction with the execution of the Purchase Agreements, we and the Mitchell Family Trust II, who acted as the lead investor in the Offering, entered into a board observer agreement (the “Board Observer Agreement”), pursuant to which Steve Mitchell will serve as an observer to our Board. Pursuant to the Board Observer Agreement, Mr. Mitchell will be entitled to serve as a board observer for a period of two years, provided that the lead investor continues to own at least
19
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF MARPAI, INC.
As used in this quarterly report on Form 10-Q (this “Quarterly Report”), the terms “we”, “us”, “our”, the “Company”, and “Marpai” mean Marpai, Inc., and our wholly owned subsidiaries, Marpai Captive Inc. (“Marpai Captive”), Marpai Administrators LLC (formerly known as Continental Benefits, LLC) (“Marpai Administrators”), Maestro Health, LLC (“Maestro Health”), and Marpai Health, Inc. (“Marpai Health”) and our 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 contains “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 Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our 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 25, 2026 with the U.S. Securities and Exchange Commission (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, 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.
Our 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, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
On May 24, 2024, we informed the staff of the Nasdaq Stock Market LLC of our intention to withdraw from the Nasdaq hearings process and transition the listing of our common shares from the Nasdaq Capital Market (“Nasdaq”) and have our shares of common stock quoted on the OTCQX Market (“OTCQX”). Our common stock was suspended from trading on Nasdaq effective at the opening of trading on Wednesday, May 29, 2024, and commenced trading on OTCQX immediately thereafter.
Overview
We are a technology platform company which operates subsidiaries that provide third party administration (“TPA”), Pharmacy Benefit Management (“PBM”), and value-oriented health plan services to employers that directly pay for employee health benefits. 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.
20
Representation in the Financial Statements of Marpai, Inc.
The unaudited condensed consolidated financial statements of Marpai, Inc. and the discussion of the results of our operations in this Quarterly Report, reflect the results of the operations of Marpai for all periods presented. The results for the three and six months ended June 30, 2026, as applicable, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
Results of Operations
Comparison of the Three and Six Months Ended June 30, 2026 and 2025
The following table sets forth our consolidated results of operations for the periods indicated.
(dollars in thousands)
| Three Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Revenue | $ | 4,166 | $ | 4,656 | $ | (490 | ) | (10.5 | )% | |||||||
| Costs and expenses | ||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization shown separately below) | 3,169 | 3,910 | (741 | ) | (19.0 | )% | ||||||||||
| General and administrative | 3,069 | 2,483 | 586 | 23.6 | % | |||||||||||
| Information technology | 1,109 | 1,291 | (182 | ) | (14.1 | )% | ||||||||||
| Sales and marketing | 136 | 312 | (176 | ) | (56.4 | )% | ||||||||||
| Depreciation and amortization | — | 107 | (107 | ) | (100.0 | )% | ||||||||||
| Facilities | 116 | 160 | (44 | ) | (27.5 | )% | ||||||||||
| Total costs and expenses | 7,599 | 8,263 | (664 | ) | (8.0 | )% | ||||||||||
| Operating loss | (3,433 | ) | (3,607 | ) | 174 | (4.8 | )% | |||||||||
| Other income and (expenses) | ||||||||||||||||
| Other income, net | 77 | 49 | 28 | 57.1 | % | |||||||||||
| Interest expense, net | (1,227 | ) | (813 | ) | (414 | ) | 50.9 | % | ||||||||
| Total other expense, net | (1,150 | ) | (764 | ) | (386 | ) | 50.5 | % | ||||||||
| Loss before income taxes | (4,583 | ) | (4,371 | ) | (212 | ) | 4.9 | % | ||||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net loss | $ | (4,583 | ) | $ | (4,371 | ) | $ | (212 | ) | 4.9 | % | |||||
| Net loss per share, basic and fully diluted | $ | (0.18 | ) | $ | (0.28 | ) | $ | 0.10 | (35.7 | )% | ||||||
(dollars in thousands)
| Six Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Revenue | $ | 8,610 | $ | 10,074 | $ | (1,464 | ) | (14.5 | )% | |||||||
| Costs and expenses | ||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization shown separately below) | 6,408 | 7,395 | (987 | ) | (13.3 | )% | ||||||||||
| General and administrative | 5,199 | 4,766 | 433 | 9.1 | % | |||||||||||
| Information technology | 2,266 | 2,681 | (415 | ) | (15.5 | )% | ||||||||||
| Sales and marketing | 365 | 556 | (191 | ) | (34.4 | )% | ||||||||||
| Research and development | — | 7 | (7 | ) | (100.0 | )% | ||||||||||
| Depreciation and amortization | 60 | 214 | (154 | ) | (72.0 | )% | ||||||||||
| Facilities | 229 | 311 | (82 | ) | (26.4 | )% | ||||||||||
| Total costs and expenses | 14,527 | 15,930 | (1,403 | ) | (8.8 | )% | ||||||||||
| Operating loss | (5,917 | ) | (5,856 | ) | (61 | ) | 1.0 | % | ||||||||
| Other income and (expenses) | ||||||||||||||||
| Other income, net | 153 | 49 | 104 | 212.2 | % | |||||||||||
| Interest expense, net | (2,002 | ) | (1,633 | ) | (369 | ) | 22.6 | % | ||||||||
| Total other expense, net | (1,849 | ) | (1,584 | ) | (265 | ) | 16.7 | % | ||||||||
| Loss before income taxes | (7,766 | ) | (7,440 | ) | (326 | ) | 4.4 | % | ||||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net loss | $ | (7,766 | ) | $ | (7,440 | ) | $ | (326 | ) | 4.4 | % | |||||
| Net loss per share, basic and fully diluted | $ | (0.31 | ) | $ | (0.49 | ) | $ | 0.18 | (36.7 | )% | ||||||
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Revenues and Cost of Revenue
During the three months ended June 30, 2026 and 2025, our total revenue was $4.2 million and $4.7 million, respectively, representing a decrease in revenue of $490 thousand. The decline is primarily due to customer turnover. The market is evolving, and we are adapting our approach to better serve our customers’ needs.
During the six months ended June 30, 2026 and 2025, our total revenue was $8.6 million and $10.1 million, respectively, representing a decrease in revenue of $1.5 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.
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 June 30, 2026 and 2025, our cost of revenue was $3.2 million and $3.9 million, respectively, representing a decrease of $741 thousand. The decrease is primarily driven by the reduction in sales.
During the six months ended June 30, 2026 and 2025, our cost of revenue was $6.4 million and $7.4 million, respectively, representing a decrease of $987 thousand. The decrease is primarily driven by the reduction in sales.
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 $3.1 million of general and administrative expenses for the three months ended June 30, 2026, compared to $2.5 million for the three months ended June 30, 2025, representing an increase of $586 thousand. The increase is primarily attributable to an investment in labor, general and administrative expenses.
We incurred $5.2 million of general and administrative expenses for the six months ended June 30, 2026, compared to $4.8 million for the six months ended June 30, 2025, representing an increase of $433 thousand. The increase is primarily attributable to an investment in labor, general and administrative expenses.
Information Technology Expenses
We incurred $1.1 million of information technology expenses for the three months ended June 30, 2026, compared to $1.3 million for the three months ended June 30, 2025, representing a decrease of $182 thousand. The decrease is due to the actions taken throughout 2025 and 2026 to streamline the Company’s operations.
We incurred $2.3 million of information technology expenses for the six months ended June 30, 2026, compared to $2.7 million for the six months ended June 30, 2025, representing a decrease of $415 thousand. The decrease is due to the actions taken throughout 2025 and 2026 to streamline the Company’s operations.
Sales and Marketing Expenses
We incurred $136 thousand of sales and marketing expenses for the three months ended June 30, 2026, compared to $312 thousand for the three months ended June 30, 2025, representing a decrease of $176 thousand. The decrease is due to improvement in our operating efficiency.
We incurred $365 thousand of sales and marketing expenses for the six months ended June 30, 2026, compared to $556 thousand for the six months ended June 30, 2025, representing a decrease of $191 thousand. The decrease is due to improvement in our operating efficiency.
Research and Development Expenses
We incurred $0 of research and development expenses for the three months ended June 30, 2026 and 2025.
We incurred $0 of research and development expenses for the six months ended June 30, 2026, compared to $7 thousand for the six months ended June 30, 2025. The reason for the decrease is the elimination of our in-house development activities.
22
Depreciation and Amortization
We incurred $0 of depreciation and amortization expenses for the three months ended June 30, 2026, compared to $107 thousand for the three months ended June 30, 2025, representing a decrease of $107 thousand. This decrease was due to the full depreciation of all fixed assets during the first quarter of 2026.
We incurred $60 thousand of depreciation and amortization expenses for the six months ended June 30, 2026, compared to $214 thousand for the six months ended June 30, 2025, representing a decrease of $154 thousand. This decrease was primarily due to the full depreciation or elimination of fixed assets during early 2025 and 2026.
Facilities expenses
We incurred facilities expenses of $116 thousand for the three months ended June 30, 2026, compared to facilities expenses of $160 thousand for the three months ended June 30, 2025, representing a decrease of $44 thousand. The decrease in facilities expenses was due to the strategic decommissioning of unutilized facilities and equipment in 2025.
We incurred facilities expenses of $229 thousand for the six months ended June 30, 2026, compared to facilities expenses of $311 thousand for the six months ended June 30, 2025, representing a decrease of $82 thousand. The decrease in facilities expenses was due to the strategic decommissioning of unutilized facilities and equipment in 2025.
Interest Expense, net
We incurred $1.2 million of net interest expense for the three months ended June 30, 2026, compared to $813 thousand for the three months ended June 30, 2025, representing an increase of $414 thousand primarily due to a non-cash adjustment to the carrying amount of the Company’s obligation to AXA.
We incurred $2.0 million of net interest expense for the six months ended June 30, 2026, compared to $1.6 million for the six months ended June 30, 2025, representing an increase of $369 thousand primarily due to a non-cash adjustment to the carrying amount of the Company’s obligation to AXA.
Liquidity and Capital Resources
As of June 30, 2026, we had an accumulated deficit of approximately $123.2 million, unrestricted cash and cash equivalents of approximately $138 thousand and negative working capital of approximately $14.5 million. For the six months ended June 30, 2026, we recognized a net loss of approximately $7.8 million and negative cash flows from operations of approximately $4.6 million.
We have spent most of our cash resources on funding our operating activities. Through June 30, 2026, we have financed our operations primarily with the proceeds from loans, the issuance of convertible notes and warrants, and sales of our equity securities.
JGB Purchase Agreement and the Amendment Agreement
On April 15, 2024, we entered into a Securities Purchase Agreement (the “JGB Purchase Agreement”) with each of the purchasers thereto (the “Purchasers”) and JGB Collateral LLC (“JGB”), a Delaware limited liability company, as collateral agent for the Purchasers (the “Agent”). Pursuant to the terms of the JGB Purchase Agreement, on April 15, 2024, we issued Senior Secured Convertible Debentures (the “Debentures”) due on April 15, 2027 for a principal sum of $11.8 million, subject to the redemption of $5 million at our election. In accordance with the JGB Purchase Agreement, JGB purchased an aggregate of $6.8 million in principal amount of the Debentures, in exchange for $6.0 million in funding. Effective June 21, 2024, we elected not to redeem up to an aggregate of $5.0 million of the Debentures.
On December 30, 2024, we entered into amendments to the JGB Purchase Agreement (the “Amendment Agreement”) and the Debentures (each, a “Debenture Amendment” and collectively, the “Debenture Amendments”), with the Purchasers, the Agent and the other parties thereto, as applicable, to, among other things, sell Debentures up to an additional aggregate principal amount of $5.4 million, for total proceeds of $5 million (the “Additional Investment”). Pursuant to the terms of the Amendment Agreement and the Debenture Amendments, $2.0 million of the Additional Investment was delivered to us at closing, and the remaining $3.0 million of the Additional Investment was held in escrow pending satisfaction of certain terms and conditions specified in the Amendment Agreement and the Debenture Amendments. On January 17, 2025, we received proceeds of $3.0 million from the Additional Investment that had been held in escrow pending satisfaction of certain terms and conditions specified in the Amendment Agreement and the Debenture Amendments.
On May 13, 2026, we entered into a second amendment agreement (the “Second Amendment Agreement”) to the JGB Purchase Agreement with each of the Purchasers and the Agent. The Second Amendment Agreement, among other things, extended the maturity date of the Debentures issued pursuant to the JGB Purchase Agreement by one year to April 15, 2028, revised the amortization schedule set forth in the Debentures and provided for certain restructuring and exit payments. In connection with the Second Amendment Agreement, Mr. Lamendola granted a second lien mortgage on certain personal real property as additional collateral for the obligations under the Debentures.
23
Promissory Notes
On February 12, 2026, we issued a promissory note (“Note 1”) in the principal amount of $410 thousand to our Chief Executive Officer (the “Holder”). Note 1 accrues interest at a rate of 12.0% per annum (or the maximum amount of interest allowed under the laws of the State of New York, whichever is less) until Note 1 is repaid in full. Note 1 may be prepaid by us, in whole or in part, together with all interest then accrued and any other sums then due and payable to the Holder, at any time, without premium or penalty. All payments of outstanding principal, interest and all other amounts due under Note 1 are payable by April 11, 2026 to the Holder, or its successors and assigns. The proceeds of Note 1 will be used by us for general working capital purposes. On April 29, 2026, we entered into an amendment agreement with the Holder pursuant to which the maturity date of Note 1 was extended to September 1, 2026.
On March 9, 2026, we issued a promissory note (“Note 2”) in the principal amount of $250 thousand to our Chief Executive Officer. Note 2 accrues interest at a rate of 12.0% per annum (or the maximum amount of interest allowed under the laws of the State of New York, whichever is less) until Note 2 is repaid in full. Note 2 may be prepaid by us, in whole or in part, together with all interest then accrued and any other sums then due and payable to the Holder, at any time, without premium or penalty. All payments of outstanding principal, interest and all other amounts due under Note 2 are payable by May 10, 2026 to the Holder, or its successors and assigns. The proceeds of Note 2 will be used by us for general working capital purposes. On April 29, 2026, we entered into an amendment agreement with the Holder pursuant to which the maturity date of Note 2 was extended to September 1, 2026.
On June 22, 2026, we satisfied all outstanding principal balances through full repayment to the related party.
The AXA Amendment
On July 16, 2026, we entered into Amendment No. 2 to a purchase agreement with AXA (the “AXA Amendment”). The AXA Amendment amends a Membership Interest Purchase Agreement, dated August 4, 2022, as amended on February 7, 2024 (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 Health, LLC.
The AXA Amendment also provides that the Company shall make minimum annual payments of not less than $0, $1.0 million, $5.0 million and approximately $22.3 million during the years ending December 31, 2026, 2027, 2028 and 2029, respectively. In addition, the Company agreed not to incur additional indebtedness other than its currently outstanding indebtedness.
Subsequent to June 30, 2026, on July 29, 2026, the Company entered into a securities purchase agreement for the issuance and sale of 12,100 shares of newly designated Series A Preferred Stock for aggregate gross proceeds of $12.1 million. As a result of the Offering and pursuant to the terms of the AXA Amendment, approximately $2.45 million became payable to AXA based on the applicable net offering proceeds. Accordingly, approximately $2.45 million of the AXA liability is reflected as a current liability, with the remaining balance reflected as a non-current liability in the accompanying unaudited condensed consolidated balance sheet.
Securities Purchase Agreement
On July 29, 2026, we entered into securities purchase agreements (each, a “Securities Purchase Agreement”) with accredited investors relating to an offering (the “Offering”) and the sale of an aggregate of 12,100 shares of newly designated Series A Preferred Stock (the “Preferred Stock”) at a purchase price of $1.0 thousand for each share of Preferred Stock. The aggregate gross proceeds to us from the Offering are expected to be approximately $12.1 million. We expect the Offering to close upon satisfaction of customary closing conditions.
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 our 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 Standards Board’s 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 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 table summarizes selected information about our sources and uses of cash and cash equivalents for the six months ended June 30, 2026 and 2025:
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Comparison of the Six Months Ended June 30, 2026 and 2025
(in thousands)
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (4,576 | ) | $ | (3,324 | ) | ||
| Net cash provided by investing activities | — | 500 | ||||||
| Net cash provided by financing activities | 2,200 | 1,872 | ||||||
| Net decrease in cash and cash equivalents and restricted cash | $ | (2,376 | ) | $ | (952 | ) | ||
Net Cash Used in Operating Activities
Net cash used in operating activities totaled $4.6 million for the six months ended June 30, 2026, and the net cash used in operating activities totaled $3.3 million for the six months ended June 30, 2025. Net cash used in operating activities was primarily driven by our net loss for the period of $7.8 million, net of (i) non-cash items totaling $2.8 million and (ii) an increase in net working capital items amounting to $365 thousand.
Net Cash Provided by Investing Activities
A total of $0 was provided by investing activities for the six months ended June 30, 2026 and $500 thousand for the six months ended June 30, 2025. The net cash provided by investing activities in the first half of 2025 was due to the collection of cash for the sale of a business unit in the first quarter 2025.
Net Cash Provided by Financing Activities
A total of $2.2 million was provided to us by financing activities during the six months ended June 30, 2026, an increase of $328 thousand compared to $1.9 million provided to us for the six months ended June 30, 2025. The net cash provided in financing activities for the six months ended June 30, 2026 was from a vendor financing advance of $2.0 million, related party loans of $660 thousand, a related party advance of $1.0 million, offset by the repayment of related party loans of $660 thousand and repayment of senior secured convertible debentures in the amount of $800 thousand. The net proceeds for 2025 were provided from senior secured convertible debentures issued on April 15, 2024, in the amount of $1.3 million, the proceeds from private placement offerings of $730 thousand and partially offset by the repayment of the loan to AXA, in connection with our acquisition of Maestro Health on November 1, 2022, of $196 thousand.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. 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 Quarterly Report for a description of the significant accounting policies that we use to prepare our unaudited interim condensed consolidated financial statements.
New Accounting Pronouncements
We have recently adopted ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,”, ASU 2024-04, Debt - Debt with Conversions and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments”, and ASU 2025-05, Financial Instruments – Credit Losses (Topic 326) as of January 1, 2026. The adoption of these standards did not have a material impact on our financial position and results of operations. We have considered recently issued accounting pronouncements and are currently evaluating the impact the adoption of such pronouncements will have on our condensed consolidated financial statements.
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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 six months ended June 30, 2026. 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 $138 thousand and $133 thousand on June 30, 2026 and December 31, 2025, 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 six months ended June 30, 2026.
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, Chief Financial Officer 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 period ended June 30, 2026. Based on this evaluation, our Chief Executive Officer, Chief Financial Officer 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 second quarter ended June 30, 2026, 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.
26
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
None.
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 2025 Annual Report, which could materially affect our business, financial condition or future results.
Currently, our revenues are concentrated with a few major customers and our revenues may decrease significantly if we were to lose those major customers.
Due to our limited operating history, we have a limited customer base and have depended on a few major customers for a significant portion of our revenue. For the three and six month periods ended June 30, 2026 and 2025, we had no single customer that accounted for more than 10% of total revenue. At June 30, 2026, two customers accounted for 18.0% and 16.0% of accounts receivable. As of December 31, 2025, two customers accounted for 19.5% and 19.1% of accounts receivable.
If our major customers were to terminate their agreement with us, or if we fail to adequately perform under our agreement, and if we are unable to diversify our customer base, our revenue could decline, and our results of operations could be adversely affected.
We are reviewing strategic alternatives and there can be no assurance that we will be successful in identifying or completing any strategic transaction, that any such strategic transaction will result in additional value for our stockholders or that the process will not have an adverse impact on our business.
The process of reviewing strategic alternatives may be costly, time consuming and disruptive to our business operations and, if we are unable to effectively manage the process, our business, financial condition and results of operations could be adversely affected. We may incur significant costs associated with identifying, evaluating and negotiating potential strategic alternatives, such as legal, financial advisor and accounting fees and expenses and other related charges. We may also incur additional unanticipated expenses in connection with this process. A considerable portion of these costs will be incurred regardless of whether any such course of action is implemented or transaction is completed, decreasing cash available for use in our business.
There can be no assurance that any potential transaction, or series of transactions, or other strategic alternative, if found and if consummated, will provide greater value to our stockholders than that reflected in the current price of our common stock. Until the review process is concluded, perceived uncertainties related to our future may impact our business performance and volatility in the market price of our common stock and may make it more difficult for us to attract and retain qualified personnel and key employees. Our Board has not set a timetable for the conclusion of this review, nor has it made any definitive decisions related to taking any further actions or potential strategic options at this time or at all.
Item 5. Other Information.
27
Item 6. Exhibits.
| * | Filed herewith. |
| ** | Furnished herewith. |
28
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: August 13, 2026 | /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) | ||
29
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: August 13, 2026
| /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.; |
| 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: August 13, 2026
| /s/ Steve Johnson | |
| Steve Johnson | |
| Chief Financial Officer | |
| (Principal Financial Officer) |
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 June 30, 2026, 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) | |
| August 13, 2026 |
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 June 30, 2026, 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) | |
| August 13, 2026 |