# EDGAR Filing Document

**Accession Number:** 0001844392
**File Stem:** 0001213900-26-034129
**Filing Date:** 2026-3
**Character Count:** 363557
**Document Hash:** 9e9b2846d91627178a6787cf24124113
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-034129.hdr.sgml**: 20260325

**ACCESSION NUMBER**: 0001213900-26-034129

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 103

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260325

**DATE AS OF CHANGE**: 20260325

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Marpai, Inc.
- **CENTRAL INDEX KEY:** 0001844392
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40904
- **FILM NUMBER:** 26793169

**BUSINESS ADDRESS:**
- **STREET 1:** 615 CHANNELSIDE DRIVE
- **STREET 2:** SUITE 207
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33602
- **BUSINESS PHONE:** 646-303-3483

**MAIL ADDRESS:**
- **STREET 1:** 615 CHANNELSIDE DRIVE
- **STREET 2:** SUITE 207
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33602

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

(Mark One)

&nbsp;&nbsp;&nbsp;&nbsp;**☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2025**

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

**For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Commission file number 001-40904**

**MARPAI INC.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **86-1916231** |
| (State or other jurisdiction of <br> Identification No.) | (I.R.S. Employer <br> incorporation or organization) |

---

---

| | |
|:---|:---|
| **615 Channelside Drive, Suite 207**<br>**Tampa, Florida** | **33602** |
| (Address of principal executive offices) | (Zip Code) |

---

**(855) 389-7330**

Registrant's telephone number, including area code

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

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which registered** |
| Class A Common Stock, par value $0.0001 | MRAI | OTCQX Market |

---

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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

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

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

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

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. $9,748,057.

Indicate the number of shares outstanding of each of the registrant's classes of common shares, as of the latest practicable date.

25,292,667 as of March 25, 2026

DOCUMENTS INCORPORATED BY REFERENCE

None.

**Table of Contents**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| [PART I](#a_001) |  | 1 |
| Item 1. | [Business](#a_002) | 1 |
| Item 1A. | [Risk Factors](#a_003) | 6 |
| Item 1B. | [Unresolved Staff Comments](#a_004) | 25 |
| Item 1C. | [Cybersecurity](#a_005) | 25 |
| Item 2. | [Properties](#a_006) | 27 |
| Item 3. | [Legal Proceedings](#a_007) | 27 |
| Item 4. | [Mine Safety Disclosures](#a_008) | 27 |
| [PART II](#a_009) |  | 28 |
| Item 5. | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#a_010) | 28 |
| Item 6. | [Reserved](#a_011) | 28 |
| Item 7. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_012) | 29 |
| Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#a_013) | 37 |
| Item 8. | [Financial Statements and Supplementary Data](#a_014) | 37 |
| Item 9. | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#a_015) | 37 |
| Item 9A. | [Controls and Procedures](#a_016) | 37 |
| Item 9B. | [Other Information](#a_017) | 38 |
| Item 9C. | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#a_018) | 38 |
| [PART III](#a_019) |  | 39 |
| Item 10. | [Directors, Executive Officers and Corporate Governance](#a_020) | 39 |
| Item 11. | [Executive Compensation](#a_021) | 45 |
| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#a_022) | 50 |
| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#a_023) | 51 |
| Item 14. | [Principal Accountant Fees and Services](#a_024) | 53 |
| [PART IV](#a_025) |  | 54 |
| Item 15. | [Exhibit and Financial Statement Schedules](#a_026) | 54 |
| Item 16. | [Form 10-K Summary](#a_027) | 55 |

---

Our consolidated financial statements are stated in United States dollars and are prepared in accordance with United States Generally Accepted Accounting Principles, or U.S. GAAP.

In this annual report, unless otherwise specified, all dollar amounts are expressed in U.S. dollars.

As used in this annual 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"), Marpai Health, Inc. ("Marpai Health"), our wholly owned Israeli subsidiary EYME Technologies, Ltd. ("EYME"), and Maestro Health, LLC ("Maestro Health"), unless otherwise indicated or required by the context.

i

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Annual Report on Form 10-K (this "Annual Report") contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever we use words such as "potential," "possible," "continue," "believes," "intends," "plans," "expects," "estimate," "may," "will," "should," or "anticipates" and negatives or derivatives of these or similar expressions, we are making forward-looking statements. These forward-looking statements are based upon our present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Forward-looking statements are based on information we have when those statements are made or management's good faith belief as of that time with respect to future events and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

● our ability to effectively manage our operations and achieve growth;

● our ability to protect our intellectual property and continue to innovate;

● our expectations of our financial performance;

● our success in retaining or recruiting, or changes required in, our officers, key employees, or directors;

● the potential insufficiency of our internal controls and procedures to detect errors or acts of fraud;

● the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

● the success of competing products, services, or technologies that are or may become available;

● our ability to obtain additional financing;

● outbreaks of pandemics or other significant adverse public health safety events or conditions, acts of terrorism, war or other hostilities, supply chain disruptions, or other manmade or natural disasters beyond our control;

● compliance with, and changes to federal, state and local laws and regulations, accounting rules, tax laws and similar matters;

● the impact of healthcare reform legislation;

● our public securities' potential liquidity and trading;

● cybersecurity breaches could compromise sensitive information and harm our business;

● our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act; and

● our current and future capital requirements and our ability to satisfy our capital needs through financing transactions or otherwise.

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements. Please see "Risk Factors" for additional risks that could adversely impact our business and financial performance. Moreover, new risks regularly emerge and it is not possible for our management to predict or articulate all the risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking statements included in this Annual Report are based on information available to us on the date of this Annual Report. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this Annual Report.

ii

**Part I**

**ITEM 1. BUSINESS**

**Our Business**

We are a technology platform company which operates subsidiaries that provide Third Party Administrator ("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.

**Market Overview**

According to the Centers for Medicare and Medicaid Services ("CMS"), in 2024, U.S. private health insurance spending reached $1.6 trillion, creating significant market opportunities for technology and service providers who help manage costs, improve member experience, and provide other solutions to health plans and plan sponsors.

More employers, particularly among the small and mid-sized enterprises ("SME"), are taking advantage of innovative captive and consortium models to move towards gaining greater control over their healthcare spending by self-insuring. Self-insuring enables an employer to capture the margin an insurance company would otherwise take while also enabling significant savings as an employer does a better job managing its member population.

Health plans and employers are increasingly looking to control costs through various programs, including payment integrity, care management, care navigation, reference-based pricing, claims repricing, centers of excellence, specialty/narrow networks, and subrogation.

As of 2025, employee benefits remain a significant and growing component of total employee compensation, increasing at a faster pace than wages in recent years. According to the U.S. Bureau of Labor Statistics, benefits account for approximately 32–33% of total compensation for private industry workers, up from roughly 30% five years ago, driven primarily by healthcare cost inflation.

TPAs now play an expanded role that includes analytics, compliance support, and digital service delivery in addition to traditional claims processing.

The growing demand for TPA services is supported by:

● Continued adoption of self-funded and alternative funding insurance plans, increasing administrative complexity.

● Employers' ongoing challenges in balancing benefit costs with competitive offerings amid rising healthcare expenses.

● Sustained year-over-year increases in health benefit costs, driving demand for outsourced administration, compliance, and cost-containment solutions.

The TPA sector remains highly fragmented, with numerous regional and specialty providers operating across benefits administration, compliance, and related services.

*Market Opportunities*

According to the Kaiser Family Foundation, 67% of covered workers in SME are enrolled in self-funded plans. We are transforming the self-funded employer health plan market through cutting-edge technology and our proprietary Marpai Saves "bundle" for enhanced outcomes and reduced costs.

We provide the tools for our Members, and we support those Members who may need additional guidance to address health concerns at an earlier stage, allowing for more cost-effective treatment.

**Our Products and Services**

We derive our revenues from three general sources: Health Plan Administration services, In-House Ancillary services, and Third-Party Vendor services.

*Health Plan Administration Services*

Our core service offerings include handling all aspects of administration related to a healthcare plan. We typically design for our Client, the SME, a healthcare benefit plan which allows the Client to define the coverage it would like to provide to its employees (the "Members"). We then manage the plan for the Client by providing the following services:

● Providing Members with access to a provider network via relationships with Aetna, Cigna, and regional networks;

● Answering Members' calls and requests related to their health plan via phone, email and via our mobile app;

● Value added services to help Members find providers and care management as well as to answer questions, including claims and benefits;

● Validating and adjudicating claims from Members, including automated adjudication;

● Promoting health and the use of high-quality medical professionals (the "Providers") to the Member population;

● Paying claims on behalf of our Clients; and

● Sourcing stop-loss insurance via our underwriters.

As plan administrators, we do not bear the financial risk with respect to the cost of the claims for any Client. The risk is borne by the self-insured Clients and the stop-loss insurance companies, if the Client purchased stop-loss insurance policies to protect themselves from unplanned healthcare costs.

We also sell complementary services to our Clients including care management, case management, actuarial services, and bill review services.

*In-House Ancillary Services*

Our In-House Ancillary Services are derived from our in-house products related to our role as the administrator of the Clients' health plans but are ancillary to paying claims such as;

*Clinical Care Management* - a nurse-led, proactive guide for at-risk Members across the care continuum so they get the optimal high-quality care at the right time and avoid excessive, inappropriate, and overpriced care. Instead of simply treating a condition, the nurses take a personal, holistic approach, to help Members.

*Repricing Insights* - out-of-network claims are a reality for any health plan. Our product encompasses all the negotiation and adjudication related to out-of-network claims. Clients often save up to 60% of the initial billed amount on their out-of-network claims.

*Marpai PACCS* - Pharmacy Advocacy Cost Containment Solution is our Member-driven pharmacy savings program that focuses on specialty and high-cost medications designed to generate up to 75% savings.

*MarpaiRx* - our national pharmacy benefit management program that saves Clients and Members money and delivers a value-add Member experience. We grant access to prescriptions at affordable rates and coordinate pharmacy and medical benefits to ensure that the right care is delivered and paid for in a way that reduces the overall cost of healthcare. We disclose all rebate information to our clients.

*Third-Party Vendor Services*

Some of our revenues are derived from services that are provided to our Clients and Members by third party vendors. We typically pass through most of these revenues to these vendors and their contribution to our gross profit is relatively small. These services include network access fees that are charged by the provider networks (such as Aetna or Cigna) when our Members visit network Providers (doctors, hospitals etc.) as well as some cost containment services, and other services provided by third party vendors.

**Company Goals**

● To be the leader in affordable intelligent, healthcare for self-funded employers.

● To improve outcomes for our Members while lowering healthcare costs to our Clients.

● To utilize our competency in deep learning and data analytics to drive efficiencies in operations and increase profitability.

● To capitalize on the large fragmented TPA market with favorable macro-economic trends.

**Technology Delivers Superior Value - Marpai Saves**

We bring deep learning and data analytics to the rapidly growing, TPA sector to deliver affordable intelligent, healthcare to our Clients and their Members. We proactively engage Members in an effort to reduce avoidable, excessive, inappropriate and overpriced care. We use data analytics and our in- house clinical management team to identify and connect at-risk members, remind Members to have annual exams and guide them to low-cost, quality in network providers. The myMarpai app is a personal health guide that gives Members on-demand access to benefits, costs, deductibles, telehealth and more.

**Government Regulation**

***Overview***

The healthcare industry is highly regulated and continues to undergo significant changes as third-party payers, such as Medicare and Medicaid, traditional indemnity insurers, managed care organizations and other private payers, increase efforts to control cost, and increase the effectiveness of healthcare services. Healthcare companies are subject to extensive and complex federal, state, and local laws, regulations, and judicial decisions.

***Fraud and Abuse***

Health care fraud and abuse laws have been enacted at the federal and state levels to regulate both the provision of services to government program beneficiaries and the methods and requirements for submitting claims for services rendered to such beneficiaries. In addition, certain fraud and abuse laws may extend to payer sources other than federal or state-funded programs. Under these laws, individuals and organizations can be penalized for various activities, including submitting claims for services that are not provided, are billed in a manner other than as actually provided, are not medically necessary, are provided by an improper person, are accompanied by an illegal inducement to utilize or refrain from utilizing a service or product, or are billed in a manner that does not comply with applicable government requirements. Both individuals and organizations are subject to prosecution under the criminal and civil fraud and abuse statutes relating to health care providers.

Noncompliance with the Anti-Kickback Law can result in civil, administrative and/or criminal penalties, restrictions on the ability to operate in certain jurisdictions, and exclusion from participation in Medicare, Medicaid or other federal healthcare programs. In addition, non-compliance can result in the need to curtail and/or restructure operations. Any penalties, damages, fines, exclusions, curtailment or restructuring of operations could adversely affect the ability to operate a business, financial condition, and results of operations. A violation of the Anti-Kickback Law can serve as a false or fraudulent claim for purposes of the civil False Claims Act and the civil monetary penalties statute.

The so-called Stark Law prohibits physician referrals of Medicare patients to an entity providing certain "designated health services" if the physician or an immediate family member of the physician has any financial relationship with the entity and the financial relationship does not fall within one of the enumerated exceptions to the Stark Law. The Stark Law also prohibits state receipt of federal Medicaid matching funds for services furnished pursuant to a prohibited referral. In addition to the Stark Law, many states have their own self-referral bans, which may extend to all self-referrals, regardless of the payer.

The federal False Claims Act imposes liability for the submission (or causing the submission) of false or fraudulent claims for payment to the federal government, including for certain violations of the Stark Law. The knowing and improper failure to return an overpayment can serve as the basis for a False Claims Act action and Medicare and Medicaid overpayments must be reported and returned within 60 days of identification. Furthermore, violation of the Stark Law also resulted in denial of payment for the underlying testing services. The private parties (known as "qui tam relators") of the False Claims Act allow a private individual to bring an action on behalf of the federal government and to share in any amounts paid by the defendant to the government in connection with the action. Various states have enacted similar laws modeled after the False Claims Act that apply to items and services reimbursed under Medicaid and other state health care programs, and, in several states, such laws apply to claims submitted to all payers.

The federal Healthcare Fraud Statute prohibits the knowing and willful execution of a scheme to defraud any health care benefit program, including a private insurer. It also prohibits falsifying, concealing or covering up a material fact or making any materially false, fictitious, or fraudulent statement in connection with the delivery of or payment for health care benefits, items, or services. In addition, state analogs often prohibit similar conduct.

The federal False Claims Act also provides that private parties may bring an action on behalf of (and in the name of) the United States to prosecute a federal False Claims Act violation. These qui tam relators may share in a percentage of the proceeds that result from a federal False Claims Act action or settlement. A person or entity found to have violated the federal False Claims Act may be held liable for a per claim civil penalty. For penalties assessed after June 19, 2020, whose associated violations occurred after November 2, 2015, the penalties range from $11,665 to $23,331 for each false claim, plus three times the amount of damages sustained by the government. The minimum and maximum per claim penalty amounts are subject to annual increases for inflation.

Many states have also adopted some form of anti-kickback and anti-referral laws and false claims acts and civil monetary penalties and other fraud and abuse provisions that apply regardless of payer, in addition to items and services reimbursed under Medicaid and other state programs. A determination of liability under such laws could result in fines, penalties, and exclusion, as well as restrictions on the ability to operate in these jurisdictions.

***State and Federal Privacy and Data Security Laws***

The Health Insurance Portability and Accountability Act of 1996 and its implementing regulations (HIPAA) and the Health Information Technology for Economic and Clinical Health Act of 2009 and its implementing regulations (HITECH) govern the collection, use, disclosure, maintenance and transmission of identifiable patient information ("Protected Health Information" or "PHI"). HIPAA and HITECH apply to covered entities, which may include health plans as well as to those entities that contract with covered entities ("Business Associates"). HITECH imposes breach notification obligations that require the reporting of breaches of "Unsecured Protected Health Information" or PHI that has not been encrypted or destroyed in accordance with federal standards. Furthermore, the regulations established standard data content and format requirements for submitting electronic claims and other administrative health transactions. Health care providers and health plans are required to use standard formats when transmitting claims, referrals, authorizations, and certain other transactions electronically. Business Associates are subject to potentially significant civil and criminal penalties for violating HIPAA.

In addition to HIPAA, we are subject to other state and federal laws and regulations that address privacy, data protection and the collection, storing, sharing, use, transfer, disclosure and protection of certain types of data. Such regulations include the CAN-SPAM Act, the Telephone Consumer Protection Act of 1991, Section 5(a) of the Federal Trade Commission Act, and the California Consumer Privacy Act ("CCPA"), as amended by the California Privacy Rights Act ("CPRA"), which, where applicable, provides consumers with additional privacy rights.

In addition, other federal and state laws afford additional protections to certain categories of sensitive information. Such protections are commonly afforded to substance abuse, mental health, or information concerning certain contagious diseases.

In addition to the federal privacy and security laws and regulations, most states have enacted data security laws, and breach notification laws, governing other types of personal data such as employee and customer information.

***State Managed Care Laws***

State insurance and managed care laws and regulations regulate contractual relationships with managed care organizations, utilization review programs and third-party administrator activities. These regulations differ from state to state, and may contain network, contracting, and financial and reporting requirements, as well as specific standards for delivery of services, payment of claims, and adequacy of health care professional networks. These laws may apply to us in the event we engage in business transactions with state managed care programs.

***State Laws Governing Licensure of Healthcare Professionals***

State professional licensing boards contain requirements for the licensure of health care professionals and typically require a healthcare professional who is providing professional services in that state to be licensed. Some state licensing boards specifically address the licensure of professionals who are providing services via telephone or other electronic means. The requirements for licensure generally apply where individuals are engaged in a licensed activity. If we elect to hire a licensed professional to engage in a licensed profession, those individuals may be subject to state licensing laws. In addition, hiring licensed professionals may implicate state prohibitions on the corporate practice of medicine.

***Employees***

As of December 31, 2025, we had a total of 107 full-time employees. None of them are parties to any labor agreements or are represented by any labor union.

***Competition***

Although we believe that the services we offer our Clients are differentiated, we operate in a highly competitive market. We only provide administrative services to self-insured employers who provide healthcare benefits to their employees. These self-insured employers can always elect to abandon self- insurance and simply buy medical insurance from one of the large players such as, Aetna, Cigna, or United Healthcare. There can be no assurances that our Clients or prospective Clients will remain self-insured for any given period. If the number of employers which choose to self-insure declines, the size of our target market will shrink.

Also, there are other technology-driven companies delivering TPA services to self-insured employers. Like us, they provide machine learning predictions models targeted at measuring risks for their employees, identifying Members susceptible to adverse healthcare events before they occur, and provide proactive guidance for preventive care. We compete with nearly 1,000 health insurance entities, all of whom are vying for the same business - the management of healthcare benefits for self-insured employers. There is only one TPA at a time for every employer wanting to provide health benefits via a self-insured model, and an employer may remain with the same TPA for many years. This means that although the market is very large, not all of it is accessible by us in any one year. In addition to the very large health insurance companies, the TPA industry has thousands of companies across the United States with the vast majority being less sophisticated small regional players. They may service only a handful of clients and provide limited benefit plans and services.

**ITEM 1A. RISK FACTORS**

Investing in our Class A common stock, par value $0.0001 per share ("<u>common stock</u>"), involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, before making a decision to invest in our common stock. The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our business, results of operations, financial condition and prospects could be harmed. In that event, the trading price of our common stock could decline, and you could lose part or all your investment. Some of the statements in "Item 1A. Risk Factors" are forward-looking statements. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business, prospects, financial condition, and results of operations.

***Summary Risk Factors***

Our business is subject to numerous risks and uncertainties that you should consider before investing in our company. You should carefully consider the risks described more fully below before making a decision to invest in our common stock. If any of these risks occur, our business, financial condition and results of operations would likely be materially adversely affected. These risks, include, but are not limited to, the following:

● The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. If we are unable to obtain additional capital, we may not be able to continue our operations on the scope or scale as currently conducted or at all, and that could have a material adverse effect on our business, results of operations and financial condition;

● We have a history of operating losses, and we may not be able to generate sufficient revenue to achieve profitability;

● We expect that we will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our shareholders' ownership interests, and any offers or availability for sale of a substantial number of our shares of common stock may cause the price of our publicly traded shares to decline;

● The loss, termination, or renegotiation of any contract with our current Clients could materially adversely affect our financial conditions and operating results.

● We are a party to several disputes and lawsuits, and we may be subject to liabilities arising from these and similar disputes in the future;

● As a plan administrator, we may be subject to ERISA fiduciary liability claims that could have a material adverse effect on our financial results;

● If our member guidance programs fail to provide accurate and timely predictions, or if they are associated with wasteful visits to Providers or unhelpful recommendations for Members, then this could lead to low customer satisfaction, which could adversely affect our results of operations;

● Issues in the use of Data Analytics and AI, including deep learning in our platform and modules, could result in reputational harm or liability;

● We rely on healthcare benefits brokers and consultants as our principal sales channel, and some of these companies are large and have no allegiance to us. If we do not satisfy their employer clients, they may steer not unsatisfied Clients, as well as others, to other TPAs;

● Our pricing may change over time and our ability to price our services, so as to achieve profitability, will affect our results of operations and our ability to attract or retain Clients;

● Our sales cycles can be long and unpredictable, and our sales efforts require a considerable investment of time and expense. If our sales cycle lengthens or we invest substantial resources pursuing unsuccessful sales opportunities, our results of operations and growth could be harmed;

● Because we generally recognize revenue ratably over the term of the contract for our services, a significant downturn in our business may not be reflected immediately in our results of operations, which increases the difficulty of evaluating our future financial performance;

● If our security measures are breached or unauthorized access to client data is otherwise obtained, our product and service offerings may be perceived as not being secure, Clients may reduce the use of or stop using our services, and we may incur significant liabilities;

● We rely on internet infrastructure, bandwidth providers, data center providers, other third parties, and our own systems for providing services to our users, and any failure or interruption in the services provided by these third parties or our own systems could expose us to litigation, potentially require us to issue credits to our Clients, and negatively impact our relationships with Members, and Clients or Providers, adversely affecting our brand and our business;

● We employ third-party licensed software and software components for use in or with our Member guidance programs, and the inability to maintain these licenses or the presence of errors in the software we license could limit the functionality of these programs and result in increased costs or reduced service levels, which would adversely affect our business;

● Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand;

● We may not be able to adequately defend against piracy of intellectual property in foreign jurisdictions;

● We may be sued by third parties for alleged infringement of their proprietary rights or misappropriation of intellectual property;

● Our Member guidance programs utilize open-source software, and any failure to comply with the terms of one or more of these open-source licenses could adversely affect our business;

● Government regulation of healthcare creates risks and challenges with respect to our compliance efforts and our business strategies;

● Our business could be adversely impacted by changes in laws and regulations related to the Internet or changes in access to the Internet generally; and

● Increases in stop-loss insurance premiums or reduced availability of stop-loss coverage could adversely affect our clients' willingness to remain self-insured, reducing demand for our services.

***The consolidated financial statements for the year ended December 31, 2025, include an explanatory paragraph in our independent registered public accounting firm's audit report stating that there are conditions that raise substantial doubt about our ability to continue as a going concern.***

As of December 31, 2025, we had an accumulated deficit of $115.4 million and negative working capital of $15.4 million. As of December 31, 2025, we had $11.0 million of short-term debt, $17.2 million of long-term debt and $133 thousand of unrestricted cash on hand. For the year ended December 31, 2025, we recognized a net loss of $16.6 million and negative cash flows from operations of $7.5 million. Since inception, we have met our cash needs through proceeds from issuing convertible notes, warrants and sales of our common stock as well as receiving loans from various lenders.

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. The sources of this capital are anticipated to be from the sale of equity and/or debt securities. We may also 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. As we seek additional sources of financing, there can be no assurance that such financing or asset sales would be available to us on favorable terms or at all.

If we are unable to raise additional capital, 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 Standard Board's ("FASB") Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date of these consolidated financial statements. These 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. Our independent registered public accounting firm, UHY LLP ("UHY"), has included an explanatory paragraph in their audit report that accompanies our consolidated financial statements as of and for the year ended December 31, 2025, referring to the footnote to the consolidated financial statements stating that there are conditions that raise substantial doubt about our ability to continue as a going concern.

***In the past we have had a high annual customer attrition rate. The loss, termination, or renegotiation of any contract with our current Clients could have a material adverse effect on our financial conditions and operating results.***

Our largest two Clients together represented approximately 10.0% and 20.6% of our total gross revenue in 2025 and 2024, respectively. In the year ended December 31, 2025, our attrition rate was approximately 28%. We observed Client movement consistent with natural market dynamics, including shifts to fully funded programs, acquisitions, and the adoption of diverse integrated solutions. Although we have initiated remedial actions to reduce future attrition rates, there is no assurance that we will be able to reduce the attrition rates. If high Client attrition rate continues, our future revenue growth will suffer and our operating results will be negatively impacted, and we may encounter difficulty in recruiting new Clients due to erosion of customer confidence.

***We are party to several disputes and lawsuits, and we may be subject to liabilities arising from these and similar disputes in the future.***

In the normal course of the claims administration services business, we expect to be named from time to time as a defendant in lawsuits by Members contesting decisions by us or our Clients with respect to the settlement of their healthcare claims. Our Clients have brought claims for indemnification based on alleged actions on our part or on the part of our agents or employees in rendering services to Members. Any future lawsuits against us could be disruptive to our business. The defense of the lawsuits will be time-consuming and require attention of our senior management and financial resources, and the resolution of any such litigation may have a material adverse effect on our business, financial condition, and results of operations.

***We are subject to regulatory approvals in the various states we operate and the failure to obtain or renew such regulatory approvals or licenses may adversely affect our business.***

As part of our TPA business, we are required to obtain regulatory approvals and licenses in the various jurisdictions we operate.

The failure to obtain and maintain licenses or approvals, from relevant regulatory agencies may impact our ability to continue providing TPA services in those jurisdictions, which could adversely affect our revenues and results of operations.

***We operate in a highly competitive industry, and the size of our target market may not remain as large as we anticipate.***

The market for healthcare solutions is very competitive. We compete with nearly 1,000 health insurance entities, all of whom are vying for the same business - the management of healthcare benefits for self-insured employers. There is only one TPA at a time for each employer wanting to provide health benefits via a self-insured model, and an employer may remain with the same TPA for many years. This means that although the market is very large, not all of it is accessible by us in any one year.

We provide administrative services only to Clients who are self-insured employers who provide healthcare benefits to their employees. These self-insured employers can always elect to abandon self-insurance and simply buy medical insurance from one of the large players such as Aetna, Cigna, or United Healthcare. There can be no assurances that our Clients or prospective Clients will remain self-insured for any given period of time. If the number of employers which choose to self-insure declines, the size of our target market will shrink.

***We rely on healthcare benefits brokers and consultants as our principal sales channel, and some of these companies are large and have no allegiance to us. If we do not satisfy their employer clients, they may direct clients to other TPAs.***

Brokers are a key sales channel for us to reach the self-insured employer market. These brokers work with many insurance companies and TPAs. Brokers and consultants earn their fees by charging employers on a per employee per month ("PEPM") basis. As they often own the relationship with the employer, they may steer our Clients to another TPA if they believe doing so can maximize their own fees. In addition, we currently work with a single broker that accounts for a significant portion of our Clients. If we do not deliver competitive pricing, quality customer service, and high member satisfaction, these brokers can take the business they brought us to another TPA. Due to the brokers' power to influence employer groups, the brokers play an outsized role in our industry and may exert pressure on our pricing or influence the service levels we offer to our Clients, all of which can lead to lower price PEPM for us, or an increase in our customer service staffing and other operating costs. In addition, if the broker that accounts for a signification portion of our Clients steers our Clients to another TPA, it will have a significantly adversely affect our revenues and results of operations.

***Our pricing may change over time and our ability to price our services competitively will affect our results of operations and our ability to attract or retain Clients.***

Our current pricing model, like most in the industry, is based on a PEPM fee. In the future, we may change our pricing model to capture more market share, including but not limited to shared savings. In a shared savings pricing model, we share the risk with the Client. For example, if the Clients' claims cost is $10 million, we may estimate that we can bring that down to $9 million with our service offering. Instead of charging a fixed PEPM fee, we would earn revenue from a share of the cost savings in a shared savings model. In the example above, if the share were 30% and we managed to achieve a reduction of $1 million, we would earn $300 thousand as a shared savings fee.

Under the shared savings model, there will be no guarantee how much savings, if any, will actually be achieved, as some of our revenue may be at risk. If cost savings are not achieved as expected, our revenue and results of operations could suffer.

***Our sales cycles can be long and unpredictable, and our sales efforts require a considerable investment of time and expense. If our sales cycle lengthens or we invest substantial resources pursuing unsuccessful sales opportunities, our results of operations and growth would be harmed.***

Our sales process entails planning discussions with prospective Clients, analyzing their existing solutions and identifying how these prospective Clients can use and benefit from our services. The sales cycle for a new Client, from the time of prospect qualification to completion of the sale, may take as long as a year. We spend substantial time, effort, and money in our sales efforts without any assurance that our efforts will result in the sale of our services.

In addition, our sales cycle and timing of sales can vary substantially from Client to Client because of various factors, including the discretionary nature of prospective Clients' purchasing and budget decisions, the announcement or planned introduction of product and service offerings by us or our competitors, and the purchasing approval processes of prospective Clients. If our sales cycle lengthens or we invest substantial resources pursuing unsuccessful sales opportunities, our results of operations and growth would be harmed.

***Because we generally recognize revenues ratably over the term of the contract for our services, a significant downturn in our business may not be reflected immediately in our results of operations, which increases the difficulty of evaluating our future financial performance.***

We generally recognize revenue ratably over the term of a contract, which is typically one to three years. Consequently, a decline in new contracts in any quarter may not affect our results of operations in that quarter but could reduce our revenue in future quarters. Additionally, the timing of renewals or non-renewals of a contract during any quarter may only affect our financial performance in future quarters. For example, the non-renewal of a subscription agreement late in the quarter will have minimal impact on revenue for that quarter but will reduce our revenue in future quarters. Accordingly, the effect of significant declines in sales may not be reflected in our short-term results of operations, which would make these reported results less indicative of our future financial results. Conversely, a non-renewal occurring early in a quarter may have a significant negative impact on revenue for that quarter and we may not be able to offset a decline in revenue due to non-renewal with revenue from new contracts entered later in the same quarter.

***The success and growth of our business depends upon our ability to continuously innovate and develop new products and technologies.***

Our technology-driven solution relies on innovation to remain competitive. The process of developing new technologies and services is lengthy and complex. We develop our own AI, deep learning and, healthcare technologies to differentiate our solution and articial intelligence ("AI") modules. In addition, our dedication to incorporating technological advancements into our solution requires significant financial and personnel resources and talent. Our development efforts with respect to these initiatives could distract management from current operations and could divert capital and other resources from other growth initiatives important to our business. We operate in an industry experiencing rapid technological change and frequent platform introductions. We may not be able to make technological improvements as quickly as demanded by our Clients or offered by competitors, which could harm our ability to keep our existing Clients and attract new Clients. In addition, we may not be able to effectively implement new technology- driven products and services as projected.

***Failure by our Clients to obtain proper permissions and waivers may result in claims against us or may limit or prevent our use of data, which could harm our business.***

We require our Clients to provide necessary notices and to obtain necessary permissions and waivers for use and disclosure of the information that we receive, and we require contractual assurances from Clients that they have done so and will continue to do so. If they do not obtain necessary permissions and waivers, then the use and disclosure of information that we receive from Clients or on their behalf may be restricted or prohibited by state, federal or international privacy or data protection laws, or other related laws. This could impair our functions, processes, and databases that reflect, contain, or are based upon such data and may prevent the use of such data, including our ability to provide such data to third parties that are incorporated into our service offerings. Furthermore, this may cause us to breach obligations to third parties to whom we may provide such data, such as third-party service or technology providers that are incorporated into our service offerings. In addition, Clients failure to provide the necessary notices and to obtain necessary permissions and waivers could interfere with or prevent data sourcing, data analyses, or limit other data-driven activities that benefit us. Moreover, we may be subject to claims, civil and/or criminal liability or government or investigations for the use or disclosure of information by reason of lack of valid notice, permission, or waiver. These claims, liabilities or government investigations could subject us to unexpected costs and adversely affect our financial condition and results of operations.

***If our security measures are breached or unauthorized access to client data is otherwise obtained, our product and service offerings may be perceived as not being secure, Clients may reduce or stop the use of our services, and we may incur significant liabilities.***

Our business involves the storage and transmission of our Members' proprietary information, including personal or identifying information regarding Members and their protected health information ("PHI"). As a result, unauthorized access or security breaches to our system or platform as a result of third-party action, employee error, malfeasance, or otherwise could result in the loss or inappropriate use of information, litigation, indemnity obligations, damage to our reputation, and other liability including but not limited to government investigations. Because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until after they are launched against a target, we may not be able to anticipate these techniques or implement adequate preventative measures. Moreover, the detection, prevention, and remediation of known or unknown security vulnerabilities, including those arising from third-party hardware or software, may result in additional direct or indirect costs and management time.

Any or all of these issues could adversely affect our ability to attract new Clients, cause existing Clients to elect not to renew their contracts, result in reputational damage, or subject us to third-party lawsuits, regulatory fines, mandatory disclosures, or other action or liability, which could adversely affect our results of operations. Our general liability insurance may not be adequate to cover all potential claims to which we are exposed and may not be adequate to indemnify us for liability that may be imposed, or the losses associated with such events, and in any case, such insurance may not cover all of the specific costs, expenses, and losses we could incur in responding to and remediating a security breach. A security breach of another significant provider of cloud-based solutions may also negatively impact the demand for our product and service offerings.

***We may acquire other companies or technologies, which could divert our management's attention, result in dilution of our stockholders, and otherwise disrupt our operations and we may have difficulty integrating any such acquisitions successfully or realizing the anticipated benefits therefrom, any of which could have an adverse effect on our business, financial condition, and results of operations.***

We may seek to acquire or invest in businesses, applications, and services, or technologies that we believe could complement or expand our product and service offerings, enhance our AI capabilities, or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable acquisitions. We may have difficulty integrating other technologies, other team members, or selling our Member guidance program to acquired Clients and we may not be able to achieve the intended benefits from any such acquisition.

In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our results of operations based on this impairment assessment process, which could adversely affect our results of operations.

Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect the results of operations. In addition, if an acquired business fails to meet our expectations, our business, financial condition, and results of operations may suffer.

***Our existing Senior Secured Convertible Debentures issued to JGB Collateral LLC subjects us to financial covenants and other restrictions that could adversely affect our liquidity, operational flexibility and financial condition.***

On April 15, 2024, we entered into a securities purchase agreement with purchasers, including JGB Collateral LLC ("JGB"), pursuant to which we issued Senior Secured Convertible Debentures (the "Debentures") due on April 15, 2027 for a principal sum of $11.83 million. Thereafter, on December 30, 2024, the Debentures were amended in order to, among other things, sell Debentures up to an additional aggregate principal amount of up to $5.4 million, for a total purchase price of $5.0 million (the "Additional Investment"), of which $2.0 million was delivered to the Company at closing, and the remaining $3.0 million of is being held in escrow pending satisfaction of certain terms and conditions.

The Debentures are secured by our assets and contain covenants and other restrictions that may limit our ability to incur additional indebtedness, grant liens, make investments, or engage in certain strategic transactions. If we fail to comply with the covenants or other requirements under the Debentures, the lenders could declare an event of default and accelerate repayment of outstanding amounts, which could materially adversely affect our liquidity and financial condition. There can be no assurance that we would be able to obtain additional waivers, amendments or refinancing on acceptable terms, or at all.

Our ability to service our indebtedness and comply with the terms of the Debentures depends on our future operating performance and our ability to generate sufficient cash flow, which are subject to economic, competitive, regulatory and other factors beyond our control.

**Risks Related to Protecting Our Technology and Intellectual Property**

***We rely on Internet infrastructure, bandwidth providers, data center providers, other third parties, and our own systems for providing services to our users, and any failure or interruption in the services provided by these third parties or our own systems could expose us to litigation, potentially require us to issue credits to our Clients, and negatively impact our relationships with Members or Clients, adversely affecting our brand and our business.***

We serve our Clients primarily from third-party data-hosting facilities. These facilities are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures, and similar events. They are also subject to break-ins, sabotage, intentional acts of vandalism, and similar misconduct. Their systems and servers could also be subject to hacking, spamming, ransomware, computer viruses or other malicious software, denial of service attacks, service disruptions, including the inability to process certain transactions, phishing attacks and unauthorized access attempts, including third parties gaining access to Members' accounts using stolen or inferred credentials or other means, and may use such access to prevent use of Members' accounts. Despite precautions taken at these facilities, the occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice, or other unanticipated problems at two or more of the facilities could result in lengthy interruptions in our services. Even with our disaster recovery arrangements, our services could be interrupted.

Our ability to deliver our Internet- and telecommunications-based services is dependent on the development and maintenance of the infrastructure of the Internet and other telecommunications services by third parties. This includes maintenance of a reliable network backbone with the necessary speed, data capacity, and security for providing reliable Internet access and services and reliable mobile device, telephone, facsimile, and pager systems, all at a predictable and reasonable cost. We have experienced and expect that we will experience interruptions and delays in services and availability from time to time.

We rely on internal systems as well as third-party vendors, including data center, bandwidth, and telecommunications equipment or service providers, to provide our services. We do not maintain redundant systems or facilities for some of these services. In the event of a catastrophic event with respect to one or more of these systems or facilities, we may experience an extended period of system unavailability, which could negatively impact our relationship with users or clients. To operate without interruption, both we and our service providers must guard against:

● damage from fire, power loss, and other natural disasters;

● communications failures;

● security breaches, computer viruses, ransomware, and similar disruptive problems; and

● other potential interruptions.

Any disruption in the network access, telecommunications, or co-location services provided by these third-party providers or any failure of or by these third-party providers or our own systems to handle the current or higher volume of use could significantly harm our business. We exercise limited control over these third-party vendors, which increases our vulnerability to problems with the services they provide.

Any errors, failures, interruptions, or delays experienced in connection with these third-party technologies and information services, or our own systems could negatively impact our relationships with users and clients, adversely affect our brands and business, and expose us to third-party liabilities. The insurance coverage under our policies may not be adequate to compensate us for all losses that may occur. In addition, we cannot provide assurance that we will continue to be able to obtain adequate insurance coverage at an acceptable cost.

The reliability and performance of the Internet may be harmed by increased usage or by denial-of-service attacks. The Internet has experienced a variety of outages and other delays because of damage to portions of its infrastructure, and it could face outages and delays in the future. These outages and delays could reduce the level of Internet usage as well as the availability of the Internet to us for delivery of our Internet-based services.

We typically provide service level commitments under our client contracts. If we fail to meet these contractual commitments, we could be obligated to provide credits or refunds for prepaid amounts related to unused subscription services or face contract terminations, which could adversely affect the results of operations.

Finally, recent changes in law could impact the cost and availability of necessary Internet infrastructure. Increased costs and/or decreased availability would negatively affect the results of operations.

***We employ third-party licensed software and software components for use in or with our member guidance program, and the inability to maintain these licenses or the presence of errors in the software we license could limit the functionality of our member guidance program and result in increased costs or reduced service levels, which would adversely affect our business.***

Our software applications might incorporate or interact with certain third-party software and software components (other than open-source software), such as claims processing software, obtained under licenses from other companies. We pay these third parties a license fee or royalty payment. We anticipate that we will continue to use such third-party software in the future.

Although we believe that there are commercially reasonable alternatives to the third-party software, we currently utilize, this may not always be the case, or it may be difficult or costly to replace our existing systems. Furthermore, these third parties may increase the price for licensing their software, which could negatively impact the results of operations. Our use of additional or alternative third-party software could require clients to enter into license agreements with third parties. In addition, if the third-party software we utilize has errors or otherwise malfunctions, or if the third-party terminates its agreement with us, our business may suffer.

***Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.***

Our success and ability to compete depend largely upon our intellectual property. To date, we have three patent applications pending in the U.S. We take reasonable steps to protect our intellectual property, especially when working with third parties. However, the steps we take to protect our intellectual property rights may be inadequate. For example, other parties, including our competitors, may independently develop similar technology, duplicate our services, or design around our intellectual property and, in such cases, we may not be able to assert our intellectual property rights against such parties. Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential information, and we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights.

We make business decisions about when to seek patent protection for a particular technology and when to rely upon trade secret protection, and the approach we select may ultimately prove to be inadequate. Even in cases where we seek patent protection, there is no assurance that the resulting patents will effectively protect every significant feature of our model, technology, or proprietary information, or provide us with any competitive advantages. Moreover, we cannot guarantee that any of our pending patent applications will issue or be approved. The United States Patent and Trademark Office and various foreign governmental patent agencies also require compliance with several procedural, documentary, fee payment, and other similar provisions during the patent application process and after a patent has issued. There are situations in which noncompliance can result in abandonment or lapse of the patent, or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If this occurs, our competitors might be able to enter the market, which would have a material adverse effect on our business. Effective trademark, copyright, patent, and trade secret protection may not be available in every country in which we conduct business. Further, intellectual property law, including statutory and case law, particularly in the United States, is constantly developing, and any changes in the law could make it harder for us to enforce our rights.

To protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming, and distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. An adverse determination of any litigation proceedings could put our intellectual property at risk of being invalidated or interpreted narrowly and could put our related pending patent applications at risk of not being issued. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential or sensitive information could be compromised by disclosure in the event of litigation. In addition, during litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Negative publicity related to a decision by us to initiate such enforcement actions against a client or former client, regardless of its accuracy, may adversely impact our other client relationships or prospective client relationships, harm our brand and business, and could cause the market price of our common stock to decline. Our failure to secure, protect, and enforce our intellectual property rights could adversely affect our brand and our business.

***We may not be able to adequately defend against piracy of intellectual property in foreign jurisdictions.***

Considerable research in AI is being performed in countries outside of the United States, and several potential competitors are in these countries. The laws protecting intellectual property in some of those countries may not provide adequate protection to prevent our competitors from misappropriating our intellectual property. Several of these potential competitors may be further along in the process of product development and operate large research and development programs. As a result, our competitors may develop more competitive or affordable products, or achieve earlier patent protection or product commercialization than we are able to achieve. Competitive products may render any products or product candidates that we develop obsolete.

***Our Member guidance program utilizes open-source software, and any failure to comply with the terms of one or more of these open-source licenses could adversely affect our business.***

We use software modules licensed to us by third-party authors under "open-source" licenses in our Member guidance program. Some open-source licenses contain affirmative obligations or restrictive terms that could adversely impact our business, such as restrictions on commercialization or obligations to make available modified or derivative works of certain open-source code. If we were to combine our proprietary software with certain open-source software subject to these licenses in a certain manner, we could, under certain open-source licenses, be required to release or otherwise make available the source code to us proprietary software to the public. This would allow our competitors to create similar products with lower development effort and time and ultimately could result in a loss of sales for us.

Although we employ practices designed to manage our compliance with open-source licenses and protect our proprietary source code, we may inadvertently use open-source software in a manner we do not intend and that could expose us to claims for breach of contract and intellectual property infringement. If we are held to have breached the terms of an open-source software license, we could be required to, among other things, seek licenses from third parties to continue offering our products on terms that are not economically feasible, pay damages to third parties, to re-engineer our products, to discontinue the sale of our products if re-engineering cannot be accomplished on a timely basis, or to make generally available, in source code form, a portion of our proprietary code, any of which could adversely affect our business, results of operations, and financial condition. The terms of many open-source licenses have not been interpreted by U.S. courts, and, as a result, there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our member guidance program.

**Risks Related to Conducting our Business Under a Complex and Evolving Set of Governmental Regulations**

***Government regulation of the healthcare industry creates risks and challenges with respect to our compliance efforts and our business strategies.***

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could create unexpected liabilities for us, cause us to incur additional costs, and restrict our operations. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

Many healthcare laws are complex, and their application to specific services and relationships may not be clear. In particular, many existing healthcare laws and regulations, when enacted, did not anticipate the data analytics and improvement services that we provide, and these laws and regulations may be applied to our product and service offerings in ways that we do not anticipate, particularly as we develop and release new and more sophisticated solutions. Certain changes to laws impacting our industry, or perceived intentions to do so, could affect our business and the results of operations. Some of the risks we face from healthcare regulation are described below:

*False Claims Laws*. There are numerous federal and state laws that prohibit submission of false information, or the failure to disclose information, in connection with submission (or causing the submission) and payment of claims for reimbursement. For example, the federal civil False Claims Act prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the U.S. federal government, claims for payment or approval that are false or fraudulent, or knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim. In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act. If our advisory services to clients are associated with action by clients that is determined or alleged to be in violation of these laws and regulations, it is possible that an enforcement agency would also try to hold us accountable. Any determination by a court or regulatory agency that we have violated these laws could subject us to significant civil or criminal penalties, invalidate all or portions of some of our client contracts, require us to change or terminate some portions of our business, require us to refund portions of us services fees, subject us to additional reporting requirements and oversight under a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, cause us to be disqualified from serving clients doing business with government payers, and have an adverse effect on our business. Our Clients' failure to comply with these laws and regulations in connection with our services could result in substantial liability (including, but not limited to, criminal liability), adversely affect demand for our services, and force us to expend significant capital, research and development and other resources to address the failure.

*Health Data Privacy Laws*. There are numerous federal and state laws related to health information privacy. In particular, the federal Health Insurance Portability and Accountability Act of 1996, as amended by the HITECH and their implementing regulations, which we collectively refer to as "HIPAA," include privacy standards that protect individual privacy by limiting the uses and disclosures of PHI and implementing data security standards that require covered entities to implement administrative, physical, and technological safeguards to ensure the confidentiality, integrity, availability, and security of PHI in electronic form. In addition to enforcement actions initiated by regulatory bodies under HIPAA, violations or breaches caused by us or our contractors may result in related claims against us by clients, which may be predicated upon underlying contractual responsibilities, and by Members, which may be predicated upon tort law or state privacy claims, as HIPAA does not contain a private right of action. HIPAA also specifies formats that must be used in certain electronic transactions, such as admission and discharge messages and limits the fees that may be charged for certain transactions, including claim payment transactions. By processing and maintaining PHI on behalf of our covered entity clients, we are a HIPAA business associate and mandated by HIPAA to enter into written agreements with our covered entity clients - known as Business Associate Agreements ("BAAs") - that require us to safeguard PHI. BAAs typically include:

● a description of our permitted uses of PHI;

● a covenant not to disclose that information except as permitted under the BAAs and to require that our subcontractors, if any, are subject to the substantially similar restrictions;

● assurances that reasonable and appropriate administrative, physical, and technical safeguards are in place to prevent misuse of PHI;

● an obligation to report to our client any use or disclosure of PHI other than as provided for in the BAAs;

● a prohibition against our use or disclosure of PHI if a similar use or disclosure by our client would violate the HIPAA standards;

● the ability of our clients to terminate the underlying support agreement if we breach a material term of the BAAs and are unable to cure the breach;

● the requirement to return or destroy all PHI at the end of our services agreement; and

● access by the Department of Health and Human Services ("HHS") to our internal practices, books, and records to validate that we are safeguarding PHI.

In addition, we are also required to maintain BAAs, which contain similar provisions, with our subcontractors that access or otherwise process PHI on our behalf.

We will also require large sets of de-identified information to enable us to continue to develop AI algorithms that enhance our product and service offerings. If we are unable to secure these rights in Client BAAs or because of any future changes to HIPAA or other applicable laws, we may face limitations on the use of PHI and our ability to use de-identified information that could negatively affect the scope of our product and service offering as well as impair our ability to provide upgrades and enhancements to our services.

We outsource important aspects of the storage and transmission of client and member information, and thus rely on third parties to manage functions that have material cyber-security risks. We attempt to address these risks by requiring outsourcing subcontractors who handle client information to sign BAAs contractually requiring those subcontractors to adequately safeguard PHI in a similar manner that applies to us and in some cases by requiring such outsourcing subcontractors to undergo third-party security examinations as well as to protect the confidentiality of other sensitive client information. In addition, we periodically hire third-party security experts to assess and test our security measures. However, we cannot be assured that these contractual measures and other safeguards will adequately protect us from the risks associated with the storage and transmission of client proprietary information and PHI.

CMS takes the position that an electronic fund transfer ("EFT") payment to a health care provider is a "standard transaction" under HIPAA. As a "standard transaction", these provider payments may be subject to certain limitations on the fees that may be charged for an EFT payment transaction with a health care provider. We outsource important aspects of our EFT payments to health care providers and thus rely on third parties to manage the EFT transactions and assure that the fees charged comply with HIPAA. The application of HIPAA to EFT payments is complex, and their application to specific value-added services for health care providers may not be clear. Our failure to accurately anticipate the application of HIPAA's fee restrictions on certain standard transactions could create significant liability for us, resulting in negative publicity, and material adverse effect on our business and operating results.

In addition to the HIPAA privacy and security standards, most states have enacted patient confidentiality laws that protect against the disclosure of confidential medical and other personally identifiable information ("PII") and many states have adopted or are considering new privacy laws, including legislation that would mandate new privacy safeguards, security standards, and data security breach notification requirements. Such state laws, if more stringent than HIPAA requirements, are not preempted by the federal requirements, and we are required to comply with them. In addition, the Federal Trade Commission, and analogous state agencies, may apply consumer protection laws to the context of data privacy. For example, the Federal Trade Commission has sanctioned companies for unfair trade practices when they failed to implement adequate security protection measures for sensitive personal information, or when they provided inadequate disclosures to consumers about the expansive scope of data mined from consumer activity.

Failure by us to comply with any of the federal and state standards regarding patient privacy and/or privacy more generally may subject us to penalties, including significant civil monetary penalties and, in some circumstances, criminal penalties. In addition, such failure may damage our reputation and adversely affect our ability to retain clients and attract new clients.

Even an unsuccessful challenge by regulatory authorities of our activities could result in adverse publicity and could require a costly response from us.

● *Anti-Kickback and Anti-Bribery Laws*. There are federal and state laws that prohibit payment for patient referrals, patient brokering, remuneration of Members, or billing based on referrals between individuals or entities that have various financial, ownership, or other business relationships with healthcare providers. In particular, the federal Anti-Kickback law prohibits offering, paying, soliciting, or receiving anything of value, directly or indirectly, for the referral of members covered by Medicare, Medicaid, and other federal healthcare programs or the leasing, purchasing, ordering, or arranging for or recommending the lease, purchase, or order of any item, good, facility, or service covered by these programs. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. Some enforcement activities focus on below or above market payments for federally reimbursable health care items or services as evidence of the intent to provide a kickback. Many states also have similar anti-kickback laws, some of which are applicable to all patients and that are not necessarily limited to items or services for which payment is made by a federal healthcare program. In addition, the federal physician self-referral prohibition - the Stark Law - is very complex in its application and prohibits physicians (and certain other healthcare professionals) from making a referral for a designated health service to a provider in which the referring healthcare professional (or spouse or any immediate family member) has a financial or ownership interest, unless an enumerated exception applies. The Stark Law also prohibits the billing for services rendered resulting from an impermissible referral. Many states also have similar anti-referral laws that are not necessarily limited to items or services for which payment is made by a federal healthcare program and may include patient disclosure requirements. Moreover, both federal and state laws prohibit bribery and similar behavior. Any determination by a state or federal regulatory agency that we or any of our clients, vendors, or partners violate or have violated any of these laws could subject us to significant civil or criminal penalties, require us to change or terminate some portions of our business, require us to refund portions of our services fees, subject us to additional reporting requirements and oversight under a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, cause us to be disqualified from serving clients doing business with government payers, and have an adverse effect on our business. Even an unsuccessful challenge by regulatory authorities of our activities could result in adverse publicity and could require a costly response from us.

● *Corporate Practice of Medicine Laws and Fee-Splitting Laws*. Many states have enacted laws prohibiting physicians from practicing medicine in partnership with non-physicians, such as business corporations. In addition, many states prohibit certain licensed professionals, such as physicians, from splitting professional fees with non-licensees. As we do not engage in the practice of medicine, we do not contract with providers to render medical care, and we do not split fees with any medical professionals, we do not believe these laws restrict our business. Our activities involve only monitoring and analyzing historical claims data, including our Members' interactions with licensed healthcare professionals, and recommending the most suitable healthcare providers and/or sources of treatment. We do not provide medical prognosis or healthcare. In accordance with various states' corporate practice of medicine laws and states' laws and regulations which define the practice of medicine, our call center staff are prohibited from providing Members with any evaluation of any medical condition, diagnosis, prescription, care and/or treatment. Rather, our call center staff can only provide Members with general and publicly available information that is non-specific to the Members' medical conditions and statistical information about the prevalence of medical conditions within certain populations or under certain circumstances. Our call center staff do not discuss Members' individual medical conditions and are prohibited from asking Members for any additional PHI as such term is defined under HIPAA. Our call center staff have been trained and instructed to always inform Members that they are not licensed medical professionals, are not providing medical advice, and that Members should reach out to their medical provider for any medical advice.

● *Medical professional regulation*. The practice of most healthcare professions requires licensing under applicable state law. In addition, the laws in some states prohibit business entities from practicing medicine. In the future, we may contract with physicians, nurses, and nurse practitioners, who will assist our clients with the clients' care coordination, care management, population health management, and patient safety activities that do not constitute the practice of medicine. We do not intend to provide medical care, treatment, or advice. However, any determination that we are acting in the capacity of a healthcare provider and acted improperly as a healthcare provider may result in additional compliance requirements, expense, and liability to us, and require us to change or terminate some portions of our business, including the use of licensed professionals to conduct the foregoing activities.

● *Medical Device Laws*. The U.S. Food and Drug Administration ("FDA") may regulate medical or health-related software, including machine learning functionality and predictive algorithms, if such software falls within the definition of a "device" under the federal Food, Drug, and Cosmetic Act ("FDCA"). However, the FDA exercises enforcement discretion for certain low-risk software, as described in its guidance documents for Mobile Medical Applications, General Wellness: Policy for Low-Risk Devices, and Medical Device Data Systems, Medical Image Storage Devices, and Medical Image Communications Devices. In addition, in December of 2016, President Obama signed into law the 21st Century Cures Act, which included exemptions for certain medical-related software, including software used for administrative support functions at a healthcare facility, software intended for maintaining or encouraging a healthy lifestyle, electronic health record ("EHR software"), software for transferring, storing, or displaying medical device data or in vitro diagnostic data, and certain clinical decision support software. The FDA has also issued draft guidance documents to clarify how it intends to interpret and apply the new exemptions under the 21st Century Cures Act. Although we believe that our software products are currently not subject to active FDA regulation, we continue to follow the FDA's developments in this area. There is a risk that the FDA could disagree with our determination or that the FDA could develop new final guidance documents that would subject our Product to active FDA oversight. If the FDA determines that any of our current or future analytics applications are regulated as medical devices, we would become subject to various requirements under the FDCA and the FDA's implementing regulations. Depending on the functionality and FDA classification of our analytics applications, we may be required to:

● register and list our AI products with the FDA;

● notify the FDA and demonstrate substantial equivalence to other products on the market before marketing our analytics applications;

● submit a de novo request to the FDA to down-classify our analytics applications prior to marketing; or

● obtain FDA approval by demonstrating safety and effectiveness before marketing our analytics applications.

The FDA can impose extensive requirements governing pre- and post-market conditions, such as service investigation and others relating to approval, labeling, and manufacturing. In addition, the FDA can impose extensive requirements governing software development controls and quality assurance processes.

Many states have licensing and other regulatory requirements requiring licensing of businesses which provide medical review services. These laws typically establish minimum standards for qualifications of personnel, confidentiality, internal quality control, and dispute resolution procedures. To the extent we are governed by these regulations, these regulatory programs may result in increased costs of operation for us, which may have an adverse impact upon our ability to compete with other available alternatives for healthcare cost control. In addition, new laws regulating the operation of managed care provider networks have been adopted by several states. These laws may apply to managed care provider networks we have contracts with. To the extent we are governed by these regulations, we may be subject to additional licensing requirements, financial and operational oversight and procedural standards for beneficiaries and providers.

These laws and regulations may change rapidly, and it is frequently unclear how they apply to our business. Any failure of our products or services to comply with these laws and regulations could result in substantial civil or criminal liability and could, among other things, adversely affect demand for our services, force us to expend significant capital, research and development, and other resources to address the failure, invalidate all or portions of some of our contracts with our clients, require us to change or terminate some portions of our business, require us to refund portions of our revenue, cause us to be disqualified from serving clients doing business with government payers, and give our clients the right to terminate our contracts with them, any one of which could have an adverse effect on our business. Additionally, the introduction of new services may require us to comply with additional, yet undetermined, laws and regulations.

The security measures that we and our third-party vendors and subcontractors have in place to ensure compliance with privacy and data protection laws may not protect our facilities and systems from security breaches, acts of vandalism or theft, computer viruses, misplaced or lost data, programming and human errors, or other similar events. Under the HITECH Act, as a business associate, we may also be liable for privacy and security breaches and failures of our subcontractors, in addition to those that may be caused by us. Even though we provide for appropriate protections through our agreements with our subcontractors, we still have limited control over their actions and practices. A breach of privacy or security of individually identifiable health information by a subcontractor may result in an enforcement action, including criminal and civil liability, against us. We are not able to predict the extent of the impact such incidents may have on our business.

Our failure to comply may result in criminal and civil liability because the potential for enforcement action against business associates is now greater. Enforcement actions against us could be costly and could interrupt regular operations, which may adversely affect our business. While we have not received any notices of violation of the applicable privacy and data protection laws and believe we are in compliance with such laws, there can be no assurances that we will not receive such notices in the future or suffer a breach.

Any failure or perceived failure by us to comply with federal or state laws or regulations, industry standards, or other legal obligations, or any actual or suspected security incident, whether or not resulting in unauthorized access to, or acquisition, release, or transfer of personally identifiable information or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines, and penalties or adverse publicity and could cause our clients to lose trust in us, which could have an adverse effect on our reputation and business. We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new products and features could be limited. Any of these developments could harm our business, financial condition, and results of operations. Privacy and data security concerns, whether valid or not valid, may inhibit market adoption of our platform.

***The healthcare regulatory and political framework is uncertain and evolving.***

The healthcare regulatory landscape is subject to rapid and significant changes that could materially impact our financial condition. Key risks include the potential expiration of enhanced premium tax credits under the Inflation Reduction Act after 2025, executive actions regarding Medicaid work requirements that may disrupt coverage markets, and ongoing Congressional budget reconciliation talks that could fundamentally alter the regulation of self-insured plans.

***Our business could be adversely impacted by changes in laws and regulations related to the Internet or changes in access to the Internet generally.***

The future success of our business depends upon the continued use of the Internet as a primary medium for communication, business applications, and commerce. Federal or state government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the Internet as a commercial medium. Legislators, regulators, government bodies or agencies may also make legal or regulatory changes or interpret or apply existing laws or regulations that relate to the use of the Internet in new and materially different ways. Changes in these laws, regulations or interpretations could require us to modify our platform to comply with these changes, to incur substantial additional costs or divert resources that could otherwise be deployed to grow our business, or expose us to unanticipated civil or criminal liability, among other things.

In addition, government agencies and private organizations have imposed, and may in the future impose, additional taxes, fees, or other charges for accessing the Internet or commerce conducted via the Internet. Internet access is frequently provided by companies that have significant market power and could take actions that degrade, disrupt, or increase the cost of our clients' use of our platform, which could negatively impact our business.

**Risks Related to Operating as a Public Emerging Growth Company**

***The requirements of being a public company may strain our resources, divert management's attention, and affect our ability to attract and retain executive management and qualified board members.***

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources. For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management's attention may be diverted from other business concerns, which could harm our business, results of operations, and financial condition.

As a result of the disclosure of information in filings required of a public company, our business and financial condition is more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, results of operations, and financial condition.

**Risks Related to Our Common Stock**

***Our issuance of additional capital stock in connection with financing, acquisitions, investments, the 2021 Plan, the 2024 Plan or otherwise will dilute all other stockholders.***

We expect that we will need to raise additional capital through equity and possibly debt financing to fund our ongoing operations and possible acquisitions. If we raise capital through equity financing in the future, that will result in dilution of our stockholders. If we raise debt in the future, this debt may be perceived as increasing the risk associated with investing in our common stock which may have a negative impact on the price of the stock. We also expect to grant substantial equity awards to employees, directors, and consultants under our 2021 Global Stock Incentive Plan (the "2021 Plan") and our 2024 Global Stock Incentive Plan (the "2024 Plan") and we expect to ask our shareholders to approve a substantial increase to this incentive plan which will enable our board of directors to grant additional equity grants in the future, all of which will result in dilution or potential dilution of all the stockholders. As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional equity may cause stockholders to experience significant dilution of their ownership interests and the per-share value of our common stock to decline.

***We do not intend to pay dividends on our common stock and, consequently, the ability of common stockholders to achieve a return on investment will depend on the appreciation, if any, in the price of our common stock.***

You should not rely on an investment in our common stock to provide dividend income. We do not plan to declare or pay any dividends on our capital stock in the foreseeable future. Instead, we intend to retain any earnings to finance the operation and expansion of our business. As a result, common stockholders may only receive a return on their investment if the market price of our common stock increases.

***The market price of our common stock may be volatile and may decline regardless of our operating performance, and you may lose all or part of your investments.***

The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

● overall performance of the equity markets and/or publicly listed health services companies;

● actual or anticipated fluctuations in our net revenue or other operating metrics;

● changes in the financial projections we provide to the public or our failure to meet these projections;

● failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors;

● the economy as a whole and market conditions in our industry;

● rumors and market speculation involving us or other companies in our industry;

● announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

● new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

● lawsuits threatened or filed against us;

● recruitment or departure of key personnel;

● other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and

● the expiration of contractual lock-up or market standoff agreements.

In addition, extreme price and volume fluctuations in the stock markets have affected and continue to affect many health services companies' stock prices. Often, stock prices have fluctuated in ways unrelated or disproportionate to the companies' operating performance. In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because technology and healthcare technology companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management's attention and resources, which could harm our business.

***Our bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit stockholders' ability to obtain a favorable judicial forum for disputes with us.***

Our bylaws provide, to the fullest extent permitted by law, that a state or federal court located within the State of Delaware will be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:

● any derivative action or proceeding brought on our behalf;

● any action asserting a breach of fiduciary duty;

● any action asserting a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation, or our bylaws; or

● any action asserting a claim against us that is governed by the internal affairs doctrine.

This exclusive forum provision will not apply to any causes of action arising under the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Nothing in our bylaws precludes stockholders that assert claims under the Securities Act or the Exchange Act from bringing such claims in state or federal court, subject to applicable law. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision which will be contained in us bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

***Our Amended and Restated Certificate of Incorporation provides that derivative actions brought on our behalf, actions against our directors, officers, employees, or agent for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and the stockholders shall be deemed to have consented to this choice of forum provision, which may have the effect of discouraging lawsuits against our directors, officers, other employees or agents.***

The choice-of-forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, and may result in increased costs to a stockholder who has to bring a claim in a forum that is not convenient to the stockholder, which may discourage such lawsuits. Although under Section 115 of the DGCL, exclusive forum provisions may be included in a company's certificate of incorporation, the enforceability of similar forum provisions in other companies' certificates or incorporation or bylaws has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. If a court were to find the exclusive forum provision of our Certificate of Incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and Board.

***Effective May 29, 2024, our common stock was suspended from trading on Nasdaq and our common stock commenced trading on the OTCQX.***

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

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 stock from Nasdaq and have the common stock quoted on the OTCQX. Our common stock was suspended from trading on Nasdaq effective at the opening of trading on Wednesday, May 29, 2024, and shares of our common stock commenced trading on the OTCQX immediately thereafter. On June 3, 2024, the Nasdaq hearings panel filed a Form 25 with the Securities and Exchange Commission which formally delisted our common stock from the Nasdaq. We have since transferred our common stock to the OTCQX to ensure that a trading market may continue to exist for our securities. There is no guarantee, however, that any broker will continue to make a market in our common stock or that trading thereof will continue on the OTCQX or elsewhere.

***FINRA sales practice requirements may limit a stockholder's ability to buy and sell our stock.***

The Financial Industry Regulatory Authority ("FINRA") has adopted rules that relate to the application of the SEC's penny stock rules in trading our securities and require that a broker/dealer have reasonable grounds for believing that the investment is suitable for that investor prior to recommending the investment. Prior to recommending speculative, low-priced securities to their non-institutional investors, broker/dealers must make reasonable efforts to obtain information about the investor's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative, low-priced securities will not be suitable for at least some investors. The FINRA requirements make it more difficult for broker/dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in our common stock, reducing a shareholder's ability to resell shares of our common stock.

***Our common stock is currently deemed to be "penny stock", which makes it more difficult for investors to sell their shares.***

Our common stock is currently subject to the "penny stock" rules adopted under section 15(g) of the Exchange Act. The penny stock rules apply to companies whose common stock is not listed on the NASDAQ Stock Market or other national securities exchange and trades at less than $5.00 per share. These rules require, among other things, that brokers who trade penny stock to persons other than "established customers" complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If the Company remains subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

**ITEM 1B. UNRESOLVED STAFF COMMENTS.**

Not Applicable.

**ITEM 1C. CYBERSECURITY.**

Our board of directors recognizes the critical importance of maintaining the trust and confidence of our customers, clients, business partners and employees. The Audit Committee along with our board of directors is actively involved in oversight of our risk management program, and cybersecurity represents an important component of our overall approach to risk management. Our cybersecurity policies, standards, processes and practices are fully integrated into our risk management program and are based on recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and other applicable industry standards. In general, we seek to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security and availability of the information that we collect and store by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.

**Risk Management and Strategy**

As part of the critical elements of our overall risk management approach, our cybersecurity program is focused on the following key areas:

● Governance: As discussed in more detail under the heading "Governance," The board of directors oversight of cybersecurity risk management is supported by the Audit Committee of the board of directors (the "Audit Committee"), which interacts with our Enterprise Risk Management function, our Chief Information Security Officer ("CISO"), other members of management and relevant management committees and councils, including management's Cybersecurity Council.

● Collaborative Approach: We have implemented a comprehensive, cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, and controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.

● Technical Safeguards: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.

● Incident Response and Recovery Planning: We have established and maintain comprehensive incident response and recovery plans that fully address our response to a cybersecurity incident, and such plans are tested and evaluated on a regular basis.

● Third-Party Risk Management: We maintain a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.

● Education and Awareness: We provide regular, mandatory training for personnel regarding cybersecurity threats as a means to equip our personnel with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices.

● The Company maintains cyber liability insurance coverage.

We engage in the periodic assessment and testing of our policies, standards, processes and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning. We regularly engage third parties to perform assessments on our cybersecurity measures, including information security maturity assessments, audits and independent reviews of our information security control environment and operating effectiveness. The results of such assessments, audits and reviews are reported to the Audit Committee and the board of directors, and we adjust our cybersecurity policies, standards, processes and practices as necessary based on the information provided by these assessments, audits and reviews.

**Governance**

The board of directors, in coordination with the Audit Committee, oversees our risk management process, including the management of risks arising from cybersecurity threats. The board of directors and the Audit Committee each receive regular presentations and reports on cybersecurity risks, which address a wide range of topics including recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations arising with respect to our peers and third parties. The board of directors and the Audit Committee also receive prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed. On an annual basis, the board of directors and the Audit Committee discuss our approach to cybersecurity risk management with our CISO.

The CISO works collaboratively across the Company to implement a program designed to protect our information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with our incident response and recovery plans. To facilitate the success of our cybersecurity risk management program, multidisciplinary teams throughout the Company are deployed to address cybersecurity threats and to respond to cybersecurity incidents. Through ongoing communications with these teams, the CISO monitors the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and report such threats and incidents to the Audit Committee when appropriate.

Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, including our business strategy, results of operations or financial condition.

**ITEM 2. PROPERTIES.**

Our principal executive and administrative offices are located at 615 Channelside Drive, Suite 207, Tampa, Florida, and consist of leased office space, which will expire in June 2026. Our base rent is approximately $3 thousand per month, subject to annual adjustments.

We lease an additional 10,725 square feet of corporate office space in Chicago, Illinois, a lease we assumed with the acquisition of Maestro Health. Rent is approximately $26 thousand per month. The current lease will expire in September 2028.

For the fiscal year ended December 31, 2025, we recognized a net lease expense in the amount of $387 thousand.

We believe that the current office space is adequate to meet our needs.

**ITEM 3. LEGAL PROCEEDINGS.**

We are subject to litigation arising in the ordinary course of our business. Although the results of litigation and claims are inherently unpredictable and uncertain, we are not currently a party to any legal proceedings the outcome of which, if determined adversely to us, are believed to, either individually or taken together, material to our business, results of operations, cash flows or financial condition. Certain legal proceedings to which we are currently a party are detailed below.

***CMS/Zelis Litigation***

By letter dated September 3, 2020, the CMS notified Marpai Administrators of a complaint alleging that Marpai Administrators uses a clearinghouse ("Zelis") that charges a percentage-based fee for Electronic Funds Transfer ("EFT") transactions, which potentially violates HIPAA, 45 CFR 162.923(a).

CMS has indicated that the issue of providers being charged to conduct standard transactions is an industry-wide concern, and that CMS is investigating the issue. During the investigation, and until a decision is made, CMS advises that the complaint will remain open. It is in a review status and will not escalate or require additional information from Marpai Administrators at this time. CMS has advised it will contact Marpai Administrators if there are any questions or changes. There are no outstanding deadlines or next steps currently.

***Messer Financial Group Inc.***

On January 30, 2025, the Company was served with a civil complaint by Messer Financial Group Inc., 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 $5 million. On February 5, 2026, the Company agreed to a settlement agreement with Messer Financial Group Inc. pursuant to the settlement agreement, the Company is required to pay (i) a one-time lump sum of $10,000 cash consideration, (ii) as consideration for Messer's attorney's fees issue restricted shares of our common stock ("RSU") in an amount valued at $25,000; and, 400,000 RSUs in installments issuable as follows: (a) 100,000 restricted shares of common stock within thirty (30) days of the settlement agreement; (b) 100,000 restricted shares of common stock by July I, 2026; (c) 100,000 restricted shares of common stock by January 1, 2027; and (d) 100,000 restricted shares of common stock by July 1, 2027 (all such RSUs, the "Stock Consideration"). On January 3, 2028, if the total value of the Stock Consideration is less than $1,000,000, the Company will (A) pay Messer an additional $250,000 in cash, or (B) issue Messer $250,000 in restricted shares of common stock, valued in the same manner as the total value of the Stock Consideration.

Within ten (10) days of Messer receiving the cash consideration, Messer shall voluntarily dismiss the lawsuit in its entirety as to all defendants with prejudice; provided that the Company will cooperate with Messer in securing the dismissal of the lawsuit as appropriate. M

**ITEM 4. MINE SAFETY DISCLOSURES.**

Not applicable.

**PART II**

**ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.**

Our shares trade on the OTCQX Market under the symbol MRAI.

As of March 25, 2026, there were 94 holders of record, and 25,292,667 shares of our common stock were issued and outstanding. Equiniti Trust Company, LLC is the registrar and transfer agent for our common stock. Their address is 55 Challenger Road, 2nd Floor, Ridgefield, NJ 07660, telephone: (718) 921-8124, (800) 937-5449.

**ITEM 6. [RESERVED]**

**ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**

***Representation in the Financial Statements of Marpai, Inc.***

The consolidated financial statements of Marpai, Inc. and the discussion of the results of our operations in this Annual Report, reflect the results of the operations of Marpai Health (and our subsidiary EYME), Marpai Administrators, and Maestro Health for all periods presented, and the results of Marpai Captive since its inception.

**Results of Operations - Comparison of the Years ended December 31, 2025 and 2024 (in thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Years Ended December 31,** | **Years Ended December 31,** | |
|  | **2025** | **2024** | **Change** |<br>**%** |
| **Revenue** |  |  |  |  |
| Revenue | $18099 | $28173 | $(10074) | (36)% |
| **Costs and Expenses** |  |  |  |  |
| Cost of revenue (exclusive of depreciation and amortization shown separately |  |  |  |  |
| &nbsp;&nbsp;&nbsp;below) | 13319 | 19066 | (5747) | (30)% |
| General and administrative | 11139 | 12832 | (1693) | (13)% |
| Sales and marketing | 1091 | 1766 | (675) | (38)% |
| Information technology | 5116 | 4697 | 419 | 9% |
| Research and development | 7 | 29 | (22) | (76)% |
| Depreciation and amortization | 381 | 2256 | (1875) | (83)% |
| Impairment of goodwill and intangible assets |  | 7588 | (7588) | (100)% |
| Facilities | 580 | 1305 | (725) | (56)% |
| Loss on disposal of assets | 19 | 648 | (629) | (97)% |
| Loss on sale of business unit |  | 73 | (73) | (100)% |
| **Total Costs and Expenses** | **31652** | **50260** | (18608) | (37)% |
| **Operating Loss** | **(13553)** | **(22087)** | 8534 | (39)% |
| **Other income and (expenses)** |  |  |  |  |
| Other income, net | 227 | 396 | (169) | (43)% |
| Interest expense | (3234) | (2709) | (525) | 19% |
| Loss on debt extinguishment |  | (1877) | 1877 | 100% |
| Gain on forgiveness of other liability |  | 3000 | (3000) | (100)% |
| Foreign exchange loss |  | (1) | 1 | 100% |
| **Total other expense** | **(3007)** | **(1191)** | (1816) | 152% |
| **Loss before income taxes** | **(16560)** | **(23278)** | 6718 | (29)% |
| Income tax expense (benefit) |  | (1190) | 1190 | 100% |
| **Net Loss** | $**(16560)** | $**(22088)** | $**5528** | (25)% |
| **Net loss per share, basic and fully diluted** | $**(0.95)** | $**(1.92)** | $**0.97** | (51)% |

---

**Comparison of the Years December 31, 2025 and 2024**

*Revenue and Cost of Revenue*

During the years ended December 31, 2025 and 2024, our total revenue was $18.1 million and $28.2 million, respectively. Revenues decreased mainly as a result of customer turnover. In 2025, we experienced an attrition rate of 28%. Total revenues consist of fees that we charge Clients 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 years ended December 31, 2025 and 2024, our cost of revenue exclusive of depreciation and amortization was $13.3 million and $19.1 million, respectively. The decrease in the cost of revenue was in line with the decrease in revenue.

Total cost of revenues consists of (i) service fees, which primarily include vendor fees associated with the Clients' benefit program selections, (ii) direct labor costs associated with claim management and processing services, and (iii) direct labor costs associated with providing customer support and services to the Clients, Members, Providers, and other external stakeholders as well as direct labor costs associated with care and case management services.

*General and Administrative Expenses*

We incurred $11.1 million of general and administrative expenses for the year ended December 31, 2025 compared to $12.8 million for the year ended December 31, 2024, a decrease of $1.7 million. The decrease is due to the actions taken throughout 2024 to streamline the Company's TPA operations, which took effect during 2025.

*Sales and Marketing Expenses*

We incurred $1.1 million of sales and marketing expenses for the year ended December 31, 2025 compared to $1.8 million for the year ended December 31, 2024, a decrease of $675 thousand. The decrease is due to the actions taken throughout 2024 to streamline the Company's sales and marketing efforts which took effect during 2025.

*Information Technology Expenses*

We incurred $5.1 million of information technology expenses for the year ended December 31, 2025 compared to $4.7 million for the year ended December 31, 2024, an increase of $419 thousand. This increase was the result of changes in two departments' core functions, aligning their tasks with information technology tasks.

*Research and Development Expenses*

We incurred $7 thousand of research and development expenses for the year ended December 31, 2025 compared to $29 thousand for the year ended December 31, 2024, a decrease of $22 thousand. The decrease is due to a shift in resources to existing operations.

*Facilities expenses, depreciation and amortization*

We incurred facilities expenses of $580 thousand and depreciation and amortization expenses of $381 thousand for the year ended December 31, 2025 compared to facilities expenses of $1.3 million and depreciation and amortization expenses of $2.3 million for the year ended December 31, 2024. The decrease in facilities expenses was due to the decommissioning of unutilized facilities in 2024. The decrease in depreciation and amortization expenses was due to full amortization of certain fixed assets and the recognition of intangible asset impairments in 2024.

*Impairment of Goodwill and Intangibles*

We held no goodwill or intangible assets as December 31, 2025.

We conduct an annual impairment test of goodwill and intangible assets on December 31<sup>st</sup> or earlier if events or circumstances indicate that our goodwill may be impaired. As circumstances changed during the three months ended June 30, 2024, that would, more likely than not, reduce our fair value below its net equity value, we performed qualitative and quantitative analyses of the potential impairment of our goodwill and intangible assets, specifically evaluating trends in market capitalization, current and future cash flows, revenue growth rates, and the impact of macroeconomic conditions on the Company and its performance. Based on the analyses performed, we determined that our goodwill and intangible assets were fully impaired in June 2024. As a result, we recorded a goodwill and intangible asset impairment charge in the amount of $7.6 million in June 2024, which is reflected in the financial statements for the year ended December 31, 2024.

Due to further operational changes and the sustained decline in performance of our Continental Benefits and Maestro Health acquisitions, a full impairment of goodwill and intangibles was required in 2024.

*Loss on Disposal of Assets*

We incurred a $19 thousand loss on disposal of assets for the year ended December 31, 2025, compared to $648 thousand loss for the year ended December 31, 2024. This decrease was primarily due to the abandonment of assets upon termination of the Charlotte lease and a software application in 2024.

*Loss/(Gain) on Sale of Business Unit*

We realized a $73 thousand loss on sale of our non-core FSA/HSA business unit for the year ended December 31, 2024, related to the realization of the contingent receivable.

*Interest Expense, net*

We incurred $3.2 million of interest expense for the year ended December 31, 2025, compared to $2.7 million for the year ended December 31, 2024, an increase of $525 thousand. Interest expense increased primarily due to additional financing through a loan and the debt provided by JGB Collateral LLC ("JGB").

*Loss on debt extinguishment*

We incurred a $1.9 million loss on debt extinguishment for the year ended December 31, 2024, primarily due to an amendment to the existing loan agreement to obtain additional financing at better terms.

*Gain on Forgiveness of Other Liability*

We incurred $3.0 million of gain on forgiveness of other liability for the year ended December 31, 2024, primarily due to an amendment to the existing payable agreement to AXA S.A., a French société anonyme ("AXA").

*Net Loss*

Net loss for the year ended December 31, 2025 amounted to $16.6 million compared to a net loss of $22.1 million for the year ended December 31, 2024. The decrease in the net loss was due to the actions taken throughout 2025 and 2024, including the reduction of redundant facilities, cutting research and development, rightsizing sales and marketing and improved operations.

Loss per share for the year ended December 31, 2025 was $0.95, compared to a $1.92 loss per share for the year ended December 31, 2024. The loss per share for the year ended December 31, 2025 decreased mainly as a result of the decreased net loss and the issuance of additional common stock through private placements.

**Strategic Operational Realignment.** In early 2026, we initiated a strategic plan to consolidate our claims processing operations onto a single upgraded cloud-based claims engine. Previously, we maintained multiple systems, which resulted in redundant licensing costs and manual labor inefficiencies. By transitioning to a unified platform, management expects to achieve greater scalability, improved data accuracy, and a more streamlined cost structure. This transition involves the elimination of certain legacy duplicative software and personnel. As a result, we are reducing our workforce by 11 full-time equivalent positions (approximately 10% of our total workforce). We expect this realignment to be substantially complete by the end of the second quarter of 2026.

**Restructuring Charges** We estimate that we will incur total pre-tax restructuring charges of approximately $465 thousand in the first half of 2026, consisting of:

$101 thousand in severance and related employee benefits.

$364 thousand in software contract termination fees and reduced contract labor.

While these actions will result in short-term cash outlays, we expect to realize significant annualized operating expense savings beginning in the second half of 2026. These savings are primarily driven by reduced payroll and the elimination of duplicate enterprise software subscriptions.

***Liquidity and Capital Resources***

As of December 31, 2025, we had an accumulated deficit of approximately $115.4 million, short-term debt of approximately $11.0 million, long-term debt of $17.2 million, unrestricted cash of approximately $133 thousand and negative working capital of approximately $15.4 million.

We have spent most of our cash resources on funding our operating activities. Through December 31, 2025, we financed our operations primarily through the sale of convertible notes, warrants, and common stock as well as borrowing from various lenders.

Management continues to evaluate additional funding alternatives and is seeking to raise additional funds through the issuance of equity or debt securities. In addition, Management has identified and expects to implement additional cost reduction actions to reduce the drain on capital resources.

If we are unable to raise additional capital, 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 Standard Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date these consolidated financial statements are available to be issued. These 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.

In accordance with the terms of the Membership Interest Purchase Agreement, dated August 4, 2022, (the "AXA Agreement"), $2.3 million, or 35% of the net proceeds from the offering, were expected to be used to pay down the seller's note issued debt to AXA. Based on an agreement reached with AXA 50% of the amount due or $1.1 million was paid to AXA on July 19, 2023, and the balance was to be paid no later than September 18, 2023. On September 18, 2023, we paid AXA $200 thousand towards fulfilling our obligation to pay the remaining $1.1 million, and AXA agreed to receive the remaining balance of $1.0 million in six monthly payments of $158 thousand through April 2024. On January 31, 2025, the parties executed a debt reduction agreement (the "Debt Reduction Agreement") pursuant to which the parties agreed to reduce the Base Purchase and the Full Base Amount (each Price (as defined in the AXA Agreement)) by three million dollars in the aggregate, due to the fact that by December 31, 2024, (i) our largest shareholder contributed at least three million dollars in equity, (ii) the Company maintained a listing of our securities on an agreed upon nationally recognized stock exchange and (iii) between February 29, 2024 and April 15, 2024, the Company made all timely payments owed under the AXA Agreement.

Pursuant to Amendment No. 1 to AXA Agreement, dated February 7, 2024 (the "AXA Amendment"), the parties agreed to reduce the Base Purchase and the Full Base Amount by $3 million in the aggregate, provided that by December 31, 2024, (i) our largest shareholder has contributed at least $3 million in equity, (ii) the Company maintains a listing of our securities on Nasdaq or a nationally recognized stock exchange and (iii) between February 29, 2024 and April 15, 2024, the Company makes all payments owed under the AXA Agreement (collectively, the "Reduction Criteria"). As of December 31, 2024, the reduction criteria had been met and a gain of $3.0 million was recognized within the accompanying consolidated statements of operations.

In addition, the AXA Amendment provided that the requirement by the Company to pay AXA an amount equal to 35% of the net proceeds, shall be deferred for any funds raised in calendar year 2024 such that any such payments shall be paid no later than January 15, 2025, and any amounts due as a result of private offerings of any officers or directors of the Company shall be due and payable no later than December 31, 2025. These amounts are included in other short-term liabilities on the accompanying consolidated balance sheets.

On April 15, 2024, we entered into a Securities Purchase Agreement (the "JGB Purchase Agreement") with each of the purchasers that are parties thereto (the "Purchasers") and 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 due on April 15, 2027 for a principal sum of $11.83 million, subject to the redemption of $5 million at our election. In accordance with the JGB Purchase Agreement, JGB purchased an aggregate of $6.35 million in principal amount of the Debentures. On June 21, 2024, we elected not to redeem an additional $5 million of the Debentures with JGB. On December 30, 2024, we entered into amendments to the Purchase Agreement (the "Amendment Agreement") and the Debentures (each, a "Debenture Amendment" and collectively, the "Debenture Amendments") with the Purchasers and the Agent, to, among other things, sell Debentures up to an additional aggregate principal amount of $5.4 million, for a total purchase price of $5.0 million (the "Additional Investment"). Pursuant to the terms of the Amendment Agreement and the Debenture Amendments, a total of $2.0 million of the Additional Investment was delivered to the Company at closing, and the balance of $3.0 million of the Additional Investment is being held in escrow pending satisfaction of certain terms and conditions specified in the Amendment Agreement and the Debenture Amendments.

On May 13, 2025, we entered into a securities purchase agreement with accredited investors, pursuant to which we agreed to issue and sell an aggregate of 730,000 shares of our common stock in a private placement, at a purchase price of $1.00 per share.

On July 17, 2025, we entered into a securities purchase agreement with two investors, including HillCour Investment Fund, LLC, an entity controlled by Damien Lamendola, our Chief Executive Officer ("HillCour"), pursuant to which we agreed to issue and sell an aggregate of 130,208 shares of our common stock (of which HillCour purchased 86,805 shares of common stock) in a private placement, at a purchase price of $1.152 per share.

On July 29, 2025, we entered into a securities purchase agreement with three investors, including HillCour, pursuant to which we agreed to issue and sell an aggregate of 603,640 shares of our common stock (of which HillCour purchased 371,470 shares of common stock) in a private placement, at a purchase price of $1.0768 per share.

On September 10, 2025, we entered into a securities purchase agreement with three investors, including HillCour, pursuant to which we agreed to issue and sell an aggregate of 1,038,519 shares of our common stock (of which HillCour purchased 896,903 shares of common stock) in a private placement, at a purchase price of $1.0592 per share.

On September 30, 2025, we entered into a securities purchase agreement with HillCour, pursuant to which the Company agreed to issue and sell an aggregate of 147,058 shares of our common stock in a private placement, at a purchase price of $1.36 per share.

On November 7, 2025, we entered into a securities purchase agreement with certain investors, including the Company's Chief Operating Officer and President, an immediate family member of the Chief Executive Officer, the chairman and certain members of the Board, pursuant to which we agreed to issue and sell an aggregate of 3,850,000 shares of our common stock and warrants to purchase up to 7,700,000 shares of our common stock (of which the Company's Chief Operating Officer and President, an immediate family member of the Chief Executive Officer, the chairman and certain members of the Board purchased 425,000 shares of common stock and warrants to purchase up to 850,000 shares of our common stock) in a private placement, at a purchase price of $1.00 per share and accompanying warrant.

On December 22, 2025, we entered into a securities purchase agreement with certain investors, pursuant to which we agreed to issue and sell an aggregate of 350,000 shares of our common stock and warrants to purchase up to 700,000 shares of our common stock in a private placement, at a purchase price of $1.00 per share and accompanying warrant.

On February 12, 2026, we issued a promissory note in the principal amount of $410,000 to Damien Lamendola, the Company's Chief Executive Officer. The note 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 the note is repaid in full. We may repay the note, in whole or in part, together with all interest then accrued and any other sums then due and payable to Mr. Lamendola, at any time, without premium or penalty. All payments of outstanding principal, interest and all other amounts due under the note are payable by April 11, 2026 to Mr. Lamendola, or his successors and assigns.

On March 9, 2026, we issued a promissory note in the principal amount of $250,000 to Damien Lamendola, the Company's Chief Executive Officer. The note 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 the note is repaid in full. We may prepay the note, in whole or in part, together with all interest then accrued and any other sums then due and payable to Mr. Lamendola, at any time, without premium or penalty. All payments of outstanding principal, interest and all other amounts due under the note are payable by May 10, 2026 to Mr. Lamendola, or his successors and assigns.

We expect to fund the $465 thousand in restructuring-related cash payments through existing cash on hand. We do not believe these payments will materially impact our ability to meet our other short-term or long-term liquidity requirements. However, the anticipated reduction in go-forward operating expenses is expected to improve our cash flow from operations in future periods.

*Cash Flows*

The following table summarizes selected information about our sources and uses of cash, cash equivalents and restricted cash for the years ended December 31, 2025 and 2024:

**Comparison of the Years Ended December 31, 2025 and 2024**

---

| | | |
|:---|:---|:---|
| (in thousands) |  |  |
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| Net cash used in operating activities | $(7453) | $(15158) |
| Net cash provided by investing activities | 500 | 227 |
| Net cash provided by financing activities | 6672 | 10671 |
| Net decrease in cash and cash equivalents and restricted cash | $(281) | $(4260) |

---

*Net Cash Used in Operating Activities*

Net cash used in operating activities totaled $7.5 million for the year ended December 31, 2025 and $15.2 million for the year ended December 31, 2024, a decrease of $7.7 million in net cash used in operations. Net cash used in operating activities for the year ended December 31, 2025 was primarily driven by our net loss for the period of $16.6 million, net of (i) non-cash items totaling $6.9 million and (ii) a decrease in net working capital items amounting to $2.2 million.

*Net Cash Provided by Investing Activities*

A total of $500 thousand was provided by investing activities in the year ended December 31, 2025 and $227 thousand provided the year ended December 31, 2024, an increase of $273 thousand. The increase in net cash provided by investing activities was mainly due to timing of the collection of cash for the sale of a business unit.

*Net Cash Provided by Financing Activities*

Financing activities provided net cash of $6.7 million and $10.7 million during the years ended December 31, 2025 and 2024, respectively. In 2025 the cash provided from financing activities was primarily due to proceeds of $7.0 million from private placements of our common stock, net proceeds from the issuance of the Debentures of $3.0 million, partially offset by the repayment of the AXA liability of $196 thousand and repayment of the Debentures of $3 million.

***Critical Accounting Estimates***

Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these 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 consolidated 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 could change the estimates used in the preparation of our consolidated financial statements, which, in turn, could change the results from those reported.

See Note 3 to our consolidated financial statements included in this Annual Report for a description of the significant accounting policies that we use to prepare our consolidated financial statements.

Critical accounting policies that were impacted by the estimates, judgments and assumptions used in the preparation of our consolidated financial statements are discussed below.

*Capitalized Software*

We comply with the guidance of ASC Topic 350-40, "Intangibles - Goodwill and Other - Internal Use Software", in accounting for our internally developed software projects that we utilize to provide our services. These software 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 three to five years. Amortization commences when the software is available for its intended use.

*Goodwill*

Goodwill is recognized and initially measured as any excess of the acquisition-date consideration transferred in a business combination over the acquisition-date amounts recognized for the net identifiable assets acquired. Goodwill is not amortized but is tested for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not result in an impairment of goodwill. The Company operates in one reporting segment and reporting unit; therefore, goodwill is tested for impairment at the consolidated level. First, the Company assesses qualitative factors to determine whether or not it is more likely than not that the fair value of a reporting unit is less than it's carrying amount. If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company conducts a quantitative goodwill impairment test comparing the fair value of the applicable reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, the Company recognizes an impairment charge in the consolidated statement of operations for the amount by which the carrying amount exceeds the fair value of the reporting unit. The Company performs our annual goodwill impairment test on December 31. During the year ended December 31, 2024, the Company recognized impairments of our goodwill – see Note 6.

*Income Taxes*

We account for income taxes using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis, net operating losses, tax credit and other carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates when the assets and liabilities are expected to be realized or settled. We regularly review deferred tax assets for realizability and establish valuation allowances based on available evidence including historical operating losses, projected future taxable income, expected timing of the reversals of existing temporary differences, and appropriate tax planning strategies. If our assessment of the realizability of a deferred tax asset changes, an increase to a valuation allowance will result in a reduction of net earnings at that time, while the reduction of a valuation allowance will result in an increase of net earnings at that time.

We follow ASC Topic 740-10-65-1 in accounting for uncertainty in income taxes by prescribing rules for recognition, measurement, and classification in financial statements of tax positions taken or expected to be in a tax return. This prescribes a two-step process for the financial statement measurement and recognition of a tax position. The first step involves the determination of whether it is more likely than not (greater than 50 percent likelihood) that a tax position will be sustained upon examination, based on the technical merits of the position. The second step requires that any tax position that meets the more likely than not recognition threshold be measured and recognized in the financial statements at the largest amount of benefit that is a greater than 50 percent likelihood of being realized upon ultimate settlement. This topic also provides guidance on the accounting for related interest and penalties, financial statement classification and disclosure. Our policy is that any interest or penalties related to uncertain tax positions are recognized in income tax expense when incurred. We have no uncertain tax positions or related interest or penalties requiring accrual on December 31, 2025 and December 31, 2024.

*Revenue Recognition*

We recognize revenue 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, which are identified below, we have an unconditional right to consideration, as outlined in our contracts.

All our contracts with customers obligate us to perform services. Services provided include health administration, dependent eligibility verification, COBRA administration, benefit billing, care management, and cost containment. 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.

The transaction price of a contract is the amount of consideration to which we expect to be entitled in exchange for transferring the 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 transferred 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 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.

*Share-Based Compensation*

We account for share-based awards issued to employees in accordance with ASC Topic 718, "Compensation - Stock Compensation". Compensation expense is measured at the grant date, based on the calculated fair value of the award, and recognized as an expense over the requisite service period, which is generally the vesting period of the grant. For modification of share-based payment awards, we record the incremental fair value of the modified award as share-based compensation on the date of modification for vested awards or over the remaining vesting period for unvested awards. The incremental compensation is the excess of the fair value of the modified award on the date of modification over the fair value of the original award immediately before the modification. The sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date is recognized over the requisite service period.

We estimate the expected term of our stock options granted to employees using the simplified method, whereby the expected term equals the average of the vesting term and the original contractual term of the option. We utilize this method as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. For stock options granted to non-employees, we utilize the contractual term of the option as the basis for the expected term assumption. All other assumptions used to calculate the grant date fair value are generally consistent with the assumptions used for options granted to employees. For the purpose of calculating share-based compensation, we estimate the fair value of stock options using the Black-Scholes option-pricing model. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The expected volatility is based on the historical volatility of company data while the expected life of the stock options is based on historical and other economic data trended into the future. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding to the expected option term. The dividend yield assumption is based on our history and expectation of no dividend payouts.

If factors change and we employ different assumptions, the share-based compensation expense may differ significantly from what has been recorded in the past. If there is a difference between the assumptions used in determining share-based compensation expense and the actual factors which become known over time, we may change the input factors used in determining share-based compensation costs for future grants. These changes, if any, may materially impact our results of operations in the period such changes are made. Incremental compensation costs arising from subsequent modifications of awards after the grant date are recognized when incurred. In addition, we account for forfeitures of awards as they occur. For share-based awards that vest based on performance conditions, expense is recognized when it is probable that the conditions will be met.

*Convertible Notes / Debentures and Embedded Derivative Evaluation*

The Company accounts for our convertible notes / debentures in accordance with Subtopic 470-20, Debt—Debt with Conversion and Other Options (Subtopic 470-20), Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40) and Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"). The Company evaluates the terms of our debt instruments to determine if any identified embedded features, including embedded conversion options or redemption features, are required to be bifurcated and accounted for separately as a derivative financial instrument. In circumstances where a host instrument contains more than one embedded derivative instrument, including a conversion option, that is required to be bifurcated, the bifurcated derivative instruments would be accounted for as a single, compound derivative instrument. Any identified and bifurcated embedded derivatives are initially recorded at fair value and are revalued at each reporting date with changes in the fair value reported as non-operating income or expense.

**Recently Issued and Adopted Accounting Pronouncements**

A discussion of recent accounting pronouncements is included in Note 3 to our consolidated financial statements in this Annual Report.

**ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Not applicable.

**ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

Our consolidated financial statements and notes thereto and the report of UHY LLP, our independent registered public accounting firm, are set forth beginning on page F-1 of this Annual Report.

**ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.**

None.

**ITEM 9A. CONTROLS AND PROCEDURES.**

***Evaluation of Disclosure Controls and Procedures***

In accordance with Exchange Act Rules 13a-15 and 15d-15, we have evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.

**MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act). We have established disclosure controls and procedures designed to ensure that material information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission and that any material information relating to us is recorded, processed, summarized and reported to our management including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating our disclosure controls and procedures, our management recognizes that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving desired control objectives.

Our internal control over financial reporting includes those frameworks that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that the transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles generally accepted in the U.S., and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

In reaching a reasonable level of assurance, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation 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 covered by this report and that we maintained effective internal control over financial reporting as of December 31, 2025.

Our management, including our Chief Executive Officer and Chief Financial Officer, have determined, based on the procedures we have performed, that the consolidated financial statements included in this report fairly present in all material respects our financial condition and results of operations as of and for the years ended December 31, 2025 and 2024 in accordance with U.S. GAAP.

***Attestation Report of the Registered Public Accounting Firm***

Management's report on internal control over financial reporting was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit a smaller reporting company to provide only Management's report in this annual report, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected.

***Changes in Internal Control Over Financial Reporting***

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of fiscal year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 9B. OTHER INFORMATION.**

None.

**ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.**

Not applicable.

**PART III**

**ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.**

Our directors and executive officers, their ages, positions currently held, and duration of such, are as follows

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Age** | **Position** | **Date First Elected or Appointed** |
| Damien Lamendola | 70 | President, Chief Executive Officer and Director | November 6, 2023 |
| Steve Johnson | 55 | Chief Financial Officer | November 6, 2023 |
| Yaron Eitan | 69 | Chairman of the Board of Directors | April 1, 2021 |
| Sagiv Shiv | 69 | Director | February 1, 2023 |
| Colleen DiClaudio | 48 | Director | October 28, 2021 |
| Jennifer Calabrese | 55 | Director | December 7, 2023 |
| Robert Pons | 69 | Director | December 7, 2023 |

---

*Business Experience*

The following is a brief account of the education and business experience of each director and executive officer during at least the past five years, indicating each person's principal occupation during the period, and the name and principal business of the organization by which they were employed.

***Damien Lamendola, President, Chief Executive Officer and Director***

Mr. Lamendola has served as our Chief Executive Officer since November 2023. He joined our board of directors on April 1, 2021. Mr. Lamendola founded Continental Benefits, LLC in 2013 and was previously the Chief Executive Officer until 2019. Mr. Lamendola has served as President of HillCour Holding Corporation (f/k/a Welldyne Holding Corp.) since March 2002, and he continues to serve in this role. Mr. Lamendola also continues to serve HillCour Holding Corporation as a Board Member since 2017, WellDyneRx, LLC as a Board Member since 2017, and HillCour Investment Fund, LLC as Manager since 2017.

As President of HillCour Holding Corporation, Mr. Lamendola leads and oversees all strategic operations of multiple operating companies in the health care space. He received a B.S. from McNeese State University and an M.B.A. from Washington University.

We believe that Mr. Lamendola is qualified to serve as a member of our board of directors based on his perspective and experience building and leading strategic corporate operations and his expertise in the healthcare industry.

***Steve Johnson, Chief Financial Officer***

Mr. Johnson has served as our Chief Financial Officer since November 2023. Mr. Johnson has served as CFO and advisory board member of HillCour Holding Corporation (f/k/a Welldyne Holding Corp.) since September 2016, an investment firm with holdings in various healthcare companies.

Mr. Johnson previously served as Chief Financial Officer of Continental Benefits, LLC which was subsequently acquired by the Company in April 2021. He received a B.B.A from The George Washington University and an M.B.A from Columbia Business School with dual concentrations in Accounting and Finance.

***Yaron Eitan, Chairman of the Board of Directors***

Mr. Eitan has served as Chairman of our board of directors since April 1, 2021. He served as Chairman of the board of directors of Marpai Health since our inception in February 2019. Mr. Eitan has also served as a member of the board of directors of Nano Dimension, Ltd. (Nasdaq: NNDM) since April 2020, and he continues to serve in this role. He served as Executive Chairman of the board of directors of DeepCube Ltd. from February 2017 to March 2021. Mr. Eitan also continues to serve Emporus, Ltd. as Chairman since February 2020, and Selway Capital LLC as Managing Partner since December 2008.

Mr. Eitan is a technology entrepreneur and investor of private and publicly traded companies with over 30 years of experience. He is the Chairman of deep learning company Emporus Technologies, Ltd. Previously, he was the Chairman of deep learning company DeepCube, Ltd. and co-founder and co-Chairman of 340Basics Technologies. He was a Partner at CNTP, a multi-stage investment fund, where he led all Israeli investments, and he has been a member of the board of directors of several technology companies. He received a B.S. from Haifa University and an M.B.A. from The Wharton School of the University of Pennsylvania.

We believe that Mr. Eitan is qualified to serve as a member of our board of directors based on his significant technology and entrepreneurship expertise, the perspective he brings as the former Chairman of Marpai Health, and his deep learning background.

***Sagiv Shiv, Director***

Mr. Shiv joined our board of directors on February 1, 2023. Since 2023, Mr. Shiv has served as the Managing Director and the Head of M&A and Advisory Services at Aldwych Capital Partners. His professional experience includes leading the M&A and Advisory teams at National Securities Corp., StoneX Inc. and Merriman Capital. Mr. Sagiv has advised governments, agencies, private and public companies, and financial institutions, with a particular focus on cross-border and international assignments. Mr. Shiv also served on the board of directors and was the lead independent director and the chairman of the audit committee of Lomiko Metals Inc. (TSX-V:LMR) from December 2021 until December 2024. He has served on the boards of several publicly-traded companies, as well as on the boards of private entities and charities.

Mr. Shiv lectured at the IESE Graduate School of Business and is a clinical professor at the Griffith School of Management at Emanuel University, he has served as a peer reviewer for the Journal of Financial Management and Global Finance Journal and has advised on several published academic papers. Mr. Shiv was an associate editor of the Nanotechnology Law & Business Journal, a member of the American Finance Association and the Financial Management Association, and of the M&A committee of the American Bar Association. Mr. Shiv holds a B.Sc. in Finance and Ph.D. in International Finance. Mr. Shiv is the recipient of the M&A Deal of the Year Award (cross-border, under $500 mil) for 2014 and of the Turnaround Deal of the Year Award (healthcare, under $50 mil) for 2019. Mr. Shiv holds Series 7, 63, 24, 79 and 99 securities licenses with FINRA.

We believe Mr. Shiv is qualified to serve on our board of directors based on his business and capital markets experience and relationships and contacts.

***Colleen DiClaudio, Director***

Ms. DiClaudio joined our board of directors on October 28, 2021. Ms. DiClaudio is the CEO and Co-Founder of WeCo Health, a virtual care management company launched in May 2025 to support Community Health Centers with outsourced chronic care services. WeCo Health was founded to bring sustainable, high-impact care between visits improving patient outcomes, easing the burden on clinic staff and maximizing revenue for safety-net providers.

Prior to launching WeCo, Ms. DiClaudio founded and served as President of 340B Technologies d/b/a Nuvem beginning in August 2014, where she led innovation in 340B program technology and compliance. She stepped away from daily operations in August 2024 and continues to serve on Nuvem's Board of Directors. Ms. DiClaudio also served as Vice President of Business Development at CompleteCare Health Network from 2009 to 2014, where she was instrumental in building scalable care coordination and population health strategies. She received a master's degree of Public Health from the University of Medicine and Dentistry of New Jersey and a Bachelor's degree in Public Health from Stockton University.

We believe that Ms. DiClaudio is qualified to serve as a member of our board of directors based on her experience in business development and the healthcare technology sector, as well as her entrepreneurial background.

***Jennifer Calabrese, Director***

Ms. Calabrese has served as a member of our board of directors since December 2023. Ms. Calabrese is the founder and Chief Executive Officer of Calabrese Consulting LLC ("CCL"). Founded in 2012, CCL is a woman-owned, full-service accounting and advisory firm with over 40 employees, serving more than 350 clients around the world. Ms. Calabrese is a Certified Public Accountant, a Chartered Global Management Accountant, and a member of both The American Institute of Certified Public Accountants and The New York State Society of Certified Public Accountants.

We believe that Ms. Calabrese is qualified to serve as a member of our board of directors based on her nearly 30 years of expertise in finance and accounting along with her service as an adjunct assistant professor in Accounting for Hofstra University.

***Robert Pons, Director***

Mr. Pons has served as a member of our board of directors since December 2023. Mr. Pons has served on the board of directors of fifteen publicly traded companies, utilizing his more than forty years of hands-on operating experience as Chief Executive Officer and in senior executive positions in high growth companies and companies in need of turnaround strategies. Mr. Pons has served as President and Chief Executive Officer of Spartan Advisors, Inc., a management consulting firm specializing in telecom and technology companies, since January 2017.

We believe that Mr. Pons is qualified to serve as a member of our board of directors based on his service on the board of directors of fifteen publicly traded companies, utilizing his more than forty years of hands-on operating experience as a Chief Executive Officer and in senior executive positions in high growth companies and companies in need of turnaround strategies.

There are no family relationships between any of the directors or officers named above.

**Number and Terms of Office of Officers and Directors**

Our Board has six members, five of whom are deemed "independent" under SEC rules.

Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office.

Our Board is authorized to appoint persons to the offices set forth in our certificate of incorporation as it deems appropriate.

**Director Independence**

We use the definition in Nasdaq Listing Rule 5605(a)(2) for determining director independence, which provides that an "independent director" is a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq listing rules provide that a director cannot be considered independent if:

● the director is, or at any time during the past three years was, an employee of the company;

● the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);

● a family member of the director is, or at any time during the past three years was, an executive officer of the company;

● the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient's consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);

● the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or

● the director or a family member of the director is a current partner of our outside auditor, or at any time during the past three years was a partner or employee of our outside auditor, and who worked on our audit.

We have determined that Yaron Eitan, Sagiv Shiv, Colleen DiClaudio, Robert Pons and Jennifer Calabrese meet this definition of independence.

**Committees of the Board of Directors**

Our Board has two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors, though we are not currently listed on a national securities exchange and are not subject to the Nasdaq rules. Each committee operates under a charter that has been approved by our board and has the composition and responsibilities described below. The charter of each committee is available on our website.

**Audit Committee**

We have established an audit committee of the board of directors. Mr. Shiv, Ms. DiClaudio and Ms. Calabrese serve as members of our audit committee. Mr. Shiv serves as the chairman of the audit committee. Each member of the audit committee meets the financial literacy requirements of Nasdaq, though we are not subject to Nasdaq rules, and our board of directors has determined that Sagiv Shiv qualifies as an "audit committee financial expert" as defined in applicable SEC rules and has accounting or related financial management expertise.

The audit committee's duties, which are specified in the charter adopted by us and include, but are not limited to:

● meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems;

● monitoring the independence of the independent registered public accounting firm;

● verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;

● inquiring and discussing with management our compliance with applicable laws and regulations;

● pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed, and establishing pre-approval policies and procedures;

● recommending to shareholders the appointment or replacement of the independent registered public accounting firm;

● determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;

● establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies;

● monitoring compliance on a quarterly basis and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance;

● obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm's internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm's independence;

● reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction;

● reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities;

● reviewing and discussing with management and the independent registered public accounting firm the annual audited consolidated financial statements, and recommending to the board whether the consolidated financial statements should be included in our Annual Report on Form 10-K;

● approving reimbursement of expenses incurred by our management team in identifying potential target businesses; and

● reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.

**Compensation Committee**

We have established a compensation committee of our board of directors. The members of our compensation committee are Mr. Pons and Ms. DiClaudio. Ms. DiClaudio serves as chairperson of the compensation committee.

We have adopted a compensation committee charter, which details the principal functions of the compensation committee, including:

● reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer's compensation, evaluating our Chief Executive Officer's performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

● reviewing and approving the compensation of all of our other Section 16 executive officers;

● reviewing our executive compensation policies and plans;

● implementing and administering our incentive compensation equity-based remuneration plans;

● assisting management in complying with our proxy statement and annual report disclosure requirements;

● approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;

● producing a report on executive compensation to be included in our annual proxy statement; and

● reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the SEC.

**Director Nominations**

We do not have a standing nominating committee, though we intend to form a corporate governance and nominating committee as and when required to do so by law. A majority of the independent directors may recommend a director nominee for selection by the board of directors. The Board believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who will participate in the consideration and recommendation of director nominees are Mr. Shiv and Ms. DiClaudio, and all such directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.

The Board will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders who wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws.

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

**Compensation Committee Interlocks and Insider Participation**

None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.

***Code of Ethics***

We adopted a Code of Ethics and Insider Trading Policy applicable to our directors, officers, and employees. A copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

***Insider Trading Policy***

We have adopted an insider trading policy, governing the purchase, sale and other transactions in our securities that applies to our directors, executive officers, employees, and other covered persons, including immediate family members and entities controlled by any of the foregoing persons, as well as by the Company itself.

The insider trading policy prohibits, among other things, insider trading and certain speculative transactions in our securities (including short sales, buying put and selling call options and other hedging or derivative transactions in our securities) and establishes a regular blackout period schedule during which directors, executive officers, employees, and other covered persons may not trade in our securities, as well as certain pre-clearance procedures that directors and executive officers must observe prior to effecting any transaction in our securities.

We believe that the insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to us. A copy of the insider trading policy is filed as Exhibit 19.1 to this Form 10-K.

**ITEM 11. EXECUTIVE COMPENSATION.**

**Summary Compensation Table**

The following table provides summary information concerning cash and non-cash compensation paid or accrued for the fiscal years ending December 31, 2025 and 2024 to our named executive officers (in thousands).

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| <br>**Name and Principal Position** | <br>**Year** | **Salary**<br>**($)** | **Bonus**<br>**($)** | **Stock <br> Awards**<br>**($)** | **All Other**<br>**Compensation** | **Total**<br>**($)** |
| Damien Lamendola, | 2025 | $— |  | 1206 |  | $1206 |
| &nbsp;&nbsp;&nbsp;Chief Executive Officer and Director (1) | 2024 |  |  | 362 |  | 362 |
| Steve Johnson, | 2025 | 59 |  | 704 |  | 763 |
| &nbsp;&nbsp;&nbsp;Chief Financial Officer (2) | 2024 | 39 |  | 211 |  | 250 |
| John Powers, | 2025 | 139 | 51 | 157 |  | 347 |
| &nbsp;&nbsp;&nbsp;President and Chief Operating Officer (3) | 2024 | 150 |  | 50 |  | 200 |
| Dallas Scrip, | 2025 | 146 |  |  |  | 146 |
| &nbsp;&nbsp;&nbsp;President and Chief Operating Officer (4) | 2024 |  |  |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Damien Lamendola was appointed as our Chief Executive Officer in November 2023. On January 11, 2024, we
entered into an employment agreement with Mr. Lamendola. Pursuant to the terms of the Lamendola Employment Agreement, Mr. Lamendola's
gross annual salary will be $1.00. Mr. Lamendola has been a member of our board of directors since 2021. He was awarded 5,000 restricted
stock units ("RSUs") under the 2021 Plan with a fair value of $1.94 per share dated May 24, 2024. He was awarded 600,000 RSUs
under the 2024 Plan with a fair value of $2.01 per share dated May 24, 2024. He was awarded 550,000 RSUs under the 2025 Plan with a fair
value of $1.43 per share dated October 20, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Steve Johnson joined Marpai as Chief Financial Officer on November 2023 and continues in this role. We
entered an employment agreement with Mr. Johnson on January 11, 2024. He was awarded 350,000 RSUs under the 2024 Plan with a fair value
of $2.01 per share dated May 24, 2024. He was awarded 275,000 RSUs under the 2025 Plan with a fair value of $1.43 per share dated October
20, 2025. On July 1, 2024 his salary was increased to $44 thousand which was mandated as the minimum salary threshold by the Department
of Labor for FLSA exemptions. On January 1, 2025, his salary was increased to $59 thousand.

&nbsp;&nbsp;&nbsp;&nbsp;(3) John Powers joined Marpai as President on January 2, 2024 until his separation on August 29, 2025. He was awarded 150,000 RSUs under
the 2021 Plan with a fair value of $1.74 per share dated May 24, 2024. He was awarded 150,000 RSUs under the 2024 Plan with a fair value
of $1.31 per share dated June 9, 2025. On May 16, 2025, his salary increased to $285 thousand and he was awarded a one-time bonus of $51
thousand.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Dallas Scrip joined Marpai as Chief Operating Officer on June 2, 2025. He became the President and Chief
Operating officer on August 29, 2025 and continued in this role until his separation on January 30, 2026. He was awarded 300,000 RSUs
under the 2024 Plan with a fair value of $1.31 per share dated June 9, 2025.

**Director Compensation**

On March 20, 2022, our board of directors, upon the recommendation of our Compensation Committee, approved the change of our independent directors' compensation to an annual fee of $50 thousand, payable quarterly. Our directors are and will continue to be reimbursed by us for any out-of-pocket expenses incurred in connection with activities conducted on our behalf.

On December 7, 2023, our board of directors, upon the recommendation of our Compensation Committee, approved the termination of our independent directors' compensation annual fee of $50 thousand, payable quarterly. In lieu of the cash compensation, the board of directors approved director compensation through the issuance of RSUs based on the following schedule: 50,000 for independent directors and 60,000 for committee chairs and the Chairman of the board of directors. The RSUs vest 30% upon grant, 35% the following year and the remaining 35% one year following.

On May 24, 2024, our board of directors, upon the recommendation of our Compensation Committee, approved the issuance of 7,500 RSUs to each independent director for each year of their respective service and 5,000 RSUs to each non-independent director for each year of their respective service.

On June 18, 2024, the Company approved a special one-time grant of 100,000 RSUs to a director for a special project to get the Company uplisted to a national securities exchange. 50,000 RSUs vested on December 31, 2024 and the remaining 50,000 RSUs will vest upon the successful uplisting of the Company. The successful uplisting is currently not probable and no share-based compensation expense was recognized for the periods presented for the remaining 50,000 RSUs.

On August 15, 2025, our board of directors, upon the recommendation of our Compensation Committee, approved the issuance of 75,000 RSUs to three independent directors for service on a special committee to vest over the nine-month period for which the committee was formed.

On October 20, 2025, our board of directors, upon the recommendation of our Compensation Committee, approved the issuance of 75,000 RSUs to one independent director for service on a special committee to vest over the seven-month period for which the committee was formed.

On October 20, 2025, our board of directors, upon the recommendation of our Compensation Committee, approved the issuance of 1,200,000 RSUs to vest immediately to our Chief Executive Officer (550,000 RSUs), Chief Financial Officer (275,000 RSUs), Board chair (125,000 RSUs) Committee chairs (75,000 RSUs) and independent directors (50,000 RSUs) for services rendered.

Other than indicated above, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments during Fiscal Year 2025.

**Benefit Plans**

We maintain a defined contribution employee retirement plan, or 401(k) plan, for our full-time employees. Our named executive officers are eligible to participate in the 401(k) plan on the same basis as our other full-time employees if they are considered an employee and not a consultant. The 401(k) plan is intended to qualify as a tax-qualified plan under Section 401(k) of the Internal Revenue Code. The 401(k) plan provides that each participant may make pre-tax deferrals from his or her compensation up to the statutory limit, which is $23 thousand for calendar year 2025, and other testing limits. Participants that are 50 years or older can also make "catch-up" contributions, which in calendar year 2025 may be up to an additional $8 thousand above the statutory limit. Participant contributions are held and invested, pursuant to the participant's instructions, by the plan's trustee.

We have no pension, or profit-sharing programs for the benefit of directors, officers, or other employees, but our officers and directors may recommend adoption of one or more such programs in the future. We do not sponsor any qualified or non-qualified pension benefit plans, nor do we maintain any non-qualified defined contribution or deferred compensation plans.

**2021 Global Stock Incentive Plan**

On May 7, 2021, our board of directors, and the holders of all our issued and outstanding shares of common stock approved the adoption of 2021 Plan which is comprised of (i) an Israeli Sub-Plan that is designated for Israeli residents; and (ii) a U.S. Sub-Plan for U.S. persons. The 2021 Plan provides for the grant of incentive stock options, restricted stocks, RSUs, and other equity-based awards (collectively, the "2021 Awards"). We had reserved a total of 375,856 shares of common stock for grants of 2021 Awards to our employees, directors, advisory board members, consultants, and the like (collectively, the "Participants") under the 2021 Plan (including the Israeli Sub-Plan and the U.S. Sub-Plan) or otherwise as shall be determined by the board of directors or any committee designated by it. No option grants shall be made under the 2021 Plan or the Israeli Sub-Plan until the date which is 30 days after filing the relevant forms with the Israeli Tax Authority (the "ITA"), or such earlier date at which the 2021 Plan may be approved by the ITA. At our annual stockholder meeting held on May 31, 2022, our stockholders approved an amendment to the 2021 Plan to increase the available number of shares issuable pursuant to the 2021 Plan from 375,856 to 1,950,855. At our annual stockholder meeting held on May 31, 2022, our stockholders approved an amendment to the 2021 Plan to increase the available number of shares issuable pursuant to the 2021 Plan from 1,905,855 to 2,450,855. The 2021 Plan shall expire in May 2031.

If any common stock with respect to which the Participant has the right to purchase and/or receive under the 2021 Plan shall terminate, expire, or otherwise cease to exist, such common stock shall again be available for grant as 2021 Awards under the 2021 Plan. To date, incentive stock options for 1,828,119 shares of common stock have been approved by the board of directors for grant under the 2021 Plan, with 1,017,377 shares terminating and returning to the plan pool, and 72,241 shares being exercised. As of December 31, 2025, 92% of the options grant have vested, 5%, and 3% will vest in 2026, and 2027, respectively. To date, RSUs for 1,558,120 shares of common Stock have been approved by the board for grant under the 2021 plan, with 391,758 shares terminating and returning to the plan pool. As of December 31, 2025, 100% of the RSUs have vested.

**2024 Global Stock Incentive Plan**

On May 6, 2024, our board of directors, and the holders of all our issued and outstanding shares of common stock approved the adoption of the 2024 Plan, effective as of March 13, 2024. The 2024 Plan includes an 'evergreen' provision, whereby the number of shares of common stock reserved for issuance will automatically increase on January 1 of each year, beginning January 1, 2025. The annual increase is equal to 1% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year. The 2024 Plan provides for the grant of incentive stock options, RSUs, and other equity-based awards (collectively, the "2024 Awards"). We had reserved a total of 2,227,910 shares of common stock for grants of 2024 Awards to our employees, directors, advisory board members, consultants, and the like (collectively, the "Participants") under the 2024 Plan or otherwise as shall be determined by the board of directors or any committee designated by it. The 2024 Plan shall expire in March 2034.

If any common stock with respect to which the Participant has the right to purchase and/or receive under the 2024 Plan shall terminate, expire, or otherwise cease to exist, such common stock shall again be available for grant as 2024 Awards under the 2024 Plan. To date, RSUs for 2,568,999 shares of common stock have been approved by the board for grant under the 2024 plan, with 417,500 shares terminating and returning to the plan pool. As of December 31, 2025, 57% of the RSUs have vested, 23%, and 2% will vest in 2026, and 2027, respectively. The remaining 18% will vest upon completion of a contractual condition.

Pursuant to the evergreen provision of the 2024 Plan, an additional 1,617,000 shares were reserved for issuance effective January 1, 2025, representing 1% of the shares outstanding as of December 31, 2024.

If any common stock with respect to which the Participant has the right to purchase and/or receive under the 2025 increase shall terminate, expire, or otherwise cease to exist, such common stock shall again be available for grant as 2025 Awards under the 2025 increase. To date, RSUs for 1,100,000 shares of common stock have been approved by the board for grant under the 2025 increase, with no shares terminating and returning to the plan pool. As of December 31, 2025, 100% of the RSUs have vested.

**Director and Officer Liability Insurance**

We maintain director and officer liability insurance that provides financial protection for our directors and officers if they are sued in connection with the performance of their services and provides employment practices liability coverage, which insures for harassment and discrimination suits.

**Employment Agreements**

***President and Chief Executive Officer***

On January 11, 2024, we entered into an employment agreement (the "**Lamendola Employment Agreement**") with our Chief Executive Officer, Damien Lamendola, effective as of January 2, 2024. Pursuant to the terms of the Lamendola Employment Agreement, Mr. Lamendola's gross annual salary will be $1.00. Mr. Lamendola will be eligible for bonuses and equity grants in amounts to be determined at the discretion of our board of directors and the Compensation Committee, as applicable. In addition, Mr. Lamendola will be granted an RSU for 600,000 shares of common stock, which shall vest over a two-year period, as follows: 30% of the shares subject to the RSU will vest immediately; 35% will vest one year after the commencement of his employment; and 35% will vest two years after the commencement of his employment. In addition, if and when we achieve five million dollars of unadjusted EBITDA within a calendar fiscal year, we will recommend to the board of directors that Mr. Lamendola be granted an equity award consisting of RSUs for 100,000 shares, with immediate vesting.

***Chief Financial Officer***

On January 11, 2024, we entered into an employment agreement (the "Johnson Employment Agreement") with our Chief Financial Officer, Steve Johnson, effective as of January 2, 2024. Pursuant to the terms of the Johnson Employment Agreement, Mr. Johnson's gross annual salary will be $36 thousand. Mr. Johnson will be eligible for bonuses and equity grants in amounts to be determined at the discretion of our board of directors of Directors and the Compensation Committee, as applicable. In addition, Mr. Johnson will be granted an RSU for 350,000 shares of common stock, which shall vest over a two-year period, as follows: 30% of the shares subject to the RSU will vest immediately; 35% will vest one year after the commencement of his employment; and 35% will vest two years after the commencement of his employment. In addition, if and when we achieve five million dollars of unadjusted EBITDA within a calendar fiscal year, we will recommend to our board of directors that Mr. Johnson be granted an equity award consisting of RSUs for 100,000 shares, with immediate vesting. On July 1, 2024 his salary was increased to $44 thousand, which was mandated as the minimum salary threshold by the Department of Labor for FLSA exemptions. On January 1, 2025 his salary was increased to $59 thousand.

***Former President and Chief Operating Officer***

Effective January 2, 2024, we entered into an employment agreement with our President and Chief Operating Officer, John Powers (the "Powers Employment Agreement"). Mr. Powers' gross annual salary was $150 thousand. Mr. Powers will be eligible for bonuses and equity grants in amounts to be determined at the discretion of our Board of Directors and the Compensation Committee of our Board of Directors, as applicable. In addition, Mr. Powers was granted a RSU for 150,000 shares of common stock, which shall vest over a two-year period, as follows: 30% of the shares subject to the RSU will vest immediately; 35% will vest one year after the commencement of his employment; and 35% will vest two years after the commencement of his employment.

On August 29, 2025, John Powers resigned from his position as President of Marpai, Inc. (the "Company"). Mr. Powers resignation was due to personal health reasons and was not the result of any disagreement with the Company on any matter relating to its operations, policies or practices. Mr. Powers will remain with the company in a part-time advisory capacity, serving as a Senior Consultant to the sales and leadership teams.

***Former President and Chief Operating Officer***

Effective June 2, 2025, we entered into an employment agreement with our President and Chief Operating Officer, Dallas Scrip (the "Scrip Employment Agreement"). Mr. Scrips' gross annual salary was $250 thousand. In addition, Mr. Scrip was granted a RSU for 300,000 shares of common stock, which shall vest over a three-year period, as follows: 33.3% will vest one year after the commencement of his employment; and 33.3% will vest two years after the commencement of his employment; and 33.3% will vest three years after the commencement of his employment.

On January 16, 2026, Dallas Scrip resigned from his position as President of Marpai, Inc. (the "Company"), effective as of January 30, 2026. Mr. Scrip resignation was not the result of any disagreement with the Company on any matter relating to its operations, policies or practices.

**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.**

The following table sets forth certain information, to the best knowledge and belief of the Company, as of March 25, 2026 (unless provided herein otherwise), with respect to holdings of our common stock by (1) each person known by us to be the beneficial owner of more than 5% of the total number of shares of our common stock outstanding as of such date; (2) each of our directors; (3) each of our named executive officers; and (4) all of our directors and our executive officers as a group.

Unless otherwise indicated, the address of each person listed below is c/o Marpai, Inc., 615 Channelside Drive, Suite 207, Suite 1417, Tampa, FL, 33602.

---

| | | |
|:---|:---|:---|
| <br>**Name of Beneficial Owner** |<br>**Beneficial**<br>**Number of**<br>**Shares(1)** | **Percentage**<br>**Of Shares**<br>**Beneficially**<br>**Owned** |
| **Directors and Named Executive Officers** | | |
| Damien Lamendola | 8463871<sup>(2)</sup> | 33.4% |
| Steve Johnson | 684592<sup>(3)</sup> | 2.7% |
| Yaron Eitan | 1301377<sup>(4)</sup> | 5.1% |
| Sagiv Shiv | 440750<sup>(5)</sup> | 1.7% |
| Jennifer Calabrese | 125000<sup>(6)</sup> | \* |
| Robert Pons | 434200<sup>(7)</sup> | 1.7% |
| Colleen DiClaudio | 186250<sup>(8)</sup> | \* |
| **All Directors and Executive Officers as a Group (7 Persons)** | **11636040** **<sup>(9)</sup>** | **44.8%** |

---

\* less than 1%

(1) Based on 25,292,667 shares of common stock issued and outstanding as of March 25, 2026. Except as otherwise
indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have
sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership
is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

Shares subject to options, warrants or right to purchase or through the conversion of a security currently exercisable or convertible, or exercisable or convertible within 60 days, are reflected in the table above and are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

(2) Comprised of (i) 6,519,893 shares of common stock, held directly by HillCour Investment Fund, LLC, of
which Mr. Lamendola is the Manager, and over which he holds the voting and dispositive power, (ii) 931,674 shares of the common stock
held directly by WellEnterprises USA, LLC, a wholly owned subsidiary of HillCour, Inc., which is wholly owned by HillCour Holdings LLC
(f/k/a HillCour Holding Corporation) ("HillCour Holdings"), a corporation controlled by Mr. Lamendola, and Mr. Lamendola holds
the voting and dispositive power over the securities held by WellEnterprises USA, LLC, (iii) 950,000 shares of the common stock, held
directly by Damien Lamendola, and (iv) options to purchase 62,500 shares of common stock, exercisable at $4.44 per share, of which 62,304
are vested

(3) Consists of (i) 684,592 shares of the common stock, held directly by Steve Johnson.

(4) Consists of (i) 1,018,073 shares of the common stock, held directly by Yaron Eitan, (ii) 200,000 shares
of common stock issuable upon the exercise of warrants at an exercise price of $1.00 per share expiring on October 30, 2028, (iii) options
to purchase 62,500 shares of common stock, exercisable at $4.44 per share, of which 62,304 are vested, and (iv) 21,000 shares of common
stock RSUs that are vested.

(5) Consists of (i) 276,000 shares of the common stock, (ii) 100,000 shares of common stock issuable upon the exercise of warrants at
an exercise price of $1.00 per share expiring on October 30, 2028, (iii) options to purchase 43,750 shares of common stock, exercisable
at $3.56 per share, of which all are vested, and (iv) 21,000 shares of common stock RSUs that are vested.

(6) Consists of (i) 125,000 shares of the common stock.

(7) Consists of (i) 334,200 shares of the common stock, and ii) 100,000 shares of common stock issuable upon the exercise of warrants
at an exercise price of $1.00 per share expiring on October 30, 2028.

(8) Consists of (i) 121,500 shares of the common stock, (i) options to purchase 43,750 shares of common stock, exercisable at $4.44 per
share, of which all are vested, and (iii) 21,000 shares of common stock RSUs that are vested.

(9) Consists of 10,960,932 shares of common stock, 400,000 shares of common
stock issuable upon the exercise of warrants, options to purchase 212,109 shares of common stock and 63,000 RSUs.

**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS.**

In addition to the compensation arrangements, including employment, termination of employment and with our directors and executive officers, including those discussed in the sections titled "Management", "Executive Compensation," and "Description of Securities," the following is a description of each transaction since January 1, 2023 or any currently proposed transaction in which:

● we, Marpai Health or Marpai have been or are to be a party;

● the amount involved exceeded or exceeds $120,000 or 1% of the average of our total assets as of the end of the last two completed fiscal years; and

● any of our directors, executive officers, or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest.

***HillCour's Financial Support***

On December 14, 2023, we entered into a securities purchase agreement with HillCour, pursuant to which we agreed to issue and sell 150,000 shares of our common stock in a private placement, at a purchase price of $1.97 per share (or the consolidated closing bid price of our common stock on Nasdaq as of December 14, 2023).

On January 16, 2024, we entered into a securities purchase agreement with certain insiders consisting of HillCour, our Chairman, Yaron Eitan, and our director, Robert Pons, pursuant to which we agreed to issue and sell 1,322,100 shares of our common stock in a private placement, at a purchase price of $0.9201 per share (or the consolidated closing bid price of our common stock on Nasdaq as of January 16, 2024).

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

On August 28, 2024, the Company entered into a securities purchase agreement with two investors, including HillCour, pursuant to which the Company agreed to issue and sell an aggregate of 2,702,702 shares of our common stock (of which HillCour purchased 1,351,351 shares of common stock) in a private placement, at a purchase price of $0.481 per share (or the closing bid price of our common stock on the OTCQX on August 28, 2024).

On July 17, 2025, we entered into a securities purchase agreement with two investors, including HillCour, pursuant to which we agreed to issue and sell an aggregate of 130,208 shares of our common stock (of which HillCour purchased 86,805 shares of common stock) in a private placement, at a purchase price of $1.152 per share.

On July 29, 2025, we entered into a securities purchase agreement with three investors, including HillCour, pursuant to which we agreed to issue and sell an aggregate of 603,640 shares of our common stock (of which HillCour purchased 371,470 shares of common stock) in a private placement, at a purchase price of $1.0768 per share.

On September 10, 2025, we entered into a securities purchase agreement with three investors, including HillCour, pursuant to which we agreed to issue and sell an aggregate of 1,038,519 shares of our common stock (of which HillCour purchased 896,903 shares of common stock) in a private placement, at a purchase price of $1.0592 per share.

On September 30, 2025, we entered into a securities purchase agreement with HillCour, pursuant to which the Company agreed to issue and sell an aggregate of 147,058 shares of our common stock in a private placement, at a purchase price of $1.36 per share.

***Insider Private Placement***

On December 5, 2024, we entered into a securities purchase agreement with four investors, including Yaron Eitan, our Chairman, Steve Johnson, our Chief Financial Officer and John Powers, our President and Chief Operating Officer, pursuant to which the Company agreed to issue and sell an aggregate of 621,194 shares of our common stock (of which Mr. Eitan purchased 110,619 shares of common stock, Mr. Johnson purchased 5,000 shares of common stock and Mr. Powers purchased 10,000 shares of common stock) in a private placement, at a purchase price of $1.13 per share(or the closing bid price of our common stock on the OTCQX as of December 5, 2024).

On November 7, 2025, we entered into a securities purchase agreement with certain investors, including the Company's Chief Operating Officer and President, an immediate family member of the Chief Executive Officer, the chairman and certain directors of the Board, pursuant to which we agreed to issue and sell an aggregate of 3,850,000 shares of our common stock and warrants to purchase up to 7,700,000 shares of our common stock (of which the Company's Chief Operating Officer and President, an immediate family member of the Chief Executive Officer, the chairman and certain directors of the Board purchased 425,000 shares of common stock and warrants to purchase up to 850,000 shares of our common stock) in a private placement, at a purchase price of $1.00 per share and accompanying warrant.

***Consulting Fees***

The Company executed a separation agreement with Mr. Finger, pursuant to which Mr. Finger's position as our President of Product and Development was terminated effective as of August 15, 2023. On August 15, 2023, the Company executed the Advisory Agreement with Mr. Finger pursuant to which Mr. Finger will continue to provide services to the Company.

Pursuant to the terms of the Advisory Agreement, the Company agreed to retain Mr. Finger for a set term through December 31, 2023, and commencing on January 1, 2024, the Advisory Agreement continued and was able to be terminated by either party with thirty (30) days' prior written notice. As consideration for Mr. Finger's services thereunder, the Company agreed to pay Mr. Finger a monthly retainer fee in the amount of $27 thousand until December 31, 2023, increasing to $28 thousand on January 1, 2024. In addition, the Company agreed to issue Mr. Finger 400,000 RSUs under our 2021 Plan which were to fully vest on September 7, 2023. In addition, 96,154 RSUs previously issued to Mr. Finger had their vesting accelerated to September 7, 2023.

Thereafter, in May 2024, as a means to settle any and all disputes as to amounts owed to Mr. Finger, we agreed to issue Mr. Finger 250,000 RSUs in lieu of payments owed pursuant to the Advisory Agreement. Mr. Finger objected to the grant of RSUs, and in December 2024 we agreed to cancel the 250,000 RSUs issued to Mr. Finger and agreed to issue him stock options to purchase up to 400,000 shares of common stock. The options are exercisable at any time on or after December 31, 2024 until December 31, 2029, and have an exercise price of $0.95 per share.

***Chief Executive Officer Promissory Notes***

On February 12, 2026, we issued a promissory note in the principal amount of $410,000 to Damien Lamendola, the Company's Chief Executive Officer. The note 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 the note is repaid in full. We may repay the note, in whole or in part, together with all interest then accrued and any other sums then due and payable to Mr. Lamendola, at any time, without premium or penalty. All payments of outstanding principal, interest and all other amounts due under the note are payable by April 11, 2026 to Mr. Lamendola, or his successors and assigns.

On March 9, 2026, we issued a promissory note in the principal amount of $250,000 to Damien Lamendola, the Company's Chief Executive Officer. The note 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 the note is repaid in full. We may prepay the note, in whole or in part, together with all interest then accrued and any other sums then due and payable to Mr. Lamendola, at any time, without premium or penalty. All payments of outstanding principal, interest and all other amounts due under the note are payable by May 10, 2026 to Mr. Lamendola, or his successors and assigns.

**Policy for Approval of Related Party Transactions**

Our Board adopted our Code of Ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board of directors) or as disclosed in our public filings with the SEC. Under our Code of Ethics, conflict of interest situations includes any financial transaction, arrangement, or relationship (including any indebtedness or guarantee of indebtedness) involving Marpai, Inc.

Our Code of Ethics is posted on our Internet website at https://www.marpaihealth.com/. The information on our website is not incorporated by reference into this Annual Report. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Conduct by posting such information on the website address specified above.

In addition, the audit committee of our board of directors has adopted a charter, providing for the review, approval and/or ratification of "related party transactions," which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so, requested by the chairman of the committee, participate in some or all of the committee's discussions of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine whether to permit or to prohibit the related party transaction. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, or directors, or any of their affiliates.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee, or officer.

**ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES**

The fees for services provided by our independent registered public accounting firm to the Company and paid in the last two fiscal years were as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year ended**<br>**December 31,**<br>**2025** | **Year ended**<br>**December 31,**<br>**2024** |
| Audit Fees | $441 | $538 |
| Audit-Related Fees |  |  |
| Tax Fees | 87 | 97 |
| All Other Fees | - | - |
| Total Fees | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 528 | $&nbsp;&nbsp;&nbsp;&nbsp; 635 |

---

*Audit Fees*. These fees were for professional services in connection with the audit of the consolidated financial statements and quarterly reviews of the condensed consolidated financial statements included in Form 10-Q. Included in this amount are fees for consents and comfort letters related to registration payments and review of documents filed with the SEC.

*Audit-Related Fees*. None

*Tax Fees.* These fees were for professional services in connection with the filing of our tax returns.

*All Other Fees*. None

SEC rules require that before the independent registered public accounting firm are engaged by us to render any auditing or permitted non-audit related service, the engagement be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) pre-approved by our audit committee; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) entered into pursuant to pre-approval policies and procedures
established by the audit committee, provided the policies and procedures are detailed as to the particular service, the Audit Committee
is informed of each service, and such policies and procedures do not include delegation of the Audit Committee's responsibilities
to management.

The audit committee pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees were reviewed and approved by the audit committee before the services were rendered.

As of December 31, 2025, we have accrued approximately $265 thousand for the annual audit fees for the fiscal year ended December 31, 2025, which we expect to pay UHY LLP during fiscal year 2026.

**PART IV** 

**ITEM 15. EXHIBITS.**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1 | [Amended and Restated Certificate of Incorporation of the Registrant, dated March 31, 2021 (incorporated by reference to Exhibit 3.4 to](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex3-4.htm) [registration statement on Form S-1 filed on October 25, 2021).](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex3-4.htm) |
| 3.2 | [Second Amended and Restated Certificate of Incorporation of the Registrant, dated July 8, 2021(incorporated by reference to Exhibit 3.5 to](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex3-5.htm) [registration statement on Form S-1 filed on October 25, 2021).](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex3-5.htm) |
| 3.3 | [Amendment to Second Amended and Restated Certificate of Incorporation of the Registrant, dated September 2, 2021 (incorporated by](https://www.sec.gov/Archives/edgar/data/1844392/000110465921113548/tm215661d6_ex3-6.htm) [reference to Exhibit 3.6 to registration statement on Form S-1 filed on October 25, 2021).](https://www.sec.gov/Archives/edgar/data/1844392/000110465921113548/tm215661d6_ex3-6.htm) |
| 3.4 | [Amendment to Second Amended and Restated Certificate of Incorporation of the Registrant, dated October 17, 2021 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on October 20, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025100355/ea026166301ex3-1_marpai.htm) |
| 3.5 | [Certificate of Amendment to Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Registrant's](https://www.sec.gov/Archives/edgar/data/1844392/000095017023030533/mrai-ex3_1.htm) [Current Report on Form 8-K filed on June 29, 2023).](https://www.sec.gov/Archives/edgar/data/1844392/000095017023030533/mrai-ex3_1.htm) |
| 4.1 | [Specimen Common Stock Certificate of the Registrant (incorporated by reference to Exhibit 4.1 to registration statement on Form S-1 filed](https://www.sec.gov/Archives/edgar/data/1844392/000110465921124767/tm215661d15_ex4-1.htm) [on October 25, 2021).](https://www.sec.gov/Archives/edgar/data/1844392/000110465921124767/tm215661d15_ex4-1.htm) |
| 4.2 | [Form of Representative's Warrant (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on April](http://www.sec.gov/Archives/edgar/data/1844392/000095017023013356/mrai-ex4_1.htm) [19, 2023).](http://www.sec.gov/Archives/edgar/data/1844392/000095017023013356/mrai-ex4_1.htm) |
| 4.3 | [Description of Securities (incorporated by references to Exhibit 4.68 to Annual Report on Form 10-K filed on March 30, 2022).](https://www.sec.gov/Archives/edgar/data/1844392/000141057822000657/mrai-20211231xex4d68.htm) |
| 4.4 | [Form of Warrant (incorporated by reference to Exhibit 1.1 to the Registrant's Current Report on Form 8-K filed on December 11, 2023).](http://www.sec.gov/Archives/edgar/data/1844392/000095017023069428/mrai-ex1_1.htm) |
| 4.5 | [Form of Common Warrant (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on November 12, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025108593/ea026491801ex4-1_marpai.htm) |
| 4.6 | [Form of Common Warrant (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on December 23, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025124729/ea027070401ex4-1_marpai.htm) |
| 4.7 | [Promissory Note, by and between Marpai, Inc. and Damien Lamendola, dated February 12, 2026 (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on February 13, 2026).](http://www.sec.gov/Archives/edgar/data/1844392/000121390026016406/ea027706101ex4-1_marpai.htm) |
| 4.8 | [Promissory Note, by and between Marpai, Inc. and Damien Lamendola, dated March 9, 2026 (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on March 11, 2026).](http://www.sec.gov/Archives/edgar/data/1844392/000121390026025966/ea028097901ex4-1.htm) |
| 10.1+ | [Marpai Health, Inc. Global Share Incentive Plan (2019) (incorporated by reference to Exhibit 10.10 to registration statement on Form S-1](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex10-10.htm) [filed on October 25, 2021).](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex10-10.htm) |
| 10.2+ | [Marpai, Inc. 2021 Global Stock Incentive Plan (incorporated by reference to Exhibit 10.12 to registration statement on Form S-1 filed on](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex10-12.htm) [October 25, 2021).](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex10-12.htm) |
| 10.3+ | [Amended and Restated Exhibit A dated April 21, 2021, Services and Compensation between Marpai, Inc. and Yaron Eitan, appended to](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex10-14.htm) [Consulting Agreement between CITTA, Inc. and Yaron Eitan dated July 29, 2019 (incorporated by reference to Exhibit 10.14 to registration](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex10-14.htm) [statement on Form S-1 filed on October 25, 2021).](https://www.sec.gov/Archives/edgar/data/1844392/000110465921093678/tm215661d4_ex10-14.htm) |
| 10.4+ | [Amendment to the Amended and Restated Services and Compensation between Marpai, Inc. and Yaron Eitan (incorporated by reference to](https://www.sec.gov/Archives/edgar/data/1844392/000141057822000657/mrai-20211231xex10d14.htm) [Exhibit 10.14 to Annual Report on Form 10-K filed on March 30, 2022).](https://www.sec.gov/Archives/edgar/data/1844392/000141057822000657/mrai-20211231xex10d14.htm) |
| 10.5 | [Securities Purchase Agreement executed by and between Marpai Health Inc. and HillCour Investment Fund, LLC, dated December 14,](http://www.sec.gov/Archives/edgar/data/1844392/000095017023070583/mrai-ex10_1.htm) [2023 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on December 15, 2023).](http://www.sec.gov/Archives/edgar/data/1844392/000095017023070583/mrai-ex10_1.htm) |
| 10.6 | [Securities Purchase Agreement executed by and between Marpai Health Inc., HillCour Investment Fund, LLC, Yaron Eitan and Robert](https://www.sec.gov/Archives/edgar/data/1844392/000095017024005016/mrai-ex10_1.htm) [Pons, dated January 16, 2024 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on January](https://www.sec.gov/Archives/edgar/data/1844392/000095017024005016/mrai-ex10_1.htm) [17, 2024).](https://www.sec.gov/Archives/edgar/data/1844392/000095017024005016/mrai-ex10_1.htm) |
| 10.7+ | [Employment Agreement, dated January 18, 2024, by and between Marpai, Inc. and John Powers (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on January 18, 2024).](http://www.sec.gov/Archives/edgar/data/1844392/000095017024005385/mrai-ex10_1.htm) |
| 10.8+ | [Employment Agreement, dated January 11, 2024, by and between Marpai, Inc. and Damien Lamendola (incorporated by reference to](http://www.sec.gov/Archives/edgar/data/1844392/000095017024005385/mrai-ex10_2.htm) [Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on January 18, 2024).](http://www.sec.gov/Archives/edgar/data/1844392/000095017024005385/mrai-ex10_2.htm) |
| 10.9+ | [Employment Agreement, dated January 11, 2024, by and between Marpai, Inc. and Steve Johnson (incorporated by reference to Exhibit](http://www.sec.gov/Archives/edgar/data/1844392/000095017024005385/mrai-ex10_3.htm) [10.3 to the Registrant's Current Report on Form 8-K filed on January 18, 2024).](http://www.sec.gov/Archives/edgar/data/1844392/000095017024005385/mrai-ex10_3.htm) |
| 10.10+ | [Separation Agreement, dated January 15, 2024, by and between Marpai, Inc. and Gonen Antebi (incorporated by reference to Exhibit 10.4](http://www.sec.gov/Archives/edgar/data/1844392/000095017024005385/mrai-ex10_4.htm) [to the Registrant's Current Report on Form 8-K filed on January 18, 2024).](http://www.sec.gov/Archives/edgar/data/1844392/000095017024005385/mrai-ex10_4.htm) |
| 10.11+ | [Consulting Agreement, dated January 15, 2024, by and between Marpai, Inc. and Gonen Antebi (incorporated by reference to Exhibit 10.5](http://www.sec.gov/Archives/edgar/data/1844392/000095017024005385/mrai-ex10_5.htm) [to the Registrant's Current Report on Form 8-K filed on January 18, 2024).](http://www.sec.gov/Archives/edgar/data/1844392/000095017024005385/mrai-ex10_5.htm) |
| 10.12˄ | [Purchase Agreement by and between X.L. America, Inc., Seaview Re Holdings Inc., AXA S.A. and Marpai, Inc. dated as of August 4, 2022](http://www.sec.gov/Archives/edgar/data/1844392/000110465922087928/tm2222887d1_ex10-1.htm) [for the purchase of Maestro Health, LLC (incorporated by reference to Exhibit 10.1 to current report on Form 8-K filed on August 9, 2022).](http://www.sec.gov/Archives/edgar/data/1844392/000110465922087928/tm2222887d1_ex10-1.htm) |
| 10.13+ | [First Amendment to Marpai, Inc. 2021 Global Stock Incentive Plan (incorporated by reference to Annex A to Definitive Proxy Statement](http://www.sec.gov/Archives/edgar/data/1844392/000110465922043688/tm2212053d1_def14a.htm#a_016) [on Form 14A filed on April 7, 2022).](http://www.sec.gov/Archives/edgar/data/1844392/000110465922043688/tm2212053d1_def14a.htm#a_016) |

---

---

| | |
|:---|:---|
| 10.14+ | [Employment letter agreement by and between Gonen Antebi and Marpai, Inc. (incorporated by reference to Exhibit 10.1 to current report](https://www.sec.gov/Archives/edgar/data/1844392/000095017023001535/mrai-ex10_1.htm) [on form 8-K filed on February 1, 2023).](https://www.sec.gov/Archives/edgar/data/1844392/000095017023001535/mrai-ex10_1.htm) |
| 10.15 | [Agreement of Sale of Future Receipts, by and among Marpai, Inc., Libertas Funding LLC and Damien Lamendola, as guarantor, dated](https://www.sec.gov/Archives/edgar/data/1844392/000095017024012762/mrai-ex10_1.htm) [February 2, 2024 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on February 8, 2024).](https://www.sec.gov/Archives/edgar/data/1844392/000095017024012762/mrai-ex10_1.htm) |
| 10.16 | [Amendment No. 1 to Purchase Agreement, by and between Marpai, Inc. and AXA S.A., a French société anonyme, dated February 7, 2024](https://www.sec.gov/Archives/edgar/data/1844392/000095017024012762/mrai-ex10_2.htm) [(incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on February 8, 2024).](https://www.sec.gov/Archives/edgar/data/1844392/000095017024012762/mrai-ex10_2.htm) |
| 10.17 | [Securities Purchase Agreement executed by and between Marpai Health Inc. and HillCour Investment Fund, LLC, dated March 7, 2024](https://www.sec.gov/Archives/edgar/data/1844392/000095017024028393/mrai-ex10_1.htm) [(incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on March 8, 2024).](https://www.sec.gov/Archives/edgar/data/1844392/000095017024028393/mrai-ex10_1.htm) |
| 10.18 | [Securities Purchase Agreement, by and among Marpai, Inc., our subsidiaries named therein, the purchasers named therein, and JGB](https://www.sec.gov/Archives/edgar/data/1844392/000095017024045089/mrai-ex10_1.htm) [Collateral, LLC, dated April 15, 2024 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on](https://www.sec.gov/Archives/edgar/data/1844392/000095017024045089/mrai-ex10_1.htm) [April 17, 2024).](https://www.sec.gov/Archives/edgar/data/1844392/000095017024045089/mrai-ex10_1.htm) |
| 10.19 | [Amendment to Securities Purchase Agreement, by and among Marpai, Inc., our subsidiaries named therein, the purchasers named therein, and JGB Collateral, LLC, dated December 30, 2024 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on January 6, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025001170/ea022688401ex10-1_marpai.htm) |
| 10.20+ | [Marpai, Inc. 2024 Global Stock Incentive Plan (incorporated by reference to Exhibit 99.1 to registration statement on Form S-8 filed on](http://www.sec.gov/Archives/edgar/data/1844392/000095017024045088/2024_proxy_statement_fin.htm) [May 22, 2024).](http://www.sec.gov/Archives/edgar/data/1844392/000095017024045088/2024_proxy_statement_fin.htm) |
| 10.21 | [Form of Securities Purchase Agreement executed by and between Marpai Health Inc. and investor parties thereto, dated August 28, 2024](https://www.sec.gov/Archives/edgar/data/1844392/000121390024075117/ea021332501ex10-1_marpai.htm) [(incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed September 3, 2024).](https://www.sec.gov/Archives/edgar/data/1844392/000121390024075117/ea021332501ex10-1_marpai.htm) |
| 10.22 | [Securities Purchase Agreement executed by and between Marpai Health Inc. and investor parties thereto, dated December 5, 2024](https://www.sec.gov/Archives/edgar/data/1844392/000121390024107406/ea022417501ex10-1_marpai.htm) [(incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed December 10, 2024).](https://www.sec.gov/Archives/edgar/data/1844392/000121390024107406/ea022417501ex10-1_marpai.htm) |
| 10.24 | [Employment Offer Letter by and between Marpai, Inc. and Dallas Scrip, dated May 1, 2025 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on May 13, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025042317/ea024179201ex10-1_marpai.htm) |
| 10.25 | [Securities Purchase Agreement executed by and between Marpai Health Inc. and investor parties thereto, dated May 13, 2025 (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed on May 14, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025043333/ea024077101ex10-1_marpaiinc.htm) |
| 10.26 | [Securities Purchase Agreement executed by and between Marpai Health Inc. and investor parties thereto, dated July 17, 2025 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on July 21, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025066092/ea024958001ex10-1_marpai.htm) |
| 10.27 | [Securities Purchase Agreement executed by and between Marpai Health Inc. and investor parties thereto, dated July 29, 2025 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on August 4, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025071305/ea025159901ex10-1_marpai.htm) |
| 10.28 | [Securities Purchase Agreement executed by and between Marpai Health Inc. and investor parties thereto, dated September 10, 2025 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on September 16, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025087900/ea025748301ex10-1_marpai.htm) |
| 10.29 | [Securities Purchase Agreement executed by and between Marpai Health Inc. and investor parties thereto, dated September 30, 2025 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on October 6, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025096526/ea026039101ex10-1_marpai.htm) |
| 10.30 | [Securities Purchase Agreement executed by and between Marpai Health Inc. and investor parties thereto, dated November 7, 2025 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on November 12, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025108593/ea026491801ex10-1_marpai.htm) |
| 10.31 | [Securities Purchase Agreement executed by and between Marpai Health Inc. and investor parties thereto, dated December 22, 2025 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on December 23, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000121390025124729/ea027070401ex10-1_marpai.htm) |
| 14.1 | [Marpai, Inc. Code of Ethics, adopted September 2, 2021 (incorporated by reference to Exhibit 14.2 to registration statement on Form S-1](https://www.sec.gov/Archives/edgar/data/1844392/000110465921113548/tm215661d6_ex14-2.htm) [filed on October 25, 2021).](https://www.sec.gov/Archives/edgar/data/1844392/000110465921113548/tm215661d6_ex14-2.htm) |
| 19.1 | [Marpai, Inc. Insider Trading Policy, adopted March 25, 2025 (incorporated by reference to Exhibit 19.1 to the Registrant's Annual Report on Form 10-K filed on March 27, 2025).](http://www.sec.gov/Archives/edgar/data/1844392/000101376225002871/ea023505601ex19-1_marpai.htm) |
| 23.1\* | [Consent of UHY LLP](ea028291801ex23-1.htm) |
| 31.1\*\* | [Certification pursuant to Rule 13a-14(a)/15d-14(a) of Chief Executive Officer](ea028291801ex31-1.htm) |
| 31.2\*\* | [Certification pursuant to Rule 13a-14(a)/15d-14(a) of Chief Financial Officer](ea028291801ex31-2.htm) |
| 32.1\*\* | [Certification pursuant to 18 U.S.C. Section 1350 of Chief Executive Officer](ea028291801ex32-1.htm) |
| 32.2\*\* | [Certification pursuant to 18 U.S.C. Section 1350 Chief Financial Officer](ea028291801ex32-2.htm) |
| 97.1 | [Marpai Inc. Clawback Policy, dated October 2, 2023 (incorporated by reference to Exhibit 97.1 to Annual Report on Form 10-K filed on](http://www.sec.gov/Archives/edgar/data/1844392/000095017024036590/mrai-ex97_1.htm) [March 25, 2024).](http://www.sec.gov/Archives/edgar/data/1844392/000095017024036590/mrai-ex97_1.htm) |
| 101\* | The following materials from our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 formatted in inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Loss, (iv) the Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to the Consolidated Financial Statements, tagged as blocks of text and in detail. |
| 104\* | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

\* Filed herewith.

\*\* Furnished herewith.

+ Management contract or compensation plan.

˄ Certain identified information in the exhibit has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed.

**ITEM 16. FORM 10-K SUMMARY.**

None.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| Marpai, Inc. | Marpai, Inc. |  |
| By: | /s/ Damien Lamendola |  |
|  | Damien Lamendola, Chief Executive Officer and <br> Director (Principal Executive Officer) |  |
|  |  | Dated: March 25, 2026 |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| By: | /s/ Damien Lamendola | Dated: March 25, 2026 |
|  | Damien Lamendola, Chief Executive Officer and Director (Principal Executive Officer) |  |
| By: | /s/ Steve Johnson | Dated: March 25, 2026 |
|  | Steve Johnson, Principal Financial Officer and Accounting Officer |  |
| By: | /s/ Yaron Eitan | Dated: March 25, 2026 |
|  | Yaron Eitan, Chairman of the Board of Directors |  |
| By: | /s/ Jennifer Calabrese | Dated: March 25, 2026 |
|  | Jennifer Calabrese, Director |  |
| By: | /s/ Sagiv Shiv | Dated: March 25, 2026 |
|  | Sagiv Shiv, Director |  |
| By: | /s/ Colleen DiClaudio | Dated: March 25, 2026 |
|  | Colleen DiClaudio, Director |  |
| By: | /s/ Robert Pons | Dated: March 25, 2026 |
|  | Robert Pons, Director |  |

---

**MARPAI, INC. AND SUBSIDIARIES**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page(s)** |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID 1195)](#a_028) | F-2 |
| Consolidated Financial Statements |  |
| &nbsp;&nbsp;&nbsp;[Consolidated Balance Sheets](#a_029) | F-3 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Operations](#a_030) | F-4 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Changes in Stockholders' Deficit](#a_031) | F-5 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Cash Flows](#a_032) | F-6 |
| &nbsp;&nbsp;&nbsp;[Notes to Consolidated Financial Statements](#a_033) | F-7 - F-33 |

---

![](ea028291801_img1.jpg)

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors and Shareholders

Marpai, Inc. and subsidiaries

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Marpai, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders' deficit, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Substantial Doubt about the Company's Ability to Continue as a Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2 to the consolidated financial statements, the Company has incurred recurring operating losses and negative cash flows from operations, has an accumulated deficit, and has historically met its cash needs primarily through proceeds from issuing convertible notes, warrants, and common stock, as well as receiving loans from various lenders. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company's auditor since 2020.

/s/ UHY LLP

Melville, New York

March 25, 2026

**MARPAI, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

(in thousands, except share and per share data)

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| **ASSETS:** |  |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $133 | $764 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 8818 | 8468 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for credit losses of $21 and $1 | 697 | 837 |
| &nbsp;&nbsp;&nbsp;Unbilled receivables | 280 | 569 |
| &nbsp;&nbsp;&nbsp;Due from buyer for sale of business unit |  | 500 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 408 | 759 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | 10336 | 11897 |
| &nbsp;&nbsp;&nbsp;Capitalized software, net | 60 | 441 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets | 218 | 296 |
| &nbsp;&nbsp;&nbsp;Security deposits | 229 | 229 |
| &nbsp;&nbsp;&nbsp;Other long-term asset | 61 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $10904 | $12878 |
| **LIABILITIES AND STOCKHOLDERS' DEFICIT** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $3668 | $3109 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 2115 | 2585 |
| &nbsp;&nbsp;&nbsp;Accrued fiduciary obligations | 8521 | 6308 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 89 | 625 |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 264 | 244 |
| &nbsp;&nbsp;&nbsp;Current portion of convertible debentures, net | 3037 | 3106 |
| &nbsp;&nbsp;&nbsp;Other short-term liabilities | 8000 | 3005 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | 25694 | 18982 |
| &nbsp;&nbsp;&nbsp;Other long-term liabilities | 11450 | 14891 |
| &nbsp;&nbsp;&nbsp;Convertible debentures, net of current portion | 5795 | 5921 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, net of current portion | 528 | 793 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | 43467 | 40587 |
| COMMITMENTS AND CONTINGENCIES (Note 20) |  |  |
| **STOCKHOLDERS' DEFICIT** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.0001 par value, 2,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2025 and 2024, respectively. |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 227,791,050 shares authorized; 24,035,610 issued and outstanding at December 31, 2025 and 14,237,176 issued and outstanding at December 31, 2024 | 2 | 1 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 82829 | 71124 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (115394) | (98834) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total stockholders' deficit** | (32563) | (27709) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' deficit** | $10904 | $12878 |

---

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

**MARPAI, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

(in thousands, except share and per share data)

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2025** | **2024** |
| Revenue | $18099 | $28173 |
| **Costs and expenses** |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenue (exclusive of depreciation and amortization shown separately below) | 13319 | 19066 |
| &nbsp;&nbsp;&nbsp;General and administrative | 11139 | 12832 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 1091 | 1766 |
| &nbsp;&nbsp;&nbsp;Information technology | 5116 | 4697 |
| &nbsp;&nbsp;&nbsp;Research and development | 7 | 29 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 381 | 2256 |
| &nbsp;&nbsp;&nbsp;Impairment of goodwill and intangible assets |  | 7588 |
| &nbsp;&nbsp;&nbsp;Facilities | 580 | 1305 |
| &nbsp;&nbsp;&nbsp;Loss on disposal of assets | 19 | 648 |
| &nbsp;&nbsp;&nbsp;Loss on sale of business unit |  | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total costs and expenses** | 31652 | 50260 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Operating loss** | (13553) | (22087) |
| **Other income (expenses)** |  |  |
| &nbsp;&nbsp;&nbsp;Other income, net | 227 | 396 |
| &nbsp;&nbsp;&nbsp;Interest expense | (3234) | (2709) |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment |  | (1877) |
| &nbsp;&nbsp;&nbsp;Gain on forgiveness of other liability |  | 3000 |
| &nbsp;&nbsp;&nbsp;Foreign exchange loss |  | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Loss before provision for income taxes** | (16560) | (23278) |
| Income tax expense |  | (1190) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net loss** | $(16560) | $(22088) |
| **Net loss per share, basic and fully diluted** | $(0.95) | $(1.92) |
| **Weighted average number of shares of common stock, basic and fully diluted** | 17367886 | 11511203 |

---

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

**MARPAI, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT**

(in thousands, except share data)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred stock** | **Preferred stock** | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional Paid-In**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total Stockholders'**<br>**Deficit** |
| **Balance, December 31, 2023** |  | $&nbsp;&nbsp;&nbsp;&nbsp; — | **7960938** | $**1** | $**63307** | $**(76746)** | $**(13438)** |
| Share-based compensation |  |  |  |  | 3157 |  | 3157 |
| Issuance of stock upon vesting of restricted stock units |  |  | 720242 |  |  |  |  |
| Issuance of privately placed shares |  |  | 5555996 |  | 4660 |  | 4660 |
| Net loss |  |  |  |  |  | (22088) | (22088) |
| **Balance, December 31, 2024** |  | $— | **14237176** | $**1** | $**71124** | $**(98834)** | $**(27709)** |
| Share-based compensation |  |  |  |  | 3614 |  | 3614 |
| Issuance of stock upon vesting of restricted stock units |  |  | 2179010 |  |  |  |  |
| Issuance of common stock to vendors in exchange for services |  |  | 769999 |  | 1062 |  | 1062 |
| Issuance of privately placed shares and warrants |  |  | 6849425 | 1 | 7029 |  | 7030 |
| Net loss |  |  |  |  |  | (16560) | (16560) |
| **Balance, December 31, 2025** |  | $— | **24035610** | $**2** | $**82829** | $**(115394)** | $**(32563)** |

---

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

**MARPAI, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(16560) | $(22088) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 381 | 2256 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of assets | 19 | 648 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 20 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on sale of receivables |  | 306 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 3614 | 3157 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares issued to vendors in exchange for services | 1062 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use asset | 59 | 211 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of goodwill and intangible assets |  | 7588 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on sale of business unit |  | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on forgiveness of other liability |  | (3000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on lease termination |  | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest expense | 1810 | 1395 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt premium and debt issuance costs, net | (33) | 201 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment |  | 1877 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred taxes |  | (1190) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable and unbilled receivable | 409 | 486 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expense and other assets | 351 | 142 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security deposit |  | 138 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 559 | (1540) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | (470) | (231) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued fiduciary obligations | 2213 | (5265) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (245) | (464) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | (596) | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other asset | (46) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (7453) | (15158) |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of business unit | 500 | 227 |
| &nbsp;&nbsp;&nbsp;Net cash provided by investing activities | 500 | 227 |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Payments to seller for acquisition | (196) | (631) |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock and warrants in a private offering | 7030 | 4660 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of convertible debentures | 3000 | 8000 |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of future cash receipts on accounts receivable |  | 1509 |
| &nbsp;&nbsp;&nbsp;Payments to buyer of receivables |  | (1816) |
| &nbsp;&nbsp;&nbsp;Payments on convertible debentures | (3000) | (420) |
| &nbsp;&nbsp;&nbsp;Payments of convertible debenture issuance costs | (162) | (631) |
| &nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 6672 | 10671 |
| **Net decrease in cash, cash equivalents and restricted cash** | (281) | (4260) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Cash, cash equivalents and restricted cash at beginning of period** | 9232 | 13492 |
| **Cash, cash equivalents and restricted cash at end of period** | $8951 | $9232 |
| **Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets** |  |  |
| Cash and cash equivalents | $133 | $764 |
| Restricted cash | 8818 | 8468 |
| **Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows** | $8951 | $9232 |
| **Supplemental disclosure of cash flow information** |  |  |
| Cash paid for interest | $1457 | $1742 |

---

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

**MARPAI, INC. AND SUBSIDIARIES**

**NOTES TO 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 its subsidiaries (as applicable).

***Organization***

Marpai, Inc.'s ("Marpai" 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. The Company has combined these two businesses to create what it believes to be the Payer of the Future, which has not only the licenses, processes and know-how of a payer but also the latest technology. This combination allows the Company to differentiate itself in the TPA market by delivering a technology-driven service that it believes can lower the overall cost of healthcare while maintaining or improving healthcare outcomes. Marpai Captive, Inc. ("Marpai Captive") was founded in March 2022 as a Delaware corporation. Marpai Captive engages in the captive insurance market and commenced operations in the first quarter of 2023 and operated until the fourth quarter of 2025.

***Nature of Business***

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 the Company to administer members' healthcare claims, (ii) employees who receive these healthcare benefits from our clients, and (iii) healthcare providers including doctors, doctor groups, hospitals, clinics, and any other entities providing healthcare services or products.

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

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

**NOTE 2 – LIQUIDITY AND GOING CONCERN**

As shown in the accompanying consolidated financial statements as of and for the year ended December 31, 2025, the Company has an accumulated deficit of approximately $115.4 million and negative working capital of approximately $15.4 million. As of December 31, 2025, the Company had short-term debt of approximately $11.0 million and long-term debt of approximately $17.2 million and approximately $133 thousand of unrestricted cash on hand. For the years ended December 31, 2025 and 2024, the Company has reported operating losses and negative cash flows from operations. The Company has met its cash needs primarily through proceeds from issuing convertible notes, warrants, and shares of our Class A common stock, par value $0.0001 per share (the "common stock"), as well as receiving loans from various lenders.

If the Company is 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 the Company 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 of these consolidated financial statements are issued. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

On January 16, 2024, the Company entered into a securities purchase agreement (the "Second SPA") with certain Company insiders consisting of HillCour and one of our directors, pursuant to which the Company agreed to issue and sell 1,322,100 shares of common stock in a private placement, at a purchase price of $0.9201 per share (or the consolidated closing bid price of our common stock on Nasdaq as of January 16, 2024).

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

Pursuant to the terms of the Libertas Agreement, the Company agreed to pay Libertas $57 thousand each week, including interest, based upon an anticipated 20% of our future receivables until such time as $2.2 million has been paid, a period Libertas and the Company estimated at the time to be approximately 11 months. The Libertas Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and terminations provisions. In April 2024, the Company repaid $1.8 million to Libertas to satisfy the Libertas Agreement in full.

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

Pursuant to the AXA Amendment, the parties agreed to reduce the Base Purchase and the Full Base Amount (as defined in the AXA Agreement) by $3 million in the aggregate, provided that by December 31, 2024, (i) our largest shareholder has contributed at least $3 million in equity, (ii) the Company maintains a listing of our securities on Nasdaq or a nationally recognized stock exchange and (iii) between February 29, 2024 and April 15, 2024, the Company makes all timely payments owed under the AXA Agreement (collectively, the "Reduction Criteria"). As of December 31, 2024 the reduction criteria has been met and a gain of $3.0 million was recognized within the accompanying consolidated statements of operations for the year ended December 31, 2024.

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

The AXA Amendment also provides that the Company shall make three monthly payments of $158 thousand on or prior to February 29, 2024, March 31, 2024 and April 15, 2024 for the 2024 year, as well as make such total accumulated annual payments of $2.3 million, $5.3 million, $13.3 million and $22.3 million in years 2024, 2025, 2026 and 2027 if the Reduction Criteria are met or $2.3 million, $8.3 million, $16.3 million and $25.3 million in years 2024, 2025, 2026 and 2027, respectively, if the Reduction Criteria are not met. The Company made timely payments of $158 thousand for February, March and April 2024. As of December 31, 2025, the amount due in 2026 of $8 million is included in other short-term liabilities and amounts due thereafter aggregating $11.4 million are included in other long-term liabilities on the consolidated balance sheets.

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

On April 15, 2024, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with each of the purchasers that are parties thereto (each, including its successors and assigns, a "Purchaser" and collectively, the "Purchasers") and JGB Collateral LLC ("JGB"), a Delaware limited liability company, as collateral agent for the Purchasers (the "Agent"). Pursuant to the terms of the Purchase Agreement, on April 15, 2024, the Company issued the Senior Secured Convertible Debentures (the "Debentures") due on April 15, 2027 for a principal sum of $11.83 million, subject to the redemption of $5 million at our election. In accordance with the Purchase Agreement JGB purchased an aggregate of $6.35 million in principal amount of the Debentures. On June 21, 2024, the Company elected not to redeem an additional $5 million of the Debentures with JGB.

On December 30, 2024, the Company, the Purchasers and the Agent entered into amendments to the 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 party thereto, as applicable, in order to, among other things, sell Debentures up to an additional aggregate principal amount of $5.4 million, for a total purchase price of $5.0 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 the Company at closing, and the remaining $3.0 million of the Additional Investment is being held in escrow pending satisfaction of certain terms and conditions specified in the Amendment Agreement and the Debenture Amendments. See Note 9.

On May 24, 2024, the Company 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 stock from the Nasdaq Capital Market ("Nasdaq") and have the common stock quoted on the OTCQX Market ("OTCQX").

On August 28, 2024, the Company entered into a securities purchase agreement with two investors, including HillCour, pursuant to which the Company agreed to issue and sell an aggregate of 2,702,702 shares of our common stock (of which HillCour purchased 1,351,351 shares of common stock) in a private placement, at a purchase price of $0.481 per share (or the closing bid price of our common stock on OTCQX on August 28, 2024).

On December 5, 2024, the Company entered into a securities purchase agreement with four investors, including certain executives of the Company, pursuant to which the Company agreed to issue and sell an aggregate of 621,194 shares of our common stock (of which the executives purchased an aggregate of 125,619 share of common stock) in a private placement, at a purchase price of $1.13 per share (or the closing bid price of our common stock on OTCQX on December 5, 2024).

On May 13, 2025, we entered into a securities purchase agreement with accredited investors, pursuant to which we agreed to issue and sell an aggregate of 730,000 shares of our common stock in a private placement, at a purchase price of $1.00 per share.

On July 17, 2025, we entered into a securities purchase agreement with two investors, including HillCour, pursuant to which we agreed to issue and sell an aggregate of 130,208 shares of our common stock (of which HillCour purchased 86,805 shares of common stock) in a private placement, at a purchase price of $1.152 per share.

On July 29, 2025, we entered into a securities purchase agreement with three investors, including HillCour, pursuant to which we agreed to issue and sell an aggregate of 603,640 shares of our common stock (of which HillCour purchased 371,470 shares of common stock) in a private placement, at a purchase price of $1.0768 per share.

On September 10, 2025, we entered into a securities purchase agreement with three investors, including HillCour, pursuant to which we agreed to issue and sell an aggregate of 1,038,519 shares of our common stock (of which HillCour purchased 896,903 shares of common stock) in a private placement, at a purchase price of $1.0592 per share.

On September 30, 2025, we entered into a securities purchase agreement with HillCour, pursuant to which the Company agreed to issue and sell an aggregate of 147,058 shares of our common stock in a private placement, at a purchase price of $1.36 per share.

On November 7, 2025, we entered into a securities purchase agreement with certain investors, including the Company's Chief Operating Officer and President, an immediate family member of the Chief Executive Officer, the chairman and certain directors of the Board, pursuant to which we agreed to issue and sell an aggregate of 3,850,000 shares of our common stock and warrants to purchase up to 7,700,000 shares of our common stock (of which the Company's Chief Operating Officer and President, an immediate family member of the Chief Executive Officer, the chairman and certain directors of the Board purchased 425,000 shares of common stock and warrants to purchase up to 850,000 shares of our common stock) in a private placement, at a purchase price of $1.00 per share and accompanying warrant.

On December 22, 2025, we entered into a securities purchase agreement with certain investors, pursuant to which we agreed to issue and sell an aggregate of 350,000 shares of our common stock and warrants to purchase up to 700,000 shares of our common stock in a private placement, at a purchase price of $1.00 per share and accompanying warrant.

**NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis of Presentation**

These consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"), expressed in U.S. dollars. The accompanying consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with GAAP. The accompanying consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

**Use of Estimates**

The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, valuation of share-based compensation, accounting for warrants, allowance for credit losses, useful lives of internally developed software, intangible assets and, incurred but not reported ("IBNR") reserves, whether an arrangement is or contains a lease, the incremental borrowing rate used for operating leases, income tax accruals, the valuation allowance for deferred income taxes, and contingent liabilities.

The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates.

**Cash and Cash Equivalents**

Cash consists of funds held in bank accounts. Cash equivalents consist of short-term, highly liquid investments with original maturities of 90 days or less at the time of purchase and generally include money market accounts.

**Concentrations of Credit Risk**

The Company maintains cash accounts with financial institutions. At times, balances in these accounts may exceed federally insured limits. The amounts over the federally insured limits as of December 31, 2025 and 2024 were approximately $87 thousand and $87 thousand, respectively. No losses have been incurred to date on any deposit balances.

For the year ended December 31, 2025, we had no single customer that accounted for more than 10% of total revenue. For the year ended December 31, 2024, one customer accounted for 15.0% of total revenue. At December 31, 2025, two customers accounted for 19.5%, and 19.1% of accounts receivable, respectively. At December 31, 2024, two customers accounted for 38.2%, and 15.6% of accounts receivable, respectively.

**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 financial surety bond company for collateral, cash in a money market account as required by a credit card company for collateral, and a certificate of deposit ("CD") held for collateral for a letter of credit. Fiduciary funds generally cannot be utilized for general corporate purposes and are not a source of liquidity for the Company. A corresponding fiduciary obligation, included in current liabilities in the accompanying 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.

**Accounts Receivable and Unbilled Receivables**

Accounts receivable are recorded at the net invoiced amount, net of allowances for credit losses, and do not bear interest. Unbilled receivables are for services rendered but not yet billed to the customer, which typically occurs within one year.

The Company periodically reviews accounts receivable balances and provides an allowance for credit losses to the extent deemed uncollectible. The allowance for credit losses is our best estimate of the amount of probable credit losses in existing accounts receivable and unbilled receivables. The Company determines expected credit losses based on historical write-off experience, an analysis of the aging of outstanding receivables, customer payment patterns, the establishment of specific reserves for customers in an adverse financial condition, and expectations of changes in macro-economic conditions that may impact the collectability of outstanding receivables. Balances are considered past due based on invoiced terms. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company had an allowance for credit losses of $21 thousand and $1 thousand, as of December 31, 2025 and 2024, respectively.

**Fair Value Measurements**

The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), establishes a hierarchy of inputs used when available. Observable inputs are what market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are those that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

The three levels of inputs that may be used to measure fair value are described below:

Level 1—Inputs based on unadjusted quoted market prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable or can be corroborated by observable market data.

Level 3—Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are both unobservable for the asset and liability in the market and significant to the overall fair value measurement.

The Company measures our long-lived assets at fair value on a non-recurring basis when a triggering event requires such evaluation. During the year ended December 31, 2024, the Company recorded goodwill and intangible assets impairment charges of $7.6 million related to our goodwill and intangibles (see Note 6). The goodwill and intangible assets impairment charge was determined based on a combination of market capitalization including quoted market prices (Level 1 inputs) and a discounted cash flow analysis (Level 3 inputs).

**Fair Value of Financial Instruments**

The carrying amounts of our financial instruments, which include accounts receivable, accounts payable, accrued expenses, and debt at fixed interest rates, approximate their fair values at December 31, 2025 and 2024, principally due to the short-term nature, maturities, or nature of interest rates of the above listed items.

**Long-Lived Assets**

The Company reviews our long-lived assets for impairment whenever events or circumstances exist that indicate the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets is measured by comparing the carrying amounts of the assets to the future undiscounted cash flows expected to be generated by the assets. If the asset or asset group is considered to be impaired, an impairment loss would be recorded to adjust the carrying amounts to the estimated fair value. Management has determined that no impairment of long-lived assets exists, and accordingly, no impairment adjustments to the carrying amounts of our long-lived assets have been recorded for the years ended December 31, 2025 and 2024.

**Capitalized Software**

The Company complies with the guidance of 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 software of the Company that is not intended for sale or otherwise marketed. Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Once a project has reached the development stage, the Company capitalizes direct internal and external costs until the software is substantially complete and ready for our intended use. Costs for upgrades and enhancements are capitalized, whereas costs incurred for maintenance are expensed as incurred. These capitalized software costs are amortized on a project-by-project basis over the expected economic life of the underlying software on a straight-line basis, which is generally three to five years. Amortization commences when the software is available for our intended use.

**Goodwill**

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

During the years ended December 31, 2024, the Company recognized impairments of our goodwill – see Note 6.

**Intangible Assets**

Intangible assets consist of customer relationships, non-compete agreements, and amounts attributed to patent and patent applications that were acquired through an acquisition and are amortized on a straight-line basis over useful lives ranging from five to ten years. Our intangible assets are reviewed for impairment when events or circumstances indicate their carrying amounts may not be recoverable. The Company reviews the recoverability of our intangible assets by comparing the carrying value of such assets to the related undiscounted value of the projected cash flows associated with the assets, or asset group. If the carrying value is found to be greater, the Company records an impairment loss for the excess of book value over fair value.

During the year ended December 31, 2024, the Company recognized an impairment of our intangible assets – see Note 6.

**Income Taxes**

The Company accounts for income taxes using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis, net operating losses, tax credit and other carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates when the assets and liabilities are expected to be realized or settled. The Company regularly reviews deferred tax assets for realizability and establishes valuation allowances based on available evidence including historical operating losses, projected future taxable income, expected timing of the reversals of existing temporary differences, and appropriate tax planning strategies. If our assessment of the realizability of a deferred tax asset change, an increase to a valuation allowance will result in a reduction of net earnings at that time, while the reduction of a valuation allowance will result in an increase of net earnings at that time.

The Company follows ASC Topic 740-10-65-1 in accounting for uncertainty in income taxes by prescribing rules for recognition, measurement, and classification in financial statements of tax positions taken or expected to be in a tax return. This prescribes a two-step process for the financial statement measurement and recognition of a tax position. The first step involves the determination of whether it is more likely than not (greater than 50 percent likelihood) that a tax position will be sustained upon examination, based on the technical merits of the position. The second step requires that any tax position that meets the more likely than not recognition threshold be measured and recognized in the financial statements at the largest amount of benefit that is a greater than 50 percent likelihood of being realized upon ultimate settlement. This topic also provides guidance on the accounting for related interest and penalties, financial statement classification and disclosure. Our policy is that any interest or penalties related to uncertain tax positions are recognized in income tax expense when incurred. The Company has no uncertain tax positions or related interest or penalties requiring accrual at December 31, 2025 and 2024.

**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 the Company completes our performance obligations, it has an unconditional right to consideration, as outlined in our contracts.

***Contract Balances***

At December 31, 2025 and 2024, the balances of our accounts receivable from contracts with customers, net of related allowances for credit losses, were $697 thousand and $837 thousand, respectively, and the balance of our unbilled receivable from a contract with a customer was $280 thousand and $569 thousand, respectively. When the Company receives consideration from a customer prior to transferring services to the customer under the terms of the customer contracts, it records deferred revenue on our consolidated balance sheet, which represents a contract liability. At December 31, 2025 and 2024, the balance of deferred revenue was $89 thousand and $625 thousand, respectively. The full deferred revenue balance as of December 31, 2024 was recognized during the year ended December 31, 2025. The Company anticipates that it will satisfy all of our performance obligations associated with our contract liabilities within a year.

The Company also provides certain performance guarantees under their contracts with customers. Customers may be entitled to receive compensation if the Company fails to meet the guarantees. Actual performance is compared to the contractual guarantee for each measure throughout the period. At December 31, 2025 and 2024, the Company had performance guarantee liabilities of $199 thousand and $247 thousand, respectively, which are included in accrued expenses on the accompanying consolidated balance sheets.

***Significant Payment Terms***

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

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

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

***Timing of Performance Obligations***

All of our contracts with customers obligate the Company to perform services. Services provided include health and welfare administration, dependent eligibility verification, COBRA administration, benefit billing, cost containment services and care management services. 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 payment is received from the customer. The Company has the right to receive payment for all services rendered.

***Determining and Allocating the Transaction Price***

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

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

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

***Cost of Revenue***

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 claims management and processing services, and (iii) direct labor costs associated with providing customer support and services to clients, Members, and other external stakeholders as well as direct labor costs associated with care and case management services.

***Captive Revenue***

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

**Loss and Loss Adjustment Expenses**

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

**Share-Based Compensation**

The Company accounts for share-based awards issued to employees in accordance with ASC Topic 718, "Compensation—Stock Compensation". Compensation expense is measured at the grant date, based on the calculated fair value of the award, and recognized as an expense over the requisite service period, which is generally the vesting period of the award.

For modification of share-based payment awards, the Company records the incremental fair value of the modified award as share-based compensation on the date of modification for vested awards or over the remaining vesting period for unvested awards. The incremental compensation is the excess of the fair value of the modified award on the date of modification over the fair value of the original award immediately before the modification. In addition, the Company records the remaining unrecognized compensation cost for the original cost for the original award on the modification date over the remaining vesting period for unvested awards.

The Company estimates the expected term of stock options granted to employees using the simplified method, whereby the expected term equals the average of the vesting term and the original contractual term of the option. The Company utilizes this method as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. For stock options granted to non-employees, the contractual term of the option is utilized as the basis for the expected term assumption. All other assumptions used to calculate the grant date fair value are generally consistent with the assumptions used for options granted to employees. For purposes of calculating share-based compensation, the Company estimates the fair value of stock options using a Black-Scholes option-pricing model. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The expected volatility is primarily based on the historical volatility of company data while the expected life of the stock options is based on historical and other economic data trended into the future. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding to the expected option term. The dividend yield assumption is based on our history and expectation of no dividend payouts.

If factors change and the Company employs different assumptions, share-based compensation expense may differ significantly from what has been recorded in the past. If there is a difference between the assumptions used in determining share-based compensation expense and the actual factors which become known over time, specifically with respect to anticipated forfeitures, the Company may change the input factors used in determining share-based compensation costs for future grants. These changes, if any, may materially impact our results of operations in the period such changes are made. Incremental compensation costs arising from subsequent modifications of awards after the grant date are recognized when incurred. In addition, the Company accounts for forfeitures of awards as they occur. For share-based awards that vest based on performance conditions, expense is recognized when it is probable that the conditions will be met.

**Convertible Notes / Debentures and Embedded Derivative Evaluation**

The Company accounts for our convertible notes / debentures in accordance with Subtopic 470-20, *Debt—Debt with Conversion and Other Options (Subtopic 470-20), Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)* and *Accounting for Convertible Instruments and Contracts in an Entity's Own Equity* (ASU 2020-06). The Company evaluates the terms of our debt instruments to determine if any identified embedded features, including embedded conversion options or redemption features, are required to be bifurcated and accounted for separately as a derivative financial instrument. In circumstances where a host instrument contains more than one embedded derivative instrument, including a conversion option, that is required to be bifurcated, the bifurcated derivative instruments would be accounted for as a single, compound derivative instrument. Any identified and bifurcated embedded derivatives are initially recorded at fair value and are revalued at each reporting date with changes in the fair value reported as non-operating income or expense.

**Warrants to Acquire Common Stock**

The Company accounts for common stock warrants as either equity-classified or liability classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480 "Distinguishing Liabilities from Equity" ("ASC 480") and ASC 815 "Derivatives and Hedging" ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own common stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

**Foreign Currency Translation**

For non-U.S. operations, the functional currency is U.S. dollars since these operations are a direct and integral component or extension of the parent company's operations. As a result, the transactions of those operations that are denominated in foreign currencies are re-measured into U.S. dollars, and any resulting gains or losses are included in earnings.

**Earnings (Loss) Per Share**

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of outstanding shares of common stock for the period, considering the effect of participating securities. Diluted earnings (loss) per share is calculated by dividing net earnings (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding. During the periods when they are anti-dilutive, common stock equivalents, if any, are not considered in the computation. At December 31, 2025 and 2024, there were 12,391,326 and 5,087,419 common stock equivalents, respectively. For the years ended December 31, 2025 and 2024, these potential shares were excluded from the shares used to calculate diluted net loss per share as their effect would have been antidilutive.

**Segment Reporting**

Operating segments are defined as components of an entity for which separate discrete financial information is available. The Chief Operating Decision Maker ("CODM") reviews financial information presented on a consolidated basis for the purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one operating and one reportable segment. The Company presents financial information about our operating segment and geographical areas in Note 14 to the consolidated financial statements.

**Offering Costs**

The Company capitalizes certain legal, accounting, and other third-party fees that are directly related to an equity financing that is probable of successful completion until such financing is consummated. After consummation of an equity financing, these costs are recorded as a reduction of the proceeds received as a result of the financing. Should a planned equity financing be abandoned, terminated, or significantly delayed, the deferred offering costs are immediately written off to operating expenses in the accompanying consolidated statements of operations in the period of determination.

**Leases**

Our leases are accounted for under FASB ASC Topic 842, "*Leases*". At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating lease liabilities are recorded based on the present value of lease payments over the expected lease term and adjusted for lease incentives. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes our incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Options to extend or terminate a lease are included in the calculation of the lease term to the extent that the option is reasonably certain of exercise. The right-of-use ("ROU") asset is based on the corresponding lease liability adjusted for certain costs such as initial direct costs, prepaid lease payments and lease incentives received. ROU assets are reviewed for impairment, consistent with other long-lived assets, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease incentives are recognized when earned and reduce the operating lease asset related to the lease.

Leases with an initial term of 12 months or less that do contain purchase options or renewal terms that the Company is reasonably certain to exercise are not recorded on the accompanying consolidated balance sheets. The Company recognizes the lease expense for such leases on a straight-line basis in the accompanying consolidated statements of operations over the lease term.

**Emerging Growth Company**

The Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, (the "Securities Act"), as modified by the Jumpstart our Business Startups Act of 2012 (the "JOBS Act"), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. Private companies are those companies that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised, it adopts the new or revised standard at the time private companies adopt the new or revised standard, unless it chooses to early-adopt the new or revised accounting standard. Therefore, our consolidated financial statements may not be comparable to certain public companies.

**Recently Adopted Accounting Pronouncements**

*<u>Profit Interests and Similar Awards</u>*

In March 2024, the FASB issued ASU No. 2024-01, "Scope Application of Profits Interest and Similar Awards" ("ASU 2024-01"). ASU 2024-01 clarifies appropriate accounting for awards issued with the intent to align compensation with operating performance by providing specific examples for issuers to follow. Beyond these clarifying examples, no changes to the codification were made. ASU 2024-01 is effective for fiscal years beginning after December 15, 2024, and interim periods within the fiscal years beginning after December 15, 2024. The Company adopted ASU 2024-01 effective January 1, 2025, which did not have a material impact on our consolidated financial statements and related disclosures.

**Recently Issued Accounting Pronouncements Not Yet Adopted**

*<u>Improvements to Income Tax Disclosures</u>*

In December 2023, the FASB issued ASU 2023-09, "*Income Taxes (Topic 740): Improvements to Income Tax Disclosures*," which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The standard will be effective for public companies for fiscal years beginning after December 15, 2024. Early adoption is permitted. As the Company is an emerging growth company, the standard will be effective for the Company for the year ended December 31, 2026. The Company is currently evaluating the impact of this accounting standard update on our consolidated financial statements.

*<u>Disaggregation of Income Statement Disclosures</u>*

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 within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The disclosure updates are required to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact the amended guidance will have on our consolidated financial statements and disclosures.

*<u>Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity</u>*

In May 2025, the FASB issued ASU 2025-03, *Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (subtopic 805-10-55).* This accounting standards update seeks to improve the requirements for identifying the accounting acquirer in transactions effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity ("VIE"), enhance the comparability of financial statements and result in more closely aligned accounting outcomes as economically similar transactions in which the legal acquiree is a voting interest entity. Under the current guidance, if the legal acquiree is a VIE, the primary beneficiary of the VIE is always the accounting acquirer. The revised guidance requires an entity to assess the factors in Topic 805, Business Combinations, to determine the accounting acquirer in an acquisition transaction primarily effected by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods and applies prospectively to any acquisition transaction that occurs after the initial application date. The ASU is not expected to have a material impact on the Company's consolidated financial statements.

*<u>Targeted Improvements to the Accounting for Internal-Use Software</u>*

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.* This accounting standards update removes references to software development project stages and clarifies that an entity is required to start capitalizing software costs when both of the following occur: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The update provides the following two factors to consider in determining if the second criterion has been met:

○ The software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, has not been resolved through coding and testing.

○ The significant performance requirements (for example, functions or features) have not been identified or continue to be substantially revised.

The update specifies that the disclosures in *Subtopic 360-10, Property, Plant, and Equipment—Overall*, are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements. Additionally, the amendments clarify that the intangible asset disclosures in paragraphs 350-30-50-1 through 50-3 are not required for capitalized internal-use software costs. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods and can be applied prospectively, retrospectively or using a modified transition approach. Early adoption is permitted as of the beginning of an annual reporting period. We will adopt the guidance when it becomes effective. We are currently evaluating the effects of adopting this standard.

*<u>Codification Improvements</u>*

In December 2025, the FASB issued ASU No. 2025-12, *Codification Improvements* ("ASU 2025-12"). ASU 2025-12 adds clarification, corrects errors, or makes minor improvements. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual reporting period and adoption can be applied prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2025-12 on our consolidated financial statements and disclosures.

**NOTE 4 – PROPERTY AND EQUIPMENT**

As of December 31, 2025 and 2024, all of our property and equipment had a net book value of $0 thousand.

Depreciation expense was $0 thousand and $118 thousand for the years ended December 31, 2025 and 2024, respectively.

Effective August 23, 2024, the Company terminated our Charlotte office lease agreement and disposed of all remaining equipment, furniture, and fixtures.

In accordance with the disposal, the Company recorded a loss on disposal of assets of $493 thousand for the year ended December 31, 2024.

**NOTE 5 – CAPITALIZED SOFTWARE**

Capitalized software consists of the following at:

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Capitalized software | $3836 | $7085 |
| Accumulated amortization | (3776) | (6644) |
| Capitalized software, net | $60 | $441 |

---

Amortization expense was $381 thousand and $1.5 million for the years ended December 31, 2025 and 2024, respectively.

During the year ended December 31, 2024, the Company disposed of certain capitalized software that was no longer in use with a total gross capitalized software balance of $1.0 million and recorded a loss on disposal of assets of $155 thousand.

Estimated amortization for capitalized software for future periods is as follows:

(in thousands)

---

| | |
|:---|:---|
| Year Ended December 31, |  |
| 2026 | $60 |
| Total | $60 |

---

**NOTE 6 – GOODWILL AND INTANGIBLE ASSETS**

As of December 31, 2025 and 2024, there was no goodwill. During the year ended December 31, 2024, the Company determined that our goodwill was fully impaired due to the continuation of revenues being below management's expectations, continued operating losses and negative operating cash flows, reductions in our stock price and market capitalization, and the delisting from Nasdaq and subsequent transition to the OTCQX market in the second quarter of 2024 whereby our common stock has been thinly traded. As a result, the Company recorded a goodwill impairment charge in the amount of $3.0 million in June 2024.

There were no intangible assets as of December 31, 2025. Intangible assets consisted of the following as of December 31, 2024:

(in thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  |<br>**Useful**<br>**Life** | **Gross**<br>**Carrying**<br>**Amount** |<br>**Accumulated**<br>**Amortization** |<br>**Net**<br>**Disposal** |<br>**Impairment** | **Net**<br>**Carrying**<br>**Amount** |
| Trademarks | 5-10 years | $2320 | $(761) | $— | $(1559) | $— |
| Noncompete agreements | 5 Years | 990 | (644) |  | (346) |  |
| Customer relationships | 5-7 Years | 3760 | (1628) | (51) | (2081) |  |
| Patents and patent applications | 5 Years | 650 | (65) |  | (585) |  |
|  |  | $7720 | $(3098) | $(51) | $(4571) | $— |

---

Amortization expense was $0 thousand and $606 thousand for the years ended December 31, 2025 and 2024, respectively.

The Company conducts an impairment test of intangible assets when events occur or circumstances exist that would indicate our long-lived assets may be impaired. Based on the matters discussed above for goodwill and the qualitative and quantitative analyses performed, the Company determined that our intangible assets were fully impaired. As a result, the Company recorded an intangible impairment charge in the amount of $4.6 million for the year ended December 31, 2024.

**NOTE 7 – LEASES**

The Company leases office space and certain equipment under operating leases that expire between 2025 and 2028. The terms of the leases provide for rental payments with escalation clauses and contain options that allow the Company to extend or terminate the lease agreements.

Operating lease costs recorded in the accompanying consolidated statements of operations were $337 thousand and $560 thousand for the years ended December 31, 2025 and 2024.

Our future lease payments, which are presented as current maturities of operating leases and noncurrent operating lease liabilities on our accompanying consolidated balance sheet as of December 31, 2025, including any optional extensions, are as follows:

(in thousands)

---

| | |
|:---|:---|
| **Year Ended December 31,** | |
| 2026 | $333 |
| 2027 | 328 |
| 2028 | 248 |
| Total lease payments | 909 |
| Less: imputed interest | (117) |
| Present value of lease liabilities | 792 |
| Less: current lease liabilities | (264) |
| Long-term lease liabilities | $528 |

---

The weighted average remaining lease term was 2.7 years and 3.6 years as of December 31, 2025 and 2024, respectively. The weighted average operating lease discount rate was 10.0% and 9.9% as of December 31, 2025 and 2024, respectively.

The Company does not recognize lease liabilities or lease assets on the consolidated balance sheets for short-term leases (leases with a lease term of twelve months or less as of the commencement date). Rather, any short-term lease payments are recognized as an expense on a straight-line basis over the lease term. The Company recognized expense of $79 thousand and $146 thousand for short-term lease commitments for the years ended December 31, 2025 and 2024, respectively.

On July 18, 2023, Maestro entered into a sublease for our Charlotte location with an expiration date of July 31, 2027. The sublease calls for monthly rent payments of $40 thousand. The lease and sublease were terminated effective August 23, 2024. In accordance with the lease termination, the Company relinquished $900 thousand of our security deposits and received the remaining $100 thousand. In addition, the right of use asset of $1.9 million and operating lease liabilities of $2.7 million were written off upon termination. The Company recorded a loss on lease termination of $71 thousand, which is included within facilities expense within the accompanying consolidated statement of operations for the year ended December 31, 2024.

On May 14, 2024, Maestro entered into a sublease for our Chicago location with an expiration date of September 30, 2028. The sublease calls for monthly rent payments of $25 thousand with yearly escalation.

Sublease income recorded as other income for the years ended December 31, 2025 and 2024 was approximately $199 thousand and $280 thousand, respectively.

The following is a summary as of December 31, 2025 of the contractual sublease income:

(in thousands)

---

| | |
|:---|:---|
| **Year Ended December 31,** | |
| 2026 | $308 |
| 2027 | 319 |
| 2028 | 245 |
| Total sublease income | $872 |

---

**NOTE 8 – LOSS AND LOSS ADJUSTMENT EXPENSES**

The following table shows changes in aggregate reserves for our loss and loss adjustment expenses:

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| **Net reserves at January 1,** | $201 | $266 |
| **Incurred loss and loss adjustment expenses** |  |  |
| &nbsp;&nbsp;&nbsp;Provisions for insured events of the current year | - | 48 |
| &nbsp;&nbsp;&nbsp;Change in provision for insured events of prior year | (189) | 65 |
| &nbsp;&nbsp;&nbsp;Total incurred loss and loss adjustment expense | (189) | 113 |
| **Payments** |  |  |
| &nbsp;&nbsp;&nbsp;Loss and loss adjustment expenses attributable to insured events of the current year | - | 7 |
| &nbsp;&nbsp;&nbsp;Loss and loss adjustment expenses attributable to insured events of the prior year | 12 | 171 |
| &nbsp;&nbsp;&nbsp;Total payments | 12 | 178 |
| **Net reserves at December 31,** | $- | $201 |

---

**NOTE 9 – CONVERTIBLE DEBENTURES**

On April 15, 2024, the Company entered into the Purchase Agreement with each of the Purchasers and JGB, as collateral agent for the Purchasers (the "Agent"). On April 15, 2024, the Company issued the Debentures due on April 15, 2027 for a principal sum of $11.8 million. In accordance with the Purchase Agreement JGB purchased an aggregate of $6.8 million in principal amount of the Debentures in exchange for $6.0 million in funding. In addition, at any time within sixty days after the Closing Date, and provided that $5.0 million remains on deposit in a certain blocked account, the Company may elect to redeem up to an aggregate of $5.0 million of the Debentures. Effective June 21, 2024, the Company elected not to redeem the additional $5.0 million.

The Debentures bear interest at a rate equal to the prime interest rate plus 5.75% per annum (subject to increase upon the occurrence and continuance of an Event of Default (as defined in the Debentures)), require monthly principal payments of $140 thousand beginning on October 15, 2024, have a maturity date of April 15, 2027 and are convertible, in whole or in part, at any time after their issuance date at the option of the Purchasers, into shares of our common stock at a conversion price equal to $3.00 per share (the "Conversion Price"), subject to adjustment as set forth in the Debentures. The Conversion Price of the Debentures is subject to anti-dilution protection upon subsequent equity issuances, subject to certain exceptions, provided that the Conversion Price shall not be adjusted to a price less than $2.23 per share, the closing price of our common stock on Nasdaq on the day immediately preceding the Closing Date.

On December 30, 2024, the Company, the Purchasers and the Agent entered into amendments to the 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 party thereto, as applicable, in order to, among other things, sell Debentures up to an additional aggregate principal amount of $5.4 million, for a total purchase price 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 the Company at closing, and the remaining $3.0 million of the Additional Investment is being held in escrow pending satisfaction of certain terms and conditions specified in the Amendment Agreement and the Debenture Amendments. The remaining $3.0 million of the Additional Investment was collected in full in January 2025.

The Debentures post Debenture Amendments bear interest at a rate equal to 14%, require monthly principal payments of $250 thousand beginning in January 2025, and have a maturity date of April 15, 2027. The first $6.8 million is convertible, in whole or in part, at any time after their issuance date at the option of the Purchasers, into shares of our common stock at a conversion price equal to $3.00 per share (the "Conversion Price"), subject to adjustment as set forth in the Debentures. The Conversion Price of the Debentures is subject to anti-dilution protection upon subsequent equity issuances, subject to certain exceptions, provided that the Conversion Price shall not be adjusted to a price less than $2.23 per share, the closing price of our common stock on Nasdaq on the day immediately preceding the Closing Date. The Additional Investment is not subject to any conversion features. The obligations as disclosed above were unchanged.

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 the Company 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 Debenture Amendments were treated as a loan extinguishment for accounting purposes and the Company recorded a loss on debt extinguishment of $1.9 million, including $380 thousand of unamortized debt issuance costs and $747 thousand of unamortized original issue discounts as of the modification date.

As of December 31, 2025, the net carrying amount of the convertible debentures is $8.8 million, of which $3.0 million is short term. The loan has unamortized debt premium and issuance costs of $209 thousand and $163 thousand, respectively. The estimated fair value (Level 3) of the convertible debt instrument was $8.8 million as of December 31, 2025. During the year ended December 31, 2025, the Company made total principal payments of $3.0 million and interest of $1.5 million was paid as it was incurred.

Our future loan payments, which are presented as current portion of convertible debenture, net and convertible debentures, net of current portion on our accompanying consolidated balance sheet as of December 31, 2025, are as follows:

(in thousands)

---

| | |
|:---|:---|
| **December 31, 2025** | |
| Convertible debenture principal | $8786 |
| Unamortized debt premium and issuance costs | 46 |
| Outstanding balance, net | 8832 |
| Less: current portion | (3037) |
| Long-term portion | $5795 |

---

The following is a summary as of December 31, 2025, of the contractual principal payments:

(in thousands)

---

| | |
|:---|:---|
| **Year Ended December 31,** | |
| 2026 | 3000 |
| 2027 | 5786 |
| Total contractual principal payments | $8786 |

---

**NOTE 10 – REVENUE**

**Disaggregation of Revenue**

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

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Third party administrator services | $18106 | $28077 |
| Captive insurance | (7) | 96 |
| Total | $18099 | $28173 |

---

**NOTE 11 – SHARE-BASED COMPENSATION**

**Global Incentive Plan**

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

Under the terms of the 2020 Plan, on the grant date, the Board of Directors determines the vesting schedule of each stock option and RSUs on an individual basis. All stock options expire ten (10) years from the date of the grant. Vested options expire 90 days after the termination of employment of the grantee.

On May 6, 2024, the shareholders of the Company approved our 2024 Global Incentive Plan (the "2024 Plan") with 2,227,910 shares of common stock initially issuable under the 2024 Plan.

Under the terms of the 2024 Plan, on the grant date, the Board of Directors determines the vesting schedule of each stock option and RSUs on an individual basis. All stock options expire ten (10) years from the date of the grant. Vested options expire 90 days after the termination of employment of the grantee.

**Stock Options**

No stock options were granted during the year ended December 31, 2025. The fair value of stock options and share awards granted under the stock option plan during the year ended December 31, 2024 was estimated at the date of grant using the Black-Scholes option pricing model and the following assumptions for grants:

---

| | |
|:---|:---|
|  | **2024** |
| Risk-free interest rates | 4.27% |
| Expected life | 2.5 years |
| Expected volatility | 191.71% |
| Expected dividend yield | 0.00% |

---

The following table summarizes the stock option activity:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |<br><br>**Number of**<br>**Options** |<br>**Weighted**<br>**Average**<br>**Exercise**<br>**Price** | **Weighted**<br>**Average**<br>**Remaining**<br>**Contractual**<br>**Term** |<br>**Aggregate**<br>**Intrinsic**<br>**Value** |
| Balance at January 1, 2025 | 1145639 | $3.32 | 6.70 | $— |
| Granted |  |  |  |  |
| Forfeited/Cancelled | (407139) | 5.58 |  |  |
| Exercised |  |  |  |  |
| Balance at December 31, 2025 | 738500 | 2.07 | 5.36 | $— |
| Exercisable at December 31, 2025 | 680557 | $2.06 | 5.17 | $— |

---

The following table summarizes our non-vested stock options activity:

---

| | | |
|:---|:---|:---|
|  | **Non-vested**<br>**Options**<br>**Outstanding** | **Weighted-Average**<br>**Grant Date**<br>**Fair Value** |
| At January 1, 2025 | 159605 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.63 |
| Options granted |  |  |
| Options forfeited/cancelled | (26193) | 1.72 |
| Options exercised |  |  |
| Options vested | (75469) | 1.63 |
| At December 31, 2025 | 57943 | $1.59 |

---

For the years ended December 31, 2025 and 2024, the Company recognized $124 thousand and $351 thousand of stock compensation expense relating to stock options, respectively. As of December 31, 2025, there was $89 thousand of unrecognized stock compensation expense related to non-vested share-based compensation arrangements granted under the Plan, which is expected to be recognized over a weighted-average period of approximately 1.4 years.

**Restricted Stock Units**

On May 23, 2024, the Company approved a special one-time grant of 100,000 RSUs each to three executive team members, which will vest immediately once the Company achieves year-end unadjusted EBITDA of $5.0 million. The EBITDA metric is currently not probable and no shared-based compensation expense was recognized for the periods presented. The probability will be evaluated each reporting period. Since these RSUs only vest upon the achievement of the EBITDA metric, the Company is unable to determine the weighted-average period over which the unrecognized cost will be recognized.

On June 18, 2024, the Company approved a special one-time grant of 100,000 RSUs to a director for a special project to get the Company uplisted to a national securities exchange. 50,000 RSUs vested on December 31, 2024 and the remaining 50,000 RSUs will vest upon the successful uplisting of the Company. The successful uplisting is currently not probable and no share-based compensation expense was recognized for the periods presented for the remaining 50,000 RSUs.

On January 28, 2025, the compensation committee of the Board granted a director RSU award pursuant to which the holder has the right to receive an aggregate of 600,000 shares of our common stock in connection with the holder being a personal guarantor on new financing. These awards were granted outside of a company global stock incentive plan and vest as follows: A portion of these awards vested on the date of grant and the rest will vest over the next 2 years from the date of the grant.

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 82,000 shares of our common stock. These awards vested on the date of grant.

On June 9, 2025, the compensation committee of the Board granted various employees RSU awards, under which the holders have the right to receive an aggregate of 600,000 shares of our common stock. A portion of these awards vested on the date of grant and the rest will vest over the next three years, or upon the Company meeting certain milestones.

On August 15, 2025, the compensation committee of the Board granted certain board members RSU awards, under which the holders have the right to receive an aggregate of up to 225,000 shares of our common stock. These awards vest over a period of nine months from the date of the grant.

On October 15, 2025, the compensation committee of the Board granted an employee RSU awards, under which the holders have the right to receive an aggregate of up to 50,000 shares of our common stock. These awards vest over a period of three years from the date of the grant.

On October 20, 2025, the compensation committee of the Board granted certain board members RSU awards, under which the holders have the right to receive an aggregate of up to 1,275,000 shares of our common stock. A portion of these awards vested on the date of grant and the rest will vest over the next nine months from the date of the grant.

On November 17, 2025, the compensation committee of the Board granted certain vendors RSU awards, under which the holders have the right to receive an aggregate of up to 69,999 shares of our common stock. A portion of these awards vested on the date of grant and the rest will vest over the next eleven months from the date of the grant.

The following table summarizes the restricted stock units activity:

---

| | | |
|:---|:---|:---|
|  | **Restricted<br> Stock Units** | **Value** |
| Outstanding at January 1, 2025 | 1320000 | $1.94 |
| Granted | 3001999 | 1.24 |
| Forfeited/cancelled | (470000) | 1.16 |
| Vested | (2231499) | 1.48 |
| Outstanding at December 31, 2025 | 1620500 | $1.60 |

---

For the years ended December 31, 2025 and 2024, the Company recognized $3.5 million and $2.1 million of stock compensation expense relating to RSUs, respectively. As of December 31, 2025, there was $741 thousand in unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately one year.

**NOTE 12 – WARRANTS**

Upon closing of our private offering on November 7, 2025 (Note 2), the Company issued to certain investors, warrants to purchase 7,700,000 shares of common stock. These warrants are exercisable at a per share exercise price equal to $1.00 per share. These warrants are exercisable at any time, in whole or in part, from October 30, 2025, through October 30, 2028.

Upon closing of our private offering on December 22, 2025 (Note 2), the Company issued to certain investors, warrants to purchase 700,000 shares of common stock. These warrants are exercisable at a per share exercise price equal to $1.00 per share. These warrants are exercisable at any time, in whole or in part, from December 12, 2025, through December 12, 2028.

The following assumptions were used to calculate the issuance date fair value using the Black-Scholes Model :

---

| | | |
|:---|:---|:---|
|  | **October 30, 2025** | **December 22,<br> 2025** |
| Exercise price of the warrants | 1.00 | $1.00 |
| Contractual life of the warrants | 3 years | 3 years |
| Current value of the underlying common stock | $1.50 | $0.75 |
| Expected volatility | 156.08% | 159.21% |
| Expected dividend yield | 0.00% | 0.00% |
| Risk-free interest rate | 3.61% | 3.52% |

---

The table below summarizes our warrant activities:

---

| | | | |
|:---|:---|:---|:---|
|  | **Number of**<br>**Common**<br>**Share**<br>**Warrants** | **Exercise**<br>**Price**<br>**Range Per**<br>**Share** | **Weighted**<br>**Average**<br>**Exercise**<br>**Price** |
| Balance at January 1, 2025 | 644718 | $2.50 to $31.60 | $16.40 |
| Granted | 8400000 | 1.00 | 1.00 |
| Forfeited | (91116) | 5.71 | 5.71 |
| Exercised |  |  |  |
| Balance at December 31, 2025 | 8953602 | $1.00 to $31.60 | $2.06 |
| Balance at January 1, 2024 | 644718 | $2.50 to $31.60 | $16.40 |
| Granted |  |  |  |
| Forfeited |  |  |  |
| Exercised |  |  |  |
| Balance at December 31, 2024 | 644718 | $2.50 to $31.60 | $16.40 |

---

**NOTE 13 – INCOME TAXES**

Income tax benefit consists of the following:

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
| **Current:** | | |
| &nbsp;&nbsp;&nbsp;Federal |  |  |
| &nbsp;&nbsp;&nbsp;State |  |  |
| &nbsp;&nbsp;&nbsp;Foreign |  |  |
| &nbsp;&nbsp;&nbsp;**Total Current** |  |  |
| &nbsp;&nbsp;&nbsp;**Deferred:** |  |  |
| &nbsp;&nbsp;&nbsp;Federal |  | (1016) |
| &nbsp;&nbsp;&nbsp;State |  | (174) |
| **Total Deferred** |  | (1190) |
| &nbsp;&nbsp;&nbsp;**Income tax benefit** |  | $(1190) |

---

The effective tax rate was 0.0% and 5.1% for the years ended December 31, 2025 and 2024, respectively. The effective tax rate differs from the federal tax rate of 21% for the years ended December 31, 2025 and 2024 due primarily to the full valuation allowance and other discrete items.

Reconciliation between the effective tax rate on loss before provision for income taxes and the statutory tax rate is as follows:

---

| | |
|:---|:---|
|  | **December 31,**<br>**2025** |
| Income tax benefit at federal statutory rate | 21.0% |
| State and local taxes | 1.9% |
| Change in valuation allowance | (23.8)% |
| Permanent book to tax differences | (0.1)% |
| Provision to return adjustments | 0.5% |
| Earnings of foreign subsidiary | (0.2)% |
| Other - net | 0.7% |
| **Income tax benefit** | 0.0% |

---

---

| | |
|:---|:---|
|  | **December 31,**<br>**2024** |
| Income tax benefit at federal statutory rate | 21.0% |
| State and local taxes | 2.0% |
| Change in valuation allowance | (13.2)% |
| Permanent book to tax differences | (3.0)% |
| Provision to return adjustments | (0.4)% |
| Earnings of foreign subsidiary | (1.0)% |
| Other - net | (0.3)% |
| **Income tax benefit** | 5.1% |

---

At December 31, 2025, the Company had federal and state net operating losses ("NOLs") in the amount of approximately $71.0 million and $57.4 million respectively. While the federal NOLs carryforward indefinitely, the Tax Cuts & Jobs Act of 2017 limits the amount of federal net operating loss utilized each year after December 31, 2020, to 80% of taxable income. The state NOLs start expiring in 2031.

Temporary differences which give rise to a significant portion of deferred tax assets are as follows at:

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Deferred income tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Startup costs | $587 | $808 |
| &nbsp;&nbsp;&nbsp;Stock compensation – options (NQO) / RSAs/ RSUs | 2405 | 1603 |
| &nbsp;&nbsp;&nbsp;Net operating losses – Federal | 14908 | 12477 |
| &nbsp;&nbsp;&nbsp;Net operating losses - State and Local | 2318 | 2165 |
| &nbsp;&nbsp;&nbsp;Amortization | 328 | 203 |
| &nbsp;&nbsp;&nbsp;Depreciation |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease assets | (52) | (62) |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | 189 | 244 |
| &nbsp;&nbsp;&nbsp;Deferred revenue |  |  |
| &nbsp;&nbsp;&nbsp;Allowance for Doubtful Accounts | 5 |  |
| &nbsp;&nbsp;&nbsp;Business Interest Expense Adjustment Under §163(j) | 707 |  |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 236 | 406 |
| **Deferred tax assets** | 21631 | 17844 |
| Less: Valuation allowance | (21617) | (17770) |
| **Deferred tax assets, net** |  |  |
|  | $**14** | $**74** |
| Deferred income tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization | $(14) | $(74) |
| &nbsp;&nbsp;&nbsp;Depreciation |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease assets |  | (11) |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities |  | 11 |
| **Deferred tax liabilities** | (14) | (74) |
| **Total net deferred tax liabilities** | $— | $— |

---

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred since inception. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of December 31, 2025, a valuation allowance of $21.6 million has been recorded to recognize the portion of the deferred tax asset that is more likely than not to be realized. The net change in the valuation allowance was $3.8 million. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

The Company and our subsidiaries' income tax returns for 2022 through 2024 remain subject to examination by tax jurisdictions.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "Inflation Reduction Act") that includes, among other provisions, changes to the U.S. corporate income tax system, including a fifteen percent minimum tax based on "adjusted financial statement income," and a one percent excise tax on net repurchases of stock after December 31, 2022. The Company is continuing to evaluate the Inflation Reduction Act and its requirements, as well as the application to our business.

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.

At December 31, 2025 and 2024, there are $0 unrecognized tax benefits that if recognized would affect the annual effective tax rate.

During the years ended December 31, 2025 and 2024, the Company recognized $0 in interest and penalties.

**NOTE 14 – SEGMENT INFORMATION**

Research and development activities were conducted through EYME in Israel. Geographic long-lived asset information presented below is based on the physical location of the assets at the end of year. All of our revenues are derived from customers located in the United States.

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

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| United States | $278 | $596 |
| Israel | - | 141 |
| Total long-lived assets | $278 | $737 |

---

The Company operates as one operating segment. Our consolidated results represent the results of our one operating segment based on how our CODM, our Chief Executive Officer, views the business for purposes of evaluating financial performance, allocating resources, and making overall operating decisions.

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, the Company does not report asset information beyond what is presented in the consolidated balance sheets.

**NOTE 15 – RELATED PARTY TRANSACTIONS**

In January 2024, March 2024, August 2024, December 2024, July 2025, September 2025, and November 2025 the Company entered into securities purchase agreements with an entity controlled by our Chief Executive Officer, various directors, and certain executives (see Note 2).

**NOTE 16 – ACCRUED SEVERANCE PAY AND EMPLOYEE RETIREMENT PLAN**

The Company has a defined contribution plan covering eligible employees with at least one month of service. The Company fully matches employee contributions up to 5% of the total compensation. Total expense for the years ended December 31, 2025 and 2024, was $252 thousand and $351 thousand, respectively.

**NOTE 17 – OTHER LIABILITIES**

Other liabilities consisted of the following:

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Due to AXA (current and long-term) | $19401 | $17788 |
| Sublease security deposit | 49 | 108 |
| Other liabilities | $19450 | $17896 |

---

As of December 31, 2025, we had $19.4 million in outstanding liabilities due to AXA S.A., a French société anonyme ("AXA") in connection with our acquisition of Maestro Health on November 1, 2022. The liability is due to AXA by December 31, 2028. Included in the balance is accrued interest of $5.2 million and $3.6 million as of December 31, 2025 and December 31, 2024, respectively

Our future payments to AXA, which are included in other short-term liabilities and other long-term liabilities on our accompanying consolidated balance sheet as December 31, 2025, are as follows:

(in thousands)

---

| | |
|:---|:---|
| **December 31, 2025** | |
| Outstanding balance | $19401 |
| Less: current portion | 8000 |
| Long-term portion | $11401 |

---

**NOTE 18 – ACCRUED EXPENSES**

Accrued expenses consisted of the following:

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Employee compensation | $548 | $504 |
| Accrued bonuses | 232 | 252 |
| Performance guarantee liabilities | 199 | 247 |
| Accrued payables | 671 | 1381 |
| Other accrued expenses and liabilities | 465 | 201 |
| Total accrued expenses | $2115 | $2585 |

---

**NOTE 19 – STOCKHOLDERS' DEFICIT**

During the year ended December 31, 2025, the Company issued 44,999 shares of common stock to a vendor in consideration for services rendered.

During the years ended December 31, 2025, and 2024, the Company issued 6,849,425 and 5,555,996 shares of common stock via private placement offerings, respectively.

During the year ended December 31, 2025, the Company issued 725,000 shares of common stock to a vendor for services.

During the year ended December 31, 2025, the Company issued 8,400,000 warrants via private placement offerings (see Note 12).

**NOTE 20 – LITIGATION AND LOSS CONTINGENCIES**

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

On January 30, 2025, the Company was served with a civil complaint by Messer Financial Group Inc., 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 $5 million. On February 5, 2026, the Company agreed to a settlement agreement with Messer Financial Group Inc. pursuant to the settlement agreement, the Company is required to pay (i) a one-time lump sum of $10 thousand cash consideration, (ii) as consideration for Messer's attorney's fees issue restricted shares of common stock ("RSU") of Marpai in an amount valued at $25,000.00; and, 400,000 RSUs in installments issuable as follows: (a) 100,000 restricted shares of common stock within thirty (30) days of the Effective Date; (b) 100,000 restricted shares of common stock by July I, 2026; (c) 100,000 restricted shares of common stock by January 1, 2027; and (d) 100,000 restricted shares of common stock by July 1, 2027. On January 3, 2028, if the Total Value (defined below) of the Stock Consideration is less than $1,000,000.00, Marpai will (A) pay Messer an additional $250,000.00 in cash, or (B) issue Messer $250,000.00 in restricted shares of common stock of Marpai (MRAI), valued in the same manner as Total Value.

Within ten (10) days of Messer receiving the Cash Consideration, Messer shall voluntarily dismiss the Lawsuit in its entirety as to all Defendants with prejudice; provided that Marpai will cooperate with Messer in securing the dismissal of the Lawsuit as appropriate.

**NOTE 21 – SUBSEQUENT EVENTS**

The Company has evaluated subsequent events through the date of these consolidated financial statements were issued.

On February 2, 2026, the compensation committee of the board of directors granted employees RSU awards, under which the holders have the right to receive an aggregate of 70,000 shares of the Company's common stock. These awards will vest over the next 2 years.

On February 2, 2026, the Company issued 31,746 shares of common stock to a vendor in consideration for services rendered.

On February 5, 2026, the Company reached a final settlement agreement regarding a dispute with Messer Financial Group Inc. concerning a sublessee of the Company's previously rented office space in Charlotte, NC, for breach of contract.

Pursuant to the settlement agreement, the Company is required to pay (i) a one-time lump sum of $10 thousand cash consideration, (ii) as consideration for Messer's attorney's fees issue restricted shares of common stock ("RSU") of Marpai in an amount valued at $25,000.00; and, 400,000 RSUs in installments issuable as follows: (a) 100,000 restricted shares of common stock within thirty (30) days of the Effective Date; (b) 100,000 restricted shares of common stock by July I, 2026; (c) 100,000 restricted shares of common stock by January 1, 2027; and (d) 100,000 restricted shares of common stock by July 1, 2027. On January 3, 2028, if the Total Value (defined below) of the Stock Consideration is less than $1,000,000.00, Marpai will (A) pay Messer an additional $250,000.00 in cash, or (B) issue Messer $250,000.00 in restricted shares of common stock of Marpai (MRAI), valued in the same manner as Total Value.

Within ten (10) days of Messer receiving the Cash Consideration, Messer shall voluntarily dismiss the Lawsuit in its entirety as to all Defendants with prejudice; provided that Marpai will cooperate with Messer in securing the dismissal of the Lawsuit as appropriate.

In connection with the settlement agreement with Messer, we have accrued $465,440 included within accrued expenses in the accompanying consolidated balance sheet.

On February 12, 2026, Marpai Inc. issued a promissory note (the "Note 1") in the principal amount of $410,000 to the Company's Chief Executive Officer (the "Holder"). The 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 the Note 1 is repaid in full. The Note 1 may be prepaid by the Company, 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 the Note 1 are payable by April 11, 2026 to the Holder, or its successors and assigns. The proceeds of the Note 1 will be used by the Company for general working capital purposes.

On March 5, 2026, the Company granted 300,000 shares of RSUs to a board member for services related to the strategic transaction initiative.

On March 9, 2026, the Company issued a promissory note (the "Note 2") in the principal amount of $250,000 to the Company's Chief Executive Officer. The 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 the Note 2 is repaid in full. The Note 2 may be prepaid by the Company, 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 the Note 2 are payable by May 10, 2026 to the Holder, or its successors and assigns. The proceeds of the Note 2 will be used by the Company for general working capital purposes.

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 424,799 shares of the Company's common stock. These awards vested on the date of grant.

On March 13, 2026, the Company issued 6,345 shares of common stock to a vendor in consideration for services rendered.

## Exhibit 23.1

**Exhibit 23.1**

![](ea028291801_ex23-1img1.jpg)

**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S CONSENT**

We consent to the incorporation by reference in the Registration Statements of Marpai, Inc. (the "Company") on Form S-8 (No. 333-279624 and No. 333-265572) of our report dated March 25, 2026, which includes an explanatory paragraph as to the Company's ability to continue as a going concern, with respect to our audits of the consolidated financial statements of the Company as of December 31, 2025 and 2024 and for the years then ended, which report appears in this annual report on Form 10-K.

![](ea028291801_ex23-1img2.jpg)

Melville, NY

March 25, 2026

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION PURSUANT TO RULE 13a-14**

I, Damien Lamendola, certify that:

1. I have reviewed this Annual Report on Form 10-K, 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:

&nbsp;&nbsp;&nbsp;&nbsp;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;

&nbsp;&nbsp;&nbsp;&nbsp;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;

&nbsp;&nbsp;&nbsp;&nbsp;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

&nbsp;&nbsp;&nbsp;&nbsp;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):

&nbsp;&nbsp;&nbsp;&nbsp;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

&nbsp;&nbsp;&nbsp;&nbsp;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: March 25, 2026 | */s/ Damien Lamendola* |
|  | Damien Lamendola |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION PURSUANT TO RULE 13a-14**

I, Steve Johnson, certify that:

1. I have reviewed this Annual Report on Form 10-K 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:

&nbsp;&nbsp;&nbsp;&nbsp;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;

&nbsp;&nbsp;&nbsp;&nbsp;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;

&nbsp;&nbsp;&nbsp;&nbsp;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

&nbsp;&nbsp;&nbsp;&nbsp;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):

&nbsp;&nbsp;&nbsp;&nbsp;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

&nbsp;&nbsp;&nbsp;&nbsp;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: March 25, 2026 | */s/ Steve Johnson* |
|  | Steve Johnson |
|  | Chief Financial Officer |
|  | (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

In connection with the Annual Report of Marpai, Inc. on Form 10-K, for the period ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Damien Lamendola, Chief Executive Officer of Marpai, Inc., certify, pursuant to 18 U.S.C. § 1350, that, to my knowledge:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of Marpai, Inc.

---

| | |
|:---|:---|
| Date: March 25, 2026 | */s/ Damien Lamendola* |
|  | Damien Lamendola |
|  | (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES OXLEY ACT OF 2002**

In connection with the annual Report of Marpai, Inc. on Form 10-K, for the period ending December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steve Johnson, Chief Financial Officer of Marpai, Inc., certify, pursuant to 18 U.S.C. § 1350, that, to my knowledge:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of Marpai, Inc.

---

| | |
|:---|:---|
| Date: March 25, 2026 | */s/ Steve Johnson* |
|  | Steve Johnson |
|  | (Principal Financial and Accounting Officer) |

---