Health In Tech, Inc.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Health in Tech fourth quarter and full year of 2024 earnings conference call. Currently, all participants are in listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now I will turn the call over to Lori Babcock, Chief of Staff for the company. Ms. Babcock, please proceed.

Thank you, Operator, and hello, everyone. Welcome to Health and Tech's fourth quarter and full year of 2024 earnings conference call. Joining us today are Mr. Tim Johnson, Chief Executive Officer, and Ms. Julia Chin, Chief Financial Officer. Full details of our results can be found in our earnings press release, and in a related form, 10-K submission to the SEC issued after markets closed today. These documents are available on our investor relations website at healthandtech.investorroom.com. As a reminder, today's call is being recorded, and a replay will be available on our IR website as well. Before we continue, please note that today's discussion includes forward-looking statements made pursuant to the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements are based on information available as of today and involve risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed or implied. including those discussed in our annual report on Form 10-K for the period ending December 31st, 2024, filed with the SEC. Please review the forward-looking and cautionary statement section at the end of our earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today. We undertake no obligation to update and expressly disclaim the obligation to update these forward-looking statements to reflect events or circumstances after the date of this call or to reflect new information or the occurrence of unanticipated events. We may also refer to certain financial measures not in accordance with generally accepted accounting principles, such as adjusted EBITDA for comparison purposes only. Our GAAP results and reconciliations of GAAP to non-GAAP measures can be found in our earnings press release. With that, I now turn the call over to our CEO, Mr. Tim Johnson. Tim?

Thanks, Lori. Hi, everyone. Welcome to our first earnings call as a public company. Our December IPO marked an exciting milestone for health and tech, and I'd like to start off by thanking our customers, partners, and investors for your trust and confidence in us. Your belief in our vision drives us to push boundaries, innovate, and continuously improve. We recognize that sometimes market fluctuations can be challenging, but our focus remains unwavering, delivering value, executing on our strategy, and driving long-term growth. That said, our IPO was not the finish line. It was just the beginning of an even bigger opportunity to transform our healthcare industry through digital innovation, through bringing efficiency, and through the options of competitive cost. We are excited that the current administration is focused on cutting out waste and improving efficiency, which would be a great tailwind for our company. Our company is deeply invested in this industry because it's part of who we are. It's in our DNA. For decades, the healthcare industry, particularly for small businesses, has been plagued by inaccessibility, complexity, and lack of transparency. Small businesses are often underrepresented due to the limited number of competitive insurance solutions, leaving them with fewer options and higher costs. Traditional quoting processes remain outdated and inefficient, taking anywhere from 12 to 14 days to complete, causing unnecessary delays and administrative burdens. Business owners often lack visibility in their healthcare costs, making it difficult to make informed decisions. These challenges have created barriers to affordability and efficient self-funded healthcare. And at Health and Tech, we are set out to change that. I started Health and Tech from my living room couch. I didn't even have an office at the time. I was frustrated with how many, how my own healthcare issue was handled and with the lack of options that I had to try and resolve them. Since I was already in the insurance business, I thought I would try to help people like myself and other small employers. So I quit my job, I started a new company, and off we went. I knew I needed to create programs and products that included all players in the healthcare and insurance cycle to control the entire process so that I could eliminate all the redundancies, cut down on the cost, and do the right thing. That took me almost 10 years to figure it out with a technology platform backed by a third-party AI company that brings all participants together in one platform the insurance company, the TPAs, the brokers, hospitals, clinics, employers, and finally, and most importantly, the employees. Our technology-driven solutions finally make self-funded health plans and stop-loss insurance more accessible, cost-effective, and transparent. Our sales platform, eDIBS, which is backed by a third-party AI, enables brokers and employers to generate fully bindable proposals in about two minutes. offering 12 plan options with four-tier rates compared to the traditional two-week quoting process. We also provide real-time access to data and 24-7 transparency, ensuring seamless transactions and updates for all participants. By streamlining workflows, eliminating inefficiencies, and empowering businesses with greater control, we are not just improving healthcare accessibility, we are redefining the way small businesses approach self-funded health plans. The market opportunity in front of us is enormous. The US healthcare and insurance industry is a $6 trillion market that has seen very little innovation, creating a vast opportunity for disruption. According to a Frost and Sullivan report, the small business self-funded medical insurance market has grown from $157 billion in 2019 to $186 billion in 2023, with projections reaching $242 billion by 2028, growing at a 5.4% CAGR. As AI, big data, and automation reshape the industry, health and tech is uniquely positioned to lead this transformation. Our underwriting and automated quoting platform are driven with efficiency, affordability, and transparency, unlocking new opportunities in the market that is primed for innovation. 2024 was a pivotal year for our company. We took a strategic approach to moderating our growth to achieve critical milestones. We successfully completed our IPO, made significant investments in IT, InfoSec, and cybersecurity, and introduced our new specific, and ag products. Additionally, we launched a transformative technology innovative initiative aimed at delivering unique solutions for large group underwriting. These strategic initiatives have laid a strong foundation for accelerated growth in 2025. I'm excited to share how the groundwork we laid in 24 is driving our momentum and setting stage for a long-term success. First, we make critical investments in IT infrastructure, functionally enhancements with cybersecurity. We strengthen our internal controls and compliance framework, ensuring a robust foundation for scalable expansion. These efforts enable us to extend our solutions to a broader range of carriers, brokers, TPAs, and other businesses. Second, we developed a specific and aggregate product, our latest stop-loss healthcare plan product design, to simplify the claims process for TPAs and carriers. This innovation enhances efficiencies and streamlines operational successes, reinforcing our commitment to delivering value-driven solutions. Third, we are advancing our underwriting capabilities in our eDIBS platform to serve midsize businesses with over 150 employees, expanding beyond our traditional focus on small businesses with five to 150 employees. While AI-driven automation has transformed many industries, healthcare insurance has been slow to evolve. We are the leader in this shift, modernizing underwriting to create more efficient data-driven ecosystems. Traditionally, the underwriting process for large companies with more than 150 employees takes approximately three months due to the extensive information gathering and prolonged communication cycles between brokers and underwriters. This outdated model creates a bottleneck, delaying access to cost-effective healthcare plans. Our underwriting solution addresses these inefficiencies, reducing processing time, helping employees secure coverage faster, while improving accuracy and pricing competitively. To achieve this breakthrough, our eDIPS platform integrates data from various third-party vendors that leverage machine learning tools. connecting to our system via API. This real-time data feeds into our proprietary risk scoring model, which assesses risk, calculates premiums, and aligns with carriers' underwriting guidelines and risk acceptance thresholds. While our small business underwriting solution utilizes third-party AI tools, we have significantly enhanced it with proprietary machine learning algorithms that continuously refine decision-making through third-party data feeds and insights. Governed by our internal AI governance framework, this ensures compliance, reliability, and continuous optimization. Since launching beta testing in November 24, we have received strong initial feedback and we are on track for full-scale rollout of our large business underwriting platform in 2025. backed by third-party AI, unlocking significant expansion in our total addressable market. Look, it has never been an easy task to scale up profitable and sustain a viable company. After a four-times year, year-over-year revenue jump in 2023, we realized that $20 million in revenue company requires a different foundation for the next two to three times growth. We started with 41 employees in the beginning of 23, ended with 91 in December of 23. We doubled our workforce in 12 months. We realized that our people and our process has to catch up with the growth. In 2024, we moderated our growth to strengthen our organizational structure, reorganized operational departments, expanding IT department, built internal controls and info securities, and went through the IPO. With all of that, tasks, we reduced the headcount from 91 to 80 as of December 2024. The solid groundwork we laid in 24 has set the stage for accelerated growth momentum in 2025. Our unaudited total revenue for January and February is around $5.7 million, which has already exceeded the entire first quarter revenue of 2024. To drive our growth strategy, we have expanded our executive leadership team with highly experienced professionals in sales operations and cybersecurity. Chris Kurtenbach has been promoted to Chief Operating Officer after serving as Senior Vice President of Operations since 2024. With over 30 years of experience in operations, customer service, and process improvement, he will drive scalability with operational efficiencies. Prior to joining Health & Tech, He served as Vice President of Operations at BCS Financial Corporation, a leading provider of insurance and financial solutions for Blue Cross Blue Shield organizations and commercial partners nationwide. He also held senior leadership roles at AIM, especially healthcare, now Clairon, a life watch company where he led large-scale operational improvements and business transformation initiatives. Dustin Plantholt joins as Chief Growth Officer bringing two decades of experience in insurance, emerging technologies, and strategic partnerships to accelerate market expansion and revenue growth. He has served as CEO of BlockBuzz, a strategy and media advisory company, and previously led Life's Tough Media as chief executive officer. Additionally, he played a pivotal role in business growth and marketing leadership at OptiMed Health and Evergreen Health. where he helped drive innovation and strategic expansion in healthcare and insurance sectors. Jenny Garica has been promoted to Chief Information Security Officer, where she will continue advancing our cybersecurity risk management and regulatory compliance as we scale. Prior to joining Health and Tech, she was a security architect at Allegiant Air, where she played a crucial role in strengthening cybersecurity frameworks, ensuring regulatory compliance, particularly in surveying the Oxley requirements. She also gained extensive experience in regulatory compliance and security architecture at Progressive and IGT, building resilient security infrastructures for highly regulated industries. Del Lockett, our formerly Chief Operating Officer, has been appointed Chief Strategy Officer, leading high-impact initiatives in business development. SaaS innovation, and market expansion. With deep expertise in managing general agencies, third-party administrators, and captive health insurance, he will play a critical role in driving strategic growth. With his leadership team in place, we are poised to accelerate our expansion, optimize our technology-driven platform, and continue redefining the self-funded healthcare industry. Now I'd like to turn the call over to our Chief Financial Officer, Julia Chen, to walk through our fourth quarter and four-year 2024 financial results and our expectations for 2025.