Assure Holdings Corp.

Greetings. Welcome to the Assure Holdings first quarter 2023 conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If you would like to ask a question, please press star one on your telephone keypad. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Brett Maas of Hayden IR. You may begin.

Hello, everyone, and thank you for participating in today's conference call to discuss Assure Holdings' financial results for the first quarter of 2023. On the call today are Executive Chairman and CEO, John Farlinger, and CFO, John Price. Remarked this morning, the company issued a press release announcing its results. The release is available in the investor section of the company's website. Before we begin the prepared remarks, I'd like to remind everyone that some of the statements made today are before looking and are made under the Private Securities Allegation Reform Act of 1995. Actual results may differ materially from those projected or implied due to a variety of factors. We refer you to Assure's recent filings of the SEC, including its annual report on Form 10-K for the full year for a more detailed discussion of the risks that could impact the company's future operating results and financial condition. Also on today's call, management will reference certain non-GAAP financial measures, which we believe provide useful information for investors. For reconciliation of these non-GAAP measures, please consult the most recently filed 10-Q associated with the filing of the earnings release for the quarter ended March 31st, 2023, which is available on the SEC's website. This call is being recorded and will be made available for replay via a link on the company's website. Now I'd like to turn the call over to Executive Chairman and CEO, Assure Holdings, John Parlinger. John.

Thank you, Brett. Hello, everyone, and thank you for joining us today. Reflecting our first quarter results, the company had a slight increase in the number of cases managed, an approximate 25% decline in our operating expenses, and a much lower use of cash in operations. reflecting the tremendous progress we have made towards striping our operations and improving our financial results, despite persistent challenges with reimbursement across the industry. Our first quarter case volume was up slightly year over year, as we supported approximately 5,200 managed cases. We collected approximately $5 million in cash and reduced our average days to collect by 15 days from 61 days for the fourth quarter to 46 days during the first quarter of 2023. On the cost side, we reduced our operating expenses by $1.2 million, or 26% year over year, as the benefits of the cost reduction initiatives that we put in motion in 2022 and earlier this year are being realized. We are encouraged by the progress we're making toward achieving our targets of profitability on an adjusted EBITDA basis and positive cash flow from operations during the latter part of 2023. Across the industry, reimbursements to providers continues to be challenging. At the federal level, time from claim submission to resolution has not changed substantially in 2023. We have filed nearly 400 claims to date under the Federal No Surprises Act. While we remain optimistic about eventual improvements to the reimbursement process, the time from submission to resolution continues to be several months longer than the 90 days expected. Given these conditions, the internal revenue cycle management process that we've established is crucial. As we build a sophisticated data-driven revenue cycle management function, our collections are improving. Our first quarter revenue collections were better than our internal forecast. The percentage of first pass payment rates has been increasing and days to pay have been reduced. Collections and cash management is a key differentiator for us in contrast to many of our competitors. The industry remains highly fragmented, and we are establishing the analytics and operational footprint to be a consolidator as others in our space are struggling. While there is no transaction imminent, we are actively evaluating tuck-in M&A opportunities in attractive markets that could help us scale our business. Neuromodern is widely considered to be the standard of care and surgeons agree it is a vital resource in the operating room, despite the operational reimbursement challenges that we believe are temporary. Demand for our services is strong. We have a business model that is readily scalable and unit economics that make our business attractive for investment. Subsequent to quarter end, we performed our first neuromonitoring case in the state of Montana. We've established ourselves with a distinguished surgical center in this market and have an additional foothold from which to grow from. We are eager to scale our operations there and believe this is an opportunity to increase our cases by approximately 150 cases annually across Bozeman and Livingston. Beyond this key win, we're also continuing our efforts to expand in high-performing markets like Texas and Colorado, which we are already established and highly concentrated in. Today, we closed an underwritten public offering of 5 million common shares, including pre-funded warrants in lieu of stock. Shares were offered to the public at $1.20 per share or $1.199 per pre-funded warrant. The pre-funded warrants are immediately exercisable at a nominal exercise price of $0.001 or on a cashless basis and may be exercised at any time until all the pre-funded warrants are exercised in full. The offering was fully subscribed, and the underwriters have a 45-day option to purchase up to an additional 750,000 shares of common stock at the offering price, less underwriting discounts and commissions to cover over allotments. We plan to use the proceeds from this offering for continued growth, the rolling out of a potential new service line, general corporate purposes, including working capital, sales, product development, and capital expenditures. Importantly, this offering gives us the runway to execute our strategy and strive to achieve our targets of positive adjusted EBITDA and cash from operations during the second half of 2023. In addition to this new financing, there are two other items that could positively impact our financial position in 2023. First, we have filed for the Employee Retention Credit, or ERC, a refundable tax credit for businesses that continue to pay employees while shut down due to COVID-19 pandemic. Related to that, we are filing amended federal tax returns for the years ended 2020 and 2021 and we expect that we could receive a cash refund from the IRS of approximately $3.3 million. Secondly, we have filed a multimillion-dollar lawsuit against an orthopedic and spine surgery center located in the state of Louisiana. The lawsuit is related to the reimbursement of services provided. The case is scheduled for a jury trial in late July of this year. With the completion of the offering, and the receipt of the ERTC credits, the company would have generated nearly $9 million of cash, which is approximately $1.50 per share outstanding. Further, the company has nearly $13 million of trade accounts receivable due from commercial payers, hospitals, and the winding down of the MSA structure. Next, John Price will walk us through the financial results for the first quarter. John?