Skylight Health Group Inc.

Thank you everyone for standing by. This is the conference operator. We would like to welcome you to the Skylight Health third quarter 2021 financial results conference call. The results are for the period ending September 30th, 2021. As a reminder, all participants are in listen-only mode. After today's speakers conclude the presentation portion of the call, should time permit, they will move to a question and answer period. If you wish to ask a question, you may queue at any time by pressing star, then 1 on your telephone keypad. You'll hear a tone acknowledging your request. To withdraw your question, please press star, then 2. Should you need assistance during the conference call, you may signal an operator by pressing star and 0. As always, I would like to remind you that listeners are cautioned that today's call and the responses to any questions may contain forward-looking statements. including certain statements which concern long-term earnings objectives. These should be considered in conjunction with the cautionary statement contained in the Skylight Health earnings release and in the company's MD&A and other filings. Forward-looking statements are subject to risks and uncertainties and assumptions. Accordingly, actual performance could differ materially, and undue reliance should not be placed on such statements. Skylight Health does not undertake to update any forward-looking statements except as required. All currencies discussed on this call will be in Canadian dollars unless otherwise stated. This conference call is being recorded today, November 16th, 2021 at 8 a.m. and will be posted to the Skylight Health's website within 24 hours after the conclusion of the call. I would now like to turn the meeting over to Skylight Health's Chief Executive Officer, Mr. Pratty M. Shaker. Please go ahead.

Thank you, Ariel. And a good morning to everyone. Thank you for joining us today for our third quarter conference call for the period ending September 30th, 2021. With me today is our Chief Financial Officer, Andrew Olinsky. He'll be on in a bit to provide you with a detailed overview of our financial performance. I'll go over some overall performance initially and then come back after with a bit of an outlook. Skylight Health is a primary care-focused organization that is committed to changing how healthcare works in the U.S., We operate a multi-state primary healthcare network comprised of practices providing a range of services from primary care, subspecialty, allied health, and laboratory diagnostic testing. Our business model is focused on solving two major issues in U.S. healthcare. First, providing a white knight solution to small and independent primary care practices looking to consolidate within a highly fragmented market and where providers and practices are eagerly looking for qualified and supportive buyers. Through a national platform, we aim to bring scale, efficiency, and improved revenues to these practices. Second, we aim to realign the reimbursement model within these practices to outcome-based care, or more commonly known as value-based care contracting. Our focus with specific patient populations today, such as Medicare, is to shift from a traditional fee-for-service model, generating on average $100 to $200 per visit or $200 to $400 per year per patient. to a value-based care contract where some full-risk total cost of care program can remunerate the provider group over $10,000 a year per patient, paid by the payers and not the patient. This model enables the practice to receive the full healthcare dollar, putting the patient first and allocating expenses accordingly. Value-based care models are designed to manage the growing cost of care while improving on patient health outcomes. We are all extremely proud of our results this quarter. Revenue was up 269% year-over-year and 16% sequentially. We saw both top-line revenue growth from acquisitions made during the first, second, and third quarters in 2021 and from those in Q4 2020, as well as organic growth. We continue to grow at the operational level, with each new acquisition being accretive to our growth. Over the quarter, we saw organic growth from Q3 up approximately 8%, resulting from improvements to provider and patient access, revenue cycle management, and leadership to the clinical level. We closed on Aspire Health during the quarter in September, which continues to support our model for growth, both building density in existing markets as well as opportunities in new markets. Aspire Health expands our reach into Pennsylvania and access to a share of the primary care market in Harrisburg. Further, it strengthens our financial performance, contributing over $2.5 million U.S., in annualized revenues with positive EBITDA. With Aspire Health now in network, we are in a strengthened position to advance payer conversation on enabling value-based care plans within the group, growing our patient base by over 10,000 per year, including over 2,000 Medicare and Medicare Advantage lives and increasing our national footprint. As of the end of the third quarter, patient lives grew to 99,000 from 88,000 the previous quarter. Medicare and Medicare equivalent lives continue to represent 15% of that population. With the continued growth by acquisition and plan de novo, we expect to see additional growth to our patient and Medicare count going forward. Our teams were largely focused during the quarter on the integration of Rocky Mountain and Doctor Center, both practices that were acquired during the quarter. Efforts were largely on improvements to workflows, provider access, and shared services. Combined with previous acquisitions, we have seen a second straight quarter of organic growth of 8%. We are confident that as we continue to generate economies of scale, revenue, and cost synergies, that we will be able to further contribute to this growth. With the recent addition of Greg Simon as SVP Marketing Communications, the company will be looking to bolster marketing efforts to drive new patients, both commercial and Medicare, into existing practices and for future de novo sites. Year to date, our annual value per patient has seen significant improvement within the current fee-for-service model. This represents an improvement to the economic growth of our existing practices before any progression into value-based care relationships. Additionally, the improvement was seen mainly in the primary and urgent care service lines. Focus for the teams moving forward will be on generating additional access within the current utilization as we look to marketing efforts on new patient acquisition and the prevention and screening for the existing roster. As it stands today, the Skylight Network represents a little under 28 locations across the US, with nearly two-thirds of that in Colorado and Florida. From a provider panel, we are more evenly divided into physicians and advanced practice providers. Our focus will be on the development of care teams for our patients. Within a value-based care environment, care teams look after a population of patients rather than the traditional one provider to one patient approach. This gives the network far more accessibility, support, and a collaborative model of care. Our clinical care teams have also begun laying the foundation for our value and performance framework, which goes into effect for 22. Once implemented, the program will align providers with the key metrics that drive our performance with payers, helping in winning savings and demonstrating progressive value-based care capabilities. We have executed a participation provider contract with a leading national healthcare organization who is a recipient of a direct contracting entity license. With Skylight Health's participation beginning in 2022, the agreement to join the DCE is a major upgrade from the previously announced Accountable Care Organization and is expected to result in improved care and benefits for traditional Medicare patients. The DCE contracts directly with the Centers for Medicare and Medicaid Services, and provides multiple enhanced pathways for risk sharing agreements. We also recently announced the execution of a definitive agreement to divest the legacy portion of our services arm, which was focused primarily on the qualification and certification for patients seeking medical cannabis for state regulated medical purposes. With this transaction expected to close by the end of November, we will be able to put 100% of our focus and efforts on the primary care growth. Andrew will discuss details of the transactions further on the call. While it's unfortunate that the expected divestiture will see the departure of long-term employees and providers, we know this shift is important, not only to the growth of that business, but to allow us to dedicate our resources in full to our model. This transaction cements our full commitment towards setting aside medical cannabis and focusing on primary care and value-based care as we continue to acquire primary, urgent, and specialty practices in the U.S., I want to especially thank our entire team here at skylight all our practices providers and employees, without whom our vision for changing our healthcare works in the US would not be possible. So with that I would like to turn the call over to Andrew who will review our financial results in more detail, and then I will be back to discuss what we are excited for in the coming quarters.

Thanks, Brad.