WELL Health Technologies Corp.

participants are in a listen-only mode. We will conduct a question and answer session later in the call, which will be restricted to analysts only. Please note that this conference is being recorded today, November the 10th, 2021, and I would now like to turn the call over to Mr. Pardeep Sangha, Vice President of Investor Relations. Mr. Sangha, please go ahead, sir.

Thank you, Operator, and welcome everyone to Well Health 2021 Fiscal Third Quarter Financial Results Conference Call. Joining me on the call today are Hamed Shabazi, Chairman and CEO, and Eva Fong, the company's CFO. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Listeners are also encouraged to download a copy of our third quarter financial statements and management discussion analysis from CDAR.com. Portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provisions of those laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic, and competitive uncertainties and contingencies. These forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors that many of which are outside of wells control that may cause the actual results performance or achievement of well to differ materially from the anticipated results performance or achievement implied by such forward-looking statements. These factors are further outlined in today's press release and in our management discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future We don't undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based, except if it's required by law. We may use terms such as adjusted gross profit, adjusted gross margin, and that's adjusted EBITDA and Shared EBITDA on this conference call today, which are all non-GAAP and non-IFRS measures. For more information on how we define these terms, please refer to the definition set out in today's press release and in our branchment discussion and analysis. The company believes that adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations which the company can use to fund working capital requirements, service future interest and principal debt repayments, and fund future growth initiatives. Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS. And with that, let me turn the call over to Mr. Hamid Shabazi, Chairman and CEO of WellHealth.

Thank you, Pardeep, and good day, everyone. We hope that you're all keeping safe and healthy, and we truly appreciate everyone for joining us today. I'll begin with a brief introduction to Well for any newcomers to the call. WellHealth is a technology-enabled healthcare company whose mission it is to positively impact health outcomes and to empower and support healthcare practitioners and their patients globally. Our overarching mission has always been to empower healthcare practitioners. We believe that digital health innovations help practitioners become better providers. It helps them become more efficient, provide better care, and deliver more value. The whole idea of WELL is to participate in the digitization and modernization of diverse and fragmented healthcare sector, which is one of the largest services sector in any economy. Operationally, Well has organized all of its businesses into two lines of business, the first one being omnichannel patient services and the second being virtual services. Omnichannel patient services includes all patient services businesses that have any material exposure to in-person operations, in addition to virtual care and or other business models. Well owns and operates Canada's largest network of outpatient medical clinics nationwide. serving primary and specialized healthcare services, and is a provider of leading multinational, multidisciplinary telehealth offering. Based on our knowledge, we are the market leader in omnichannel patient services in Canada today. And we will look to build on that lead purposefully and ambitiously over the next year. We don't know of any other provider in Canada that has anywhere close to the capacity of delivering both physical, in-person, and telehealth patient services to the same degree as we can. And now with My Health and the Family, our patient care scope includes a substantial specialized care and diagnostic offering. Our second line of business, virtual services, is comprised of businesses that are almost entirely digital in nature, inclusive of SaaS and services. Revenues from the company's practitioner enablement platform or patient services businesses that have little to no exposure to in-person care. Well has built an innovative practitioner enablement platform that is used to power health care practitioners both inside and outside of Well's own omnichannel patient services offering. This platform and its tools, software, products and services is compelling and is rapidly making Well a one stop shop to help support and advance health care practitioners, their medical clinics and of course, their patients. The platform includes practice management and EMR capabilities, telehealth services, billing and revenue cycle management solutions, digital health productivity apps, an extensive array of digital patient engagement features such as online patient booking, waiting room automation, self-service mobile check-in, along with data protection solutions. These two lines of business exemplify Wells Business in a way that is easy to track and understand. Both are profitable and both are growing. Think of omnichannel patient services as being our patient services business that has material exposure to brick and mortar operations, but also has significant technology enablement. This line of business is expected to generate approximately three quarters of our total revenues in Q4 2021 and generates the vast majority of our EBITDA. Whereas our virtual services line of business has very little to no exposure to brick and mortar and is comprised of super scalable digital businesses, which today generate less EBITDA, but are growing at a much higher rate. With Wist and the family, our virtual services business is forecasted to now exceed over $100 million Canadian on a run rate basis, which is an incredibly important milestone for us. So in summary, omni-channel patient services has higher revenue in EBITDA, but grows slower, and virtual services, which should now exceed $100 million in revenue, is growing much faster. Stay tuned, as later in our remarks today, we'll be providing some increased color and outlook on organic growth, which we believe investors will find compelling. I will provide a quick summary of our Q3 financial results as Eva Fong will then provide a more detailed financial analysis later in the call. We're pleased to report another outstanding quarter for the company as a result of the growing success of our Practitioner in the Platform. and strong financial performance from our recent acquisitions. In the third quarter, we increased overall revenue by an impressive 711% to $99.3 million, just shy of the $100 million mark. In addition, we achieved adjusted gross profit of approximately $50 million, which was an increase of almost 10 times the adjusted gross profit from one year ago. And our adjusted gross margin percentage expanded to over 50% for the first time in history. We now have accomplished four quarters in a row of positive adjusted EBITDA, and we achieved record adjusted EBITDA margins of 22%. Both our revenue and adjusted EBITDA for Q3 not only exceeded analysts' mean consensus expectations, but also beat the highest analysts' revenue and adjusted EBITDA estimates on the street. During Q3 2021, 55% of total revenues, or $54.2 million, was generated in the United States, while 45% of total revenues, or $45.1 million, was generated in Canada and other locations. In Canada, we are the leader in the tech-enabled healthcare sector with an end-to-end ecosystem of outpatient clinics providing primary care, allied health, specialized care, and diagnostics. Layered on top of that, we are a top three telehealth network, top three EMR business, and number one provider of digital apps and practitioner-enabled tools in the country. We're building an end-to-end ecosystem that we believe will be Canada's most consequential healthcare network. Comparatively in the United States, our focus is on a few key specialty verticals, such as serving the gastrointestinal market, providing women's health services, and a growing primary care business that has an emphasis on telehealth delivery of longitudinal care and mental health. Now for an update on some of our key assets. I'll start with My Health. During the third quarter, Well's completed its acquisition of My Health, a leading provider of specialized care, telehealth services, and accredited diagnostic health services in the province of Ontario. My Health represents a major acquisition for the company as it boosts Well's free cash flow. It accelerates Well's revenue EBITDA growth profile, and it establishes a strong presence of diagnostic and specialty services in Ontario for the company. This is our first quarter that includes My Health Revenue, so I'd like to provide some additional details on this business. My Health specialist consultations and diagnostic care is focused on four main areas, cardiology, bone and muscle health, women's health, and cancer diagnostics. With the My Health acquisition, we provide a chain of services starting from telemedicine, primary care, specialist consulting, diagnostic care, pharmacy, and health record access. There's a significant effort within My Health to provide a robust continuity of care to the patient and along the patient journey. With this foundational acquisition, Well became the largest owner-operator of outpatient clinics in Canada. Since joining the Well family, My Health has completed the acquisition of Durham Nuclear Imaging, a nuclear medicine clinic east of Toronto in Ontario, bringing the total number of My Health locations to 49. My Health owns more than 90,000 square feet of clinical space, which affords well the opportunity to expand additional services to the market. My Health is certified as a great place to work for the past five years. This certification is obtained through an annual survey of all employees on criteria such as credibility, respect, fairness, pride, camaraderie, and performance. The positive My Health culture is a competitive advantage in today's tight labor market. My Health is the only chain of independent health facilities that have been accredited by Accreditation Canada. This is the same organization that accredits hospitals in Canada. They accredited My Health with commendation, which is a testament to My Health's protocols and patient safety standards. We've already started to connect My Health with other well assets. My Health is already leveraging the Pillway technology from our investee, Simpil, for e-pharmacy delivery, and we're in the process of establishing referral links from our telehealth programs to My Health such that patients can quickly and easily be processed for diagnostic procedures. Furthermore, we'd like to recognize the My Health team for being selected by the Canadian federal government to provide medical examinations and associated diagnostics to newly arrived refugees from Afghanistan. We're very proud of the work that My Health has done in this regard to serve in this humanitarian effort. And now I'll say a few words about CRH Medical. CRH's core business is performing beautifully with strong caseloads and stable per unit economics. We're very pleased with their performance as CRH had another great quarter. In Q3 2021, CRH achieved revenue of approximately 38.6 million U.S., which represents 27% year-over-year growth as compared to Q3 2020 as measured in U.S. dollars. CRH completed a record of almost 123,000 anesthesia cases in this third quarter, a slight increase from the previous record in Q2. CRH also sold over 2,100 O'Regan units in the second quarter. CRH is also making a number of strides towards digitizing legacy processes to improve areas of operation. A key example of this is its revenue cycle management function. Over the past quarter, CRH has been working on implementing tech-enabled revenue cycle management tools and products. We're expecting these improvements will result in significant savings in the coming quarters, which will drive noticeable bottom line improvements. As part of Well's ecosystem now, CRH has been instrumental in unlocking opportunities for Well's other business units. CRH is already working closely with our Source 44 cybersecurity business unit to provide cybersecurity tools to GI practices. Source 44 has already moved past the pilot stage with its first CRH customer and secured a significant contract which will deliver over $30,000 USD in ARR. Well is also working on ramping up patient services using the O'Regan system, its own patented and FDA-approved best-in-class hemorrhoid banding system. We have now initiated our first banding-focused clinic in Canada, a de novo site in the greater Toronto area that is a hemorrhoid banding clinic. as well as started to offer banding patient services in our XLMD Montreal clinic system. As you may remember, CRH owns the Oregan MedTech device, a patented FDA-approved device for banding hemorrhoids. Well believes that the banding patient services opportunity in Canada alone could be a material business and has plans to open several new de novo sites over the next few months. This is an excellent example of a clear and positive synergy between CRH and its new . CRH has the industry's leading band ligator system delivering outstanding patient outcomes. However, historically, CRH had never provided patient services with its own intellectual property. It had generally sold its intellectual property to clinicians who have generated hundreds of millions of dollars with its technology. CRH's business plan did not consider patient services because it didn't have the experience in providing patient services, whereas Well has extensive experience in providing clinical services as Canada's largest owner-operator of outpatient clinics. We look forward to providing updates on our growth in patient services fueled by our O-Rigging device in 2022 as we expect this to emerge into a growing source of revenue for the company. When we acquired CRH, it was a provider of two products and services to the GI channel. It sold O'Regan banding products and provide anesthesia services to GIs for routine colonoscopies. We're proud of the fact that we have now added two new sources of revenue, cybersecurity and banding patient services, which means we are now at four revenue streams. We'd like to add at least one or two more revenue streams in the next few months as we are currently considering a number of new services. When we announced the acquisition of CRH, we also indicated that we were determined to leverage the power of digital enablement to further empower the sales of Oregon devices. We're also pleased to provide an update on our new digital resources to promote our Oregon business. We're making strong progress in this area and expect to roll out a number of new digital business and consumer sites and resources before the end of the year. Also, we've submitted our new B2C digital GI and O'Regan-focused app to Apple and expect to have that operational and commercially deployed within the next few weeks. We believe these digital resources will further accelerate our efforts to drive organic growth across our device sales segment and, as well, allow us to partner and provide our GI partners and well itself with opportunities to grow patient services revenues. The CRH acquisition is working. We're making progress in terms of unlocking new revenue streams in CRH's valuable GI channel, and we're making progress with digitization. As you can see, CRH's core business is healthy and firing on all cylinders. And now on to our Circle Medical business. Our US telehealth efforts with Circle Medical are also gathering steam. is currently on an annualized revenue run rate approaching 24 million U.S. as of the end of October. Monthly revenue for the month of October is expected to have over 300% growth compared with the same period last year. Circle Medical ended October with 152 providers on its platform, an increase of 424% compared to 29 providers in October of last year. Given the growth trajectory that Circle Medical is on, we're continuing to reinvest in the growth of its business. As a rapidly growing telehealth provider, we don't believe Circle Medical is being properly priced into the wealth story currently. For instance, when we announced the deal, Circle was just at $5 million in its revenue run rate. They are now approaching 24 million US just over a year later and continuing to grow and expand rapidly. We believe Circle Medical will continue to grow well into 2022 and be an important asset in the U.S. healthcare IT ecosystem. While Well does have a call option to acquire the balance of Circle's share, Well also has the right to partner with management and potentially launch Circle as a separate IPO. This should be considered in the value of Circle and, by extension, Well Health. And finally, I'd like to talk about our recent acquisition of WISP. WISP is a Silicon Valley company that is a national provider of telehealth and e-pharmacy solutions specializing in women's health, delivering solutions for female reproductive and sexual health ailments to patients across all 50 states in the US. When we announced the WISP acquisition, the company was growing at over 100% year over year and was on a $30 million revenue run rate. WISP is now approaching close to 33 million revenue run rate only a couple months later. WISP has gross margins exceeding 65% with majority recurring subscription revenues and has achieved positive EBITDA over the last few quarters. WISP's business plan is working and the business is growing aggressively. We're in early planning on launching WISP in Canada by integrating WISP with our Investee Pillway, which is an e-pharmacy platform that can programmatically drive all fulfillment of WISP products and services here in Canada. I'd like to turn the call over to our CFO, Eva Fong, who will review the financials for the third quarter. I will then come back and comment on our future outlook. We will then conclude the call with a question and answer session.