Newtopia Inc.

Greetings and welcome to the Newtopia Inc. Q4 and full year 2021 conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Kimberly Esterkin, Investor Relations. Please go ahead.

Good evening and welcome to Newtopia's fourth quarter and full year 2021 earnings conference call. Joining me today are Jeff Ruby, founder and chief executive officer, Edmund Lem, interim chief financial officer, and Laura Dodo, chief growth and operating officer. Please note that today's call is being broadcast live over the internet and will also be archived for both telephone and online listening upon completion of the call. Details on how to access the replays are available in the company's fourth quarter press release issued this afternoon and can be found on the investor section of Newtopia's website at www.newtopia.com. Before we begin, let me remind you that certain matters discussed during today's call or answers that may be provided to questions asked during the Q&A portion of the call could constitute forward-looking statements which are subject to certain risks and uncertainties relating to Newtopia's future financial and business performance. Actual results could therefore differ materially from those anticipated in such forward-looking statements. Newtopia is under no obligation to update any forward-looking statements discussed today, and investors are cautioned not to place undue reliance upon those statements. These factors that may affect results are detailed in Newtopia's periodical results and registration statements, which you can access via the CDAR database at www.cdar.com. Also, please note that all figures stated on today's call are in Canadian dollars unless otherwise noted. I would now like to turn the call over to Jeff Ruby, founder and CEO of Newtopia. Please go ahead, Jeff.

Thank you, Kimberly, and thank you to everyone for joining us today on our fourth quarter and full year 2021 earnings conference call. I'll begin today's call with an overview of our financial performance and strategic and operational highlights for the year. I'll then turn the call over to Edmund Lem, our Interim Chief Financial Officer, for a more detailed discussion of the fourth quarter results. Lara Dodo, our Chief Growth and Operating Officer, will conclude today's discussion with commentary on progress against each of our core growth drivers. With the holiday season, and the distraction of open enrollment for new benefits in the following year taking place for U.S. employers, the fourth quarter is traditionally a seasonally challenging period for new enrollments and engagements. That headwind, combined with the surge in the Omicron variant late last year, impacted our business and drove a decline in both quarterly and full-year revenues as compared to 2020. For the quarter, revenues totaled $2.4 million, a decline of 3% year-over-year. For the full year, revenues totaled $10.5 million, down 8% compared to 2020. While these results do not live up to our historical performance or our long-term goals, they do reflect the overall negative impact of the COVID-19 pandemic as employers were justifiably preoccupied by the ever-changing pandemic realities. This, in turn, pushed out our sales cycle and our revenue growth plan by roughly a year. Fortunately, As the contours of the pandemic have changed for employers and health plans in 2022, we are experiencing strong momentum thus far and believe that our business has officially turned a corner. As a result of the current trends and pipeline of planned launches, we are now anticipating sequential and year-over-year revenue growth in the first quarter of 2022, as well as full-year revenue growth over 2021. I'm confident that our organic growth into existing employer clients plus a return to our robust employer sales season, alongside an expanded sales strategy to larger health insurers, will set us up for growth this year and even further top-line improvements in 2023. While 2021 represented challenges to onboarding new participants, we delivered the best engagement and retention rates for existing participants in our company's history. This increase in engagement and retention was attributed to improved stickiness in our participant base through reductions in churn, along with ongoing innovation in our program content that resulted in higher usage rates, such as the introduction of the BDNF gene into our genetic screening panel. Annual participant engagements on the Nootopia platform totaled 135,500 in 2021, a strong improvement of approximately 14% over 2020. A large part of this growth in engagements took place in the second half of last year with a partner that has had a long-standing relationship with Newtopia. Given the timing of this partner launch in the back half of the year, combined with the fact that this particular partner has been granted legacy pricing having participated in our original randomized control trial, the increased engagements did not unfortunately directly translate to revenue growth for the year. Nevertheless, these strong engagement numbers and rates of growth will certainly drive revenue for this year and for years to come. Speaking of driving revenue, with the return to more normal operating procedures and working conditions, clients are increasing their usage of in-person biometric testing and online health risk assessments to identify chronic disease risk factors and, in turn, eligible participants for Nootopia. This acceptance of a combined approach to risk assessment, along with the resumption of new phase rollouts in 2022, is helping us onboard additional participants onto our platform. Once enrolled, we know we can engage participants in our differentiated habit change approach, as is evident in our engagement numbers for 2021. In addition, many employer and health plan prospects, which now have higher rates of membership risk as a result of the pandemic, are exploring strategic options to lower risk and costs earlier in the year with the resumption of a more traditional sales cycle. This provides us with a robust pipeline of activity across self-insured employers, along with a growing pipeline of private health plans focused on fully insured, Medicare Advantage, and accountable care organizations. In 2021, we benefited from a strong mid-year launch with a Fortune 50 health services client whose participants' onboarding will positively impact financials this year. Based on the first six months of positive onboarding, engagements, and clinical outcomes, we were able to secure a larger phased expansion in 2022 that is proceeding well. The ability to identify eligible members based on physical or mental health risk factors, to expand our whole health product offerings, and to diversify our client base are all supported by our ongoing investments in research and development. At the end of the third quarter of 2021, we amended our revolving credit facility and doubled the amount of growth capital available to our company to hire additional health coaches, which we call inspirators, to expand our marketing team and to continue to advance our technology efficiencies. I'm pleased to report that we've made progress against all three of these goals, and specifically, we've continued to advance our engagement technology in anticipation of the launch of our new technology platform in 2022. This platform is built on our own infrastructure and is currently in beta and expected to launch in the second half of this year. Along with these many accomplishments, 2021 was also a key year for operational and product development. At the start of 2021, we officially launched our habit change provider category for delivering habit change at scale. We also brought our unique offering to Canada with our launch with Eastern Health in the province of Newfoundland in April. Three months later in July, we introduced our mental health offering and added a new behavioral gene, the BDNF gene I noted earlier, which gauges resilience to stress. Just last week, we announced an expanded partnership with one of the world's largest brand name apparel companies, a leader in jeans wear, who beginning this June will be extending to their employees Newtopia's mental health services. With social isolation, mental stress, and generally poor habits fostered by the pandemic, there is no better time to engage with our whole person offering, which treats both physical and mental health needs as a means to prevent, reverse, and slow chronic disease. All of these accomplishments would be less meaningful if we were not to simultaneously deliver solid results for our customers. Midway through the year, in June 2021, we announced strong outcomes from the results of a weight loss study conducted during the pandemic in which 77% of participants lost weight and nearly one-quarter of those taking part in the study dropped a BMI risk category. These are meaningful clinical results that demonstrate the effectiveness of our habit change platform and continue to validate our strategic importance to health insurers to prevent, reverse, and slow chronic disease. By employees achieving such results, employers are able to lower their healthcare costs and optimize their existing benefits, both value-added services that drive increased revenues. Overall, while our revenue growth was not acceptable, we are making the necessary shifts in our business development strategy to favorably position Utopia for the future. We are excited to see continued organic growth from our employer-client segment, as well as the results of several proofs of concept anticipated to launch this year with new health plan clients that will set us up for even further top-line expansion in 2023. One of these proofs of concept is focused on the Medicare Advantage space. which will open up access to a new addressable market of more than 27 million Americans enrolled in Medicare Advantage plans today. We are in advanced negotiations with five of the leading national and regional Medicare Advantage innovators and expect to announce our first finalized contract in the coming weeks. And with that, I'll turn the call over to Edmund Lem to speak to our fourth quarter results in greater detail.