Newtopia Inc.

Greetings, and welcome to Newtopia Inc. Fourth Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. 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. It is now my pleasure to introduce your host, Kimberly Esherkin, Investor Relations. Thank you. You may begin.

Good evening, and welcome to Newtopia's Fourth Quarter and Full Year 2022 Earnings Conference Call. Joining me today are Jeff Ruby, Founder and Chief Executive Officer, Colin Swenson, Chief Financial Officer, and Lara Dodo, Chief Growth and Operating Officer. Please note that today's call is being webcast 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 earnings 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 these statements. The risk factors that may affect results are detailed in Newtopia's periodic results and registration statements, which you can access via the CDAR website 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 2022 learnings conference call. When I started Newtopia, my mission was to approach our traditional sick care system from a new perspective, one that focuses on keeping people healthy as a first priority. I envisioned that a focus on primary prevention delivered by humans helping humans, amplified by cutting-edge technology, could prevent, slow, and reverse chronic disease and improve the unsustainable economics for public and private health insurers. For many years, we served that mission strongly, delivering some of the industry's best outcomes to a select group of leading U.S. innovator employers and health plans, but in doing so, sacrificed our profitability along the way. When we spoke last November, I announced that Utopia could no longer be a health tech company innovating to the expense of our profitability and that the time for profitable growth was now. With that said, in the fourth quarter of 2022, we initiated a strategic repositioning plan. We evaluated our cost to serve and operations, determined what expenses were not generating a return on their investment, and then went back to the basics of reducing our costs while simultaneously optimizing our inspirator or health coach service ratios, all while maintaining and improving our industry-leading engagements and whole health outcomes. Increasing inspirator utilization to improve our overall platform efficiencies while conducting ourselves in a strict operating environment is key to Utopia's continued success. With our expenses and costs to serve increasingly in order, as Colin Swenson, our CFO, will address shortly, Our main focus in 2023 will be to achieve profitability alongside the closing of some exciting new employer and health plan contracts. The sizable efficiencies gained in the fourth quarter have proven helpful in moving the business in the right direction, and we have driven even further operating improvements in Q1 of 2023. With improved financial stewardship actively under Colin's watch, we expect another year of revenue growth in 2023. While our efforts to revamp the business will continue, the work to strategically manage costs has been successfully initiated, and as we make our way through each quarter, the efforts we've undertaken to improve margins and reduce operating expenses will be increasingly apparent. With that as a background, let's turn to our financial results for the year. If there's one thing I can say about last year with certainty, it is that 2022 was a crucial year to the lifecycle and development of Newtopia. Not only did we grow our revenue year-over-year to reach $11.2 million, but we also actively expanded our gross margins by 500 basis points, secured key contract renewals across our installed client base, and achieved a record number of participant engagements on our platform, 149,000 to be exact. These accomplishments are a testament to our remarkable team and the successful results delivered by our outcomes-based platform. These results are even more important in tough market cycles as the economy is currently experiencing as our proven clinical outcomes demonstrate real cost savings for our health insurer clients. We are now seeing more than ever before a prevailing belief that unchecked chronic disease is one of the greatest cost generators across the entire North American healthcare landscape. It is this realization that effective habit change can translate into meaningful cost savings that has resulted in all of Newtopia's pilot and proof of concept programs evolving into larger client engagements. Newtopia's tailored, one-on-one coaching and integrated digital solution can benefit the health system overall. And the more engaged our participants, the more effective our platform is in reducing costs and generating value-added revenues for our clients. Newtopia is one of the most comprehensive approaches to prevent, reverse, and slow chronic disease on the market today, and one of the very few offerings in our space to receive the highest full-plus recognition from the Centers of Disease Control and Prevention. In 2023, we will continue to prove our platform's efficacy by strengthening our relationships with our current client base of leading innovators while adding new fully-insured employers and health plans. With large operational changes and cost-cutting measures, we remain an innovative health tech company with proven clinical and financial outcomes and a value-based business model affirmatively answering the two fundamental questions for risk-bearing insurers. Do my people like it? And does it work? Against this backdrop, there are two developing macro trends that we feel incredibly well-positioned to add value and drive future growth. The first is the introduction of the new blockbuster class of effective diabetes and obesity drugs with names like Ozempic, Wegovy, and Mungaro. These injectable drugs are being dubbed as the new statins that mimic hormones in the body to reduce appetite, boost production of insulin, and lower blood sugar. They are generating promising clinical outcomes at a very high price and have the potential to become the largest class of drugs ever globally. What is getting less attention is that they are most effective clinically and economically when paired with an effective behavior change program. The second macro trend is the emergence of advanced primary care for employers and commercially insured populations. Advanced primary care represents an effort by providers to offer comprehensive value-based, not fee-for-service primary care, either in person or virtually, with a goal of delivering the triple aim of improving the patient's experience, improving the health of populations, and reducing costs. Zootopia's industry-leading enrollment, engagement, and ability to deliver lifestyle habit change and help make medical treatment plans into habits represents an ideal complementary capability. As part of our business development efforts, we are in active stages to partner with health plans and provider groups in enhancing member adherence to medical treatment plans, specifically for those individuals being prescribed these new classes of diabetic and obesity drugs. Laura Dodo, our Chief Growth and Operating Officer, will speak to this shortly. As is apparent from our discussion today, Utopia is sitting at a very positive inflection point. We've returned to top-line growth, and continue to deepen our relationships with our current client base, finalize key contracts to open up our distribution with health plans serving Medicare Advantage and broad commercial populations, while at the same time expanding our new business pipeline based on exciting macro developments. Importantly, our client contract renewals, along with a recent equity raise in March, will drive Utopia toward both EBITDA and cash flow positive this year. Profitable growth in 2023 is our number one goal. With that, I'll turn the call over to Colin Swenson to discuss our fourth quarter financials and pathway to profitability in further detail.