Welcome to the Greenbrook TMS Inc Fiscal Year 2023 Q2 Results Conference Call and Webcast. All lines are currently on mute to prevent any background noise. I would like to remind you that this conference call is being recorded today and is also being webcast on the company's website at www.greenbrooktms.com under the Investor section, Events. After the speaker's remarks, there will be a question-and-answer session. Analysts and investors are reminded that any additional questions can be directed to the company at investorrelations@greenbrooktms.com. This call contains forward-looking statements, which reflect the current expectations or beliefs of the company based on currently available information. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations are discussed in the Risk Factors section of the company's annual report on Form 20-F for the fiscal year ended December 31st, 2022, and in the company's other materials filed with the Canadian Securities Regulatory Authorities and the U.S. Securities and Exchange Commission from time to time, which are available on SEDAR, EDGAR, and the company's website. Any forward-looking statement speaks only as of the date on which it is made, and the company disclaims any intent or obligation to update any forward-looking statement unless required by law. I would now like to turn the meeting over to Bill Leonard, President and Chief Executive Officer of Greenbrook TMS, and Erns Loubser, Chief Financial Officer. Please go ahead, Mr. Leonard. Thank you, Michelle, and thank you to everyone for joining our conference call and webcast today. During Q2 2023, we continued to focus on the execution of our restructuring plan, and we are very pleased with our progress to date. The company has now effectively stabilized its cost structure with a headcount reduction of 145 employees, amounting to approximately $11 million in annualized savings. Furthermore, the rationalization of the marketing spend, establishment of lease liabilities, and a reduction of other recurring corporate, general, and administrative expenses has effectively removed $10 million in annualized costs as compared to Q4 2022, with a total of approximately $21 million annualized cost saving from the business to date. Revenue in Q2 2023 and year to date 2023 increased by 29% to $18.3 million and by 40% to $38.3 million respectively, predominantly due to the Success TMS acquisition that was completed in July 2022. Q2 2023 revenue provided resilient at approximately 87% of the total quarterly revenue achieved in Q4 2022, despite the closure of 50 treatment centers in connection with the restructuring plan and a significantly reduced marketing spend. The lack of investment in marketing and general liquidity constraints prohibited any meaningful patient outreach year to date, this significantly impacted the revenue we were able to generate in Q2 2023. Despite this, our base level post-restructuring quarterly revenue proved to be very encouraging as it was achieved without any meaningful marketing investment. This presents a significant opportunity to build on the base revenue for a clear path to profitability. We believe a measured investment in our refined marketing strategy will enhance our TMS business and the continued rollout of SPRAVATO program, including the launch of buy-and-bill. It paints a clear and realistic path to profitability, especially in context of our newly rationalized cost structure. We have also commenced the rollout of a medication management program as an additional revenue stream and a mechanism to build an internal patient pipeline, which we expect to yield results in the longer run. We have also now strengthened our balance sheet through recent financing transactions with our supportive insiders and lender, and expect to see continued access to capital to drive us to self-sufficiency. On the strategic partnership side, we continue to work with Neuronetics leadership closely at various levels to implement a mutually beneficial strategy as it relates to enhancing TMS awareness, expanding patient access to care, and effectively redeploying systems from recently closed treatment centers. Additionally, key operators have attended North Star University in an effort to leverage a strong education and training program to better service our patients. Although the costs associated with the restructuring plan have been substantially executed, the full benefit will only reflect in the second half of the year, as we expect our new operating structure will continue to allow us to rationalize costs while further reducing business complexity, streamline our operating model, and drive operational efficiencies. We believe that the mental health remains a key focus in the United States, and the unmet demand for treatment remains at an all-time high, with our network of treatment centers well positioned to serve this unmet demand. We believe our business fundamentals are stronger than ever with the growth of the SPRAVATO program, the opportunity to increase marketing investment in our streamlined business, the introduction of medication management, and the potential future of opportunities, including psychedelics. At the end of Q2 2023, the company had a footprint of 133 treatment centers. As of today, we have 50 treatment centers offering SPRAVATO. We expect to have 70 to 80 treatment centers offering SPRAVATO by the end of the year through an accelerated rollout plan. Now, for a more detailed review of the company's financial and operating performance, I will turn it over to our CFO, Erns Loubser. Thank you, Bill. As Bill mentioned, revenue in Q2 2023 and year-to-date 2023 increased by 29% to $18.3 million, and by 40% to $38.3 million, respectively. Predominantly due to the Success TMS acquisition that was completed in July 2022. Furthermore, Q2 2023 revenue proved resilient at approximately 87% of the total quarterly revenue achieved in Q4 2022, despite the closure of 50 treatment centers in connection with the restructuring plan and a significantly reduced marketing spend. The marketing spend in Q2 2023 represented less than 10% of the marketing spend in Q4 2022. Average revenue per treatment decreased by 2% to $224 in Q2 2023, and decreased by 3% to $219 in year-to-date 2023. This decrease was primarily attributable to change in pay mix and the geographical distribution of revenue. Despite lower revenue, revenue levels in Q2 2023, we continued to generate positive entity-wide regional operating income as a result of the significant cost reductions implemented in connection with the restructuring plan. The company has now effective, effectively stabilized its cost structure with a headcount reduction of 145 employees, amounting to approximately $11 million in annualized savings. Furthermore, the rationalization of marketing spend, extinguishment of lease liabilities, and a reduction of other recurring corporate G&A, has effectively removed $10 million in annualized cost saving as compared to Q4 2022. That totals $21 million in annualized cost savings achieved to date. Globally, direct center and regional costs increased by 27% to $18.1 million during Q2 2023, compared to, compared to Q2 2023. More importantly, decreased 18% compared to Q4 2022, due to the reduction in headcount, rationalization of marketing spend, and a reduction in other direct center expenses resulting from execution of the restructuring plan. Furthermore, Q2 2023, other regional and center support costs decreased 11% as compared to Q2 2022, and 50% compared to Q4 2022. Also evidencing efficiencies gained through our condensed regional footprint post-restructuring. Given the ongoing nature of the restructuring plan execution, the reduction associated costs were only partially reflected in Q2 2023, but will be fully realized by the end of fiscal 2023. Regional operating income was $0.2 million during Q2 2023, as compared to a $0.1 million loss in Q2 2022, and a $1 million Regional operating income during year-to-date 2023, as compared to a Regional operating loss of $1.1 million during year-to-date 2022, as a result of the significant cost reductions previously described. Corporate G&A, excluding one-time costs and the revaluation of conversion instruments, increased 25% compared to Q2 2022, and increased by 23% as compared to year-to-date 2023, predominantly due to the Success TMS acquisition. More importantly, we have seen a 14% decrease compared to Q4 2022, as a result of the restructuring plan. We believe we can continue to reduce corporate G&A costs as part of our restructuring plan. The loss for the period and comprehensive loss increased 68% in Q2 2023, to CAD 12.3 million, up CAD 4.9 million as compared to Q2 2022, and increased by 41% to CAD 21.6 million for year-to-date 2023, up CAD 6.2 million as compared to year-to-date 2022. The increase, increases are predominantly due to the increase in interest expense arising from the additional debt financings completed in Q1 2023. The increase in share-based compensation expense, the increased costs and depreciation as a result of the completion of the Success TMS acquisition in Q3 2022, and one-time costs, partially offset by the revaluation of conversion instruments. From a balance sheet perspective, accounts receivable remained fairly stable as we have optimized our RCM function and now effectively generate cash revenue as our collection cycle shortened. Cash at the end of Q2 2023 was $2.1 million, including restricted cash. Subsequent to Q2 2023, the company secured $5 million of debt financing from Greybrook Health and Madryn. These financing transactions have enhanced our liquidity position. With secured access to further capital, we can continue to execute on our restructuring plan with an objective to achieve profitability. We remain confident in our ability to access capital to move to a self-sustaining business. Now more than ever, we believe we have a concrete, concretely defined pathway to profitability with a stable cost base, as Bill described earlier. Moving to our core operating metrics. As at the end of Q2 2023, the total treatment centers decreased by 8% to 133 from 144 a year ago. Compared to Q2 2022, the number of consultations performed increased by 130% to 9,924, while the number of new patient starts increased by 46% to 2,647, and the number of treatments performed increased 32% to 81,855. compared to year-to-date 2022, the number of consultations performed increased 129% to 17,899, while the number of new patient starts increased by 52% to 5,501, and the number of treatments performed increased by 44% to 174,388. These increases were predominantly due to the completion of the Success TMS, TMS acquisitions and strong performance in our mature regions as compared to Q2 2022, and year-to-date, as I previously mentioned. We believe that devoting more resources and focus to our best-performing centers through the restructuring plan will increase conversions. This, paired with a measured approach to increase marketing, will boost our core TMS business and continues to strong growth of our SPRAVATO program, will be a catalyst for future revenue growth, despite the reduction in centers. Back to you, Bill. Thanks, Erns. The execution of our restructuring plan continues to yield positive results, including entity-wide regional operating income. We believe that we are well positioned to continue to reduce the business cost structure sufficiently to operate profitability. We have now strengthened our balance sheet through recent financing transactions, including with our supportive insiders and lender, secured access to future capital, providing with us with the ability to continue to strengthen our business through the growth of SPRAVATO program, the opportunity to increase marketing investment in our streamlined business, the introduction of medication management, and the potential future treatment opportunities, including psychedelics. We believe that mental health remains a key focus in the United States, the unmet demand for treatment remains at an all-time high. We continue to offer innovative solutions for this unmet need, and our leadership position and nationwide footprint continue to serve as a valuable platform to bring the needed help to patients struggling with depression. As always, I would like to take a moment to thank our amazing team. We are extremely proud of them as they continue to deliver the highest levels of care through some recent turbulence. Most importantly, we know that we are making a difference. We have now treated over 38,000 patients with more than 1.2 million treatments performed. We are having significant positive impact on the lives of so many people suffering from mental health disorders. We look forward to keeping you updated on the progress of the company. Thank you for your time today, and with that, Michelle, we will now take questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a 3-tone prompt acknowledging your request. Should you wish to remove yourself from the queue, please press star two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. The first question comes from David Martin of Bloom Burton. Please go ahead. Yeah, good morning, Bill and Erns. First question, I, I'm wondering when during the quarter was the center count fully trimmed to 133? Erns, I think you mentioned that the benefit of the restructuring was only partially in Q2. I'm also wondering what further savings should we expect in future quarters at, at the center, regional, and corporate levels? That's a really good question, David. As it, as it relates to closure of centers, those were substantially complete at the end of Q1. We didn't really see any revenue contribution as it relates to the closed centers. There's obviously a lag effect as it relates to the reduction in force. What we'll see in, in direct page center and patient care costs are the regional personnel expenses, as well as corp, corp G&A. It's probably $200,000 in each of those, between $100,000-$200,000 in each of those line items, that is included for staffing that has been subsequently removed. Okay. Okay. When do you expect to reach cash flow break even? We wanna aim from a free cash flow to firm on an unlevered basis. We wanna see that, as we exit the year, and then realistically see, kind of fully, fully burdened, cash flow to equity, early in Q2 2024. All right. 24. Okay, now you're at steady state with 133 centers. I'm wondering, what's the capacity utilization in those centers? You know, what, what is the opportunity to grow in those 133, and what kind of growth rate are you expecting? In terms of as, as Bill and I mentioned, it is fairly underutilized at the moment. The, the current base of centers has the capability to generate well north of $25.5 million in revenue. That's obviously in the immediate future, we can look at that. The, the reason for the capacity utilization is we've hardly invested any money in marketing. With liquidity constraints that we've experienced over the last few quarters, we haven't really invested in marketing. Now that we've stabilized that to a certain extent, two things will happen. We'll continue to accelerate the SPRAVATO program, which will drive, can drive significant revenue growth on top of the base of the $18.5 millionish that we've generated, and reinvestment in marketing that we believe will also drive a significant amount of TMS, base TMS revenue. Those are the two catalysts that, that will drive us, to, to kind of a, a, a cash flow self-sufficient business. Okay. David, let me just add, David, let me just add, in addition, as we discussed on the phone, we're also extremely excited to kind of roll out a medication management pilot. The value of that medication management introduction to our centers is, number one, it allows us to control that patient from the start of their journey in mental health. Today, with TMS and SPRAVATO, that patient tends to get into the treatment paradigm later along the lines, after probably five, six, seven, eight failed meds. Having that opportunity to pilot a center allows us the ability to get that patient into sooner treatment options like TMS and SPRAVATO. That's significant. It kind of shortens the treatment paradigm. So we're really excited about kind of launching that, which we just have. We still do have the upside, and we will... You know, our first center will launch this week, first area in Alaska with buy-and-bill. There's some upside to us that we're really excited in terms of our platform. It's been right-sized. Now there's really good growth opportunities. Is medication management going to cost you a lot before it starts to pay off? From, from a cash, we, we are taking, obviously, in context of our liquidity position, a very measured approach to that. We've got in certain, certain regions, the infrastructure, and to a lesser extent, have already built some of those codes. We're taking a very measured approach. For the moment, there's no initial cash investment. We, we are using existing staff, existing providers to roll that out. Based on the learnings from that, that pilot, we will expand that, that broader. We obviously, although if, if, if you would have to do it at every center today, there would be a cash requirement, but we're taking a much more measured approach to it, to make sure we manage our liquidity adequately. Okay, great. My last question, if I can slide it in: The TMS devices installed were at 341. I think that's only down four from your peak. You, you've closed a bunch of centers. Do you expect that number to be reduced substantially in future quarters, or are you obligated to keep them on lease contracts? Are the lease contracts per click, or are they per month? What's that situation? We've obviously got, as Bill mentioned, a significant install base with Neuronetics, which is a very close partner of ours. We will be redeploying those devices. As we said, we condensed our footprint, but are shifting capacity to more productive, higher volume centers. As it relates to overall install base, yes, you'll see that just dissipating slowly as we negotiate all the leases naturally come to an end. It's not that we could cut the cord immediately, and that's why you haven't seen a significant reduction yet. Are the leases based on per use or per month or something else? Our predominant install, install base is, is based on kind of a usage fee, per treatment. Okay. Okay, thank you. That's it for me. Thanks, David. Thank you. The next question comes from Frank Takkinen of Lake Street Capital. Please go ahead. Yeah. Hey, thanks for taking the questions. Wanted to start with SPRAVATO. One, can you just give us kind of a feel of how that rollout is going with the newest additions? Two, you referenced buy-and-bill on the, in the prepared marks. Again, can you give us a, maybe a finer point on when that could roll out and how we could see that impact in the model? Yeah. From a SPRAVATO standpoint, obviously, we now have 50 centers operating. We expect that to reach kind of that 70-80 number by the end of the year. At this time, at the end of last year, we only had roughly just north of 30 centers in full play. It's still kind of a staggered approach, Frank. We have centers that are doing extremely well, who've, who've now started out the year as a full SPRAVATO kind of center. We're having great support and a working relationship with Janssen in terms of the relationship between the two organizations. We're excited about the SPRAVATO opportunity. It allows us to expand to a wider capture range with patients. They're very complementary of one another, both TMS and SPRAVATO, with the ability to transition patients from one treatment modality to the other. As far as what buy-and-bill does for us, it's really two things. One, the biggest area is there are specific payers in certain marketplaces that will not allow you to provide patients with SPRAVATO unless you do buy-and-bill. We definitely want to roll that out. Our first location is going to be in Alaska, that just rolled out this week. From a contribution side, Erns, I believe we're going to see probably an uptick of 10%, per treatment over the course of time with that. We're going to learn from buy-and-bill, and then obviously, as we begin to strengthen the balance sheet and put ourselves in position with some of the vendors, in terms of the distributors, we'll begin to roll that out at marketplaces across the country. Okay, that's helpful. Then I wanted to ask one on some of the patient metrics. If you're looking at a, at a, a quarter-over-quarter basis, it looks like treatments were down, quarter-over-quarter, but new patient consults were up really, nicely on a quarter-over-quarter basis. I was hoping you could maybe talk to maybe some of the dynamics that occurred in the quarter, if there was some, challenged conversions from consult to treatment, then, maybe any implications of that good consult number into Q3, Q4 revenue expectations. Yeah, absolutely. We, we have said, this has been a product of kind of integrating, kind of the marketing approach between the legacy Success platform and the Greenbrook platform. We, our marketing strategy has changed a little bit that, that covers broader outreach that generates a higher lead volume, but a lower conversion rate. I'll let Bill speak a little bit more to this, but we've now really, from learnings in Q4, optimized our marketing approach, and we expect to start seeing an uptick in our conversion, conversion rates due to those optimization of marketing. Yes, I'm encouraged, although it's not completely like for like, in terms of the lead volume. I think it is encouraging that we saw such a, such a, big increase in leads and, and the ability to convert those, kind of going into Q3. Yeah, I, I think to add to that, Frank, we really saw some good stories in the fact that we, our base business was resilient when we weren't marketing. But with that said, I think early on November, November, December, we were, you know, we were spending significant dollars, attracting a wide range of patients. Some of those conversions, so that patient didn't close, just probably wasn't as kind of tuned into TMS or SPRAVATO. I think now we are-- the lessons learned in terms of customizing that spend based on our product offering at a center, both having the ability to, to offer TMS and SPRAVATO. Obviously, looking at the patient pipeline, what's in the pipeline at particular centers and regions, physician coverage, including Medicare, and obviously the pr- network performance in terms of us driving patients from the network to us. I think we've gotten smarter with how we spend that dollar, and I think it's gonna maximize profitability by, you know, increasing our conversions based on that. Okay, that's helpful. Then maybe for my last one, just wanted to put a finer point on some of the financials. How should we be thinking about a regional operating income margin for Q3 and Q4? Then is there, can you just kind of parse out in the corporate G&A line, below regional operating income, what is likely to fall off as you go into Q3? It looked like there was a fair amount of one time in that aggregate corporate G&A expense line. Yeah, sure. First dealing with regional operating income. The core element that we like I said, there's two elements to it. The dynamics is going to be direct center and patient care costs are going to reduce as the reduction in force is fully realized into Q3. As regard to other, you're going to see the same on the regional personnel expenses and other regional and center support costs. Regional marketing expense is probably going to flex the other way as we start a measured investment into regional marketing with a better liquidity position now. In turn, is obviously going to have a return on investment to boost revenue. We, we wanna see the sooner we can do that, the sooner we can ramp up the, ramp up the regional operating income profile, and we wanna see, see that go, go into the teens, or at least get close to it, depending on how quickly we can get, get up and running, in Q3, Q4. Okay, that's helpful. I'll stop there. Thank you. Thanks, Frank. Thank you. Once again, ladies and gentlemen, if you do have a question, please press star one at this time. There are no further questions at this time. I will turn the call back to Bill Leonard for closing remarks. Yeah, thanks, Michelle. Again, we're really excited about the resilient performance in light of no marketing for our TMS business. Really pleased with how we've addressed the cost out of our business and excited about the future in terms of the getting back to normalizing our TMS business with some supportive marketing, expansion of SPRAVATO footprint, excited about the medication management trial to see what we learn, and feel really good about where, what the progress made. You know, we appreciate your time today, and hope everyone enjoys the rest of the summer. Have a great summer. Thanks. Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.