Thank you everyone for standing by. This is the conference operator. We would like to welcome you to the Skylight Health's Third Quarter 2022 Financial Results Conference Call. The results are for the period ending September 30th, 2022. As a reminder, all participants are in listen-only mode. After today's speakers conclude the presentation portion of the call, should time permit, we 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 one on your telephone keypad. You will hear a tone acknowledging your request. To withdraw your question, please press star then two. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. 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. Today's conference call is being recorded today, Thursday, November 17th, 2022, at 8:00 A.M., and will be posted to the Skylight Health's website within 24 hours after conclusion of the call. I would now like to turn the meeting over to Skylight Health's Chief Executive Officer, Mr. Pradyum Sekar. Please go ahead. Thank you, operator, and a good morning to everyone, and thank you for joining us today for our third quarter conference call for the period ending September 30th, 2022. I have with me today our CFO, Farooq Akhter, who will join us shortly to review our financial statement. 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 care health 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 the U.S. healthcare. First, providing a white knight solution to small and independent primary care practices looking to consolidate within a highly fragmented market. Secondly, we aim to realign the reimbursement models within these practices to value-based care from traditional fee-for-service only. Under these models focusing on populations, including Medicare, it allows us 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 continue to execute against our objectives for 2022 in progressive changes to our cost structure and establishment of new contracts for Medicare and Medicare Advantage global risk plans for 2023. I am pleased to see that efforts made year to date have resulted in significant improvement in adjusted EBITDA from the previous quarter. I expect that further improvements in the first quarter will result in a reduced cash burn by the end of 2023. We saw a full quarter of revenue and cost of sales from our acquisition of NeighborMD in the third quarter, which resulted both in higher revenues as well as a lower gross profit margin. As previously mentioned, the global risk model or value-based care model has a lower gross profit margin as a percentage due to the medical expenses that are deducted from the premium benchmark we receive. However, we receive a higher dollar contribution due to the increased capitated revenue under this new model. This is an industry standard and one that will continue to improve upon plan performance, both by accurate coding as well as the cost of care. We have already seen a positive trend towards an improved benchmark for our high-risk members, which more accurately reflects the conditions of our patients. The trend we expect will continue as more efforts are placed with education with our providers and additional care staff to support our high-risk membership base. Additionally, we have seen significant improvement to our quality scores nationally within our Medicare membership base, which we believe will set us up well for 2023 in the ACO REACH program. Our work with managed care teams will focus on expanding support to Colorado, Pennsylvania, and Texas to bring care coordination, coding, and quality support to those Medicare members. For this, we will receive a global capitation per member per month in Medicare, which we expect to have between 1,500-2,000 new Medicare members in the ACO REACH in 2023. We have also elected to participate in the new alternative payment model for Medicaid in Colorado. In this model, we will shift to a capitation per member per month for our Medicaid members. We have always been in a traditional fee-for-service model with our Medicaid population, which has resulted in revenue variation month-over-month based on volume of patient visits. With the capitated payment model, we remove the volume-based volatility as well as have an opportunity to improve our per member per year fee to drive similar managed care services as our Medicare membership base. We have significant density in Colorado with Medicaid, now with over 25,000 members. We see a strong opportunity to excel in our plan with Medicaid and become a leading provider for Medicaid at-risk programs in the future within the state. While typically many have stayed away from Medicaid due to the challenges in adequate funding, we believe the density and growth potential we have can see success within this population group as peers have in other markets, such as CityMD, who has recently merged with VillageMD. Finally, we strengthened our balance sheets, completing two convertible financings in August and October for CAD 2.35 million and a committed $5 million, of which $3.37 was completed. With this capital, our focus has been to continue driving efforts to streamline operations, cost reduction through location consolidations and headcount reduction, as well as setting up new contracts such as Medicare ACO REACH and Medicaid that we expect will begin resulting in improved revenues in 2023. With that, I will turn the call over to Farooq and be back for closing remarks. Thanks, Prad, and good morning, everyone. It's been five months since I took over my new role and worked diligently alongside the two co-founders to positively improve the results of the company. As Prad mentioned, we are very pleased with the company's achievements during the quarter. I will start off with a review of the income statement. Please note that my comparisons will mainly be with the prior quarter of Q2 2022. Revenue for the quarter came in at just over CAD 20 million, a growth of 30% compared to just over CAD 16 million for the previous quarter. This increase was primarily a result of the full quarter revenue from the acquisition of NMD in Q2 2022. The primary driver was the capitated business segment from value-based care, where the company earned a fixed or capitated fee per member per month at a significant premium to traditional fee-for-service. The cost of sales and related gross profit margin percentage for the quarter was CAD 17.1 million and 18% respectively, compared to CAD 12.1 million and 25% respectively in the last quarter. The margins in Q3 2022 were lower due to the change in how gross profits are calculated in a traditional fee-for-service model versus a value-based care or capitated model acquisition. To explain further, I would like to build some context here. Cost of sales for fee-for-service under revenue mainly comprises of service fees paid to doctors and nurse practitioners, medical billing costs, and medical supplies consumed at the time of service. In comparison, the cost of sales of capitated revenue comprises of all the costs associated to the medical care of the members, irrespective of who provided the service. Due to this, the cost of capitated services are significantly higher compared to the fee-for-service and underwriting. The margins in Q3 2022 were lower due to the first full quarter of NMD's capitated revenue. The company believes the gross profit margins are in line with industry standards and will establish a new baseline as the capitated revenue segment is expected to contribute significantly to the growth in the future. Although the gross margin percentage is lower, but the gross margin dollar contribution is significantly greater in capitation. To further improve the margins, the company has identified three major cost control areas where the company can achieve cost savings and reduce the medical loss ratio. First thing, hospital admissions, then medical utilization of services, and high-cost pharmacy prescriptions. The company also expects to see further improvements in its gross profit margin through increased marketing efforts to increase their members and also accurate medical coding for lives at risk to improve the MRA, hence pulling all major levers to further improve the results. Moving on to the net loss. Net loss from continuing operation during the quarter was CAD 4.3 million, compared to CAD 5.2 million for the last quarter, an improvement of 16%, primarily achieved due to the cost rationalization initiatives that the company further discussed with the adjusted EBITDA analysis, which is next. Adjusted EBITDA loss of CAD 3.9 million compared to a loss of CAD 5.4 million for the prior quarter, an improvement of 27%. All of this was achieved due to extensive cost rationalization efforts across the company, which will be fully realized by end of the year. We anticipate our operating costs to decrease in the coming quarters, considering the cost rationalization initiatives being implemented and expected improvements to revenue organically through MA contracting and other efforts. The company continues to work towards adjusted EBITDA profitability by the end of 2022. Moving on to the balance sheet and cash flow now. We closed the quarter with a low cash balance of around two hundred K compared to eleven point five million dollars last year. The significant drop in cash was addressed by a financing commitment of US dollar five million. The first tranche of US dollar three point three seven million was closed on October 21, 2022 Second tranche of $1.63 million will be closed shortly. Main changes in the cash were CAD 10.9 million cash was used in the operations during the nine months of the year. Operating cash was also used in the quarter to pay for the workdown costs and one-off charges related to cost rationalization initiative. CAD 10.1 million cash was used in investing activities, primarily on the acquisition of NMD. A net cash of CAD 11.6 million was drawn from the FLC debt facility. CAD 1.7 million was raised from the debenture financing. This is partially offset by CAD 3.1 million paid for the principal and interest on these liabilities and dividends paid on preference shares. The company is in the process of completing the second tranche of debenture financing to improve the short-term cash position. At the same time, cash conservation is a top priority. With that, I'll turn it back to Prad Thanks, Farooq. We've come a long way in 2022, both in setting up a business model to enter and begin participation in global risk and value-based care plans in Medicare Advantage, and beginning in 2023, Medicaid. We expect further efforts in the management of our members as well as growth of new members to the current annual enrollment period, AEP, to reflect an improved economics for 2023 across revenue, gross margin, and EBITDA contribution. With AEP currently underway, we are active in our practices in Florida and have already begun seeing a growth in new leads starting to convert into new members. To aid in our membership growth, we have made several improvements and additions to our Medicare Advantage plan. We expanded Humana to our three Central Florida offices as well as our four Jacksonville practices. We expanded CarePlus to Jacksonville as well as AvMed health plans to Central Florida. In addition to these, we introduced two new health plans for 2023, Ultimate in Central Florida and Alignment in Jacksonville. With these plans, we expect to see stronger membership growth from AEP this year as well as into 2023. We also recognize the change in market conditions, and extending into 2023 means that we need to be ultimately focused on getting to cash flow positivity. As Farooq mentioned, we have made significant progress in 2022 and recognize that while those changes have resulted in a cash burn of less than 50% of what we had entering this year, we have more work ahead of us. To address this, we are continuing to work tirelessly against our cost improvement plan while we await for 2023 to bring an expected growth in revenue contribution within our existing centers. We remain committed to getting to cash flow positivity in 2023, and then looking to benefit from the growth across our value-based care segment from new members and improved membership performance. With that, I think it's time to open the call for any questions. Operator, please go ahead. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question comes from Rob Goff with Echelon Wealth Partners. Please go ahead. Morning, guys, and congratulations on all of the hard efforts taken in the quarter. Definitely starting to put you on a good trend. Prad Sekar, in your commentary, you were talking about some of your coding efforts. Could you talk to what you have seen with respect to some of your RAF scores and what your leverage might be to further improvements on those scores? Yeah, absolutely. Morning, Rob. Thank you for the comment. I appreciate it. The risk-adjusted scores, which are largely aligned with what we call as the driver for our benchmark revenue on the capitated Medicare Advantage risk plan, is typically aligned with the health and well-being of our membership base. Now, normally, what happens with a new membership base or patients that have, you know, sort of largely not been adequately cared for, tend to have a lower RAF score even though their conditions may be greater. Typically the way the RAF scores align is more conditions a patient is diagnosed with or can be at risk for, the higher the RAF score, therefore the intended cost of care for that patient will also then be commensurate with that increased condition base. Therefore, your benchmark revenue, the PMPM, per member per month or per member per year, that's then allocated from the health plan to us as Skylight, goes up based on what we define as accurate coding. We've been putting in a lot of effort over the last six months since the acquisition of NeighborMD in really targeting and focusing on provider education, working with our risk-adjusted coding team to be able to identify any missed gaps and opportunities with our current patient base. This has to be done on an annual basis. Really focusing on making sure that those patients are being accurately diagnosed, their conditions are being properly mapped in the billings to the health plans, which then gets reflected in the RAF score from the health plan, has led to over the past six months now, an expected growth and a trending growth from the health plan of our current population base, which this typically trails on a six-month window. What we expect to see starting January and then as we go six months forward, is further effort in this will increase the ability for us to get improved funding for the adequate condition and cost of care for our patients, which will both help improve gross margin due to increased revenue, but also increase top-line revenue with the existing membership base. Thank you. Dropping down the income statement, could you talk to when you see your operating cost structure at a level to support positive EBITDA? Yeah, thanks. Our expectation is, and we've been driving pretty heavily this year, we've been communicating that through the various quarterly results, that our focus was to get to a cost structure by the end of this year that is a cost structure, one, that does not need to necessarily reflect positivity, but reflect the ability to flip to positivity in 2023. You know, the cost of operating a value-based care business, the practices, et cetera, have far improved since the start of this year, and that's reflected in the financial statement that we've been able to show reducing adjusted EBITDA or improved adjusted EBITDA with increased revenues. We're pretty confident that as we exit this year, especially now as we look forward to 2023, which is, you know, less than two months ago, we've got the new Medicaid program, we've got increased memberships from the AEP this year, we've got the changeover of our traditional Medicare lives into the ACO REACH program, that this expected revenue growth with an improved cost structure as we exit this year will start to look to now generate positive cash flow in the new year. We're continuing to stay positive, and we're continuing to stay consistent with our messaging that that's our number one focus, and you know, that'll ultimately be our plan as we exit this year. Perfect. Thank you very much. Good luck. Thanks, Rob. The next question comes from Carl Byrnes with Northland Capital Markets. Please go ahead. Thanks for the question. Prad, you mentioned that you expect 1,500-2,000 additions in terms of value-based care at risk. Where would that bring, you know, the number of value-based and at-risk patient count, given that 1,500-2,000? I have a follow-up as well. Also, what might that translate in terms of revenue on a run rate basis for fiscal 2023 from the at-risk population? Thanks. Hey, morning, Carl. Thanks for the question. Mindful that we want to hold back on any formal guidance for 2023 until we get the final attribution list from CMS on those Medicare lives, which we're probably not gonna see until December. Once we have that, we'll be able to provide a better update. The initial attribution list is not gonna be reflective of the final list in 2023, as many members will continue to roll into the program through our efforts in alignment with those patients in 2023. If we look at the sort of targeted 1,500-2,000 new Medicare members in the Reach, we're adding on to an existing approximately 2,400-2,500 patient panel today. So that'll take us somewhere to, somewhere between four thousand to forty-four hundred, total Medicare members within a, globally capitated risk program. now, the membership base in a ACO Reach typically doesn't have the same benchmark as, Medicare Advantage, as there's a small benchmark of a few percentage that's allocated from CMS. But we're expecting, based on the data we've received so far, and again, we can confirm this once we get the final attribution list from CMS, that that benchmark should be somewhere around eleven thousand dollars PMPY per member per year. And so, you know, we're looking at, you know, somewhere between, um, you know, fifteen, six, seventeen million to about, you know, $22 million, USD in terms of, you know, improved revenues for 2023, through the increased attribution of the membership base going to risk within Medicare. Again, that's still subject to us getting the final attribution list for January 1st, and then what we'll continue to roll in during the close of the year. You know, one thing to note is, you know, with Medicare Advantage, typically, you know, with existing health plans, you can continue to enroll, but with most new health plans, you don't typically tend to enroll until the fourth quarter of the year. With ACO REACH, you can actually continue to align Medicare members over the course of a 12-month period, although there is typically a quarterly lag in their attribution. With traditional Medicare, we should continue to see membership growth even continue during the course of 2023. Got it. That's very helpful. Just a follow-up question on the ACO program in Colorado. Maybe you can go through how that works mechanically in terms of percent sharing of savings and what that might mean in terms of what could possibly drop to the bottom line with that program in Colorado. Thanks. Yeah. With the ACO REACH at risk, the percentage savings is really gonna be dependent on surplus deficits, similar to how we see it in Medicare Advantage. You know, with the partnership we have with CHS, that's effectively what our joint venture will be focused on, is sort of maximizing that opportunity to keep healthy patients and our patients managed member care well, so that we have an opportunity to beat the benchmark based on what CMS has set for the annual period. Difficult to say what the direct contribution will be to the bottom line, but typically, you know, what we see in gross profit margins on these things, you know, should be somewhere between 6%-8% on the ACO REACH program. Again, you know, we're trying to do better and trying to achieve that. You know, this will be something that we'll be able to probably speak to more during the course of the calendar year. With regards to the actual managed care services, Colorado, Pennsylvania, Texas, I mean, these providers have been obviously caring for this patient panel for quite some time. It's a known patient panel. We have a fair bit of claims data on these patients that have been generated through our joint venture program we've been able to process. Now it's just a question of ensuring that we have the right team in place around those providers and to support those members, similar to, again, what we've done within the Medicare managed programs, to be able to improve on things like utilization within hospitalization, overall quality and care management capabilities, and so forth. That'll be our plan moving forward into 2023. Great, thanks. Very helpful, and congratulations on the progress. Thanks, Carl. Once again, if you have a question, please press star then one. The next question comes from Rahul Sarugaser with Raymond James. Please go ahead. Morning, Prad. Morning, Farooq. Thanks so much for taking our questions. Please let me reiterate the congratulations on all the progress this quarter. Just wanna start with a little bit from last quarter, where you had indicated that you'd be providing a little bit more, you know, reporting on some of the KPIs, things like member counts, medical risk adjustment, medical loss ratio. Wanted to see if you could, you know, give us any color there and whether we can be expecting to see that being reported in future quarters. Yeah. Hey, Rahul. Thank you. Yes, we certainly can provide a little bit of color on that. The exact scores and numbers are a little bit difficult for us to provide currently right now just because we're still getting our hands on what the changes made over the last six months reflect in terms of trends. What I can say is overall membership growth has improved within our CarePlus programs that we have. Humana has seen a few patient reductions, primarily due to the fact that we've had one of our offices that has a provider gap, but we now have a new provider that has begun seeing patients in that location. We anticipate that membership growth to recover back again. Overall membership base is still strong within both the health plans on an average basis. MRA, which is the benchmark reporting score for RAF scores, has seen an improvement, and we've seen that continued trend continue over the last few months. We're expecting to get an updated report this month, which should give us sort of what we can expect to see and then what we can potentially expect to see by the end of the year, which again is a pretty significant improvement from where we started off back in May post-acquisition of NeighborMD. In terms of the cost of sales, again, we'll provide more firm numbers probably once we have a couple of quarters of this data under us. In terms of cost of sales, Q3 did see a higher cost of sales with regards to our membership base. Maybe what I'll do is I'll turn it over here to Farooq. Farooq, maybe if you wanna provide a little bit of color into that and maybe what we can expect in Q4 in terms of that MLR. Just briefly before I do, you know, one caveat and one, you know, sort of context I'd like to provide around the cost of sales on our patients is that unlike the benchmark revenue which is the MRA, which can be more consistent because it's on a six-month trailing basis, MLRs are typically dependent on your patient population in the given time of year. We do our best in terms of forecasting the health of our population, but sometimes it ebbs and flows based on quarterly results. You tend to look at this more on an annualized basis. This is something that we've seen pretty consistent across the board with our other peers as well and listening and understanding how they explain and how they're able to communicate to shareholders how to think about the MLR on a quarter-by-quarter basis, is that there tends to be a fair amount of adjustments made by the health plans to these metrics over the course of a 12-month cycle based on claims data. We just have to have that context in mind when we talk about the MLR in that you might have one or two months of higher expenses followed by a few months of improved performance, and that just sort of, you know, reflects the nature of the need for patients with regards to things like medications, referrals, hospitalizations, et cetera. Farooq, maybe I'll turn it over to you if you wanna provide a little bit of color in terms of how MLR has performed in Q3 and what we can expect in Q4. Thanks, Prad. You know, well, to your point, Prad has already explained about the medical loss ratio and how there is a lag. What we've seen in quarter three when you go to the cost of sales, we saw a higher expenses in the service front in quarter three. Now, any improvement in the service front, any improvement in medical loss ratio, which we have been doing over the course of the quarter three, that will be reflected with a timeline which can range from three months-six months. Moving on to October, we have already started to see improvements in the service fronts. October, November, December, when we report the fourth quarter results along with the year-end, you will see a significant improvements in the medical loss ratio and the resultant impact on the P&L. The significant improvements which we did in quarter three were, as Prad mentioned, the hospital admissions, medical utilization of services, pharmacy prescriptions, which are the higher cost charging items in the service fronts. To your point, we have already started to see the improvement in quarter four. Terrific. That's actually very helpful. Thanks very much for that. Now shifting a little bit to the top line, given as, you know, much of the top line growth has been through inorganic, you know, acquisitions, NeighborMD, you know, recognizing that you're not giving guidance for the moment, just give me how, you know, should we be thinking about top line growth, particularly as we enter 2023, you know, in balancing, you know, inorganic growth with organic growth? Yeah. Thanks, Rahul. I'll take that. I think you should think about it as sort of a transition to organic growth, you know, ahead of inorganic growth, as typically our cost has been M&A growth historically. The levers for organic growth for us entering 2023 are strong, which is partially why we're very excited based on, you know, a reflected cost structure we expect at the end of this year against what we can see currently into 2023. There are really four levers in 2023 that will drive organic growth for us. The first one is increased membership base within our current Medicare Advantage plans and potentially new membership within our new membership plans that we have within Florida, as I communicated earlier. That will be number one for organic growth. Number two will be the ACO REACH, where now our traditional Medicare members will move to a risk model in the joint venture that we have with CHS and team. That will allow for us to see increased revenues on those membership populations, but of course, that will come with increased care coordination and overall managed care services. That will be a second driver for organic growth as I was previously explaining on this Q&A. The third driver for organic growth will be within the Colorado Medicaid program, and the Medicaid program is something that we've been participating in for a few years now for quite some time. Of course, shifting to the new alternative payment model, it does improve our overall consistency of cash flow on a month-to-month basis because we move to capitation versus fee-for-service. It also does increase our capitated dollar amount compared to what we saw in fee-for-service as a result of now being able to provide more quality and care services to those memberships within Medicaid. That'll be the third lever for organic growth. The fourth lever for organic growth will come from our existing fee-for-service contracts, where we've been able to see some improved negotiation with healthcare payers, specifically in a few markets, where now on a fee-for-service basis with the existing revenue. With the existing patient volume that we're seeing, we're seeing improved funding per patient visit based on those contract negotiations that we're gonna see. That's gonna be really where our focus is right now. We're looking at same practice sales. We're looking at same practice growth. We're looking at adding new providers. We're looking at adding increased capacity and days and times for our memberships to be seen, of course with the four levers that I mentioned before as well. Moving forward, as we start to move into cash flow positivity, it does present us an option again to start looking at increasing density in these markets. Now, strategically, it's tuck-in acquisitions now that we have a very clear game plan and health plans in place to convert new practices into value-based care much quicker and actually start to report on that sooner. Of course, you know, inorganic growth for us will really be based on first achieving a cash flow positive model, which also is then benefiting from organic growth and then continuing to build from there. Hope that answers the question, Rahul. That's actually very, very helpful. Thank you very much. Okay. Well, congratulations again on the quarter. We'll certainly be looking forward to seeing how this all plays out into Q4. Thanks, Rahul. This concludes the question and answer session. I would like to turn the conference back over to Mr. Sekar for any closing remarks. Thank you everybody for participating in today's conference call. We hope, as always, we're able to convey some of the excitement that we feel overall about where Skylight Health is going and its prospects for 2023. As always, we invite you to visit our website, skylighthealthgroup.com, where you can find out more about our company and contact details should you wish to reach out to us. Thank you very much, and hope you all have a great day. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.