Good day, and thank you for standing by. Welcome to the Marpai Second Quarter 2022 Earnings conference call, in which management will also discuss the Maestro Health acquisition. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw from the question queue, please press star then two. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Simon Li, Vice President with Marpai. Please go ahead. Thanks, operator. Welcome, everyone, to our second quarter 2022 and Maestro acquisition earnings call. With me on the call today are Marpai's Chief Executive Officer, Edmundo Gonzalez, and Chief Financial Officer, Yoram Bibring. Before turning the call over to Edmundo, please note that we'll be discussing certain non-GAAP financial measures that we believe are important when evaluating Marpai's performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and the reconciliations thereof can be found in the press release that is posted on our website. Also, please note that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause the actual results for Marpai to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statements in our press release and our filings with the SEC, all of which are available at marpaihealth.com. With that, I will turn the call over to Marpai CEO, Edmundo Gonzalez. Edmundo? Thanks, Simon. Good morning, everyone, and thank you for joining us. It's a pleasure to be here to discuss our acquisition of Maestro Health and review our Q2 2022 results. Now, as you probably know, on August 4th, we announced the acquisition of Maestro Health. Yoram will describe the terms of the deal later on, but let me tell you a little bit about Marpai and why I believe this is a transformational acquisition for Marpai. Here are some highlights, first and foremost. First, the acquisition approximately doubles our revenue. Second, we are getting value-added products that we didn't have. Third, the acquisition is non-dilutive and financed entirely by the seller. Four, the seller is also leaving almost $60 million of cash on the Maestro balance sheet, and this will fund our integration plan. Fifth, we believe that this acquisition, with planned synergies realized, propels us closer to our EBITDA breakeven level and beyond. Now a bit about Maestro Health. Like Marpai, it is a third-party administrator that is well known in the market as a high-quality TPA that does a great job servicing its customer base, as evidenced to fight high retention rates. In many ways, Maestro is very similar to Marpai. Maestro services approximately 80 employers who self-insure their 25,000 employees, while Marpai currently services also around 80 employers who self-insure approximately 21,000 employees. In terms of revenues, Maestro's annual revenues are currently approximately $19 million compared to our trailing 12 months of $22 million or so. The reason Maestro's revenues are lower than ours is that they don't resell low-margin third-party services to their customers. Instead, they let their customers contract directly with the third-party providers as needed. Also, they have two important value-added services which they provide with their own resources. These are clinical management and cost containment. Now, until now, Marpai has been providing these two services to our customers by reselling third-party services. When you resell a third-party service, you keep a fraction of the amount paid by the customer and pass along most of the revenues to that third-party service provider. By providing these services using its own resources, which include its people and proprietary technology, Maestro is keeping all of the revenues from these two services. This is very significant, as close to 50% of Maestro's revenues are derived from these two products. Let's dive into these two product lines in a bit more detail. First, care management. This is a service which is billed to clients on an hourly basis. It includes nurses and other clinicians working with members of health plans that require monitoring or need help managing a disease like diabetes, or have other health journeys where they require some wellness help, like quitting smoking or losing weight. One of the reasons I'm so excited about this product, is that it fits perfectly with Marpai's AI-driven predictions. As you know, Marpai predicts costly events. Care management is all about doing something about these costly events in terms of actively managing the member's journey. This could mean less ER visits, proactive matching of care for members, and of course, we know healthier members means lower costs for our clients, the self-insured employers. Now the second big product line is cost containment. This includes services that are largely monetized on a shared savings model. These include pricing and settling of out-of-network claims where a large network like Aetna or Cigna is not relevant. A claim for $100,000, for example, that is settled for $20,000, generates $80,000 in savings for the client. Maestro would take a percent of that savings as its fee. The same approach is executed for prescription drugs and specialty, meaning high cost categories. Often, it can get a member into a patient assistance program sponsored by pharma or source the drug at a lower cost. Again, moving a monthly drug bill of, say, $20,000 a month to $5,000 a month generates real hard savings for the client, and Maestro takes a percent of that fee, or of that savings as its fee. I cannot wait to introduce these products into our client base. In terms of synergies, I think these are clear and obvious for all to see. We expect both revenue and significant expense synergies. On the revenue side, we have Maestro's two homegrown products that we hope to sell to our customer base and our own AI-driven value-added services that we hope to sell into the Maestro customers. On the expense side, we're expecting to become one company over the next 6-12 months, which should lead to substantial savings. While the contract closing calls for closing within 60 days, we expect the actual closing to occur soon after Labor Day. The management teams of both companies are now working hard on an integration plan, and my goal is to start executing on the integration plan right after closing. As we stated in the release, we are not providing guidance for the third quarter, as it is difficult for us to estimate how much of Maestro's revenues will be included in the third quarter figures. We hope to resume providing guidance on our Q3 earnings call. Moving on to the second quarter, our revenues came in at $5.6 million, slightly higher than our guidance. We are continuing to work hard to ensure that we have an excellent January 1, 2023, meaning that we will add a large number of new customers with thousands of new employee lives. I want to stress that we are continuing to push organic growth as a strategic priority for us, and we believe that a bigger and stronger post-deal Marpai with additional in-house products will contribute to stronger organic growth in the long run. I do also want to inform you that we have decided to terminate three customers who are related to one broker. Together, these account for approximately 4,000 lives. The termination, we have said, is effective September 1. The reason for the termination is that, in our opinion, the customers are failing to fulfill terms of their contract with us. This has nothing to do with Marpai. It's purely an internal issue with these customers, which we were obligated to address through the termination of these contracts. Now, although I always hate to lose a customer, in this case, it is the right thing to do. We are pushing hard so our new lives from organic growth activities, including new ads by 1/1/2023, will far exceed the loss of these. Now before I hand it over to Yoram to go through the deal terms and quarterly numbers, I want to thank all the people that worked extremely hard to make the Maestro acquisition a reality. Of course, the work is just starting, and yet I think making the deal happen is indeed transformational. Thank you to all the employees and advisors, as well as Maestro employees, consultants, and representatives of AXA, who is the seller in this deal. All of them enabled this amazing deal to happen. A big thank you to you all. I truly believe this acquisition represents a huge leap forward for Marpai and brings us closer to fulfilling our strategic goal of capturing a large slice of this $22 billion market segment. Now let me hand it over to Yoram. Yoram? Thank you, Edmundo, and good morning, everyone. Let me start with the Maestro acquisition, which Edmundo talked about. What are we getting? Number one, we're buying 100% of Maestro in the stock deal. Edmundo described to you the business assets that Maestro has, in which we find extremely appealing, and I'll recap them in a minute. For those who re-read the 8-K, they will see that we are also buying debt. This is intercompany debt that Maestro owed to its former shareholder and will now owe Marpai. This debt will be eliminated in the consolidation and is of no economic significance outside Marpai and should be ignored. Number two, Maestro will have on its balance sheet at the closing, $15.79 million free cash, which is available to finance the operations of Marpai and Maestro without any restrictions or limitations. Number three, it was agreed that the working capital of Maestro at the closing will be within a certain range that it usually has been operating with. Also it was agreed that Maestro will not have any external debt at the closing. What are we paying? At the closing, we're not paying anything. The consideration of $22.1 million is due on April 1, 2024. If we don't have the cash on that date and assuming we have met our obligations under the contract, which we expect to do, the seller will finance the deal with a 10% annual cost of capital. We're obligated to make minimum payments of $5 million on December 31st, 2024, $6 million on December 31st, 2025. $8 million on December 31st, 2026, and $9 million on December 31st, 2027. The reason that the total minimum payments are $28 million and not $22.1 million is the 10% annual interest that starts accruing on April 1st, 2024. In addition, a minimum of 35% of the proceeds of any equity offering must be used to repay this debt. To the extent we make such payments, these will reduce the minimum payment obligations, factoring in the 10% interest, which I just explained. In other words, if we pay earlier than the due dates I just listed, we will be saving on interest costs. From our perspective, the bottom line is this, that we're getting $15.79 million in cash, 80 customers with 25 employee lives, and two strategic products. Our purchase price of $22.1 million is financed over four years by the seller at 10% interest. I believe this is a very good strategic transaction for Marpai, and we were very happy to do it. Moving on to the quarter. Our revenues for the second quarter of 2022 were approximately $5.6 million, compared to approximately $6.2 million in the first quarter of 2022, and revenues of $5.9 million for the fourth quarter of 2021. As you recall, our Q2 guidance was $5.2 million-$5.5 million. Moving on to employee lives. As you know, TPAs calculate their fees mostly based on per employee, per month basis, and therefore, employee lives is a key revenue and growth indicator in our business. When we say employee lives, we refer to the employees of our customers who are covered under the self-insured plan that we administer. We finished the second quarter with 21,074 employee lives, almost unchanged from 21,139 on March 31, 2022, and down from 25,195 at the end of 2021. As you can tell from these figures, the reason revenue declined from Q1 was the customers that we actually lost in the first quarter. There is usually some lag in the change in revenues compared to the number of employee lives that we report. The lag is in part because the contract may have ended during the quarter and not at the start of the quarter, and in part because when a customer decides not to renew a contract and to change TPA or switch to self-insured, which is usually the case, by the way, they typically pay us to process claims that come in after the contract ends. We call this runout revenues. These are short-term revenues with higher margins. Moving on to expenses. I will be comparing the second quarter of 2022 expenses to the 2022 first quarter expenses. Cost of revenues include our cost of processing and adjudication claims, our customer service costs, and the amounts charged by third-party vendors for the services that we resell to our customers. Our cost of revenues for Q2, excluding depreciation and amortization, were approximately $44.2 million, or 75% of revenues, compared to 73% of revenues for the first quarter. The reason for the decline in the gross margin was because in Q1 we had some higher margin runout revenues from the current customers. Gross profit, not including the impact of depreciation and amortization expenses, was approximately $1.4 million, compared to $1.7 million in the first quarter. Our second quarter operating expenses, not including cost of revenues, depreciation and amortization, and stock-based compensation, increased by approximately $500,000 compared to the first quarter. Approximately $200,000 of this increase was due to decreased capitalization of software expenses. The costs that were previously capitalized were expensed, while other operating expenses increased by $300,000 due to increased investments in technology, product marketing, as well as other sales and marketing expenses. Operating loss for the second quarter was $6.7 million, compared to $5.5 million operating loss for the first quarter. Our net loss for the second quarter was approximately $6.7 million or $0.34 per share, compared to a net loss of $5.5 million or $0.28 per share for the first quarter. Excluding stock-based compensation of $1.1 million and depreciation and amortization and asset write-off expenses of $776,000, Adjusted EBITDA for the second quarter was a negative of approximately $4.7 million, compared to a negative of $4 million in the first quarter. In terms of guidance, as Edmundo told you, we are not providing Q3 revenue guidance due to the Maestro acquisition, which we expect to close before the end of the third quarter. With that, we will open the call for questions. Operator? We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw from the question queue, please press star then two. The first question comes from Allen Klee of Maxim Group. Please go ahead. Good morning. Hello, Edmundo and Yoram. Thank you for taking my questions. I have a bunch. If there's other people in the queue, let me know and I'll get back or I'll just keep going. The first one is, you had a broker summit, and the brokers are who sell your offerings. Can you give some feedback on how that went, what you've heard from the brokers in terms of potential business that you got, and why a broker would consider to choose yourselves versus another TPA? Thank you. Thanks, Allen, and thanks for joining our call today. First and foremost, the broker summit I think was a huge success in multiple ways. First, it was a gathering of 50 of the top brokers in America. You'll remember the business that we purchased in 2021, Continental Benefits, the TPA, was an ongoing business with its own history and clients. We have obviously set about transforming that business and creating, you know, really a TPA of the future, a payer of the future. The quality of the brokers and the stature of the brokers is quite different from maybe legacy brokers, where we are working now with some of the largest national brokers in America. This means that when you're in the machine, right, you are receiving requests for proposals as a matter of course. It's not just a you know, relationship based or knowing you know, some guy or some executive, but it's in the normal course. That is my goal. We have seen a significant uptick in our RFP level vis-à-vis where we were last year. By our accounting, we now at the beginning of this month had as many RFPs representing as many lives as we did in 2021. All of 2021, right? You will also know understanding this industry that Oh, I'm sorry to interrupt you. [crosstallk] Sure. I apologize. When you say that your RFPs were as many represented as many lives as 2021, did you mean as many lives that you had of employees under coverage in 2021? No. No, no. What I mean is that an RFP is really an invitation to bid, right? An at bat, if you will. The number of those RFPs and the lives that they represent in our pipeline, that right now, is equal to all of the RFPs that we bid on in all of 2021. One at most, right? The funnels is developing quite nicely, which I'm obviously very pleased at. The enthusiasm, I think, from the broker community is most certainly there. That is really what is driving. I mean, at the end of the day, they are still in this industry, the gatekeepers, right? For who gets business, who doesn't. In order to get business, you have to bid on a lot of business. The last point I would make to that is that the sales cycle against one-one, although it has started, it's really at the beginning, right? There's a lot more a brand new RFPs to mine here over the next two months, let's say. Does that answer your question? Go ahead, Allen. Yeah, that's great. Thank you. You talked about, I think, last call about how you've used technology to adjudicate claims more efficiently. Could you go into that a little more in terms of how that's progressing and maybe how you think that compares to your efficiency relative to peers? Sure. Look, we have made big strides in essentially turning this service provider that pays claims into a technology company. That journey continues, right? What is the core function of a third-party administrator payer? It's to pay claims, right? We've introduced a lot of technology and a lot of process improvement to make that journey a lot better and much more efficient. For example, in our core cost per claim, when we bought Continental Benefits, we had a cost per claim that was approximately 3x, 2.5x-3x what it is now. I still believe there's a lot more efficiency to gain there. But that's what technology, when implemented correctly, that's the effect of it, right? Meaning you can process a lot more in our factory of claims, if you will, with you know, with the same resources. Why? Because you're employing technology to do that. That's our commitment. We are investing in all areas of this process to make it a lot more efficient, especially at scale. That work continues. That's great. Thank you. In terms of your machine learning, can you tell us where that stands in terms of identifying potential high claims of in terms of rolling that out and maybe some examples of success you're having? Most of our machine learning and AI has actually been focused on numbers, right? Not necessarily only the claim flow. A lot of the process improvements that we have made and technology introduction that we've made on the operating side is just that. It's process people and obviously a lot of technology. A lot of our machine learning and prediction deal with prediction of disease states. So we are able to look at a population and basically assess who is on a journey on a certain journey. For example, who is on a journey to have an orthopedic procedure? Now why do we want to know that with a lot of certainty? Well, Allen, as you may know, the price variation for a knee replacement, for example, can be 3x-8x. Not 3%-8%, but 3x-8x. Those variations normally are independent of quality. What we're doing is predicting that event months and months before it happens, not when the member is already at a you know asking for pre-certification, but months before. Because that gives our team time to intervene, to essentially educate that member that there are certain doctors with different quality metrics, and basically help that member make the right choice for his own health. Obviously there's many interactions here. The best choice also for the company health plan. We can in some cases even use incentives. For example, if you go to doctor A versus doctor B, some of your co-pays may be waived. Essentially absorbed by the client. Why? Because the savings for the overall company plan may be in the tens of thousands of dollars given, you know, that choice from doctor A to doctor B. It all starts with the ability to ascertain who is on a journey and what that journey is. We'll continue obviously to invest in this, and we are seeking essentially the high cost event, right? We're seeking that event way before it happens when it is actionable, meaning when we can actually do something about it. Now, one of the key things that makes me so excited about the Maestro acquisition is that their care management essentially does this without AI, right? By focusing a lot on the matchmaking and the selection of members, we think we can actually pinpoint and identify a whole cadre of members that are just not in scope. Now, what that means financially is obviously more utilization of these products. Utilization is monetized on an hourly basis, so more utilization, more revenue. Fantastic. A financial question. Can you give us a general sense of if to the degree there was one-time costs in the quarter potentially related to the transaction or other items? Yes, I will turn that over to Yoram. Yoram? Yeah. We did not have substantial expenses in the second quarter relating to the deal. No. In terms of one-time, we didn't have any. We had some one-time costs, but they're not one, you know, certain vendor here and there. The main thing was that we capitalized much less software expenses this quarter than the prior quarter, about $200,000. Basically, cash-wise, we're in the same expenses, except less were capitalized. This has to do with GAAP. It's not a substantive thing. About $300,000 of increased expenses. I'm talking about cash expenses. I'm not talking about stock-based compensation. Not including stock-based compensation. Approximately $300,000 were expenses in, you know, product marketing, technology, sales and marketing, things of that nature. Some of them were one time, but these one time tend to repeat themselves once every few quarters, so I don't think they're worth mentioning specifically. That's great. Thank you. Then the comment on that, around half of Maestro's revenues come from these two offerings they have, and that they don't sell third-party solutions at lower or no margin. Two things related to that. One is, would that imply that the gross margins of Maestro's business are likely higher than Marpai's? Then second, is there a way to think about the potential additional revenue per employee if those new services could get cross-sold to Marpai? Let me let Yoram comment first, and then I'll chime in. Go ahead, Yoram. Yeah. With regard to the gross margin. The way they do their gross margin, if you look. You know our financials. If you look at our financials, the way we say it, and I say it every time we do the call, I explain what's included in cost of goods sold, and it's basically those third-party costs which you just mentioned. And that's how we do our cost of goods sold. They do it a little bit differently. They add a lot more people from the operational side. You know, we have information technology, for example, one line. They take a lot of this IT and put it in, into cost of goods sold and other things they do. I guess you could call it a better job, almost like management accounting because they are a private company after all, so they could do it a little bit differently. Yes, if we take what they do and adapt it to the way we do it, yes, gross margin will go up, definitely. Yes, the answer is yes, assuming that's what we'll do. In other words, if we adapt what they do to the way we do it today, which is most likely the case, not 100% sure yet, you know, we still have to do some a gap work here. Assuming that's the case, then yes, the gross margin will definitely go up. Do you wanna talk about the second part? What was the second part? Yeah. Now I have to remember it. What really cross-selling. I- Oh, the cross-selling. I don't. Yeah. It's just Allen, in terms of the ability here to cross-sell, and Allen, you're maybe on mute while I'm chatting because there's the background noise. So Allen, obviously there's a tremendous amount of opportunity to cross-sell these products to our base, right? So right now I'm executing these functions, meaning we have care management, we have cost containment. The only thing is we don't do them, meaning I have partners that actually execute this on behalf of our clients. So in the background here, what we want to do obviously is use the resources, the products that Maestro has because we would keep 100% of that revenue, 100% of that generated gross profit, right? From these activities. That's part of what we're extremely excited about is really getting these into our base. Again, we do these functions. This is not brand new items. The only thing is we do them externally and only take a small slice of revenue. We want all the revenue. Now we can access all the revenue via these new products. To follow up on that, is it the goal to try to get the cross-selling opportunity available for the January 1, 2023 renewals? Look, it certainly is, but we have to. Again, sorry, there's a little background noise here. We have to consider where we are in that sales cycle and when we can actually, you know, start. I mean, it's not ours officially yet, right? We have to close the deal in early September. The exciting part here, Allen, is that I believe for some segment of the market at least, or for some section of our book, we can actually do the swaps in the background, if that makes sense, right? Because the Oh, yeah. Again, we're the ones kind of providing the care management. The only thing is, again, it's through a vendor. Instead of a vendor, we'll provide it through us, right? The cost containment, yes. There's other vendors there that we would have to clear. Certainly on the care management side, that's just a swap on our end. Okay, great. I have an unfair question, so I understand if you don't answer it exactly. If we were gonna take a stab at modeling the combined company, and I know we don't have the Maestro results yet, but is it a reasonable assumption to assume that Maestro's results are pretty similar to Marpai, so we pretty much just double everything as a starting point from the top line to the bottom line? Yoram, you wanna comment on that? Unfortunately, you know, we cannot comment on that at this point. You know, are we in the same business? Obviously, there are a lot of similarities, but we can't go into the details on the numbers beyond what the information that we already provided to the public. We will be filing financials, you know, within 70 days or so after the closing, and we'll provide more information obviously on our next call. At this point, beyond this, you know, giving you the employee life's numbers and, you know, we gave you the revenue numbers, we can't provide additional financial information at this point. Sorry. I figured that was the answer, but thank you. Okay. Further, you mentioned that you're terminating three customers related to one broker. Can you tell us the number of employee lives related to that then? Yes. That's approximately 4,000. This is, I just wanna stress, you know, this is obviously painful, but it's not a, this is not a Marpai issue. Basically, this group of customers is just not meeting their obligations per the contract. It has nothing to do with Marpai. It does have more to do with how these groups were underwritten. In order to, you know, protect all parties, we decided actually to give this termination. It's not something we take lightly, but I believe this is in the best interest of the company. My goal and hope here is obviously that this is not even a wash, but that this is not only replaced, but replaced several times over, with new lives, you know, coming in the fall and of course, in the all-important one-one. Okay, great. Last question. Just wanna make sure I understand. I believe when you made the announcement of the potential acquisition of Maestro, you talked about 18 months, that there was enough cash being brought in for 18 months to bring it to around profitability. Could you talk a little about the strategy of getting there? When you say profitability, just so I understand, is that just for the Maestro or a cash flow, I believe it is? Or is it the combined, the new combined company? We're talking about the combined company, the new Marpai with Maestro. That is the goal. Our plan of integration will obviously have that as the overall goal here. Yoram, do you wanna comment a little further on this? I agree 100% what you said, Edmundo. This is a target for us, which we believe we can meet, but we're not saying anything beyond that. We're saying that we have a target to get to break even within 18 months. We think this transaction is gonna help us move us towards that, but we're not saying anything beyond that. Okay, great. Well, congratulations. Thank you for the time. Thanks, Allen. Again, if you have a question, please press star then one. There are no questions at this time. This concludes our question- and- answer session. I would like to turn the conference back over to Edmundo Gonzalez for closing remarks. Thank you, operator. For all participants, thank you so much for your time this morning. We wish you a very good day and look forward to meeting again next quarter. Thank you very much for your participation. We appreciate it. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.