Q1 2020 Earnings Call
[music].
Please standby.
Good morning, ladies and gentlemen, and welcome to Dorio House first quarter Twentytwenty financial results Conference call.
A reminder, today's conference call is being recorded at this time I would now like to turn the conference over to David homes of life Science.
May begin.
Thank you operator.
Good morning, everyone.
Thank you for joining us today for a discussion I'm sorry in house first quarter 20, <unk> financial results, leading the call today, we'll see a rise Rafael President and Chief Executive Officer, Oreo House he'll be joining five feet Davis, Chief Financial Officer, Rec, Anderson General manager North America or no.
After the prepared remarks, well open the call for human <unk>.
An audio recording a webcast replay for today's conference call will be available online in the Investor section of the company's website.
Benefit of those listening to the replay archive webcast. This call is being out and recorded on May 12 2020.
This morning, we issued a press release announcing our financial results for the first quarter 2020, a copy of the really can be found at the Investor Relations page on the company's website.
Actual events or results may differ materially from those projected as a result of changing market trends reduced demand on the competitive nature of Dariohealth industry.
Such forward looking statements and their applications involve known and unknown risks uncertainties and other factors that may cause actual results performance to differ materially from those projected.
Forward looking statements discussed on this call are subject to other risks and uncertainties, including those discussed in the risk factor section and elsewhere in the company's quarterly report on form 10-Q.
The quarter ended March 31st 2020 to be filed with the Securities and Exchange Commission.
Additional information concerning factors that could cause results to differ materially from affordable units are described in greater detail companies press release issued today and in the company's filings with the FCC [noise].
In addition, certain non-GAAP financial measures.
Maybe he discussed during this call. These non-GAAP measures are used by management makes strategic decisions forecast future results.
And evaluate the company's current performance management believes the presentation that these non-GAAP financial measures its useful for investors understanding and assessment of the company ongoing core operation and prospects for the future. A reconciliation of these non-GAAP measures choose the most recent.
Comparable GAAP measures is included in today's press release.
And with that I'd like to introduce arrests Rafaelle CEO of Daria health.
Mr. Rafael.
Thank you David Good morning, everyone and thanks for joining our call today also joining me today, so we've been Davy, though too.
Okay, So and Rick I understand the president and the General manager North America.
No. Thank God knows the guy that value ongoing transformation.
We emphasize them in previous calls and I would like to eat today them. Today is this is the way that we all amazing the progress that is related to a more to use strategic plan.
Through a number one is the company ongoing transformation with software as a service model that generates high margin recurring revenue for the company.
Selling them the to seize the evolution from direct to consumer into business to business.
Consumer which is something that these lower our cost of acquisition as well as rating is good and accelerating our goal.
Total number three is the expansion of all falling from a single only condition that was originally diabetes into most piccone condition and everything is on the product excellence, well, we oh and striving to create the best performing product in the market.
The last below the fourth below is the positioning of valuable Hill has the market leader in the digital therapeutic space that according to business inside though he is projected to be a 9 billion dollar market by 2025.
I would like to start with this dose do though so as you heard and devious schools. We all that we started the transformation on selling and their own medical device into a photo membership program that is integrating software hogeland silvious already.
Toward the Dnbi plenty 18 and ER.
The members you pull them.
So with the ability to help that uses no just that has the medical device, but also get digitally domains and driven by all the analytics on a high it's helps them improve outcomes. The overall objective was to increase user engagement to improve the outcomes of the user.
And for the company improve the goal small James and also increased average revenue that is generated <unk> member per month.
The only be seeing an indication that the success into software as a service model is improving and he is reflected in the financial profile of the company, especially on the gross margin Paul why did the revenues for the first quarter was 20 $21.67 million a slight decrease on the previous quarter.
Well go small just an overall gross profit will significantly higher relative to the previous you. Most profit increased from 24.9% him to fill sport of 29 in 47.
46.7% into first quarter of 2020. This is something this is reflecting an older or 87% improvement you know gross margins. The gross profit in the first quarter of 2024 $779000 an increase of 240.
$1000 or 39.6%.
Gross profit or $558000 reported in Q1 point in 18.
Blend of improving margins is expected to continue into next few years well. The overall goal is to being above 70% margins as we move forward.
The total operating expenses for the first quarter of 2020 were $11.2 million compared to $5.9 million into fourth quarter of 29.
Increasing the operating expenses is mainly due to the increase in one time stock based compensation to be like those employees on service provider.
Operating expenses, excluding the equity based compensation for the first portal 2020, well 4.6 million dollar only.
To $5.7 million into first quarter of 2019. This is a reduction of 1.1 million, though overall reduction of 19%.
Moving to Q1 2019, the reduction in the total operating expenses reflect and reduce spending in the direct to consumer and transforming budget into b to b to C. So some of the reduction was offset by this increased investment into building b to b team in the U.S.
So the oil well all of these see evidence and then put the benefit that the transformation into software as a service model is impacting all their financial profile.
Actually the gross margin and the reduction and user the acquisition.
Cost.
Hmm I would love to move from here to the second piece now which is the transformation.
For the business from direct to consumer only into a b to b to C. China's so here. Despite the fact that need a b to C might have a longer sales cycle, we see here a few significant benefit.
Oh. This overall strategy number one is that through these kind of and.
Business to business to consumer we have the ability to access the border patient population, which is something that can accelerate the goals intensively the cost of acquisition. The use of these is reducing down once we have to poaching decisively and.
And also we have the ability by selling our premium membership or that will generate much how high revenue per member per month.
Turning to what we're doing today in the direct to consumer I'd like to deep dive into the unit economics.
The fuel membership programs that we had so you can understand the potential of the says goals that we can generate in the next few quarters. So if we're looking on how the company was operating toward the end of 2018, well selling a device and disposables well whenever grades will generate.
Being between five to seven.
Those amendable months as we move forward into the membership program still under the direct to consumer well generating 25 Bucks whenever the age remember the months on now stands out membership program.
Once swell evolving into the business to business to consumer and selling our membership program.
Price points here is between 60 to $70 per member per month, depending on the number of conditions that the specific use it is getting on the platform.
If we simulate anew 10000 fuses that will go on the lots woman the three new membership on the business to business to consumer China.
We are generating revenue with books, who makes me at Dominion, though 88 million, though the every and thousand users on the yearly basis.
This is a significant and this can be a significant improvements while offline as well continue our transformation and executing on I'll be happy to see.
Strategy.
I'd like to move from here.
If you updates on a few of the initiatives that we're doing on that b to b to C.
And here. The overall goal is to have access to a border and also fuses.
We also have.
The overall targets to reduce the cost of acquisition.
And then remind though this is not something that we started today. This is something that we started by mid last year.
Today, we can update would that we made some progress here on the different China's under which will open trading just as a reminder, will open anything on them boils. John is on the retailers channel on the health will provide those China as well as on the interest on it.
So since we started the means that 2019 were already signed few significant agreement with partners some of them already announced I'm going to talked about one of them shortly.
We also have few contracts that a significant that under negotiation and we feel that in some cases, the covert 19 is pushing them well one.
We also see a significant increase in all the pipeline.
So we think that they're already this year, we can see the results of Oh this transformation into b to b to C translating into a country that increasing says.
I want to talk about one of the agreements that we already signed than we announced the only.
Earlier this year on March and this is a significant example for the progress that we are more making when assessing children oil market I'm talking about the agreement that we signed with vitality rule. This is oh no shape with a company that is selling wellness that bolt ons vitality is an entity.
The under a big gain sure called Discovery health.
More than 16 million.
Insurers and that's probably the only thing we have access to hundreds of them on the telephone employers in the states.
Well together, well marketing overload offering on the disease management site.
So we have the vitality as a strategic partner. It's also has an equity interest in our company and we have them as a motivated organization get us an immediate access to their network will impose that they have that otherwise would have it's to do with one by one. So this is an example fully do that.
The concrete evidence that the strategy of transforming.
Oh go to market strategy from direct to consumer into B to B to C is a strategy that is already built some fruits philosophy and we all the show that we're going to see $18 later this year.
Other than that I would like to talk also about the health plans John I would because we believed that this is one of the major China's for the company. We strongly strongly believed that this is going to be allowed just goes the engine in the next.
As five use and we believed that the majority of the revenue for the company is going to come from this channel and we are spending an awful I'm, an air force, making sure that our solution will be appealing toll.
For health plans.
Let them you can help them with.
The most expensive patients and we can help them reviews. The overall cost we seem to we have the right solution. We also proved with more than 50000 users and with a more than 10 different clinical papers that we submitted multiple entities that uses that operating.
On our platform, while improving outcomes in the way that we can show it countries savings and we know how to do that in a very very cost effective way. So on one hand, we can show a significant evidence that we are improving outcomes with little data from where users but at the same time, we know how to bleak in a very cost effective way, but.
She is something that we believe that and insurers.
And need to have.
We also believed that the major success factor in having is in in making this overall most successful is having a best in class management team Im to understand this China is very well and have the experience and the relationships to execute on these China also here, we made a huge.
Progress and on executing on our strategic.
Correct.
In January we appointed bleak understand would be the president of the company as well as the general manager for North America.
We bring.
A lot of experience a lot of it comes from codices worries and more than and use cultivating its business.
Building is scaling business that generated and stuff millions of dollars in recurring revenue for cat Asus.
Most recently, we also announced that he starts join in joined the company is the SVP and head of managed markets. We also have an extensive experience with the health plans market our major China.
In addition, we also announced that book So Amal minded Twyla joined our company is the Chief Medical Officer.
Booked ormeau will lead our clinical delivery as well as supporting now or the offering as well as the sales team.
Booked or myself.
And.
The last decade building it working with health plans and areas.
He is specialized in delivering value added clinical programs.
We understand the very well the intersection that is very important for us.
Which is the intersection between chronic conditions to behavioral health.
So we are thrilled to have reach in Oman, when all team.
So as we start this response to the progress.
In the two pillars that.
Just and mentioned into specific economics.
We expect that we're going to see continuous improvement in our margins.
We also confident that we're going to see the results of signing all this agreement and openness to twill, making you're going to see this result in a better top line as we move forward toward the second household this year and they're going to see also a positive impact on all PNM.
With that I would like to hand over the caused a week and more on the marketing initiatives.
As well as on all evolving for the whole thing.
Rick.
Thank you, whereas I.
Im excited to report today on the continued progress we have made on or commercial front. However, before I go through each of the channels, whereas we sometimes refer to the markets I would like to review diary is competitive advantages that we believe will provide for meaningful penetration in several of our target markets.
In order to be successful digital health company, you must have one strong clinical data to good technology that is quickly adaptable and configurable three an understanding how the health care system works and who the players are.
And lastly.
The ability to engage people in the solution.
Arguably many digital health companies do not achieve their goals because they lack one or more of these key ingredients.
Sorry, who has a strong clinical data across multiple studies and a large number of users.
Daria with a software company at its core with a best in class application built on a flexible open platform, which allows us to pivot quickly to do opportunities.
He was brought together a team that understands the health care market and most importantly, Dario has strong consumer engagement as demonstrated by its high user satisfaction scores 4.9 out of five on the Apple App store, a net promoter scores 77, and 50000 plus active users on the platform nothing says can.
Tumor engagement like people paying out of their pocket for a solution each month Daria checks all the boxes and our solution is very cost effective to deliver this enables us to compete in markets others cannot and allows us to provide significantly better product at a significantly lower cost in the employer and help land markets.
We're very pleased with the progress that we have made over the last quarter. In spite of the fact that some of these channels have long sales cycles and we are still in the first inning of the transition to the B to B model.
I will expand on her for market segments and highlight how Dario has made significant headway in the first quarter to position ourselves for growth in the second half the year, but first I want to briefly discuss the impact recent events have had on the digital therapeutic space.
On an overall basis, we've seen an impact of Kevin 19 on or opportunity pipeline in some cases, we've seen decisions and projects delayed.
However, in others, including some employers and in the remote patient monitoring market, we've seen an acceleration of interest.
On an overall basis, we have significantly grown or pipeline across all channels in the first quarter.
On a more macro level. The recent pandemic has highlighted several inadequacies in antiquity dated features of our current health care system, which has been slow to modernize with the rest of our now digital society.
The challenges created by depend to make our dramatically accelerating the adoption curve for digital health solutions, such as Tele health remote patient monitoring and a digital therapeutics as providers and patients look to provide care remotely and reduce risk for both the patient and the pair.
We believe that the trend towards more acceptance and utilization of digital health will continue even when the pandemic mitigates as people have experienced these advantages.
Now for the market segments first on the retail front, we have continued to expand through the relationships. We entered into in 2019 with best buy in Walmart. We believe that we have built the foundation to see an increase in her business through these partners in 2020.
In addition, we believe that we are close to entering a significant opportunity that would leverage or membership model in the retail space and provide significant growth during the rest of this year.
One of the most substantial changes that we have made this quarter was in how we're approaching providers health systems and provider groups. We have pivoted away from trying to convince providers to distributor solution or have their patients acquired Oreo through a retail channel.
Given the flexibility of our open platform the efficient cost structure and high engagement, we evolved our product into the remote patient monitoring offering.
Whereby we can provide the infrastructure to allow providers to remotely monitor their patients between visits.
With the new remote patient monitoring codes that became available in January this year for Medicare the shift allowed us to offer providers improved clinical care, while increasing their revenue from their existing patient population.
As such we began pursuing larger provider practices and provider consolidators like chronic management companies or ccms, who are ready or providing services to a number of providers.
We believe our solution is a natural fit for these existing businesses.
Our RPM solution has become even more relevant during the pandemic and we have seen increasing interest as a result.
We're pleased to report that we have signed our first two RPM contracts with others in negotiation.
One of the channels that we're most excited by as Rich mentioned is the self insured employers.
We have significantly increased our activity and traction directly with employers and through benefit brokers in the first quarter.
We're now in the traditional benefit sales window for self insured employers well many of those opportunities, which we are now in competition for will be implemented in 2021. We're also working several that we believe will provide revenue in the second half of 2020, including one that we're in late stage discussions with.
In addition, as far as previously mentioned, we recently entered into an agreement with the vitality group, which is a health and wellness platform that provides integrated and curious solutions for employers. We're beginning now to co market. The Daria solution to the employers on their platform and this represents a significant opportunity for us in the second.
Half of 2020.
Health plans represents one of our largest and most complex opportunities with the recent additions to the team. We now have a team of season health care executives with a track record of success in this market.
We spent the first quarter working diligently to positioned Oreo to be able to aggressively pursue health plans and are now launching those efforts.
Well the health plan market has long sales cycles, we're already seeing some interest in it move too late stage discussions with a plan that has the potential to close as early as the second quarter.
One thing I would like to highlight is that diary is open platform, which allows for data sharing an integration with health plan care resources is a significant advantage in this market segment.
The ability to integrate into existing systems and workflows with minimal disruption is often a make or break proposition, especially in increasing complex health care environment.
We anticipate the health plans will grow into being one of our most significant channels in the medium and long term.
Interestingly beyond the four identified market segments that we usually speak of and in a testament to the power of our platform and applications. We've also recently seen interest from several parties on partnerships that would utilize our platform to integrate our solutions.
We believe that this creates the potential for high margin revenue opportunities and we look forward to discussing these more with you in the future.
Our continued success in all of our market segments in a large value driver in the medium and long term lies in the capability of our platform to engage in helping members manage multiple chronic conditions.
As Resmed mentioned, our initial focus with diabetes as it was the biggest opportunity to make meaningful improvements in healthcare outcomes and cost. Since then we've expanded our offering.
The end of last year, we added hypertension and integrated blood pressure monitor recently, we have announced our expansions into tele health and behavioral health coaching for stress anxiety and loneliness.
The behavioral health coaching is especially relevant today as we know that many of our members are suffering from stressing loneliness due to the risk and social distant seen may necessary bike hub in 18, and further aggravated by factors such as unemployment financial stress bereavement and fears surrounding the global crisis.
Given the well establish link that exists between mental health in chronic disease outcomes. We believe the implementing these changes will lead to better more comprehensive care for Daria members and improve our members experience.
The implementation of full service telemedicine on her platform has been achieved through our recent partnership with Mehdi Orbis.
This partnership runs our SaaS based business model and provides our members with access to physicians in a range of medical specialties, including primary and acute care as well as chronic disease management.
With these recent additions where product we now have the ability to offer an almost entirely remit solution to our members, which is a compelling value proposition in the current stay at home reality.
Even as restrictions or east high risk populations, such as those we serve well continue to need to exercise care. We anticipate that this integrated complete remote solution will have a significant value in all of our markets.
We'll now turn it over Dizzy to discuss our financial results.
Thank you Rick.
I will now provide a brief overview and now financials.
Additional details on our results can be found in our form 10-Q, which we have filed yesterday evening.
Revenues for the first quarter ended March 31st went to 20, well $1.7 million.
7.3% sequential decrease from fourth quarter ended December so those 2000 and aim.
And at 25.6% decrease palms at $2.1 million to $4 million into first quarter ended March 31st 2019.
Revenues generated during the first quarter ended mazzocchi fills twentytwenty.
Well derived mainly from the sale of value will help component and formed the offering or fall membership plans to our customers in the U.S.
Revenue declines how they attribute it below spending in the direct to consumer channel.
And shifting efforts to the larger deep will need to see channels, which we anticipate will drive growth later this year.
At the end of the first quarter ended March 31st Twentytwenty, We had accumulated deferred revenues were $1.17 million the majority of which we expect recognized during the remainder of this year.
Revenues for membership services was $778000 or 46.7% revenues for the first quarter ended March 31st 20.8, compared with $608000. All 27.1 Percentof revenue for.
The first quarter ended March 31st one in 19.
This increase in revenues for membership services.
To get the to the increase in our margins.
Gross profit in the first quarter ended March 31st Twentytwenty was $779000, an increase of $221000 or 39.6%.
Gross profit below $558000 in the first quarter ended March 31st when you 19.
Our gross profit increased from 24.9% in the first quarter ended March 31st 2019, 46.7% in the first quarter ended March so the first so to first twentytwenty.
The increase is mainly due to the increase in revenues generated from our membership plants.
Total operating expenses for the first quarter and there's more took the first twentytwenty well end point $9 million, an increase of $5 million, all 84% compared with $5.9 million for the first quarter ended March 31st 2019.
The increase in the operating expenses is mainly due to the increase in equity based compensation will direct those employees on service providers.
Oh 6.6 $6.3 million into first quarter.
Ended March 31st Twentytwenty compared to only $243000 into first quarter ended March 31st.
When you 19.
Non-GAAP operating expenses, which are excluding equity based compensation for the first quarter ends of the March 31st Twentytwenty will only $5.6 million compared with non-GAAP operating expenses, excluding equity based compensation or $5.7 million into first quarter ended them all.
So to first went to 19 this was a reduction of 1.4 $1.1 million.
This reduction was mainly due to the reduction in our digital marketing activity in the direct to consumer channel.
Operating loss for the first quarter ended March 31st Twentytwenty was $10.1 million, an increase of 4.7% mainly oh, 89%.
Compared to the $5.4 million operating loss in the first quarter ended March 31st went in 19.
This increase was mainly due to an increase in stock based compensation, partially offset by the increase in our gross margin.
Net loss attributable to holders of common stock was $11.1 million or $1.57 cents per show in the first quarter ended March 31st Twentytwenty compared to 5.4 million balls that loss or $2, a 92 cents per share in the first quarter ended.
Mazzocchi first one Tonight.
We had cash and best equivalents totaling $15.8 million. Some also because when people lumpy.
No but anywhere else.
I could see.
So in summary, it's very exciting Tom I'm for Valeo health as we keep executing on a multi years strategic plan.
Believed that we going to create substantial value with those shareholders.
Just.
You point to summarize the yeah, Yeah Nicole.
As an echo ways number one is the space digital therapeutics, we see it going we believe that value has that I can only be to disrupt your health care market. The other digital digital therapeutic space.
We anticipate that business insiders anticipate that this market will go into 9 billion dollar market by 2025, we believe that will well positioned to be one of the leaders in this market and we see that cobot 19 is something that in the medium and long term will push the transformation into digital.
We also believed that we have the product excellence hold with more than 50000 to users sat on the platform we have clinics in the clinical data the demonstrated.
Hello.
Health outcomes.
And as we evolve with the transformation we are doing a in terms of the business model into saw US an improvement of small James we believed that we're going to keep seeing improvements that you know margins.
To exceed the 70%.
We also believed that the transformation into a b to b to C that is happening as we speak is going to help us scale.
Our business and we believed that we have the best in class management team. It totally they did it then execute on a similar motors and we believe that this is something that increases the chances that we're going to be successful well me capitala.
Raises standpoint, we did a raising in December so we'll also very well funded to continue the transformation.
With that I would like to open the call for questions operator.
Thank you [laughter] is now open for questions. If he would like to ask a question. Please press star one on your telephone keypad to join the queue and if you're using speakerphone. Please pick up your handset to provide the best sound quality.
And our first question comes from Alex Nowak with Craig Hallum. Please go ahead.
Hi, Good morning, everyone. Recchi, you joined about four months ago in that time, we've seen some nice b to B wins and also the addition of behavioral health. If you step back what have you ever uncovered in the last four months and with the Daria platform or what do you still believe needs to be modified with Oreo.
And the platform that that arrests it fell to position the business to succeed with B to B.
Thanks for that question I think that from what I'm seeing I was actually.
More pleased than I thought walking through the door in terms of the flexibility of a platform and what that gives it the ability to do and some of the other partnership opportunities have been created I think that you know the pivoting into the remote patient monitoring for example, I was a good example of what we were able to do with the technology.
As there is also mentioned you know I think we need to continue to evolve the VTB product, which is you know underway and I think you will be completed in time for some of the deals that we see coming in the short term and you know we needed just continue to do the marketing and get the name out there diarrhea was only really started in the last.
Few months you know just couple of months before I got here really on that a transformation. It takes a little bit of time to get the name out into the marketplace and get people to see it we're already starting to see some traction in that and ER was very pleased this quarter to see the door you name being involved in the RF piece and having some great.
Success in that marketplace. So I think it's really matter of.
Finalizing the products and getting the name out there getting people to understand what areas capable.
That's great and can you point to anything that worked well catabasis and that you're trying to implement that diarrhea.
I think that the primary thing well I think theres a lot of things actually they all really sort of boiled down to understanding the health plan market as I mentioned in my remarks, you know one of the things is that a company like Daria or any company doesn't matter how big they are.
He's gonna get a health plan to change to the way that they do things weren't employer for that matter. You know, there's its very very hard to change the health care system into a lot of times, you have to be flexible and fit within how the health plans function, how the employers function and I think that the flexibility. The solution here is one of the things.
It really works well in that and I found the same thing to be true and catalysis.
By being flexible we were able to accomplish things that others could not accomplished I think the other big thing is you really have to understand the weight the system works, who the players or because it's a very complex.
Multi individual type of sale and so being able to understand how they see those value propositions and position the product to deliver on those is important one of the things that we have here that we didn't have there is actually the having the competition in the marketplace really helps.
In between.
Not the pioneer, but the fast follower in a couple of the market helps too because you can position yourself against a the weaknesses that the other products have in the feedback that you're getting from the market.
And the pivot to behavioral health desk fits with the campus. This background, but it is a complete pivot from oreos diabetes platform. So why do you think the pivot towards behavioral health makes sense and what sort of additional investments that are I need to make to succeed in that market.
So let me be clear in terms of what we've done from a behavioral health perspective, and there's two pieces to it. One is is that we very well understand that behavioral health and chronic condition management are tied together if you do not deal with the behavioral health portions you're not can be success.
So with a chronic conditions, where those exist, but rather than have behavioral health as a separate add on module as you know some of the other companies in the space have what we're doing is pushing behavioral health.
Into all of the other modules and so you won't be able to go through any thing with argue health without there being a background of behavioral health, where we'll be looking for issues and potentially coaching and steering people to the right resources to address those.
But in the near term what we've done is really add coaching which was existing dario coaching that has been re purposed. If you will to provide coaching around stress anxiety and loneliness, especially in the current environment. That's why we rolled it out quickly you will always find those.
Coexisting with chronic conditions and so that's why we think that it's important but we're not building a standalone behavioral health module with you know coaches and psychologists and things like that will we will use partners to address that is needed, but what we're really focused on is making this part of the overall product offering.
Okay. That's helpful. And then I think one of the biggest questions. Among investors is how many names and what sort of names that are a partner west or is that isn't the pipeline, so resure or Rick.
Are you just you know as you're starting to win deals here with clinics employers and payers shouldn't we expect to see a press release with the names of these actual organizations. So we can start to get an idea for the quantity and quality. The names and also is there any way to come up with going forward to standardize lives under under contract metric.
You can share in each of these earnings calls going forward. Just so you can start the benchmark performance.
[noise] Rick can you. Please take it sure. So you know we will endeavor as we I mean, we will announce what we do and we will endeavor to let everybody know who those partners are that we're working with you know when I am very familiar with the.
The fact that lots of partners want to control their name.
You know as it gets out there, but I think that we will be able to announce them.
Some very interesting deals for people as it relates to the metric absolutely you know we're looking now at what are the right you know metrics. So that everybody can understand or progress in the business as we move that forward and you know go from you essentially six months ago, a standing start to as we move through the rest of the year. So.
Everybody can assess the progress because that's the way that we you look at it and understanding how many people do we have on platform and where those people coming from and what are the opportunities that are created by the additional deals that were site.
Okay got it and you still do have a good amount of business today with direct to consumer. So what has been the dynamics with an April or may around diabetes equipment purchases by consumers that Amazon Dot com Walmart Dot com.
[laughter], yes, so a man and thanks for the question Alex So a here that you're right. We are we still have a business than we have a very powerful business on the membership side.
We have seen that day in some cases, a users because we all of that Oh book of business on the direct to consumer we've seen that when the old crisis. The some users had challenges there in terms of paying out of pocket, but on the other hand, we've seen a growing demand because.
Reduction into possibly position because.
The importance of such a solution or those that on the high it is well covered maintain like it was the diabetes hypertension. So overall it was and it was something that there was also thing.
With regards to the marketplaces, we felt that down Amazon is getting stronger on behalf of others. So Amazon there and we believe had their own challenges in one of the things that they did is always sizing there.
Suppliers like valuable hill that dealing with healthcare products and this is where we got priority by Amazon and this is also something that's helped them all members. So overall.
And we cannot say that it was pushing the business forward, but it was not the using it as well so.
Well more or less table here.
Okay got it and then just to this quick cleanup questions I huge junk jump and stock based compensation expense and the Gionee line anything that happened in the quarter to leach that huge jump.
Yes, I think that that what one of the things that we did these like expanding the team there and Oh, you know advisory team and those that are helping the company ticket for the next stage, we bought the very Oh hold him and this is something.
We.
We are doing guy not occasionally dwell doing it every few years in order to make sure that.
The team board of directors shows and the service providers. So all incentivized to take the company to the next stage.
So that's something that it's a onetime.
Congrats and how long do you expect the current cash balance Alas through.
Okay.
Yes, so we updated our financial reports and.
We reported at September 2021 is well.
The cash should be sufficient for so we we raised significant amounts of money in December.
I was very and the good Guy group of investors very supportive unless those.
More than third of the deal was done by investors that already so all the company. So we believe that will billing community of believers that will help us.
The company to the next stage also from a valuation standpoint.
Okay excellent. Thank you.
Thanks, Alex.
And our next question kind of spam and a high now with Alliance Global Partners. Please go ahead.
Good morning gentleman, thanks for taking my questions.
First off for me when when a employers are gone through vitality and building. These benefits plans. It I know that vitality has a you know on interest in the company.
Itself, but how many other options are a they present in our on the menu that could be considered digital health or potentially competitive today Mario on on some level.
They certainly have a couple on there that could be considered competitive and actually I think one of the things. We really welcome is that opportunity to be set up side by side for those opportunities actually consider that a win a if somebody it'll take a look at us side by side so we'd be.
That is an advantage.
In the sense of your the strength of your offering but also that there are multiple.
Offerings out there. That's so maybe employers believes that wall jeez I should should choose one of these.
I think there's a couple of things that are going on a in the marketplace. I mean, clearly we see an expansion in the diabetes and hypertension chronic condition management with these kinds of platforms and I think that speaks to the overall need that the market is seen and I think that you're seeing a growth and acceptance that this isn't something.
You know should we do it or not do it but you know which solution should we used to do it and I think that that works to our advantage as I mentioned earlier.
You know the fact that we're not necessarily the pioneer somebody else's opened this market, which is I mean I've done it it's really hard to do in a cost a lot of money and takes a lot of time and we're gonna take advantage of that and the fact that you know we believe we've got a best in class solution that we can provide added an extremely competitive price I think speaks well.
For our ability to compete in that market [laughter].
Okay. That's not the colors helpful. There and then you don't just in a in terms of the insights so you're getting it yeah. If any through the vitality program <unk> you know all of the the the the employers that I have made a choice. So far do you get a sense on how often you're winning versus.
The the competition on the platform or don't you get that detailed of data or you know any color. They can you might bullish are there.
I think that's more than just the vitality question I think that's you know a question of as we go through the process. You know we're really in the sales a window right now for these types of opportunities. So it's a little early for me to comment on you know what those statistics look like with the hope to have more of that available here in the future.
Okay. So so basically the way it worse, if I'm understanding that correctly is right now they employers are going and figuring out what they want to offer to their employees. The employees later on this year or make a decision and a further enrollment and then the.
Likely most of the revenue that is generated or it will be generated shows up probably starting in 2021 is that the right way to think about it.
I think we will start to see revenue at the back half of 2020, but then you know the normal sales cycle would have a employers that are buying to an RFP process. During the sales cycle would be implementing in January 2021, but I do believes that we will see some revenue this year.
Based on some of the contracts.
Got it and just lastly from me in terms of food, where the efforts are kind of being directed at present and <unk> going forward. I mean are you spending or I mean, all if he had to break it down you know how much time are you spending on going out for health plans versus employer services RPM a provider.
Good and you know how does that all shake out.
About Oh, probably about 80% of our efforts over the last quarter.
Had been spent in the RPM in employer space and the remainder of getting ready to pursue the health plan space and you know part of that was making sure that we had the team in place and you know really have spent the last 60 days, let's say in terms of getting ready for launch in that so you know going forward I expect we'll see it.
Little bit more health plan effort than we have for the last couple of months, but I think that in the short term a lot of the effort is going to continue to be employers and you know we've seen some nice traction in the RPM markets. So we did pivot resources into that.
Okay great.
Thanks for all the color gentlemen, that'll do it for me thanks for taking the questions.
Thank you thanks Bye.
And that does conclude I cant many fashion for today I'll turn it back over to your rationale for any closing remarks.
So thanks, everyone and thanks for joining our call today and looking for you so with the ceiling on they will have a good day.
And that does conclude todays teleconference. We thank you for your participation you may disconnect. Your lines at this time and have a great. Thanks.
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