Q3 2020 Ontrak Inc Earnings Call

November 5, 2020

[music].

Welcome to the on track third quarter of 2020 earnings call. My name is Johnny I'll be your operator for today's call at this time, all participants aren't they listen only mode. Later, we will conduct a question and answer session fall. During the question and answer session. If you have a question. Please Sarah then one on your Touchtone phone.

Oh, and I'll turn the call over to Caroline Paul Investor Relations, Let's talk you may begin.

Thank you and thank you all for participating in today's call Joy.

Joining me today are Karen Peyser, Chairman and Chief Executive Officer.

Random Lavern, Chief Financial Officer, and Kurt Mandera, President and Chief operating Officer, who will join US for the question and answer portion of the call.

Earlier today on track released financial results for the quarter ended September 30th 2020, a copy of the press releases available on the company's website.

Before we begin I would like to make the following remarks concerning forward looking statements all.

All statements in this conference call other than historical facts are forward looking statements.

Words anticipate believe estimate expect intend guidance confidence target project and some other expressions typically are used to identify forward looking statements.

These forward looking statements are not guarantee of future performance, but may involved in our subject to certain risks and uncertainties. Other factors that may affect on track business financial condition and other operating results, which include but are not limited to the risk factors described and the risk factor section of the form 10-K and form time to.

Is filed with the F C C.

Therefore, actual outcomes and results may differ materially from those expressed or implied by these forward looking statements.

On track expressly disclaims any intent or obligation to update these forward looking statements with that I'd like to turn the call over to Taryn.

Thank you good afternoon, everyone and thank you for joining us today.

With the growing behavioral health crisis in the United States and on trucks proven ability to demonstrate value for payer customers.

The growth opportunity for on truck in the coming years has never been larger.

The demand for what is now known as <unk> mental health has searched confirming reports by the C. D C and millman that the mental health crisis in the country is significantly worse than previously documented importantly, the journal of American Medical Association or <unk>.

<unk> is just reported that an accumulation of evidence that indicates that a second wave of mental health disorders is on the horizon.

The tremendous growth opportunity ahead for on truck is underscored by in August 2020, Mckinsey report, which predicts that in the post covid period traumatic stress unemployment and social isolation will lead to exacerbation of existing b.

Hey Rural health conditions, and the onset of new conditions that could drive 100 billion to 140 billion of additional spending that'd behavioral and physical health in the coming year.

On track is well positioned to support the second wave through our telehealth enable behavioral health solutions for health plans and for the first time through our acquisition of life, So Joe commercial employers.

Executing on our strategy to add lower cost digital interventions in behavioral health as well as future programs for severe chronic conditions could increase our total addressable market by up to 100 per cent.

Turning to our results for the third quarter, our business has continued to perform well in an unprecedented in your environment. We.

We delivered revenue of 24 million, reflecting a 172% growth from last year are total active enrolled members grew rapidly as well totaling 14345 members at the end of the quarter already.

Alright, perfect of outreach pool ended the quarter at 144000, a small increase of quite chilly from 141000 and has increased further to 155000 as of today, we anticipate that the outreach pool will be.

164700 in the next week or so.

We are also pleased to report that we were adjusted EBITDA positive in the last two months of the quarter. We anticipate we will be significantly adjusted EBITDA positive in 2021.

That said or payer customers have faced tremendous disruption in 2020, and those disruptions created headwinds for our financial performance. This year. We are pleased that improvements in our productivity efficiency and performance metrics offset many of the cut.

<unk> related headwinds and we would like to provide more detail and these customer headwinds as.

As you May recall from our last earnings call, a new enterprise level procurement process at Cygne and subsequent data protocol changes had delayed the signing and launch of our contract by nine months.

Why were able to successfully launch the on track program in October and give Cigna Medicare advantage members access to critical behavioral health care and an additional 13 states. This pushed approximately $38 million in revenues to 22.

21.

The growth of our outreach pool in Q3 was affected by headwinds related to lower consumption of health care services by members of our health plan customers.

This lower utilization trends during the pandemic causes high cost members to drop below the medical expense threshold for inclusion in our outreach Paul while we are beginning to see utilization trends stabilize we have seen up to 40% more.

Or concerns with Amtrak data is our lifeline to engaging members and we are working closely together with our partner to ensure that we can meet the rapidly expanding needs of their members during this pandemic.

Importantly, this is one of the plans for which we anticipate continued significant expansion.

Given the headwinds that I just outlined we have revised our guidance for 2020.

Auguring well for 2021, we anticipate that many of our 2020 headwinds will become 2021 tailwind with full year revenue from new launches nationwide contracts upon which to expand and significant progress towards contracting with our increasing pipeline.

A potential partners, we are expecting 2021 revenue growth in excess of 100% and we are executing our growth strategy on multiple fronts.

First we will expand our addressable market through innovative suite of clinical interventions for behavioral health and future severe chronic conditions.

We will invest in building out the outreach, the Amtrak platform, which integrates data workflows and analytics across members providers and payers.

We will drive this strategy would transformative acquisitions that accelerate our growth trajectory, while simultaneously investing in the capabilities and scalability of our AI and internal systems.

We recently announced that we acquired life dojo, a comprehensive science back behavioral change platform that combined digital modules with coaching support through a single mobile application.

The acquisition enables us to enhance our value proposition in the marketplace with the addition of market leading behavior change interventions, new multi modal engagement and remote patient monitoring data that will feed our AI capability and further enhance.

Hands on tracks evidenced based coaching we plan to offer the life. So Joe tools, both as part of our on track program for high cost members as well as a standalone program for the larger medium and low cost populations within our health plan partners, where.

Life Dojo previously positioned itself in the wellness category, we are not changing our focus pink.

Think of us as leveraging the valuable features of their platform and an Amtrak context.

We see the greatest market opportunity for odd track as the leading engagement platform for those with unaddressed behavioral health conditions and severe chronic disease.

To illustrate the power of today's on track platform I'd like to highlight two specific examples for you. The first is a new agreement with the Veterans Health administration and the second is a significant expansion with an existing health plan partner today, we announce a partner ship with the veterans health.

Administration to leverage the artificial intelligence of both our organizations and are evidenced based coaching model conduct a three year research study are the most effective interventions for veterans at risk for suicide related behaviors.

We are honored to be partnering with the BHA and understanding the ways in which we can reduce veteran suicide risk.

In October Dr. Chester, how the CMO of Health Alliance Medical plans reported and and a hip CMO round table that the on track program had delivered a 41% reduction in medical costs, which averaged 28000 pre enrollment as a result his organization is bigger.

Wanting to explore how to expand the Amtrak program too it's Asl base.

In the near future, we expect to share news of significant expansions among our existing health plan partners. We look forward to shining a light and more advocates of Amtrak like Doctor Ho in 2021.

Speaking of which while we are clear.

Clear industry leader and our ability to significantly improve the house and lives of our targeted care and treatment avoid in population. We are also the least well known and the best kept secret in the industry.

This will change in 2021, we have just hire a new senior vice president of marketing from one of the world's most respected communication firms to ensure that are compelling story and results are shared nationwide.

We have also retain a highly acclaimed communications firm that is poised to work with the mainstream national media and telling our story.

Just like our name change to Amtrak, we have purposely waited to take a national profile and two we were ready for prime time.

Our growth trajectory expanding national health plan partner footprint clinical impact and value proposition and expanding technological delivery systems mean that next year, we will be ready for prime time.

I want to take a moment to comment on the quickly deteriorating mental behavioral health of our country due in large part to the pandemic.

We have highlighted the latest stats as you can see the pandemic has been a significant headwind this year yeah.

People are more at home and theoretically easier to reach we have always found the Medicare population easier to reach let's remember that we are dealing with a care avoid in population and while we can reach them, we still have to engage them and it takes a cigar.

Difficult time to engage them to enroll this also augers very well for 2021.

During the quarter.

That equates to revenue of about $1823 per enrolled member for the quarter or annualized just shy of $7300 per enrolled member per year.

This compares to our second quarter average of about 6700 per enrolled member per year.

Using the 14512 enrolled members we have today as of this call multiplied by the $7300 per year rate that equates to a run rate of over $106 million as of now compared to a run rate of $88 million as we had as of our second quarter call.

Note that this largely excludes the newly launched cygnet business since enrollments just barely began in October.

We ended the quarter with 455 team members included in cost of sales up 18% sequentially from 384 at the end of Q2 and up 70, 70% from 267 at the same time last year, primarily made up of our care coaches and member engagement specialists.

We of course are proud that we're able to say we had positive adjusted EBITDA in the last two months of the third quarter.

While we are investing a significant portion of our growth into our operation to support the expected ramp in 2021, we see a trajectory that leads to significant adjusted EBITDA for 2021.

Looking at the balance sheet and cash flow cash flow used in operations in the third quarter was $2.5 million and on the balance sheet. We ended the quarter with cash cash equivalents of $57.6 million, but including restricted cash associated with our first eight quarters of bank preferred stock dividend payments total cash was 67.4 million.

Dollars.

Our cash balance increased as a result of two primary sources first we raised net proceeds of $45.1 million via public offering of our nonconvertible series a preferred stock.

Our series a preferred stock is perpetual trades on NASDAQ global select market under the ticker OTI RK, Pete and paid quarterly cash dividends at the rate of nine and a half per annum. So.

Second we raised $10 million with a note issued under our Goldman Sachs debt financing agreement.

Given our existing cash balances and increased efficiencies in our business I am confident that we have sufficient capital and access to future capital to manage our operations and execute on the strategic initiatives we've outlined.

As Terry mentioned, we've revised our revenue guidance for the year to $82 million to $85 million from $90 million due to the timing of some of the launches and data refreshes. This year in softer utilization environment due to the covenant team pandemic.

However, we anticipate revenue growth in excess of 100% in 2021 as these headwinds turn into Tailwinds for us and.

I'll now turn the call back over to Taryn for his closing remarks John.

Thank you Brandon.

As we look ahead to 2021, we are very excited about the opportunity ahead of us to drive behavioral change among the low and high acuity populations, we remain focused on innovation and transformative acquisition opportunities which are critical.

Core to our continued success this year and beyond.

We are deeply committed to improving the lives of millions of members facing barriers that can make their engagement difficult and we are confident that we are taking the right steps to drive near and long term shareholder value.

As far as timing.

The expected due to refresh has to be turned back on.

We have a mutual agreement with a client based on our current understanding that.

We expect it needed to be turned back on by the end of the year.

Of course, we're working with large health plans and they move at their own pace and their own timing.

But right now the target gate that was agreed to is by the end of the year.

In terms of how that translates into the outreach pull numbers that we talked about for November that is not included.

And any uptick uptake is both driven by.

Expected.

Increases with our current customers incur.

The launch of segment, which just started in October which has pretty substantial increase.

As well as some other.

Anticipated things that we've talked about as far as expansion with some of our existing customers that are in the pipe and so we don't have in there are large.

Large expansion the big transformational expansion some of which we do I'd like to say expect but once.

We are contemplating how we can leverage that into our business and how our business can leverage their business.

So we while we know well why are we are hopeful and expect some significant expansions next year.

When they take place as we always caution with these health plan customers very largest companies in America or in the world.

I'll look about 100 per cent growth, you're you're basically saying Edna still stays within substance use disorder, only a sickness days with an M. A only is that correct.

Correct.

That we don't go down the acuity curb even though we know that.

Get them enrolled in the program and then go through the care journey.

We have always use a mix of historical data as well as being able to.

Information with the from the member as well as verify that with their behavioral health provider.

Because as you know the claim stated that we receive will have a lag to it.

A month up to three months in certain circumstances. So once someone is enrolled in the program.

Of all the above so as turn mentioned earlier with help alliance, we're actually looking at the opportunity to serve their azo customers, which is not currently part of our contract and that is a significant uptick relative to their non ISO customers that we're serving today.

We have clients.

Okay.

Ed.

I would also had sorry I.

I would also add.

This past week, we announced a an extension of our contract with 17.

Ah renewal extension or whatever you Wanna call it.

<unk> is a very fragmented plan.

State by state, but we also who else that we can.

So I just got an echo sorry, we also hope that we can expand perhaps nationally with 17 overtime.

There is no data issue.

One two months delays and data.

Covenants have been modified and we got plenty of clearance under them. The next time you have an income comes in play next year.

That we want to take them out and we will take them out. We're looking forward to we're looking forward to refinancing them and hopefully we refinance them with Goldman and that they've been an unbelievable partner I'm, they're very I'm sure word the least of their concerns and.

Order with folk.

Folks side disrupting their plan changes.

As well as we tend to collect less in the first quarter as folks are paying off their co pays and coinsurance.

And so that has a revenue impact on us and enrollment impact on us that we tend to recover from in the second quarter.

And are really harsh partial partially through the first quarter.

And so Q1 has as we're investing in the growth we've talked about some of the.

Anticipated launches of of some of our expansions not the giant ones, we've talked about but the ones that that we've kind of said, we're pretty comfort comfortable will happen. We are ramping up for that and so that does require hiring that does require cogs and so my gut would tell me now that you know as a Q4 gross margin.

You know, it's probably going to stay at this elevated level I would usually expect Q ones gross margin to go down for all those reasons, which puts pressure on EBITDA in the first quarter okay.

Okay and final question.

Great news on the B, a Harvard study here Thats good.

Big plus for you guys, but it's a three year study so are there opportunities would be a.

So before the study and what are your thoughts in and around that.

Well, let me answer that.

Yes in the first year.

Because I think we will make a significant impact.

That we will enter into a commercial relationship sooner rather than later and sooner rather than three years.

Great. Thank you very much.

And our next question comes from Bill Sutherland from the Benchmark Company. Please go ahead.

Thanks, Good evening, everybody I just at this point I think I have one question left I guess, that's what hurt us.

And I'm thinking about your acquisition of Jojo and I know, it's not I'm going to move the needle based on the commentary for 21 that much but I would like to understand.

The integration process for it into your ER and into the core line that you do and then also how you may be helping them build.

Build out at the at the coaching levels they have right now.

Thanks, Phil Great question. So you know when we started looking at life. So Joe we were really impressed with you know as Ciaran said, they have 32 digital behavior change modules.

This overlap significantly with the needs of our on track members.

They also have all the components in their solution with some expertise from our side to be able to put together, a leading depression and anxiety treatment at.

Doing currently where you where you are treating something beyond substances.

Im not sure if it applies to substantiate Slavia to us.

It does not overlap with substance abuse.

Today.

But it does have a whole series of tools that help with.

Things like healthy living.

Help managing stress as well as anxiety, but in slightly different ways than we approach. It. So part of what we're doing is bringing our expertise to be able to offer these tools.

As you ask broadly across the current membership to give them additional resources and additional ways for our coaches to engage.

But then also again to the lower cost larger populations, who might not need as much help on the coaching side. So we can offer at a lower price point a way to engage them.

And get them into the treatment that they need.

Tend to.

Any color that you guys want to talk about as far as the M&A pipeline.

In the diabetes business.

What we are operating in and we have a much bigger moat around our business and our long term objective is where we have very little to no competition at the high acuity segment.

We're going to through the use of increasing technology.

Part of companion it with the high Utilizers moving down the acuity care to include them medium to low Utilizers, we believe that we'll be able to offer a value proposition that to every employer and every health plan.

That we've already demonstrated we're dealing with care avoidant members, we're doing something the industry is focusing on treatment seeking we're focusing on care avoiding.

Where.

It's.

We've developed a 15 16 have been pursuing 17 year playbook and engagement no. One was as stupid as we work to practice at home, but here. We are so we have a huge moat around our business will combine it with the lower acuity populations and no one will be able.

It will offer the full spectrum of care, both the treatment avoid it care avoid it with the treatment neutral and then the treatments seeking offer the whole continuum of care to all in health plans and employers that are touching the high acuity members, but with our acquisition strategy.

We will be able to.

Effectively be the lowest cost highest value provider for all populations period.

Curt if you want to add something please do.

I mean I'll make it quick so thanks, Bill again, the just going back to what turns said earlier I see that strategy as two main pieces and this is both organic as well as M&A.

We're looking to grow the portfolio interventions both.

Both across populations as Karen talked about but also across conditions and so obviously the the announcement today with the VA is a step in that direction, we expect to sign and start the pilot in heart failure that we've talked about in the fourth quarter.

Sure.

That is tied to a renewal a contract renewal with an existing client and then as we look out in the marketplace.

In the M&A the M&A opportunities, we're looking to also add a novel.

Interventions that have that combination of digital and human touch again to spread the population that we can address and then the second part that turned talked about is being able to extend the platform that we have built with pre.

As well as the engagement tools embedded in our coaching system.

To the member, which place dojo is a part of it but also to better integrate data analytics with the provider network as well as payers and so that's another focus area is how do we actually look at assets that will help us move to integrate with.

Those other stakeholders the provider network and the parents as well.

I know you've.

You mentioned that before occur and I think that's pretty that's the long ball right.

Yes.

Well, there's I mean that theres a its.

It's a highly underserved opportunity in the behavioral health space in particular.

And so.

We are looking at opportunities that would move us in that direction not only to help solve those challenges for the on track program.

And like to joke, but also.

We'll engage and modify the behavior of a care avoid in population. So that's where I think we're going we're going to look very much.

Less like a human interaction company and a lot more like a technology company.

Maybe even evolving into SaaS model.

Okay guys. Thanks for all the color.

Good work thanks.

We have no further questions at this time.

Okay, well, thank you operator and more importantly, thank you for all of our shareholders interested in investors and again. Thank you for are on track team for their commitment and devotion and we'll see you soon have a great night, everyone stay safe and social.

Distance where mask. Please thank you.

Thank you ladies and gentlemen, today's conference. Thank you for participating you may now disconnect.

[music].

Welcome to the on track third quarter of 2020 earnings call. My name is Johnny how beer operator for today's call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session. During the question and answer session. If you have a question. Please Sarah then one on your Touchtone phone.

I will now turn the call over to Caroline Paul Investor Relations, Let's talk you may begin.

Thank you and thank you all for participating in today's Coll.

Joining me today are Karen Peyser, Chairman and Chief Executive Officer random.

Brandon Lavern, Chief Financial Officer, and Kurt Mandera, President and Chief operating Officer, who will join US for the question and answer portion of the call.

Earlier today on track release financial results for the quarter ended September 30th 2020, a copy of the press releases available on the company's website.

Before we begin I would like to make the following remarks concerning forward looking statements.

All statements in this conference call other than historical facts are forward looking statements.

Words anticipate believe estimate expect intend guidance confidence target project and some other expressions typically are used to identify forward looking statements.

These forward looking statements are not guarantee of future performance, but may involved in our subject to certain risks and uncertainties. Other factors that may affect the Amtrak business financial condition and other operating resolved which include but are not limited to the risk factors described and the risk factor section of the form 10-K and form 10-Q.

Is filed with the F C C.

Therefore, actual outcomes and results may differ materially from those expressed or implied by these forward looking statements.

On track expressly disclaims any intent or obligation to update these forward looking statements with that I'd like to turn the call over to Taryn.

Thank you good afternoon, everyone and thank you for joining us today.

With the growing behavioral health crisis in the United States and on tracks proven ability to demonstrate value for a payer customers.

The growth opportunity for on track in the coming years has never been larger.

The demand for what is now known as tell a mental health has searched confirming reports by the C. D C and millman that the mental health crisis in the country is significantly worse than previously documented importantly, the journal of American Medical Association or.

Jama has just reported that an accumulation of evidence that indicates that a second wave of mental health disorders is on the horizon.

The tremendous growth opportunities ahead for on track is underscored by in August 20th 20, Mckinsey report, which predicts that in the post covid period traumatic stress unemployment and social isolation will lead to exacerbation of existing b.

Hey Rural health conditions, and the onset of new conditions that could drive 100 billion to 140 billion of additional spending and behavioral and physical health in the coming year.

Track is well positioned to support the second wave through our telehealth enabled behavioral health solutions for health plans and for the first time through our acquisition of life, So Joe commercial employers.

Turning to our results for the third quarter, our business has continued to perform well in an unprecedented in your environment.

We deliberate revenue of 24 million, reflecting a 172% growth from last year are total active enrolled members grew rapidly as well totaling 14345 members at the end of the quarter.

Are effective outreach pool ended the quarter at 144000, a small increased quite chilly from 141000 and has increased further to 155000 as of today, we anticipate that the outreach pool will be.

164700 in the next week or so.

We are also pleased to report that we were adjusted EBITDA positive in the last two months of the quarter. We anticipate we will be significantly adjusted EBITDA positive in 2021.

Sturmer related headwinds and we would like to provide more detail and these customer headwinds.

As you May recall from our last earnings call, a new enterprise level procurement process at Cigna and subsequent data protocol changes had delayed the signing and launch of our contract by nine months.

21.

The growth of our outreach pool in Q3 was affected by headwinds related to lower consumption of healthcare services by members of our health plan customers.

Or high cost members falling below the medical expense threshold during the pandemic compared to Q1.

In practical terms. This means we have lost 42000 individuals from the outreach pool than we would have expected with pre pandemic utilization levels.

Fortunately the decline in high cost members in Q3 was offset by members added to our outreach pool to a health plan expansions and further enhancements that we have made to our outreach pool identification algorithms, we believe normal utilization patterns will resume and <unk>.

821, once the economy opens up again or when people feel they can no longer put off necessary health care services.

This will accelerate the growth of our outreach, Paul importantly, Unitedhealth, just announced an uptick and utilization, which bodes very well for our 2021 outreach poll numbers.

Finally, with respect to other customer headwinds and their impact on 2020 guidance. We would also like to point out that our largest customer is conducting compliance reviews of all of their vendors. These reviews have disrupted data refreshes for the <unk>.

<unk> program since July.

Putting further pressure on our outreach poll numbers, despite the customer having no compliance issues or concerns with on track data is our lifeline to engaging members and we are working closely together with our partner to ensure that we can meet the rapidly.

Expanding needs of their members during this pandemic.

Importantly, this is one of the plans for which we anticipate continued significant expansion.

Given the headwinds that I just outlined we have revised our guidance for 2020.

Auguring well for 2021, we anticipate that many of our 2020 headwinds will become 2021 tailwind with full year revenue from new launches nationwide contract upon which to expand and significant progress towards contracting with our increasing pipeline.

A potential partners, we are expecting 2021 revenue growth in excess of 100 per cent and we are executing our growth strategy on multiple fronts.

First we will expand our addressable market too innovative suite of clinical interventions for behavioral health and in future severe chronic conditions.

We will invest in building out the outreach, the Amtrak platform, which integrates data workflows and analytics across members providers and payers.

We will drive this strategy would transformative acquisitions that accelerate our growth trajectory by simultaneously.

First thing in the capabilities and scalability of our AI and internal systems.

We recently announced that we acquired life dojo, a comprehensive science back behavioral change platform that combines digital modules with coaching support through a single mobile application.

Hands on tracks evidenced space coaching we plan to offer the life. So Joe tools, both as part of our our track program for high cost members as well as a standalone program for the larger medium and low cost populations within our health plan partners.

Life Dojo previously positioned itself in the wellness category, we are not changing our focus pink.

Think of us as leveraging the valuable features other platform and then and track context.

We see the greatest market opportunity for odd track as the leading engagement platform for those with an address behavioral health conditions and severe chronic disease.

To illustrate the power of today's on track platform I'd like to highlight two specific examples for you. The first is a new agreement with the Veterans Health administration and the second is a significant expansion with an existing health plans partner today, we announce a partner ship with the veterans health.

Administration to leverage the artificial intelligence or both or organizations and our evidence based coaching model conduct a three year research study are the most effective interventions for veterans at risk for suicide related behaviors.

We are honored to be partnering with the BHA and understanding the ways in which we can reduce veteran suicide risk.

Wanting to explore how to expand the Amtrak program too it's Asl base.

In the near future, we expect to share news of significant expansions among our existing health plan partners. We look forward to shining a light and more advocates of Amtrak like Doctor Ho in 2021.

Speaking of which while we are clear industry leader in our ability to significantly improve the house and lives of our targeted care and treatment avoid M. Population. We are also the least well known and the best kept secret in the industry.

We have also retain a highly acclaimed communications firm that is poised to work with the mainstream national media and telling our story.

Just like our name change to Amtrak, we have purposely waited to take a national profile and two we were ready for prime time.

I want to take a moment to comment on the quickly deteriorating mental behavioral health of our country due in large part to the pandemic.

We have highlighted the latest staff as you can see the pandemic has been a significant headwind. This year, yes people are more at home and theoretically easier to reach we have always found the Medicare population easier to reach let's remember.

That we are dealing with a care avoid in population and while we can reach them, we still have to engage them and it takes a significant time to engage them to enroll this also augers very well for 2021.

Let's understand that the worsening mental behavioral health crisis has a lagged effect on our business as the exacerbated chronic disease conditions work their way through the increasing medical claims cost.

We expect this to be a powerful macro backdrop and tailwind in 2021.

I will now turn the call over to Brandon Laverne, our Chief Financial Officer, and will return with closing comments.

Thank you Darren Simcha.

Similar to last quarter, rather than spending a lotta time reading results from a press release I'm going to roll forward, our data to help give you insights into how we think about a revenue model in the future.

We received great feedback on this approach last quarter and as a result will provide similar date of this time around.

As Ken mentioned, we recorded revenue of $24 million. During Q3, most of which has received on a per enrolled member per month or P. E. M. P M basis.

Our new signal expansion that lost that launched in October and for which we expect to deliver in the neighborhood of $40 million next year.

Is handled on what we call a case right. This means to be billed for the entire program. Upon initial enrollment with proportionate credit back for any of this enrollments during the first six months.

Wow that is great for cash flow it will increase deferred revenue significantly as we attempt to record the revenue as evenly as possible over the life of the members time in the Entr'acte program.

At the beginning of the quarter, we had 11989 enrolled members with 14345 at the end of the third quarter, an increase of 2000 and 356.

And a simple average of one of 13167 enrolled members during the quarter.

That equates to revenue of about $1823 per enrolled member for the quarter or annualized just shy of seven $300 per enrolled member per year.

This compares to our second quarter average of about 6700 per enrolled member per year.

Using the 14512 enrolled members we have today as of this call multiplied by the $7300 per year rates that equates to a run rate of over $106 million as of now compared to our run rate of $88 million as we had as of our second quarter call.

Note that this largely excludes the newly launched Signet business since enrollments just barely began in October.

Breaking down in the queue three enrollment a bit more we enrolled a total of 7192 members during Q3 compared to 6723, and Q2 or 7% increase sequentially and 118% more than the 3295 gross enrollment in the third quarter last year.

Despite the headwinds mentioned by tear in earlier.

Without those headwinds, we would've expected to enroll enrolling a significantly higher amount.

Dividing Q3 gross enrollment by our outreach pool, which averaged 142500 during the third quarter. It annualized two of 20% enrolled enrollment rate a little higher than the 19% annualized rate we saw in queue too.

Or just enrollment rate fluctuates, but ran between 8% to 10% per month during the quarter, resulting in us. This enrolling a total of 3706 enrolled members during the quarter.

Further we graduated 1130 enrolled members during the quarter, which works out to about 94% of the enrolled members in the program at the beginning of the quarter.

The net impact of all that was a net enrollment increase of 2000 and 356 in the third quarter versus just 1456 in the third quarter of 2019 and increase of 62%.

Our gross margin for the third quarter of 45, 6% increase sequentially from 42, 7% and compared to 38% in the third quarter of last year. We're currently forecasting gross margin to stay at least in this higher rates during the fourth quarter as well.

We ended the quarter with 455 team members included in cost of sales up 18% sequentially from 384 at the end of queue to end up 70, 70% from 267 at the same time last year, primarily made up of our care coaches and member engagement specialists.

We of course are proudly, we're able to say we had positive adjusted EBITDA in the last two months of the third quarter.

While we are investing a significant portion of our growth into our operation to support the expected ramp in 2021, we see a trajectory that lead to significant adjusted EBITDA for 2021.

Looking at the balance sheet and cash flow cashflow used in operations in the third quarter was $2.5 million and on the balance sheet. We ended the quarter with cash cash equivalents of 57 6 million, but including restricted cash associated with our first eight quarters of bank preferred stock dividend payments total cash was 67 4 million.

Our cash sales increased as a result of two primary sources first we raised net proceeds with $45.1 million via public offering of our non-convertible series, a preferred stock or.

A series a preferred stock as perpetual trades on NASDAQ global select market under the ticker OTR copy and paste quarterly cash dividends at the rate of 95 per annum.

Second we raise $10 million with the note issued under a Goldman Sachs debt financing agreement.

Given our existing cash balances and increased efficiencies in our business I'm confident that we have sufficient capital and access to future capital to manage operations and execute on the strategic initiatives we've outlined.

Is turn mentioned, we revise the revenue guidance for the year to $82 million to $85 million from $90 million due to the timing of some of the launches in data refreshes this year and soft utilization environment due to the COVID-19 pandemic.

However, we anticipate revenue growth in excess of 100% in 2021 is <unk> headwinds turn into tailwind for us now.

I will turn the call back over to Taryn for his closing remarks darn.

Thank you Brandon.

To our continued success this year and beyond.

Before closing I'd like to thank everyone and are on track team from our senior leadership to our various support organizations.

To our exceptional frontline community of care coaches remember engagement specialists let.

Let work provider specialists community care coordinators and community operations specialist for their unwavering commitment to help our health plan partners and their members in these challenging times.

We are our mission driven company.

Our mission that on track is to help improve the health and save the lives of as many people as possible.

With that we will now open it up to questions operator.

Thank you have you have a question. Please press Star then one on your Touchtone phone if you wish to be removed from the queue. Please pass the pound sign or the hash key have you used any speaker phone you may need to pick up the handset first before pressing the numbers. Once again, we have a question. Please pasdar than one on your Touchtone phone.

And our first question comes from Charles <unk> from Cohen. Please go ahead.

Yeah, Thanks for taking the questions.

John maybe ask just Ah.

About some of the data refresh issue with one of your with your large customer here.

Is when is that expect it to be resolved and is that part of your estimate in the what you're thinking for mid November outreach pool or is that all really from cigna launching.

Since Curtis intimately involved with it I'll, let Kurt address that.

Thanks Charles.

So as far as timing with the expected due to refresh it has to be turned back on.

Mutual agreement with the client based on our current understanding.

We expect it needed to be turned back on by the end of the year.

Of course, we're working with Marge health plans.

And the move at their own pace and their own timing.

Right now the target gate that we've agreed to is by the end of the year.

In terms of how that translates into the outreach pull numbers that we talked about for November that is not included.

Any uptick uptick is both driven by.

Expect dude.

Increases with our current customers include.

Inclusive of Sigma, but also his term mentioned earlier, we've been continuing on the work of updating our algorithms as well as bringing in third party data on phone numbers to increase our effective outreach pool.

I hope that helps.

Yeah, I think it does and.

And so then maybe if you could help us understand a little bit then when we're turning you're providing here preliminary 21 Alpha obviously very significant in terms of growth and expectations also want EBITDA.

You know.

With these issues currently I know you're kind of hinted at discussions expansion can you tell us how how you're building to this 21 outlook and what sort of gives you the confidence here. This early on.

Given given the state of you know.

Just dean Martin with Covid and everything thanks.

Hey, Charles Brandon.

The way we look at it is really we look at look at the pool, we look at our enrollments that exists and how long each of the cohort stay in the program, we continue to see enrollment.

At similar rates as we saw in Q3, even now and so we are we are growing we're growing our membership.

Our pools as you've heard us say is growing as well and so we look at that.

There that with the launch of segment, which just started in October which has pretty substantial increase.

As well as some other.

Anticipated things that we've talked about as far as expansion with some of our existing customers that are in the pipe.

And so we don't have in there are large.

Large expansion the big transformational expansion some of which we do I'd like to say expect to launch.

To have next year, those would provide even more upside and so the way we see today is what we're doing now.

Realization returning into the business and continue to invest in ourselves and our technology and capabilities to increase our pool organically as well, let me, let me add something to that.

First.

We did indicate that we expect greater than 100% growth next year.

Unfortunately last year, we gave guidance at this time and as you May recall, we gave guidance for 90 million off of $127 million internal forecast and we thought we were being extremely conservative in the whole year would be about beating and raising.

We expect next year to be as how beating and raising and.

Having learned the lesson of of waiting until the first week or two of February we're going to defer to that to give our official guidance.

But in our numbers, we've had a history and just like we attempted to do a year ago, we have a history of telling you what we know not what we expect.

We view or what we think are implying towards our guidance. We believe that is a very low bar of what we know and has very little to do with what we expect of what we're going to endeavored to accomplish also not included in the guidance.

Is how we can leverage the acquisitions delight dojo acquisition and several others that we are contemplating how we can leverage that into our business and how our business can leverage their business.

So we while we know what we're up while we are hopeful and expect some significant expansions next year.

When they take place as we always caution with these health plan customers very largest companies in America or in the world.

Things always take a whole lot longer than they imply.

That said, we think next year's growth.

It should be quite significant.

And and Charles It's Brandon again, just just to put just a little bit of quantification on there I had mentioned that our run rate as we sit now is around 106 million, which largely excludes the $40 million a sigma that we've talked about as well and so you're already looking at a $145 million, assuming we don't grow anything in the rest of the.

<unk> business outside of Cigna.

And so we still have other customers there that are growing nicely.

So you can see the baseline gives us most of the way they're already without any growth at all and.

And I also know that in Signup for example.

We are in their Medicare population, which is tiny compared.

Compared to their commercial operation.

Also with respect to Aetna, we're primarily in substance use disorder, which is.

Which is a fraction of what the total opportunity would be in both.

Depression, and anxiety and then you add in what could possibly be as we expand down the acuity curve.

That is not in our numbers. So as you see as time goes on this next year and thereafter.

We contemplate continuing this growth rate in excess of 100% for years to come.

Just to just to clarify, though right when you're saying this preliminary cut out look about 100 per cent growth.

Basis, saying Edna still stays within substance use disorder only <unk>.

Sickness stays within May only is that correct.

Correct and that we don't go down the acuity curve, even though we know we will that we don't go down the acuity curve from the high cost members to the monitor medium and to low cost members.

But that was ever early anticipated though.

In the near term right.

Well, we are in discussions already.

Okay.

But but but in terms of what you're not in our numbers right now.

Okay, Yes, I just wanted to clarify that.

Alright. Thanks, Thanks, I appreciate the comments.

Thank you. Thanks for your support we appreciate it.

As a reminder of you have a question. Please press Star then one on your Touchtone phone.

Our next question comes from Sean Dodge from our V C capital markets. Please go ahead.

Yeah. Thanks.

I just wanted to better understand real quick the disruption in the data fetus is that that's something that only affects your ability to enroll new members or or is that kind of critical the feeding how you coordinated care for people in the program. So when we think about how that impacts you is that does that show up more in the enrollment or.

Or is that more something that drive just enrollments.

Thanks, John This is Kirk I'll take that one.

So.

We are still in rolling based on the data feed that we received back in July.

Our largest customer.

So our ability to identify the individuals with the data that we have.

Still still persists.

As we engage with those individuals get them enrolled in the program and then go through the cared journey.

We have always use a mix of historical data as well as being able to.

Collect information with the from the member as well as verify that with their behavioral health provider.

Because as you know the claim stated that we receive will have a lag two minutes.

A month up to three months in certain circumstances. So once someone is enrolled in the program.

It really turns to sort of real time data exchange with the number and the provider.

That being said.

Even when we get new data feeds from existing customers.

There will be people that will leave the overall outreach pool as well as new members that will come into the outreach pool.

Given right now that we are static working off of July get upset.

What we're missing is the ability to get new members.

And that's why.

Our growth in terms of enrollment is not accelerating as fast as we had originally planned.

Got it okay.

Helpful.

And then you mentioned.

Part of the bridge two 100% revenue growth next year being dependent upon some expansion with the existing clients. You said doesn't include the big big one with figured out or or expanding into aetna.

With depression anxiety.

So can you give us a sense of.

Which which kinds of customer expansions quiet experiences are included in there.

Do you already have these contracted are they close to being contracted and then kind of the the characterization of them are they.

Geographic expansion into additional states are they more remember populations different diagnoses.

Any help there.

I'll, let occurred answer and I'll chime in if cover anything he doesn't answer.

Yeah.

So it's actually a mix Shawn of all the above so as turn mentioned earlier with help alliance, we're actually looking at the.

The opportunity to serve there are so customers, which is not currently part of our contract and that is a significant uptick relative to their nominee esso customers that we're serving today.

We have clients.

Variety of clients that or finishing.

Or at least early stage Rollouts, where there's an opportunity to go even further so an example, there is optimal when we have successfully completed that early fees.

Of our pilot and now are expanding within their network, but they also bought the health plan Cold, Virginia Premier which provides us additional opportunity.

To expand within their books of business.

And then some of our larger clients both cigna as they continue to.

Expand their market. So sigma is investing aggressively to expand their Medicare advantage footprint, we're discussing how do we grow with their footprint into new geographies and then with that now.

We have scheduled mulch.

Multiple geography expansions that we hope to sign in the fourth quarter and rollout early in the year.

One example, there is the state of New York.

We have started the process to get licensed in the state of New York, both for an expansion with an existing client.

But also.

To to move forward with a new logo that we're we're looking to launch in 2021.

So I hope you have some flavor that we have.

A lot of irons in the fire.

To meet the growth numbers for 2021 and beyond.

Okay. Let me go ahead.

I would also add sorry.

I would also add.

This past week, we announced.

A an extension of our contract with 17.

Ah renewal extension or whatever you want to call it.

<unk> is a very fragmented plan.

State by state, but we also geraldo.

Oops I've just got an echo sorry, we also hope that we can expand perhaps nationally with centene overtime.

Okay, then the two big one cigarette commercial and Aetna Depression anxiety 30, you said some of the health plans can be frustrating because sometimes it just takes a long time what.

You think those are 2021 opportunity still are those something more real squeaked, maybe you can add in 2021.

I would be surprised and we would all personally be surprised and disappointed.

The expansion that we are.

Alluding to don't happen in 2021, but accordingly, we don't put them in our numbers.

Got it okay. Thank you.

Thank you thanks for your support Sean.

And once again that's.

And then one for questions. Our next question comes from Richard calls from Canaccord Genuity. Please go ahead.

Great. Thank you congratulations.

Yeah, I don't want to focus on the trees and not see the pores here, but just to go on that and vendor compliance Uhm I guess comments there. So you reiterated the guidance back.

After the second quarter that was despite cigna being delayed.

This lowering of guidance here, the five to 8 million.

Should we assume that a majority of that is this data issue.

I'll start.

Start with that question then could could chime in.

On our last call.

Put this all in perspective, so we knew about the compliance data issue.

Back in July August.

At the time, we thought it was only a one two or three months issue.

As has typical with the help are these large health plan customers. It dragged at at the time, we did our last call, we still expected to achieve $90 million and guidance.

And it really was look we had this whole year, we've had nothing but headwinds.

We are able to grow so significantly despite all of these headwinds is quite a statement too.

The high productivity efficiency that we're operating it.

That said the data refresh was just a and again it really has nothing to do with US in fact quite the contrary.

It was just a gut punch because it really does impact our ability to optimize what our capabilities.

Courtesy you want to add anything please do.

No I think you've covered a term.

Okay.

And at what point, they're Richard in that.

Over a course of time with our largest customer we've had several periods, where we've had one two months delays and data and never really created a blip for us in the past. It's this is the first time, we've had anything that was an extended period of time and so as we sat here in August on the same call thinking it was gonna be over.

Move forward, that's where we were and so now that we've seen the effects of what I would call an aging outreach pool of that particular plans membership you can start to see the impact on enrollment and so.

I want to make sure you got that point and in fact prior to that I will add that we were on a monthly refresh.

Which really turbo.

Turbocharges our capability. So that's where we were the first half of the year.

And to go from what is.

Five months from monthly is a big.

Hit.

Okay that that's helpful and then Brandon.

We had you here does the lowered guidance impact the Goldman covenants.

Do those come into play here, just refreshes on that and whether there's any financial impact associated with that.

No not at all those those covenants have been modified and we've got plenty of clearance under them. The next governor income comes in play next year.

With with EBITDA, having significant EBITDA by the career, yes, I believe let me add let me add onto that Richard I believe the covenant is $20 million of EBITDA for next year, which we think will significantly b.

I will let me say something about the Goldman that.

First of all as you know.

They have done extremely well and there are investment.

It was great for them at the time it made sense for us.

As you also know we have significant access to capital both equity which were.

A parent too.

I have a strong aversion to issuing common equity.

The the non convertible preferred we have significant access to as well as well as we get pitched or I get pitch weekly.

People that would like to finance Goldman out Goldman.

Negotiating with them on allowing us to pay preferred dividend.

They they required us to take that 10 million additional and they extended the recent.

The redemption period, a few months.

Because they know that we want to take them out and we will take them out we're looking forward to.

We're looking forward to refinancing them and hopefully we refinance them with Goldman.

And they've been an unbelievable partner.

They are very I'm sure were the least of their concerns and their portfolio and I'd say they have other concerns in their portfolio, but it's a very difficult environment for a lot of <unk>.

Cash flow manufacturing and alight companies.

We really are thankful for their support and their pleasure to work with and we hope they are the ones that refinancing, but we will refrain refinance at significantly lower rates.

Okay I got a.

And Richard just want to just want to take into that so the covenant for next year is $20 million is obviously, that's that's what our target is that's our goal.

Is to not have to.

Redo any covenants associated with that but that's when people are looking at.

Next year as a target you can look at.

Okay. So as we think about next year and the positive adjusted EBITDA are you assume you.

It's been getting positive EBITDA here for the fourth quarter should we think about 2021 is just a stair step and adjusted EBITDA Rzrs, there's not going to be like anything like additional investments in the first quarter, where you dip back negative or just any thoughts on that.

<unk>.

Sure that the way, we think about the first quarter is always a strange quarter for us.

I shouldn't say always because we have a much much better handle on our data now than we did a year ago in Q1 of 2019.

We've been saying for a few quarters that there's.

There's going to be an enrollment impact in the first quarter with.

Folks disrupting their plan changes.

As well as we tend to collect less in the first quarter as folks are paying off their copays and coinsurance.

And so that has a revenue impact on us with an enrollment impact on us that we tend to recover from in the second quarter and are really partial partial partially through the first quarter.

And so Q1.

As we were invested in the growth we've talked about some of the.

Anticipated launches of of some of our expansion is not the giant ones, we've talked about but the ones that that we've kind of said.

We're pretty comfortable will happen, we are ramping up for that and and so that does require hiring that does require cogs in so.

Tell me now that as I say queue for gross margin.

Probably get a stages elevated level I would usually expect Q1's gross margin to go down for all those reasons, which puts pressure on EBITDA in the first quarter.

Okay and final question.

Great news on the B, a I'm a Harvard study here.

Big plus for you guys, but it's a three year studies. So are there opportunities would there be a.

Before this study and what are your thoughts swimming around that.

Well, let me answer that.

Well first of all for those that don't know V. A veterans in the country number about 19 million so that would make it one of the larger health plan.

In the country.

Obviously, we as we all know veterans suffer from major issues with depression anxiety substance use disorder post traumatic stress disorder, although post traumatic stress disorder and suicide suicidal ideation or some.

Related somewhat the same.

We didn't talk about it because the actual title of this study is on suicide prevention.

But I think it's fair to say that we have a very.

Nice significant relationship with the J.

I would think.

We are going to endeavour to engage them with our other programs.

It's important to know that we treat suicidal ideation today, we are a lot of environmental burrs through whether it be and as we've talked about it's exacerbated significantly this year.

Because of Covid and we are dealing a lot often with suicide successfully suicidal ideation, and we would hope to engage them certainly well before three years.

In fact, we are hopeful that if they see success in the first year.

Because I think we will make a significant impact.

That we will enter into a commercial relationship sooner rather than later in sooner rather than three years.

Great. Thank you very much.

And our next question comes from the so the airline from the benchmark company. Please go ahead.

Thanks, Good evening, everybody I just at this point I think I have one question left I guess, it's for Kurt.

And I'm thinking about your acquisition of Jojo and I know it's not.

Going to move the needle based on the commentary for 21 that much but I would like to understand uhm.

Have the integration process for it into your.

Into the Coraline that you do and then also how you may be helping them.

Build out.

At the coaching level that they have right now.

Thanks, though.

Great question so.

When we started.

Looking at life Dojo, we were really impressed with.

As parents, they have 32 digital behavior change modules.

And this overlap significantly with the needs of R on tract members.

They also have all the components in their solution with some expertise from our side to be able to put together, a leading depression and anxiety treatment at and.

And so this was the basics looking at how can we leverage these tools were very existing members and then how can we add some of our expertise into their strong platform to be able to go into a new direction is turn said going after sort of the medium to lower cost populations Gimme anxiety depression.

Which are actually much much larger.

And so as we think about the integration process.

We have brought the team over.

It's a small dedicated team.

We are looking at already building into.

Our offering both for existing on track members as well as the larger population as we're going out and renewing contracts. So is Taryn said the 17 contract was in the works before life.

<unk> acquisition as we're moving forward with.

Renewals and extensions with other health plan partners through the end of the year and the beginning of next we are adding this into the offering.

To be able to expand our reach in the amount of data that we can have in the ways that we can engage the members.

And then the second party.

Is in parallel we're starting to build out this anxiety and depression keep ability by taking pieces of the modules that they already have and adding the expertise both from our clinical team.

As well as from the coaching side as as you mentioned, so they getting a two parodies.

Interesting so.

Do you expect this will be standard cart.

The.

Care protocol that you're.

Doing currently where you where you are treating something beyond substances.

I'm not sure if it applies to substance use maybe a tones.

It does not overlap with substance use.

Today.

But it does have a whole series of tools that help with.

Things like healthy living.

Hope managing stress as well as anxiety, but in slightly different ways. Then we approach. It so part of what we're doing is bringing our expertise to be able to offer these tools.

As you ask broadly across the current membership to give them additional resources, an additional ways for our coaches to engage.

But then also again to the lower costs larger populations, who might not need as much help on the coaching side. So we can offer at a lower price point away to engage them.

And get them into the treatment that they need.

And.

Any color that you guys want to talk about as far as the M&A pipeline the.

Kind of Mushoo.

More towards the the broader population or or whatever you're you're kind of contemplating to.

Expand but.

Extreme capabilities there.

I'll I'll comment on a macro level and I'll, let her comment on a more micro level, if you'd like to.

On a more macro level.

In our in our legacy on track program.

We've always said that it was a combination of human interaction and technology, obviously the technologies two parts the delivery of of the.

The program it would be the identification algorithms.

And the the technology, we also used to enhance productivity and efficiency within the member engagements specialist care coaches.

Et cetera.

As we always said as we progressed down the acuity curve it would entail cause lower acuity lower cost it would entail a cheaper deliberate well less expensive I don't like we're using the word cheaper less expensive delivery like mobile apps et cetera.

And also gathering remote patient monitoring capability.

Is also a high priority for us as we said it feeds our AI Lake.

Enhances engagement capability.

Life Dojo is just the beginning.

Of what we want to accomplish strategically and just a part of a platform that we're putting together that I think in terms of.

It will offer all things to all people in a sense.

People always wonder well can you scale your business because you have such a human interaction component.

The short answer is yes of course I think if you go from seven 7 million to 5.12 to 35.1 to whatever this year's number ends up being until next chairs, yes, we're scaling the business and the high acuity high cost members.

That again, the minimum threshold will say is 7000 and average somewhere between 30 35000 or if you look at the moment report pre Covid 44000, but the bottom line is is it is kind of interesting because a lot of people liked comparing us to levonne ago different business, we're not in the diet.

Well, we treat patients members that have both.

Diabetes.

And also mental behavioral health issues, so in that sense, we're in the diabetes business.

What we are operating and we have a much bigger mode around our business and our long term objective is where we have very little to no competition at the high acuity segment.

We're going to through the use of increasing technology.

[noise] part companionate with the high utilizes moving down the acuity curve to include the medium to low utilizes we believe that will be able to offer a value proposition that to every employer and every health plan that.

That we've already demonstrated we're dealing with care avoided members were doing something industries, focusing on treatment seeking we're focusing on care avoiding.

Where.

It is.

We've developed a 15 16, how going to 217 year playbook and engagement no-one was as stupid as we were two practices at home, but here. We are so we have a huge motor run our business, we'll combine it with the lower acuity populations and no one will be able.

To offer the full spectrum of care, both the treatment avoided care avoided with the treatment neutral and then the treatment seeking after the whole continuum of care to all health plans and employers that are touching the high acuity members, but with our acquisition strategy.

We'll be able to.

Effectively be the lowest cost highest value provider for all populations period.

If you want to add something please do.

I'll make it quick so thanks, Bill again, the just going back to what Taryn said earlier I see the strategy is two main pieces and this is both organic as well as M&A.

We're looking to grow the portfolio interventions.

Both across populations is taryn talked about but also across <unk>.

Conditions and so obviously the the announcement today with the VA is a step in that direction, we expect to sign and start the pilot and heart failure that we've talked about in the fourth quarter.

That is tied to.

Ah renewal a contract renewal with an existing client and then as we look out in the marketplace.

And the <unk> the MMA opportunities, we're looking to also add.

Novel.

Interventions that have that combination of digital.

And human touch again to spread the population that we can address and then the second part that term talked about is being able to extend the platform that we have built with pre as well as the engagement toward embedded in our coaching system.

To the member, which life dojo as a part of but also to better integrate data analytics with the provider network as well as pairs and so that's another focus area is how do we actually look at assets that will help us move to integrate with those.

Other stakeholders the provider network and the parents as well.

[laughter] I know you mentioned that before current I think that's pretty that's the long ball right.

[laughter].

<unk>.

Well I mean, there's.

Highly underserved opportunity in the behavioral health space in particular.

And so we.

We are looking at opportunities that would move us in that direction not only to help solve those challenges for the on track program.

And my dojo, but also.

Solve those for our health plan partners specific to behavioral health as well as a biased starting place.

And by the way.

Didn't really think I closed the loop test hard to say that I was referencing levonne ago.

So everyone was trying to compare us and say that we're the next Levonne go yeah. We're.

They're much there a pool SaaS model technology platform.

We have at the high acuity higher human interaction, but I think what we will evolve as is a better levonne ago.

In in terms of as I said path Levonne goes to the world Teladoc for the World.

They were first.

First movers and they used off the shelf technology and as time goes on there is better technology available I think will emerge as a better look bongo, but focused on this behavioral health space because you can't really be in the behavioral health business without understanding engagement and you can't.

Really solved for is Nolan said, the five 7% of the population that cost 44% of the total medical spend unless you can treat and and enroll engage and modify the behavior of a care avoid in population. So that's where I think we're going we're.

Look very much less like a human interaction company and a lot more of like a technology company.

Maybe then evolving into SaaS model.

Okay, guys. Thanks for all the color and good work. Thanks.

We have no further questions at this time.

Okay, well, thank you operator and more importantly, thank you for all of our shareholders interested in investors and again. Thank you for are on track team.

For their commitment and devotion and we'll see you soon have a great night, everyone stay safe and social distance where mask. Please thank you.

Thank you ladies and gentlemen, today's conference. Thank you for participating you may now disconnect.

Q3 2020 Ontrak Inc Earnings Call

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