Q3 2021 Greenbrook TMS Inc Earnings Call

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Speaker 1: I would like to remind you that this conference call is being recorded today and is also being recorded today.

I would like to remind you that this conference call is being recorded today and is also being webcast on the company's website at Www Dot Green Brook P. M S dot com under the investors section.

Speaker 1: After the speaker's remarks, there'll be a question and answer session. Analysts and investors are reminded that any additional questions can be directed to the company at investor relations out greenbrooktmf.com.

After the Speakers' remarks, there'll be a question answer session analysts and investors are reminded if any additional questions can be directed to the company at Investor Relations Al Greenberg P. M S dotcom.

Speaker 1: This call contains forward-looking statements which reflect the current expectations or beliefs of the company based on the current available information.

This call contains forward looking statements, which reflect the current expectations or beliefs of the company beef and current available information.

Forward looking statements are subject to a number of risks and uncertainties that may cause the actual results of the company to differ materially from those discussed and before but looking sequels.

Speaker 1: Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual result of the company to differ materially from those discussed in the forward-looking...

Factors that could cause actual results or events to differ materially from current expectations are disclosed under the heading risk factors in the company's annual information form dated March 30, 2021 and in the company's MD&A for the period ended September 30, 2021 which are available.

Speaker 1: Factors that could cause actual results or events to differ materially from current expectations are disclosed under the heading risk factors in the company's annual information form dated March 30, 2021, and in the company's MD&A for the period ended September 30, 2021, which are available on CDER, EGER, and on the company's website.

On theater, Edgar and on the company's website.

Speaker 1: Any forward-looking statement speaks only as of the date on which it is made, and the company disclaims any intent or obligation to update any forward-looking statements unless required by law.

Any forward looking statement speaks only as of the date on which it is made and the company disclaims any intent or obligation to update any forward looking statements unless required by law.

Speaker 1: I would like now to turn the meeting over to Mr. Bill Leonard, President and Chief Executive Officer of Greenbrook TMS and Ernst Lobster, Chief Financial Officer. Go ahead, Mr. Leonard.

I would like now to turn the meeting over to Mr. Bill Lennie, President and Chief Executive Officer of Greenberg T N S and lobster Chief Financial Officer go ahead Mister Leonard.

Thank you Suzanne and good morning, and thank you to everyone for joining our conference call and webcast today.

Speaker 2: Thank you, Suzanne. Good morning and thank you to everyone for joining our conference call and webcast.

Speaker 2: Q3 2021 presented a challenging quarter with a more prominent seasonal factor than usual, with patients delaying treatment during the first open summer season since the onset of COVID-19.

Q3, 2021 presented a challenging quarter with a more prominent seasonal factor than usual with patients delaying treatment. During the first open summer season since the onset of COVID-19.

Speaker 2: The surge in the COVID-19 Delta variant during the summer season also created caution among patients and referring physicians, especially in late August and September .

The surge in the COVID-19 Delta Varian during the summer season also create a caution among patients and referring physicians, especially in late August and September.

Despite these challenges we saw continued growth with quarterly revenue increasing by 9% in Q3, 2021 as compared to Q3 2020 and by 15% year to date 2021 as compared to year to date 2020.

Speaker 2: Despite these challenges, we saw continued growth with quarterly revenue increasing by 9% in Q3 2021 as compared to Q3 2020 and by 15% year-to-date 2021 as compared to year-to-date 2020.

Speaker 2: We believe the exaggerated seasonal effect in adverse market conditions were experienced industry-wide and represents a temporary downturn. And we saw a strong bounce back in patient volumes in October 2021, tracking toward record volumes that we experienced last quarter.

We believe the exaggerated seasonal effect in adverse market conditions were experienced industry wide and represents a temporary downturn and we saw a strong bounce back in patient volumes in October 2021 tracking toward record volumes that we experienced last quarter.

We're excited about the rollout of our <unk> program at select Gms centers, which continued through Q3 2021 building on our long term business plan of utilizing our T. M. S centers as platforms from delivery of innovative treatments to patients suffering from major depressive disorder, OCD and other mental health disorders.

Speaker 2: We're excited about the rollout of our Spervato program at select TMS centers, which continued through Q3 2021, building on our long-term business plan of utilizing our TMS centers as platforms for delivery of innovative treatments to patients suffering from major depressive disorder, OCD, and other mental health disorders.

Speaker 2: Spravato enables us to leverage capacity in our existing platform, which effectively enhances profit margins at TMS centers where Spravato is often.

It's per bottle enables us to leverage capacity in our existing platform, which effectively enhances profit margins at Gms centers worst provider has offered.

Speaker 2: We're excited about the prospect of expanding this offering to an additional 14 TMS centers, bring our total to 23 TMS centers offerings bravado in early fiscal 2022.

We're excited about the prospect of expanding this offering to an additional 14 T. M. S centers, bringing our total to 23 P. M. S centers offerings bravado and early fiscal 2022.

Speaker 2: With this anticipated expansion, we believe our Spervato program has the potential to grow up to as much as 10% of our total revenue by the end of fiscal 2022.

With this anticipated expansion, we believe our superb auto program has the potential to grow up to as much as 10% of our total revenue by the end of fiscal 2022.

Speaker 2: During the quarter, we also completed a bought deal public offering, an offering price of $7.75 per common share for aggregate gross proceeds of approximately $13.2 million.

During the quarter. We also completed a bought deal public offering and operating price of 7.7 $5 per common share for aggregate gross proceeds of approximately $13 2 million.

Speaker 2: The proceeds were used to fund the acquisition of Achieve TMS East and Achieve TMS Central on October 1, 2021. This raise paired with forgiveness of the PPP loan also strengthens our balance sheet position.

The proceeds were used to fund the acquisition of a CIT achieved T M S East and achieve T M Central on October one 2021.

This raised paired with forgiveness of the PPP loan also strengthens our balance sheet position.

Speaker 2: From a development perspective, we expect to add a total of 25 TMS centers in 2021, bringing the total to 150 Greenbrook centers by year-end.

From a development perspective, we expect to add a total of 25 P. M. S centers in 21, bringing the total to 150 Greenberg centers by year end.

Speaker 2: We organically added two TMS centers in Q3 2021. And as I mentioned, we acquired Achieve TMS East and Central subsequent to the end of the quarter, which represented 17 additional TMS centers.

We organically added to T. M. S centers in Q3, 2021 and as I mentioned, we acquired achieve Tms East and central subsequent to the end of the quarter, which represented 17 additional T. M S centers.

Speaker 2: We are very excited about this acquisition as it strengthens our presence in New England and the central United States.

We are very excited about this acquisition as it strengthens our presence in new England and then in the Central United States. The acquisition also secures robust payor contracts brand recognition physician reputation and a strong management team within these regions.

Speaker 2: The acquisition also secures robust payer contracts, brand recognition, physician reputation, and a strong management team within these regions.

Speaker 2: We also expect the acquisition to serve as a foundation for continued growth within these regions and to realize operational synergies through leveraging our established infrastructure in adjacent regions. Our footprint now consists of 148 centers in 17 states.

We also expect the acquisition to serve as a foundation for continued growth within these regions and to realize operational synergies through leveraging our established infrastructure in adjacent region. Our footprint now consists of 148 centers in 17 states.

Speaker 2: And now for a more detailed review of the company's financial and operating performance, I will turn it over to CFO , Errs.

And now for a more detailed review of the company's financial and operating performance I will turn it over to CFO earns looser.

Speaker 3: Thank you, Bill. As Bill mentioned, quarterly revenue increased by 9% to $13.1 million as compared to Q2 2020. And year-to-date 2021 revenue increased by 15% to $38.2 million as compared to year-to-date 2020.

Thank you Bo as Bo mentioned quarterly revenue increased by 9% to $13 1 million as compared to Q2, 2020, and yesterday 2020, one revenue increased by 15% to $38 2 million as compared to year to date 2020 revenue iva decreased by 4% compared to Q2 2021 predominantly due.

Speaker 3: Revenue, however, decreased by 4% compared to Q2 2021, predominantly due to the adverse market conditions, as described by Volk.

Two the adverse market conditions as described by bolt on.

Speaker 3: Average revenue per treatment increased by 2% to 241 in Q3 2021 compared to Q3 2020 and decreased by 1% to 231 in year to date 2021 compared to year to date 2020.

Revenue per treatment increased by 2% to 241 in Q3 2021 compared to Q3 2020 and decreased by 1% to 231 and year to date 2021 compared to year to date 2020.

Speaker 3: The increase was primarily a triple drill to three key factors.

The increase was prior.

Primarily attributable to three key factors normalization of the adjustment on two variable consideration estimate will favorite Brexit bull rates negotiated in established markets, especially, Maryland, Delaware and Virginia and collections on older Cons previously adjusted for.

Speaker 3: normalization of the adjustment of two variable consideration estimate, for favorable rates negotiated in established markets, especially Maryland, Delaware, and Virginia, and collections on all the accounts previously adjusted.

Speaker 3: Same region sales growth was 9% in Q3 2021 and 15% here today 2021, as compared to 2% in Q3 2020 and 2% in here today 2020.

Same region sales growth was 9% in Q3, 2021 and 15% year to date 2021 as compared to 2% in Q3, 2021 2% and year to date unit train journey. The same region sales growth major essentially mirrors aggregate growth as a result of the slow development during the pandemic.

Speaker 3: This same region's sales growth measures essentially mirrors aggregate growth as a result of the slower development during the pandemic.

Speaker 3: Entity-wide regional operating income was 0.2 million in Q3 2021, as compared to 1 million in Q3 2020. Year-to-day 2021 resulted in an end-to-end to why the regional operating loss of 0.3 million, as compared to an end-to-wide regional operating income of 1.5 million in year-to-day 2020. This is the result of lower revenue during the pandemic, relatively existing center and regional cost structure, pointing to the past year in our platform.

Entity wide regional operating income was.

012 million in Q3, 2021 as compared to $1 million in Q3 2020, yeah today 2021 and resulted in an Intuit Gee why the regional operating loss of 0.3 million as compared to the engine wide regional operating income of one 5 million and year to date 2020.

This is the result of lower revenue during the pandemic relative to existing center and regional cost structure pointing to grow capacity in our platform.

Speaker 3: We believe we are very well positioned to utilize this capacity through our Spivado program and growth in our GMS business as market conditions normalize.

We believe we are very well positioned to utilize this capacity through ASP of auto program and growth in our Tms business as market conditions normalize.

Corporate G&A for Q3, 2021 increased 45% to $5 1 million and by 49% to $15 7 million and year to date 2021.

Speaker 3: Corporate GNA for Q3 2021 increased 45% to 5.1 million and by 49% to 15.7 million in year-to-date 2021. Predominantly due to the normalization of spending in Q3 2021 and year-to-date 2021, coupled with an increase in one time.

Predominantly due to the normalization of spending in Q3, 2021 and year to date 2021, coupled with an increase in one time costs.

Speaker 3: Corporate GNA for Q3 2020, excluding one-time costs, increased by only 33% from Q3 2020, but decreased 12% from Q2 2021, representing a stabilization spend in corporate GNA.

Corporate G&A for Q3, 2020, excluding onetime costs increased by only 33% from Q2, Q3, 2020, but decreased 12% from Q2 2021, representing a stabilization in Spain and corporate G&A.

Speaker 3: Loss for the period and comprehensive loss decreased by 55% in Q3 2021 to 3.5 million as compared to Q3 2020 and decreased by 17% to 18 million during the year today 2021 as compared to yesterday 2020.

The loss for the period and comprehensive loss decreased by 55% in Q3, 2021 to $3 5 million as compared to Q3, 2020, 2020 and decreased by 17% to $18 million during the year to date 2021 as compared to yesterday 2020.

Speaker 3: The decrease was predominantly driven by the forgiveness of the PPP loan and the lack of earn-off consideration expenses in 2021.

The decrease was predominantly driven by the forgiveness of the PPP loan and the lack of Illinois consideration expenses in 2021.

Speaker 3: From a balance sheet perspective, the accounts receivable balance remains stable, and we strengthen our balance sheets through the completion of a public offering for net proceeds of approximately 12.2 million and the forgiveness of the PPP loan. As of September 30, 2021, we had approximately 26.1 million in cash on hand.

From a balance sheet perspective, the conscious evil balance remained stable and we strengthened our balance sheet through the completion of a public offering for net proceeds of approximately $12 2 million and the forgiveness of the PPP loan as of September 30, 2021 we had approximately $26 1 million in cash on hand.

Moving to our core operating metrics.

Speaker 3: As of the end of Q3 2021, the total CMS centers increased by 5% to 131 from 125 a year ago. Keep in mind, this does not include the Achieve East and Achieve Central acquisition that added 17 CMS centers immediately after the end of 2021.

As of the end of Q3, 2021 the total Tms centers increased by 5% to 131 from $1 25, a year ago keep in mind. This does not include the cheap east and achieve central acquisition that added 17 team as centers immediately after the end of the quarter.

Speaker 3: Compared to Q3 2020, the number of concentrations was performed increased 5% to 1,520. The number of PMS treatments performed increased by 7% to 54,525. A new patient starts to increase by 3% to 1,500 and

Compared to Q3 'twenty 'twenty the number of concentrations performed increased 5% 2520, the number of Tms treatments performed increased by 7% to 54525 in new patient starts increased by 3% 2520.

Speaker 3: As Paul mentioned, market conditions were challenging during Q3 2021, which temporarily depressed some of these key metrics. But we remain optimistic as these forward-looking indicators bounce back very strongly, trending to world record level experience in Q2 2021.

As Bob mentioned market conditions were challenging during Q3, 2021 which temporarily depressed some of these key metrics, but we remain optimistic as these forward looking indicators bonds back very strongly trending toward record levels experienced in Q2.

2021.

Back to you Bill.

Speaker 2: Thanks, Ernst. As I mentioned, Q3 2021 presented specific challenges early in the quarter with patients delaying treatment during their first open summer season since the onset of COVID-19 and a surge in the Delta variant late summer. Despite these challenges, we saw continued growth in both our consolidated revenue and patient treatment.

Thanks Ernst.

Mentioned Q3, 2021 presented specific challenges early in the quarter with patients delaying treatment during their first opened the summer season since the onset of COVID-19, and a surge in the Delta very late summer. Despite these challenges we saw continued growth in both our consolidated revenue and patient treatments.

Speaker 2: We are very pleased with the results of the Spervato program, and I look forward to expanding this offering.

We're very pleased with the results of this bravado program and I look forward to expanding this offering we.

Speaker 2: We believe we can enhance profit margin by optimizing the utilization of our current TMS centers. This move also builds on our long-term strategy of utilizing our growing network of TMS centers and affiliate physician as a services platform to deliver innovative treatments to patients suffering from mental health disorders.

We believe we can enhance profit margin by optimizing the utilization of our current Tms centers. This move also builds on our long term strategy of utilizing our growing network of Tms centers and affiliated physician as a services platform to deliver innovative treatments to patients suffering from mental health disorders.

Speaker 2: At this time, we continue to collaborate with device manufacturers to expand the range of indications for TMS.

At this time, we continue to collaborate with device manufacturers to expand the range of indications for Tms.

Speaker 2: Most importantly, mental health remains a key focus in the US, with the unmet need for treatment at an all-time high. Our business fundamentals remain sound, and we are positioned better than ever to serve the need for the mental health support across the country.

Most importantly, mental health remains a key focus in the U S with the unmet need for treatment at an all time high our business fundamentals remain sound and we are positioned better than average or serve a need for a mental health support across the country.

Speaker 2: We have now treated over 20,000 patients with over 730,000 treatments performed, a significant positive impact on the lives of so many patients suffering from mental health disorder.

We have now treated over 20000 patients with over 730000 treatments performed a significant positive impact on the lives of so many patients suffering from mental health disorders.

Speaker 2: We look forward to keeping you updated on the progress of the company. Take your time today and operator will now take questions.

We look forward to keeping you updated on the progress of the company. Thank you for your time today and operator, we will now take questions.

Speaker 1: As a reminder, to ask a question, please press star 1. It's also on the keypad. And to withdraw your question, please press the pound sign.

As a reminder to ask a question. Please press star one and telephone keypad and you enjoy a question. Please press the pound key.

Speaker 1: Our first question comes from the line of Frank Tackenen from Lake Street Capital.

Our first question comes from the line of Frank Pacman from Lake Street capital.

Bill earns thanks for taking my questions. A couple for me today I wanted to start on the October commentary you provided of getting back to record volumes you experienced last quarter.

Speaker 4: Bill Ernst, thanks for taking my questions. A couple from me today. I wanted to start on the October commentary you provided of getting back to record volumes you experienced last quarter. How should we extrapolate this commentary plus the Achieve acquisition into expectations around Q4 revenue?

Should we extrapolate this commentary plus the achieve acquisition into.

Expectations around Q4 revenue.

Speaker 3: So in terms of forward-looking indicators, we saw a significant bounce back in October , kind of back to Q2 21 levels. That was inpatient starts. Obviously, treatments take some time to follow, so we expect a pretty strong November and December .

So in terms of forward looking indicators, we saw a significant bonds back in October back to Q2, 'twenty, one levels and that wasn't patients thoughts obviously treatments take some time to follow so we expect a pretty strong November and December.

Speaker 3: and as I said it tracked towards Q2 2021 level. So we're pretty bullish about Q4 and then we obviously layer on some additional treatments format to ups taken and tend to track towards Q2 2021 level.

As al said it track towards the Q2 2021 level. So we were pretty bullish about Q4, and then we obviously you layer on some some additional treatments on the G. P M S eastern and central.

Got it that's helpful and I wanted to take a little bit deeper dive and provide oh can you walk us through what exactly the model looks like here, how we should we expect this to impact margins and then just lastly on that 5% to 10% contribution by year end, how what is the six baking in.

Speaker 4: Got it, that's helpful. And I wanted to take a little bit deeper dive on Spravato. Can you walk us through what exactly the model looks like here? How should we expect this to impact margins? And then just lastly on that, five to 10% contribution by year end, what is this baking in as it relates to per site mix between your traditional PMS offering versus Spravato?

As it relates to.

Per site mix between your traditional Tms offering versus <unk>.

Speaker 3: I'll take the two questions there and I'll take the first one first. From a margin profile perspective, as we mentioned before, the variable margin on PMS and Spervado is very similar. So you essentially layer on Spervado and leverage your semi-variable and fix costs.

Yeah. So I'll take the last two questions there and I'll take the first one person from a margin profile perspective, as we mentioned before before kind of the variable margin on on Tms and Nevada is very similar so you essentially layer ons, bravado and beverage or semi variable and fixed costs.

Speaker 3: in a center, effectively enhancing that margin. So we're very excited to layer that on. And as we said, that can represent up to 5% to 10% of our business by year end. And also points to a nice lift in margin to trend towards profitability. So that's really where we, again, you have a variable margin that's very similar to TMS, which essentially drops straight to the bottom line as you utilize your technicians, your real estate, and your existing infrastructure.

In a in a center effectively enhancing that margin. So we're very excited you to layer that on and as we said that that can represent up to 5% to 10% of our business by year end.

And also points to a nice lift in margin to trend towards profitability. So that's really where we began to you you have a substitute you have the variable margin, that's very similar to Gms, which essentially dropped straight to the bottom line as you utilize your technicians your real estate and.

In your existing infrastructure. So that's.

Speaker 3: So that's part one.

Part one.

Frankly, we could just repeat the second part of the question in terms of the 10% yeah.

Speaker 3: Frank, we can just repeat the second part of the question in terms of the 10%.

Speaker 4: Yeah, so if you think about 5% to 10% by year end for those 23 sites offering spravado, what does the mix look like between spravado and traditional team-up?

Yeah. So if you think about 10, 5% to 10% by year end for those 23 sites offerings provide oh, what does the mix look like between <unk> and traditional Tms.

So that's going to that's going to vary there's obviously, they they're not all going to be in place in and immediately on an and.

Speaker 3: So that's gonna vary. There's obviously, they're not all gonna be in place and immediately on in...

And in January. So you you have centers that operate as kind of a 50 50 mix.

Speaker 3: January . So you have centers that operate kind of a 50-50 mix down in St. Louis at the moment. I think the high end will be kind of a 50-50 split. And then obviously, as we ramp the ones through the year, they'll be kind of less a split for those. But a 50-50 split is where we're at in kind of some of our highest providers tend to.

Donaldson Louis at the moment.

I think that the high high end will be kind of a 50 50 split and then obviously as we as we ramp.

The ones through the yeah, there'll be kind of less the split for those but a 50 50 split.

His way, we at and kind of some of all highest promoter centers at the moment.

Speaker 2: Yeah, Frank, let me just add to that. Let me just add to that in terms of what Spervato actually does to us as a company.

Yeah, Frank let me just add to that and let me just add to that in terms of what's provider actually does to us as a company.

Speaker 2: One is the fact that it really allows us to capture a wider range of patients suffering from depression. Patients that may not qualify for TMS or are too far down to depression scale. So for us, we're seeing what I would now say our pilot removing it's an actual offering outspirado is in a pilot, probably 30% of those patients were patients who initially had treatment for TMS therapy, fell out of remission and they really were great candidate for spirado. So we're seeing a very complimentary relationship between TMS and spirado. Spirado getting patients to baseline to move over to TMS and then vice versa. So we're pretty excited. We're pretty excited about the opportunity to expand on that platform and just be able to provide a treatment that is customized especially for that particular patient suffering from depression.

One is the fact that.

It really allows us to capture a wider range of patients suffering from depression patients that may not qualify for Tms or are too far down to depression scale. So for us we're seeing what I would now say our pilot and we're moving into an actual offering house bravado isn't a pilot.

30% of those patients were patients who initially had treatment for Tms therapy fell at a remission and they really you know we're.

We're a great candidate for robotics, so we're seeing that very complementary relationship between <unk> and <unk>.

Rabato getting patients the baseline to move them over to Tms in and vice versa. So we're pretty excited.

We're pretty excited about the opportunity to expand on that platform and just be able to provide a treatment that is customized and especially for that particular patient suffering from depression.

Speaker 4: Got it. That's really helpful. And then just last one from me. You alluded to it, Bill, a little bit, but maybe talk to some of the rough sketches you've gone through as far as the new center opportunity on a greenfield basis around the 17 newly acquired clinics with the Achieve acquisition.

Got it that's really helpful. And then just last one for me.

Alluded to it bill a little bit, but maybe talk to some.

Some of the rough sketches, you've gone through as far as the center New center opportunity on a greenfield basis around the 17 newly acquired clinics with the achieve acquisition.

Speaker 2: Sure, I mean, if you look at the achieved business, first let's deal with the East, the East was a little bit more established from a kind of provider standpoint, you know, in getting in there and starting to dig in with the management team up there, there are some unique opportunities to continue to expand on that platform, probably closer to the actual city of Boston. And then if you shift over to TMS Central, TMS Central is really a brand new kind of footprint for us and for them. There was three centers in play in the kind of Midwest, the Iowa marketplace. We will have opportunities to expand not only within the Iowa, but start to drift closer to kind of some unmet needs in the South Dakota area. So one is a little bit more established. It has some unique plugins that are kind of needed and would be a great opportunity. And the other one is really a platform to, is a new region.

Sure I mean, if you look at the achieved business first let's deal with the east the east was a little bit more establish from a a kind of provider standpoint.

And getting in there and starting to dig in with the management team up there. There are some unique opportunity to continue to expand on our platform are probably closer to the actual city of Boston.

And then if you shift over to Tms Central Tim a central was really a brand new are kind of off of a footprint for us and for them. There was a three centers in play in the kind of.

Midwest, the Iowa marketplace, we will have opportunities to expand not only what the Iowa, but start to drift closer to kind of some unmet needs in the South Dakota area. So all one is a little bit more established that has some unique plug ins that are kind of needed and will be a great opportunity and the other one is really a platform that is a new region.

Got it I'll stop there congrats on all the progress in the quarter. Thanks, Great to have you on the call.

Speaker 4: Got it. I'll stop there. Congrats on all the progress in the quarter. Thanks. Great to have you on the call.

Our next question comes from the line of Jean Li from D. Jordan.

Speaker 1: Our next question comes from the line up, Cheeg Lee from The Jards.

Hi, good morning.

Speaker 5: Hi, good morning, Bjornun. My first question will be from, so you're targeting.

My first question will be from.

So you're targeting 150 by the end of.

Speaker 5: by the end of 2021, which would imply a bit of part on the center development as your digesting achieved East-Write. And at a high level, are you rescinding your organic center development strategy, given that profitability is more elusive or deferred as your open

<unk> 'twenty, 'twenty, one, which would imply a bit of a pause on the Senate development.

Adjusting achieved easily and at a high level are you rethinking the organic development strategy given the profitability is more elusive or deferred.

Have you opened organic F&D.

Speaker 2: Yeah, I think it's, you know, from our standpoint, as we talked about on our prior call, in some case we really substituted a more mature marketplace.

Yeah, I think it's a you know from our standpoint, as we talked about on our prior call in some case, we really substituted a more mature marketplace, especially during this time of COVID-19 versus a kind of greenfield organic growth, but at the end of the day, we're still going to grow roughly 20% from prior year with 25, new centers that are added.

Speaker 2: especially during the time of COVID versus kind of Greenfield organic growth. But at the end of the day, we're still gonna grow roughly 20% from prior year with 25 new centers added.

Speaker 2: When we look at growth next year, it really is two things. One from a new center number for TMS centers, we're in the middle of our annual planning session with our team and we don't expect to finalize that budget for 2022 in the near future. It's a little early for me to comment on new centers for next year.

When we look at growth next year. It really is two things one from a new center number for Tms centers, where you know we're in the middle of our annual planning session with our team and we don't expect to finalize our budget for 2022.

In the near future. So its a little early for me to comment on new centers for next year, but from a gross standpoint overall, we have done a great job of growing the Tms footprint. You know, we put ourself in a position to continue to grow and build upon our MAU platform to meet the needs of an underserved marketplace that became even greater due to the pandemic. So for US a key initiative for us.

Speaker 2: but from a gross standpoint overall, we have done a great job of growing the TMS footprint. You know, we've put ourselves in position to continue to grow and build upon a mental health platform to meet the needs of an underserved marketplace that became even greater due to the pandemic.

Speaker 2: So for us, a key initiative for our team is not only to continue to grow our footprint, but leverage our footprint and increase utilization at the center level through TMS and now with Spervato. So we're extremely excited about the opportunity to expand Spervato into more centers, building on our alarm tone plan. It's not that we're pausing development. We just focused on more of an acquisition, more mature market versus pausing completely from an organic standpoint.

Our team is not only to continue to grow our footprint, but leverage our footprint and can increase utilization at the center level through Tms analysis barbell. So we're extremely excited about the opportunity expand purpose provider and the more centers building on our alarm tone plan.

So it's it's a it's a it's not that we're pausing development. We are we just focused on more of an acquisition more mature market versus partnering completely from an organic standpoint.

Thank you and just a follow up on that so.

Speaker 5: Thank you. And just to follow up on that, so I feel focusing on driving more to l

As you are focusing on driving modulate Jason.

Our Savannah and acquiring more profitable network.

Speaker 5: Do you feel more confident on the path to profitability and perhaps can you provide a road map to profit?

Feel more confident on our path to profitability and perhaps could you provide a roadmap to our profitability.

Yeah, I think with the continued rollout of <unk>, we have the ability to capture a wider range of patients provide a treatment that best fits the patient needs and we believe this robotic offering will enhance.

Speaker 2: yeah i think with the continued rollout of spravado we have the ability to capture wider range of patients provide a treatment that best fits the patient needs and we believe the spravado offering will enhance the margin by optimizing utilization of the current center so it is for us uh... uh... a path towards profitability

By optimizing utilization of the current centers. So it is for us.

Our path towards profitability.

Thank you and the last one for me so on the.

Speaker 5: Thank you. And the last one for me, so on the revenue per treatment side, given a GPMF East and Central is operating in more established regions with favorable reimbursement, how can we think about this?

The revenue per treatment side.

Given a TTM is essential is established.

Operating in more established regions with favorable reimbursement and how should we think about that.

The linked quarters.

Speaker 3: So good question. There's three things I've played there. We have some wounds kind of mid-year with some of the bigger players in established regions which up reimbursement. You see that in kind of a 241 versus the 231 here to date.

So good question.

There's three things at play there.

Had some ones kind of mid midyear on what some of the bigger payers in established regions, which reimbursement and you see that in in and kind of a 241 versus the 231 year to date.

Speaker 3: We've got a normalization in collection so adjustment for variable consideration has normalized which also helps because we threw the whole recredentialing and conversion process. And then there's as you mentioned in terms of the mix of business we acquired TMS Achieve Central and especially on the east side that has a higher average reimbursement than what we're operating at. So you'll see as that becomes a bigger mix of our business.

We've got a normalization in collections, so adjustments for full variable consideration.

<unk> has normalized normalized which which also a help so because we are through the whole recruit venturing into the conversion process and then there's as you mentioned in terms of the mix of business, we acquired Tms achieved central in the space, especially on the east side that has a higher average reimbursement than what the operating at so you'll.

You'll see as that becomes a bigger mix of our business.

Speaker 3: And as we explained the California market, you should see a slight upward trend in kind of average reimbursement. I mean, I'm cautiously optimistic about that. That always depends on the mix of business. But we see a positive trend in the market.

And as we explained the California market, you should see a slight upward trend in kind of average reimbursement I mean.

I'm cautiously optimistic about that that always depends on the mix of business.

But we see a positive trend in that.

Thank you.

Our next question comes from the line of Noel Atkinson from Clarus Securities.

Speaker 1: Our next question comes from the line of Noel Atkinson from Claro Security.

Good morning, Bill and earn so lots of progress since the last quarter. So well done on that just quickly for me so on.

Speaker 6: Good morning Bill and Ernst. Lots of progress since the last quarter. So well done on that. Just a quick few from me. So.

In terms of the activity in October you mentioned patient volumes, we're back up near record levels, how about patient starts or is that also following through.

Speaker 6: patient volumes were back up near record levels, how about patient starts? Is that also following through?

So sorry.

Go ahead sorry.

Speaker 2: Alright, so yeah, I think what you're seeing is, as I alluded to earlier, is we had nice month of solid bookings for October , and those patients are kind of starting to, and as we talked about, you have the patient start, and then that...

So yeah, I think what you're seeing as far as earned alluded to earlier is we had nice a month of solid bookings for October and those patients are kind of starting to and as we talked about you have the patients start and then that kind of a six week process. So youll see those treatments in play for both November and into December.

And we continue on a strong bookings, but the good news is the fact that the patient is kind of returning to normalcy in the sense that they're taking care of their depression needs are taken care of the mental health needs.

Speaker 2: care of their mental health needs and they're settling into a schedule that's we're happy to see the work we've done. And like you said, we were a little bit disappointed in what happened in the summer in terms of patient volume, but we were pretty thrilled with the fact that during that quarter we also strengthened the balance sheet with the financing and put a great acquisition in play and really built our platform for a strong end of the year and also into 2022. In terms of the expansion of Sperbata delivery to the 23 locations, how are you choosing these locations? How far would you take them if they couldn't will come in for these other employers?

And they're settling to a schedule that we're happy to see the work we've done.

And like you said, we were you know a little bit disappointed in what happened in the summer in terms of patient volume, but we were pretty thrilled with the fact that during that quarter. We also strengthened our balance sheet with the with the financing and put a great acquisition in play in and really built our platform for a stronger and.

For the year and also into 2022.

Okay.

Speaker 6: In terms of the expansion of Spervada delivery to the 23 locations,

In terms of the expansion of Superbad into delivery.

The 23 locations how are you.

These.

Sorry, how are you choosing these locations.

Yeah.

Speaker 2: you know that that twenty three we talk about was really the center that had the shortest timeline to ramp up due to physician coverage and footprint but i would tell you that uh... throughout twenty twenty two and beyond we will continue with the pieces in place for additional expansion but that that first uh... twenty three we uh... announced what were really kind of the shortest uh... timeline and ramp to kind of get up and running

You know that 'twenty three we talked about was really the centers that have the shortest timeline to ramp up due to physician coverage and footprint, but I would tell you that.

Throughout 2022 and beyond we will continue to put the pieces in place for additional expansion, but that first 23, we announced will really kind of the shortest timeline and ramp to kind of get up and running okay.

Speaker 2: Okay, so it's possibly- Especially with physician coverage.

Especially with.

You must have is especially with physician coverage okay.

Speaker 6: So that in theory you could be well beyond 23 clinics by the...

Okay.

In theory, you could be well beyond 'twenty three clinics by the end of 'twenty two.

Speaker 2: We will continue to work towards expanding the offering.

We will continue to work towards expanding the our expanding the offering okay.

Speaker 6: And then in terms of reimbursement and billing, are you doing any buying bill yet? And is that something that you would be looking at for 22? And if so.

Then in terms of.

Reimbursement and billing.

Are you doing any buy and bill yet and is that something that you would be looking at for 'twenty, two and if so what does that do for revenue and margin profile.

Speaker 2: You know, I think urge will weigh in on this a little bit, but I'll start in terms of what we're seeing from the billing side right now. We're pretty comfortable in offering it in the administer and observed methodology in terms of not taking on the cost of the drug at this time. There is a little bit of margin difference on the buy and bill. You're probably gonna see a little bit higher revenue, but you're also gonna see a higher cost structure. And for some cases, I think what we'll do know is, we may have a specific market where you have to be in a buy and bill situation to acquire kind of type of...

You know I think urge will weigh in on this a little bit but I'll start.

In terms of what we're seeing from a billing side right now, we're pretty comfortable and offering it in the administer and observe methodology in terms of not taking on the cost of the drug at this time, there is a little bit of margin difference on the buy and bill you're probably going to see a little bit higher revenue, but you're also going to see a higher cost structure and for in some cases I think what we will do no.

As we may have a specific market, where you have to be in a buy and bill situation too.

Acquire type patients with for example in St. Louis, but I don't know if its something were going to demand we rollout throughout all centers in 2022.

Speaker 2: patients with, for example, in St. Louis, but I don't know if it's something we're gonna...

Speaker 2: demand we roll out throughout all centers in 2022.

Or has anything to add.

No I think that captures capture it adds contribution it's a it's obviously you buy the.

Speaker 3: No, I think that capture is capture is it adds contribution. It's obviously you buy the essentially buy the drug wholesale and get green burst for it. It's a thin margin but an absolute contribution from a revenue standpoint increases.

And she buys a drug wholesaling and get reimbursed for it it's a thinner margin, but in absolute contribution from a revenue standpoint.

Increases, but as Bill said the focus is on administering an observed now.

Speaker 3: But as both said, the focus is on administer and observe now. But in certain markets, you obviously, you have to follow the biennball and there's an opportunity to capture a wider range of patients with specific insurance that require that. Okay, great.

But in certain markets. You you obviously you have to follow the buy and bill and there's an opportunity to capture a wider range of patients with specific insurance.

That require that.

Okay, great. Thanks, very much I appreciate it.

Questions.

Speaker 1: Our next question comes from the line of David Martin from Bloom, Britain.

Our next question comes from the line of David Martin from Bloom Burton.

Good morning.

Speaker 7: I will go to the next question. The first question goes back to one of your earlier questions. When you say 5050 at the high-end TMS, is that on the basis of revenues or the number of treatments in that clinic or the number of patients that are.

First question goes back to one of your earlier question. When you say 50 50 at the high end Tms bravado is that.

On the basis of revenues or the number of treatments in the clinic or the number of patients that are treated.

Speaker 3: I'm purely on the revenue basis and to reiterate that is kind of on the high end center. We don't expect in terms of all 23 centers going to be 50-50. There's specific locations that have a greater opportunity and that's on a revenue basis.

Purely on the revenue basis and to reiterate that as kind of on the high end Center. We don't expect in terms of all 23 incentives going to be 50 50 on the specific locations that that is a greater opportunity.

And that's on a revenue revenue basis.

So David.

Yeah.

Speaker 2: Just to add to that, David, you can treat many more TMS patients than you can do Spivato. So you have a two-hour observation period with Spivato, so your utilization capacity is based on the number of chairs you have in your center and the number of patients you see. So you're always going to have the ability to treat more TMS patients from a more patient number volume stamp.

Just to add to that David.

You can treat many more Tms patients then you can do is provide out. So you know you have a you have a two hour observation period was bravado. So your utilization and capacity is based on the number of shares you have in your center and number of patients you see so you're always going to have the ability to treat more <unk> patients from a pure it'd be more a T M.

Patients from a more patient number volume standpoint.

Okay.

Speaker 7: What are the factors driving the choice of the patient to either TMS or SPRIVAC?

What are the factors driving the choice of a patient to either T. A masters for vital.

Speaker 2: Good question. I think one of it, as I talked about earlier, is you have patients who were initially involved in TMS therapy, had a good result, might have fell out of remission, and wanted to choose Spravado. We also have a culture in the US that kind of likes immediate gratification. So some patients just really want a chance in our need of having a quicker onset of action. And I think from a Spravado standpoint, you do get the quicker onset of action. And from a durability standpoint, I really like the outcomes of TMS therapies. So I think you're getting the best of both worlds. Again, as I said, very complimentary of one another. And the patient has fit well in our centers. Our staff has been able to handle both Spravado and TMS.

Yeah. Good question I think one of it is I talked about earlier is you have patients who were initially involved in Tms therapy had a good result, might've fell out of our out of remission and wanted to choose to provide out we have they also have a culture and in the U S that kind of likes immediate gratification. So some patients.

I'm, just really want a chance and our.

Need of having a quicker onset of action and I think from a provider standpoint, you do get a quicker onset of action.

Well from a durability standpoint, I really like the the outcomes of Tms therapy. So I think you're getting the best of both worlds again as I said very complementary of one another and the patient has fit well in our centers. Our staff has been able to handle both bravado and Tms and we will continue to look to grow both sides of that business.

Speaker 2: and we will continue to look to grow both sides of that business.

Speaker 7: Okay, and my last question, I'll jump back in the queue. We were, and I think you were expecting a surge of patients who were depressed because of COVID. And, you know, obviously they have to work through their first or second lines of therapy. Are you seeing signs that the surge is coming your way? Or is this maybe we shouldn't be anticipating as much as we were?

Okay and my last question I'll jump back in the queue.

We were.

Thank you were expecting a surge.

Ah patients who were depressed because of COVID-19.

Obviously, they have to work through their first or second lines of therapy are you seeing signs that the surge is coming your way.

Or is this maybe we shouldn't be anticipating as much as we were.

Speaker 2: Yeah, I think from a macro standpoint, the entire mental health marketplace has gotten bigger. I think the reality is it's kind of how the domino effect, I definitely think we'll continue to see additional patients in the pipeline.

Yeah, I mean, I think from a macro standpoint are the entire the entire a mental health marketplace has gotten bigger I think the reality is it's kind of how the Domino effect I definitely think we will continue to see additional patients in the pipeline, but the reality is you have a lot of doctors, who are not seeing patients as much summit pulled back because.

Speaker 2: But the reality is you have a lot of doctors who are not seeing patients as much, so I'm gonna pull back because of COVID. So patients are having a harder time getting in to see their doctor to discuss their mental health disorders. And so you're delayed in terms of starting that med trial and you've got to fail few. So for us, from a macro standpoint, we love the fact that the pipeline's still there, they're still extremely underserved marketplace.

[noise] of Covid, so patients are having a harder time getting in to see their their doctor to discuss their mental health disorders, and so you you're delayed in terms of starting that med med trial and you've got a fell few so from us from a macro standpoint.

We love the fact that.

The pipeline is still there are still extremely underserved marketplace. We expect patients to eventually come in for Fort services, what's bravado or Tms because they felt.

Speaker 2: We expect patients to eventually come in for services with Spivada or TMS because they felt infected.

You know drug therapy, 50% of the time. So we just we don't think it has gone away. It's still there it's still a huge market and we're in great position to kind of take advantage of that opportunity.

Speaker 2: drug therapy 50% of the time. So we don't think it's gone away. It's still there. It's still a huge market and we're in great position to kind of take advantage of that opportunity.

Okay. Thank you.

Our next question comes from the line of Tania Gonsalves from Canaccord Genuity.

Speaker 1: Our next question comes from the line of Tongue Glen Salves from Canacor Genuity.

Good morning, and thanks for taking my question.

Speaker 5: First off, I'm wondering if you can tell us how many new both regional and corporate personnel you onboarded as part of the NIH

So I'm wondering if you can tell us how many more.

Regional and corporate personnel, you onboard hardesty achieve east Central acquisition.

Speaker 3: Is the question, what's the increase in corporate GNA as a result from Achieve Eastern Central?

So from a I'm sorry is the question, what's the increase in corporate G&A as good results from achieve eastern central.

Speaker 8: that I have found a question. That's right. I already can number of people that you brought on.

Did I understand that correctly or just the number of people that you brought on board from there.

Speaker 3: From a corporate perspective, very little, it, you can think of the achieved East and Central as an additional regional. So we brought regional, certainly regional personnel and a strong regional management team and technicians on, but from a corporate perspective, we can really leverage our platform to service that. So kind of back office compliance, finance, everything, we can, we can service from our established corporate platform. Okay.

From a corporate from a corporate perspective, a very liberal.

You can think of the GBS and centralize and additional region. So we brought on regional certainly regional personnel and a strong regional management team and technicians on but from a corporate corporate perspective, we can really leverage our platform to service that so kind of back office compliance.

Finance everything we can we can service from us ablation.

Corporate platform.

Okay excellent.

On a blended basis with achieved.

Speaker 8: Can you tell us where company-wide utilization is today in terms of not...

Can you talk to where company wide utilization is today in terms of snacks volume per center.

So I mean, we we always are talking about a 70% US was as you saw we dropped from $13 71.

Speaker 3: So I mean, we always at, sorry, about 70% this was, as you saw, we dropped from 13.7 to 13.1. So utilization is probably hovering a little below that 70%.

One so utilization is probably a hovering a little low below that 70%.

<unk>.

Our margin so that's really the opportunity on the platform as market conditions normalize.

Speaker 3: So that's really the opportunity of the platform. As market conditions normalized, there were specific constraints in this quarter. So not only on the TMS business, as market conditions normalized, we will utilize that capacity in the business without increasing the capacity.

There was specific constraints in this quarter, so not only on the Tms business, we as market conditions normalize we will utilize that capacity in the business without increasing costs.

Speaker 3: And then we also layer on Spravado, which is an opportunity to increase ed utilization. Okay, excellent, thanks very much.

And then we also layer on <unk>, which is a which is an opportunity to increase that utilization.

Thanks.

Just lastly for me can you provide an update on how you expect that.

Speaker 8: reversal of the Q4 provision you took to track over the coming quarter. So I think you've taken the adjustment to variable consideration in the past couple quarters. How exactly are you going to continue on over the next two to three quarter?

Reversal of the Q4 information you tend to track over the coming quarters, though I eat Sydney adjustment to variable consideration in the past couple of quarters how is that.

Continue on over the next two to three quarters.

So as you see them as you'd see in kind of as a percentage of revenue that that's decreased steadily we there they will continue to be on that.

Speaker 3: So as you see, as you've seen kind of as a percentage of revenue that's decreased steadily, we, they will continue to be adjustments for variable consteration into Q4. But we kind of was stabilized at a level with a target of ultimately getting to about 3% of, as you can call it, gross revenue or kind of allowable. So 3% to target ultimately, and we're trending towards that. Okay. Next screen update- accordingly-

Adjustments to variable concentration into Q4.

But we kind of stabilize at that level with a target of ultimately getting to.

About 3% of all that you can call. It gross revenue all kind of allowable so the 3% target ultimately.

And we're trending towards that.

Okay, well I think before we had talked about.

Inc.

Speaker 8: There was many reversal it being complete by the first half of 2022. So that's it's just it's going to be completed earlier.

There wasn't any first of all it being complete by the first half.

2022.

It's going to be completed earlier than expected.

Yeah. So I mean, the reversal as you see in our average revenue per treatment is.

Speaker 3: Yeah, so I mean the reversal as you see in our average revenue per treatment has gone pretty well. I mean, like I said, there will be continued adjustments to variable consideration, but that should stabilize into 2022.

It has gone pretty pretty well I mean like I said, they will be continue continued adjustments variable concentration, but that that should stabilize into interchange Angie.

Okay. Okay. That's all for me thank you.

Thanks.

Our next question comes from the line of Justin <unk> with Stifel GMP.

Speaker 1: Our next question comes from the line of Justin Key with Ren staple GMT.

Hi, good morning, Thanks for taking my call.

Speaker 9: i was just uh... hoping to dive in on this provato a bit more are you able to describe the competitive landscape first provato like are there other uh... pure place provato clinics out there that you be potentially competing against or is this uh... you know more uh... offered as part of uh...

I was just hoping to dive in on this provide a bit more are you able to describe the competitive landscape for <unk> like are there other pure plays provider clinics out there that you would be potentially a competing against or is this a.

You know more offered as part of a.

Speaker 9: more broadly integrated health services types of uh... organizations out there and then also just on the the expansion if they're it are these uh... your critics are just provides product spravata with the beat some opportunity to acquire them

More broadly integrated health services types of organizations out there and then also just on the the expansion. If there is are these are you know clinics that just provides brought up bravado would there be some opportunity to acquire them.

A good question Justin Great to hear from you I'll take this one.

Speaker 2: Good question Justin great to hear from you. I'll take this one

Speaker 2: let's stop the top level, obviously with a TMS market of...

Let's stop the top level, obviously with the Tms market.

Speaker 2: you know twenty six twenty seven hundred devices install were pretty used to be in a competitive environment uh... with revata were not seen any specific

'twenty six 'twenty 700 devices installed we're pretty used to being in a competitive environment.

<unk>, we're not seeing any specific.

Speaker 2: Spirado only types centers. What you see with Spirado is individual practitioners who offer this within their office.

Spur Bartow only type centers, where do you see with supermodel as individual practitioners who offer this within our office space as we talked about before just like with Tms therapy. We think we have a distinct advantage in our kind of how we that patient experience and know how quickly we get back the patients where unlike under our mental health providers.

And that's what makes Greenberg special so we.

We know, it's a competitive environment, but I think our early pilot prove that we're able to attract patients and keep in mind I think it's important to note on the call that this initial pilot. We did was bravado did not layer on any direct consumer marketing or any of our sales team in the field educating doctors. So we have yet to turn on the faucet.

Speaker 2: on the call that this initial pilot we did with Spervato did not layer on any direct consumer marketing or any of our cell team in the field educating doctors. So we have yet to turn on the faucet with it. It's a great opportunity for us to begin to kind of provide branding greenbrook with both Spervato and TMS therapy. So we have considerable upside in kind of tracking patients. But it's going to be a competitive landscape, but we are comfortable in our delivery care model as it exists today and we've shown we've proven in the past with TMS therapy that is also extremely competitive. Why is that

It's a great opportunity for us to begin to kind of provide.

Branding Green broke with both <unk> and Tms therapy, so where we have considerable upside in kind of attracting patients, but it's going to be competitive landscape, but we are comfortable in our delivery care model as it exists today and we've shown we've proven in the past with Tms therapy that is also extremely competitive.

Speaker 2: branding green broke with both provato and tms therapy so we're we have considerable upside in kind of tracking patients but uh... it's gonna be a competitive landscape but we are comfortable in our delivery care model as exist today and we've uh... shown we've proven in a pass with ms therapy that is also extremely competitive

Got it that's helpful and then as far as the stuff that administers providers is there an additional type of training that's needed could it be accomplished with the same practitioners that you have offering a tms therapy.

Speaker 9: got it that's helpful and then as far as the staff that administers provoto is there an additional type of training that's needed could it be accomplished with the same practitioners that you have offering a TMS therapy?

Speaker 2: Yeah, there is a training and Janssen does a great job with that, but it's no additional staff in terms of that's the beauty of the layering on the verbato to our current footprint of t of grieber centers. Today we have great doctors, great technicians who deliver a wonderful patient experience. That's the same staff we're using. So just like they had to learn how to do TMS therapy, there's a training for verbato that our staff has done a great job of getting comfortable verbato and layering that on. So again, it's an opportunity for us to capture a wider range of patients and continue to utilize the center with the current staff and doctors even more to drive towards profitability.

Yes, there is a training and Jansen does a great job with that but it's no additional staff in terms of that's the beauty of the layering on rabato to our.

Current footprint of T. A greenberg centers today, we havent paid doctors.

Great technicians, who deliver a wonderful patient experience. That's the same staff. We're using so just like they had to learn how to do Tms therapy. There's a training first for motto that our and our staff has done a great job of.

Getting comfortable as Roberto and layering that on so.

Again, it's an opportunity for us to capture a wider range of patients and continue to utilize the center with our current staff and doctors, even more to drive towards profitability.

Okay and then just finally on the 148 T. M. S centers with all of these be potentials provider locations do they all lend themselves to the criteria that you're looking for or where there are only be a percentage of those centers in our network.

Speaker 9: okay and then just finally on the hundred and forty eight tms centers would all these uh... be potential spravado locations do they all lend themselves uh... to the criteria that you're looking for or where there only be uh... percentage of those uh... centers in the network

Speaker 2: Yeah, I think that's, you know, in theory, they can all eventually be spervatos centers, but, you know, obviously you have to layer in the physician coverage and the footprint. And as I talked about on prior calls, I don't know if I need two spervatos centers 15 minutes apart from one another, but they are an opportunity. And we do expect to begin to put the key pieces in place to go beyond 23. For now, we're focused on getting that 23 up and running as early as possible in 2022.

Yeah, I think that's a.

And in theory, they can all eventually be bravado centers, but obviously you have to layer in the physician coverage and the footprint and as I talked about on prior calls I don't know if I need Touse bravado centers 15 minutes apart from one another but they are an opportunity and we do expect to begin to put the.

Key pieces in place to go beyond 'twenty three for now we're focused on getting that 23 up and running as early as possible in our 2022.

That's helpful. Thank you for taking my questions.

Speaker 9: That's helpful. Thank you for taking my questions.

Thanks, Jeff.

Our next question comes from the line of me well hear next from Bank equity.

Speaker 1: Our next question comes from the line of NEP, the hearing aid from ThinkEquit.

Speaker 10: hi bill congratulations on the quarter question may have been touched a little bit earlier but uh... in regards to your growth are continuing to expand your clinic footprint obviously the rack position but what is the plan for organic growth within the current clinics you operate uh... maybe besides the sparrata roll out

Hi, Bill congratulations on the quarter and this question may have been touched a little bit earlier, but in regards to your growth you are continuing to expand your clinic footprint, obviously through acquisition.

But what is the plan for organic growth within the current clinics you operate.

Besides the sprout of rollout.

Speaker 2: Yeah, so again, thanks. It's great to hear from you Nate. We look at growth, obviously. It's growth within our product offering at the center, but it's also growth on actual footprint. In our footprint, we have not decided, as I said earlier, we're in a budget season and we'll comment on that the next call, but we tend to look at growth from a footprint standpoint, both through acquisition and organic. And as we talked about earlier, we have a significant opportunity to expand organically in both our new acquisition on the central, achieved central platform and the achievies.

Yeah. So again, thanks, it's great to hear from you Nate when we look at growth obviously, its its growth within our product offering at the center, but it's also growth on actual footprint in our footprint, we have not decided yet as I said earlier, we're in our budget season, and we'll comment on that at the next call, but we tend to look at growth from a footprint standpoint.

Through acquisition and organic and as we talked about earlier, we have significant opportunity to expand organically in both our new acquisition on the central achieve central platform and the achieve east and we have some centers we've had to fill out some space and as well that are existing with angry broke so again historically, we've always done.

Speaker 2: and we have some centers we have to fill out some space in as well that are existing within Greebrook. So again historically we've already done a great job of adding centers to our platform and it will be a methodology through not only just acquisition potentially or organic but also through product diversification.

A great job of adding centers to our platform and it will be a methodology through not only.

Just acquisition potentially or organic but also through product diversification.

And adding to adding to pull that from the core Tms business, obviously, we had some.

Speaker 3: And adding to that from the core TMS business, obviously, we had some constraining factors in Q3 2021. With market conditions normalized, we believe we can increase the throughput in our TMS business also. So we've got capacity in the platform, operating leverage there, and we can utilize that not only to product diversification, but also kind of boosting our core TMS business as market conditions normalize.

Straining factor then in Q3, 2021 with market conditions normalize. We believe we can we can increase the throughput in our Tms business also so we've got capacity in the platform.

Operating leverage there and we can utilize that not only through proactive notification, but also kind of boosting our core Tms business as market conditions normalize.

Got it thank you for taking the question.

Thanks, Matt.

Speaker 1: Our next question comes from the line of T-lay for D-dardings.

Our next question comes from the line of Chile for D. J D again.

Hi, just a quick follow up for me, so I can't see it reduce stigma and mental health issues in the U S plus you're passing it brought a net and consultation continued to increase and when do you anticipate the conversion rate to increase back to the pre pandemic level.

Speaker 5: Hi, just a quick follow up for me. So I should see a reduced stigma and mental health in the US, plus you're casting a broader net and consultation continue to increase. When do you anticipate the conversion rate to increase not to the pre-pandemic level?

Okay.

Speaker 3: Which a window we expect to mark conditions kind of normalizing that that is that is a that's kind of what we were going through our Adjuncing process now we obviously evaluate

When do we expect to market conditions kind of normalizing Latin does that does that.

That's kind of where we were going through our budgeting.

Budgeting process now, we obviously evaluating our market factors at play.

Speaker 3: market factors that play. The good news is we saw a bounce back and forward looking indicators early in Q Q4 in October . So it's difficult to predict in terms of exactly when the market conditions normalize to pre-pandemic levels, but we've seen some positive trends.

The good news is we saw bonds back and forward looking indicators early early in Q on Q4 in October.

So it's difficult to predict in terms of exactly when when the market market conditions normalize to pre pandemic levels, but we saw it we've seen some positive trends recently.

Speaker 2: yeah she don't think i had to that is the fact that um... again as we talk about earlier from a previous question uh... we do expecters patients in that pipeline who have never uh... first time experience depression uh... they may be calling our ads uh... based on our or us reaching out and creating awareness they may have to kind of start going through that kind of first drug med trial so i i think while they may not kind of become a patient that initial couple months or first year of

Yeah, the only thing I'd add to that is the fact that again as we talked about earlier from a previous question. We do expect those patients in that pipeline, who have never a first time experienced depression.

They may be calling our ads based on our us reaching out and creating awareness. They may have to kind of start going through that kind of first drug med trial. So I think while they may not kind of become a patient that natural couple months or first here in the us. They are still in the pipeline and make may kind of come to US later in the year. So you've got some early.

Speaker 2: uh... they're still in the pipeline and make make kind of comes to us later in the year she got some early got some new patients suffering from depression uh... early on now in the in the system

You've got some new patients suffering from depression early on now in the in the system.

Speaker 5: Thank you. And maybe just an idea here. So to build on that, like reduce stigma and corporations are increasingly focusing on the employer's mental health. Have you considered hooking in with employers to maybe offer the employees under group health benefit or AIP programs with employer covering the

Thank you and maybe just an idea here so to build on that like we do stigma and corporations are increasingly focusing on the employee mental health have you considered hooking into important to maybe offer I think all you and your group health benefit EAP programs with employer having to cost.

Speaker 2: Yeah, that's a great point. And obviously, we have actually trialed that in a specific marketplace in Richmond in terms of a large banking institution. And just based on myself coming from the TLC, this was one of our programs in place with Corporate Advantage Program. So I'm comfortable and have an understanding of that marketplace. It is one of our next things that we will begin to look at. Not only with providing opportunities within the corporations that have our insurance coverage, obviously, you work closely with the benefits group on it. But we're also looking at opportunities to work closer with the actual payers directly in creating opportunities with them directly for their members.

Yeah. That's a great point, then obviously, we have actually tried that in a specific marketplace enrichment in terms of a large banking institution.

And you know just based on my.

Myself coming from there. The TLC. This was one of our programs in place with corporate advantage program. So I'm comfortable and have our understanding of that marketplace. It is one of our next things that we will begin to look at not only was kind of providing opportunities within the corporation.

Our insurance coverage, obviously, we work closely with the benefits group on it but we're also looking at opportunities to work closer with the actual payers directly in creating <unk>.

Opportunities with them directly for their members.

Thank you for that.

Speaker 5: Thank you for that. Next question comes from the line of David Martin from Bloomberg.

Next question comes from the line of David Martin from Bloom Burton.

Hi, Thanks for taking my second question set of questions.

You outlined your organic and acquisitive.

Speaker 7: growth inventions or desires. I'm wondering within that plan, is it possible to break even or reach profitability, or is that something far off in the future and we shouldn't expect that until once you grow in your network to a certain size?

Both intentions or desires.

I'm wondering within that plan is it possible to break even or reach profitability or is that something far off in the future and we shouldn't expect that until once you've grown your network to a certain size.

Look all our outlook in terms of growing profitably and growing towards profitability has not changed.

Speaker 3: Our outlook in terms of growing profitability and growing towards profitability has not changed. As we've mentioned, we're going through the budgeting process now and there's a lot of variables that play. But Spravato also gives us a really good tool to enhance profit margins at the regional level, which we can help us drive to profitability. But in terms of...

As we've mentioned will be going through the budgeting process now and there's a lot of variables at play.

But <unk> also gives us a really good tool to enhance profit margins at the regional level.

Which was going to help us drive to profitability.

Terms of.

<unk>.

Speaker 3: On comment directly on 23 to quite yet, but it remains a key initiative of the business to grow towards profitability and self-sufficient.

One comment directly on 23, two quite yet, but it remains a key.

Initiative of the business to grow towards profitability and self self sufficiency.

And would that be near term profitability intermediate term or long term.

Speaker 7: then would that be near-term profitability, intermediate term or what?

Speaker 3: I mean, we haven't changed our outlook on that. Like, we can kind of medium term is what I can say now. Like I said, we're going through our strategic budgeting process.

I mean, we we haven't changed at all your outlook.

On that like we can kind of medium to medium term is what I can say now like I said, we're going through through all strategic budgeting process at the moment.

Okay.

Speaker 7: Okay, and second question, what are the remission rates in your clinics that you're experiencing spravato and TMS? Are they similar or different?

Second question.

What are the readmission rates and your clinics that you're experiencing.

Oh, and Tms are they similar or different.

Yes.

Speaker 2: yes for a while and i think uh... we do it i lived to this little bit earlier at you know tms therapy across the country we have never published our data we're closing in on that

And I think we.

I alluded to this a little bit earlier.

Ms therapy across the country, we've never published our data we're closing in on.

Speaker 2: by far the largest data set in the US with over 720,000 treatments.

By far the largest data set in the U S with over 720000 treatments and with that we've never published our data so to speak but we're having we're having patients that meet remission just shy of 50% which is above the the FDA study lines I think with this for Bartow you have a quicker onset David some of those patients.

Speaker 2: And with that, we've never published our data, so to speak. But we're having patients that meet remission just shy of 50%, which is above the FDA study lines. I think with Spervato, you have a quicker onset, David. Some of those patients tend to fall out of remission later on, but they are also very quick to come back in for maintenance therapy because of the quicker onset of treatments.

And to fall out of remission.

Later on but they are also very quick to come back in for maintenance therapy because of the they quicker onset of treatments.

For us you're probably going to see a patient be more long term stable with Tms therapy and from us for motto standpoint, a quicker onset of action, but they may need more provider in the future.

Speaker 2: You're probably going to see a patient be more long-term, stable with TMS therapy, and from a spravato standpoint, a quicker onset of action, but they may need more spravato in the future.

And do they do.

Speaker 7: Do some of them start with provodel and then go to T.F.

Do some of them start was provided with mango to Tms for the long term maintenance.

Absolutely. So if you look at to provide owner indications you may have someone that's more suicide ideation. So you want to get that patient to baseline and then potentially continue to treat them as provider or have the ability to move them over to Tms in that and that's where you find that kind of crossover that complementary behavior that allows patients to start with rabato and move into <unk>.

Speaker 2: Absolutely. And so if you look at Spravato and their indications, you may have someone that's more suicide ideation. So you want to get that patient to baseline and then potentially continue to treat them with Spravato or have the ability to move them over to TMS. And that's where you find that kind of crossover, that complimentary behavior that allows patients to start with Spravato and move into TMS therapy or even TMS therapy and eventually be on Spravato. So they do very well work together. Okay, and one last quick question. Where regions where you see higher

Happy or even Tms therapy, and eventually be honest for motto. So they do very well worked together.

Okay, and one last quick question, where regions, where you see higher reimbursement rates are your costs also higher in those areas.

Speaker 3: So there's some correlation, but in the California market, as we've said before, like that's just proportional. So you can generate high margins there.

So.

The there's some correlation but in the California market as we've said before like that just were bullish and also you can generate higher margins there.

Speaker 3: Because your cost basis may be slightly higher from a starting perspective but not significantly Similarly in the in the Texas market and the Massachusetts market

Because your cost basis, maybe slightly higher from a staffing perspective, but not significantly similarly in the in the Texas market in the Massachusetts market.

Speaker 3: It's more favorable economics with higher investment. You've got a slightly higher cost base, but it doesn't engage the higher investment, the totality. So you've got opportunity to generate higher margins there. Okay, thanks. That's it for me.

So its more favorable economics with higher investment you've got a slightly higher cost base, but it doesn't negate the high reimbursement.

Totality, so you've got opportunity to generate higher margins there.

Okay. Thanks, that's it for me.

Thanks, David.

And there are no further questions at this time.

Yeah.

Well. Thank you Suzanne we appreciate the opportunity to talk to you today about the company, where we're really excited about the position we're going to end up with at the end of the year and kind of going forward with the opportunity to expand our offering to patients and really run towards kind of a utilization and profitability look forward to talking to you again and wishing everyone a happy.

Speaker 2: Well, thank you, Suzanne. We appreciate the opportunity to talk to you today about the company. We're really excited about the position. We're going to end up with the end of the year and kind of going forward with the opportunity to expand our offering to patients and really run towards kind of utilization and profitability. Look forward to talking to you again and wishing everyone a happy holiday season as I won't speak to you until after the new year. So thanks for all your support and I will talk to you soon.

Holiday season, as I won't speak to Utah after the new year. So.

Thanks for all your support and I will talk to you soon.

Thank you everyone and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker 1: the East Conference. Thank you for participating. You may now.

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