Q2 2022 MSP Recovery Inc Earnings Call

Thank you for holding for <unk> B M. S P recovery conference call.

The call will begin momentarily again, thank you for your patience.

[music].

Good morning, and welcome to the MSP recovery second quarter earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the starchy followed by zero.

After todays presentation, there will be an opportunity to ask questions.

Ask a question you May press Star then one on a touchtone phone.

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Please note this event is being recorded.

I would now like to turn the conference over to M. S. P recoveries General Counsel Alexandra plus NCR. Please go ahead.

Speaker 1: Good morning. I am Alexandra Placencia, general council of MSP recovery. Welcome to our second quarter 2022 earnings conference call.

Good morning, I'm Alexandra for Associate General counsel of atmosphere recovery welcome to our second quarter 2022 earnings Conference call.

Speaker 1: Before we begin, please note that statements made during this presentation which state the company or management's intentions, beliefs, expectations, or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act and actual results could differ in a material manner. Additional information about factors that could cause results to differ from those in the forward-looking statements is contained in the company's SEC filings.

Before we begin please note that statements made during this presentation, which gave the company or management's intentions beliefs expectations or predictions of the future are forward looking statements within the meaning of the private Securities Litigation Reform Act and actual results could differ any material manner additional information about factors that could cause results to differ.

From those in the forward looking statements is contained in the company's SEC filings. This includes but is not limited to risk factors contained in our quarterly report on Form 10-Q for the quarter ended June 32022, subsequent SEC filings and in the news release issued earlier today a copy of these materials can be found in the investors section of our website at MSP.

Speaker 1: This includes, but is not limited to, risk factors contained in our quarterly report on Form 10Q for the quarter ended June 30, 2022, subsequent SEC filings and in the news release issued earlier today. A copy of these materials can be found in the investors section of our website at MSPRecovery.com.

Recovery dotcom non.

Speaker 1: non-GAAP financial measures are included in our comments today and in our presentation slides. The reconciliation of these non-GAAP measures to the corresponding GAAP measures is included at the end of the presentation slides and can be found in the investors section of our website. At this time, all participants are in a listen-only mode. The participants on today's call will be Johnny Therese, founder and CEO of MSP Recovery.

non-GAAP financial measures are included in our comments today and in our presentation slide the reconciliation of these non-GAAP measures to the corresponding GAAP measures is included at the end of the presentation slides can be found in the investors section of our website. At this time all participants are in a listen only mode participants on today's call will be jonny three foundries.

M. A C recovery Frank has got a co founder and Chief Legal Officer, and Kelvin Hampshire, Chief Financial Officer, I would now like to turn the call over to John H relief.

Speaker 1: Frank Quesada, co-founder and chief legal officer, and Calvin Hamstra, chief financial officer. I would now like to turn the call over to John H. Ruiz.

Good morning, everyone.

Speaker 2: This is John A. Trees, founder and CEO of MSP Recovery. We welcome you to today's

This is John <unk>, founder and CEO of MSP recovery.

We welcome you to today's earnings call.

Today, we will discuss MSP recovery second quarter, 2022 earnings, including an overview on MSP.

Speaker 2: Today we will discuss MSP Recovery's second quarter 2022 earnings, including an overview on MSP. I will provide some color on the MSP ecosystem. I started this business in 2014 and at the time it was designed to disrupt the Medicare, Medicaid and commercial reimbursement system with data-driven solutions.

I will provide some color on the MSP ecosystem.

We started this business in 2014 and at the time it was designed to disrupt the Medicare Medicaid and commercial reimbursement system with data driven solutions.

Speaker 2: Over time, our mission has evolved as a result of uncovering the major issues that confront the US patient, provider, and payer ecosystem.

Overtime, our mission has evolved as a result of uncovering the major issues that confront the U S patients.

<unk> and payer ecosystems. In this regard we have granted solutions that will correct a significant flaws that are current daily and in the process.

Speaker 2: In this regard, we have created solutions that will correct the significant flaws that occur daily and in the process. Identify ways.

Identify waste.

Speaker 2: fraud and improper payments in a real-time solution, providing patients with better care, and at the same time, save lives, while decreasing further injury for many, as well as providing efficiency for patients, providers, and payers.

Rod and improper payments in a real time solution, providing patients with better care and at the same time save lives, while decreasing further injury for many as well as providing efficiency for patients providers and payers.

All of this will lead to better care for patients.

Speaker 2: All this will lead to better care for patients, higher collections for the providers, and less improper payments for health care providers including Medicare, Medicaid, and commercial payers when those payers are at financial risk.

Your collections for the providers.

Les improper payments for health care providers, including Medicare Medicaid and commercial payers when those payors are at financial risk.

In 2014, Frank Asada Ni identified a problem, where the government was incorrectly paying for billions of dollars for healthcare expenses.

Speaker 2: In 2014, Frank Casada and I identified a problem where the government was incorrectly paying for billions of dollars for health care expenses where other parties were ultimately the responsible parties. In addressing this issue, MSP's innovative solutions support the long-term sustainability of Medicare and Medicaid programs.

Our other parties were ultimately the responsible parties.

In addressing this issue.

S P's innovative solution to support the long term sustainability of Medicare and Medicaid programs.

Speaker 2: relied upon by over 100 million people in the United States of America. By ensuring that the responsible parties, known as primary payers, properly pay in those instances where such payers are liable.

Relied upon by over 100 million people in the United States of America by ensuring that the responsible parties known as primary payers.

Properly pay in those instances, where such payers are liable billions of dollars in improper payments are identified which in turn helps.

Speaker 2: billions of dollars in improper payments are identified, which in turn helps sustain the Medicare and Medicaid programs for years to come by preventing improperly paid claims by government programs.

Sustained the Medicare and Medicaid programs for years to come by preventing improperly paid claims by government programs.

MSP continues to be a disruptor in the healthcare technology space.

Speaker 2: MSP continues to be a disruptor in the healthcare technology space, supported by three key pillars.

Ported by three key pillars.

I truly believe that no one has a better understanding of health care.

Speaker 2: I truly believe that no one has a better understanding of health care, health care data, and the law all combined, which makes our business unique and very difficult to replicate. We own a unique asset.

Al Khair data.

And the law, all combined which makes our business unique and very difficult to replicate.

We own a unique asset.

Irrevocably, a fine recovery right that as of June 30th 2022.

Speaker 2: irrevocably assigned recovery rights that as of June 30th, 2022

We're valued at 88.3 billion and identified recovery opportunities, which represents 31% of the recovery rights associated with the Medicare advantage market.

Speaker 2: were valued at $88.3 billion and identified recovery opportunities, which represents 31% of the recovery rights associated with the Medicare Advantage market.

Speaker 2: As of June 30th, 2022, the total amount of owned claims was 370.2 billion in paid.

As of June 30 of 2022.

Total amount of AUM claims was 372 billion and paid.

And 1.553 trillion and build them out.

Speaker 2: and 1.553 trillion in build amount.

Further our women legal and recovery strategies.

Speaker 2: Further, our winning legal and recovery strategies have strengthened the Medicare Secondary Payer laws as shown by the legal precedent we have created since starting this business.

A strengthened Medicare secondary payer laws.

Starting by the legal precedent, we have created since starting this business and lastly, our intellectual property, which consists of over 1400 proprietary algorithms will only serve to strengthen our association with columns here.

Speaker 2: And lastly, our intellectual property, which consists of over 1,400 proprietary algorithms, will only serve to strengthen our association with Palantir, whose innovative engineers are working together closely with our team to bolster our next generation recovery detection system.

Whose innovative engineers are working together closely with our team to bolster our next generation recovery detection systems.

We further that with the creation of life wallet, a self contained equal system that was designed for patients providers and payers.

Speaker 2: We furthered that with the creation of LifeWallet, a self-contained ecosystem that was designed for patients, providers, and payers. LifeWallet works in its own self-contained ecosystem and can be utilized throughout the entire world. Now I'd like to walk you through some of our second quarter highlights regarding our recovery efforts and MSP's LifeWallet platform.

Life wallet words, and its own self contained ecosystem and can be utilized throughout the entire world now I'd like to walk you through some of our second quarter highlights regarding our recovery efforts.

MSP is life wallet platform.

Speaker 2: On our recovery efforts, our paid value of potentially recoverable claims continues to grow.

On our recovery efforts are paid value potentially recover no claims continues to grow.

As of June 30th we have $88 3 billion and paid value of potentially recoverable claims.

Speaker 2: As of June 30th, we have 88.3 billion in paid value of potentially recoverable claim.

Speaker 2: During the second quarter, we focused on deploying a new strategy that will enable primary payers to make the required payments prior to engaging in litigation. This effort is truly focused on accident-related recoveries. Additionally, we continue to see investor interest in our very unique asset.

During the second quarter, we focused on deploying the new strategies that will enable primary payers to make the required payments prior to engaging in litigation.

This effort is truly focus on a similar related recoveries.

Finally, we continue to see investor interest and our very unique asset.

The claim rates.

Speaker 2: as evidenced by our agreement with Pruden Group, which has committed to invest up to $250 million related to our recovery efforts. To significantly bolster our recovery efforts, MSP Recovery has formed strategic alliances with Milberg Brinson Phillips Grossman Law Firm as well as the Rivera-Mestre Law Firm, both of which will bring significant resources and nationally recognized litigators to secure recovery. For more information, visit www.mps.gov

As evidenced by our agreement with prudent group, which has committed to invest up to $250 million related to our recovery efforts.

Significantly bolster our recovery efforts MSP recovery has formed strategic alliances with Milberg Grimsson Philips Grossman.

Our firm as well as the Rivera administrative law firm.

Both of which will bring significant resources and nationally recognized litigators to secure recoveries.

Melbourne is considered a pre eminent firm for mass torts in federal class action cases.

Speaker 2: Millberg is considered a preeminent firm for mass torts and federal class action cases.

They've recovered more than $15 billion for their clients.

Speaker 2: They've recovered more than $50 billion for their clients.

Speaker 2: Rivera-Mestry is known for handling the bet the House litigation for its large corporate clients. Recently, Rivera-Mestry prevailed a trial in a 600 billion dollar dispute where they successfully represented Dr. Craig Wright, who is considered by many to be the creator of the coin.

Rivera Ministry is known for handling to bet the house litigation for its large corporate clients.

Recently Rivera mastery of per barrel, a trial and a $600 billion dispute where they success pretty represented Doctor, Greg Wright, who is considered by many to be the creator of bitcoin.

Speaker 2: We have made significant progress in our recovery efforts, with several cases in settlement discussions. Others that have already settled. As it pertains to LifeWallet, we entered into an agreement with Seguritec, a Mexican data company, to position LifeWallet for international growth.

We have made significant progress in our recovery efforts with several cases in the settlement discussions.

They're just that have already settled as it pertains to life wallet, we entered into an agreement with the grid Tech a Mexican data company to position life wallet for international growth.

Speaker 2: Also, canon health and La Colonia Medical Centers have agreed to load all their patient data onto the life wallet ecosystem. We also are working with Tokenology on a tokenized healthcare initiative on the Polygon Network.

Also panel health and like colonial medical centers have a green to load all of their patient data onto the life wallet ecosystem. We also are working with Coke analogy I mean, Cocainize health care initiative on the polygon network.

The initiative combined with a life waters biometric technologies should significantly reduce fraud and abuse and the health care system.

Speaker 2: The initiative combined with LifeWallet's biometric technologies should significantly reduce fraud and abuse in the health care system.

Speaker 2: as the invoicing or 837 form, as known in the industry, will be embedded with biometric technology.

As the invoicing or 837 form is known in the industry will be embedded with biometric technology.

Speaker 2: signifying to the payer that the patient was actually there. I want to take a moment to highlight significant growth which I believe is indicative of the success we have achieved since starting MSP.

Fine to the payer the patient was actually there I wanted to take a moment to highlight significant growth, which I believe is indicative of the success, we have achieved since starting in MSP.

Speaker 2: When we first started, we had very few assinors, which made up just over $2.7 million in paid amounts in our portfolio.

When we first started we had very few assay noise, which made up just over $2 $7 million and Peter Mountains in our portfolio.

Speaker 2: Today, as it stands, we have over 150 acinors with over 370 billion paid amounts, of which $88.3 billion have been identified as potentially recoverable. 2021 was a positive year in terms of growth as we finalize a number of agreements with prospects that we have been working on since 2019 and 2020.

Today as it stands we have over 150 as an orange with over 370 billion paid amounts of which $88 3 billion have been identified as potentially recoverable 2021 was a positive year in terms of growth.

As we finalize a number of agreements with prospects that we had been working on since 2019 in 2020.

As we have stated previously that must be has engaged in data matching with over 10 auto insurance carriers.

Speaker 2: As we have stated previously, MSP has engaged in data matching with over 10 auto insurance carriers.

Speaker 2: Through this process, we have identified over 4.4 billion accident-related treatments that were paid by our <expletive> and Orsh. In June 2022, MSP deployed a new strategy, depicted by demand letters.

Through this process, we have identified over 4.4 billion.

And I certainly am related treatments that were paid by our as an order in.

In June 2022, MSP deployed a new strategy depicted by demand letters.

This will enable primary pairs to make the required payments outside of the purview of litigation and in the ordinary course of business as we announced in June of 2022 MSP commenced spending individual claim demands totaling more than $1 5 billion in billed amounts.

Speaker 2: This will enable primary payers to make the required payments outside of the purview of litigation and in the ordinary course of business. As we announced in June of 2022, MSP commenced sending individual claim demands totaling more than $1.5 billion in billed amounts.

Speaker 2: for payments by auto insurers who admitted to the federal government CMS that they were the primary payers for the underlying accident.

For payment by auto insurers, who are admitted to the federal government CMS that they were the primary payers for the underlying accidents.

Speaker 2: Now I'll hand it over to Frank Casada, co-founder and chief legal officer of MSP to discuss our recent accomplishments and provide 2022 guidance.

Now I'll hand, it over to Frank Asada, cofounder, and Chief legal officer of MSP to discuss our recent accomplishments and provide 2022 guidance.

Speaker 3: Good morning, this is Frank Cassada, co-founder and chief legal officer of MSP Recovery. I oversee the legal strategy that is employed in our recovery efforts here at MSP Recovery.

Good morning. This is Frank disorder, co founder and Chief legal Officer and Mr. Your recovery.

Legal strategy that is employed in our recovery efforts here at MSG recovery.

Speaker 3: The 2022 guidance was developed as part of our business combination. As of June 30th, 2022, we surpassed our 2022 guidance as it relates to the paid value of potentially recoverable claims by 3.2 times. We estimated by the end of 2026, we would have approximately $26.9 billion of paid value of potential recoverable claims. Today as it stands, we have $88.3 billion.

The 2022 guidance was developed as part of our business combination.

As of June 32022, we surpassed our 2022 guidance as it relates to the paid value.

Potentially recoverable claims by three two times, we had estimated by the end of 2026, we would have approximately $26 $9 billion of paid value potential recoverable claims today as it stands we have $88 $3 billion.

Our total gross recoverable revenue guidance.

Speaker 3: Our total gross recoverable revenue guidance is dependent on the completion of data matching and achieving settlements in our case.

On the completion of data matching and achieving settlements in our cases, while there are extension risks, we feel comfortable that there's progress being made towards meaningful settlements in our recovery efforts.

Speaker 3: While there are extension risks, we feel comfortable that there is progress being made towards meaningful settlements in our recovery efforts.

Speaker 3: MSP recovery is currently in data matching or settlement discussions with approximately 27% of the auto liability market

Recovery is currently in data bashing or settlement discussions on approximately 27%.

Auto liability market.

Speaker 3: MSP has brought a majority of the data matching exercises in-house, eliminating the need for a third-party administrator. This has increased the speed and efficiency of MSP's ability to identify previously unknown claims.

He has brought a majority of the data matching exercises in house, eliminating the need for a third party administrator.

This has increased the speed and efficiency of Msp's ability to identify previously unknown claims.

Speaker 3: All current data matching exercises have reached the final phases in which claims information is being exchanged with primary payers to detail amounts owed.

All current data matching exercises have reached a final phases with claims information has been exchanged primary repairs to detail amounts owed.

Due to the volume of claims identified data matching process MSP has consulted with a robust team statisticians to develop a model, which uses sampling techniques to estimate the aggregate.

Speaker 3: Due to the volume of claims identified through the data matching process, MSP has consulted with a robust team of statisticians to develop a model which uses sampling techniques to estimate the aggregate recoveries attributable to a given primary payer. This model is a cornerstone of settlement conversations as it allows MSP recovery to put forward a lump sum number and avoid a claim by claim analysis.

Salaries attributable to a given primary payer.

This model is a cornerstone of settlement conversations as it allows MSP recovery before a lump sum number and avoid a claim by claim analysis.

Speaker 3: MSB recovery in conjunction with some primary payers is also in the process of developing a real-time recovery platform which will allow for immediate recoveries without the need to resort to litigation for both past and future claims.

Must be a recovery in conjunction with some primary payers is also in the process of developing a real time recovery platform, which will allow for media recoveries without the need to resort to litigation for both past and future claims.

Speaker 3: We believe that if we can achieve a settlement in 2022, we can hit our projected revenue.

We believe that if we can achieve a settlement in 2022.

Our projected revenue.

Although we have yet to publicize a recovering multiple at this time, we have achieved settlements in the past that exceed one nine times multiple that we projected for 2022.

Speaker 3: Although we have yet to publicize a recovery multiple at this time, we have achieved settlements in the past that exceed 1.9 times multiple that we projected for 2022. In the past, MSB Recovery has entered into settlement agreements to recover amounts in excess of the paid amount. For example, Ocean Harbor agreed to pay more than the Medicare fee-for-service schedule rate by 3.5 times. For Medicare Part A Emergency Services and Medicare Part D claims.

In the past I'm, assuming recovery has entered into settlement agreements to recover amounts in excess of the paid them out for example.

Barbara agreed to pay more than the Medicare fee for service schedule rate three five times for Medicare part a emergency services in Medicare part D claims we owe.

Speaker 3: We also enter into a settlement agreement with Horseman in which it has agreed to pay match claims according to applicable commercial rates, subject to the assertion of certain agreed upon offenses. We live a difference between the paid amount of claims in that case and commercial rates are generally between four to six times. I would now turn the call back over to John so that he can explain how MSP has developed a solution to address the pain of problem going forward. Thank you.

Also entered into a settlement agreement with horseman.

Wish it has agreed to pay Bash claims according to applicable commercial rates.

Subject to the assertion of certain agreed upon defenses. We wanted the difference between the paid amount of claims in that case. The commercial rates are generally between four six times.

I will now turn the call back over to John So he can explain how MSP has developed a solution to address the pain a problem going forward. Thank you.

Focusing on the American health care system. This system relies upon a series of data systems, which are currently fragment that day.

Speaker 2: focusing on the American healthcare system. This system relies upon a series of data systems which are currently fragmented.

Speaker 2: Data is stored in passive knowledge silos that are ill-equipped to handle the complexity of the healthcare system.

Data is stored in passive knowledge silos that are ill equipped to handle the complexity of the health care system.

Speaker 2: In analyzing the medical claims data for millions of Americans, we came to the realization that there are three main components when providing care to patients.

In analyzing the medical claims data for millions of Americans, we came to the realization that there are three main components when providing care to patients.

Speaker 2: Knowledge of the Law, Knowledge of Medicine, and Knowledge of Healthcare Data.

Knowledge of the law knowledge of medicine, and knowledge of health care data.

We believe our team's knowledge of all free has continued to grow our legal and healthcare data ecosystem.

Speaker 2: We believe our team's knowledge of all three has continued to grow our legal and healthcare data ecosystem.

Speaker 2: To identify the proper payer, you need medical expertise, legal expertise, and health care data expertise.

To identify the proper Bayer you need medical expertise legal expertise in health care data expertise.

Msp's life wallet combined these three areas and further supplement our existing business.

Speaker 2: MSP's LifeWallet combines these three areas and further supplements our existing business. For example.

For example.

From a patient perspective.

Life, while it is delivering biometrics and giving patient ultimate access and control over their own health care data from a payer's perspective lifestyle. It is providing block chain for billing in an effort to eliminate fraud and abuse from the bidding process.

Speaker 2: Life wallet is delivering biometrics and giving patient ultimate access and control over their own healthcare data. From a payers perspective, Life wallet is providing blockchains for billing in an effort to eliminate fraud and abuse from the billing process by combining biometrics with the particular bills and question. Lastly, with MSPs legal expertise, Life wallet will have the technology to identify the proper payer at the point of care.

Combining biometric with a particular building question lastly, with MSP is legal expertise life, while it will have the technology to identify the proper Bayer at the point of care.

Through the functionality of a billing of proper payer and real time life wallet will ultimately lead to visible and predictable revenues for our company.

Speaker 2: Through the functionality of billing the proper payer in real time, LifeWallet will ultimately lead to visible and predictable revenues for our company. Something that is not always the case in historical claims recovery business.

Something that is not always the case and historical claims recovery business.

Speaker 2: The life wallet or Chase to pay revenue streams will allow MSP to transition its financials to more consistent and predictable revenue.

Our life wallet or chase to pay revenue streams will allow MSP to transition its financials to more consistent and predictable revenue.

Speaker 2: Now I'd like to introduce Calvin Hemsdrup, our CFO , who will walk you through our quarterly financials.

Now I'd like to introduce Calvin Hamstra, our CFO , who will walk you through our quarterly financials.

Speaker 4: Thank you, John . Good morning, everyone. I'll be giving a brief overview of our quarter to 2022 financials.

Thank you John good.

Everyone I'll be giving a brief overview of our quarter two 2022 financials.

Speaker 4: To start, I'd like to cover some highlights of our financials as this is the first quarter reporting as a public company under MSPR. Our balance sheet consists mostly of our intangible assets or claims recovery rate assets of 2.1 billion, and investments in rights to claim recovery cash flows of 3.7 billion.

To start I'd like to cover some highlights of our financials. As this is the first quarter reporting as a public company under M. S. P. R. Our balance sheet consists mostly of our intangible assets or claims recovery rate assets of $2 1 billion in investments and rights to claim recovery cash flows of $3 7 billion.

Speaker 4: These assets are held at cost, not fair value. The intangible assets are amortized over eight years, while the investments and rights to claim recovery cash flows are a financial instrument and therefore not amortized.

These assets are held at cost not fair value.

Tangible assets are amortized over eight years, while the investments in rights to claim recovery cash flows are a financial instrument and therefore not amortize.

Speaker 4: There are also increases in cash to $25.00 million, restricted cash to $11.4 million, and prepaid to $36.9 million.

There are also increases in cash to 25.1 million restricted cash of $11 4 million and prepaid to $36 9 million.

These were driven by the cash from the business combination and the funds from the related party loan obtained during the quarter for liabilities outside of the related party loan. Our liabilities also increased related to the mark to market of the warrants the derivative liability related to the Cantor facility noted in previous filings and liability.

Speaker 4: These were driven by the cash from the business combination and the funds from the related party loan obtained during the quarter. For liabilities outside of the related party loan, our liabilities also increased related to the market market of the warrants, the derivative liability related to the counter facility noted in previous filings. And liabilities payable and stock related to the purchase of claims recovery assets also noted in previous filings.

He is payable in stock related to the purchase of claims recovery assets also noted in previous filings.

Speaker 4: Our income statement for the period has a lot of noise from the business combination transaction, and I'll go into further detail on this in another slide. But overall, the majority of the items driving the increase in expenses are due to one-time and non-cash items, such as change in fair value of warrants and derivative liability, stock-based compensation, interest expense, and claims amortization expense.

Our income statement for the period as a lot of noise from the business combination transaction and I'll go into further detail on this in another slide but overall the majority of the items driving the increase in expenses are due to onetime and noncash items such as change in fair value of warrants and derivative liability stock based compensation intra.

Expense and claims amortization expense.

Speaker 4: Also during the period, we strategically entered into alliances with other law firms, as noted previously. While these have increased expenses in the short term, we anticipate these alliances will drive and accelerate claims recoveries and allow us to push the biggest return out of our historical portfolio.

Also during the period, we strategically entered into alliances with other law firms as noted previously.

These have increased expenses in the short term, we anticipate these alliances will drive and accelerate claims recoveries and allow us to push the biggest return out of our historical portfolio next I'd like to provide the overall balance sheet. Some items to highlight here are on the asset side as noted previously the increase was driven.

Speaker 4: Next, I'd like to provide the overall balance sheet. Some items to highlight here are on the asset side as noted previously. The increase is driven by the asset acquisitions as part of the business combination, as well as increases in cash, prepaids, and acquisitions of other infangible assets.

By the asset acquisitions as part of the business combination as well as increases in cash prepaid and acquisitions of other intangible assets. These increases are all related to the business combination our liabilities are mostly non current when the guarantee obligation is excluded as this is a gross up of the Verizon recovery Master.

Speaker 4: These increases are all related to the business combination. Our liabilities are mostly non-current when the guarantee obligation is excluded as this is a gross up of the Viraj Recovery Master LP full return and offset by the indemnification asset.

L P full return and offset by the indemnification asset. The non current assets consists of claims financing obligations and notes payable related interest accrual and loans from a related parties one item to keep in mind on the claims financing obligations and notes payable and related interest payable is approximately one.

Speaker 4: The non-current assets consist of claims financing obligations and notepable. Related interest accrual and loans from a related parties. One item to keep in mind on the claims financing obligations and notepable and related interest payable is approximately 134.3 million is non-recourse and represents a sale of future revenue on claims portfolio.

<unk> hundred $34 3 million is nonrecourse and represents a sale of future revenue unclaimed portfolios on the income statement. As previously noted the main drivers of our quarter and year to date losses are one time and noncash.

Speaker 4: On the income statement, as previously noted, the main drivers of our quarter and year-to-date losses are one-time and non-cash. Outside of the items noted previously, expenses within general and administrative and professional fees have increased from previous periods. This is related to the development of additional revenue sources such as LifeWallet, as John mentioned earlier.

Outside of the items noted previously expenses within general and administrative and professional fees have increased from previous periods. This is related to the development of additional revenue sources, such as life wallet as John mentioned earlier.

Our management team has been focused on not only extracting the value from our historical portfolio, but also addressing the go forward problem and health care billing by developing these new revenue streams that will drive consistent revenue period to period.

Speaker 4: Our management team has been focused on not only extracting the value from our historical portfolio, but also addressing the go-forward problem in healthcare billing by developing these new revenue streams that will drive consistent revenue period to period.

Speaker 4: While the unique assets we hold as a part of our historical portfolio will provide significant revenue, we feel MSP's value to shareholders will be through developing these applications that will address the healthcare billing problem go forward.

While the unique assets, we hold as a part of our historical portfolio will provide significant revenue, we feel msp's value to shareholders will be through developing these applications that will address the health care billing problem go forward in order to help look past some of the noise in the financials related to the business combination we have highlighted the onetime and noncash.

Speaker 4: In order to help look past some of the noise in the financials related to the business combination, we have highlighted the one-time and non-cash items that are flowing through the financials.

Items that are flowing through the financials. This is a non-GAAP measure, but we feel it is important in order to understand what we would anticipate in expenses going forward within the income statement for the three and six months ended June 32022, there were onetime noncash items related to a share grant to non employees of 'twenty.

Speaker 4: This is a non-GAP measure, but we feel it is important in order to understand what we would anticipate and expenses going forward.

Speaker 4: Within the income statement for the three and six months ended June 30, 2022, there were one time non-cash items related to a share grant to non-employees of $20.1 million and changes in the fair value of warrants and derivative liabilities related to the Cantor facility, which was disclosed in previous filings of $14.4 million.

$1 million and changes in the fair value of warrants and derivative liabilities related to the Kansas facility, which was disclosed in previous filings of $14 $4 million.

Speaker 4: Additionally, there are non-cash items for the period related to claims amortization expense and paid-in-kind interest. These along with the one-time items noted total $69.2 million for the three months and $82.3 million for the six months.

Additionally, there are noncash items for the period related to claims amortization expense and paid in kind interest fees along with the one time items noted totaled $69 2 million for the three months and $82 3 million for the six months.

Excluding these onetime and noncash items, our net loss was approximately $8 million for the three months and approximately $9 million for the six months, while we anticipate being able to start generating more meaningful revenue from our operations in the next few quarters. We have also publicly announced several other sources of cash that could provide.

Speaker 4: Excluding these one-time and non-cash items, our net loss was approximately $8 million for the three months and approximately $9 million for the six months.

Speaker 4: While we anticipate being able to start generating more meaningful revenue from our operations in the next few quarters, we have also publicly announced several other sources of cash that could provide resources to cover current needs.

I'd resources to cover current needs.

Speaker 4: Based on our current cash, the funds included in prepaids to fund law firm related expenses and are announced facilities or agreements with Cantor, Barrage and Prudent.

Just on our current cash the funds included in prepaid to fund a law firm related expenses, and our announced facilities or agreements with Cantor barrage and prudent we have potential sources of approximately $1 $5 billion to continue to fund our operations.

Speaker 4: We have potential sources of approximately $1.5 billion to continue to fund our operations.

Speaker 4: As noted in each of the announcements of these agreements or facilities, these are all still in process of being implemented.

As noted in each of the announcements of these agreements are facilities. These are all still in process of being implemented.

Speaker 4: In summary, our current balance sheet and publicly announced resources should provide the ability for MSP to execute undriving strong cash flows from operations through our historical claims portfolio and continue to develop additional revenue streams we have disclosed. Thank you all for joining us today.

In summary, our current balance sheet and publicly announced resources should provide the ability for MSP to execute on driving strong cash flows from operations through our historical claims portfolio and continue to develop additional revenue streams, we have disclosed.

Thank you all for joining us today.

This is Diana Diaz, Chief Communications officer at NSP recovery, we encourage everyone to visit our website in the Investor relations portion for reporting with the attached presentation of what you just Terry Thank you so much.

Speaker 5: This is Diana Diaz, Chief Communications Officer of MSP Recovery. We encourage everyone to visit our website in the Investor Relations portion for a recording with the attached presentation of what you just heard. Thank you so much. We will now begin the question and answer.

We will now begin the question and answer session.

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Our first question today comes from Meyer Shields.

Please go ahead.

Thanks, two quick questions if I can first.

Getting a little bit more insight into the $1 3 million up claims recovery income in the quarter in terms of.

I guess, how long those were being litigated I don't know if you can.

Characterize the sources of income.

Yes. Good morning, how are you this is Johnny drawings.

Speaker 2: So there are a couple of different buckets of claims that we process, and I'll break them down in this fashion. So there are claims that are in litigation, and then there are claims that we process day in and day out and they fall into three categories.

So there are a couple of different buckets of claims that we process.

And I'll break them down in this fashion.

So there there are claims that are in litigation and then there are claims that we process a day in and day out and they fall into three sort of categories.

Speaker 2: One type of claim is one where the insurer actually ensures the Medicare beneficiary directly.

One type of claim is one where the insurer actually ensures the Medicare beneficiary directly the other type of claim is where there's already been a settlement where the Medicare beneficiary, but those claims have not been extinguished our liens that we own.

Speaker 2: The other type of claim is where there's already been a settlement with a Medicare beneficiary, but those claims have not been extinguished, those liens that we own. And then the third category are claims that are actually in process, meaning in progress, or by people.

And then the third category or claims that are actually in process, meaning in progress whereby people were injured.

Speaker 2: and have lawyers and those lawyers in particular have claims that they're processing and we own those lien rights.

And have lawyers and those lawyers in particular have claims that they're processing and we own those lean rights.

Speaker 2: As it pertains to the 1.3 in total, half of that subset were actual claims that were paid by primary payer for a batch of claims that were sent to them where they acknowledged that they owed primary responsibility and those were paid only at the pay domain.

As it pertains to the 1.3 in total a half of that subset.

Or actual claims that were paid by primary pay or.

For a batch of claims that we're sending to them where they acknowledged that they owed primary responsibility and those were paid only at the paid amount.

Speaker 2: This payer has previously been paying at the build amount. So even in those revenues that we reported there is an upside even with what we've already collected. We're in the process of getting that difference.

This payer has previously been paying at the billed amount. So even in those are revenues that we reported are there is an upside even with what we've already collected and we're in the process of getting that difference as it relates to some of the other claims also with a fabulous settlements as Mr.

Speaker 2: uh... as it relates to some of the other claims also with a stobbert settlement says uh... mr. cassada indicated uh... which is a company and another primary pair that is paid they also paid the paid amount but the settlement agreement requires them to pay for to six times the amount that we've already collected.

Hisada indicated.

Which is a company in another primary payer that has paid they also paid the paid amount, but the settlement agreement requires them to pay.

Four to six times the amount that we've already collected.

Speaker 2: So what we're seeing futuristically with what Mr. Quesada said and we've explained, because we have significant progress in data matching and in conversations with sort of settlement strategy with a significant portion of the bigger primary payers, that's the path that we're taking. To answer that question directly, that recovery is probably half of the recovery that we've

So what we're seeing futuristic Lee with what Mr. Casado Center, we've explained because we have significant progress and data matching and in conversations with sort of settlement strategy with a significant portion of the bigger primary payers are that's the path that we're.

Taking so to answer that question directly that recovery.

It's probably half.

What I call the daily flow of what transpires.

Speaker 2: What I call the daily flow of what transpires. And then the other half is for historical claims that we had been processing from.

And then the other half is for historical claims that we had been processing from before.

Okay. Thank you that's very helpful.

Speaker 6: Okay, thank you. That's very helpful. And bigger picture question, when we talk about the relationship and partnerships with other law firms.

And bigger part of your question when we talk about the relationships and partnerships with other law firms.

Yeah.

Should we assume that there's a particular percentage of the recoveries that theyre going to collect anything that they're doing it on a percentage basis.

Billable hours.

Speaker 2: Yes, so great question. The numbers that we've projected do not change at all because even though we have a lot more lawyers, I think collectively now we have over 100 lawyers working on these cases between all the respective law firms.

So great question, but the numbers that we've projected do not change at all because even though we have a lot more lawyers I think collectively now we have over 100 lawyers working on these cases between all the respective law firms.

Speaker 2: the dynamics of the monetary impact to MSPR doesn't change. So while we add more and more lawyers, we're just adding more soldiers short of speak, but it doesn't cost MSPR anymore. One of the things that we feel is very positive is there have been two major cases decided by the Federal Pellacorte.

The dynamics of the monetary impact to MSP or doesn't change so while we add more and more lawyers, we're just adding more soldiers shortage speak but it doesn't cost M. S. P. R anymore, one of the things that.

That we feel is very positive as there had been two major cases decided by the federal appellate Court one was decided in late 2020.

Speaker 2: One was decided in late 2020 where the insurers petitioned the United States Supreme Court for review and the United States Supreme Court rejected that. So that's the law of the land and that established the rights of downstream providers in addition to Medicare Advantage organization.

Where are the insurers a petition to the United States Supreme Court for review in the United States Supreme Court rejected that so that's the law of the land and that established the rights of downstream providers. In addition to Medicare advantage organizations to be able to prosecute these cases and collect upon them. So we won that.

Speaker 2: to be able to prosecute the cases and collect upon them. So we won that significant issue. And just within the last two weeks, we won another significant case, which is called MSP versus Metropolitan, where the court established that we had

Significant issue and just within the last two weeks, we want another significant case, which is called.

MSP virtually metropolitan where the court established.

That we had.

Speaker 2: established the necessary elements to file the loss of the claims in the manner in which we were doing.

Stablish the necessary elements to file the lawsuit the claims and the manner in which we were doing.

Because of that we've seen which is reported in all the docket entries. The judges are starting to put more pressure on the primary payers, which are the defendants to essentially respond to the lawsuit and we're starting to see a huge move and one of the things that we've also reported already publicly is we started.

Speaker 2: Because of that, we've seen which is reported in all the DACA entries, the judges are starting to put more pressure on the primary payers, which are the defendants, to essentially respond to the lawsuits and we're starting to see a huge move.

Speaker 2: And one of the things that we've also reported already publicly is we started a huge drive to send out all the demand letters. And as a result of that, we feel that there's going to be a lot less litigation and a lot more of what normally happens in the industry, which is bills are sent and paid automatically. So if you look at this in the bigger scope,

At a huge drive to send out.

All of these demand letters and as a result of that we feel that theres going to be a lot less litigation and a lot more of what normally happens in the industry, which is bills are sent and pay it automatically. So if you look at this in the bigger scope.

Speaker 2: We had to for many many years establish the right.

We had to for many many years establish the rights of these Medicare advantage organization and downstream providers and the court we've done that that's over and done with there's not a lot of room for a primary payers if any at all.

Speaker 2: of these Medicare Advantage organization and downstream providers in the courts. We've done that, that's over and done with. There's not a lot of room for primary payers, if any at all.

Speaker 2: uh... to try to defend themselves against these kinds of claims or now we're just doing the data matching and uh... we strongly feel and believe that this pays away for uh... you know the the processing of these claims the way that it happens every day and if you look at the entire uh... structure of how bills get processed there's about seven billion of them

To try to defend themselves against these kinds of claims. So now we're just doing the data matching and.

We strongly believe that this paves the way for our.

You know the the processing of these claims the way that it happens every day and if you look at the entire structure of how Bill's got process Theres about 7 billion of them.

Speaker 2: nationwide between car accidents, slip and falls, and normal health care treatment.

Nationwide between car accidents slip and falls in normal health care treatment.

Okay.

Okay fantastic. Thank you so much.

Youre welcome.

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