Q1 2024 WELL Health Technologies Corp Earnings Call

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Operator: Welcome to the WELL Health Technologies Corp. 1st Quarter 2024 Financial Results Conference Call. My name is Sylvia, and I will be your operator for today's call. At this time, note that all participants are in the listen-only mode. We will conduct a question and answer session later in the call, which will be restricted to analysts only. Please note that this conference is being recorded. I will now turn the call over to Tyler Baba, Manager, Investor Relations. Please go ahead, sir. Thank you.

Welcome to the World Health Technologies Corp, first quarter 2024 financial results Conference call. My name is Sylvie and I will be your operator for today's call. At this time note that all participants are in a listen only mode. We will conduct a question and answer session later in the call, which will be restricted to analysts only please note that this conference.

Tyler Baba: Is being recorded I will now turn the call over to Taylor manager Investor Relations. Please go ahead Sir.

Tyler Baba: Thank you, Operator, and welcome everyone to WELL Health's Fiscal First Quarter 2024 Financial Results Conference Call for the three months ended March 31st, 2024. Joining me on the call today are Hamed Shahbazi, Chairman and CEO, and Eva Fong, the company's CFO. I trust that everyone has received a copy of our financial results press release that was issued earlier today.

Tyler Baba: Thank you operator, and welcome everyone to Bauhaus fiscal first quarter 2024 financial results conference call for the three months ended March 31 2024.

Tyler Baba: Joining me on the call today are how much about the chairman and CEO and EBIT from the company's CFO.

Tyler Baba: I Trust that everyone has received a copy of our financial results press release that was issued earlier today.

Tyler Baba: Portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws, including future-oriented financial information and financial outlook information. These forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors, many of which are outside of WELL's control, that may cause the actual results, performance, or achievements of WELL to differ materially from the anticipated results, performance, or achievements implied by such forward-looking statements.

Tyler Baba: Portions of today's call other than historical performance include statements of forward looking information within the meaning of applicable securities laws, including future oriented financial information and financial outlook information.

Tyler Baba: These forward looking statements involve known and unknown risks uncertainties assumptions and other factors many of which are outside of cloud control that may cause the actual results performance or achievements of well could differ materially from the anticipated results performance or achievements implied by such forward looking statements.

Tyler Baba: These factors are further outlined in today's press release and in our management's discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based, except as required by law.

Tyler Baba: These factors are outlined in today's press release and in our management's discussion and analysis.

Tyler Baba: We provide forward looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future.

Tyler Baba: We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward looking statements to reflect any change in our expectations or any change in events conditions assumptions or circumstances on which any such statement is based.

Tyler Baba: Except if it is required by law.

Tyler Baba: We may use terms such as adjusted gross profit, adjusted gross margin, adjusted EBITDA, shareholder Evita, Adjusted Net Income, Adjusted Net Income per Share, and Adjusted Pre-Cash Flow on this conference call, all of which are non-GAAP and non-IFRS. For more information on how we define these terms, please refer to the definitions set out in today's press release and in our management discussion and analysis. The company believes that adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations, which the company can use to fund working capital requirements, service future interest and principal debt repayments, and fund future growth initiatives. And with that, let me turn the call over to Mr. Hamed Shahbazi, Chairman and CEO.

Tyler Baba: You may use terms such as adjusted gross profit adjusted gross margin adjusted EBITDA.

Hamed Shahbazi: Shareholder EBITDA adjusted net income.

Hamed Shahbazi: Adjusted net income per share and adjusted free cash flow on this conference call all of which are non-GAAP and non <unk> measures for more information on how we define these terms. Please referred some definition set out in todays press release.

Hamed Shahbazi: And in our management discussion and analysis.

Hamed Shahbazi: The company believes that adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations, which the company can use to fund working capital requirements service feature interest and principal debt repayments and fund future growth initiatives.

Hamed Shahbazi: Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with IRS and with that let me turn the call over to Mr. How much about the chairman and CEO.

Hamed Shahbazi: Thank you, Tyler, and good day, everyone. We appreciate everyone for joining us today. We're extremely pleased to be with you and discuss Q1 2024, the quarter in which we achieved our 21st consecutive record-breaking revenue quarter. We're also pleased to note another record. This was a record-breaking net profit performance in any Q1 period in terms of IFRS net income, as well as adjusted net income. As the first conference call for fiscal 2024, we believe this is an important opportunity to update our guidance for revenue and EBITDA while rolling out brand new guidance for free cashflow generation and provide commentary around our improving cashflow per share metrics, demonstrating the strength of our platform and the momentum of our business.

Hamed Shahbazi: Thank you Tyler and good day, everyone. We appreciate everyone for joining US today, we're extremely pleased to be with you and discuss Q1 2020 for the quarter in which we achieved our 20 <unk> consecutive record breaking revenue quarter.

Hamed Shahbazi: Also pleased to note. Another record this was a record breaking net profit performance in any Q1 period in terms of <unk> net income as well as adjusted net income.

Hamed Shahbazi: As the first conference call for fiscal 2024, we believe this is an important opportunity to update our guidance for revenue and EBITDA, while rolling out brand new guidance for free cash flow generation and provide commentary around our improving cash flow per share metrics, demonstrating the strength of our platform and the momentum of our business.

Hamed Shahbazi: The first quarter of 2024 exceeded all expectations, and we're proud to report that we've begun the year with an intense focus on enhanced profitability and capital efficiency and are happy to report an 11% year over year improvement in the all important free cash flow available to shareholders per share metric. I will speak more to this later as it is thematically very important to today's call.

Hamed Shahbazi: The first quarter of 2024 exceeded all expectations that we're proud to report that we began the year with an intense focus on enhanced profitability and capital efficiency and.

Hamed Shahbazi: And are happy to report, an 11% year over year improvement in the all important free cash flow available to shareholders per share metric.

Hamed Shahbazi: I will speak more to this later as it is dramatically very important to todays call.

Hamed Shahbazi: You see, we believe we have reached an inflection point in the history of the company, due to the hard work and dedication of our team members and care providers, and especially due to our hard work in Q1 2024, where we reduced a significant amount of costs. We can now reduce our share issuances significantly and instead leverage our own cash flow to grow our business, as well as attract and retain the best and brightest people. You may have noticed that we recently started using our stock buyback program or normal course issuer bid.

Hamed Shahbazi: You see we believe we've reached an inflection point in the history of the company were due to the hard work and dedication of our team members and care providers and especially due to our hard work in Q1, 2024, where we reduced a significant amount of cost.

Hamed Shahbazi: We can now reduce our share issuance is significantly and instead leverage our own cash flow to grow our business as well as attract and retain the best and brightest people.

Hamed Shahbazi: You may have noticed that we recently started using our stock buyback or normal course issuer bid.

Hamed Shahbazi: While the number of shares we're buying on a daily basis is not very material as compared to our overall flow at roughly $10,000 per day, we want to make sure shareholders understand that this is the beginning of a sustained and purposeful pattern that speaks to optimizing our share structure and reducing share issuances of all kinds, including stock-based compensation, while growing and optimizing our free cash flow available to shareholders. This year, we're absolutely determined to deliver the best cash flow generation performance in our history, as well as the lowest amount of dilution since I started the company just over six years ago.

Hamed Shahbazi: While the number of shares we're buying on a daily basis are not very material as compared to our overall float at roughly $10000 per day, we wanted to make sure shareholders understand that this is the beginning of a sustained and purposeful pattern.

Hamed Shahbazi: <unk> to optimizing our share structure, and reducing share issuances of all kinds, including stock based compensation, while growing and optimizing our free cash flow available to shareholders.

Hamed Shahbazi: This year, we're absolutely determined to deliver our best cash flow generation performance of our history as well as the lowest amount of dilution since I started the company just over six years ago.

Hamed Shahbazi: While our optimism does stem from a lot of hard work on cost reduction and improved integration, it does also come from our sustained and elevated organic growth. We're pleased to report that we achieved organic growth of 13.5% year over year, with approximately 3.5% contribution from absorption. As such, you will see over time that our stock buyback is symbolically and thematically very important as it ushers in a new period that we expect to be the norm. A period where we are that would be characterized by sustained growth in cash flow and improvements in reducing and then reversing dilution.

Hamed Shahbazi: While our optimism does stem from a lot of hard work on cost reduction and improved integration. It does also come from our sustained and elevated organic growth.

Hamed Shahbazi: We're pleased to report that we achieved organic growth of 13, 5% year over year with approximately three 5% contribution from absorptions.

Hamed Shahbazi: As such you will see over time that our stock buyback is symbolically and dramatically very important as it ushers in a new period that we expect to be the norm.

Hamed Shahbazi: Well that would be characterized by sustained growth in cash flow and improvement in reducing and then reversing dilution.

Hamed Shahbazi: Before I get into the financials, I will first review some key operational metrics. At the end of Q1 2024, 3,900 WELL providers and clinicians were delivering care across our physical and virtual clinics. In addition, there are more than 36,000 providers benefiting from our SAS and technology services, that is more than one third of all providers in the country, which we believe will continue to increase materially over time. WELL achieved a record 1.3 million patient visits in Q1 2024, an increase of 34% as compared to the previous year and representing 5.2 million patient visits on an annualized run rate basis. Canadian visits grew by 45%, while U.S. visits grew by 23%.

Hamed Shahbazi: Before I get into the financials I will first review some key operational metrics at the end of Q1, 2024, 3900, well providers and clinicians, we're delivering care across our physical and virtual clinic.

Hamed Shahbazi: In addition, there are more than 36000 providers benefiting from our SaaS and technology services that is more than one third of all providers in the country.

Hamed Shahbazi: Which we believe will continue to increase materially over time.

Hamed Shahbazi: Well achieved a record $1 3 million patient visits in Q1, 2024, an increase of 34% as compared to the previous year and representing $5 2 million patient visits on an annualized run rate basis.

Hamed Shahbazi: Canadian visits grew by 45% while U S visits grew by 23%.

Hamed Shahbazi: Meanwhile, total patient interactions increased to a record 2 million interactions in Q1, an increase of 43% as compared to the previous year. Turning to our guidance for 2024, due to the strength that we're seeing, we're pleased to increase our annual revenue guidance to between $960 and $980 million. This increase in guidance reflects the recently acquired 10 new clinics from Shoppers Drug Mart.

Hamed Shahbazi: Meanwhile, total patient interactions increased to a total to a record 2 million interactions in Q1 and.

Hamed Shahbazi: An increase of 43% as compared to the previous year.

Hamed Shahbazi: Turning to our guidance for 2024 due to the strength that we're seeing we're pleased to increase our annual revenue guidance to between 960 and $980 million. This increase in guidance reflects the recently absorbed 10, new clinics from shoppers drug Mart.

Hamed Shahbazi: We're also improving our annual adjusted EBITDA guidance to be in the upper range of the $125 million to $130 million range we provided last quarter. In support of our operating plan for 2024, we have strategically implemented comprehensive cost-cutting measures, including a streamlined approach to staff restructuring, increased utilization of AI and technology for process improvement and optimization, consolidation of suppliers, and tighter integration of our business units. These initiatives have not only strengthened our operational efficiency but resulted in millions of dollars of annualized cost savings, which really permit us to continue our strong growth and limit our dilution.

Hamed Shahbazi: We're also improving our annual adjusted EBITDA guidance to be in the upper range of the 125 million.

Hamed Shahbazi: Two $130 million range, we provided last quarter.

Hamed Shahbazi: In support of our operating plan for 2024, we have strategically implemented comprehensive cost cutting measures, including a streamlined approach to staff restructuring increased utilization of AI and technology for process improvement and optimization consolidation of suppliers and tighter integration of our business units. These initiatives have not only.

Hamed Shahbazi: We strengthened our operational efficiency, but resulted in millions of dollars of annualized cost savings, which really permit us to continue our strong growth and limit our dilution.

Hamed Shahbazi: In addition, we're providing you additional guidance for improving free cash flow available to shareholders to over $55 million in 2024, which would reflect an increase of 30% from $42.4 million in 2023. Eva will provide some additional color on this later in the call, but before I turn the call over to her, I'd like to highlight some key themes.

Hamed Shahbazi: In addition, we are providing you additional guidance for improving free cash flow available to shareholders to over $55 million in 2024, which would reflect an increase of 30% from $42 4 million in 2023, even though we'll provide some additional color on this later in the call.

Eva: Before I turn the call over to her I'd like to highlight some key themes.

Hamed Shahbazi: The strategic alternative process for our U.S. digital health assets, 2. Our clinic absorption model in Canada, and 3. The success of our clinic transformation program. But let's first talk about the strategic alternatives for Circle and Wisp. Last quarter, we indicated that we'd begun considering strategic alternatives for Circle and Wisp. We're pleased to report that we've hired two different global banks as advisors for each of Circle, Medical, and Wisp to help us with this process.

Hamed Shahbazi: One the strategic alternative process for our U S digital health assets to our clinic construction model in Canada and three the success of our clinic transformation program.

Hamed Shahbazi: And we believe that we should have important updates on this by the end of the year. You may be asking why we are seeking strategic alternatives for two successful high-growth businesses. Our primary reason is that WELL has a call option for both of these businesses, which provides us with several alternatives, including acquiring the remaining ownership of the businesses, seeking an IPO, or selling the business. Call options for both businesses extend to and conclude in the Q4 timeframe of this year. The second reason for seeking strategic alternatives is that we do not believe that capital markets are assigning a fair value to these two assets.

Hamed Shahbazi: Let's first talk about the strategic alternatives for circle with last quarter, we indicated that we'd begun considering strategic alternatives for <unk> quarter with we're pleased to report that we have hired two different global banks as advisors for each of circle medical and wished to help us with this process and we believe that we should have important updates on this.

Hamed Shahbazi: At the end of the year.

Hamed Shahbazi: <unk> be asking why are we seeking strategic alternatives for <unk> successful high growth businesses.

Hamed Shahbazi: Our primary reason is that well has a call option for both of these businesses, which provides us with several alternatives, including acquiring the remaining ownership of the businesses seeking an IPO or selling the businesses.

Hamed Shahbazi: Call options for both businesses extend too and conclude in the Q4 timeframe of this year.

Hamed Shahbazi: The second reason for seeking strategic alternatives that we do not believe that capital markets are signing a fair value for these two assets both circle and with our high growth businesses that are operating at lower EBITDA operating margins than the rest of world due to their maturity while investors today are primarily valuing the entire well business as a multiple of EBITDA.

Hamed Shahbazi: Both Circle and WITS are high-growth businesses that are operating at lower EBITDA operating margins than the rest of WELL due to their maturity, while investors today are primarily valuing the entire WELL business as a multiple of EBITDA. Hence, both Circle and WISP are essentially hidden within the larger WELL company valuation. We believe that unlocking the value of water, both of these assets could result in a significant cash benefit to WellShare, which we will use to reduce our debt, issue a special buyback, and or allocate funds into new cash-producing businesses in the Canadian market, where we have a greater synergy potential given our market leadership. As such, we believe this could be proved to be a positive catalyst for Well and return value to Well shareholders. I want to reiterate that we are very pleased with the success of both circles.

Hamed Shahbazi: Hence both circled with bar essentially hidden within the larger well company valuation.

Hamed Shahbazi: We believe that unlocking the value of water. Both of these assets could result in a significant cash benefit to well shareholders.

Hamed Shahbazi: We will use to reduce our debt.

Hamed Shahbazi: Issue, a special buyback <unk> allocate funds into new cash producing businesses in the Canadian market, where we have.

Hamed Shahbazi: Greater synergy potential given our market leadership.

Hamed Shahbazi: As such we believe this could be the.

Hamed Shahbazi: Proved to be a positive catalyst for well and returning value to well shareholders.

Hamed Shahbazi: I want to reiterate that we are very pleased with the success of boats or Congress.

Hamed Shahbazi: Recall when we announced our agreement to acquire a majority position in Circle in September of 2022, it was at an approximately $5 million revenue run rate in US dollars. And this year, Circle is expected to achieve approximately $100 million in revenue. Meanwhile, WISP had an approximately $30 million US revenue run rate in October 2021, when we acquired a majority stake in the company, and this year is expected to achieve around 76 million US dollars in revenues or approximately 100 million Canadian dollars, demonstrating unquestionable value creation through our capital allocation strategy and execution.

Hamed Shahbazi: Recall, when we announced our agreement to acquire a majority position in circle in September of 2022. He was added approximately $5 billion revenue run rate in U S dollars and this year's circle is expected to achieve approximately $100 million U S and revenues.

Hamed Shahbazi: Meanwhile, with patent and approximately $30 million U S revenue run rate in October 2021.

Hamed Shahbazi: When we acquired a majority stake in the company and this year, it's expected to achieve around 76 million U S. <unk> revenues were approximately $100 million Canadian demonstrating unquestionable value accretion through our capital allocation strategy and execution.

Hamed Shahbazi: For the second theme, I'll provide an update on our clinic absorption and acquisition program in Canada. WELL's current pipeline of new clinic opportunities consists of almost 40 clinics, under an LOI agreement where 10 of these clinics would be actionable under our clinic absorption model, where we absorb these clinics into the WELL network, and the remaining 30 clinics would be under our regular M&A bolt-on program. Under the clinic absorption model, we're acquiring clinics for nominal cash costs in the range of less than 0.02 times revenue multiplier.

Hamed Shahbazi: For the second theme I will provide an update on our clinic absorption and acquisition program in Canada, while its current pipeline of new clinic opportunities consists of almost 40 clinics.

Hamed Shahbazi: Under an LOI agreement of which 10 of these clinics would be actionable under our clinic absorption model.

Hamed Shahbazi: Where we absorbed clinics into the well network and the remaining 30 clinics would be under a regular M&A bolt on program.

Hamed Shahbazi: Under the clinic absorption model were acquired clinics for nominal cash costs in the range of less than 0.02 times revenue multiple.

Hamed Shahbazi: Compared to our regular M&A program, where we may pay up to 0.5 times revenue multiple or in the range of three to five times EBIT, the clinic absorption model is a very unique opportunity for WELL. Under this absorption model, we take over the lease, and the staff of the clinic, and the doctors join our network. There are minimal upfront capital costs in most of these cases, but there can be some relatively minor costs to secure data protection and improve IT.

Hamed Shahbazi: Compared to a regular M&A program, where we may pay up to <unk> five times revenue multiple or in the range of three to five times EBITDA.

Hamed Shahbazi: The clinical absorption model is very unique opportunity for well under the subscription model, we take over the leaf and the staff of the clinic and doctors joined our network. There is minimal upfront capital costs in most of these cases, but there can be some relatively minor cost to secure data protection and.

Hamed Shahbazi: Improve it.

Hamed Shahbazi: We're able to absorb these clinics for nominal purchase consideration because the doctors are facing such significant technology challenges and administrative burdens that they increasingly don't want to run their own clinics and just want to focus on providing. We believe the consolidation and digitization of over 20,000 primary care diagnostic, allied health, and longevity clinics across Canada is a once-in-a-lifetime opportunity, with over 175 clinics operating in 97 facilities across Canada. WELL is the clear market share leader, yet we represent just shy of 1% of this $35 billion dollar market opportunity for physician spending, which is a key component of the $330 billion dollars spent every year on all health care costs across Canada. We believe that the Canadian market continues to be an enormous, untapped opportunity for WELL and very much remains a land grab.

Hamed Shahbazi: We're able to absorb these clinics for nominal purchase consideration because the doctors are facing such significant technology challenges administrative burdens that they are increasingly don't want to run their own clinics and just want to focus on providing care.

Hamed Shahbazi: We believe the consolidation and Digitization of over 20000 primary care diagnostic Allied health and longevity clinics across Canada is a once in a lifetime opportunity with over 175 clinics operating in 97 facilities across Canada.

Hamed Shahbazi: Well is the clear market share leader, yet, we just represent just shy of 1% market share up to $35 billion market opportunity for physician spending which is a key component of the $330 billion.

Hamed Shahbazi: Spent every year and all health care costs across Canada.

Hamed Shahbazi: We believe the Canadian market continues to be an enormous untapped opportunity for well and very much remains a land graph situation.

Hamed Shahbazi: We have conviction that we can grow our Canadian business to multiples of its current size in the near future. The third theme is the success of our clinic digitization and transformation program. When we acquire or absorb primary care clinics, they're typically operating at one to three percent EBITDA margins. The large Manitoba clinic and the MCI Ontario clinics that we acquired in Q4 were actually operating at a negative EBIT. Through the clinic transformation process, we generally implement a number of technology solutions and processes, including online booking, waiting room automation, workflow optimization, accounting shared services, virtual care, and billing improvements, as well as our AI suite of products, which is unmatched by any market participant. Our goal is to get these clinics operating in the 5 to 10% EBITDA margin range within the first year and to over 10% margins within 18 to 24 months. This is not easy.

Hamed Shahbazi: We have conviction that we can grow our Canadian business to multiples of its current size in the near future.

Hamed Shahbazi: The third theme is the success of our clinic Digitization and transformation program. When we acquire absorbed primary care clinics, they're typically operating at one 3% EBITDA margins the large Manitoba clinic in the Mci, Ontario clinics that we acquired in Q4 were actually operating at a negative EBITDA margin.

Hamed Shahbazi: Through the clinic transformation process, we generally implemented a number of technology solutions and processes, including online booking waiting room automation works workflow optimization accounting shared services virtual care billing improvements as well as our our AI suite of products, which are unmatched by any market participant.

Hamed Shahbazi: <unk>.

Hamed Shahbazi: Our goal is to get these clinics to operating in the 5% to 10% EBITDA margin range within the first year and to over 10% margins within 18 to 24 months.

Hamed Shahbazi: It's just not easy our clinic Digitization and transformation program is performing better than ever.

Hamed Shahbazi: Our clinic digitization and transformation program is performing better than ever. The original cohort of 18 clinics in BC that we acquired from Dr. Frankel in 2018 is now operating at over 13% EBITDA. Comparatively, the cohort that we acquired in 2022 achieved over 10% EBITDA margins within 18 months and is now operating at over 12% EBITDA. We're now very closely watching our 2023 cohort of clinic absorptions and acquisitions included in the 2023 cohort.

Hamed Shahbazi: The initial the original cohort of 18 clinics in BC that we acquired from Dr. Frankel in 2018 is now operating at over 13% EBITDA margins comparatively the cohort that we acquired in 2022 achieved over 10% EBITDA margins within 18 months and are now operating at over 12% EBITDA margins.

Hamed Shahbazi: It's a large Manitoba clinic and MCI Ontario. Recall, these clinics were not profitable and caused downward pressure on our EBITDA margins in Q4. I'm pleased to announce that the digitization and transformation efforts at these clinics are running ahead of plan. And as of today, both Manitoba and NCI Ontario are now running at positive adjusted EBITDA. Going forward, we expect to continue to increase adjusted EBITDA margins at these clinics over the next year. And with that, I'd like to turn the call over to our CFO, Eva Fong, who'll provide some financial context. I'll then come back and provide further commentary on our business units and Outlook. Eva

Hamed Shahbazi: We're now very closely watching our 2023 cohort of clinic absorptions in acquisitions included in the 2023 cohort, it's a large Manitoba clinic in Mci, Ontario clinics.

Eva Fong: Recall these clinics were not profitable and caused downward pressure on our EBITDA margins in Q4 I am please sit down that the digitization and transformation efforts at these clinics is running ahead of plan and as of today, both Manitoba and Ncis area are now running at positive adjusted EBITDA.

Eva Fong: Going forward, we expect to continue to increase adjusted EBITDA margins at these clinics over the next year.

Eva Fong: And with that I'd like to turn the call over to our CFO <unk> will provide some financial context, I'll then come back and provide further commentary on our business units and outlook Eva.

Eva Fong: Thank you, Hamed. I'm pleased to report that we had very strong results for the three months ended March 31st, 2024. I won't go into details of the financials as they are available on CETA Plus and in our press release this morning. Instead, I'll touch on our new disclosures in the financial statement and MD&A and our plan to issue fewer shares this year. First, on our new financial disclosures. At the beginning of each year, we solicit feedback from analysts, shareholders, and capital market advisors on how we can improve our financial reporting disclosures.

Eva Fong: Thank you Amit.

Eva Fong: Pleased to report that we had very strong results for the three months ended March 31 2024.

Eva Fong: I won't go into details of the financials as they are available on SEDAR and on our press release this morning.

Eva Fong: I'll touch on our new disclosure in the financial statement and DNA and our plan to issue less shares this year.

Eva Fong: Sure I'll now new financial disclosure at the beginning of this year, we solicit feedback from analysts shareholders and capital market advisors on how we can improve our financial reporting disclosures.

Eva Fong: Based on these feedbacks, this quarter we have included adjusted EBITDA in our segment notes in the financial statement. Also, in our MD&A, we have added cemented adjusted gross profit and adjusted EBITDA for all our businesses. We believe this will help investors better track margin developments around each line of business and determine that our margin changes as of the last year are more a result of the blend with new M&A rather than a secular change in any of our margins. Now on our plan to issue lectures this year.

Eva Fong: Based on this feedback this quarter. We have included adjusted EBITDA in our Steckman notes in the financial statement.

Eva Fong: Also in our MD&A, we have added segment adjusted gross profit and adjusted EBITDA for all our business units. We believe this will help investors better track margin development around each line of business and determine that our margin changes as of the last year.

Eva Fong: As a result of the blend with new M&A, rather than a secular change in any of our markets.

Eva Fong: Now on a plan to issue less shares this year.

Eva Fong: Last quarter, we indicated that we have a preference for preserving cash rather than issuing shares. We wanted to revisit this and advise that, as Hamed noted earlier, we believe we have generally reached a fairly significant inflection point in how we think about our security. Given the continued growth of our business, as well as the successful cost optimization program we started executing in Q1, we will be favoring paying cash over shared insurance for M&A purposes, as well as looking to materially reduce our share-based compensation moving forward.

Eva Fong: Last quarter, we indicated that we have a preference for <unk> cash rather than issuing shares.

Eva Fong: We wanted to revisit this and advised as noted earlier, we believe we have generally reached a fairly significant inflection point in how we think about <unk> given the continued growth of our business as well as the successful cost optimization program, we started executing on in Q1.

Eva Fong: We will be favoring pay paying cash over share issuance.

Eva Fong: Process as well as looking to materially reduce our share based compensation moving forward.

Eva Fong: WELL experienced about a 10% share dilution in 2022 as a result of share issuance for all equity issuance, including share incentives for employees, earner payments, acquisitions, and equity financing. Comparatively, our total share dilution declined to 4% in 2023, and we're expecting to reduce this by a double-digit percentage in 2024. This is before consideration of our Normal Course Issuer Bid or NCIB buybacks, which may be increased over time depending on any significant improvements to our cash flows or if we were to successfully unlock the value from one or more of our U.S. digital assets. As of May 7, we have bought back 75,300 shares under NCIB.

Eva Fong: Well experienced about a 10% share dilution in 2022 as a result of share issuance for all equity issuance, including share incentives for.

Eva Fong: Our employees.

Eva Fong: Now payments acquisitions and equity financing.

Eva Fong: Comparatively our total share dilution declined two 4% in 2023, and we are expecting to reduce despite double digit percentage in 2024.

Eva Fong: This is before consideration of our normal course, issuer bid and CIB buybacks, which may be increased overtime, depending on any significant improvement to our cash flow and if we were to success successfully unlocking value from one of our U S digital assets.

Eva Fong: As of May seven we have bought back 75300 shares under and CIB.

Eva Fong: We are also switching our employee incentive programs to be more cash-based versus share-based, which we expect will result in a significant reduction in new share incentive grants in 2024 as compared to 2023. This again will result in a corresponding decrease in stock-based compensation expense this year compared to last year. In terms of our earning our commission, In 2023, we settled approximately $29.4 million in earnouts and vendor takebacks, which was a 55% decline from $65.2 million in earnouts and vendor takebacks we settled in the prior year, 2022.

Eva Fong: We're also switching our employee incentive programs to be more cash based versus share based.

Eva Fong: We expect will result in a significant reduction in new share incentive grants in 2024 as compared to 2023.

Eva Fong: Again, we will result in a corresponding decrease in stock based compensation expense this year compared to last year.

Eva Fong: In terms of all of our now commitment in 2023, we settled for approximately $29 4 million in earn out and then to take back which was a 55% decline from $65 2 million in <unk> <unk>.

Eva Fong: Ben to take back we settle in the prior year 2022.

Eva Fong: Looking forward to 2024, our current expectation is that earner payments will further decline by another 20% to approximately $23 million. In addition, this reduction in earner payments will have a favorable impact on reducing the amount of shares issued on earner payments.

Eva Fong: Looking forward in 2024, our current expectation is that payment will further decline by another 20% to approximately $23 million.

Eva Fong: In addition, this reduction in earn out payments will have a favorable impact on reducing the amount of shares issued an earn out payment.

Eva Fong: Payments.

Eva Fong: It is also important to note that as of the end of Q1, we've already paid down the vast majority of our earners for the year and are not planning significant share issuance for earner payments for the balance of the year. So with improving revenue, EBITDA, and cash flow, and while reducing our share issuance, this should result in an improvement in our per-share metric. Looking at our balance sheets at the end of Q1 2024, we ended Q1 2024 with a solid balance sheet.

Eva Fong: It is also important to note that as of the end of Q1, we've already paid down the vast majority of our earn out for the year and I'm not planning significant share issuance for or no payments in the balance of the year.

Eva Fong: So with improving revenue EBITDA and cash flow.

Eva Fong: While reducing our share issuance. This should result in an improvement in our per share metrics.

Eva Fong: Looking at our balance sheet at the end of Q1 2024, well ended Q1 2024 with a solid balance sheet.

Eva Fong: As of March 31, 2024, WELL has cash and cash equivalents of $48.2 million. WELL continues to be in good standing and fully compliant with all covenants related to its two credit lines, J.P. Morgan in the U.S. and Royal Bank in Canada.

Eva Fong: As of March 31, 2024, well had cash and cash equivalents of $48 2 million.

Eva Fong: While it continues to be in the spending and fully compliant with all covenants related with its two credit lines J P. Morgan in the U S and raw banking, Canada. That's on the two credit lines was approximately $303 million and Canadian dollars as of March 31 2024.

Eva Fong: The debt from the two credit lines was approximately $303 million in Canadian dollars as of March 31, 2024. The global net debt to shareholder ratio for the two credit lines was 2.75 times as at the end of Q1 2024, in line with 2.69 times as at the end of Q4 2023. On a constant currency basis, the net debt to shareholder ratio actually remained unchanged compared to Q4 2023 at 2.69 times. We define net debt-to-shareholder EBITDA ratio as net bad debt, less cash on hand, divided by adjusted EBITDA attributable to well shareholders.

Eva Fong: Whilst net debt to shareholder ratio for the two credit lines was 275 times at the end of Q1 2024 in line with $2 six nine times at the end of Q4 2023.

Eva Fong: On a constant currency basis, the net debt to shareholder ratio actually remained unchanged compared to Q4 2020 Street at 269 times.

Eva Fong: We define net debt to shareholder EBITDA ratio as net bad debt less cash on hand divided by adjusted EBITDA attributable to well shareholders.

Eva Fong: We exclude convertible debentures from this calculation because convertible debentures are not included in our bank confidence. If we include our convertible debentures, which mature at the end of 2026, we will be at approximately 3.51 times leverage. In terms of our share capitalization, as of May 7, 2024, WELL had 263,875,048 fully diluted securities issued and outstanding. That is my financial update, and I turn the call back over to Ha

Eva Fong: <unk> convertible debentures from this calculation because convertible debentures are not included in our bank covenants.

Eva Fong: We include our convertible debentures, which mature at the end of 2026th we will be at approximately $3 five one times levered.

Eva Fong: In terms of our share capitalization as of May seven 2024, well have $263 million 875048, when he does it has to create east issued and outstanding.

Eva Fong: That is my financial update and I'll turn the call back over to Herman.

Hamed Shahbazi: Thank you, Eva. Before I get into the individual business units, I wanted to elaborate on Eva's comments about reducing our share dilution. This is what I refer to as the fourth and most important key theme for today's call, our commitment to delivering improved shareholder value. The best expression of this commitment is closely looking at and tracking our per share metrics. While our revenue per share and EBITDA per share metrics have generally been favorable, as a capital allocation company, we're quite focused on our cash flow per share available to shareholders. This metric is the gold standard in terms of delivering and exemplifying shareholder values.

Ha: Thank you Eva before I get into the individual business units I wanted to elaborate on EBIT comments about reducing our share dilution. This is what I referred to as the fourth and most important key theme for today's call our commitment to delivering improved shareholder value.

Hamed Shahbazi: Best expression for this commitment is closely looking at and tracking our per share metrics, while our revenue per share and EBITDA per share metrics have generally been favorable as a capital allocation company. We're quite focused on our cash flow per share available to shareholders. This metric is the gold standard in terms of delivering and exemplifying shareholder value.

Hamed Shahbazi: We're pleased to report that in Q1 2024, we increased cash flow per share available to shareholders to 5.17 cents per share, which is more than a 10% increase from the same period last year. This shows that while we have experienced some increases in the number of shares, we've managed to grow our cash flow to overcompensate for this. Moving forward, given that we improved our cost efficiency in Q1 and are working to further reduce our dilution, we expect cash flow per share figures to increase materially throughout the year.

Hamed Shahbazi: We're pleased to report that in Q1 2024, we've increased share cash flow per share available to shareholders to five $1 70 per share, which is more than a 10% increase from the same period last year.

Hamed Shahbazi: This shows that while we have experienced some increases in share count we've managed to grow our cash flow overcompensate for this.

Hamed Shahbazi: In fact, we expect notable percentage increases in the next three quarters and more significant increases each year moving forward. Simply put, we've reached an exciting inflection point with the company where our earnouts are decreasing, our cash flows are increasing, and our share issuances are dramatically decreasing and eventually reversing. This has the effect of substantially improving shareholder value and contributing to an improved cash flow per share metric. I might add that the bub dynamic that we just discussed will be true, irrespective of the interest rate environment.

Hamed Shahbazi: Moving forward given that we have improved our cost efficiency in Q1 and are working to further reduce our dilution we expect cash flow per share figures to increase materially throughout the year. In fact, we expect notable percentage increases in the next three quarters and more significant increases each year moving forward simply put.

Hamed Shahbazi: We've reached an exciting inflection point with the company, where our earn outs or decreasing our cash flows are increasing and our share issuances are dramatically decreasing and eventually reversing.

Hamed Shahbazi: This has the effect of substantially improving shareholder value contributing improved cash flow per share metrics.

Hamed Shahbazi: I might add that the above dynamic.

Hamed Shahbazi: We just discussed about will be true irrespective of the interest rate environment, if rates start coming down. This will have the effect of increasing our cash flow, even more which will improve these figures.

Hamed Shahbazi: If rates start coming down, this will have the effect of increasing our cash flow even more, which will improve these figures. It also doesn't assume any progress or specific outcomes with respect to our strategic alternatives initiatives that we discussed earlier in the call.

Hamed Shahbazi: It also doesn't assume any progress or specific outcomes with respect to our strategic alternatives initiatives that we discussed earlier in the call if any of those initiatives results in liquidity for the company our cash flow would improve as we would likely significantly reduce our interest costs by paying down more debt.

Hamed Shahbazi: If any of those initiatives results in liquidity for the company, our cash flow would improve as we would likely significantly reduce our interest costs by paying down more debt and BuyingMore. In the past, we had a strategy that relied more heavily on growth through acquisition and structuring our deals and earnouts with the help of share issuances. But now that WELL's cash flows have improved, organic growth has sustainably increased, and the company has matured, we are in a phase of the company where we have a preference for using cash, then shares, for acquisitions, earnouts, and employee incentive programs. Of course, that preference is also partially related to our own stock price, and at the moment, we feel that we are deeply undervalued given our operational performance as compared to our peers

Hamed Shahbazi: And buying more stock in the past, we had a strategy that relied more heavily on growth through acquisition and structuring our deals and earn outs with the help of share issuances, but now that wealth cash flows have improved organic growth is sustainably increase and the company has matured we are in a phase of the company, where we have a preference for our.

Hamed Shahbazi: For using cash than shares for acquisitions earn outs and employee incentive programs of course that preference is also partially related to our own stock price and at the moment, we feel that we are deeply undervalued given our operational performance as compared to our peers.

Hamed Shahbazi: I will now provide some specific commentary on our individual business units. First, our Canadian Patient Services business, which is now overseen by Dr. Michael Frankel, our Chief Medical Officer. This division includes our primary care business and our WELL Diagnostic Centers, previously referred to as My Health. WELL owns and operates the largest network of clinics across Canada, with physical facilities in the five most popular provinces of Canada, namely Ontario, Quebec, BC, Alberta, and Manitoba, providing multiple services, including primary care, diagnostic, allied health, specialty care, and longevity medical services.

Hamed Shahbazi: I will now provide some specific commentary on our individual business units first our Canadian patient services business, which is now overseen by Dr. Michael Frankel, Our Chief Medical Officer. This division includes our primary care business and our wealth diagnostic centers previously referred to as my health.

Hamed Shahbazi: While owns and operates the largest network of clinics across Canada with physical facilities in the five most popular provinces of Canada, namely, Ontario, Quebec, BC, Alberta, and Manitoba, providing multiple services, including primary care diagnostic.

Hamed Shahbazi: Gnostic Allied health specialty care and longevity medical services.

Hamed Shahbazi: Performance of our Canadian patient services business has been exceptionally strong, generating $75.7 million in revenue in Q1, an increase of 49% from the previous year, and is ahead of our previous guidance of achieving $300 million in 2024, which had already reflected a 30% increase over 2023. Canadian patient services generated adjusted EBITDA of $11.3 million for the quarter, representing a 15% EBITDA margin and an increase of 43% from Q1 of last year. In addition, EBITDA generated in Canada primarily goes to shareholder EBITDA given the small, non-controlled interest that we have in the Canadian market.

Hamed Shahbazi: Performance of our Canadian patient services business has been exceptionally strong generating $75 7 million.

Hamed Shahbazi: And revenue in Q1, an increase of 49% from the previous year and is ahead of our previous guidance of receipt of achieving $300 million in 2024, which was which had already.

Hamed Shahbazi: Reflected a 30% increase over 2023.

Hamed Shahbazi: Canadian patient services generated adjusted EBITDA of $11 3 million for the quarter, representing 15% EBITDA margins.

Hamed Shahbazi: And an increase of 43% from Q1 of last year. In addition, EBITDA generated in Canada, primarily goes to shareholder EBITDA given the small noncontrolling interests that we have in the Canadian market.

Hamed Shahbazi: Let's look a bit closer at the primary care segment. Our primary care business unit includes family practice, walk-in clinics, virtual care, allied health, and longevity services. The company's primary care business unit generated revenue of $45.3 million in Q1, an increase of 83% as compared to the same period last year. This increase relates primarily to the acquisitions of MCI Ontario and Alberta based medical clinics and the large Manitoba clinic, as well as strong organic growth of thirty five percent, which includes same clinic growth as well as impact from our clinic absorption program.

Hamed Shahbazi: Let's look a bit closer at the primary care segment. Our primary care business unit includes family practice walk in clinics and virtual care Allied health and longevity search services.

Hamed Shahbazi: The company's primary care business unit generated revenue of $45 3 million in Q1, an increase of 83% as compared to the same period last year.

Hamed Shahbazi: This increase relates primarily to the acquisitions of Mci, Ontario, and Alberta based medical clinics, and the large Manitoba clinic as well as strong organic growth of 35%, which includes same clinic growth as well as impact from our clinic absorptions program.

Hamed Shahbazi: Our outlook for primary care continues to look strong for the second quarter and beyond, notwithstanding the transformation and digital work that we will be doing on the acquired Shoppers Drug Mart Clinics, which will have a planned and temporary negative impact on our P&L. As we go through the process of digitizing and modernizing these clinics, we expect them to be profitable in 2024. Our longevity business has had a great start since announcing it in Q4 of last year.

Hamed Shahbazi: Our outlook for primary care continues to look strong for the second quarter and beyond notwithstanding the transformation and digital work that we would be doing on the acquired shoppers drug Mart clinics, which will have a planned and temporary negative impact on our P&L.

Hamed Shahbazi: As we go through the process of digitizing and modernizing these clinics, we expect them to be profitable in 2024.

Hamed Shahbazi: Our longevity business has had a great start since announcing this in Q4 of last year, we've already generated close to $1 billion of new higher margin revenues in Q1, 2024 as compared to $6 6 million in Q1 2023.

Hamed Shahbazi: We've already generated close to $1 million in new higher margin revenues in Q1 2024 as compared to $6.6 million in Q1 2023. And while this is a young program, we believe we've created a truly special and scientifically relevant program that is helping patients with their preventative health goals. Now, for a few words about WELL Health Diagnostics.

Hamed Shahbazi: And while this is a young program. We believe we created a truly special and scientifically relevant program that is helping patients with their preventative health goals.

Hamed Shahbazi: And now for a few words about well health diagnostic centers, well health diagnostic had a very strong Q1, achieving record number of patient visits and record revenue of $30 4 million, an increase of 17% compared to the same period last year. This performance was mainly driven by organic growth from the expansion of.

Hamed Shahbazi: WELL Health Diagnostic had a very strong Q1, achieving a record number of patient visits and record revenue of $30.4 million, an increase of 17% compared to the same period last year. This performance was mainly driven by organic growth from the expansion of services and an increase in the number of health care providers, which allows us to serve more patients. Q1 was also boosted by some one-time positive reimbursements, which won't be repeated in Q2.

Hamed Shahbazi: Services and an increase in the number of health care providers, which allows us to serve more patients.

Hamed Shahbazi: Q1 was also boosted by some one time positive reimbursements, which won't be repeated in Q2.

Hamed Shahbazi: For 2024, we're expecting our WELL Health Diagnostic Centers to achieve another year of record revenue and even break even. We anticipate expanding cardiology services in Q2 to address the growing demand while recruiting more physicians. This will allow for increased demand for cardiology consultation and diagnostic services. And in terms of M&A, we're now seeing acquisition multiples finally start to moderate in this segment and become more reasonable on specialized care and diagnostic M&A opportunities. We're looking forward to expanding our diagnostic centers to more provinces in 2024 and beyond. And now I'll discuss the outlook for our WELL Health USA business. First, CRH and provider standing, and staffing.

Hamed Shahbazi: For 2024, we're expecting our well health diagnostic centers to achieve another year of record revenue and EBITDA, we anticipate expanding cardiology services in Q2 to address the growing demand while recruiting more physicians. This will allow for an increased demand for cardiology consultations and diagnostic services.

Hamed Shahbazi: In terms of M&A, we're now seeing acquisition multiples finally start to moderate in this segment and become more reasonable.

Hamed Shahbazi: On specialized care and diagnostic M&A opportunities, we're looking forward to expanding our diagnostic centers to more provinces in 2024 and beyond.

Hamed Shahbazi: And now I'll discuss the outlook for our well help USA business.

Hamed Shahbazi: CRH is provider standing staffing.

Hamed Shahbazi: Series Medical Enter 2024 and the first quarter after fully integrating its 2023 mid-year acquisition of Care Plus Management, which included radar provider staffing business. As a reminder, provider staffing is a premier entrusted staffing and locum tenancies business specializing in anesthesia. They provide recruitment and placement services along with temporary staffing to a national network of provider groups, hospitals, and ASCs across the lower 48 states.

Hamed Shahbazi: CRH medical entered 2024.

Hamed Shahbazi: And the first quarter after fully integrating its 2023 midyear acquisition of Kerr plus management, which included radar provider staffing business.

Hamed Shahbazi: As a reminder, provider staffing as a premier entrusted staffing in locum tenens business specializing in anesthesia, they provide recruitment and placement services along with temporary staffing.

Hamed Shahbazi: National network provider groups hospitals, and ASC across the lower 48 states.

Hamed Shahbazi: This business is extremely complementary to CRH's legacy anesthesia business and provides high revenue growth along with many operating synergies. We expect growth of this segment to continue with anesthesia as well as plans to expand to other health care specialties. Q1 is typically CRH's weakest seasonal quarter in both revenue and margins due to health insurance and payer mix shifts, along with the renewal of patient deductibles coinciding with year-end. With that in mind, Q1 revenue for the CRH business unit, which includes both anesthesia and hemorrhoid banding, was still up 7.4% year-over-year. Also, last year's Q1 included some one-time revenue which was not repeated this year.

Hamed Shahbazi: This business is extremely complementary to CRH as legacy anesthesia business and provides high revenue growth along with many operating synergies.

Hamed Shahbazi: We expect growth of this segment to continue with anesthesia as well as plans to expand to other health care specialties.

Hamed Shahbazi: Q1 is typically CRH is weakest seasonal quarter in both revenue and margins due to health insurance and payer mix shifts along with the renewal of patients deductibles coincides with year end with that in mind Q1 revenue for the CRH business unit, which includes both anesthesia and hemorrhoid banding with still.

Hamed Shahbazi: Seven 4% year over year also last year's Q1 included some onetime revenue, which was not repeated this year we're.

Hamed Shahbazi: We're expecting Q2 revenue to be in line with Q1 levels for both CRH and provider staffing, with growth and profitability accelerating into the second half of 2024, as expected. Now, on to Circle Medical. In Q1, Circle Medical saw continued growth in patient visits, an impressive uptick of 32% year over year, with patient volumes growing from 133,000 to 175,000. Concurrently, revenue surged to $28.7 million in Q1, an increase of 24% as compared to the same period last year.

Hamed Shahbazi: We're expecting Q2 revenue to be in line with Q1 levels for both CRH and provider staffing with growth and profitability accelerating into the second half of 2024 as expected.

Hamed Shahbazi: And now on the circle medical in Q1 Circle medical saw continued growth in patient visits and impressive uptick of 32% year over year with patient volumes growing from 133000 to 175000.

Hamed Shahbazi: Concurrently revenue surged to $28 7 million in Q1, an increase of 24% as compared to the same period last year.

Hamed Shahbazi: For Q2, we expect another record revenue quarter with positive adjusted EBIT. We reiterate our previous guidance of CIRCLE expecting to reach positive adjusted EBITDA in 2024 with improved margins as compared to last year. Some highlights about the Circle Medical Business. In Q1, during Q1, Circle launched virtual care in eight new states, bringing their total number of active states to 38.

Hamed Shahbazi: For Q2, we expect another record revenue quarter with positive adjusted EBITDA.

Hamed Shahbazi: We reiterate our previous guidance of circle expecting to reach positive adjusted EBITDA in 2024 with improved margins as compared to last year.

Hamed Shahbazi: Some highlights about the circle medical business.

Hamed Shahbazi: Q1, it during Q1 circle launched virtual care and eight new states, bringing their total number of active states of 38 also circles pioneering AI scribe product developed in house is currently undergoing beta testing with 15 providers.

Hamed Shahbazi: Also, Circle's pioneering AI scribe product, developed in-house, is currently undergoing beta testing with 15 providers and is anticipated to broaden its reach. The platform is slated to deploy this product to 100 providers in the summer, promising enhanced accuracy in medical documentation and time savings for providers. Circle has a compelling AI-inspired product development pipeline, and we look forward to updating shareholders as more products and features are released. Now, a bit of a bit of focus on WISP.

Hamed Shahbazi: It is anticipated to broaden its reach the platform as stated slated to deploy to this product to 100 providers in the summer promising enhanced accuracy and medical documentation and time savings for providers circle has a compelling AI inspired product development pipeline and we look forward to updating shareholders as more products that feature.

Hamed Shahbazi: Or released.

Hamed Shahbazi: I'm pleased to report that WISP reported adjusted EBITDA in Q1 2024 with revenue of $21.1 million and an increase of 13% from Q1 2023. More importantly, WISP improved its profitability with adjusted EBITDA, increasing 213% as compared to Q1 last year. For Q2, we expect UIST to see continued growth as the business ramps up marketing spend and continues to lean in on new product development, with plans to launch its new fertility vertical in June, as well as new membership programs. However, with increased spending in Q2, we expect adjusted EBITDA levels to decline in Q2 from the level in Q1.

Hamed Shahbazi: And now a bit.

Hamed Shahbazi: A bit of focus on with I am pleased to report that with reported adjusted EBITDA in Q1, 2024 with revenue of $21 1 million and an increase of 13% from Q1 2023.

Hamed Shahbazi: More importantly, with improved its profitability with adjusted EBITDA, increasing 213% as compared to Q1 last year.

Hamed Shahbazi: For Q2, we expect with to see continued growth as the business ramps up marketing spend and continues to lean in on new product development with plans to launch its new <unk>.

Hamed Shahbazi: Utilities vertical in June as well as new membership program.

Hamed Shahbazi: With increased spending in Q2, we expect adjusted EBITDA levels.

Hamed Shahbazi: Will decline in Q2 from the level in Q1.

Hamed Shahbazi: Finally, our SaaS and technology services are a SaaS and technology business. Unit experienced a revenue decline of approximately 20% in Q1 as compared to last year. This was almost entirely driven by, less one-time software project revenue in our cybersecurity division, which tends to be fairly lumpy. However, despite the sale of IntraHealth on February 1st, 2024, recurring or highly recurring external revenue across the SAS and Technology Services Business Unit increased by 13% to $11.9 million in Q1, due to strong organic growth in our platform businesses, including OceanMD.

Hamed Shahbazi: Finally, our SaaS and technology services business.

Hamed Shahbazi: Our SaaS and technology business.

Hamed Shahbazi: <unk> experienced a revenue decline of approximately 20% in Q1 as compared to last year. This was almost entirely driven by.

Hamed Shahbazi: Less onetime software project revenue in our cyber security division, which tends to be fairly lumpy. However, despite the sale of ensure health on February one 2024 recurring or highly reoccurring external revenue across the SaaS and technology services business unit increased by 13.

Hamed Shahbazi: <unk> to $11 9 million in Q1 due to strong organic growth in our platform businesses, including Ocean M D.

Hamed Shahbazi: During Q3 2023, we announced that OceanMD signed a $38.5 million contract with the province of BC. We've already received one-time consulting and project revenue under this contract, and we expect to go live with e-referrals in British Columbia in the coming weeks, at which time we'll also begin to receive recurring subscription revenue.

Hamed Shahbazi: During Q3, 2023, we announced the Ocean MD signed to $38 $5 million contract with the province of BC weed.

Hamed Shahbazi: We've already received one time consulting and project revenue under this contract and we expect to go live with you referrals in BC in the coming weeks at which time, we will also begin to receive recurring subscription revenue in.

Hamed Shahbazi: In addition, I'm pleased to know that OCEAN MD is in the final stage of negotiations with another Canadian province for its e-referral solution. OceanMD is the dominant e-referral solution in Canada and is becoming recognized as the e-referral standard across the country. And now a little bit about our AI product. In 2023, we introduced WELL AI Voice, AI Inbox Administration, and AI Decision Support. I'll start with AI decision support, or WAIS, as some people are starting to call it.

Hamed Shahbazi: In addition, I am pleased to know that Ocean and D is in the final stage negotiation with another Canadian province foresee referral solution.

Hamed Shahbazi: Ocean empty is the dominant E referral solution in Canada and is becoming recognized as the referral standard across the country.

Hamed Shahbazi: And now a little bit about our AI products in.

Hamed Shahbazi: In 2023, we introduced AI voice.

Hamed Shahbazi: In AI Inbox administration, and AI decision support.

Hamed Shahbazi: I'll start with AI decision support or waves as some people are starting to call. It. This is our physician co pilot that compliant leaf screens patient data and provides physician.

Hamed Shahbazi: This is our physician co-pilot that compliantly screens patient data and provides physicians with Risk Stratification and Other Actionable Information. By risk stratification, what we mean is that it will segment by disease patients in a physician roster that are high, medium, or low risk for a particular disease.

Hamed Shahbazi: Physicians with risk stratification and other actionable insights.

Hamed Shahbazi: By risk stratification is what we mean is that it will segment by disease patient and a physician roster that are high medium or low risk for a particular disease. It makes it very easy for physicians to scan and determine if there are any patients that are misdiagnosed underdiagnosed or completely undiagnosed for a particular disease.

Hamed Shahbazi: This makes it very easy for physicians to scan and determine if there are any patients that are misdiagnosed, underdiagnosed, or completely undiagnosed for a particular disease, which is pretty incredible support for a physician. Our first generation system was focused more on rare diseases, but with the second generation version, we are now broadening support to chronic diseases, such as hypertension, chronic kidney disease, and diabetes. In both the US and Canada, more than half of all adults reported having one or more chronic diseases. Chronic disease diseases are the leading causes of risk and disability in both the US and Canada.

Hamed Shahbazi: Which is pretty incredible support for physicians.

Hamed Shahbazi: Our first generation system was focus more on rare diseases, but with the second generation version, we now have broadening out support to chronic diseases, such as hypertension, chronic kidney disease and diabetes, both in the U S and Canada more than half of all adults reported having one or more chronic diseases.

Hamed Shahbazi: Chronic disease diseases are the leading causes of risk and disability in both the U S and Canada. They are also the leading driver of health care costs. So, adding chronic diseases is a game changer for <unk>.

Hamed Shahbazi: They're also the leading driver of healthcare. So adding chronic diseases is a game changer for WELL AI decision support. This is a very special co-pilot program, which is the leading product of its kind in Canada and one of very few available globally. It is powered by our investee and partner HealWell AI. More on HealWell later.

Hamed Shahbazi: Well AI decision support.

Hamed Shahbazi: This is a very special co pilot program, which is the leading product of its kind in Canada and one of very few available globally. It.

Hamed Shahbazi: It is powered by our investors and partners <unk> AI more on fuel well later.

Hamed Shahbazi: WELL AI Voice, A little bit about WELL AI VoiceNow, we've discussed this product before; it is a leading medical transcribing product that significantly reduces administrative burden and enhances patient engagement, giving physicians valuable time back in their day. The strong adoption of WELL AI Voice underscores its immense value to healthcare practitioners, having seamlessly integrated into over 131,000 patient consultations in 2023 and substantially enriching the quality of patient care. Just four months into 2024, we've already exceeded the entire previous year's volume of encounters with nearly 200,000 documented patient consultations.

Hamed Shahbazi: Well AI voice.

Hamed Shahbazi: A little bit about well AI voice now.

Hamed Shahbazi: We've discussed this product before it is a leading medical transcribing product, which significantly reduces administrative burden and enhances patient engagement, giving physicians valuable time back in the day the.

Hamed Shahbazi: The strong adoption of AI voice underscores its immense value to health care practitioners, having seamlessly integrated into over 131000 patient consultations in 2023 and substantially enriching the quality of patient care.

Hamed Shahbazi: With four months into 2024, and we've already exceeded the entire previous year's volume of encounters with nearly 200000 documented patient consultations.

Hamed Shahbazi: This growth represents savings of over 10,000 hours for physicians, highlighting our commitment to enhancing physician efficiency and patient care through our advanced AI capabilities. WELL AI Voice is now operational in over 40 WELL clinics across Ontario and BC with plans for expansion into Alberta soon. The strategic roadmap is set to further our mission of supporting wealth positions and extending our network's reach. And now, a bit about WELL AI in box administration. Well, AI and Box administration significantly reduce the clinic administrative burden by automating facts and document handling.

Hamed Shahbazi: This growth represents savings of over 10000 hours for physicians, highlighting our commitment to enhancing physician efficiency and patient care through our advanced AI capabilities.

Hamed Shahbazi: Voice is now operational in over 40, well clinics across Ontario, and BC and plans for expansion into Alberta.

Hamed Shahbazi: The strategic role it is set to further our mission of supporting wealth physicians and extending our network reach.

Hamed Shahbazi: And now a bit about well AI Inbox administration.

Hamed Shahbazi: Well alien Bucks administrating significantly reduces clinic.

Hamed Shahbazi: Clinic administrative burden by automating facts and documents handling.

Hamed Shahbazi: WELL AI Inbox is currently active in 117 clinics and processes over 40,000 faxes monthly. In Q1, WELL AI Inbox introduced full-fax automation. Using AI technology, the application can now automatically file incoming fax documents directly into the patient chart and provider inbox without any staff input.

Hamed Shahbazi: <unk> AI Inbox is currently active in 117 clinics and processing over 40000 faxes monthly.

Hamed Shahbazi: In Q1, while AIA Inbox introduced full factory automation using AI technology.

Hamed Shahbazi: The application can now automatically file incoming fax documents directly into the patient chart and provider inbox without any staff input based on an initial pilot up to 50% of documents can be fully triage and assigned for provider review in the EMR saving clinic admins up to 90% of their time.

Hamed Shahbazi: Based on an initial pilot, up to 50% of documents can be fully triaged and assigned for provider review in the EMR, saving clinic admins up to 90% of their time. Overall, our technology platform services group continues to perform with the rollout of AI-based tools, expansion of Ocean's e-referral solution, and the continued execution by our EMR and billing solutions group. I'd like to provide some additional commentary now on HealWell AI and our partnership.

Hamed Shahbazi: Overall, our technology platform services group continues to perform with the rollout of AI based tools expansion of ocean. The referral solution and the continued execution by our emo EMR and billing solutions groups.

Hamed Shahbazi: We've been very pleased with the performance of HealWell AI. Since its debut launch on October 1, 2023, Well has completed three financings for a total of twenty nine point nine million dollars in convertible debt and equity and just launched what looks like will end up being a twenty million dollar bought deal, which will altogether total approximately fifty million dollars raised since October, just seven months ago. HealWell has already, during this period of time, completed two acquisitions of Intra Health and Pentavir and made a minority investment in Doctorly.

Hamed Shahbazi: I'd like to provide some additional commentary now on <unk> AI and our partnership.

Hamed Shahbazi: We've been very pleased with the performance of <unk> AI.

Hamed Shahbazi: Since its debut launch on October one 2023, well has completed.

Hamed Shahbazi: <unk> has completed three financings for a total of $29 9 million in convertible debt and equity and just launched what looks like we'll end up being a $20 million bought deal, which will altogether total approximately $50 million raised since October just seven months ago.

Hamed Shahbazi: <unk> has already during this period of time completed two acquisitions of intra health incentive year and made a minority investment in Dr. Lee Hill is currently on a $20 million revenue run rate with which is expected to more than double.

Hamed Shahbazi: HealWell is currently on a twenty million dollar revenue run rate, which we believe is expected to more than double in the coming months with additional organic and organic growth based on what they've noted publicly. WELL currently owns 18% of the common shares of HealWell on a fully diluted basis, taking into consideration our convertible notes and warrants. Consequently, its ownership is approximately 27%.

Hamed Shahbazi: In the coming months with additional organic inorganic growth based on what they've noted publicly.

Hamed Shahbazi: Well currently owns 18% of the common shares of <unk>.

Hamed Shahbazi: On a fully diluted basis, taking into consideration our convertible notes and warrants wells ownership is approximately 27%.

Hamed Shahbazi: While also has a call option on 30 million multi voting shares, which will provide well with over 40% economic ownership and 72% of class B voting shares and heal well once exercise.

Hamed Shahbazi: WELL also has a call option on 30 million multi-voting shares, which will provide WELL with over 40% economic ownership and 72% of Class B voting shares in HealWell One. In summary, we're pleased to have this opportunity to showcase some of our latest thinking on the business, including the inflection point we discussed earlier on how we think about our preference for cash usage versus share issuance. We're very focused on improving our free cash flow per share metric and believe that this metric will continue to demonstrate significant improvements throughout the year and beyond. Our outlook remains positive, hence I'm confident in upgrading our annual guidance and introducing new guidance for the first time on free cash flow generated to more than $55 million for the year.

Hamed Shahbazi: In summary, we're pleased to have this opportunity to showcase some of our latest thinking on the business, including the inflection point, we discussed earlier on how we think about our preference for cash usage versus share issuances.

Hamed Shahbazi: We're very focused on improving our free cash flow per share metric and believe that this metric will continue to demonstrate significant improvements throughout the year and beyond.

Hamed Shahbazi: Our outlook remains positive, hence im confident in upgrading our annual guidance and introducing new guidance for the first time on free cash flow generated to more than $55 million for the year.

Hamed Shahbazi: We hope the improvements in disclosure in this call and in our MD&A demonstrate that we're really committed to meeting the requirements of the Analyst and Investor Community. If there's something that you believe is missing, please don't hesitate to reach out to your WELL Investor Relations team. Before closing, I want to share some important updates with you. WELL Health is hosting its annual general meeting on June 12th. This is a virtual AGM, and details can be found in our information circular, which will be filed on CDAR in the coming weeks.

Hamed Shahbazi: We hope the improvements in disclosure in this call and in our MD&A demonstrates that we're really committed to meeting the.

Hamed Shahbazi: The requirements of the analyst and Investor community.

Hamed Shahbazi: There is something that you believe is missing please don't hesitate to reach out to your well Investor relations team.

Hamed Shahbazi: We're also hosting an in-person Investor Day on June 18 at the Toronto Hilton Hotel. Details can be found in the events section of our website. Finally, I'd like to thank you all for joining us on this call today and thank our shareholders and investors for their continued support. The capital markets have been very supportive of our vision and have provided us with the funding needed to pursue our goals, and we are working hard to return the favor and drive exceptional shareholder value.

Hamed Shahbazi: Before closing I want to share some important updates with you.

Hamed Shahbazi: <unk> is hosting its annual general meeting on June 12. This is a virtual AGM and details can be found in our information circular which will be filed on SEDAR in the coming weeks.

Hamed Shahbazi: Were also hosting an in person Investor day on June 18th at the Toronto Hilton Hotel <unk>.

Hamed Shahbazi: Details can be found under the events section of our website.

Hamed Shahbazi: Finally, I'd like to thank you all for joining us on this call today and thank our shareholders and investors for their continued support the capital markets have been very supportive of our vision and it provided us with the funding needed to pursue our goals and we're working hard to return the favor and drive exceptional shareholder value.

Hamed Shahbazi: I'd also like to thank WELL's senior management team, all our employees, and contractors for their tremendous effort, and, in particular, I'd like to thank our team of talented healthcare practitioners and frontline workers who provide unbelievable patient care. And with that, we'd like to open the call for questions. Operator, would you please...

Hamed Shahbazi: I'd also like to thank wells senior management team all of our employees and contractors for their tremendous effort and in particular I'd like to thank our team of talented health care practitioners and frontline workers, who provide unbelievable patient care.

Hamed Shahbazi: And with that.

Speaker Change: We'd like to open the call for questions. Operator would you. Please accommodate thank you ladies and gentlemen, if you would like to ask a question. Please press star followed by one on your Touchtone phone you will hear a tone acknowledging your request and if you would like to withdraw from the question queue. Please press star followed by two and if you're using a speaker phone.

Operator: Thank you. Ladies and gentlemen, if you would like to ask a question, please press star followed by 1 on your touchtone phone. You will hear a tone acknowledging your request. And if you would like to withdraw from the question queue, please press star followed by 2. And if you're using a speakerphone, you will need to lift the handset before pressing any keys. Please go ahead and press star 1 now if you have any questions. And first, we will have Michael Freeman at Raymond James. Please go ahead.

Michael W. Freeman: You will need to lift the handset before pressing Andy Keys. Please go ahead and press Star one now if you have any questions.

Michael W. Freeman: And first we will have Michael Freedman of Raymond James. Please go ahead.

Michael W. Freeman: Hey, Hamed, Eva, Tyler, thanks so much for taking our questions and congratulations on another fantastic quarter. I'd like to start at a really high level.

Michael W. Freeman: Hey, Tyler Thanks, so much for taking my questions and congratulations on another fantastic quarter.

Michael W. Freeman: I'd like to start out at a really high level.

Michael W. Freeman: This this company has been evolving very quickly and appears to be preparing itself for a period of either even greater change and greater scale.

Michael W. Freeman: I wanted to ask you what what does this company look like in five years like what and what do you expect.

Michael W. Freeman: Are we that we will see emphasized in the company and what should we expect to see de emphasized going forward. Thank you.

Michael W. Freeman: This company has been evolving very quickly and appears to be preparing itself for, you know, a period of even greater change and greater scale. I want to ask you what this company will look like in five years? Like what and what do you expect? Well, we expect that we will see emphasized in the company. And what should we expect to see emphasized going forward?

Michael W. Freeman: Thanks, Michael that's a really great question and I think it's very fitting based on.

Michael W. Freeman: The themes that we discussed today.

Michael W. Freeman: Thank you.

Speaker Change: We believe that.

Michael W. Freeman: Kind of what.

Michael W. Freeman: We've hit that inflection point, where the company can can rely on its own cash flow and so I think youre going to see.

Hamed Shahbazi: Thanks, Michael. That's a really great question. And I think it's very fitting based on the themes that we discussed today. You know, we believe that, you know, kind of we've hit that confliction point where the company can rely on its own cash flow. And so I think you're going to see a real emphasis on optimizing cash flow and reducing dilution and eventually reversing dilution. So really, really focused on cash flow per share.

Hamed Shahbazi: A real emphasis on optimizing cash flow and reducing dilution and eventually reversing solution. So really really focused on cash flow per share, but as far as operationally.

Hamed Shahbazi: But as far as operationally, you know, in the script, I talked about how we are just shy of 1% of the market share in the country today in terms of our share of physician spending and being the largest player in the country, and a significant opportunity to grow because this is a hyper-fragmented market. I mean, there's no reason why we can't be five to 10% of the market. And, and, and frankly, there's very little competition for us right now. There are very few companies that have demonstrated the ability to execute on clinic transformation and change management and support physicians. You'd think that that's easy work, but it's really hard.

Hamed Shahbazi: No.

Hamed Shahbazi: In the script I talked about how we are just shy of 1% market share in the country today.

Hamed Shahbazi: In terms of our share of physician spending.

Hamed Shahbazi: And being the largest player in the country, we see.

Hamed Shahbazi: Significant opportunity to grow because there's the hyper fragmented market I mean, there's no reason why we can't be 5% to 10% of the market.

Hamed Shahbazi: And frankly, there is very little competition for US right now there's very few.

Hamed Shahbazi: Companies that have demonstrated the ability to execute on clinic transformation and change management and supporting physicians.

Hamed Shahbazi: And it's something that we've honed over time and with the use of our technology. So I would expect that we would have a much stronger clinic platform as well. I think, you know, given that we've acquired so much technology and so much platform capability, I don't think that you're going to see us make too many more of those technology acquisitions because, frankly, we don't have to. We now have a significant capability inside the company to develop software and build new products and services.

Hamed Shahbazi: You would think that that's easy work, but it's really hard and it's something that we've honed over time and with the use of our technology. So I would expect that we would have a much stronger clinic platform as well I think given that we've acquired so much technology. So much platform capability I don't.

Hamed Shahbazi: Think that youre going to see us make too many more of those technology acquisitions, because frankly, we don't have to we now have significant capability inside the company to develop software and build new products and services and that's not saying that we'll never acquire tech anymore, we'll certainly be looking at that but.

Hamed Shahbazi: And that's not saying that we'll never acquire tech anymore. We'll certainly be looking at that. But there was a time when we needed to do that to complete the platform picture. And I think this is where also the investment in the partnership with HealWell is very important. We are on a path to control with HealWell, as I noted, you know, with our multi-voting share option. And so I think what you're going to see is, you know, a lot of opportunity to bring in innovation through HealWell, especially on the AI side of things. So, um, really what, what, what, what picture and, and, and seeing, you should be really thinking about is a, it's a very profitable, very relevant and important company that is helping healthcare providers at scale.

Hamed Shahbazi: There was a time when we needed to do that to complete the platform picture.

Hamed Shahbazi: And I think this is where also the investment in the partnership with <unk>.

Hamed Shahbazi: It's very important we are in a path to control we feel well.

Hamed Shahbazi: I noted.

Hamed Shahbazi: With our multi voting share option and so I think what youre going to see us.

Hamed Shahbazi: A lot of a lot of opportunity to bring in innovation through field, well, especially on the AI side of things so.

Hamed Shahbazi: Really what.

Hamed Shahbazi: Picture and theme you should be really thinking about is that it's a very profitable very relevant and important company that is helping healthcare providers at scale.

Hamed Shahbazi: This is helpful. Thank you, Hamed. And very quickly, like it seems there, there will be a real emphasis on, you know, increasing market share in Canada and scaling in a sustainable way. Can it, would it be fair to characterize that there might be a reduced emphasis on operations in the States?

Speaker Change: This is helpful. Thank you Amit very quickly like it seems there there'll be a real emphasis on increasing market share in Canada and scaling.

Hamed Shahbazi: A sustainable way Kennedy would it be fair to characterize that there might be a reduced emphasis on operations in those states.

Hamed Shahbazi: You know, I think, as we noted in the script, U.S. businesses are growing very well, and obviously, CRH has been just an anchor of strength for a long time. And, you know, we love the move that we made with the locum tenants business because, ultimately, CRH is a provider-rich business. It is, essentially, a staffing business. It is providing significant staffing solutions to ASCs across the country, and to now have a staffing platform that was previously also serving CRH integrated, it even strengthens that business further.

Hamed Shahbazi:

Hamed Shahbazi: As we noted in the script the U S businesses are growing very well and obviously CRH has been just an anchor of strength.

Hamed Shahbazi: For a long time and.

Hamed Shahbazi: We loved the moves that we made with.

Hamed Shahbazi: The locum tenants business, because ultimately CRH as the provider rich business. It is it is essentially a staffing business.

Hamed Shahbazi: It is providing significant staffing solutions.

Hamed Shahbazi: <unk> across the country and to now have a staffing platform.

Hamed Shahbazi: That was previously also.

Hamed Shahbazi: Serving CRH integrated even strengthened that business further so in our efforts to tech enabled that business have been have been notable is strong and so I think youre going to continue to see us really.

Hamed Shahbazi: And our efforts to tech-enable that business have been notable and strong. And so I think you're going to continue to see us really make progress there as well. You know, as far as Circle and WISP are concerned, we'll see where those processes end up.

Hamed Shahbazi: Really make progress there as well.

Hamed Shahbazi: As far as circle and West, we'll see where those processes end up I mean, certainly we don't own a 100% of those businesses, but I.

Hamed Shahbazi: I mean, certainly, you know, we don't own 100% of those businesses. But, you know, I can't see a scenario where we'd be letting go of those assets on the cheap. We just, you know, we don't have to. We don't need to

Hamed Shahbazi: I can't see a scenario where.

Hamed Shahbazi: Where we'd be letting go with those assets on the cheap.

Hamed Shahbazi: We just.

Hamed Shahbazi: We don't have to we don't need to we're not under no duress in terms of selling those those or seeking strategic alternatives for those for those assets, but it's really important with the help of our advisors to really consider all the options are and to see if there are liquidity opportunities, particularly at a time when we're seeing such great.

Hamed Shahbazi: We're under no duress in terms of selling them or seeking strategic alternatives for those assets. But it's really important, with the help of our advisors, to really consider what all the options are and to see if there are liquidity opportunities, particularly at a time when we're seeing such great return on investment opportunities in Canada. We are being very disciplined in Canada right now. We're not buying things that we probably should be buying because of our discipline and because of wanting to maintain and not grow our leverage ratios and wanting to deliver on growing cash flow, given that we're in a high-rate environment.

Hamed Shahbazi: Return on investment opportunities in Canada.

Hamed Shahbazi: Are we.

Hamed Shahbazi: We're being very disciplined in Canada right now, we're not buying things that we probably should be buying because of our discipline and because of wanting to maintain.

Hamed Shahbazi: And not grow our leverage ratios and wanting to deliver on growing cash flow give.

Hamed Shahbazi: Given that we're in a high rate environment.

Speaker Change: That's helpful.

Michael W. Freeman: Super helpful. Thank you. See you at investor day.

Speaker Change: Super helpful. Thank you see you at the Investor Day.

Hamed Shahbazi: Thank you, Michael. I'm looking forward to it.

Speaker Change: Thank you Michael looking forward to it.

David Kwan: The next question is from David Kwan at TD Cowen. Please go ahead.

Hamed Shahbazi: Next question is from David Kwan at TD Cowen. Please go ahead.

David Kwan: Can you provide an update just as it relates to the Ontario opportunity, you know, pushing more of the care and services to the private sector as it relates to, I know you talked about MRI licenses in particular. Can you talk about where you are in that process and maybe the related catbacks?

David Kwan: Hi, guys.

David Kwan: Can you provide an update.

David Kwan: Just as it related to.

David Kwan: The Ontario opportunity pushing more of the.

David Kwan: Care and services to the private sector as it relates to I know you talked about MRI licenses in particular can you talk about where you are in that process and maybe the related capex.

Hamed Shahbazi: Absolutely. We have been hearing that the process is inching forward. It, you know, things certainly do take time in the public sector, but we do see a real sustained and focused effort to bring Bill C-60 over the line. And so we don't have any kind of confirmation just yet that, you know, so that we can start the planning in terms of CapEx or anything like that. But I think in the next quarter or two, we hope to have some good news on that front, as we have heard that, you know, licenses may be coming available in the near future.

David Kwan: Absolutely.

Speaker Change: We have been hearing.

Hamed Shahbazi: The processes is inching forward.

Speaker Change: Got it.

Hamed Shahbazi: Things.

Hamed Shahbazi: Certainly do take time in the public sector, but we do see a real sustained and focused effort to bring bill.

Hamed Shahbazi: C 60 over the line and so.

Hamed Shahbazi: We don't have any kind of confirmation.

Hamed Shahbazi: Just yet that so.

Hamed Shahbazi: So that we can start the planning in terms of capex or anything like that but I think in the next quarter or two we hope to have some good news on that front.

Hamed Shahbazi: As we have heard that licenses, maybe coming available in the near future.

David Kwan: Well, that's helpful. And then just on the commentary related to minimizing share dilution, we saw stock-based comp fall this quarter. Is that kind of what we should be expecting for the full year?

Speaker Change: Well that's helpful. And then just on the commentary related to minimizing share dilution.

David Kwan: We saw the stock based comp fall this quarter.

Speaker Change: Is that kind of what we should be expecting for the full year alright, maybe more a question for Anna.

David Kwan: And it may be more of a question for Eva.

Speaker Change: Yeah, do you want to take that one yeah.

Eva Fong: Sure, yeah. So as we mentioned in the script, that's our strategy and that's our plan for this year that we will continue to use cash for our employee incentive plan. And so we're not expecting to issue new shares for both employee incentive shares or M&A acquisitions. So what's the stock-based compensation expenses that will be seen in 2024 are really based on the prior year issuance. So yeah, we will expect to have those decreased quarter by quarter this year.

Eva Fong: Yeah, Eva, do you want to take that one? Sure, yeah.

Eva Fong: Sure Yeah. So as we mentioned on the script, that's our strategy and desktop plan for this year that we will continue to use cash for all employee incentive plan.

Eva Fong: So we're not expecting to issue new shares for employee incentive share all M&A acquisition. So what are they just stock based compensation expenses that will be seen in 2024 is really based on the prior year issuance. So so yes, we will expect to have those.

Eva Fong: This.

Eva Fong: Decrease quarter by quarter this year.

David Kwan: That's great. Thank you. Thank you. Thank you. The next question will be from Alan Klee. Thank you. Please go ahead.

Eva Fong: That's great. Thanks.

Operator: Thank you. The next question will be from Alan Klee at the Maxson Group. Please go ahead.

Speaker Change: Thank you.

Speaker Change: Next question will be from Allen Klee of Maxim Group. Please go ahead.

Speaker Change: Yes, hi.

Speaker Change: In terms of your.

Eva Fong: Your AI initiatives.

Speaker Change: How do you find or could you talk a little about working with you well, how you think about kind of the synergies and growing that business. Thank you.

Allen Robert Klee: Yeah, thanks. Thanks for the question, Alan. We are very encouraged and probably even more encouraged than we were last quarter when we spoke to you. I think what we're finding is that the depth of the products and technology and capabilities at HealWell were probably greater than we first thought. And I think this is more of a reflection of their journey prior to being recapped and relaunched as HealWell when they were MCI. You know, they had a rough time as a as a company, but.

Eva Fong: Yeah. Thanks, Thanks for the question Alan.

Allen Robert Klee: Yeah.

Allen Robert Klee: We're very encouraged and probably even more encouraged than.

Allen Robert Klee: Then we were last quarter when we spoke to you. We I think what we're finding is that the depths of the products and technology and capabilities at <unk>, we're probably greater than we first thought.

Allen Robert Klee: And I think this is more of a reflection of their journey prior to being recapped and relaunched as COO when they were Mci.

Allen Robert Klee: Yes.

Allen Robert Klee: They had a rough time.

Allen Robert Klee: As the company, but.

Hamed Shahbazi: That should not be mistaken with the power of the platform that they were able to put together. And the ability for us to launch a chronic disease tool that compliantly scans patient data so quickly into our network in an integrated way with our EMRs. I mean, it's pretty remarkable.

Allen Robert Klee: That should not be mistaken with the power of the platform that they were able to put together and the ability for us to launch a chronic disease.

Hamed Shahbazi: Tool that compliant we.

Hamed Shahbazi: Scans patient data so quickly.

Hamed Shahbazi: To our network.

Hamed Shahbazi: And in an integrated way with already a Mars I mean, it's pretty remarkable.

Hamed Shahbazi: We're absolutely alone in the marketplace right now with that capability, and so we're absolutely very encouraged. It's still early days, but we see applications here for the public sector.

Hamed Shahbazi: We are absolutely alone in the marketplace right now with that capability.

Hamed Shahbazi: So we're absolutely.

Hamed Shahbazi: Very encouraged its still early days, but we see applications here for public sector, we've been talking to some public sector about these technologies, we've been getting a very good reception.

Hamed Shahbazi: We've been talking to some public sector about these technologies, and we've been getting a very good reception. So, not only do we feel that HealWell is on the right track in their business, but we think that, ultimately, we would be able to unlock the value of HealWell significantly across our network. So, you know, that's kind of where we sit with it.

Hamed Shahbazi: So so not only do.

Hamed Shahbazi: Do we feel that.

Hamed Shahbazi: <unk> is on the right track in their business, but we think that ultimately will be able to unlock the value of fuel will significantly across our network.

Hamed Shahbazi: So so.

Hamed Shahbazi: That's.

Hamed Shahbazi: That's kind of where we sit with it.

Speaker Change: Thank you.

Operator: Thank you. The next question will be from Rob Goff at Echelon. Please go ahead.

Hamed Shahbazi: Thank you. Thank you. The next question will be from Rob Goff at Echelon. Please go ahead. Thank you very much for taking my question and congratulations.

Hamed Shahbazi: Thank you next question will be from Rob Goff of echelon. Please go ahead.

Robert Goff: Thank you very much for taking my question and congrats on the quarter.

Robert Goff: Thank you.

Robert Goff: My question would be around circle.

Robert Goff: Could you discuss the ongoing expansion of circles virtual and physical coverage and within that can you also discuss where you are seeing opportunities to leverage the CRH network.

Robert Goff: Sure, yeah, I mean, look, there was a time when we felt that the physical side would grow a lot faster due to the requirements of the regulatory side of things following the pandemic. And that really just hasn't happened.

Robert Goff: Sure Yeah, I mean look there was a time when.

Robert Goff: We felt that the physical side would grow a lot faster due to the requirements of the regulatory side of things following the pandemic.

Hamed Shahbazi: So the regulatory environment is not as severe and structured and challenging as we thought it would be. So there isn't as much of a need to leverage physical brick and mortar. And so actually, you're probably going to see the physical brick and mortar side of things not being emphasized or grown significantly, and more of an emphasis on the more cost-effective and scalable virtual side of things. So, that's why we're pleased to report that we have now launched in eight new states.

Robert Goff: And that really just has not happened. So so the regulatory has not been as severe.

Hamed Shahbazi: And structured and challenging as we thought it would so that there isn't as much of a need to leverage our physical brick and mortar and so actually.

Hamed Shahbazi: Youre, probably going to see.

Hamed Shahbazi: The physical brick and mortar side of things not being emphasized or grown significantly and more of an emphasis on the more cost effective and scalable virtual side of things.

Hamed Shahbazi: So that's why we were pleased to report that we have now launched in eight new states.

Hamed Shahbazi: You know, I think if you sort of look at the different business units, the circle, the virtual side is a lot more profitable than the physical side. And we know that, based on what we see here in Canada, but in the US, you also have better per unit economics.

Hamed Shahbazi: I think with with if you sort of look at the different business units the circle.

Hamed Shahbazi: The virtual side is a lot more.

Hamed Shahbazi: Profitable and the physical side and we know that based on what we see here in Canada, but in the U S. You also have better per unit economics.

Hamed Shahbazi: For virtual care, so it's quite a bit more pronounced. And I think with their product development efforts and the tech advantage that they have, it's one of the reasons why they continue to perform and contrast so many other unprofitable platforms in the U.S. You may have heard that a number of platforms are closing shop in the U.S., and it's because it's really hard to execute and innovate. And I think what Circle has is just really great tech.

Hamed Shahbazi: For virtual care, so it's quite a bit more pronounced and I think with their product development efforts and the tech advantage that they have it's one of the reasons why they continued to perform and contract. So many other unprofitable platforms in the U S. You may have heard that a number of.

Hamed Shahbazi: Platforms are closing shop in the U S and it's because it's really hard to execute and innovate.

Hamed Shahbazi: I think what circle has is just really great Tech I mean, this was a Y Combinator company.

Hamed Shahbazi: I mean, this is a Y Combinator company. It's a Bay Area company with a tradition of fantastic technology. And that's really what sustained it, and that's really what will cause it to grow. So we're quite pleased with that. And so to really answer your question, there is a lot more emphasis on the virtual experience.

Hamed Shahbazi: Bay area accompany with the tradition of fantastic technology, and Thats really whats sustained it and thats really what will cause it to grow so we're quite pleased.

Hamed Shahbazi: That and so to really answer your question, it's a lot more emphasis on the virtual expansion.

Robert Goff: Group. Thank you very much. Thank you. Thank you. The next question will be from Christian Sgro at 8 Capital; please go ahead.

Speaker Change: Thank you very much.

Speaker Change: Thank you. Thank you our.

Operator: The next question will be from Christian Sgro at 8 Capital. Please go ahead.

Christian Sgro: Next question will be from question escrow at eight capital. Please go ahead.

Christian Sgro: Hi, good afternoon, thanks for taking my questions.

Christian Sgro: You've called out a 275 times leverage ratio.

Christian Sgro: Wondering if I could.

Christian Sgro: As holiday that organization, if you have a target leverage ratio you're comfortable with.

Christian Sgro: What number you want to get it down to.

Christian Sgro: Where you become more active on M&A or buybacks or that sort of thing.

Christian Sgro: Yeah, thanks, Christian. I'll note that while she did talk about a 2.75 leverage ratio, we actually did not see an increase in our leverage ratio on a constant currency basis. So the only reason why the leverage ratio went up was because the USD went up. And the majority of our debt is denominated in U.S. dollars. So, look, in the past, we've said that we're pretty comfortable with it being less than three times. And I think we still feel that way. I think we're sort of at our threshold for pain threshold here.

Christian Sgro: Yeah. Thanks Christian.

Christian Sgro: I'll note that while she did talk about $2 75 leverage ratio we actually.

Christian Sgro: Did not see an increase in our leverage ratio on a constant currency basis. So the only reason why the leverage ratio went up was because USD went up.

Christian Sgro: And the majority.

Christian Sgro: Yes.

Speaker Change: Sorry about that.

Christian Sgro: And the majority of our of our use of our debt is denominated in U S dollars.

Christian Sgro: So so look.

Christian Sgro: I think in the past, we've said that we're pretty comfortable with it being less than three three times and I think we still feel that way.

Christian Sgro: I think we're sort of at our thresholds for pain here.

Hamed Shahbazi: We generally don't like debt, but we can service it. And it's the right thing to do right now to, I think, sustain it and not add to it, especially given that we are still in a high-rate environment. We are eagerly looking forward to rate decreases in both the U.S. and Canada. It appears that those will show up first in the Canadian market, given what we're seeing on the macro side of things.

Christian Sgro: We generally don't like debt.

Hamed Shahbazi: But we can service it and it's the right thing to do right now too.

Hamed Shahbazi: I think the sustain it and not add to it, especially given that we are still in a high rate environment.

Hamed Shahbazi: So we're encouraged. And look, the good news for us is that, notwithstanding the high rate environment, we're going to be delivering 30% more cash flow this year than last year. I mean, that's what I hope is notable for analysts and investors on this call today.

Hamed Shahbazi: We are eagerly looking forward to a rate decreases in both the U S and Canada. It appears that that will show up first in the Canadian market given what we're seeing in the macro side of things.

Hamed Shahbazi: So so we're encouraged and looked at the good news for us is that.

Hamed Shahbazi: Notwithstanding.

Hamed Shahbazi: The high rate environment, we're going to be delivering 30% more cash flow this year than last year, I mean thats whats.

Hamed Shahbazi: Hopefully notable for for analysts and investors on this call today.

Christian Sgro: That's helpful context on it. Thanks for taking my question. I'll pass the line. The next question will be from Justin Keywood at STFL. Please go ahead.

Speaker Change: That's helpful context, Thanks for taking my question I'll pass the line.

Operator: The next question will be from Justin Keywood at CIFO. Please go ahead. All right, thanks for taking the time.

Justin Keywood: Next question will be from Justin <unk> of Stifel. Please go ahead.

Justin Keywood: Alright, thanks for taking my call.

Justin Keywood: So on the EBIT contribution for the Canadian business. So it was pretty strong in the quarter of 2000 14.6, a little over a half of your overall EBITDA and I know theres been some active M&A pursuits, so where that margin appreciation takes a little while to work out. So just wondering what led to that improvement.

Operator: Improvement in the Canadian EBITDA.

Justin Keywood: Yeah, thanks, just this is kind of what we've been saying now for a while, the strength of the Canadian business has just really started to shine through the acquisition multiples. I mean, I mean, the ability to buy assets at the rates that we've been buying them and the ability to improve them by several hundred basis points within a several-month period of time.

Justin Keywood: Yeah. Thanks, Justin this is kind of what we've been saying now for a while the strength of the Canadian business has just really started to shine through.

Justin Keywood: The acquisition multiples I mean, the ability to buy assets.

Justin Keywood: At the rates that we've been buying them and the ability to improve.

Justin Keywood: And then.

Justin Keywood: By several hundred basis points within our within our <unk>.

Hamed Shahbazi: These are really substantial numbers, and I don't think people have really locked into what this really means. And I think it's quite unprecedented, just given the challenges that we're seeing in the healthcare ecosystem. We're all seeing this sort of play out in the broader media landscape when we hear about physicians struggling, and I do think it's just demonstrating the relevance that we have to the market. And so, you're right, this was the first time that our Canadian shareholder EBITDA, as a whole, exceeded our US.

Hamed Shahbazi: Several month period of time. These are really substantial numbers and I don't think people have really.

Hamed Shahbazi: Locked into to what this really means I mean, and I think it's quite unprecedented just given the challenges that we're seeing in the health care ecosystem.

Hamed Shahbazi: We're all seeing that sort of play out.

Hamed Shahbazi: And in the broader media landscape when we hear about physician struggling and I do think it's just demonstrating the relevance that we have to the market and so.

Hamed Shahbazi: You are right. This was this was the first time that our Canadian shareholder EBITDA.

Hamed Shahbazi: On a whole exceeded our U S and I think it's very notable and I think it will continue I think I think this trajectory and I think whats.

Hamed Shahbazi: And I think it's very notable, and I think it'll continue. I think this trajectory, and I think what's really interesting about it is just the capital efficiency with which it's done. And I might add that it's not just the clinics. I think we continue to see great EBITDA contributions from the platform side of things. We have a really strong software and services business that, if it was a separate business on its own, it would probably command a very significant valuation. So, we'll do more to highlight that in the future.

Hamed Shahbazi: Really interesting about it is just the capital efficiency with which it's done.

Hamed Shahbazi: And I might add that its not just the clinics I think we continue to see great EBITDA contributions from the platform side of things. We have a we have a really strong software and services business that.

Hamed Shahbazi: If it was a separate business onto itself it would probably command.

Hamed Shahbazi: A very significant valuation.

Hamed Shahbazi: So what we will do more to highlight that in the future.

Speaker Change: Absolutely. Thanks for taking my question.

Operator: Thank you. And at this time, I would like to turn the call back over to our speakers for any closing remarks.

Speaker Change: Thank you and at this time I would like to turn the call back over to our speakers for any closing remarks.

Hamed Shahbazi: Thank you very much for everyone joining us today, and we really appreciate your time today, and we look forward to speaking with you over the next several weeks and months, and, of course, during our next conference call in late summer.

Speaker Change: Thank you very much for everyone. Joining us we really appreciate your time today and we look forward to speaking with you over the next several weeks and months and of course <unk>.

Hamed Shahbazi: During our next.

Hamed Shahbazi: Conference call it late summer.

Speaker Change: Have a great day.

Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we do ask that you please disconnect your lines.

Speaker Change: Thank you, Sir ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines.

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