Good morning. Welcome to MTBC First Quarter 2020 Conference Call -- Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]Please note, this event is being recorded. I would now like to turn the conference over to Kim Grant, General Counsel. Please go ahead.

Thank you, and good morning, everyone. Welcome to the MTBC first quarter 2020 conference call. On today's call are Mahmud Haq, our Founder and Executive Chairman; Stephen Snyder, our Chief Executive Officer and the Director; A. Hadi Chaudhry, our President and the Director; and Bill Korn, our Chief Financial Officer.Before we begin, I would like to remind you that certain statements made during this conference call are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended.All statements other than statements of historical facts made during this conference call are forward-looking statements, including, without limitation, statements regarding our expectations and guidance for future financial and operational performance, expected growth, business outlook and potential organic growth and acquisitions.Forward-looking statements may sometimes be identified with words such as will, may, expect, plan, anticipate, upcoming, believe, estimate or similar terminology and the negative of these terms.Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements.These statements reflect our opinions only as of the date of this presentation and we undertake no obligation to revise these forward-looking statements in light of new information or future events.Please refer to our press release and our reports filed with the Securities and Exchange Commission, where you will find a more comprehensive discussion of our performance and factors that could cause actual results to differ materially from these forward-looking statements.For anyone who dialed into the call by telephone, you may want to download our first quarter 2020 earnings presentation. Please our Investor Relations site ir.mtbc.com click on Events and download the earnings presentation.Finally, on today's call, we may refer to certain non-GAAP financial measures. Please refer to today's press release announcing our first quarter 2020 results for a reconciliation of these non-GAAP performance measures to our GAAP financial results.With that said, I'll now turn the call over to our Chief Executive Officer, Stephen Snyder. Steve?

Thank you, Kim. And thank you everyone for joining us on our first quarter 2020 earnings call. In addition to the regular members of our panel, I am pleased today to be joined by Juan Molina, the President of our CareCloud Division; and Karl Johnson, who was recently promoted to the role of President of our MTBC Force Division.Today we are pleased to report a strong start to 2020, including a 45% year-over-year increase in first quarter revenue to $21.9 million, which was driven in large part by our acquisition earlier this year of CareCloud.CareCloud was the 15th acquisition that we have closed since our initial public offering in 2014, and like our other acquisitions represented a good, but nevertheless distress company serving the critical back office and technology needs of healthcare providers throughout the country.We're very pleased to report that our adjusted EBITDA for the first quarter of 2020 was $767,000, this reflected a planned year-over-year decline, driven by our acquisition of CareCloud during January of this year, but nevertheless, outperform our internal model.Consistent with our regular acquisition playbook, we have already substantially rationalized CareCloud operating expenses having now reduced more than $16 million of annualized net expense since we acquired CareCloud at the beginning of the first quarter.It goes without saying that our country and the world face an extraordinary challenge in COVID-19. As a company, we have never been stronger or better positioned from an operational, technological and financial perspective to support our new and existing customers.And as a team, we have never felt such a profound sense of purpose in our work as we've been reminded time and time again the a privilege we have to support the heroic women and men who were serving as healthcare providers on the front-lines of this important battle.We are…

Thank you, Steve. And thank you everyone for joining us on first quarter 2020 calls. As Steve mentioned earlier, like others, we have seen a decrease in our customers overall appointment volumes. More specifically, we did see patient visits trending downward beginning in first half of March. This decrease in appointment volume was roughly 40% and then began to stabilize by the end of March.Based on the data that we are reviewing, we believe that the rebound has already started to take place. In fact, our numbers show that we have already made up close to half of the overall declines in appointment volumes since then.While these declines were happening, we also saw an almost immediate and substantial increase in our customers move toward virtual appointment. In fact, on March 1, 2020, Telehealth consults represents less than 1% of all visit types. We then saw this spike tremendously and level out to approximately 21% of all visits being Telehealth consults.We have been following these reimbursement metrics and have seen a nice income stream for our customers from Telehealth consults. Specifically, as Medicaid provided flexibilities in Telehealth reimbursement created by the Coronavirus Aid, Relief and Economic Security the CARES Act.As a result, we immediately begin outreach to our customer’s base on a weekly or sometimes biweekly basis on different topics. We provided guidance via webinars and in-app [ph] announcements on how medical practices could navigate the federal programs available to them and to apply for specific programs that would allow them to request federal assistance for payroll or request advanced medical -- Medicare payments, as an example.We also begin immediate training and best practice consultations with providers on how to effectively set up your practice to provide Telehealth services. We reacted quickly and pivoted our roadmap and enhanced our technology, likable…

Thank you, Hadi. Revenue for the first quarter of 2020 was $21.9 million, an increase of $6.8 million or 45% from the first quarter of 2019. Our first quarter of 2020 results included those of CareCloud subsequent to our acquisition on January 8, 2020.We added 700 practices with over 5,000 providers to our client base, 75% of which pay monthly staff fees, use CareClouds award winning cloud based platform, and 25% of which also use revenue cycle management services in addition to SaaS.Our first quarter 2020 GAAP net loss was $2.5 million, as compared to a net loss of $296,000 in the same period last year. The GAAP net loss reflects $1.3 million of non-cash depreciation and amortization expenses, $1.3 million of stock-based compensation and $645,000 of integration and transaction costs related to recent acquisitions.Our GAAP net loss was $0.42 per share based on the net loss attributable to common shareholders, which takes into account the preferred stock dividends declared during the quarter. Short-term increase in our net loss was expected when we decided to buy CareCloud.When MTBC acquires businesses, we typically buy companies which are losing money, knowing that we will reduce their expenses dramatically over the next 12 months. This lets us pay significantly less than we were to for profitable businesses and we can attain a similar or better level of profitability after two or three quarters of ownership. Our acquisition of CareCloud fit into this pattern.CareCloud’s venture backers had invested well over $100 million developing an industry-acclaimed technology platform, but CareCloud lost over $21 million in 2019. We knew when we bought CareCloud that this would reduce MTBC’s profitability during first quarter 2020, but we also knew we could reverse that trend quickly and turn this into a profitable acquisition as we've done many times before.…

One moment we have lost connection with our main speaker. Please hold on until we bring them back in.

Hey, Bill. They're putting us on the conference bridge.

Yeah. Our speakers back. Mr. Korn, go ahead. Mr. Korn – Mr. Bill Korn go ahead.

Hope everybody on.

The lines are open.

Bill, go ahead.

Hi. Sorry about that. I guess for all our plans with redundant lines, Murphy's law happened, so I apologize you to everybody. I'm not quite sure where I dropped off, but let me just wrap up the revenue guidance portion by saying the prospects for organic growth via MTBC Force, as well as additional acquisitions, which these prospects have never been better. We now expect to exit 2020 at a higher revenue run rate than originally anticipated. This gives us confidence that we can meet or exceed our $100 million to $102 million revenue guidance.Our adjusted EBITDA is still expected to be $12 million to $13 million for full-year 2020. Growth of 48% to 60% over 2019 adjusted EBITDA, as we integrate the CareCloud acquisition. The acquisitions we’ve -- the actions we've already taken will significantly reduce CareCloud’s operating expense [Technical Difficulty] acquisitions.We anticipate that CareCloud will add to our overall adjusted EBITDA during Q3 to Q4 at a sufficient level for the impact of full-year 2020 operating results to be accretive. However, with lower revenue anticipated during the second quarter, we're not counting on generating positive adjusted EBITDA during this quarter, but we plan to exit 2020 with CareCloud, as well as additional second half strategic initiatives contributing significantly to our growth and profitability in future years.I'll now turn the floor over to our Chairman, Mahmud for his concluding comments.

Thank you, Bill. While 2020 is a challenging year for the world. We are fortunate to be in a very strong position and we anticipate another year of record breaking growth with increasing profitability. We thank our investors, our customers, and our employees for their support.We will now open the call to the question. Operator?

[Operator Instructions] Our first question is from Gene Mannheimer from Dougherty & Company. Go ahead.

Thanks. Good morning and great start to the year guys. I wanted to ask you with respect to your sense that visits are going to return to normal in the back half, is I think that's contemplated in your outlook. What gives you that confidence? I mean, I know you saw a little bit of a pickup here since the March lows, but why do you feel that we're going to return to a normal cadence of doctor visits and utilization?

Hi. Can you hear me?

Yes. You're back on. Sorry, Gene. Actually we lost Bill and we just got him back on.

Did you hear my question?

Yes. I think Gene your question – yeah. Gene, your question, as Hadi mentioned, we have screening about half of the volume already came back in month of April, and I think, we're seeing – we are tracking it on a daily basis and we are seeing the projectory to be back in the third quarter, as Hadi and Bill mentioned. So it's based on our actual tracking of patient encounters today. And again, there could be the second wave and there's other issues, things could change, but at this point we believe that the third quarter will be back to normal.

Okay. All right. Very helpful. And then my follow-up would be in your outlook, I think, you said you're going to -- you're tracking an exit rate higher than what you said -- what you thought previously, what level of acquired growth, if any, is contemplated in your 2020 outlook? Thanks.

Great. Thanks, Gene, for the question.

Bill?

You lost from the line.

Okay. Let me, I don’t know, I think, he is having trouble connecting. But to answer your questions, Gene, as we look at the year, there is no doubt that the COVID impact will be there in terms of the full-year.So for us, if you look at there are multiple paths for us in order to achieve guidance. And as we think about the ways of doing that [Technical Difficulty] potential binary avenues, one being MTBC Force deals and the other being through acquisitions. And we see an opportunity there to add additional revenue above and beyond what we had anticipated on January 1, probably, $8 million or $9 million for the year through one of those two avenues or through a combination of those avenues.

That's great. So $8 million to $9 million above your current outlook or is that contemplated in the outlook?

That's contemplated in the outlook. That's right.

Got you.

Yes. Right.

Thank you, Steve.

For sure. Thank you, Gene.

Our next question is from Alan Klee from National Securities Corporation. Go ahead.

Yes. Hi. For your offshore centers, can you talk about what you're doing and your confidence that they can continue to run, as well as they have given COVID?

Okay. Sure. Thank you and this is Hadi. Good question. As I mentioned earlier, so there are – so first of all, one of the advantage that we have in many of our competitors, we have a global workforce. We are about over 400 plus team members on the U.S. side and about 2,500 between the different offices offshore.So the different layers that we have taken, so there is about a 30% workforce that are working from home. We already have set them up and they are working directly home. They are roughly about 30% that are commuting to the office on the daily basis and working under that strict health safety guidelines and working closely with the health agencies there. They are commuting to the work and then working from there. And then the rest of the employees, they are even literally living in the onsite dormitories that we have in our back office one of -- at one of the locations.So between those three, we have been able to provide the turnaround time, which was far better than any of the competitors out there. And right now virtually it's completely caught up, nothing pending and we have a lot of excess capacity and that's why we also have started, as Steve mentioned, the other opportunities that are providing these partnership here at the back office facilities and the support can be provided -- provided to the other vendors.

Right. Alan, this is Mahmud. And if you look at the Pakistan, where major back office is, whether it is a temperature difference with much harder, harder, hotter over there or whether it's the malaria type discussions, the infection rate is with a country of 200 million. I think the cases reported are less than 35,000 today. So we believe that this – the epidemic could not affect Pakistan as much as it has other countries.

Okay. Thank you very much. Then I was trying to understand a little better the organic growth rate from your legacy business. And maybe you said it and I missed it when you said 40% volume declines -- maybe could you help with what the patient volume declines were in the first quarter, and maybe how the legacy business did on a standalone, and how you would think about how the legacy business -- what by legacy, I mean, excluding CareCloud is anticipated in kind of the following quarters? Thank you.

Thanks Alan. So during Q1, there was a small decline in inpatient volumes, but remember COVID wasn't a big deal in January, wasn't a big deal in February. And even in March, in most of the country, people were still basically going about normal activities, going to the doctors. So we saw a decline in inpatient volumes during the last two weeks of March in certain areas. So that reduced our revenue by a little bit, but not a very large amount during Q1.Again, we think most of the impact from COVID candidly is -- that you're going to see during Q2. When we see 40% less visits to the doctor, and again, we've seen other people talk about numbers ranging from 40% to 50% to maybe even 60% decline depending on the specialties they're serving.Only about 60% of our revenue is tied to the value of the doctor encounters. So for some of Q2, and again, we don't have a crystal ball. We know that the country is starting to reopen. We've seen many doctors starting to see patients in house, and of course, many of our doctors were already using Telehealth. So the fact that there were less in person visits didn't hurt revenues.So, I think that if you're trying to think about Q2 revenue, I would look at Q2 revenue being a little less than it was in Q1. And I'm sorry, I can't be a lot more specific because I can't tell you whether on June 1st, everyone is going to declare a victory and start going back to bringing their children in for well-baby visits or whether we'll start to see a second rebound in certain areas. So, given that, I think, we can't really be as specific on the short-term.What we can do is we can look at the whole year, and say, there are a lot of paths by which we can hit our $100 million to $102 million guidance. And candidly, we see a lot of opportunities to significantly exceed our guidance, and we feel totally confident that with the various things that we could do a -- we've got a way to hit the overall numbers, but telling you how much will come from each piece, especially during second quarter, it's without a crystal ball, it's hard to predict.

Okay. Thank you. That's my last question and then I'll get back in queue is, two areas of growth that you highlighted was telemedicine and your – and Force. You made an interesting comment on how you were seeing increase in reimbursement for Telehealth. I was wondering if maybe you could just expand on that, that I could get educated on that. And is this something that is likely to be longer term post to be economy getting back to normal? And then on Force maybe if you could just go into a little of what you're seeing and your thoughts about that? Thank you. Thank you again.

Okay. Absolutely. Thank you for the question. I'll start with Force, and then I'll loop Hadi in to talk some more about Telehealth. MTBC Force as you may recall, is an outgrowth of our longstanding acquisition strategy. So we think there is a -- then there remains a significant addressable market.Some of the opportunities that we're pursuing today are opportunities that initially came to us through our acquisition pipeline and for a variety of reasons, whether its insufficient alignment regarding valuations or structure or timing or size, they weren't necessarily good candidates for our acquisition growth, but were phenomenal candidates potentially for MTBC Force.So we launched MTBC Force in 2019 -- the second half of 2019 in an effort to be able to benefit from and provide benefits to other vendors through this alternate arrangement of working with them.MTBC Force if we just kind of level set in terms of the overall offering. What it includes is it includes workforce augmentation, revenue cycle management back office services, administrative support, R&D support for providers, other vendors in our space generally speaking at a 50% or greater reduction or discount compared to a similarly situated and educated U.S. based resources with similar output. It also excluding some of its variations to offerings, white labeled, healthcare IT solutions and also sometimes as an aspect of a customer referral that's part and parcel of that overall opportunity.Since that launching MTBC Force, we've signed close to half dozen of those relationships. About half of those are revenue cycle management companies and the other half are either EHRs or in one case HER value added reseller.I also have had Karl through phone, and Karl was promoted to the role of President to MTBC Force, and has already been doing a great job in terms of helping…

Thank you, Steve. To add that to Steve points, the number of different layers we all understand it's going to be a new norm, they will be more and more encounters the transition towards the Telehealth even post-COVID.So during this public health emergency, under the executive order, so they have announced, as an example that the reimbursement levels can be or will be at the same level as it would have been otherwise in the regular course of business.So for how long this will continue. We are not sure yet. But for now in terms of reimbursements, the Telehealth encounters are also being paid at the same amount that otherwise would have been paid in office or at home visit. So that's one.And the second thing is even in EMEA at another point here even using a non-HIPPA compliant initially during the public health emergency, when using the FaceTime or some of the other methods of connectivity, and there are new codes that have been added for audio-only treatments, for example, audio only calls. So all of those have started to add the reimbursement for the two started to add the revenue for the client.From the MTBC standpoint, we launched our first Telehealth product in the last year and we continue to focus on the SaaS. And as we are going through nowadays more focusing on making sure that the right coding is being done for those encounters. The right rules have been created in the system, guiding the practices and providers to make sure that they achieve the right level of reimbursement.And then in the next coming quarters, we will continue to provide the update and launch the second phase of our Telehealth solution called TalkMD, which we have talked about in the earlier quarters and we are making progress on those lines as well.

Thank you so much.

Thank you.

Our next question is from Marc Wiesenberger from B. Riley FBR. Go ahead.

Thank you. Good morning. Can you talk about your ability to move customers up through the value added services you offer for example, on CareCloud going from kind of Concierge to Concierge Pro and how did the economics differ there? And maybe help us think about what types of practices, would you use the respective tiers of service that you offer?

Thanks Marc for the question. Great question. I'll get it first and then loop in Juan, who is the President of our CareCloud Division. Big picture exactly as you alluded to as we think about the average revenue associated with a SaaS only client versus a SaaS plus billing or as you said, Concierge clients.The difference is a kind of a one to three difference. So as we take for argument's sake, as you take a $400 and the price varies, but let's use $400, just take a $400 SaaS only provider to billing, you're going to generally speaking, take that overall revenue per provider from $400 per month to $1,200 per month to $1,300 per month. These are monthly numbers I am talking about.So for us, a key part of our focus in terms of organic growth has been that upsell campaign and we've completely revamped the overall structure of the sales team. At CareCloud, we brought in another individual, who has a real significant experience on the RCM upsell within technology companies to come and to lead that effort and he has been working on launching that upsell campaign. We have special promotions.So more news come on that and subsequent quarters. But that's where we really see a significant amount of that promise even as we're talking about the CAC [ph], a natural question would be why do you MTBC believe, and why are you targeting a CAC that's so much more favorable vis-à-vis the competition. That's largely because we see the opportunity, a very cost efficient way to be able to grow through upselling and also through leveraging our global team. Hand over Juan to talk a little bit more about the upsell opportunities. Please.

Thank you, Steve. Appreciate and appreciate the question. I think you're absolutely right, Steve. We do see a huge opportunity for -- the ability for our sales teams to be able to upsell into our customer bases. In particular, with the new expanded services and offerings that we're able to offer now because of the MTBC capabilities and scale including things like significant coding capabilities, we think about referral and authorization management, preauthorization work, the ability for us to dive deep into other specific specialties like orthopedics and worker's comp and PIP claims. We see a huge opportunity to be able to upsell these practices where we normally wouldn't have been able to do this in the past.When I think about surgical subspecialties like ortho and others and folks that are required to bill off of actual transcriptions or author reading notes, the ability for us to do this poses a unique opportunity for us versus some of our other competitors that really don't offer the depth or breadth of these types of revenue cycle management services.So we see that as organizations are moving and really thinking through what this new normal looks like. They're really looking to see how you outsource a lot of these non-clinical operations and ensure really kind of a more streamlined approach, and a more streamlined organizational footprint themselves. And we see that happening through a myriad of ways, whether they're adopting new technologies like the – like our electronic healthcare records or practice management systems, or also the revenue cycle management solutions that we can now offer.

Yes. That's really helpful. Thank you. Prior to the pandemic, you guys had a very busy conference schedule lined up, presumably with your new reps going out with the new offering and the combined company, a lot of buzz. Can you maybe talking about some of the things you're doing to kind of mitigate the loss of the conferences and get out there in front of clients to get new wins?

Good question. And as you correctly alluded to those conferences have either been canceled by the conference holders or converted to electronic conferences. We don't actually see a whole lot of promise in most of the electronic versions of those conferences and even the conferences themselves were never anticipated to be one of the key drivers of opportunities. So we've really been doubled down on the avenues that we think are -- that we thought [Technical Difficulty] COVID and continue to think will be the key drivers of growth.The upsell campaign we certain through building referral relationships with other industry vendors, which have been really critical to our growth and also through driving referrals from our existing clients.There's really no more powerful and successful lead from a conversion perspective than a lead that's coming from a satisfied client who's recommending a colleague of his or hers, who that particular physician customer knows or believes may benefit from our service. Those leads are golden to us and our efforts have really been oriented towards driving those referrals and then executing all those and closing those.So those are the key things that we're doing. And frankly, the approach is really not that much different than pre-COVID. And in fact, if anything, I would submit that this has actually allowed us to focus our energies even more so in a laser like way on the types of activities that are most oriented towards driving new business.

That's helpful as well. And one more from me, and then I'll jump back in the queue. We're hearing a lot about disruption and dislocation in some of the smaller medical practices around the country, as they're shutdown and they're unable to have cash flows and maybe potentially survive. As you think about maybe potential consolidation of these smaller practices and/or going out of business, how do you think about that evolving through the back half of the year and maybe into ’21, and then the impact on your business if there is consolidation?

Great question Marc. And maybe Juan, maybe you can jump on that if you would please.

Sure. Thanks, Steve. Yeah. Great question, Marc. One can argue, I would say that smaller medical practices are probably most impacted by the pandemic as they were probably the least likely or the organizations that were at least likely to weather this financial storm.However, as we've indicated before, we are seeing kind of this bounce back and we're even seeing smaller medical practices that are starting to bounce back on their appointment volumes and regain their footing as they continue to expand and start seeing patients again.We do think, however, though, that we'll see larger probably more well-funded medical groups likely to start acquiring some of these struggling practices over the next couple of quarters. But regardless of the fact, I think, that we believe that the independent medical group space is very strong and will continue to thrive.We do feel that regardless of size though both because of our breadth and our depth of technology tools, we're able to really work very closely with the larger groups that are acquiring these smaller practices or these smaller groups as they need a new technologies.So as a new normal begins to take shape, I would say that our conversations with prospects are really shifting. And as I mentioned, they're really looking at how do they drive some more sophistication and some better leverage and margins in their business.So we do see that these medical practices even smaller ones will likely thrive. But if they do get consolidated by these larger groups, we're perfectly positioned I think to help both segments of that market space.

Very good. Thank you. Appreciate it

[Operator Instructions] At this time, there is no more questions. So we'll conclude our question-and-answer session. I would now like to turn the conference back over to Kim Grant for closing remarks.

Thank you. And we would like to thank everyone for joining today and for your continued support. We look forward to speaking to you again in the near future. Take care and have a great day.

The conference is now concluded. Thank you for coming in today's presentation. You may now disconnect.