Good afternoon. My name is Kevin and I'll be your conference operator today. At this time, I'd like to welcome everyone to the PaySign Inc., Fourth Quarter and Full Year 2023 Earnings Conference Call. After the speakers' remarks, there will be a question-and-answer session. As a reminder, this conference call is being recorded. Comments on today's call regarding PaySign's financial results will be on a GAAP basis unless otherwise noted. PaySign's earnings release was disseminated to the SEC earlier today and can be found on the Investor Relations section of our website paysign.com, which includes reconciliations of non-GAAP measures to GAAP reported amounts. Additionally, as set forth in more detail in our earnings release, I'd like to remind everyone that today's call will include forward-looking statements regarding PaySign's future performance. Actual performance could differ materially from these forward-looking statements. Information about the factors that could affect future performance is summarized at the end of PaySign's earnings release and in our recent SEC filings. Lastly, a replay of this call will be available until June 26, 2024. Please see PaySign's fourth quarter and full year earnings call announcement for details on how to access the replay. It's now my pleasure to turn the call over to Mr. Mark Newcomer, CEO. Please go ahead.

Thank you, Kevin. Good afternoon, everyone, and thank you for joining our earnings call. Today we're thrilled to discuss PaySign's performance for the fourth quarter and the full year of 2023. I'm Mark Newcomer, President and Chief Executive Officer. Joining me today is Jeff Baker, our Chief Financial Officer. Additionally, Matt Turner, our President of Patient Affordability, and Matt Lanford, our Chief Payments Officer, will also be joining us for the Q&A session. Earlier today, we announced our 2023 fourth quarter and full year financial results. We are extremely pleased with our performance as we continue to grow revenue, net income, and adjusted EBITDA. Our fourth quarter revenue grew to $13.7 million, a robust 29% increase year-over-year. For the full year, we saw 24% revenue growth to $47.3 million. Most notably, our net income increased by 528% to $6.5 million or $0.12 per fully diluted share from $1 million or $0.02 per fully diluted share the prior year. Full-year adjusted EBITDA also saw an increase of 21% from $5.5 million in 2022 to $6.7 million in 2023. Our plasma donor compensation business continued its strong performance, contributing $42 million in 2023 versus $34.7 million in 2022, up 21% from 2022. The fourth quarter alone showed a 14% increase in the average revenue per center from $7,293 in Q4 2022 to $8,297 in Q4 of 2023, and we expect this ongoing expansion of revenue per center to continue. In 2023, we expanded our reach to 464 centers. We onboarded 38 centers and lost 18 centers; 14 of the 18 lost centers were closures and the remaining 4 were sales to non-client plasma collection companies. Following an extended period of rapid growth in new centers, our plasma clients began to shift their focus from new center openings to increasing plasma yield per center, concentrating on donor acquisition and retention. As a result, we are expecting 15 to 25 new centers in 2024. The patient affordability segment has emerged as a significant growth engine for the company as we launch programs for some of the world's largest pharmaceutical manufacturers. In 2023, we launched 24 net new programs and ended the year with 43 active programs, marking a 126% increase over the prior year. This segment saw a 122% rise in claims volume for 2023 with even higher expectations for 2024. Fourth quarter claims volume increased 215% from the same period the previous year. Our sales cycle remained in the 90 to 120-day range, a marked improvement from prior years, and our pipeline remains extremely robust. Patient affordability revenue increased 172% year-over-year. We expect patient affordability revenue to continue to grow at triple-digit rates in 2024. I would like to add some additional context regarding our claim volumes, as it is a key performance indicator for our patient affordability business. In simple terms, we received medical and pharmacy claims. Medical claims are typically submitted by a doctor's office, practice, or hospital and can be for physician-administered or infused drugs. Pharmacy claims are dispensed by a pharmacy and include retail claims, which originate from retail brick-and-mortar corner drugstores, and specialty claims filled by mail-order pharmacies that work with high-cost drugs such as biologics. A well-rounded portfolio is key to addressing long-term growth as drugs gain approval or lose exclusivity. To build a well-diversified revenue model, we pursue programs in all three categories. In 2024, we expect to see an increase in retail claims helping us diversify the balance of our mix of claims. During the fourth quarter, we onboarded a total of 9 net new patient affordability programs. Of note, we successfully transitioned the oncology portfolio of a major pharmaceutical manufacturer consisting of four programs. These are mature programs that deliver claims immediately upon onboarding. We also launched 2 additional programs for this client, and they have already awarded us 3 more programs in 2024. It should be noted that transition programs, which are existing programs serviced by another vendor, outnumber our program launch of new-to-market drugs. Transitioning a patient affordability program requires a detailed and comprehensive approach with zero margin for error. A seamless transition is of the utmost importance to the program sponsor and the patients that rely on a well-run program. We are pleased that we have been able to provide solutions where the value offered is so compelling that our clients are willing to change mid-program. I want to take a moment to talk about the recent disruptions to the patient affordability sector. On February 21, there was an unprecedented cyberattack on the U.S. health system and the change health care claims and payment infrastructure. This had a substantial impact on consumers, providers, and many of our competitors, leaving their pharmaceutical manufacturer clients scrambling for a solution to the prolonged outage. As a result of the fallout, we were able to secure and launch 8 new programs from 2 manufacturers in less than ten days, adding substantial revenue and approximately 1 million additional claims to our 2024 claims volume. We are confident that this will lead to additional programs in 2024 from these and other manufacturers as we continue to assist our current partners and fulfill new requests. Much like our payment platform, our patient affordability platform has been purpose-built for high availability and utilizes multiple redundant network connections to ensure continuity. These multiple processes or connections enabled us to quickly move to other processors not impacted by this event. To catapult PaySign's innovative fintech solutions to the forefront of patient affordability in the health care ecosystem, we made a number of executive changes, which we believe both sharpen our focus on the accelerating growth of our patient affordability segment and better enable us to enter new markets. This year, Matt Turner assumed leadership of the patient affordability segment, being promoted to President of Patient Affordability. We appointed Cosimo Cambi to the position of Chief Operating Officer, leveraging his 12 years of experience in both patient affordability and the fintech space. Most recently, he was the Director of Data Science and Vice President of Operations here at PaySign. Mr. Cambi succeeds Matt Lanford, who transitioned to the newly formed position of Chief Payments Officer, where he will rely on his 35 years of experience in payments to lead our new product and project management office. Mr. Lanford's fintech expertise, leadership, and guidance will be instrumental in the development of new products and the opening of new markets. In summary, we are pleased with our 2023 results as we reported another year of strong growth. We are especially pleased with the trajectory of our patient affordability segment as we continue to execute our mission to bring innovative fintech solutions to the forefront of the patient affordability and healthcare ecosystem. We believe we have assembled an excellent team coupled with what we believe to be a truly disruptive product portfolio that continues to gain acceptance in the industry. Our plasma segment continues to grow at a steady pace, and we believe this will continue for the foreseeable future. We will continue to invest in our people and systems to meet the rapidly growing demand for our services. I believe we are well-positioned to capitalize on the many opportunities that lie ahead of us. Jeff, over to you for more insight into our financials for the quarter and year-end.

Thank you, Mark. Good afternoon, everyone. As Mark said, we closed 2023 with a solid fourth quarter, capping off what was a nice year. Ever since exiting from COVID, getting our plasma business back to pre-COVID results was the focus of the investment thesis, and that has materialized as expected. We also have been telling investors that we were committed to investing in other attractive vertical markets, such as our fast-growing Pharma patient affordability business, to help diversify the financial concentration we had with our plasma business. Today, I can tell you that thesis has also materialized as expected. Our plasma business was 84% of total revenue in the fourth quarter of 2023, versus 91% compared to the same period last year, and we expect that business mix shift to continue in 2024. Looking more closely at our plasma business, we experienced strong growth in gross dollars loaded to cards, total number of loads, gross spend volume, and the average revenue per plasma center. For the fourth quarter, gross dollars loaded to cards increased 9%. The total number of loads increased 14%. Gross spend volume increased 8%, and the average revenue per plasma center increased 14% to $8,297. Fourth quarter plasma revenues increased 19% to $11.5 million, and we added 2 net new plasma centers during the quarter, exiting the year with 464 plasma centers, which equates to a 39% U.S. market share at year-end. As Mark mentioned, we have seen a strategic shift by our plasma partners from opening new centers to increasing the plasma yield per center as financing rates remain elevated compared to the previous 10 years. The guidance for 2024 that I will provide in just a moment reflects this strategic shift. Moving to our pharma patient affordability business, you heard Mark talk about the traction we experienced in 2023, which has continued into 2024. Fourth quarter pharma patient affordability revenues of $1.7 million or 12% of total revenue versus 5% during the same period last year. We launched 9 net new programs in the fourth quarter, exiting the year with 43 pharma patient affordability programs, and we have already launched an additional 10 new programs in the first quarter of 2024. With the hyper-growth we have experienced in our pharma patient affordability business, we expect it will continue to make up a greater percentage of total revenue in 2024. As in previous calls, with all of the details we provided in the press release and that will be available in our 10-K filing tomorrow morning, I will simply hit the financial highlights for the fourth quarter of 2023 versus the same period last year. Fourth quarter 2023 total revenues of $13.7 million increased $3.1 million or 28.9%. Gross profit margin for the quarter was 52.2% versus 51.9% during the same period last year, which marks the first quarter in which we have seen gross profit margin expansion since exiting our pharma prepaid business in 2022. SG&A for the quarter increased 23.2% to $4.6 million, with total operating expenses increasing 25.3% to $6.5 million. We have made significant investments in IT and employees over the past year to support the continued growth of our business, exiting this year with 123 employees versus 110 during the same period last year. For the quarter, we posted a net income of $5.6 million or $0.10 per fully diluted share versus $713,000 or $0.01 per fully diluted share for the same period last year. We recorded a tax benefit of $4.3 million during the quarter, as we released the valuation allowance on our deferred tax assets related to both federal and state taxes. Without this benefit, net income would have been $1.4 million or $0.03 per fully diluted share, an increase of over 90% versus the prior year period. The fourth quarter adjusted EBITDA, which is a non-GAAP measure that adds back stock compensation to EBITDA, was $2.5 million or $0.05 per diluted share versus $1.7 million or $0.03 per diluted share for the same period last year. This equates to a 43% year-over-year growth in our adjusted EBITDA. The fully diluted share count for both quarters used in calculating the per-share amounts was 53.8 million in both periods. Regarding the health of our company, we exited the year with $17 million in unrestricted cash and zero debt, a $7.3 million increase over a year in 2022. We did not complete any share repurchases during the fourth quarter, but we did use $1.1 million to repurchase almost 395,000 shares during the year. Now turning your attention to our initial guidance for 2024. We expect total revenues to be in the range of $54.5 million to $56.7 million, reflecting year-over-year growth of 15% to 20%, with plasma making up between 80% and 85% of total revenue. Pharma revenue is expected to grow at least 100% year-over-year as we receive a full-year benefit for all pharma patient affordability programs added in 2023 and continue to add new pharma patient affordability programs throughout 2024. Full-year gross profit margins are expected to be between 52% and 54%, reflecting increased revenue contribution from our pharma patient affordability business and stable plasma gross margins. Operating expenses are expected to be between $29 million and $31 million as we continue to make investments in people and technology, of this amount depreciation and amortization are expected to be between $6 million and $6.5 million, while stock-based compensation is expected to be between $2.7 million and $3 million. Given our large unrestricted and restricted cash balances in the current interest rate environment, we expect to generate interest income of $2.6 million to $2.9 million. Taking all of the factors above into consideration, we expect net income to be in the range of $2 million to $3 million or $0.04 to $0.06 per diluted share, and adjusted EBITDA to be in the range of $8 million to $9 million or $0.15 to $0.17 per diluted share. For the first quarter of 2024, we expect total revenue to be in the range of $12 million to $13 million, reflecting the seasonal impact of tax refunds on our plasma business offset with a strong start to the year with our patient affordability business. Gross profit margins are projected to be between 52% and 53% driven largely by an increased revenue contribution from our pharma patient affordability business. Operating expenses are expected to be between $7 million and $7.5 million, of which depreciation and amortization will be approximately $1.3 million. This reflects investments largely required to support our pharma patient affordability growth. Adjusted EBITDA is expected to be in the range of $1.2 million and $1.5 million. With that, I would like to turn the call back over to Kevin for questions and answers.

Thank you. Our first question is coming from Peter Heckman from DA Davidson. Your line is now live.

Great results and good to see the strong guidance for 2024. I want to dig into patient affordability a little bit more. There isn't an average program, but could you talk a little bit about how you would explain to an investor the range of sizes of programs and how long they last? If you could go over that statistic you made about competitive takeaways versus new programs and some of the competitive advantages that allowed you to do that.

Hey, Pete. So that's a long-winded question. Let me try to answer all your points. Number one, the size of the programs can vary all over the board. We have some programs – not many – but we have some programs with a copay program in place just as an insurance policy. We may not do any claims with them, and we just receive monthly management fees. We have some programs that are generating quite an extensive number of claims that we get paid every month on top of management claims. So there is no average, unfortunately, I wish it was that easy.

And Jeff, I can give some more color here too if you'd like me to.

Yes. Go ahead.

Yes. I think we've talked about this on previous calls, going back into last year. As you look at the plasma business, one of the metrics we discussed is how much a plasma center is worth on average. Unfortunately, with affordability programs, it's just like drugs. You’ll have a drug that’s a rare orphan drug, and you may have 50 people in the country that have that disease state and need that drug. Then you could end up with something like a blockbuster drug like Enbrel or Humira that can do tens to hundreds of thousands of claims a month. So there's not really a standard average program. When we look at the business, we evaluate the long-term profitability of a program versus one that is more transactionally based versus one that's more admin fees based. Does that help?

Yes, that does. Can you talk about the average term for these programs? I remember some of the older programs that were one or two years. Can you talk about how you expect these terms to average, considering you have programs rolling off and then having to replace others?

Yes. I'll take that. So, Pete, most of these contracts are typically a stub period if they come in during the year, and then they'll have a full year after that with evergreen terms for years beyond that. I will honestly say we have not lost a program to competition yet, knock on wood. The only program we lost was a provider that decided no longer to offer a copay program because their drug went generic. Those are few and far between. So it's like anything else: if you do a good job for your partners, they're going to stay with you. If you don't, then they won't be here and we earn their business every day and every year, and hopefully, we'll continue those relationships for a long time.

Got it. Got it. I did note the change healthcare security breach and its ramifications. Can you talk a little bit more about how you worked around that, whether that was through partners or PaySign's proprietary network?

Matt, you want to take that?

Yes. We were in a really good position coming out of that. To our knowledge, we are the only vendor in the space that had three processor connections. So we had a very diverse network that we could leverage to stand up programs for new clients and get them onboarded quickly. We've also worked hard to develop better partnerships with these processors than a lot of other people have, and that really paid off here in spades. We had an existing client that had their business split between us and another company. We were able to walk in the door and say, 'Hey, we can get this set up; we can set you up quickly.' The disruption for us was minimal on our side. We did have a few programs on the chain side that were very small; we quickly transitioned those programs over. Then, we started working on the new business wins that came in. The disruption was there, but again, very minimal for us.

Next question is coming from Gary Prestopino from Barrington Research. Your line is now live.

Could you help me understand the patient affordability business better? Could you give an example of how this works? Does this start in the actual doctor's office where they put a prescription in, and they give some kind of voucher that you process through the pharmacy? Can you just simply walk us through what you're doing?

Yes. It does kind of initiate at the doctor's office at the time the prescription is written. There's a bit of variance there depending on whether it's a specialty drug or a retail drug. So, going back to Mark's comment, the specialty drug is like a SKYRIZI, Enbrel, Humira, or Stelara, which are very expensive drugs shipped by mail order. They often happen at the doctor's office where they say, 'Hey, we need to put you on this drug because you have rheumatoid arthritis, or whatever else. And hey, there's a copay coupon that's going to help reduce your insurance cost.' Retail drugs aren't always the same thing, right? You may be written a prescription for a retail drug, for example, your kid gets a prescription for Vyvanse because they have ADD or ADHD. You probably don’t know there’s a coupon out there, but the pharmacist does. When you take your prescription into the pharmacy, they immediately go and pull a coupon down to offset your insurance copayments. If you had a $2,000 deductible, depending on the program, it may pay all $2,000 or a portion of it. The ultimate goal of copay assistance programs is to remove the financial barriers associated with patients accessing and remaining on therapy. That's the number one thing we solve for: financial barriers for patients to gain and stay on expensive drugs.

Okay. So years ago, I quoted this because my wife used to sell for Merck. The doctors would leave behind typical prescription drugs as samples at a doctor's office. Is this now kind of taking the place of that in a sense that pharmaceuticals have a better way to track where these prescription drugs are, be they specialty or normal?

So yes, and no. The genesis of where all this started was on the sample side. Back in PaySign's history, during the 3P days, we ran a very large sample program for a Schedule 2 ADHD drug. It was pretty dangerous having a sales rep drive around with a carton full of Schedule 2 drugs. They came out with cards to utilize the pharmacy network to essentially get these Schedule 2 drugs in the hands of patients who needed them. Then everyone started to figure out, 'Oh, we can start buying down the cost in other areas.' The Affordable Care Act passed, and now a good chunk of Americans have health insurance with co-pays and deductibles. They started utilizing coupons to offset that. There are some specific examples where samples have been replaced but it's not the most common type of co-pay program. It's probably less than 10% to 15% of all available co-pay programs are what we call voucher products, which would be like a sample or first-fill product. This is mainly because of expense. If you leave a sample in a doctor's office, you're out the cost of producing the pills and the packaging, which may be $5 or $10 for a pill or capsule. If that drug costs $800, then you have to pay the pharmacy that amount for that product. There’s a cost differential. That's why we run several voucher programs designed to replace samples.

Yes. If you look at the market, can you size the market for us in terms of that?

That's a great potential revenue.

Yes, I'm going to let Jeff answer that one, but I've discussed this in the past. My initial commentary would be that every new-to-market drug, almost every new-to-market drug will have some kind of patient affordability program. So, if the FDA approves 100 drugs in 2024, there's a pretty good chance that’s 100 new programs coming to market. That grows every year. I don't know that we can put a number on it, but I’ll let Jeff and Mark weigh in here.

Hey, Gary. We don't really know how big the market is. We know it's bigger than the plasma market. The total addressable market is complicated because the competitors we're winning business from offer other services that we don't. We're focused on the payment and claims processing side. Where they may be doing other services like getting a drug to market or marketing that drug or whatever. What we do know is that it is bigger than the plasma total addressable market, which is around $120 million. It's hard to guess right now what the patient affordability market is just on the payments and claims side as a standalone basis.

Thank you. Our next question is from Jon Hickman from Ladenburg Thalmann. Your line is now live.

Nice quarter, guys. Good year. I was just wondering if you could talk a little bit about the competition in the plasma side. Has anything changed there with the refocus from the guys who run the centers?

Not really. I don't believe so. I mean, really what we have going on in that space is we've seen the cost of money increase. We’ve seen people take more of an approach to bring efficiencies to the way their centers are operating and trying to derive more plasma in that manner rather than just going out in the past years where there was a lot of new center building. I think we've seen a focus on improving the efficiencies of their existing centers. That's kind of what I think is going on there.

Jon, I've added that also. I mean, I'm not mentioning any names. These are public companies. You can do your own research, but one company recently hired a new CEO within the past year with the plan to reduce costs and improve yields. There's another public company out there who's installing new technology to improve yield by 20% per donation. So that seems to be on the minds of the plasma companies today. As far as competition, it really hasn't changed. There's a handful of people out there. It's the same people. We've seen one bank leave and a new bank come in. They've been in and out of it before. There's us and the usual suspects we talked about in the past, but no real change from a competitive perspective.

Thank you. Next question is a follow-up from Gary Prestopino from Barrington Research. Your line is now live.

Yes. Mark, you mentioned, and I couldn't write it down quick enough. What was the growth in claims processed and the number of claims year-over-year? And that would be for the full year and then Q4 to Q4.

Yes. For Q4, it was 215% quarter-over-quarter growth, and for 2023, we saw a 122% rise in claim volume. We provided a 215% claim volume rise from the fourth quarter of 2022 to the fourth quarter of 2023.

Okay. That's good enough growth. I guess the question is, you're showing some really good growth here. You obviously have competitors in the market. Why are you winning?

I believe, and I'll let Matt address some of this. From my perspective, we're winning because we've put up some disruptive products. Much like our foray into the plasma market, we got involved there when the market was a bit stagnant. There weren’t many innovative offerings in that space. We came in with a fresh look and tried to make some changes, which were received well. I believe we're experiencing the same acceptance of our products in this space. There's a lot of excitement from many players, and I think the existing providers are not taking care of their clients, which always leaves an opening.

Yes. I want to add something important here. A lot of the other players in the space have attempted to diversify their offerings to the point that they have watered down everything. We were at a conference last week, and a client told us that they asked a competitor to pitch alongside us while considering bringing us on. We established ourselves as experts in their specific needs, while the other company spent minutes discussing their range of offerings without delving into the specifics. Our marketing campaign now highlights the return of expertise in the market, something that has mostly disappeared. Everyone is trying to buy another company to enhance their offerings. We saw when the change healthcare situation happened that we experienced clients who saw a significant loss in revenue due to being with a big-box provider that lacks the expertise to address pressing issues. We also brought in new technology that helps our processors identify accumulators and maximizers, saving our clients tens of millions of dollars. This fresh approach has opened doors with manufacturers that previously overlooked us due to our size but have now recognized our results over the last two quarters.

I also want to add, Matt, that we introduced pricing transparency, a significant change in this business space. Before we did this, there wasn't much pricing transparency; there was a lot of misunderstanding. That's akin to the black box interchange I mentioned earlier.

Okay. Is there a technological moat here? You've indicated some technological advancements. Can you explain what accumulators and maximizers are? Are these middlemen in the system that inflate the prices? This is the first time I've heard of this, so if you don't mind me asking –

That's a tough problem. I don't think we have the time to discuss it on this call, but it's certainly something we can address on a different call. It is very complex. Much of what we've done is based on technology we've developed in-house.

Okay, so there is a technological moat there.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over to Mark for any further or closing comments.

Thank you, Kevin. I'd like to thank everybody for joining us today. A special thanks goes out to all of our employees and our Board for the hard work and support they've exhibited throughout the year. I believe that 2024 will be a very exciting year for PaySign, and we're looking forward to updating everyone on the next call. Thank you all very much and have a great day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.