Greetings and welcome to the DarioHealth Fourth Quarter and Full Year 2020 Financial Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this call is being recorded.

It's now my pleasure to introduce Glenn Garmont of Life Sci Advisors. Thank you. Glenn, you may begin..

Thank you, Darrel and good morning everyone. Thank you for joining us today for discussion of DarioHealth's fourth quarter and full year 2020 financial and operating results. Leading the call today, will be Erez Raphael, Chief Executive Officer of DarioHealth.

He's joined by; Rick Anderson, President and General Manager of North America; and Zvi Ben-David, Chief Financial Officer. After the prepared remarks, we'll open the call for Q&A. An audio recording and webcast replay for today's conference will also be available online as detailed in the press release invite for this call.

For the benefit of those who may be listening to the replay or the archived webcast, this call is being recorded on March 9, 2021. This morning, we issued a press release announcing our financial results for the fourth quarter 2020. A copy of the release can be found on the Investor Relations page of the company's website.

Actual events or results may differ materially from those projected as a result of changing market trends, reduced demand, and the competitive nature of DarioHealth's industry.

Such forward-looking statements and their implications involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected.

The forward-looking statements discussed on this call are subject to other risks and uncertainties including those discussed in the risk factors section and elsewhere in the company's annual report on Form 10-K for the year ended December 31, 2020.

Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the company's press release issued today and in the company's filings with the SEC. In addition, certain non-GAAP financial measures may be discussed during this call.

These non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company's current performance. Management believes the presentation of these non-GAAP financial measures is useful for investors understanding an assessment of the company's ongoing core operation and prospects for the future.

A reconciliation of these non-GAAP measures to the most comparable GAAP measures is included in today's press release regarding our quarterly and year end results. And with that, I'd like to introduce Erez Raphael, Chief Executive Officer of DarioHealth.

Erez?.

Thank you, Glenn. And thanks everyone for joining our call this morning. Also joining me today is Zvi Ben-David, our Chief Financial Officer; and Rick Anderson, the President and the General Manager for North America. So 2020 was an exciting year for us.

And I think it was an exciting time for all those that are part of the healthcare industry as the industry is transforming widely these days, and we are even super excited to be at the forefront of this amazing changes happening in the healthcare industry.

And like we are doing in every earnings call, I would like to refer to our progress by referring to our three main pillars that we keep mentioning every earning call I think for the last six or seven quarters. This is something that helps us communicate the progress that we are doing with the transformation that we are having.

And it also helps us to focus on capturing the huge opportunity that we are experiencing these days.

The three main pillars number one, the transformation into a SaaS, software as a service where we are generating high margin recurring revenues; number two is the transformation into B2B2C and number three is the expansion into multi-chronic conditions. So 2020 was a very foundational year for us. I'll start with the B2B2C.

We put a lot of effort in 2020. In order to build the infrastructure to be not only a B2C company, but also a B2B company. We started the year with only six employees that are operating in the US, in front of employers' health plans and providers and as of now, we are close to 30.

We also signed eight different agreements along the year, with the last three months where we won two big Fortune 500 employers and even further than that, we managed to win overall size, overall main competition, which speaks to the overall offering and then great products that we have.

When we started 2020, we knew that we have a great product as you can - all of you can see on the App Store, Amazon, we are operated and we are considered one of the best products in the market that we had during 2020 to package the product in a way that we can take it to the B2B market.

And this is what we did, and with this recent wins we were very confident that we can start and generate meaningful revenue in 2021. And as we started to implement this accounts in Q1, we're also getting very good first results and indication that we know how to enroll and turn these accounts into dollars and Rick will speak to that very shortly.

On the expansion into multi-chronic conditions, one of the things that we believe in is that operating as a digital therapeutics company, when we are providing a solution that is extremely user centric and consumer centric, we need to provide - for personalization, we need to provide a very comprehensive solution for our users.

And it doesn't make sense that we will operate in silos, like the traditional healthcare industry. Companies in the traditional healthcare industry will focus on one single condition. We have seen companies that bid only diabetes or hypertension.

When moving into digital therapeutics, and when dealing with a personalized solution, we need to provide multiple chronic conditions and that's what we put as a target. And we are very happy and proud to complete the acquisition of Upright Technologies at the beginning of February.

And the more we are making progress with the PMI the more confident we are about making the right decision with regards to this acquisition. Just as a reminder, Upright was acquired as a company that had 90,000 active paying users.

This is a company that is scaled when we are looking into the musculoskeletal space and looking into other companies in the space. There are not too many companies that are having more than 50,000 active users Hinge that just raise money at the $3 billion valuation is one of them.

Next, in line in terms of users actually is Upright, so Upright is sharing the same philosophy that we have combining together hardware software and service in order to drive behavioral change. And they are doing great job creating change in the behavior of users.

And in terms of the synergies that we see into the B2B market, this is a perfect match for us. And we started to hear very - first very positive comments from our potential clients and existing clients. So this was a very good move from our perspective.

And then the fact that we did this transaction or acquisition as an equity-only speaks to the fact that we got here real partners that want to work together with us and build this company as a multibillion dollar company. So the actual PMI, the post-merger integration activities are moving forward, great.

So if we are looking on the overall three pillars, each of them has some kind of contribution into the main parameters that define our business elements related to recurring revenue, gross margins, we still see as the overall objective of the business to exceed the 70% gross margins moving forward, and we're going to see an improvement in the gross margin already in Q1 we believe.

And in terms of the eligible population, when we started with the diabetes, we had an access for a potential employer for 8% to 10% of the population, high potential expenses into 20 to 25 with MSK we exceed the 40% for the conditions together.

So in terms of account utilization, multi condition makes our overall commercial efforts much more effective. And also in terms of the cost of acquisition, the transformation into B2B2C is something that should improve our views drastically the cost per acquisition per user.

And the fact that we are selling more conditions makes up the cost of acquisition per user condition is even lower.

So each of these pillars have its own contribution into our financial profile, and our ability to grow and I think that the combination of the three of them together, create even a kind of exponential impact on the financial profile of the company, and also on the overall ability to grow.

And I know that in 2020, we haven't seen a significant grow in terms of the revenue between 2019 to 2020, but we should look into 2020 as a foundational year and we should look into the progress in this foundation that was done, the accounts that we want.

And I'm sure that in 2021, we're going to see the impact of all the three pillars and the parameters that I just mentioned in a very, very significant way, moving forward. So I'd like now to drill down into the B2B2C transformation. And I'll hand it over to Rick to elaborate more on that.

Rick?.

Thanks Erez. Over the last few months, we've seen the creation of a lot of the efforts that we've been making for the last years - for the last year and announced several wins in our B2B market. Two Fortune 500 companies including those won in a competitive RFP situation.

And we've also signed several RPM contracts, including a significant one with an integrated health system in New Mexico. We have now launched these customers in the first quarter and are pleased with our progress to date. We are seeing over 30% enrollment within the first month of commencing our outreach.

And we're continuing to hone our approaches and anticipate that that will go higher. On the business development side, the pipeline is now more than $600 million across all the market segments.

And just as a reminder, we calculate our pipeline as the live in an opportunity times 10% for the prevalence of diabetes, so we're not even including the other condition, times at 35% enrollment rate times $59 per month, times 12 months. Of course, we use actual numbers if we have actual numbers for that.

And that calculates our annual revenue opportunity, which is the amount that we're seeing as our pipe. We continue to make progress in all three channels. For employers, we are now starting the sales cycle for self-insured employers that are on an annual cycle.

And a significant portion of employers are on this cycle, which runs from January 1 to December 31. The cycle we'll see RFPs for the next few months, contracting in the third quarter and the launch of these new opportunities in the first quarter of 2022.

We are seeing the benefits of the progress we have made on increasing name recognition and increasing our relationships with benefit consultants which are currently driving the RFP volume and RFI volumes that we are seeing. We anticipate that this will increase the pipeline and contracts later in this year.

And in addition to that we still have opportunities that are on a different cycle closing in the middle of the year, or have no cycles so can close throughout the year. For health plans, we continue to rapidly grow the pipeline of opportunities.

And we are working a handful of plans that we have late stage contracting or vendor management through the process. We anticipate closing many of these contracts over the next few months and that they will add additional revenue in the second half of 2021. For remote patient monitor we have a growing pipeline of near-term opportunities with providers.

Recall that RPM enables providers to bill CMS for codes that went into effect at the beginning of 2020 thereby having a top line revenue opportunity as well as improving clinical quality.

We did see some headwinds in completing contracts with providers that have been distracted by the COVID surge in a vaccine rollout, but things have picked back up in the last month. And we are continuing to see things move towards closure.

We have several agreements that are in contracting and believe that RPM will contribute to significant revenue in 2021.

We are also working on an interesting partnership that will enable our direct-to-consumer Medicare members to take advantage of virtual care and receive their membership through an RPM model with significantly higher average revenue per user. We've also made great progress growing the team this year.

We've added management, product and sales talent from Livongo, Omada, Mercer, OPTiM, Hinge and other significant digital health companies. These folks are joining us because they are seeing the differentiated opportunity at Dario and the ability to do great things. These key hires are also helping us to accelerate across our business.

As Erez discussed, we've expanded into MSK and are actively looking at other conditions to round out our offering. Our overall strategy is to leverage the expertise of condition specific point solutions for our customers with an integrated front end and back end. And we will also integrate with third parties.

We chose MSK because it's consistently in the top five priorities to reduce costs and improve outcomes for our customer. It expands the portion of the population that we address as Erez said to approximately 40%. And MSK can add to our average revenue per user, we estimate up to an additional $35 a month.

And there's significant comorbidity with MSK in our existing condition. This acquisition makes our platform one of the most robust in the industry. And that's already paying off as customers are expressing interest in our MSK solutions, even before we had gone to market and some of our current pipeline now includes a MSK opportunity.

With that, I'll turn it over to Zvi..

Thank you, Rick. I will provide a brief overview of our results for the fourth quarter. Additional details on our quarterly results can be found in our press release published earlier today.

Revenues for the first quarter ended December 31, 2020 were $2.1 million, a 1.9% sequential increase on the third quarter ended September 30, 2020 and 15.7% increase from the 1.8 million in the fourth quarter ended December 31, 2019.

Revenue generated during the first quarter end year ended December 31, 2020 were mainly from the sales of DarioHealth's medical devices offering and from our membership plans to our customers in the US.

Gross profit for the fourth quarter of 2020 was $549,000 a decrease of $299,000 or 34.6% of total gross profit of $840,000 in the fourth quarter of 2019. Gross profit as a percentage of revenues decreased from 46.7 in fourth quarter of 2019 to 26.4 in the fourth quarter of 2020.

The decrease resulted from the price reductions of our medical devices sold as part of our direct-to-consumer promotion campaigns. With that said, as we scale and implement our transitioning to sales market, we believe we can drive gross margins to 70% and higher over the longer term.

Total operating expenses for the fourth quarter of 2020 were $9.6 million, compared with $5 million in the first quarter of 2019. Total operating expenses excluding stock-based compensation for the fourth quarter of 2020 were only $7.5 million compared to $4.6 million in the fourth quarter of 2019.

Net loss was $9 million for the fourth quarter of 2020 an increase of $4.8 million compared to $4.2 million net loss in the fourth quarter of 2019. As of December 31 cash equivalent - cash and cash equivalents totaled $28.6 million and our net proceeds from the private placement is closed on February 1, 2021 was $64.9 million.

And with that, I'll return the call back to Erez..

Thank you, Zvi. So we are super excited to be at the forefront of this amazing changes that are happening in the healthcare industry and in few cases when we talk with investors, we are getting the question whether this kind of transformation or demand on the healthcare is going to disappear post COVID-19.

From our perspective, the COVID-19 accelerated the change that should have happened anyway in terms of digitalizing the space. So it created, no doubt, a huge acceleration in this transformation into digital space. But all this information is here to stay, and we see it when we talked with clients and that's something that we expect to stay here.

And when we are looking on the overload opportunity, even if we are looking on the biggest competitors out there that are doing chronic condition management to diabetes or potential in others, and we aggregate all the penetration into the market together, we're going get to somewhere around 2%. So the opportunity is huge.

The opportunity is there and we believe that we're going to be a very important player in this space. So in 2020, we put all the foundations from a B2B2C perspective, multi condition.

And we believe that the foundation that we put out there, in terms of the three pillars that I mentioned, are going to contribute to exponential improvement in our financial profile and also in our growth. And we're going to start seeing this kind of results6 and this impact in 2021 in a more significant way.

When we are looking on where we are from a capital market standpoint, and balance sheet standpoint, I would just like to emphasize and to remind everyone that we did two important fundraising, one in July and another one by the end of January, where we raised an overall $100 million in order to fund all these activities.

So overall, we are very well funded. The company has no debt on the balance sheet. And when we are looking on the run rate, it's going to go deep into 2023. So with that kind of funding and even more important the profile of investors and shareholders that we have today is very different than what we had like two years ago.

We have investors that understand the space and understand the strategy of the company and the overall plan that we have moving forward.

And as we are in a very late stage of Q1 and typically we don't give any financial guidance nor do we plan to do so going forward, but in light of the transformative Upright acquisition would like to highlight that we expect a consecutive quarter double digit percentage growth in both our MSK and base business between Q4 of 2020 to Q1 of 2021.

We believe this is just the beginning of a positive trend that we expect to see in 2021. So with that, I would like to hand over the call to the operator for a Q&A session..

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first questions come from the line of Alex Nowak with Craig-Hallum. Please proceed with your questions..

Good morning, everyone. Erez, I want to touch right on that point there that you mentioned you had around the sequential growth. So double digit sequential growth into Q1 here. If I just kind of run through the rough math, assuming a 10% growth off of 2 million that annualizes close to about a $1 million.

So is it fair to say that the deals that you signed, the three big deals that you signed, the two Fortune 500 companies, the RPM piece of the business, those deals signed in Q4 is going to lead to a roughly annualized 100 million - $1 million sort of net bump to the business? Is that the right way to be thinking about it?.

Yeah, I think that although your calculation is not so accurate, you're definitely in the right direction. That's approximately the numbers that you're talking about. As we stated before, employers are generating for the company somewhere between a quarter of a million to $1.52 million a year.

Your calculation is in - generally it's on the right direction, so yes..

Okay, I was never very good at mental math. So I totally understand that.

So maybe of the deals that you've signed so far, what is the total contract value of those? If you go through the math that Rick mentioned on how you think about contract value, what is the total contract value of the deals that you've signed so far? And then of that pipeline number, the $600 million, how much of that is near-term contract value? Meaning, those are deals that you expect to sign up sometime in 2021..

So the - we're not going to go to annual contract revenue yet until we've got a little bit more traction and make sure that we understand exactly what the percentages are that we're going to get. We'd rather talk about the way what our enrollment rates look like, and how many members we have on platform as we go forward.

But if you want to think about them in the context of just dividing the employers by the number you were talking about, you're going to be generally in the range for those that we're anticipating once they're ramped up here.

And what we are pleased by is the speed at which we are seeing that ramp towards our assumed 35% rate, which would be a bit lower than what we've seen historically. So we seem to be trending with what we had expected in these cases. And second part of your question again, Alex..

And then I guess it was total contract value on the deals you expect to sign up in 2021 that you kind of touched on that..

Yeah. So the way that we look at it is we expect somewhere between 10% and 20% of our pipeline to close in any given year. That doesn't mean that if it doesn't close this year, it won't close next year, because some of those are in the longer sales cycles, especially on the health plan side.

But if you want to think about it in that kind of a range, that's what we would expect..

Okay, that makes sense.

And then maybe on health plans, I know there was at least one, maybe two health plans that was pretty close to being signed last time we spoke, just where does that health plans stand? And are they getting pushed out a little bit, just due to the annual cycle, kind of restarting here?.

The health plans aren't really on an annual cycle. They can easily lose some time in terms of just coordinating schedules, getting through processes, et cetera.

But we continue - the ones that were late stage continue to be including, as of yesterday, saying that we're looking at launches, potentially at the end of this quarter or at the beginning of the third quarter is what we're anticipating at least for a couple of them.

And then we anticipate a couple more contributing to revenue in 2021 in the back half of 2021..

Okay, that makes sense. And going back on the multi condition here, the final I think real big channel that doesn't touch behavioral health. And Rick you obviously have some good experience with that business, but maybe for either Rick or for Erez.

Would Dario go into behavioral health and fill out the bag? And how would this happen? Is this going to be an organic sort of bolt on piece of the business? Or would you do this inorganically through an acquisition somewhere to operate?.

I think obviously, behavioral health is an area that is not only in significant demand by our customers, but also is something that has a high comorbidity with chronic conditions.

And we have a strong belief that the - you can't really address the underlying chronic conditions for somebody who has behavioral health conditions or at least significant behavioral health conditions without addressing this behavioral health conditions. We have new interest in building behavioral health from scratch.

So this would be done either through partnership or acquisition..

Alright, that's great. Thank you..

Thanks Alex..

Thank you. Our next question is come from the line of Charles Rhyee with Cowen and Company. Please proceed with your questions..

Yeah. Hey, thanks, guys.

Just wanted to clarify the earlier comment around sort of the expectation for first quarter, did you say it was double - a double digit sequential increase?.

Yes, in percentage..

In percentage, so not 50%, just a double digit increase okay..

This increase, I mean it might be 10%, 15, 20 that's double. Yeah..

You're talking a lot about the opportunity here with diabetes and musculoskeletal.

Did you provide at all any kind of metric in terms of the overlap between customers? How much overlap in customers do you have between Upright and the legacy Dario business?.

Yeah, so in terms of the chronic condition itself, 36% of those that have diabetes on average will have MSK issues. From looking into the overall business, if you're talking about clients, we do anticipate that more than 20%, 25% of our clients will have more than one product.

So the way that we look at it is that eventually, in between diabetes to a pretension to the MSK, and hopefully the next one that we will have on the platform, eventually, we're going to get to 30% to 35% of our clients will buy at least two conditions. That's the way that we are thinking about the business moving forward.

The MSK specifically is something that is ranked very high among our clients..

Thanks, but is that fair to say then currently, though, there's no overlap and clients between the two products..

At this point, we don't have yet an overlap between clients.

But based on what we have built now in the pipeline that Rick mentioned, he did - added the MSK based on specific interest that we have seen in the last five weeks since the acquisition, because as soon as we announced on acquisition, we started to get phone calls and we started to communicate the new offering.

And we believe that we will be able to sell into it. And that pipeline that you mentioned is including the MSK. Just to remind you Charles, the MSK solution that we have at the moment is something that we are redefining, so the product exists, but we - repackaging the product into an offering that will be able to go into the employers market.

And we are planning to launch it only at the beginning of Q3. So I wouldn't expect MSK sales into the B2B - into the employers market before Q3. And just another short reminder is that the MSK and Upright even before the acquisition, were selling those solution into clinics.

And then we have hundreds of clinics that are already utilizing and recommending the solution to the - to their patients. But the sell into the employers and the health plan market will not happen before the beginning of Q3..

Okay, that that's helpful. Maybe one last question for me is, if we think about remote patient monitoring, the health plan business and the employer market.

Of those three, which do you think by the end of the year will be the biggest contributor? Will it still be the employer market? And maybe if you can give us - if you can give us sort of a percentage mix that'd be great, but if not, maybe you could rank order, what you think in terms of sort of dollar value between these three will be sort of the biggest contributor for the year? Thanks..

Yeah, that's, that's a tough one.

Rick, you want to take it?.

Sure.

So I can give you my best guess, Charles at this point is that just based purely on the size of the opportunities, we would anticipate that on a run rate basis, at least, the health plans would make the majority of the revenue by the end of the year or at least be the biggest portion of that, probably followed by RPM and employers sort of with the balance with almost equally.

It's possible RPM could exceed employers in terms of total revenue, but on a run rate basis, that's what we would anticipate..

Okay, thank you.

I'm sorry you said 30% enrollment at the beginning, does that include RPM? Does RPM enroll the same way or is that different?.

Yeah, so I said 30% - we've exceeded 30% enrollment within 30 days. RPM is - well, it certainly depends on the contract, but in the case of the ones that we're operating now, it's actually the RPM customer is identifying blocks of patients.

And then we're enrolling those blocks of patients and we're getting a very high portion of those blocks to be able to enroll. So it doesn't enroll in quite the same way in terms of eligibility that in that enrollment.

They're just saying here's 200, 500, 1000 patients we want to enroll and usually they will communicate first, and then we will communicate with them, or sometimes they just directly enroll them into the system. And then they're up and operating. And we're generating revenue off of them for a little bit..

And that's over 30%?.

In terms of the blocks that we're identifying, no, that's more like 85% to 90%. But it doesn't calculate in terms of eligibility quite the same way..

Okay, that's helpful. Thanks a lot..

Thank you. Our next question is coming from the line of Steve Halper with Cantor Fitzgerald. Please proceed with your questions..

I just as a follow up, can you talk to some of the changes that you have to make at Upright in order to sell it into the employer market? And also as a follow on as, obviously this is a big selling season for employers.

Is that part of the conversation now, as you're selling the traditional service?.

Yeah, so thanks for that question. There's two ways that we're going about it, specifically, as it relates to employers that we're going about the Upright solution. One is the existing solution, has relevance in the employer market, and including some of the sub segments of that market like health and safety.

And then on top of that what we're really doing is utilizing the existing hardware and building out a bit more robustly the video libraries of exercises that they have, so that we can connect the sensors to those video libraries, and then also leveraging and expanding on their existing relationships with physical therapists to provide virtual physical therapy solutions.

That's what Erez was referring to when he said that we'd be in a position to be launching those products beginning in July of this year. The existing product, obviously, we can deliver today. But all of our existing opportunities, including those that are currently in the pipeline that timing will fit very well, with those.

And for employers that are in the sales cycle right now, for January 2022 launch, yes, we are including that in all of our RFPs. We know what the product is? What we'll be delivering? And we'll be able to deliver it at that point. Well, before that point..

Great. Thank you..

Thanks, Steven..

Thank you. Our next questions are from the line of David Grossman with Stifel. Please proceed with your questions..

Thank you. Good morning. I'm wondering if you talk a little bit more about where we are with the transformation of the sales force.

And perhaps you could integrate into those comments, how the selling efforts of Upright are going to be - going to change that dynamic, if at all, as we kind of progress through 2021? Yeah, so I'll leave it at that for a moment..

Yeah, so from a B2B perspective we have separate sales forces, although there's obviously some overlap in each of the market segments that we're pursuing, so health plans, self-insured employers and RPM. We've doubled basically our sales force over the last few months in the RPM space.

And in also really in the employer space and we're continuing to fill out some additional sales positions there. We've been very pleased with the sales talent that we've been able to persuade to join us.

As I mentioned they're really seen the differentiated opportunity and these folks are coming from people that are very familiar with both selling point solutions into employers as well as the overall market where we're competing, whether that be diabetes et cetera. In terms of MSK as a condition, really, it just adds into our existing sales forces.

So other than educating the team on the product including that in our RFP effort, et cetera, it's really like just having another tool in the bag, if you will. So we don't anticipate having to add sales folks specifically for that.

We have added some sales folks that have expertise in the health and safety area as a way to also differentially pursue that market because we think Upright has a unique opportunity in that space. But that's the only differentiator versus just having the rest of the products like we normally do..

So are you at steady state for the moment with your sales force record or you think you need to continue to add over the course of the year?.

We're looking to fill a couple of open positions right now. And then we'll reassess where we are. And I would anticipate we will probably add a couple more as we get towards the end of the year. But we're always respond to demand. So if the demand starts to outstrip what our capacity is, we will add to that..

Right and then, in terms of selling and sorry, if I miss this, selling Dario into the provider market, any thoughts on that at this point?.

We are primarily focused on the provider market through the remote patient monitoring side, so that our targets are generally going to be large providers with Medicare members or integrated health systems. There are certainly some exceptions to that because remote patient monitoring is becoming more prevalent in demand in the non-Medicare space.

But funding sources there are a little bit different than they are in the Medicare space where they can build through to CMS to get reimbursed for providing those services, which is usually the primary hurdle in a provider market.

So we're not targeting the provider market for just general adoption of the product at this point, although we do see some of that just sort of organically really focused on where the providers can get reimbursement or have other revenue sources or funding sources I should say, for the product..

Got it and just I know you talked about not providing guidance for the year, can you give us any sense for how you expect the cadence revenue to change over the course of the year or expenses, and anything that would kind of help us think about how you may exit the year differently from where you enter the year..

So if you're looking into the confirmation from 2019 to 2020, practically, we continued with our B2C sales. And we've put all the foundation into the B2B. And in 2021, we are looking to see - to implement that on top of the B2C because the B2C is going to stay there, this is part of the philosophy of the company. This is how we are getting data.

This is how we are improving the solution and creating a better AI. So I would expect that in terms of the foundation, we can see B2C staying and even growing at the single digit. On top of that we need to add the Upright that is also growing and the most important part is the three channels of health plans, employers, and providers.

Well, at the short-term, we're going to see the revenue coming from employers like in this quarter, we already signed in, it's starting to get into implementation, as well as providers. This is something that we'll see in Q1 and also more intensively in Q2.

And moving into the second half of the year, we're going to see a bigger impact that will come from the health plans because we do believe that we will have some plans and then the more we go with further into the year, the more intensive the growth is going to happen in terms of the absolute numbers.

So to my point we're going to start and see significant revenue already this quarter. So it's starting to go up and if we need to compare 2020 to 2021, we are not providing a formal guidance, but the growth is going to be I would say significant..

Okay, great. Thank you very much..

Thank you. Our next questions come from the line of Nathan Weinstein with HS capital. Please proceed with your questions..

Hey good morning Erez, Rick and Zvi. Thanks for taking my question.

So with the acquisition of Upright and sort of your willingness to plug in very interesting hardware onto your SaaS model, just thinking about your M&A pipeline ahead, do you think acquisitions will still be a big way that you expand your ecosystem ahead? And have you seen other companies out there that are as interesting as Upright maybe in other chronic conditions?.

Yeah, so thanks Nathan for the question. So the way that we were thinking about building this technology as a platform for digital therapeutics is that we invent - created a technology where we can have the integration of other products fairly quickly. The open platforms allow us to integrate other devices.

We already integrated other glucose monitors into the platform. We are looking into the CGM. So it's easier to integrate and easier to create one integrated experience.

So having said that when we think about heading other technologies, when we need to define whether we want to acquire or build it by ourselves, in a lot of cases, acquisition is easier, as long as it's being done at the right price, with the right company and the right philosophy and DNA of company.

So acquisition is something that we are considering, and then the instigation of a potential different product into our platform is something that should be fairly easy because of the open architecture that we created.

So we are thinking in terms of - our mindset is in terms of having kind of a quick integration and being able to absorb other technologies. So that's something that - the chances of higher full acquisition rather than build something by ourselves when we are going to the next condition..

Thank you, Erez. And I suppose - I just have sort of sort of an out of the box question or earlier, there was a very interesting question asked about mental health and probably see a large issue in the US and can sometimes be a gating item to full or any employment.

So for millions of people that are unemployed or underemployed in the US, I mean, is there a future scenario where you could work with government payers to address that issue with your technology?.

So in terms of government payers, are you referring to Medicare and Medicaid or are you referring to something else?.

Yeah, and whether you could work with those government payers, such as Medicaid to provide your service to folks who are perhaps not currently employed, for example?.

Yeah. So I mean that's a great question. And it's a great point. And accessibility to care is obviously a significant issue in the US and digital ability to access care is also a significant issue. But one of the nice things about digital is that allows for care at scale at a reasonable price point.

And I think that if you look at behavioral health in general, you have sort of - I'll put it in three buckets, I'm going to oversimplify it. But if you think about it, is you've got a larger group of people that have behavioral health issues, or could benefit from behavioral health treatment that are not driving significant costs in the environment.

Historically, we have not done a great job of providing services to those folks on a broad base scale. You then have sort of your middle bucket of people who may be driving some level of behavioral costs, some level of treatment costs, but are not generating a large amount of costs.

And then you have the more severe people in the very top of the pyramid you have, seriously and persistently, mentally ill, which is a different set. And you have to look at each of those general buckets differently. The one you're kind of really referring to is this broad group of people at the bottom.

And digital gives the ability to provide low-cost treatment to people to help them with their behavioral health conditions. And I really see an opportunity for that going forward, whether that's working with Medicare, Medicaid plans directly or through the managed area, or there may be other opportunities as well to provide those kinds of services..

Thanks for addressing that question. It was such a thoughtful response. And thank you all for taking my questions again..

Thanks for the question..

Thank you. There are no further questions at this time. I would like to hand the call back over to management for any closing comments..

Thank you. So thanks everyone for joining us this morning and see you on our next earnings call. Have a good day. Bye, bye..

Thank you.

Thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a great day..