Hello, and welcome to the Paysign Fourth Quarter 2021 Earnings Conference Call. As a reminder, this conference is being recorded. This presentation may include forward-looking statements to the extent that the information is presented in this presentation discusses financial projections, information or expectations about the company’s business plans, results of operations, the impact of COVID-19, returns on equity, expected gross margins, markets or otherwise, make statements about future events. Such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as should, may, intends, anticipates, believes, estimates, projects, forecasts, expects, plans and proposals. Although, the company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading Risk Factors and elsewhere in Form 10-K. Forward-looking statements speak only as of the date of the document in which they are contained, and the company does not undertake any duty to update any forward-looking statements, except as may be required by law. This presentation also includes adjusted EBITDA, a non-GAAP financial measure that is neither prepared in accordance with nor an alternative to financial measures prepared in accordance based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies. It is now my pleasure to turn the call over to Mark Newcomer. Please go ahead.

Good afternoon, everyone, and thank you for joining us for Paysign’s fourth quarter and full year 2021 earnings call. I’m Mark Newcomer, Chief Executive Officer. And with me this afternoon is Jeff Baker, our Chief Financial Officer. Everyone touch wood because I don’t want to jinx this, but I’m very happy to say that it looks as though we are starting to see the effects of the pandemic on our business subside. Throughout the fourth quarter, we saw our load in spending trends continue to improve as the number of plasma donations increased as well as seeing an increase in average donation compensation. Funds loaded on cards was up 12.5% over fourth quarter last year and up 4.6% over last quarter. On a full year basis, funds loaded was up 10% over 2020. The fourth quarter spend volume increased 13.2% from last year and was up 5.4% over the last quarter. And for the full year, spend volume was up 14.3% over the previous year. As a result of these positive trends, our Q4 revenues of $8.8 million increased 21% versus the prior year. And for the full year, our revenues increased 22% to $29.5 million over the previous year. In addition to the positive transaction trends, we also saw our plasma clients resume their expansion plans. In 2021, we signed six new plasma clients and onboarded an additional 26 net new plasma centers. In the fourth quarter, we added seven new plasma centers, ending the year with a total of 366 centers. With the increase in new centers and the increase in transaction volumes, we saw a 20% increase in plasma revenues and an increase in monthly revenue per center to $6,800 per center. In Q4, we renewed one of our large plasma clients. In addition to the contract…

Thank you, Mark. Good afternoon, everyone. As Mark pointed out, we had another good quarter with revenues, income from operations, EBITDA, adjusted EBITDA and transactional trends all improving both sequentially and year-over-year. We met or exceeded all guidance metrics provided during our Q1 earnings call last May. Full year total revenue of $29.5 million was in line with our guidance of $29 million to $32 million. Gross profit margin was 49.9%, well ahead of our guidance of 45%. Operating expenses were $17.5 million, slightly below our initial guidance of $18 million to $18.5 million. Adjusted EBITDA of $2 million was ahead of our guidance of $350,000 to $1.9 million. With all the details we provided in the press release and that will be available in our 10-K when it’s published tomorrow, I will simply hit the financial highlights for the fourth quarter relative to the fourth quarter of 2020. Total revenues of $8.8 million increased $1.5 million over the previous year. Of that amount, plasma revenues were $7.6 million, up 19.9% and pharma revenues were up 27.8% to $1.2 million. Other revenue was up slightly to $37,000. The average revenue per month per plasma center was $6,798 versus $6,660 last year, and we exited the year with 366 centers versus 340 at the end of last year. Gross profit margin for the quarter was 54.3% versus 51.2%, an increase of over 300 basis points. SG&A was up 5.4% to $4 million and total operating expenses were up 6.5% to $4.7 million as we continue to invest in our operations and technology platform. Adjusted EBITDA, which adds back stock compensation to EBITDA was $1.3 million or $0.02 per diluted share. This was up 64.5% over last year’s adjusted EBITDA of $768,000. Regarding the health of our company, we exited the quarter…

[Operator Instructions] Our first question is from Peter Heckmann with D.A. Davidson. Please proceed.

Hey, good afternoon, everyone. Thanks for taking the question. I believe I heard you say that you expect the net new plasma centers, the net new additions in 2022 to be greater than 2021. If you could verify that. But then as well, I think going back a couple of quarters, you talked about a pipeline of about 60 centers. Can you talk a little bit about that pipeline and maybe what the conservative number might be, but a couple of things break the right way, what type of number we might be looking for over the next four to six quarters?

Yes. Pete, it’s Mark. I’m happy to discuss that with you. Basically, we – back – let me address first your question about the 50 that was in prior quarters. We went down a path with some folks that we expected to get those and they just don’t materialize. We do absolutely believe that we will beat the numbers that we did last year with net new centers. We’re expecting that number to be close to 40, and that can go plus or minus.

That’s helpful. And just in terms of thinking about that gross margin in the first quarter. Is there any unusual item in there? Or it’s just that you won’t be able to ramp some of your planned investments in people and technology as fast as the revenue is coming back?

Pete, this is Jeff. So if you heard Mark say, we renewed a large plasma customer during the quarter. Part of that renewal and negotiation and some things is going to cause us to have a onetime benefit on the cost of sales line for the first quarter. So what you’re going to see is for the guidance, roughly like a 60% gross margin. And then it’s going to go back to the upper 40s kind of throughout the rest of the year. So the second quarter, third quarter, fourth quarter. What that’s also going to result in is you’re going to see kind of like a smiley face as you get to adjusted EBITDA, where you’re going to have a high number in the first quarter, then it will go down in the second. And then remember, second to third quarter is kind of flattish, maybe up a little bit in the third quarter and then it will go up in the fourth quarter. And again, that’s tracking with the seasonality that you see in our business. Keep in mind, February, we always – January looks good and February falls off with tax season, March starts to rebound and the flat revenue ramps up throughout the remainder of the year. So I’m just trying to give as much visibility out there for everyone, so they understand kind of the plus and takes that are going on in the model this year.

That’s helpful. And then maybe just one more, and then I’ll get back in the queue. But on the pharma side, I think you noted maybe two net new for the year. And just trying to figure out where we are then? Are we at about, I don’t know, mid-teens type in terms of number of programs? I mean, I know it’s not – the programs can vary more significantly than the plasma centers. But in terms of like the total pharma programs you might be working on as you enter 2022, is it – are we thinking about that right, about 15, 16, 17 type programs?

Well, so on the two net news, so we had some programs that ended and then – and that’s what happens. These are two- to three-year contracts. And sometimes they renew and sometimes they just end. So in the quarter, we had a couple ended. And those are on the kind of the old – I’m going to say, the old model versus the new model, the new co-pay business model that we’re having a lot of traction and then the legacy prepaid model. So today – I mean, I’d be guessing, but we’re probably in the 10 to 15 range of the number of – sorry, 17 programs. So I don’t have to guess, Mark told me. We’re at 17 programs, and then we’ll add – we’ll continue to add more of those throughout 2022. And then what you guys – it’s hard to see from an outsider’s perspective is you have the old legacy prepaid business kind of declining from left to right. And we’ve got a couple of programs left there that will end in 2021 – excuse me, 2022. And then you got the growth of the new co-pay business from the bottom left going up to the right to – for 2022. And that’s why you’re looking at kind of like a flattish revenue in the pharma business what really starts around, call it, $700,000 around that in the first quarter going to $750,000-ish and then exiting around $850,000 for the year. But that should get you pretty close to flattish year-over-year.

Got it. Okay, great. Thank you. I will be back in the queue.

You bet.

[Operator Instructions] There are no further questions at this time. I would like to turn the conference back over to management for closing comments.

Thanks, Sherry. Really appreciate everyone’s time and interest today. I want to also thank the Paysign team for their continued dedication and hard work. And with that, thank you very much. Have a great day.

Thank you. This does conclude today’s conference. You may disconnect your lines at this time, and thank you for your participation.