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Welcome, everybody, to the quarterly investor call. [Operator Instructions] Thank you again for joining us today. I'll hand over to our first speaker, Louis Gagnon, CEO.
Good morning, Australia. Good evening, North America, and thank you, everyone, for joining us today. Before we start, please note that our comments and responses to questions on this call reflect today's management views only and will include forward-looking statements. Actual results may differ materially and additional information about factors that could potentially impact our financial results is included in our quarterly investor report and Appendix 4C. Total Brain has achieved a great deal in the June quarter. We are continuing to build momentum, and we are putting in place infrastructure, partnership and people that will allow us to accelerate. Here are the highlights for the quarter. One, we continue to make steady progress on the funding of the Total Brain/IBM platform called Mental Health 360. Many large government organizations like the U.S. Department of Veteran's Affairs and the U.S. National Guard are currently evaluating how to fund the platform. We have established an effective working relationship with IBM through the IBM team over the last 2 quarters. We have joint sales product and planning sessions on a regular cadence and our scientific and product value, together with IBM's knowledge of the federal health care market, is proving to be a great combination. While COVID-19 has understandably created delays in decision-making in all major health systems such as the VA, the growing need for scalable mental health solutions for vulnerable populations is absolutely acknowledged as critical. As such, we remain confident that our platform will be implemented in the coming quarters. Today, Ms. Melissa Frieswick has accepted to join Total Brain as Chief Revenue Officer. Melissa brings 2 decades of highly relevant experience in health care and employee -- employer-sponsored total rewards SaaS companies. I will tell you more on Melissa's amazing background in a few minutes. Let me now say that we have also successfully launched the Mental Health Index: U.S. Worker Edition. We partnered with One Mind at Work, a coalition of 25 leading employers, representing 6 million employees and with the National Alliance of Healthcare Purchaser Coalitions, an organization representing 12,000 employers and 45 million individuals, spending approximately AUD 425 billion annually on health care. The purpose of the index is to create awareness about the impact that life events like COVID-19 have on our mental health and about the need to take concrete actions to address the [ picture or fact ] that mental health is more volatile, less controllable and therefore, less predictable than our physical health. The index targets the business and policymaking communities. After only a few months, we have already attracted significant attention from both the general media like Forbes and specialized media like the Journal of Managed Care or the Harvard Business School Managing the Future of Work podcast series. As anticipated, the index as an initiative has also started to generate sales leads from Fortune 1000 CHROs. During the quarter, we attracted 137,000 new users to the Total Brain platform. With that, we have doubled the number of new users of Total Brain in fiscal year 2020 compared with previous year. A significant part of the growth was driven by 100,000 new users from the American Association of Retired Persons, otherwise known as AARP. It is the result of additional marketing commitments from AARP following the renewal of our partnerships in the last quarter which, by the way, has increased the size of our B2C Affinity business by a factor of 4.5. On the product front, we launched the largest product update to the Total Brain application since the relaunch at the end of 2018, creating a new personalized self-care experience that is based on individual strengths and weaknesses instead of thematic 30-day journeys. New features, which include custom capacity-targeted training recommendations, daily programming, new content type expansion are already driving 12% more content consumptions per user visit. Screenshots and trial account details are available in the Product section of the 4C quarterly update. From a cash perspective, we collected AUD 1.7 million in cash receipts in the June quarter, which represents an 11% increase quarter-on-quarter and a 187% increase year-on-year. I will now discuss some of the progress made in each business function during the June quarter. In sales and customer success, as mentioned before, we have the great pleasure to announce that Ms. Melissa Frieswick will join Total Brain as Chief Revenue Officer on August 17, 2020. Melissa focused her career on improving health care within the U.S. and globally, working with some of the nation's most forward-thinking employers, payers and consultants. Immediately prior to joining us, she served as Chief Revenue Officer at Maven Clinic, the digital health care company that earned the top spot on Fast Company's 2020 Most Innovative Health Care Companies. Frieswick's extensive carrier in the health care industry also includes Senior Vice President of Sales at Virgin Pulse, part of Richard Branson's famed Virgin Group and global leader within the health and well-being market. Prior to Virgin, she was Vice President of National Accounts and Consumer Strategy Business Leader at Cigna Insurance, one of the country's most innovative payer. We expect that Melissa's proven health care experience and network will help us accelerate sales growth across all of our go-to-market verticals: corporate, B2C Affinity and clinical. Our Vice President of Sales since 2018, Mr. Marcel Legrand, will be leaving Total Brain by the end of August 2020. Marcel built our sales and service infrastructure and the team from scratch. He and his team executed on the very hard work of finding product market fit while reconstructing everything. We are very grateful for his work and dedication, and we wish him the very best in his endeavors. The very real buzz that is being created by the Mental Health Index will induce other large partnerships as it has started to produce CHRO-level leads from very large companies. As those leads convert in the months to come, they will grow the list of more than a dozen new contracts worth approximately AUD 2 million in ARR, or annual recurring revenue that we signed since January. In the clinical market front, we added 2 more mid-market clinic -- addiction clinics to our list of pilots. The functionality of the Total Brain platform, including clinician portal and reporting is seen by practitioner as providing useful health outcome data, improving onboarding, helping to plan treatment, providing continuity of care and generating incremental revenue via insurance code reimbursement. Despite the fact that COVID has put clinicians in an all-or-nothing professional situation, where it is hard to do anything new for them, we will continue to try adding more clinics to more robustly test the different hypothesis around optimal price benefit ratio of our new product. We are also transitioning our legacy clinical population, which represents about AUD 285,000 per annum to the new platform and the new user experience. We expect that most dollars will transition successfully and are excited about the additional number of data points we can use for testing our hypothesis. As part of our desire to give back and with a view to start building bridges in the education and student markets, we have closed a partnership with the Center for Adolescent Research and Education, otherwise known as CARE, which will promote positive youth development by offering teens access to Total Brain tools with a special focus on those transitioning from high school to college and college to workforce, a cohort amongst the most at risk for mental health conditions and suicide. In marketing, let me start by saying how transformational the Mental Health Index promises to be for our brand. And in everything else we do, we build to scale. At this time, we have launched our first index, the U.S. Worker Edition with top U.S. partners at the intersection of mental health care and corporate HR. As we grow CHROs and policymakers' habits of checking and discussing our robust benchmark periodically, we will build the brand based on scientific rigor and relevance. We will build a gold standard endorsed by the most credible people in the field publicly on a monthly basis. That standard has been architected to replicate in other countries. For example, we could launch the Mental Health Index: Australian Worker Edition and for other audiences like students or senior editions. Such data-driven strategy exploits our most differentiated assets or data, and it positions us at the forefront of technology, data and health care policy. The fact we would work around the index, our account-based marketing strategy has delivered 30-plus sales qualified leads from U.S. corporates with 5,000 employees or more since January 2020, doubling the monthly run rate of qualified leads post COVID-19. We also continue to invest in the Total Brain Podcast, which features high-quality conversations between our Founder and Chairman, Dr. Evian Gordon and world-renowned key opinion leaders on subjects related to mental health and brain health available on our website. I personally must admit that this initiative completely led by, introduced by Evian himself makes me very proud. My favorite series is the one where we answer the questions, what does a person suffering from depression or anxiety or ADHD has to teach us? Very interesting themes. In product and technology, the integration of the newly expanded team is increasing our ability to deliver product and new functionality across multiple work streams, including clients, infrastructure and core user platform. The latest product release completes the renovation of our app as envisaged 3 years ago. Yes, 3 years is what it took to finally do it all. We could not have imagined the amount of work that was required to rebuild all the technological infrastructure from a data warehouse to a cloud infrastructure to revamp the assessment, to reinvent the result pages, the reporting systems, the recommendation engines and the 41 digital self-care apps across web and mobile while seamlessly integrating into our channel partners and architecting the system so that it could accommodate customized label requirements of the AARPs and IBMs of this world. Let me just say how grateful I am for the work that my partner, Matt Mund and his lieutenants, [ Dmitry Buslaev ], Andy Markham and Pablo Sanchez and their teams have accomplished to date. Moving forward in 2020, Matt and his team are focused on many exciting features that will enrich our value proposition and deepen our user engagement. Here are 3 examples. We will refactor and break the assessment in smaller, more digestible, less demanding pieces that one can take over time versus in one time. This feature, we believe, is necessary for future direct-to-consumer experience. Two, we will optimize the new daily feed recommending exercises and content linked to one's great strengths, weaknesses and risk. Note that we will -- we have recently added scientific articles to the field, and we will soon add our own collection of NeuroTunes to leverage music as a lever to affect our mood and capacities. Three, following a year worth of research that started with our collaboration with the American Heart Association, we were also working on our first alpha version of a phone camera-enabled Heart Rate Variability assessment, which will be discrete to start with, eventually continuous and which we are planning to test by the end of this year. This 3-minute assessment will be immediately paired with a new resident breathing tool that has proven to break the state of fight or flight in minutes. This new development will allow TTB to address the need of people who in the moment as opposed to, in the long run, want to see effect or do something. With that, we will address a new user segment who is less invested in the long term and more driven by short-term easy actions and tangible results. In Human Resources, we have replaced our Director of HR, Meredith Haas by Caitlin Mimnaugh. Caitlin comes to TTB with an impressing HR career in the financial and consulting world and also with significant experience as a licensed mental health clinician herself. I also want to thank Meredith very sincerely for all of the great work she's done building the infrastructure of our company. We have also continued to enter an integration of the work-from-home environment from all Total Brain employees with minimal business disruption, and the team remains at high spirits and healthy. In closing, amidst the current global situation, we are very encouraged by the expressed interest of large organization to deploy mental health solutions with their populations. We signed more than a dozen partnerships and commercial contracts since the start of the pandemic, and we currently feel a general acceleration of all types of discussions. Those discussions are also very aligned with our new and exciting product vision for 2020. And very importantly, we have hired a world-class CRO to help and grow our team with a view to convert this great energy into significant dollars into our bottom line. The ongoing progress of our pilots in the addiction clinic market also continues to be very encouraging. As such, we remain focused on the following priorities for our business. One, proactively penetrate various verticals in the B2C Affinity market in collaboration with our partners from IBM, AARP and Everyday Health while seeking new opportunities; two, accelerate sales cycles of B2B Corporate revenue via continued execution of the account-based marketing strategy and launch a pull strategy with the Mental Health Index and penetrate new and existing channel partners; three, product -- test product market fit and scalability in the addiction clinic market; and four, retain and upsell our existing book of business. This concludes my update for the June quarter. We are infinitely grateful for your trust. And as always, we remain committed to creating significant shareholder value in fiscal year 2021 and beyond. I will now open for questions.
[Operator Instructions] The first question comes from Elyse Shapiro from Bell Potter.
Just in light of everything that's been going on over the last few months, how have you found first, the utility and also the utilization of the app changing over this time? And on that, what sort of lessons and changes will you implement going forward?
Thank you so much for your question, Elyse. This is, first and foremost, the future of the company. Our product is what drives our revenue at the end of the day, and our product must engage users. We have extremely good engagement on the assessment front, always have and continue to have. We are generally engaged in more than any other apps in the market when companies actually promote what we do because what we do is gold. But that being said, there is still a long way to go. What we just did recently in May has increased usage per visit of the content or content that is consumed for every visit by 12%. And for us, it's only the beginning of what needs to be done. If I may, I will ask Matt [indiscernible] things, to give us briefly what are the highlights of the changes that perhaps he plans to do to increase engagement in the months to come.
Thanks, Louis. And just to take up your -- on your question, we've seen that many corporates are still very much invested in promoting the program. They have lots of additional communications [ that didn't ] push out due to virtual work from their workforce. So we have been working pretty aggressively with many of our large clients to matriculate additional specific content to support those employees into other communications for clients. So that's -- as an example, it's a new media and content tool kit that we've been developing and deploying out across our customer bases. So we see engagement holding, and it's likely working to increase by virtue of some of that efforts at the client and product marketing level as well. And in the upcoming, as Louis mentioned, there's several new features that are in the queue like NeuroTunes, which is the neuro-optimized music, which we're really excited about as well as coupled with the launch of a new messaging platform that is just getting up and running. We will also see, as Louis said, HRD developed before the end of the year as well as a refactoring for the way that we onboard folks based on their persona. So whether or not they are in need of immediate in-the-moment support or whether they're looking for a more structural training to help support a longer-term growth of their brain capacities and individual mental health. So we're really quite positive in what we're seeing both from the client side engagement as well as from the product side and the road map to come. And just as another reference point with respect to your post-COVID question. As mentioned separately, we saw a massive spike in usage in one of our larger partners, AARP specifically, with over 100,000 assessments taken in a 2-month period. So the obvious demand and interest is there for all of our services.
Got it. And just another question. I mean I've seen apps like Talkspace. Do you have that kind of therapists or mental health profession engagement kind of coming through on a live basis? Is that something that you could integrate with or work with through your system as well?
Yes, it is, Elyse. This is something that we are definitely dreaming of integrating with down the road because we are 100% complementary. The way we see the world, the biggest problem in the mental health world is the fact that half of everyone with a condition is undiagnosed, untreated. They go to work sick. So we address that with a self-monitoring tool that is about the brain. And we have conversion rates on that assessment and our capacity to evaluate the risk that is unmatched and absolutely unique in the marketplace. And the index is another manifestation of that. But self-monitoring is one part. The other part is driving people to the resources that employers are already paying for. In the U.S., we call them employee assistance programs. And so when we see that someone is at risk, we absolutely refer them to the employee assistance program, and could down the road, refer them to other parties like Talkspace. Today, we are doing it with BetterHelp, where we could become a lead generation tool for them. Then when the patient wants to share their data, we can really help as we are demonstrating on the clinical side that we actually could help the clinicians of the Talkspace of this world do a better data-driven job, show outcomes and have self-care tools that people can do in between sessions. So it's a good question that you have. We are 100% complementary. And we believe that in our future, we will have some serious relationships with players like that.
[Operator Instructions] We have no further questions at this point, Louis.
Thank you very much. Nigel, do you have any questions that came directly to you?
We've just had one come online. It's from Finola Burke from RaaS.
I did send a couple of questions through to on the e-mail, but I just have one further question. I just wondered if you could give us a sense of what the annualized revenue run rate is now for the business. And because you did put on a couple of -- out of your present -- your e-mail, sorry, your 4C mentioned that there have been a number of new clients put on in the third quarter that you were starting to see in this quarter. Just if you could give us a sense of what that ARR is going into the next year.
Thank you for your question, Finola. I will say that all of those numbers will soon be part of our annual report. We're going to report on our fiscal year-end in a matter of weeks. And so I am sure that we will disclose precisely what it is. In the meantime, I will ask Emil, maybe to add some color to the fact that we will disclose it soon. Emil?
Yes. From a numbers point of view, in Australian dollars, we're close to 4.5 right now. Obviously, you're well aware, our business earns revenue in U.S. dollars, and that has weakened substantially relative to last quarter, 10%, 12%. So that impacted that. I would take that into account as you think about that quarter-over-quarter. And obviously, some of the recent wins that we mentioned in the 4C are also part of that. I think a bigger related question is also our general transition, as Louis pointed out in his comments to sort of a pure-play SaaS recurring revenue business. And as we make that transition and as more of these new accounts coming in, their revenue is recognized in the recurring manner, will be in a better position to actually start putting such numbers out into our communications, and it could be easier for everyone to follow. And we are still making that transition. So we are not yet committing to a specific time line. I just wanted to highlight that, but we are well on our way there.
It's -- Louis, it's Nigel speaking. And for those questions from shareholders that came through, could you please highlight what you know to be some of the barriers, the take-up of the product, what measures you're taking and are those measures successful? The second question was regarding the clinical market. If you could provide some time frame for when you feel you may be ready to go to market for this segment.
Thank you, Nigel. On the first question, I think it's useful to look at it market by market. Different customers, different barriers, different challenges. I would start by saying that on the corporate side, what we have seen as the key barrier is the long sales cycles in the many point solutions, the noise in the market and the energy that it takes to educate people to the fact that ones mental health should be a priority. It's not an ROI exercise anymore, it is a necessity. The risk of mental health just doubled in our societies given the hard context we are going through. So one, doing that evangelization, finding the person who feels accountable, who has the budget and can create it has been a challenge for us. That is, I think, being addressed very elegantly with the index and the partnerships that we are having there with organizations that are made of CHROs that are more aware of the strategic importance of mental health and more in control of creating budgets and priorities. So the long sales cycle, the units of mental health prevention as opposed to treatment was part of our challenge. It is being addressed very elegantly with the index, and we are starting to see the results of those efforts panning out as we speak. So that will be for the corporate side. On the B2C Affinity side, the main challenge, I would say, has been that COVID has slowed down meaningful conversations with meaningful partners. We are continuing to significantly increase our understanding of those markets, those players and are actively developing many new conversations. We are focusing on penetrating IBM with a very clear intent. Those conversations and this pipeline is very large. And so the barrier that I see there is just a question of scaling what we have given the very volatile business environment we're in, in the U.S. right now. On the clinical side, I don't see any particular challenges other than execution of a test where we can confirm all of our hypothesis. We are on our way to do it. We never intended to scale that business this year. But what we did intend and what I think we will achieve is a position where we will understand how to go to market at what price we do and how by the end of the year. And that, to me, is a great outcome. I would ask maybe Matt to add anything to what I just said, if he thinks there is anything else to add.
No, Louis, I think that was very well put. I wouldn't add to that.
Thank you, Matt. Regarding the clinical market questions, I kind of express the fact that we are researching it as we speak, very intently. We hope that we will be able to validate our assumptions, have a minimum viable product that is tested in place, ready to scale by the end of the year. And when we do that, we are now in position to address a huge market just to take the addiction market, let alone the whole mental health market. Just addiction is 20 million addicts in the U.S., 4 million of them go to treatment every year. There are about 345 addiction clinics, representing 1.3 million beds that are sizable and take insurance. So we are starting there. But already, I can tell you that we have many discussions from people in mental health, not just addiction, who are extremely intrigued and extremely pleased with the value proposition that we bring to market. And my prediction is that we will open up the funnel and go wider in mental health sooner than later. But for now, we have a plan to stay in the addiction side and to try and replicate the knowledge as soon as we can. So that's it for the clinical question. Nigel?
Thanks, Louis. Because that's covered the other question that I was going to ask. Perhaps given that for our Australian audience, you may just want to give your thoughts on whether or not the Presidential election is having any impact on decision-making. I mean between the pandemic and the election, things are obviously are interesting business-wise. Perhaps your thoughts there for the Australian audience.
Yes. As a -- in view of a small business, I must say that, number one, I am extremely grateful that the U.S. government was able to help us during this transition. So did the Australian government. We are extremely grateful for the help that we got. The small businesses like us definitely are affected in terms of decision-making and everything else across all markets. The specific questions around the election is very relevant to all of us, and it is definitely raising a lot of questions. This is not a very stable political environment. It is very volatile. We are discovering new twists in terms and new strategies and new tactics every day that has potential impacts on the business environment in major ways. And we all hope that we can get to a date of November where we can have clear, well-managed elections with clear results so that the country can move in a more resolute direction where all -- some of the uncertainty is being removed in regards to the political landscape. We all know that the COVID is there to stay, hurricanes will continue to hit us but it would be great if we knew that there will be good, fair, well-managed elections for which the results will be respected by all parties. And it would be really nice to put that behind us so that this country can reenergize in the face of a challenge that is only getting bigger and bigger on a daily basis, as COVID is hitting and as the economic impact keeps growing. So lots of uncertainty is not easy at all, but I am by nature optimistic. And I hope that we will get to November with a huge sense of purpose and unity for the country.
Thanks, Louis.
The next question comes from [ Sahal Rohit ], who is a private investor.
My question is, are we doing -- are we having any partnership with the variable technologies if -- well, I've got a couple of questions. The first one is this one. I read somewhere that we are actually thinking of partnering with some variable technologies. So are we having any plans on that?
Yes. Thank you for your question, [ Mr. Rohit ]. We have been looking at the wearable market deeply with the American Heart Association trying to see or really deeply understand the HRV measurement, the markets, the technology limits and the technology prowesses. And what we have concluded was that there is a very beautiful opportunity to go with a low-priced band, wristband that could be commercialized below $20 to really specialize in tracking HRV and a few other things to really deliver on the promise of tracking HRV reliably and managing stress. So we hope that a partner like that will show up in our future. We have not yet started any of those discussions in depth, but it is definitely something that we will consider on our horizon. Right now, we are going to do it ourselves with the phones. And in terms of discrete measures eventually for continuous measure, we would hope to partner with all the ecosystem and/or more importantly, a low-priced reliable band that would allow us to go mass. So that's where we're at [ Mr. Rohit ].
Yes. My second question is, correct me if I'm wrong, but I think in the last teleconference, we were told that we are looking at the ARR of $100 million in the next 5 years or something. Are we still on target for that? Or has the bar been raised?
Yes. So the question was asked with reference to an article that was written the day that we signed the deal to recapitalize the company 3 years ago. And it was definitely not a prediction, more of a, "Hey, Louis, do you think this thing can be big?" I thought then that it could be big. I say now that I think it's going to be huge. Am I going to hit it in 3, 4, 5 years? It's hard to say. But it's definitely a goal that is worth dreaming for us. And that is, I believe, realistic in our future. Does that answer your question?
Yes, yes. Awesome. And just the last one is, are we actually planning to list TTB on New York Stock Exchange? Do we have any plans like going forward?
We have no plans for relisting the company at this stage. I will let Emil maybe add to this question -- to my response.
Yes. I think it's a good question, whether we should dual list in the U.S. or just completely shift to a U.S.-based exchange. I think the reality of it is that it's too early to tell. At our scale of market cap and revenue, it's probably a bit too early, but it's certainly an option for us down the road that we'll remain open to and opportunistic as things evolve.
Fair enough. And lastly, I just wanted to -- this is not a question, but I just wanted to express my disappointment over the number of announcements. Basically, we are getting -- any announcement like every 2 or 3 months, which is pretty low compared to other companies. I'm not comparing apple with apple, I understand. But however, if we can -- since we are in a growing phase, we are just starting up. We are aiming to become a tech unicorn. So maybe like a monthly operational update on ASX would be really appreciated, so that at least -- because I've been invested a huge amount in this company and the share price has done nothing. And I -- like this is my frustration and this is my disappointment overall. Otherwise, in terms of the vision, the product and everything, I'm completely happy. But the operational announcement, if they are made more frequently, it could be really appreciated. Thank you.
Thank you so much, [ Mr. Rohit ], one for your belief and trust in us. Believe me, we would have loved to have been in a position up until now where we could have made announcements every day. And believe me, when we have such a cadence, we will -- I will let Emil maybe take the question and or make a comment on what we are doing and what our plans are moving forward. Emil?
Yes, absolutely. It's another good point that you're raising. I think the reality is that it's a balance between the materiality of certain announcements. The ASX has, these days, a pretty strong stance on what an announcement should contain and how material this -- the announcement should be if it's treated as publishable to the ASX. So we're always sort of conscious of that as well as, of course, providing sufficient information and continuous disclosure to all of our investors. So it's a balance. Your frustration is very well noted. And we'll keep striking the balance as our business evolves.
[Operator Instructions] We have no further questions at this time, Louis. So I'll hand it back over to you for any additional or closing remarks.
I just would like to thank you again all for your time, for your support, for your trust and stay safe, stay healthy. We are doing the same here. These are interesting times. I believe that together with Total Brain, we really are at the intersection of a need in a context that is favorable. We just need to be very patient, laser-focused on executing properly. And I think that we will all benefit personally and collectively from the work that we are doing if given the chance. And so I thank you for that chance. And I will wish you a very beautiful day for those of you in Australia and a great evening for those of us in the U.S.
That concludes the quarterly investor call. Thank you once again for joining us today. You may all disconnect.