LifeWallet will host a conference call and live webcast to review the Company’s first quarter 2024 results for investors and analysts at 8:30 a.m. Eastern Time on Thursday, May 16, 2024. To access this call, we encourage you to pre-register using this link: LifeWallet Q1 2024 Earnings Pre-Registration.
A live webcast of the conference call will be accessible from the Investors section of LifeWallet’s website here:
A replay of the webcast will be archived and accessible here:
First Quarter Highlights
- The Company achieved its most successful quarter to date since becoming a publicly traded company, as it relates to claims recovery income, achieving two comprehensive settlements.
Comprehensive Settlements
- The Company announced two comprehensive settlements with more than 28 property and casualty insurers (“P&C Insurers”). In addition to settling existing claims, these settlements establish a process to collaboratively and timely resolve future claims that are owed to
LifeWallet from the Company’s portfolio of assigned claims. Through collaborative data sharing, these settlements provide the Company with additional data that enhances its ability to identify the parties responsible for unreimbursed medical liens owned byLifeWallet . It also allows the Company to identify any recoverable claims for future business that pertain to the settling counterparties. - The Company began implementing the terms of its
March 2024 settlement by entering into a tri-party data collaboration agreement betweenLifeWallet , Palantir Technologies (NYSE: PLTR), and the settling counterparties. The collaboration agreement allows for data sharing in order to reconcile potential Medicare liabilities and existing owned claims. This is part of the Company’s initiative to maximize its Chase-to-Pay platform. - In addition to the settlements described above, the Company continues to progress with settlement negotiations involving other P&C Insurers to resolve pending litigation under the same or similar framework. The Company’s goal is to bring additional P&C Insurers into a similar settlement structure, building a potential revenue stream that is diversified and predictable.
Utilizing First-Quarter Settlements to Identify Additional Recoveries
- By processing historical claims data received from settlements,
LifeWallet has been able to match first and/or third-party claimants with specific claims that were paid by LifeWallet’s assignor clients usingMedicare Trust funds. As a result, the Company has launched a targeted claims recovery process with third parties. - The historical claims data enhances LifeWallet’s ability to discover liens and recover payments owed, more quickly than through litigation. It also enables
LifeWallet to pursue a diversified number of entities that failed to pay liens or collected twice for the same bills, both from the insurer and LifeWallet’s assignor clients. LifeWallet believes additional value lies in the Company’s identification and collection of unreimbursed liens from these other responsible parties. To date, the Company has identified thousands of unreimbursed claims and initiated the collections process. Any additional revenue from these potential collections would be reflected in future filings.
Developing Business Solutions for Medicare Advantage Subrogation and More
- As previously announced,
LifeWallet has developed a comprehensive clearinghouse platform with Palantir Technologies, utilizing Palantir Foundry as the foundation of the data ecosystem, enabling healthcare entities and P&C Insurers to efficiently coordinate benefits. The platform was built with LifeWallet’s unique healthcare data industry knowledge and Palantir’s advanced technology, which has universal applications, and can resolve all types of liens, not just Medicare and Medicaid. - The clearinghouse directly connects healthcare entities and P&C Insurers, reducing the need to subrogate or investigate when or if a Medicare or Medicaid entity is a secondary payer. This system can substantially improve the Medicare and Medicaid payment coordination system, helping eliminate improper payments.
- LifeWallet Founder and CEO,
John H. Ruiz , is confident in the Company’s outlook, stating: “We identified an industry-wide problem over a decade ago and these recent settlements prove the need for LifeWallet’s comprehensive solutions, which utilize data analytics and technological innovations to positively impact theU.S. healthcare system. By providing a first-of-its-kind coordination of a benefits clearinghouse, we are revolutionizing healthcare claims adjudication and payment integrity, while creating a repository of information that benefits patients, payers and providers. Our systems help discover historical unpaid medical liens and provide a platform for the reconciliation of future claims owned or processed by LifeWallet. This can be used by lawyers, providers, payers, and beneficiaries alike.”
First Quarter Financial Highlights
- Revenue: Total revenue for the three months ended
March 31, 2024 was$6.0 million compared to$4.0 million for three months endedMarch 31, 2023 , out of which$498 thousand pertained to claim recovery service income, which was terminated at the beginning of 2023. - Operating loss: Operating loss for the three months ended
March 31, 2024 was$130.2 million , compared with$140.6 million during three months endedMarch 31, 2023 . Adjusted operating loss for the three months endedMarch 31, 2024 was$8.7 million , excluding non-cash claims amortization expense of$121.0 million and shared-based compensation of$469 thousand . - Net loss: Net loss for the three months ended
March 31, 2024 was$176.6 million and$157.7 million to controlling members, or net loss per share of$1.26 per share, based on 15,013,881 million weighted average shares outstanding. Adjusted net loss for the three months endedMarch 31, 2024 was$8.5 million , excluding the non-cash item noted above, change in fair value of warrant and derivative liabilities of$51.3 million , and$98.0 million of non-cash expenses related to paid in kind interest. - Liquidity: As of
March 31, 2024 , cash totaled$12.0 million . The Company has in place other sources of potential funding, including its working capital facility and Yorkville standby equity purchase agreement. The Company continually monitors its liquidity, and may in the future access debt and equity markets as necessary in order to meet its ongoing liquidity needs.
Assigned Recovery Rights Claims Paid and Billed Value
The table below outlines the Company's claims data for the most recent periods. The amounts represent data received from current and new assignors:
$ in billions | Three Months Ended | Year Ended | Year Ended | ||||||
Paid Amount | $ | 370.0 | $ | 369.8 | $ | 374.8 | |||
Paid Value of Potentially Recoverable Claims(2) | 86.6 | 88.9 | 89.6 | ||||||
Billed Value of Potentially Recoverable Claims | 363.8 | 373.5 | 377.8 | ||||||
Recovery Multiple | N/A(1)(3) | N/A(1) | N/A(1) | ||||||
Penetration Status of Portfolio | 86.8 | % | 86.8 | % | 85.8 | % | |||
(1) During the three months ended (2) On (3) The Recovery Multiple for the three months ended |
Non-GAAP Financial Measures
Additional information regarding the non-GAAP financial measures discussed in this release, including an explanation of these measures and how each is calculated, is included below under the heading “Non-GAAP Financial Measures.” A reconciliation of GAAP to non-GAAP financial measures has also been provided in the financial tables included below.
About
Founded in 2014 as
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each case, their negative, or other variations or comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance or results and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by
Contact
Media:
LifeWallet@icrinc.com
Investors:
Investors@LifeWallet.com
Consolidated Balance Sheets (Unaudited) | ||||||||
(In thousands except per share amounts) | 2024 | 2023 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 11,973 | $ | 11,633 | ||||
Accounts receivable | — | 217 | ||||||
Affiliate receivable (1) | 1,242 | 1,188 | ||||||
Prepaid expenses and other current assets (1) | 6,018 | 8,908 | ||||||
Total current assets | 19,233 | 21,946 | ||||||
Property and equipment, net | 4,886 | 4,911 | ||||||
Intangible assets, net (2) | 3,011,882 | 3,132,796 | ||||||
Right-of-use assets | 315 | 342 | ||||||
Total assets | $ | 3,036,316 | $ | 3,159,995 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 11,507 | $ | 6,244 | ||||
Affiliate payable (1) | 19,822 | 19,822 | ||||||
Commission payable | 924 | 821 | ||||||
Derivative liability | 190 | 37 | ||||||
Warrant liability (1) | 33,316 | 268 | ||||||
Other current liabilities (1) | 17,008 | 19,314 | ||||||
Total current liabilities | 82,767 | 46,506 | ||||||
Guaranty obligation (1) | 984,450 | 941,301 | ||||||
Claims financing obligation and notes payable (1) | 575,021 | 548,276 | ||||||
Lease liabilities | 204 | 235 | ||||||
Loan from related parties (1) | 130,328 | 130,709 | ||||||
Interest payable (1) | 20,047 | 73,839 | ||||||
Total liabilities | $ | 1,792,817 | $ | 1,740,866 | ||||
Commitments and contingencies (Note 13) | ||||||||
Stockholders’ Equity (Deficit): | ||||||||
Class A common stock, | $ | 2 | $ | 1 | ||||
Class V common stock, | 12 | 12 | ||||||
Additional paid-in capital | 367,079 | 357,928 | ||||||
Accumulated deficit | (104,433 | ) | (85,551 | ) | ||||
Total Stockholders’ Equity | $ | 262,660 | $ | 272,390 | ||||
Non-controlling interest | 980,839 | 1,146,739 | ||||||
Total equity | $ | 1,243,499 | $ | 1,419,129 | ||||
Total liabilities and equity | $ | 3,036,316 | $ | 3,159,995 | ||||
1. As of 2. As of |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Condensed Consolidated Statements of Operations (Unaudited) | ||||||||
Three months ended | ||||||||
(In thousands except per share amounts) | 2024 | 2023 | ||||||
Claims recovery income | $ | 6,001 | $ | 3,497 | ||||
Claims recovery service income | — | 498 | ||||||
Total Claims Recovery | $ | 6,001 | $ | 3,995 | ||||
Operating expenses | ||||||||
Cost of claim recoveries | 1,673 | 1,021 | ||||||
Claims amortization expense | 121,014 | 113,469 | ||||||
General and administrative (1) | 5,566 | 6,855 | ||||||
Professional fees | 4,420 | 9,728 | ||||||
Professional fees – legal (2) | 3,467 | 8,551 | ||||||
Allowance for credit losses | — | 5,000 | ||||||
Depreciation and amortization | 67 | 9 | ||||||
Total operating expenses | 136,207 | 144,633 | ||||||
Operating Loss | $ | (130,206 | ) | $ | (140,638 | ) | ||
Interest expense (3) | (97,953 | ) | (42,390 | ) | ||||
Other income (expense), net | 252 | 6,627 | ||||||
Change in fair value of warrant and derivative liabilities | 51,307 | 2,255 | ||||||
Net loss before provision for income taxes | $ | (176,600 | ) | $ | (174,146 | ) | ||
Provision for income tax expense | — | — | ||||||
Net loss | $ | (176,600 | ) | $ | (174,146 | ) | ||
Less: Net (income) loss attributable to non-controlling interests | 157,718 | 169,230 | ||||||
Net loss attributable to | $ | (18,882 | ) | $ | (4,916 | ) | ||
Basic and diluted weighted average shares outstanding, Class A Common Stock | 15,013,881 | 3,544,381 | ||||||
Basic and diluted net income per share, Class A Common Stock | $ | (1.26 | ) | $ | (1.39 | ) | ||
- For the three months ended
March 31, 2024 general and administrative expenses included$45.1 thousand of related party expenses. See Note 15, Related Party Transactions, for further details. No such related party expenses were present for the three months endedMarch 31, 2023 . - For the three months ended
March 31, 2024 and 2023, Professional Fees—legal included$3.0 million and$4.2 million , respectively, of related party expenses related to the Law Firm. See Note 15, Related Party Transactions, for further details. - For three months ended
March 31, 2024 and 2023, interest expense included$73.4 million and$37.1 million , respectively, related to interest expense due to VRM. See Note 15, Related Party Transactions, for further details.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Non-GAAP Financial Measures
Non-GAAP Reconciliation | ||||||||
Three Months Ended | ||||||||
(In thousands) | 2024 | 2023 | ||||||
GAAP Operating Loss | $ | (130,206 | ) | $ | (140,638 | ) | ||
Professional fees paid in stock | 469 | 7,557 | ||||||
Claims amortization expense | 121,014 | 113,469 | ||||||
Allowance for credit losses | — | 5,000 | ||||||
Adjusted Operating Loss | $ | (8,723 | ) | $ | (14,612 | ) | ||
GAAP Net Loss | $ | (176,600 | ) | $ | (174,146 | ) | ||
Professional fees paid in stock | 469 | 7,557 | ||||||
Claims amortization expense | 121,014 | 113,469 | ||||||
Allowance for credit losses | — | 5,000 | ||||||
Interest expense | 97,953 | 42,390 | ||||||
Change in fair value of warrant and derivative liabilities | (51,307 | ) | (2,255 | ) | ||||
Adjusted Net Loss | $ | (8,471 | ) | $ | (7,985 | ) | ||
In addition to the financial measures prepared in accordance with GAAP, this press release also contains non-GAAP financial measures. We consider “adjusted net loss” and “adjusted operating loss” as non-GAAP financial measures and important indicators of performance and useful metrics for management and investors to evaluate our business’s ongoing operating performance on a consistent basis across reporting periods. We believe these measures provide useful information to investors. Adjusted net loss represents net loss adjusted for certain non-cash expenses set forth in the table above, and adjusted operating loss represents operating loss adjusted for certain non-cash expenses set forth in the table above.
Source:
2024 GlobeNewswire, Inc., source