Kooth (LSE:KOO) — Annual Results

0:01 Good morning, and welcome to the KOOTH PLC investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be a position to answer every question received in the meeting itself. However, the company can review all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Tim Barker, CEO. Good morning to you, sir.

0:31 Good morning. Thanks for the introduction. Good morning, everyone. Thanks for joining us today. Over the next thirty, forty five minutes, we're gonna walk you through the key highlights from last year, which was a transformational year for KOOTH as we expanded on the footprint and established business we have in The UK into The US. So as, you just heard, submit questions as we go through. We'll cover those off at the end of the presentation.

1:00 Perhaps just to set the scene as a reminder, beyond between mental health and the environmental crisis, these really are the two biggest challenges of the modern era. Over the last decade, we've seen a double digit year on year growth in demand for people seeking mental health support, no more so than young people 20. Demand is outstripping the support available. In The UK, latest data shows that 950,000 25 sought out in the NHS in the last, NHS year. That's one in twelve of the whole population. In The US, CDC does a study every two years in their most recent study.

1:47 One in five youth had seriously considered suicide in the previous year, and we're seeing both recognition of this and funding going in to tackle this challenge. In The US, over $7,000,000,000 in state and federal funding, and in The UK over the last five years, over £2,300,000,000. Our job at KOOTH is to help scale up innovative, transformative digital services that can help tackle this challenge. And the way that we approach this is to tackle problems early. We were founded over twenty years ago in two in two thousand and one. This week is the anniversary, the twentieth anniversary of our first go live, back in Stockport in Greater Manchester two decades ago.

2:33 So we've been on a diligent, thoughtful journey for over two decades really focused on these three key areas. Firstly, we're gonna provide support for people. We need to remove barriers to access. We need to help destigmatize seeking help. And because it's not always the case, if you build it and they will come, you need to engage with communities. You need to become embedded within the communities to support those who are seeking help before they go to a health care system so we can reach them early. Secondly, you need to do this in a person centric way. We are not a service that diagnoses and prescribes. We are a service that provides support for individuals on their own terms. So there is no one size fits all. We offer a range of different support options, not only just providing support, but helping young people build skills for life.

3:26 And finally, to achieve this, you need to have a view of doing this as a population health service, supporting everyone in the community. So we are a digital front door, not only to providing support directly, but into other services that are available. So we connect, individuals in need into other services that are available through health care system. We provide to our customers incredible insights into what's happening, what their mental health of their population is, so they can create a responsive data driven strategy on how they can support their population better. And increasingly, a north star for us around health economic outcomes, which in other words is about demonstrating the great value for money that we provide.

4:14 In The UK today, a pound spent on KOOTH saves public services £3.40 in short term cost savings. In The US, our initial projections are that it could be up to 12 to one in terms of cost savings. So we're on a journey to really help tackle this and have been on that journey for over two decades.

4:39 What that means is for an individual seeking support, they may hear about youth in school or from a health care professional or just from a friend or online. They're going to, get a referral code from a doctor to get support. They can sign up themselves. And in doing so, they can access on their own terms what support they want. They can access helpful content. So let's imagine an individual, 16 year old, worried about exam anxiety, something that a lot of kids are going through right now. So they could go on to kids. They could learn about anxiety. Is it normal? They could understand themselves better. They could go and access tools and activities, box breathing activities to help them manage their anxiety in the moment.

5:26 They might wanna seek support from others that have been through similar challenges in the past so they can post on a peer support community. Every single piece of content that's posted there is rigorously reviewed by our moderation and safety team. We have over half a million posts and pieces of content submitted by users every year. And so that individual 16 year old might get support from a 17 year old who's walked in their shoes and give give them some advice. Also, with one click, they can access professional support. And in doing so, they will engage with one of our professional members of our practitioner team. All of our practitioners are employed by us. They are trained, supervised by us, and uniquely in the industry, we audit every single practitioner at least once a quarter.

6:21 That means the full transcripts of every engagement and activity they've had are reviewed by our clinical government teams to ensure that we're delivering good practice.

6:33 What's interesting is when you freely open up that service and those options to different users, where do they go? So there are no thresholds or limits. We're simply providing the support that people are seeking or that we might be recommending to them based on their needs. So 60% of individuals get the support they want and need through the community and the content. Of those seeking professional support, thirty five percent we might see infrequently. Once perhaps if they just need some advice or infrequently perhaps if they may need support in the moment. And then around five percent of individuals we would then support in what's called structured counseling, which is more familiar to anyone who's undergone sort of talking therapies. That may be 12 sessions that we might see you over several months, and we'll work with you by setting some goals to achieve some positive outcomes and improvement in your life.

7:29 Obviously, that top of the pyramid is the more intensive support that we provide for our service. And so the key thing here is to be a population health service. Can scale up, and ninety five percent of people get the support they want and need with that more costly option of structured counseling. Now that is great for those individuals. They get what they need early, they and get the support they need. It's also great for the health care system because we are supporting people early and reducing the total demand with this more intensive support.

8:03 Thanks, Tim. So just taking a quick look at our business model and how that works. We are completely free at the point of use for the end user. So we'll contract with our clients, which is generally a public health care system or local authority or state governments. And when we're initially agreeing a first shift fee, we feel it be based on what we expect usage of the service to be in that particular region. We have around 25,000,000 data points, so we can quite accurately model whether a rural area versus an urban area or an area perhaps with a higher ethnic minority population will have different levels of usage. And once we've agreed that fee for the first twelve months based on perhaps one in 40 of that population using the service, we will then really try and, you know, look look for you know, we we want more and more people to be using the service across a particular region, So our engagement with them is incredibly important.

9:02 And we do that in two ways. We have engagement staff who are employed across The UK as well as in The US. And these are our feet on the streets. They're all professionals. They've worked with children previously or young people, typically, you know, ex teachers maybe. And they will visit schools. They'll be talking in assembly, explaining the good service to young people, perhaps running some workshops as well within the schools. And other areas where people might also congregate or hang out, like community centers or youth clubs. The work they'll be doing in a region will be supplemented by some specifically targeted social media campaigns. And the ambition is really to get more and more people aware of the service so that they're able to access and use it as and when they need to.

9:54 You know, we we we know that across the country, there's a need of perhaps one in five, one in six at any point in the year of a population requiring mental health support. And in some areas, we are, you know, already reaching one in ten of that population.

10:11 So as we get towards the end of our initial pilot contract and the pilot contract is charged. It's a fixed fee. It's charged on a monthly basis, typically monthly in advance, and that gives the client certainty around how much they're going to be paying. We will start to look at the usage of service towards the end of the contract. And let's say we now have one in 25 of the population using service, that gives us a great opportunity to put more resource into the service and agree a perhaps a higher fee to cover the cost of that resource. We're also able to typically expand a contract through the age groups that we cover. So we might initially cover eleven to eighteen year olds. And then depending on the success of the service, we can add nineteen to twenty five year olds to the service. And in some cases, we'll also add adults in a particular population giving us what we call a whole population contract.

11:07 A great example of this is on the next slide. Next, Tim, where as Tim mentioned, we started Stockport nearly twenty years ago. That was our first contract. This is Greater Manchester we're looking at. Other regions started to hear. Around Stockport started here about service. We started to add other regions to the contract as well as increasing the age groups there. And in 2022, we added adults across Greater Manchester to the contract as well. So we now look after more than 2,000,000 people across Brayton Manchester. The ARR there is around £2,000,000. So that that's for £1 per person per year, that is professional support is available to all all the population of Manchester.

11:58 So as Sanjay mentioned that we have a service to adults, Manchester being a a key area where that service is available. Where KOOTH really got started and where it's best known for is the support we provide for ten to twenty five year olds. So in The UK, around 60% of the population of that age group has access to the service. And, of course, we're now expanding into The US, primarily working with state government and insurers and Medicaid providers. We'll talk more about that later on. And looking over the horizon, we see an opportunity to, license our technology, healthcare operators in other countries so that they can staff up service with their own workforce, deliver under their own brand. That's beyond what our planning goals for this year. 'd expect over the next eighteen months to two years to really start to see some activity there.

12:54 Just to touch on the headlines, we're gonna talk more about all of these after we've gone through the financial highlights. But, obviously, the key highlights from last year were around successful launch, about new contract with California, the deployment of a new product, which we'll talk more about in Soluna. We announced a few weeks ago our first partnership with the Medicaid provider, Aetna, and we'll talk more about our progress and terms of uptake and contractual progress in Pennsylvania. We raised capital last July to enable us to continue to grow and expand service to support the ever growing demand or need that there is. And we'll give you some color on the progress we're making in The US expanding into additional states with our commercial team.

13:42 Finally, as a UK founded service, we'll come back and give you some color on The UK landscape and the outlook for the year. Excellent. So I'm taking a look at the financial highlights for 2023. As as Tim indicated, transformational year for us. We grew organically by record 66% in terms of revenues. Most of that revenue growth was driven by our US contracts, but we did manage to also grow UK revenue by around 3% last year. UK will be probably flatter this year, and we'll we'll give you a bit more color on that in the outlook in a few minutes' time. We finished the year with 65,000,000 just under 65,000,000 of ARR, and we've been a little bit cautious around that number. So that was, for example, including Pennsylvania where we're still sort of discussing the contracts.

14:34 And it does, however, give us great visibility into 2024 and thereafter. And so in terms of our expectations for 2024, we with three months of the year gone, we're confident that we'll hit market expectations for revenue as well as EBITDA. EBITDA, we expect to be to have a margin of mid teens this year, and it will be disappointed if our margins for EBITDA didn't start to get closer to around 20% in in in the medium term. Gross margin was up by nearly nine percentage points, 77.6%. If I was to break that out, that's approximately 68% in The UK, 80% in The US.

15:20 But The US is a little bit flatter at the moment because we have a contribution to product development revenues coming into the revenue line. And product development work is typically for search and development. So, for example, we did a lot of work last year working with young people across California to determine what they would like to see in the Sluva platform. Those costs go to go through the operating expenses line or the product development revenues are the costs associated with our capital as part of the overall platform. So the 8% I mentioned from The US on a on a more normalized basis, we'd expect group margins to be between 7075%. Of course, our direct costs are predominantly the cost of our practitioners and the clinical support staff supporting them.

16:11 Finally, just looking at the balance sheet very quickly, We had £11,000,000 of cash on the balance sheet at the end of last year, which gives us confidence that we will not need to raise any further cash. We have sufficient invest in the business. We also have a working capital facility with Citibank of just under $10,000,000, although we don't expect at this point in time to have to draw down on that. Some of you will recall that we did a fundraise in July of last year, raising timber income's gross. And those funds whilst the California contract is very much sort of self funding, those funds were raised for two reasons. One, to accelerate our ability to expand across The US and invest in business development efforts.

16:58 And part of those proceeds were earmarked for the engineering efforts to bring the Sluda platform back to our UK customers and clients at the end of this year, early next year. And that, we think, will also help kick start UK growth once the election is over. And, you know, we'd be confident of getting back to double digit growth in The UK thereafter. So perhaps coming on just talking a little bit more about the progress we've made across those six areas we spoke about earlier, perhaps starting with California. But over almost twelve months, we were working with California in a process that they ran to identify providers that they could work with to help roll out a service across the state to reach six million thirty to twenty five year olds.

17:54 As part of the process, we were successful in being awarded a contract over four years, and a key milestone for us last year was to get relief to go live. So in terms of the evaluation of of KOOTH, they evaluate California Department of Healthcare Services, evaluated us and identified that we met, out of the gate probably about 70% of the requirements. And so last year, we had a big focus on building out our technology, getting ready to go live, and then also building out our team. So you can see some of the milestones we achieved here in terms of delivering on contract deliverables, which we're achieving quality certificates for ISO twenty seven zero one and SOC two. In terms of building the workforce, we have over 25,000 applicants for the roles.

18:41 We conducted over 3,000 interviews to hire around 200 staff across 26 states. And in terms of building out a next generation of our product, it's absolutely critical that the voices of young people are part of the process, are included, and have a seat at the table for the kind of support and service that they want and need. And so we worked with over 200 young people in the development and design of

19:09 the student service, giving us feedback, ideas, and identifying what kind of support they wanted. And in doing so, we built a service that went live initially in a pilot stage towards the end of last year, and then on January 1 across the entire state. It's we're really proud of the work that we've done. And, you know, we're providing support across 19 languages today to the population of California. An incredible project, but, of course, we're just down at the start of the next chapter of this, which is really around building awareness, driving usage, continue to deliver value, and supporting the population. So the next generation app is called Soluna. The reason why it's called Soluna or not KOOTH is because KOOTH did not test well linguistically across all 19 languages.

20:00 Soluna is a combination of the sun and the moon coming together. So Luna provides a combined integrated service that provides content, community, and coaching in a single integrated platform. It's free for users. They can download it from the App Store, and then they can immediately get access to all the capabilities here if they register as a resident in California. So there's an engaging mobile app where we're providing support in English, Spanish, and telecoaching across all those 19 languages. Because we're about reaching people early, we're providing what's called preclinical coaching support, across all those languages and for individuals, again, that need more acute support that might need a referral into an eating disorder service or a service to help them with the specialist need, then we have a directory of all of the services available in California.

20:57 And we can do what's called a warm handoff to make sure that that individual gets into those other services. We are using artificial intelligence very core carefully and cautiously in three areas.

21:12 We use it and are using it increasingly to improve the user experience. The more that you use the app, the better it should become for you in the same way that your Netflix account starts to learn more about about what your interests are. We are in the early stages of using it to support our practitioners to help improve their productivity. So something that we're working on is the idea of summarizing case notes to make consistency and productivity

21:42 available to our practitioners so that they can spend more time supporting individuals and less time on administrative activities. And we use AI to detect individuals who might be at risk so we can reach out to them. For example, if an individual posted their daily journal that they are feeling, about suicidal ideation, we will then flag that content and and then connect to that individual, ask them to join us in a one to one session. Of course, now we're live. We've been asked what is the uptake and usage like. But our customer, the Department of Health Care Services in California, will be leading the charge there. We expect they're gonna be providing quarterly updates on progress and usage.

22:27 I couldn't tell you the date at which they'll come out, but, I'd expect within this quarter or next, we'll start to see that. But we're really pleased with the fast start that we've got, the work that we've done, and the journey that we're on to reach every thirty to twenty five year old in the state, provide them with much needed support. Just to touch briefly on some of the work that underpins the work that we've done with Soluna, as well as providing support to individuals directly, we want to support them on a journey to develop the psychological flexibility, which probably in layman's terms, we'd all understand as resilience. And so by having a service where people feel they've got autonomy, but they can they're free to choose their own path, whether service is relatable to them, that's culturally relevant to them. And but through the support, through the coaching that we've got, we can help them through a journey of mastery and self efficacy, ultimately to help build that psychological flexibility for the future.

23:32 Moving on from California, we announced a few weeks ago a really exciting partnership that we're doing with Aetna. Aetna is part of CVS Health. They are one of the largest health care providers in The US, a $95,000,000,000 market cap, and they run Medicaid managed care services across 16 states. As you may be familiar, Medicaid is the largest single health insurance program across The US providing support for low income families. And when you look at youth, around $30,000,000,000 a year is already being spent on behavioral health care for children and young adults. In fact, over 29,000,000 under eighteens are covered by Medicaid. This is a much needed service for a low income group.

24:20 And so working with Aetna, what we aim to achieve is by deploying initially in Chicago, sport small support a small population. And as we prove out the service, obviously, we have opportunity to expand further into Illinois and then into additional states.

24:37 And, really, our objective here is we've done for many years, which is by providing this upstream support, we're to reduce the demand for acute mental health interventions downstream. That's great for individuals, supporting them early, creating less distress in the population, and also saving the health care system for more expensive downstream costs. Our objective here is by working in partnership with Aetna, we build service within Chicago and Illinois and within Aetna, and then also a blueprint for how we could expand into other states. You may be familiar that our very first contract in The US was was the state of Pennsylvania, which, we rolled out our first services in around October 2022.

25:29 Just gives you a snapshot of the progress that we've made and probably a testament to the level of demand that there is within this population.

25:38 So, working through school districts, we were able to reach around, provide that service to around a 100,000 individuals. And what we saw is around one in ten of that population using Q3 this first year. When we compare that with the uptake that we see on average in The UK of one in forty, incredibly high level of usage in the first year, and we think a real testament to the need that there is to grow access to mental health support across such a large population. Eighty eight percent of students self reported that they got the support that they need. And in addition to the support that we saw from students, we also saw support from school districts in view that we can help expand the support options for their students.

26:25 Also We're very grateful for the support from the mayor of Philadelphia who mentioned us in a speech they gave a few weeks ago. So in terms of where we are in Pennsylvania, we are disappointed that we couldn't bring more positive news to you for the for the latest presentation, but we are still hard at work in Pennsylvania working on with in the state capital to really help secure future funding for this. One reason why this has been delayed is the state budget for health care and education was delayed about five months and wasn't signed off till mid December. And looking at election year, there's more conversations to be had with every party around what they see as the future and the support needed to support the population.

27:13 So when we have additional news, we'll come back to market with an update. Outside of that, as I mentioned earlier, we did a capital raise to support us expanding a commercial organization, enable us to engage with more states and support more individuals. So since then, we did an analysis of remaining 48 states to identify key ones where we should focus our energy. We've hired lobbyists to support us in those efforts to raise awareness and build support. And we've got a commercial team that's busy and a clinical team that's busy engaging with representatives across states. We demonstrate the efficacy of what we do and build a foundation by which we can deploy our service and then expand it over time.

28:06 In addition to that, although we have a decade's worth of research and academic evidence, feel we it's important to also work with local US academic partners there. So we are starting a number of academic research, partnerships where they can demonstrate the efficacy, both the economic outcomes and the therapeutic ones of our service in The US. Finally, bringing you back to The UK. Those of you that are in The UK will know that the NHS is going through a time of pressure right now. There is pressure on funding. So the NHS starts in its year with in England with a estimated £7,000,000,000 budget deficit. Industrial action added another billion pound in costs, and the NHS has been given the instruction to balance their budget this year. In addition, obviously, there's urgency to tackle those elective care waiting lists for people awaiting surgery, and I think some uncertainty around an upcoming UK election.

29:10 Net net of that is that we've seen new business in The UK, particularly in England, slow down. And when we look at our existing business, we see that churn ticked up from 2,000,000 to 2,300,000 last year. Positive that we managed to expand 41% of contracts that came up for renewal either through an inflation or a utilization expansion. And the way that we measure our net revenue retention is really looking at the number of contracts we have at the start of the year and the expansion of those at the end of the year. The first time that trips below a 100%, perhaps one key reason for that is in the prior year in 2022, we won a number of new contracts to support adult populations.

29:57 In their first year, while they achieved good outcomes, did not get deeply established enough for commissioners who were under financial pressure, had to make tough decisions. So in those seven cases, we thought funding go into other initiatives, and regrettably, those contracts end. Our focus now is to focus on our customers, our existing renewals and retention to continue to demonstrate the impact of what we do and also to ensure that the the work that we do is heard broadly at a national level, not just a regional level, so working with policy and public affairs teams. We launched a new service last year called IDP, which also supports our conditions at these tough times by plugging in to their waiting lists so they can support individuals that may be waiting some considerable time for mental health support. So we could potentially support individuals who might be lower acuity and might wanna opt in to, get support from that service so we can hopefully support them and remove them from the waiting list.

31:07 We also, over our plans over the next year, plan to bring all these innovations that we've spoken about with SLUNA back to The UK. It will be branded as KOOTH in The UK given the brand equity that there is built here, and we think that will create a more engaging and also effective service based on all the innovations that we've developed. We can't foresee the future, but we do anticipate that post election as the NHS priorities and funding solidifies that we'll be back to double digit growth. Then finally, in terms of our summary and outlook, look, we've been really busy over the last year, really delivering and focusing on our strategy to expand in The US both through California, the work we've done in Pennsylvania, and then additional states.

32:01 We've also expanded, as we mentioned, about support, individuals that qualify for Medicaid, so low income families and youth. And so that partnership with Aetna Better Health, we think that would be an incredibly much needed additional support option for those individuals. And in The UK, focus on renewals, retention, given the tough financial pressures that the NHS is under. And so finally, just taking a look at the outlook for 2024. As we indicated, '23 was a transformational year for us, and we expect that to continue into '24. We've talked about ARR coming into the year of nearly 65,000,000, so that gives us a strong underpinning for the year. It gives us confidence that we'll make the numbers that market expects us to make in terms of both revenue and EBITDA margins.

32:56 And, you know, we have we'll start generating positive cash flow towards the end of this year in terms of free cash flow. And, you know, one thing I'm particularly excited about is being able to bring the Sluna platform back to The UK. It's a really engaging platform. We think it'll give us some operational leverage because young people in particular will get a lot more of the support they need from PAP's platform rather than the requirement for professional support. So, we're we're very excited about the upcoming year. Great. That concludes the presentation. We'll hand it, back now, and then we'll go into q and a. Perfect, Tim, Sanjay. Thanks very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab, which is situated on the top right hand corner of your screen.

33:42 But just while the company take a few moments to review the questions that have been submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. And, Tim, Sanjay, if I could just hand back to you to read out the questions and give responses where it's appropriate to do so. I'll pick up from you both at the end. Certainly. So the first question submitted is from Colin. Thank you, Colin. What's your strategic priorities in the coming year in terms of consolidating your current market position and exploring new growth opportunities? So I think probably to reference the outlook slide. Some key objectives that we've got this year. Firstly, California is a large opportunity, a large contract for us committed to ensuring that we deliver on the uptake, on the usage that goes with that. So we can demonstrate the impact that we can have across the population.

34:36 Driving awareness, uptake, and impact is key there. Across that in The US, as we've mentioned, we've we've now working in a new Medicaid environment. We wanna demonstrate the the impact that we can have there as well as taking all these innovations into additional states, tackle the ever growing crisis that there is in youth mental health. In The UK, we want we want to bring in the next year all these innovations of Saloona back to The UK. I might summarize it as saying that what we've done is look at some of the back we went back to basics to look at some of the capabilities that we have. So for example, in case today, if you want to read about exam anxiety, there'll be a blog post for that.

35:24 If you go to Soluna, there'll be a video for that. We'll be there'll be interactive activities you can do. So we've really tried to build something that really is engaging for Gen z, building on everything we've learned there. So a big program of work this year is to bring Soluna to The UK. And in doing so, not simply just view it as a technology project, but then work with our NHS commissioners, work with young people in The UK to make sure that what we're delivering is culturally relevant to them, supporting their most urgent needs, and then, pretty soon, looking at how we can best integrate with other NHS services. So those are the probably key things that that we'll be focused on this year. And, look, analyst forecast, I'll look will more than double the revenues this year. That's really focused on fundamentals.

36:18 If we just continue on executing things that are currently already contracted with us, that's the direction of travel that we'll be going in. David's asking questions. Do you see expansion into other geographies as viable at this stage? Great question, David. I think if there's any certainly strategies that we can really get off the ground at any one time, obviously, The US is an entirely new market. We entered in late twenty twenty one, and we think probably one of the one key reason why we were excited for the longer term on other international markets is we can receive every month inbound from healthcare systems looking for advice or support or technology or services that can help them deal with the growing demands of medical support in their country.

37:11 And our approach to this is that we cannot really scale headcount and be everywhere. So our thinking is that we'll license our technology, healthcare operators in their country, market under their brand. And in doing so, we can deliver technology. Obviously, as a software as a service product, it is a higher margin service and and enable us to then take all of our learnings and scale that up to truly be a global solution. But word of caution, we can only move it so fast in so many initiatives. So we probably would look to that to be somewhere over the next eighteen to twenty four months before we you'll start to see visible progress there. Question here for me, I think. Hi. Will you consider a dual listing or relisting on the New York Stock Exchange given this is where the growth of the business would be derived from? It's a good question. And, you know, absolutely, US has been a real driver of growth, but The UK is our home market.

38:13 And, you know, we're very much focused on executing our strategy, and we think that's gonna drive growth of the business going forwards. Listing or relisting in The US is probably a complication for us that, you know, we don't really we're already looking for them. I think Tim and I are very focused on you know, we're very hands on within the business as well as, of course, dealing with the investor relations side of the business. So probably not on the agenda at the moment. We do have, you know, some in The US investors on the share register. We're starting to see more interest given the, you work that we're doing in The US, but watch the space. Question here asking about anti q concern about anti q's discussion, particularly from Pennsylvania.

39:05 While some of this is attributable to poor understanding, how's the company managing this negativity and what can be done to overcome it? Is it detracting from further upstate this guidance? So, look, a really good question and something I think, you know, I wanna give a full answer to. So, look, a key principle for every organization is to operate on a foundation of trust. We spent twenty years building our service and the trust within it. The trust of our service, our safeguarding, our outcomes, providing a welcoming service to the population, those seeking support. In addition to doing that, we've got 50 peer reviewed research papers that we developed over a decade.

39:50 I've always been to seek independent audit and assessments of the quality of that service, whether that be from organizations like BACP, the British Association of Capsule and Psychotherapy, emerging standards like the NHS DTAC standard, ISO twenty seven zero one, and SOC two, and others. You're right, though, in the question of point to that there are detractors in Pennsylvania that are looking to undermine this trust. And whether that's because they don't trust our intentions or motivations or that as a state funded initiative, they don't trust the government or both, I I couldn't answer for them. But there are misunderstandings that are being presented, and they tend to fall into three broad categories. The first one being parental rights being undermined.

40:36 The view is that parents should be involved and informed at every step of their journey for a teacher for those teenagers seeking mental health support or substance abuse support. However, young people aged 14 have the autonomy and the rights and the freedom as legislated by the state seek support directly, whether that's from KOOTH or through any other service that's available to them. That's a state law, and it's a right that we can't take away from young people. We will, however, as always, through our service, parents are an important critical part of the mental health journey that young people go on. If they can open up to their parents with what they're going through, we'll always recommend they should, because your parents are supporters and champions of their children.

41:30 The second claim is that we have some pro LGBT activist agenda. That's just under three. As a population wide health service, we support everyone, including those in marginalized and underserved communities. But let's say a delicate topic around something like gender identity. We do not promote, diagnose, or discuss treatments. What we will do is offer psychological support for individuals who may be struggling with anxiety or depression because of how they feel. And the most important thing we wanna do is safe. And thirdly, there are, this misinformation, misunderstandings about, overall safeguarding of our service, whether that be the credentials, about professionals, or our content moderation process.

42:25 Addressing concerns, up to now, we've really focused on addressing any concerns already to stakeholders, whether that be the state, that be to schools, or or other health care professionals. But as we know, across really a foundation across is also transparency. Reflecting on it, we can be more proactive here. So what we're doing over the next few weeks is launching a transparency center that goes into the detail of every aspect of our service, Our clinical governance, our processes, how we moderate to help address any misunderstandings. We also recognize the responsibility that we have in this emerging field of digital mental health care, helps set new standards by which others can hold us accountable and also audit.

43:11 So we are working, and that's a long term view for how we can help set and measure standards in this area. For example, we audit every single practitioner regularly based on the chat transcripts that are available. Traditional face to face services don't do this. They can't do it. They don't have full transcript of everything that happened. But for us, that's a new opportunity to help set a new standard in how to do governance and audit and set a new bar for what it looks like. So those are the proactive actions we're taking. We recognize that transparency is a key part really for building and maintaining trust. So the second part of the question is how it's impacting additional conversations.

43:56 Look. I I'm gonna answer with humility, not hubris here. We take it, I think, for granted, like we don't in The UK, and we earn the right with every customer, to support their population. It's no different today than it's been, previously in the last twenty years. And our job here is to address the growing mental health crisis that we're here to address. So in terms of other states, commercial teams are busy. I'm not gonna sit with hubris to say we take anything for granted. We've got to make sure that we with every state, just like every region in The UK, demonstrate the great efficacy of what we do, the great efficiencies of it, and the economic outcomes. Finally, Tim, I think we've got a couple of questions about international growth. Peter has asked, have you considered looking at European countries?

44:48 You know, as Tim indicated, we are really focused on looking after our existing clients in The UK and US at the moment. But one of the great things about our learnings in California is that we are delivering that service in 19 languages, English and Spanish being the key languages, and then, of course, covering the other official state language as well. And that does give us a calling card into thinking about the rest of the world. One of the things about being a public company as well as, of course, the transparency it gives to our customers as well as our investors, staff, etcetera, is that we get a reasonable amount of inbound inquiries. You know, probably once a month, we get an inbound from another country or another state that is interested in KOOTH being available in their particular region.

45:36 Now if we were to look at that, it's it's one of our four pillars of growth. That would probably take the form of a license licensing licensing about technology type agreements rather than standing up a full service. But I'd say we're probably at least eighteen months away from that service starting to be something we would spend a considerable amount of time looking at. Right. And just to look at another question that's come in. Jeremy, do you have an advanced pipeline of new states in The US with contracts that can sign in 2024, or is it too early days? So last year, we we did that, as I mentioned, we did an analysis to look at all across 48 states. Our commercial team is busy working with those. I'd dis disappointed if we don't expand into a dash one or two additional states this year. So there is a lot of work to be done, but, yeah, I'm feeling optimistic that we'll be expanding this year.

46:36 Right. So just looking through those questions, I think we've answered the the kind of key themes that have come out from today. Really appreciate you joining, and I'll I'll hand it back now. Perfect. Tim, Sanjay, thank you very much for updating investors today. Could I please ask investors not to close this session? As you now be automatically redirected to provide your feedback in order that management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of management team of KOOTH PLC, we'd like to thank you for attending today's presentation, and good morning to you all. Thank you. Thank you.