Thank you. And welcome to Pareteum Corporation's 2020 financial results conference call.

We’re delighted to speak with you today. We’ll be discussing results announcing our press release issued after market close today and in our Annual Reports on Form 10-K filed with the U.S.

Securities and Exchange Commission. Presentation slides to accompany our discussion are posted to the Events and Presentations page on the pareteum.com website and are also available to download to the webcast portal.

And we encourage you to follow along for this discussion. Turning to slide two of that presentation, before we begin, I'd advise you that we will be making forward-looking statements today, including among others statements regarding potential future revenue growth, potential general growth of our business, industry outlook, overall size of our market opportunities, and our future business strategy.

This is a partial list and these statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Some of these risks are summarized in today's press release and are more fully detailed in a Risk Factor section of our current 10-K and periodic reports filed with the SEC, which we encourage everyone to review.

On Slide 3, you will see joining me on the call today are Bart Weijermars, Interim Chief Executive Officer and Laura Thomas, Interim Chief Financial Officer. They will begin with prepared remarks, and then we will address your questions.

I’ll now turn over the call to Bart.

Thank you, Alex, and thank you all for joining us today. I'm pleased to share our 2020 results and why we are excited about reaching at this juncture.

With today's reporting of 2020 results and the prior completion of our 2018 and 2019 full year financial results, we are up to date with our required annual financial filings, which were critical steps to accomplish. We greatly appreciate the support and patience of our customers, shareholders, vendors and employees through this period.

As I mentioned, in our Business Update call in May, while we work through rectifying the legacy issues and financial restatements to get to this point, we have not been idle on the corporate and business fronts. Over the past 18 months, Pareteum has focused on repositioning itself, including new Board leadership, new management, re-establishing a culture of integrity, emphasizing our customer-centric business model, and focusing the business for future growth.

With this in mind, let me take a moment to re-introduce Pareteum, what we do and why we are excited about the opportunities we see ahead. On Slide 4, Pareteum is a cloud software communications platform company, with a vision to connect every person and everything.

This really translates into a day-to-day mission to empower our business customers to simply create and control their wireless communication products and experiences through our powerful cloud platform and global connectivity. Turning to Slide 5, and Pareteum serves enterprises, communication service providers, early stage innovators, developers, Internet of Things and telecommunication infrastructure providers.

We use our managed services solutions as a launching pad for which we grow our Pareteum Experience Cloud Platform by offering mobility, engagement, intelligence and control products and services to our existing and prospective customers. Our cloud software platform enables global connectivity and provides one-stop communication solutions for our customers.

Now on Slide 6. We believe Pareteum offset tremendous value proposition.

We are well-positioned in an industry with strong growth trends. We have a validated differentiated technology platform and service offering along with a breadth of network connectivity partners.

This supports the growing core business that has additional growth potential and an opportunity to capture share in significant global markets that are expanding rapidly. Moving on to Slide 7, over the past 18 months, we have made significant progress on foundational aspects of reimagining our company.

We have completed the necessary financial restatements and now are up to date with our 2018, 2019 and 2020 annual filings. We have created a strong foundation and the accompanying infrastructure and organizational capabilities we believe necessary to support future growth.

We have re-emphasized our customer-focused business model. And we have developed a long term plan for execution over the next year to recapitalize the balance sheet, and position the company for innovative and disruptive strategy.

We believe these efforts have positioned Pareteum to be able to drive sustainable growth and value for all stakeholders. Slide 8 highlights several of the operational accomplishments that are part of the foundational developments I mentioned.

These includes amongst them, integrated functionality of portals, billings and platforms for best-in-class features, and operational efficiencies. We also consolidated our 24/7 operational support with global tools, systems and processes.

And we've expanded our sales team training on product cross selling opportunities. In addition, we established an account management support structure.

And we instituted key internal controls and emphasis on cultural strong business ethics. Slide 9 depicts recent developments driving future growth for Pareteum.

Last year, I'm happy to say we implemented 3 key Mobile Virtual Network Enablers or verse or MVNE customers that are in the early stages of growth acceleration. We are focused on smart growth, really eliminating unprofitable customers and improving gross margins through product mix, pricing actions, and better commercial terms for connectivity.

We've also developed a product leadership strategy, including new forms of customer engagement and strategic partnerships, all of which emphasize an improved customer experience across our cloud platform. This focus on growth has been reflected in several key performance indicators, as is shown on slide number 10.

Over the past three years, our revenue has increased 244% from $20 million for 2018 to almost $70 million in 2020. Our customer base continues to grow as well.

In 2020, we deployed over 50 new customers, taking us to over 1,100 customers and partners globally, up from just 533 in 2018. And that includes notable clients across all areas of our business.

You can also see on this slide the growth in collections. Think of that as revenue generating subscribers on our network.

Connections grew to 4.6 million in 2020, up from 3.9 million in 2019, and 1.8 million in 2018, an increase of 156% since 2018. Last year was a transitional year for Pareteum as we worked towards resolving corporate legacy issues and financial restatements.

As I mentioned earlier, while that effort was underway, we were not idle on the corporate and business fronts. We've made progress in a number of areas that we believe have laid the foundation for future growth of our business.

With our differentiated cloud technology platform, our diversified customer base and our global footprint, we believe we are well-positioned to address the large rapidly growing global opportunity and to further endeavor to fulfill our corporate mission to connect everyone everywhere. I will now turn the call over to Laura to discuss our financial results in more detail.

Thank you, Bart. We're delighted to review our 2020 financial results with you today.

But before we jump into the results, I'd like to take a moment to explain the delayed reporting. As we were preparing to announce our 2020 financials mid-May, we discovered a technical accounting matter that precluded filing as planned.

The matter related to the accounting treatment of the preferred series stock. It was complex and took time to accurately reflect.

Without going into the technicalities of the issue, the revised exchange agreements for the preferred Series C with the associated conversion features and mandatory redemption drove an extinguishment of the debt and the need to modify the instrument to the mezzanine level on the balance sheet. That is the level right below liabilities, but above the equity.

Our financials as filed today are correct. With these 2020 results, along with the prior filings of our 2018 and 2019 full year results, we are now up to date, with our required annual filings, which are both critical and comprehensive.

We now turn our attention to completing the remaining outstanding quarterly filings for the third quarter of 2019 as well as the first, second and third quarters for 2020, and finally, the first quarter of 2021. These quarters and their filings will bring us current with our SEC reporting and enable us to return to a normal cadence of quarterly reporting and regular business updates going forward.

On Slide 11, you'll see a high-level summary of the financial P&L trends. We'll walk through several of the line items here in detail that address the business and growth.

But I want to start with the bottom line, net loss. 2020 net loss attributable to common equity improved some $45.5 million from $222.3 million in 2019.

During 2019, the company recognized a onetime non-cash impairment charge for the goodwill and intangible assets of $156.8 million related to the acquisitions of Artilium and iPass. Net loss per common share improved to $0.33 in 2020 from $1.91 in 2019.

Moving on to Slide 12, the summary of revenue trends remains unchanged from our last call. Total revenue has grown 244% over the past three years.

2019 saw significant growth, approximately 205%, driven by acquisitions made in 2018 and ‘19. In 2020, our revenue grew 12% in large measure organic growth across the business.

2020 revenue of $69.6 million is an increase of $7.6 million over 2019 despite the impact from the COVID pandemic. This COVID impact is conservatively sized at $7 million plus.

Our impacted customers were in the airline and hospitality verticals, as well as smaller CSPs or Communication Service Providers who limited their marketing investment dollars during this period, thus experiencing slower growth. As you can see on the slide, our revenue growth also reflects the expansion and addition of business enterprise customers.

With our global presence, we are now generating revenue in multiple geographies across North America, Latin America, Europe, Middle East, Africa, and Asia-Pac. We expect this trend to continue going forward.

Slide 13 provides a summary of gross profit trends, which also remains the same as previously discussed on our last call. Gross profit is simply revenue minus the cost of revenue.

Our gross profit as a percent of revenue is improving, after falling from 2018 to 2019 due to the impact of lower gross margin acquisitions in 2019. Gross profit for 2020 was $20.7 million, up 39% from $14.9 million in 2019.

This leverage is important to understand as we build our business. In 2019, we added nearly $42 million of incremental revenue, driving incremental gross profit of $4.7 million or 11%.

In 2020, we added $7.6 million of incremental revenue, but saw incremental gross profits improve by $5.8 million, or 76%. That's the operating leverage we see as we scale our business.

These improvements have been driven largely by successful negotiations, improving our commercial terms with suppliers and vendors, as well as a corporate focus on higher margin revenue business line with the potential to accelerate profitability going forward. Slide 14 provides an overview of SG&A trends.

SG&A is sales general and administrative expenses. Operating expenses were lower in 2020 as compared to 2019, excluding the impact of the impairment of goodwill and intangible assets.

During this period, we tightly controlled our expenses, while incurring significant costs of correcting the legacy corporate issues and the financial restatements. We've made significant improvements in SG&A as a percent of revenue, which decreased as a percent of revenue from 152% in 2018, to 67% in 2020.

Please keep in mind that in 2020, and continuing into the first half of 2021, there are significant costs associated with the restatement, audit and legal expenses, as well as technical contractors for consultation support. Although we're not quantifying these costs, the elimination of these expenses will free up much needed cash to invest back into the business for revenue growth initiatives, and return to a position of sequential growth and scale in the second half of 2021.

On Slide 15, EBITDA, or earnings before interest, taxes, depreciation and amortization, these trends are also encouraging. In 2018 EBITDA loss was $26.1 million on revenue of $20.3 million.

In 2019 EBITDA loss was $46.4 million on revenues of $62 million. This past year, in 2020 EBITDA loss was $26.2 million on revenue of $69.6 million.

Cash and cash equivalents included restricted cash, totaled $14.8 million as of December 31 2020, compared to $5.9 million as of December 31, 2019. Since the end of 2020, so in the last six months of this year, we have raised approximately $5 million from investors.

The importance of this capital raise is driven in large measure by our senior lender exercising their rights under the security documents, and directing $6 million of cash held in restricted accounts to be applied against our obligations. This partially reduces the principal value of the convertible note.

Moving forward, we now have the chance to focus our capital allocation on investments that we believe have the potential to drive sequential revenue growth and benefit from the operating leverage that I discussed in the gross profit slide. Lastly, we recognize the importance of liquidity and access to trading of our common stock to all shareholders.

Shares of Pareteum common stock are currently quoted on the OTC Pink market with an annotation of quote, no information. With this filing of our 2020 10-K today, we will work to have this annotation updated to quote, limited information.

And upon becoming current and reporting the first quarter of 2021 it will be further updated to current information. This current information status and being current is critical and will allow us to be in a position to apply for the listing on the OTCQX followed later by applying for an uplisting to a major senior exchange.

The potential for achieving such uplisting to a senior exchange is anticipated next year in 2022. We would now like to move to the Q&A portion of today's discussion.

Alex?

Thank you very much, Laura. [Operator Instructions] And thanks to everyone who's reached out to ask questions and are submitting those online today.

So the first question that has come in, which Laura, I'll invite you to answer is, what was the problem that delayed 2020 reporting? And why was that the case?

Thanks, Alex. After we had announced our intended reporting date, a technical accounting manner was identified that precluded us from filing the 10-K on the planned timeline.

The matter again, related to the accounting treatment of our preferred Series C. It was a non-cash item did not impact revenues or EBITDA.

The matter was complex and took time to ensure accuracy. Without again, going into the technicalities of the issue, the revised exchange agreements for the preferred Series C, with conversion features and mandatory redemption drove the extinguishment of debt and the modification of the instrument to the mezzanine level on the balance sheet.

This was really the only issue delaying the 10-K. Again, highly complex.

Thank you, Laura. Another question for you is, why did the financial restatements take so long?

It's a great question. And it did take a long time.

And I want to reiterate, we appreciate the patience of our shareholders, employees, customers and vendors during this period. The restatement for the fiscal year 2018 and the first two quarters of 2019 followed a detail internal and independent investigation.

So in other words, we had to complete that first. It took time to properly complete and thoroughly scrutinize the financial statements and other disclosures that we now have in the three years of 2018, 2019 and 2020.

Thank you, Laura. The next question, I think also for you, and then asking what is the plan for relisting onto an exchange.

Okay, thanks, Alex. The trading of our common stock on NASDAQ was suspended in November of 2020.

Today, our common stock is quoted on the OTC Pink Sheets with an annotation of no information. With the filing of the 2020 10-K today, we believe this annotation will be updated to limited information.

And upon reporting, the first quarter of 2021 updated to current information. This journey and the pathway to improve our OTC progression to the OTCQX will position Pareteum to apply for an uplifting to a senior exchange.

Again, we hope to achieve that status, probably in 2022, Alex.

Thanks, Laura. I guess a related question also for you.

Will there be a reverse stock split to list on an exchange?

Alex, and whoever asked the question, no determination has been made yet in that regard to any potential reverse stock split. It's the company's preference not to do so.

But let's all remember that there are multiple listing requirements to be met for listing on an exchange and the share price is only one of those requirements. We intend to file for the uplisting to a major exchange later this year, with the potential for achieving that listing sometime in 2022.

Thank you, Laura. The next question we've been asked is why do you think Pareteum can grow the business and capture additional market share?

Bart, can I ask you to answer this question, please?

Certainly, Alex. We believe that we are actually well positioned for significant growth in the coming years.

And that's the key competitive differentiators for Pareteum in the near term are based on really four elements in our business. And if I would have to point those out, then I would start with the skill and international reach of our productivity, really a global business.

Comprehensiveness of our platform offerings and the different customers we have on those. The ease of deployment and implementation, as we've seen in the last year.

And really the scalability or reliability of our service. And those are, I think really significant drivers for growth in the coming years, as well.

Thank you, Bart. And I think this question is also probably for you.

And the question is, can you discuss revenue diversity across different geographies of Pareteum?

Definitely. So we have built a global presence in the last years with operations and customers in multi-geographies [ph], North America, Latin America, Europe, Middle East, and Africa, as well as Asia-Pac.

And last year, we affected expansions in Brazil, in Colombia, as well as Tunisia. And our non-U.S.

based customer -- our non-U.S. based customer base, grew substantially in 2019 with our acquisitions and that customer growth continued last year.

And we really expected globally diversified revenue stream to be an important part of our strategy and business going forward. So yes, we have a very strong revenue diversity.

And we expect that to continue going forward as well.

Thank you, Bart. The next question I have asks, what do you see as the biggest opportunity for Pareteum?

Bart, would you like to answer that one as well?

Yes, definitely. So I think that, we are well positioned with the global footprint that we have to address a massive global opportunity.

The telecommunication services industry is undergoing a massive transformation. And if you look at this year, the expectation is that the spend in the industry is expected to amount to $1.45 trillion, which is really an increase of 35% from last year.

And with what we see as tremendous demands, we believe that we are really well positioned with our platform and service offerings to drive that significant growth in our core business, while at the same time, actually also expanding investments in the IoT segment or the Internet of Things segment.

Thank you. The next question we have asked, why was revenue growth so much stronger in 2019 compared to 2020?

Bart, could you answer that one, too, please?

Yes, well 2019 definitely saw a significant growth of approximately 205% [ph], which was in large measure driven by the acquisitions made in that year. Now, if you look at last year, 2020, revenue grew 12%, which was almost all organic across our business to $69.6 million, which is an increase of $7.6 million over 2019.

And that is the case, despite the impact that we saw from the COVID pandemic of approximately $7 million, which was primarily in the airline and hospitality verticals.

Thank you, Bart. The next question asks, does Pareteum have a sufficient cash runway, i.e.

can Pareteum confirm there's no need for additional capital increases? Laura, could you answer that one, please?

Thanks, Alex. We've worked very hard to address the corporate legacy issues and financial restatements.

And significant capital has gone towards those efforts, and not towards the strategic investments required to accelerate growth. As we become current, and announce our first quarter 2021 results, we expect to provide further insight into our cash position.

I will say that we'll continue to be opportunistic. And when we have the ability to do so and can raise additional capital to support our growth, we will.

Thank you, Laura. The next question is, do you anticipate revenue growth in 2021?

Bart, can I hand the question to you?

Definitely. Well, the simple answer to that is, yes.

We do expect continued revenue growth, also this year. And if I look at the MVNE, and MVNO markets, they are growing steadily.

And they're approaching a global market of over $25 billion, with a focus on Latin America and Asia-Pacific. At the same time, we also see that the Internet of Things segment is experiencing explosive growth really, with high compounded annual growth rates across all geographic regions.

And that is approaching a global market opportunity of almost $98 billion. So definitely, there's plenty of opportunity out there and we expect to grow this year as well.

Thanks, Bart. The next question we've received says, when do you anticipate filing first quarter 2021 results?

Laura, can I hand that one to you?

Absolutely. Thanks.

Well, we're not providing a date at this point. But we do expect to file the first quarter 2021 results in the near future.

Let's keep in mind that the 10-K reports really is a fully audited year. And while the quarters in include reviewed financials, it takes a lot less time.

So for the quarters of third quarter, 2019, and the first three quarters of 2020, those annual numbers have been audited. So it's just a matter of updating that and having it be reviewed.

The same thing with the first quarter of 2020. It really is review and not an audit.

So we expect we will bring those current in the near future.

Thanks Laura. The next question we've had and asks us, do you see strong revenue growth opportunities from increasing penetration within the existing customer base?

Bart, can you answer that question, please?

Yes, and, again, I think the answer is yes. If you look at last year, we added more than 50 new customers, bringing us to over 1,100 customers globally.

And the strong customer base really provides significant opportunities for additional business. And we did also expand our sales team trainings, specifically on product cross selling.

So we can actually capitalize on the opportunity that is there within our own customer base. So the answer to the question is, definitely yes.

Thanks, Bart. And another sort of market trend question, which I think is also for you, and asks a number of recent articles have projected significant consolidation in the EU telecom market.

Do you see that trend impacting on Pareteum?

Generally speaking, I would say culturalization creates space for new challenges in the market, and also for new commercial strategies by players that are consolidating. And if we look at reasons, the key reasons why customers choose our solutions, it is really the ability to address the market in a new and innovative way.

So, consolidation in itself does create those opportunities for Pareteum. And actually, I think there will be additional consolidation globally as well, which provides again, additional opportunities for Pareteum and particularly in the IoT segment where we intend to expand our focus as well.

Thank you, Bart. And I think this will be the last Q&A question.

I think this one's for Laura. And the question asks, when will the company be able to provide forward-looking projections and insight into future growth?

Thanks, Alex. At this point in time, since we're not current with our financial reporting, we're really not able to provide detailed guidance.

As we return to being current with our financials, we do expect to provide guidance on both business and financial metrics. With our focus being really execution for the long-term and the associated growth, we anticipate potential future guidance will be really emphasized on an annual basis.

So I wouldn't expect quarterly guidance to begin with. Thanks, Alex.

Thank you, Laura. And I think we've now reached the end of the time set aside for Q&A.

So what I'd like to do next, is turn the call over to Bart for any closing remarks. Bart?

Thank you, Alex. And thank you to everyone listening and participating and asking questions.

We greatly appreciate your time and interest in Pareteum. We have implemented the best practices and corporate governance model and are developing an enhanced and expanded corporate strategy, focused on reigniting growth and delivering shareholder value.

Our strategy emphasizes growing our core business, while expanding the company's focus within the high growth, IoT or Internet of Things segments. We will provide more details on the developing strategy over the next several months.

As you see again, on our last slide, Slide 17 we really believe we have a strong value proposition for customers and investors. With our differentiated cloud technology platform and our diversified customer base, together with our global footprint, we really believe we're well positioned to address these large, rapidly growing global markets that are providing significant opportunity for the company and our shareholders.

We look forward to updating you throughout the remainder of 2021 as we continue building Pareteum into a growing profitable, global cloud communication company. We thank all of our investors and Pareteum team members for their commitment to this call.

Thank you all for joining us today.