Good afternoon, everyone, and welcome to today's MDxHealth First Quarter 2026 Earnings Conference Call. Please note, today's call is being recorded, and it is now my pleasure to turn the meeting over to Mr. John Fraunces. Please go ahead, sir.

Before we begin, I would like to remind everyone that the company will make forward-looking statements during today's call. Whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of the company's filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 20-F. I'll now turn the call over to Michael McGarrity, Chief Executive Officer.

Thanks, John, and thank you all for joining us for our first quarter 2026 earnings conference call. With me today is Ron Kalfus, Interim Chief Financial Officer. Since I joined MDxHealth, we have been very consistent in our message and our mission. We are driven by three core operating principles: focus; execution; and growth. And while our commitment to those principles remains absolute, we also carry a great responsibility to our patients, our customers and our stakeholders to make strategic decisions that are rooted in transparency and operating discipline. Our Q1 results, our recent developments and the disclosures we issued today reflect a number of decisions driven by that exact responsibility. Over the past few years, our aggressive growth strategy and commercial execution have positioned MDxHealth as the leader in precision diagnostics focused specifically in urology. This strategy transformed our company from $11 million in revenue in 2019 to $108 million in 2025. We took gross margins from the 20s to the mid-60s, and we reached adjusted EBITDA profitability last year prior to our acquisition of the ExoDx business. However, as we prioritize the ongoing integration of ExoDx and the growth of our core prostate cancer business, we have made the strategic decision to discontinue our Resolve UTI offering and to cease operations at our laboratory facility in Plano, Texas. This was a carefully considered decision. The Resolve test was uniquely designed for our urology customer base to aid in the rapid diagnosis and treatment of patients presenting with serial, complex multi-organism infections. Despite the urgent clinical need and the undeniable medical necessity of this test to the urologists who order it, the increasingly uncertain reimbursement landscape has made the continued operation of this business line unsustainable. Specifically, an unexplained recent policy reversal by our Texas Labs Medicare administrator, Novitas, has created a level of payer uncertainty that we are simply no longer willing to accept. In connection with this, we recently received a communication from Novitas seeking up to $10.4 million in recoupments of historical Resolve testing claims. We believe this action by Novitas is without merit, and we are vigorously defending our position through the formal Medicare appeals process. We remain fully confident in our appellate strategy and in the clinical validity of our testing services. While stepping away from Resolve is unfortunate for the thousands of patients who have benefited from the test, we view this proactive exit as a powerful catalyst for our company. First and foremost, it allows us to focus our capital and operational excellence entirely on our prostate cancer precision diagnostics, where we drive the most scalable value. By stepping away from the reimbursement volatility of Resolve, our entire sales organization is now able to focus 100% on our core prostate cancer menu, Confirm, GPS and ExoDx. It is important to highlight that we have already completed the Exo-driven strategic mapping and cross-training of our expanded sales force in Q1. Furthermore, we successfully met our internal goal of transitioning our SelectMDx customers to Exo, resulting in accelerating operating efficiencies as we no longer process those select samples. With our sales force fully armed and aligned, we are cementing our position as the growth vertical in urology, offering an unmatched suite of precision diagnostics, addressing every single point in the prostate cancer pathway. An additional value driver of this refocus is our ability to catalyze our commitment to leveraging artificial intelligence. Earlier this year, we initiated an AI-dedicated strategic initiative to build out an AI data platform across the company. With the hundreds of thousands of unique biopsy tissue specimens we receive, our goal is to leverage AI to advance operating efficiency, maximize clinical value and optimize our customer experience. In fact, we are seeing evidence of this with our landmark PROTECT trial in collaboration with the University of Oxford, where the study protocol now includes AI-enhanced endpoints targeted to improve the prognostic value of our GPS test. Furthermore, we have initiated a collaboration with a customer-facing digital innovation company to develop AI-enhanced offerings that build on the evidence-based excellence of our tissue tests. We are incredibly proud of our team's commitment to not only the financials, but to what really matters, the patient and family on the other side of every sample we receive. I will follow up with some closing comments and our updated view forward. But first, let me turn the call over to Ron to walk through our first quarter financial results. Ron?

Thank you, Mike. Before I dive into the financial results, I want to briefly frame our Q1 presentation. Because our Board's strategic decision to exit the Resolve MDx business occurred in April, the financial results of the Plano Laboratory and Resolve business remain embedded within our as reported continuing operations for the first quarter. However, to provide investors with a clear and transparent view of our core business trajectory moving forward, we have provided pro forma as adjusted tables in our earnings release. These tables entirely back out the revenue and direct operating expenses of the Resolve business. To help you model the ongoing business, I will provide the statutory results today and compare them directly to these pro forma metrics of our continuing prostate cancer operations. Our as reported revenue for the first quarter ended March 31, 2026, was $27.4 million. However, on a pro forma basis, excluding the Resolve business entirely, revenues for our core prostate cancer operations increased by 11% to $23.9 million, demonstrating the continued commercial execution of our integrated sales team. Moving below the revenue line, our statutory as reported gross profit was $16.6 million. When we back out the Resolve business, our pro forma gross profit for the quarter was $15 million, yielding a pro forma gross margin of 62.9% compared to 68% for Q1 2025, with the difference primarily related to tissue versus liquid mix. Our as reported operating expenses for the quarter were $23.9 million, resulting in an as reported operating loss of $7.3 million. On a pro forma basis, excluding the direct operating expenses of Resolve, our pro forma operating expenses were $22.9 million, resulting in a pro forma operating loss of $7.9 million compared to a pro forma operating loss of $4.7 million for the prior year, primarily related to the addition of the ExoDx business. Our statutory as reported net loss was $8.9 million. Excluding Resolve, our pro forma net loss was $9.4 million compared to a pro forma net loss of $9.3 million for Q1 of last year. Once again, I'd like to direct investors to the tables at the back of today's press release where we have provided a detailed columnary reconciliation of our statutory IFRS results for the pro forma adjustments. Finally, our balance sheet remained solid for the quarter with cash and cash equivalents as of March 31, 2026, totaling $43.2 million. In addition, on April 15, we made the 2025 earn-out payment to Exact Sciences in the amount of $15 million. After taking into account this earn-out payment, our pro forma cash as of March 31, 2026, would have been $28.2 million. This concludes my overview of the financial results, and I will now turn the call back to Mike.

Thanks, Ron. As we look forward, we believe that the near-term impact of our strategic exit from Resolve will ultimately augment our ability to drive sustainable, highly profitable growth across our core prostate cancer menu. By streamlining our operations and removing the reimbursement noise associated with the UTI business, we are effectively resetting our growth trajectory. Today, we are establishing updated 2026 revenue guidance for our core cancer business, excluding Resolve, of $110 million to $115 million. This represents a robust 20% to 26% year-over-year growth rate for our core cancer business. Our culture of quality first and customer always will ensure our growing reputation for excellence in the urology market. We will continue to strive to deliver on our commitments of growth and value, positioning MDxHealth as the leading precision diagnostics company focused solely on the high-growth urology space. As always, we carry a great deal of responsibility to provide value to all of our stakeholders, including our patients, our clinicians, our payers and our shareholders. Thank you for your continued interest in and support of MDxHealth. Now I'll turn the call back to the operator for questions.

We'll go first this afternoon to Dan Brennan with TD Cowen.

Maybe just starting on the Novitas issue. I guess you guys cited $10.4 million related to retrospective review of certain historical Resolve MDx claims. And I know you're going to vigorously defend it. But can you — any other color you can provide on what the issue is there? And given the cash balance, like how do we think about the $10.4 million and just the cushion you guys think you have on that? And anything on timing, how this will play out?

Yes, Dan, we anticipate this will not be resolved or adjudicated for a significant period of time, unless it's immediately in our favor. And we feel like that's a high likelihood. This is a very recent development that we're communicating. So we have no sense of multiple initial replies. So it's difficult to bracket the timeline, but likely well beyond the period of time that we're focused on here between now and the end of the year. And I would say that although we don't anticipate any liability or recoupment, if there were any minimal, it would be amortized over a five-year period. But I only share that based on our understanding. We don't anticipate — we'd anticipate a quick positive resolution or a longer-term adjudication in our favor.

Got it. And Mike, is there any — just maybe one more quick one there. Is there any issues or any feedback you've had throughout the process of billing there where they were calling in the question, clinical utility of the test? Or is there any issues on that front? Or just anything else you can share on that?

We don't — as you can imagine, we don't have any further comment on our communications back and forth other than to present full transparency and everything we know as of today. I will say we have absolute certainty and would find it impossible to argue the medical necessity and clinical validity of our test for the patients that are treated. It's important to note that a lot of this focus on broadened abuse with infectious disease testing, which UTI has been noted in, is not policy-based, but communications coming out of Novitas. It is not the type of test that we are offering to the customer base we are, right? We market our test specifically to urology customers for a very specific patient population. And it is patients that are referred to urology, right? When you have a UTI, you don't call urologists. This is not your run-of-the-mill, immediate care, get put on ciprofloxacin and you're brand new. These are patients that present in men with large prostate or BPH, are prone to these. Women are referred to urology for these. We've had patients and clinicians present at our national sales meeting and the clinical value is impossible to argue and remarkably compelling. So the broad panel of organisms and susceptibility markers, in addition, a little bit more detail. Our test is in the 20s of organisms and susceptibility markers. Each run is a specific reaction for each analyte or target organism. So we have exhaustively, when we entered the market, been following the AMN guidelines. I'll leave it there, but it leads to our confidence and for sure, the medical necessity and our ultimate process.

And maybe for the follow-up, just on the core, maybe versus your guys' expectations, obviously, really strong growth in liquid. Tissue was up against a really tough comp there. Just tell me how did the quarter play out versus your expectations? And as you kind of have the updated guide, like kind of what are you incorporating? Or like how are you thinking about the rest of the year across your two businesses?

Thanks, Dan. Yes, I think we would appreciate your comments because it's what we expected and I communicated as far as Q4 and Q1 with the integration. There will be some focus on the transition of our Resolve customers. It's important to note also that every one of our Resolve customers is a urology customer. So our reps will be navigating that with our customers. We're confident that we'll navigate through that. And then our guidance adjustment really reflects, while we don't break it out and haven't broken it out historically, made the assumption that it's really stripping out our expectation of what Resolve will contribute. That's essentially the calculus of our new guide.

We go next now to Bill Bonello with Craig-Hallum.

I want to focus a little bit on the cash situation here. So when you think about the restructuring expenses that you're going to incur, do you have any sense of the magnitude of the cash outlay that may go along with that?

Yes, Bill, I think we're confident that our expectation would be the operation would cease by the end of June. Obviously, the majority of the Plano operation is carried in COGS. But we expect to derive any additional expense associated with that will be absorbed by additional efficiencies across our operation that has adjacent or, I guess, blended support of our Resolve business in our operation across RCM, client services and shared services with operation and product support. So I guess that — hopefully, that answers your question, if I understood your question.

I mean somewhat, I mean, it just — I just want to make sure I understand that. I mean there's going to be some severance payments you're going to be making. There's charges on the lease that you mentioned, et cetera. Those are all cash. And so you're thinking you can offset that cash outlay that may come over the next couple of quarters, you can completely offset that with enhancements to the rest of the business?

We're confident that there'll be a considerable offset there, Bill.

Okay. And then when you think about the pro formas, and I think there's maybe $700,000-something of expense that you put with Resolve. Can you give us some sense of what those expenses are? Just — and what I'm trying to get at here is how easy will it actually be to eliminate operating expense? What's truly attached to Resolve and what was just covering fixed costs?

Mainly incentive comp, Bill, to our sales organization for the Resolve test, if I'm understanding that question correctly. And again, as we — we're not in a position right now to fully reconcile, but to your two-part question, we expect the majority of the offset of the closing of the operation, the associated costs with that to be offset by efficiencies across the organization. And then from an OpEx perspective, while I noted that the majority of OpEx — the OpEx will not change materially because the majority of the Plano carry was in COGS. We would expect some benefit; incentive compensation is a good example, right, to our organization.

Okay. That's really helpful. And then just — I guess, if I can, and I'll get out of the way and let other people ask questions. But just on the tissue volume, just trying to get a better understanding of what's going on there? It's been sort of moving steadily downward. And I know you've been doing a big integration and Salesforce was distracted by that. But it's sort of hard to believe at these trends that there's nothing else at all happening. So I guess I'm just trying to get what can you tell us about whether you've actually been losing some customers on the GPS side or maybe people are not continuing to use Confirm, or what — why are we seeing volume actually going down?

Yes. So I think — I understand the question. I think I would say there's a multifactorial impact there, right? We have made significant progress, as I've noted and based on our trending consistent growth profile is sticky adoption. There are aspects of our tissue-based tests that require focus and continued work with our customer base with both Confirm and GPS. You commented on the integration, which I fully anticipated, and we expect clearly reflected in our guidance to see a sequential acceleration on the tissue side, even with the focus required on this new development that was related to Resolve on the tissue side in Q2, Q3 and Q4 as we go forward. And that's part of the calculus that we understand with our mapping of our customer base, our utilization rates, the implied churn or whatever that we would have. And we've made so much progress on that over the last couple of years that we're confident that it will be fixed. And as we look at the comp quarter that Dan noted, we would attribute it to those multiple factors. And our guidance requires that that comes back online on the tissue side as we anticipated at the beginning of the year, knowing that Q1 would be choppy.

We go next now to Mark Massaro with BTIG.

I apologize. I hopped on the call a few minutes late. So I wanted to just ask a clarifying question. I saw from your press release that you received a Medicare recoupment decision from Novitas. But I wanted to ask, did you receive a noncoverage determination? So I'm just — The clarification is, is the coverage suspended at this time?

Mark, my answer to that is we've not — I don't know that Novitas has a coverage policy, which you're very experienced in this segment. I mean I don't — I think I commented MolDX or California MAC has a clear policy related to UTI testing. Novitas does not. There have been communications that have come out over time, probably over the last year or two where they're calling attention to it and focused on fraud and abuse. I think this is government down to — and I think that MolDX has probably held up as — while difficult to navigate through MolDX, we've experienced that they have a standard and a policy coverage. We have followed the AMA guidelines and the guidelines associated with how we have billed Novitas and Medicare for the past five years, Mark. And we know — I think you would probably know this, too, from a landscape perspective. We know we're not alone here. In fact, I would add an additional point here that we have urology customers that have brought UTI testing in-house through whatever methodology they're using our platform. And they are coming to us saying that they are experiencing reimbursement inconsistencies. But we don't have a policy to lean on to explain their behavior. And we are very confident to my opening comment, which you missed, we can follow up that medical necessity is unquestioned and a very ambiguous, seemingly change in their posture on paying tests they paid for over time. We are not willing to try different billing schemes. We're just making what we believe is the prudent near and long-term decision for our company and for all of our stakeholders to maintain our transparency and integrity. It's unfortunate. It's remarkably unfortunate because of the value to patients and the way we've responsibly marketed this test.

Okay. Has — So — I understand why you made the decision to cease operations in Texas. But did you guys evaluate the option to run the test out of a separate lab in a Medicare jurisdiction that does have coverage?

Yes, Mark, I don't think I'd comment any more on all of the complex decision-making process that we went through. So I don't really have a comment. I mean our Irvine laboratories and MolDX, which has a noncoverage decision for UTI test.

Yes. All right. And then last one for me. Are you seeing any — as a follow-up to Bill's question on the tissue volume side — are you seeing any changes in the competitive landscape that you can speak of?

Nothing material from the two competitors on the GPS side.

We'll take a follow-up question now from Dan Brennan at TD Cowen.

Maybe just one more since — probably follow up later. Just — Michael, to your point on the tissue volume acceleration, can you just elaborate a little bit in terms of some of the initiatives and efforts that you kind of discussed in terms of seeing that sequential acceleration? Any color, qualitative color you can provide just about the visibility, confidence in that acceleration?

Yes. I mean I think maybe to provide to Mark's last question, the one competitive landscape change I should have noted, Mark, is on the AI side. And I think there's a lot of discussion — I don't want to say noise, but awareness of and communication about the promise of AI in our space, particularly relevant to GPS. And what I noted in our strategy here going forward, including the partnership that we've entered into is that we've been very patient in — and rigorous in our process as to the best path forward. We have not been the steep of the wheel, but we've also not panicked. I think we've gone through a prudent exercise of our operational value and use of AI, which does drive, as I noted, all of our clinical data generation and study protocols. But more importantly, the partnership that we've entered into, when I know customer-facing, my comment would be there is that this partner provides relevant urology, pathology services to our common customer base. So we are very, very confident that our patient approach there — there's not a company in the space that has been partnered with or available with AI technology that we haven't spoken to or evaluated, and we're very confident that the efforts we're taking internally and the partnership that we have embarked on will drive significant support for our GPS and Confirm business. But that coupled with our execution focus of the sales organization, I guess those are the couple, two or three different bases that we have for being confident that tissue begins to accelerate as we go forward.

And gentlemen, it appears we have no further questions today. So ladies and gentlemen, that will bring us to the conclusion of today's MDxHealth first quarter 2026 earnings conference call. We'd like to thank you all so much for joining us today and wish you all a great rest of your day. Goodbye.