Good day, and welcome to the Census Health Care Third Quarter 2025 Financial Results Conference Call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touchtone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Turf Patel with Alliance Advisors, IR. Please go ahead.

Good afternoon. This is Turf Patel with Alliance Advisors, IR. Thank you all for joining today's call to discuss Census Health Care's third quarter 2025 financial results. Joining me from Census are Joe Cerdano, Chairman and Chief Executive Officer, Michael Cerdano, President and General Counsel, and Javier Rampolla, Chief Financial Officer. As a reminder, some of the matters that will be discussed during today's call contain forward-looking statements within the meaning of federal securities laws. All statements other than historical facts that address activities Census Health Care assumes, plans, expects, believes, intends, or anticipates, and other similar expressions that will, should, or may occur in the future are forward-looking statements. The forward-looking statements are management's beliefs based upon currently available information as of the date of this conference call, November 6, 2025. Five, Census Healthcare undertakes no obligation to revise or update any forward-looking statements except as required by law. All forward-looking statements are subject to risks and uncertainties as described in the company's Forms 10-K, 10-Q, and other SEC filings. During today's call, references will be made to certain non-GAAP financial measures. Census believes these measures provide useful information for investors, yet they should not be considered as a substitute for GAAP, nor should they be viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non-GAAP to GAAP results is included in today's financial results news release. With that, I'd like to turn the call over to Joe

Sardano. Joe? Thank you, Terrence, and good afternoon, everyone. Thank you for joining us today. Supporting our expectations for future demand, earlier this week, CMS published first ever dedicated CPT codes for superficial radiotherapy in non-melanoma skin cancer and keloids. Note, not only do these codes validate SRT for this indication while providing reimbursement certainty, but they also represent an increase in SRT delivery code reimbursement per fraction of more than 300% compared with the current codes being used. We have already begun to communicate this message to our customer and prospect base. It is being very well received as we provide performance to those many who are awaiting the news. While we inform and educate our market over the next few weeks, we expect strong interest with demand on the rise. We are excited to having our own SRT coating at long last for our physicians and their patients. It really bodes well for SRT having a long and prosperous future in the dermatology space. Michael will discuss in further detail during a segment of the presentation. Now, during the quarter, we continued to execute on our strategic priorities and made progress in several areas across the business. We shipped 16 SRT systems in the quarter, including three systems to China, reflecting ongoing interest in our technology both domestically and internationally. With these shipments, we have now sold more than 900 systems globally since the launch of the SRT platform. We expect to reach 1,000 systems in 2026. Within our Fair Deal Agreement program, we continue to see encouraging utilization trends. FDA treatment volumes increased 20% from the second quarter. This was the third consecutive quarter of double-digit growth, and we expect this level of growth to continue through the end of the year. When compared to the first quarter, treatments increased 52%, and since launching the program late last year, quarterly treatment volumes have increased 157%. These trends underscore the ongoing adoption among installed sites and the growing awareness of SRT among patients and providers. We continue to focus resources on locations that are demonstrating strong physician engagement and the prospect for sustainable long-term utilization, and we believe this will support healthier, more efficient growth of the program going forward. We also maintained a strong balance sheet while taking steps to support future demand. We ended the quarter with $24.5 million in cash, up from approximately $22 million at the end of 2024. These gains were driven by improved working capital management, including ongoing collections. In addition, we have close to 100 SRT systems in inventory, which positions us well to respond to anticipated demand as the market environment becomes known. Let me turn the call over to Michael to expand upon our business and our recent progress.

Thanks, Joe. As Joe stated, we are elated about the finalization of the long-sought-after and fought-for SRT codes that CMS granted our technology this past week. This has been a decades-long process of lobbying and clinical validation complemented by significant patient demand in recent years as their awareness of the alternative to surgery has hit an inflection point. The goal of our lobbying efforts and the outcome of these new CPT codes is that the gap will now narrow between the office-based reimbursement and hospital outpatient rates. Leveling the playing field with hospital systems significantly strengthens the ROI for using SRT in dermatology offices and could expand adoption. Over the past few years, patients have been overwhelmingly demanding the non-surgical option for their skin cancer treatment, and CMS is seeing that data. To remind everybody, skin cancer is the most prevalent cancer in the United States, with the American Academy of Dermatology stating that more than 9,500 people are diagnosed each day, equating to over 3.5 million people per year. That is nearly double all other cancers combined. With the new coding certainty, outstanding clinical results, and high patient demand, SRT is here to stay. During the third quarter, we made good progress in advancing our business priorities, in particular with our fair deal agreement program and reimbursement engagement, as well as with software platform development and international expansion. Beginning with our FDA program, we remain encouraged by the continued momentum and utilization trends. Treatment volumes due to patient awareness and demand increased at a healthy pace for the third consecutive quarter. And as this program expands, it is becoming increasingly clear that the combination of education, patient awareness, and clinical experience is driving consistent uptake and supporting sustainable demand for SRT and IG-SRT within practices. The consistent growth in treatments across sites reinforces the effectiveness of our focused approach and this turnkey model. Now that we have complete clarity with SRT codes, we feel more confident than ever to maximize the adoption of our SRT technology like never before. Turning to our product pipeline, we continue to await feedback and next steps from the Food and Drug Administration with respect to our transdermal infusion, or TDI, system, and I do not have any new updates to share. Yet we are taking this time to validate training pathways, refine support models, and assess market feedback to ensure we are well positioned for a strong commercial rollout. I also want to comment on the ongoing development of our Sentinel software platform, which is central to our long-term revenue model. Sentinel today enables secure data storage, remote diagnostics, and real-time service support, allowing our engineering team to monitor and address system issues without interrupting patient care. For physicians, this translates into essential reliability, enhanced treatment confidence, and a more efficient workflow. Sentinel is also integral to any turnkey model, such as Census' FDA program, as it allows the monitoring of treatment volumes. As dermatology continues to consolidate and as more patient care shifts into scaled group structures, the value of enterprise-grade analytics has become more important, particularly for large dermatology networks and private equity-backed platforms. These organizations are highly focused on standardizing care, benchmarking performance across sites, and improving practice economics. Sentinel is well-positioned to support those needs. Census is always enhancing the Sentinel platform to provide deeper utilization insights, treatment analytics, and practice-level visibility to help groups measure patient flows, patient engagement, and care efficiency across locations. Over time, we believe this will increase the retention rate of our platform, support recurring revenue models, and elevate our competitive advantage. Looking ahead, we have initiated an expanded R&D program to build the next generation of our Sentinel platform, with a roadmap designed to introduce additional analytics, reporting capabilities, and customer-facing tools. This multi-phase initiative, which we call Sentinel 2.0, is already underway, and we expect to begin seeing initial results in 2026. On the international front, we are building a strong foundation for global expansion. As Joe noted, we shipped three systems to China during the quarter, and we are seeing encouraging interest across select international markets. Our MDSAP certification provides us with an expanded pathway to key geographies, including Canada, Brazil, Japan, and Australia. While we expect international sales to ramp gradually and recognize that the process may take up to 12 months in certain regions, we believe this expansion will provide meaningful contributions over time. Initial discussions with prospective partners in multiple markets are progressing well, and we expect initial sales under this certification in the near future. Additionally, Census will be exhibiting at its first trade show in Japan, JASTRO, the largest radiation oncology conference in the country, in two weeks. We are very excited to be meeting face-to-face with potential Japanese customers for the first time in our 15 years in business. With that, I will turn the call over to Javier for a review of our financial performance.

Thanks, Michael, and good afternoon, everyone. I'll start with a review of our financial results for the third quarter of 2025, and then I'll cover our year-to-date results. Revenues for the third quarter of 2025 were $6.9 million compared with $8.8 million for the third quarter of 2024. As Joe mentioned, the number of units sold in the third quarter of 2025 was 16 compared to 27 in the third quarter of 2024. The decrease in revenue was primarily driven by a lower number of units sold to a larger customer. Slightly upset by revenue recognized from the new placement program under the Federal Deal Agreement in 2025. Gross profit was $2.7 million for the quarter, compared with $5.2 million a year ago. Gross margin was 39.1% versus 59.1% in the third quarter of 2024. The change in both metrics reflects lower sales, higher cost of servicing system, and the cost associated with the Fair Deal Agreement program. Total operating expenses for the third quarter of 2025 were $5.3 million compared with $3.7 million for the third quarter of 2024. Breaking that down, general and administrative expense was $1.9 million versus $1.6 million in the prior year period, with the increase reflecting higher IT and professional service fees and compensation. Selling and marketing expense was $1.5 million compared with $1.3 million last year, with the increase reflecting higher headcount and payroll costs due to commissions related to the Fair Deal Agreement Program. And resounding development expense was $1.8 million for the third quarter of 2025 compared with $0.9 million in the prior year quarter, with the increase reflecting significant lobbying costs related to the billing code reimbursement. higher headcount, and an increase in product development costs related to the next-generation systems. We're reporting a net loss for the third quarter of 2025 of $0.9 million, or $0.06 per share, compared with net income of $1.2 million, or $0.07 per Deluda share for the third quarter of 2024. Adjust the EBITDA for the third quarter of 2025 was negative $2.4 million, compared with $1.6 million the year-ago period. Please see the tables in today's news release for a consideration of gap-to-non-gap financial measures. Turning now to our year-to-date results. Revenues for the first nine months of 2025 were $22.5 million compared with $28.7 million for the first nine months of 2024. The number of units sold in the first nine months of 2025 was 56 compared to 76 in the trial year period. The decrease in revenue was primarily driven by a lower number of units sold to a large customer, slightly upset by revenue recognized from the new placement program under the Federal Deal Agreement in 2025. Cost of sale for the first nine months of 2025 was $12.6 million compared with $11.4 million for the same period last year. Year-to-date 2025 gross profit was $10 million, or 44.4% of revenues, compared with $17.3 million, or 60.3% of revenues for the first nine months of 2024. These declines are largely due to a lower number of SRT systems sold in the 2025 period and higher cost of servicing system and the cost associated with the Fair Deal Agreement Program. General and administrative expense for the first nine months of 2025 was $6.1 million compared with $4.7 million for the first nine months of 2024 with the increase primarily due to higher professional fees and insurance costs. Selling and marketing expense for the first nine months of 2025 was $5.1 million compared with $3.6 million for the prior year period. The increase was primarily driven by an increase in trade-show costs, payroll costs due to commissions related to the new placement program, and an increase in headcount. Regional development expense for the first nine months of 2025 was $5.9 million compared with $2.7 million for the same period in 2024. The increase was primarily due to significant login costs related to the billing code, reimbursement, higher headcount, and an increase in product development costs related to the next generation system. Other income for the nine months ended September 30, 2025, was $0.5 million compared to $1.7 million for the same period in 2024 and relates to primarily interest income. For the first nine months of 2025, our net loss was $4.6 million, or $0.28 per share, and adjusted EBITDA was negative $6.7 million for the comparable trade prior period. The prior period net income was $5.1 million or $0.31 per dollar share and adjusted EBITDA was $6.7 million. Regarding our balance sheet, we ended the third quarter with $24.5 million in cash and no debt. We continued to maintain a strong inventory with approximately $13 million in finished goods. We believe this provides sufficient capacity to support anticipated demand. We remain focused on disciplined expense management and working capital efficiency, and we believe these efforts contributed to the strength of our cash position exiting the quarter. I will now turn the call back to Joe for closing remarks.

Thank you, Javier and Michael. Before we open the call to questions, I'd like to share a brief closing moment. We recently announced the passing of my dear friend and Census Board member, Mr. Bill McCall. Bill was an extraordinary leader and a wonderful person, and his insights were foundational to Census. I don't need to restate the sentiments conveyed in the news release we issued last Friday, other than to say my wish for each of you is to have someone like Bill McCall in your life. Separately, as Census has navigated these final weeks of debate regarding coding and reimbursement for SRT, I want to recognize and thank our employees, our business partners, our KOLs, and customers as we work together to expand access to safe, effective, and non-invasive treatment options for patients. After years of hard work, we have cleared validation that SRT is a great technology with tremendous value to skin cancer patients and keloid patients. We remain focused on disciplined execution and on supporting our customers and their patients. We are confident in our strategy, balance sheet, and utilization momentum. We look forward to updating you on future developments. And, operator, we're now ready to open the line for questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Anthony Vendetti of Maxim Group. Go ahead, please.

Thank you. Yes, so just two questions. One is on the LCD reimbursement for ultrasound-guided on your ultrasound-guided SRT system. What has been the impact on that if if any this quarter and what's your update on on what you think will be the impact any change to that and then um just in terms of uh i know you gave the system sales but any utilization uh trend metrics that you can provide for for this quarter thanks sure thanks anthony

Appreciate the question. First and foremost, we know that the original letter came from Astro, and it was their questioning of the utilization of ultrasound, the frequency of the utilization of ultrasound. They didn't feel that it was something that was medically necessary to be used each and every time for the fractions. Now, in our model for the FDA, we never used it every fraction. So quite frankly, it was less impactful to us because of that. And therefore, the reduction of the utilization of ultrasound by CMS, it does impact us, but it has been made up by the fact that the actual fractionation reimbursement code went up about 300%. So based on that, We don't lose very much in our FDA program, and in a lot of cases, it might be beneficial, even more beneficial for a lot of our physicians directly. So we don't see the same impact with our FDA program as maybe somebody else might do, but that's very, very important for us. And if there's anything else, Michael, I'll hand it over to Michael.

Yeah, just to add some color on that. Again, I've differentiated between SRT and IGSRT, right? One has the image guidance, one doesn't. What this has done, the 300% increase that Joe and I have talked about, is the new delivery code, which basically CMS allowed the hospital rate in for the first time. And this is something that we've been asking for since we started the company. Why was it for so long that if you were in a hospital setting and you build an SRT code for the delivery code, you'd get $125 per fraction, whereas the dermatologist would only get $25 per fraction? Well, now that is completely aligned. The new coding going up about 340%. We just said over 300% to make it just sound easy in the script. So the base SRT100 unit, which has been significantly less reimbursement overall than the, as of late, IG-SRT unit vision, is now getting a 300-plus percent increase as well. And the vision does as well. So both products, from the delivery code standpoint, get a massive, massive increase, one that we've never seen before in my days in healthcare for 15 years. Does that make sense?

Yeah, that's helpful. And then just on the utilization trends, any metrics you can provide?

As Javi indicated, we're seeing 20% increase on utilization from the third quarter over the second quarter, and year-to-date it's 152% increase on the utilization. We expect those trends to continue. There's nothing that's stopping the patients from wanting to have SRT, knowing that it's noninvasive. That's the choice that they prefer. And as they become more familiar with our technology, I think that that's going to continue on the rise.

Okay. And then just lastly, just in terms of placements in the U.S., you know, outside of that large customer,

as we move into the fourth quarter here, which typically is the strongest quarter,

but is there anything that you think will accelerate those placements in the fourth quarter as we speak today in terms of what you can see in terms of your pipeline or business activity?

Let's just – we all know when we announced the last quarter that when the LCD came out that there was a complete stop to the order taking, and that was a result of us going to our customers saying, hang on, there's something that's going on here, and before we start installing more units, let's hold off to make sure that we understand what it is and so on. And then, of course, CMS came up with their actions in late July, which didn't further complicate anything but still provided that halt on things. So what we see or what we have seen is a pent-up demand. And we had a bunch of units that was going into the FDA program. We feel now that we have clarity that we'll be able to deliver those units so that we can start production with those customers. And I think that the knowledge of having these units with guaranteed reimbursement codes that begin January 1, I think we're going to have customers that get in line to purchase and or to implement the program this year so that we start tracking down on the inventory that we have. And, of course, it's going to be first come, first serve. I think with the pent-up demand, there's going to be some aggressive marketing demand for our products. and we don't know where that could be yet, but we think that we're pretty good to be on line to either hit break-even or be profitable for the fourth quarter. We're excited for what that prospect is.

And with that pent-up demand, if I may add, we bought a lot of credibility. I'm really proud of our sales team, Salesforce Nationally, for going to those doctors and actually, from a short-term perspective, holding off on receiving some money in Q2, Q3. We could have easily gone out and just, you know, not told everyone and sold them all these IGSRT units, but we bought credibility with the practices, with the large roll-up groups, and told them, you know what, let's figure out exactly what's going to come down, and now I think you're going to see that that's going to work out for us.

Okay, great.

The next question comes from Ben Hainor of Lake Street Capital Markets. Go ahead, please.

Good afternoon, gentlemen. Thanks for taking the questions. Just on the reimbursement codes, it sounds to me, based upon your commentary, that there may be some shift between the SRT100 and the SRT100 visions in terms of what goes out there with, you know, kind of these shared services agreements, the FDA and kind of changes the calculus on that. Is that a fair assessment there?

I think that's a good observation, Ben, and I think rather than having our vision product decrease, I think we're going to see an uptick in the SRT100. So I think that either way it's going to help us because the important part of the vision product is that it has an operating system known as Sentinel. You can't operate on a larger scale unless you have that Sentinel product so that you can manage your products out there in the field. So I think that's going to continue to be important for all of the accounts. Now, the question is, well, what do we do with the Vision product? Well, the Vision product, you know, Javier mentioned the R&D program that we have for Sentinel 2.0. We're developing a program, a 2.0 Sentinel version, that can be utilized with the SRT100, which will literally give the SRT100 same capabilities as the vision product. So I think that we're meeting the demand of the market. We were anticipating what the market was going to do based on what CMS was going to provide, and I think that we're going to be meeting all of those perspectives. But to your point, it could impact the vision, but I think the operating program with the 2.0 is going to maintain the vision and its sustainability in the market.

Additionally, I want to point out, Ben, that the LCD when it first came out and then following that, the CMS proposed physician fee schedule, now the final, they kind of contradicted each other. And now CMS has put that issue to bed. So they actually did give the ultrasound for the first time. its own code. There is an ultrasound code for SRT in association with SRT, which means they believe it is clinically viable and important. The value right now is a little lower than we want it to be, of course, but I think that over time, as people still utilize the ultrasound, because I'll tell you, the patients absolutely love seeing the lesion shrinking over time. From fraction one, when they see how deep and what it looks like under the water, kind of like the iceberg effect with the Titanic, right? Oh, you can only see the tip. Well, now you can see the whole thing and visualize it. They love seeing that shrink. And by the time the last fraction comes in and a couple weeks after, they can see that it's gone. There is very big value in that.

We're going to continue to work on that valuation, working with CMS, helping them understand why that's very, very important. You really can't take away the vision that the doctors need to have in evaluating any kind of a tumor. Imagine a Mohs surgeon who does this, who performs the Mohs surgery on somebody, and the patient at the end of the study says, okay, did you get it all? The doc's going to say, yeah, I got it all. Well, show me. How did you get it all? I mean, you have to take the guy's word for it. So now, you know, with imaging, you're always going to be able to show that the lesion was gone when you've got that ultrasound image. So we'll be able to continue to pursue a better reimbursement for that as we continue to utilize it.

Okay, got it. And then just for clarity's sake, the LCD is basically completely non-operative at this point.

We believe so. I mean, I can't definitively say that, but what it was was, you know, kind of rubbish, if you want to use that word, because there was no evidence backing up anything that they said about the ultrasound capability in the LCD. There is no paper or clinical reference saying that imaging hurts clinical outcomes. In fact, ASTRO, the radiation oncology lobby, supports imaging, and so does all of radiation oncology, support imaging before every fraction of every other cancer on Earth, before breast cancer, before colorectal cancer. They always do imaging before therapeutic radiation. So why do they say that you don't need it for skin? They have absolutely no idea what they're talking about. And it was baseless, and CMS agrees that it was baseless by the sheer fact they just gave us a code for ultrasound, showing us in the world that it's not baseless.

Got it. So it's a start for us. It's a platform for us to continue to pursue it.

Got it. So it just depends on the adjective you want to choose rubbish or maybe something else.

I went English on that one, I know.

And then, you know, just kind of the commentary on the pent-up demand and the pending sites that you have, I think you said 11. I guess what's the right way to think about how long those are typically I know that there's unique circumstances here recently, but do those 11 go live during Q4, or, you know, what's the right way to think about that?

We believe that they will. We believe that they will, and we believe that we're going to add to that. Okay. Got it. Well, thanks for taking the questions, gentlemen. Thank you, Ben. Thanks, Ben.

Again, if you have a question, please press star, then one. Our next question comes from Yi Chen of H.C. Wainwright. Go ahead, please.

Hi there. This is Eduardo on for Yi. I guess on the topic of CPT code, the reimbursement, I'm curious that you're anticipating how that might impact the flow and utilization, specifically whether you're going to see increased utilization in existing sites or kind of increased accounts. Once you mentioned those 11 pending sites, I imagine they're going to be kind of new customers. And also how you anticipate changes in maybe purchasing behavior. Do you think the FDA will continue to be the main vehicle for purchasing, or do you think this will justify more outright systems purchases?

They're good questions. I don't think, like I said in my monologue before, I don't think that our FDA is as impacted by the new coding as much as people think. And the makeup for whatever impact the ultrasound may have had is going to be taken up by the increase in the actual fractionation code of 340%, as Michael said. So it almost offsets any of the decreases. So I don't think that it's going to impact our FDA program that much, and I think that we'll be able to continue with that FDA program. So I think that that's very viable. I think the impact that it will have is that it will increase sales on the SRT100 side because that's the lower-cost unit. But either way, you're going to see our margins now starting to take shape, and I see the longevity of the product and the utilization of it. As reimbursement stabilizes and it becomes fact, imagine this. In the past, doctors used coding and they asked for reimbursement. Sometimes they would get it, sometimes they wouldn't. Now there's no way that anybody can refuse these codes, these reimbursements, because it's what CMS says. They said this exists for SRT technology for the dermatology space to treat skin cancer and keloids. So they're undeniable. And so if you look at the amount of money that they're going to be getting on a patient-by-patient basis, I mean, it is a very, very strong reimbursement for them that bodes well for the ROI on the equipment, whether it's taken in the FDA form or whether they purchase it through a lease or direct purchase either way. So it's beneficial for the company and we see a lot of good things happening because of it.

Great. Thanks for the clarity there. And a question on the international sales, what do you anticipate the ramp to be there, and how should we model margins for those sales?

Yeah, great question. This is Michael. So, with the MD-SAP certification we announced earlier this year, that gets us automatically into five of the toughest territories globally to get in from a regulatory standpoint. I'm really excited to say that we're going to Japan, like I said, in two weeks. That is the absolute most difficult country to receive regulatory clearance in, especially for radiation technology. So we'll see where that goes. But I think that we're ever expanding on the international side. We've been – obviously, our largest market outside the U.S. has clearly been China, which continues to adopt, and especially as their economy gets better with time passing from COVID. They'll continue to go, go, go, but with everything with MD SAP, this is going to, from a distributor standpoint, once we get those locked in, I think that was the 6-12 month tie-up that I was talking about before, and we'll continue to go from there.

I think what will end up happening is we're going to start seeing a ramp outside the United States, and I think that we'll get to consistently about a 20% revenue-based international, which will be 20% of our total revenue. Right now, we're somewhere between 5% and 10%. I think we can grow that over the next 12 to 24 months to about 20%.

And if I may add, the vision, don't forget, is actually taking off internationally as well. Taiwan has two visions now, and there is some demand in Asia for the SRT100 vision, and we plan to submit for regulatory clearance to China for the vision as well, which we had not had in the past. So the vision might start becoming a very big international unit for us, much like the base SRT100 was for the last six, seven years.

Got it. Thanks so much for taking the question.

Yeah, absolutely.

This concludes our question and answer session. I would like to turn the conference back over to Joe Sardano for any closing remarks.

Thank you. As we wrap up today's call, I again want to thank everyone for joining us and your continued interest in Census Healthcare. We appreciate your support, and we look forward to speaking with you again in a little more than three months when we report our Q4 financial results. Have a nice evening.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.