Welcome to Census Health Care's First Quarter 2026 Financial Results Conference Call. All participants will be in listen-only mode. Should 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 than 1 on your telephone keypad. To withdraw your question, please press star than 2. Please note this event is being recorded. I would now like to turn the conference over to Lee Salvo with Newstreet Investor Relations. Please go ahead.

Good afternoon, and thank you all for joining today's call to discuss Census Healthcare's first quarter 2026 financial results. Joining me from Census are Joe Sardano, Chairman and Chief Executive Officer, Michael Sardano, President, Chief Commercial Officer, and General Counsel, and Javier Rampolla, Chief Financial 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 will, should, or may occur in the future are forward-looking statements. The forward-looking statements are management's belief based upon current available information as of the date of this conference call, May 7, 2026. Census Health Care 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 press release. With that, I'd like to turn the call over to Joe Sardano. Joe?

Thank you, Lee, and good afternoon, everybody. We appreciate you joining us today. The first quarter of 2026 represents an important transition period for census health care. With the dedicated CPT codes for superficial radiotherapy now in effect as of January 1, we are now operating in a fundamentally different environment than ever before. We are tasked with the responsibility of helping our entire industry pivot to the new reality. For quite some time, two factors weighed heavily on our business, customer concentration and the absence of reimbursement clarity. Today, we believe both of those factors are beginning to shift in a meaningful way. I'd like to frame our discussion today around five priorities that we believe will define our progress in 2026 and provide a clear framework for tracking our execution over the course of the year. Number one, educate the market on the new reimbursement and train them on how to utilize the codes. Two, drive customer adoption following CPT code implementation. Three, grow our recurring and utilization-based revenue streams. Four, diversify and strengthen the commercial model. And last, number five, deliver sustainable profitability. Our entire first quarter was dedicated to helping existing customers and new prospects better understand the new reimbursement coding. Initial results are excellent. The coding is simple and straightforward. And for those who have billed CMS under the new coding, they are already seeing a smooth transition by the payers as our users receive reimbursements. So both physicians and patients will continue to grow in confidence that SRT is receiving full funding. Which brings us to customer adoption and CPT impact. One of the strategic priorities is converting the new reimbursement environment into a broader customer adoption and more diversified installed base. During the first quarter, we began to see the benefits of the new CPT codes move from concept to commercial reality. With reimbursement now clearly defined and physician economics significantly improved, including approximately a 300% increase in the per-fraction delivery code, we are seeing increased inquiry levels and stronger pipeline development, a growing pipeline of qualified opportunities as of quarter end, and greater engagement from dermatology practices and hospital systems. We shipped 14 SRT systems during the quarter, including 10 direct sales and four placements under the fair deal agreement as well as rental arrangements. Importantly, these shipments reflect continued progress in broadening our customer base and meaningfully reducing historical customer concentration. We were able to match our sales from Q4, which we believe will improve upon quarter over quarter for the balance of the year and into 2027. We saw strong momentum coming out of several major dermatology conferences during the quarter, where physician interest and engagement levels were among the highest we have experienced. These events continue to be critical driver of our pipeline growth and customer education as awareness of the new reimbursement environment increases in addition to the benefit of SRT as a non-invasive alternative to most surgery. Patients are deciding more and more of their preference to avoid surgery. Recurring revenue growth, the FDA plus software. Another priority is expanding recurring revenue streams tied to utilization of our installed base and new prospects. There are still groups who prefer a shared service program, as indicated by the four of 14 units shipped in Q1. We are confident this will continue to grow. Our fair deal agreement program continues to be a driver of utilization based revenue during the quarter. Treatment volumes increased 8% over the first quarter of 2025, And we continue to increase the number of patients. We ended the quarter with 18 active FDA sites and 9 pending activations. As we've said previously, FDA placements often serve as a bridge to system ownership, and we continue to see that dynamic play out as customers better understand the economics under the new reimbursement environment. Importantly, we are now taking additional steps to expand recurring revenue through software and services. The introduction of Census Link represents an important evolution of our model, enabling enhanced workflow, treatment documentation, and operating intelligence across our installed base, while creating a scalable recurring revenue opportunity tied to treatment activity. We view this as an important step in evolving our business model toward a more predictable and recurring revenue profile in the future. Over time we expect recurring revenue including FDA, service, and software to represent an increasing percentage of total revenue which historically has been about 10 percent commercial expansion and diversification. Our next priority is broadening commercial reach through access to our technology and reducing volatility by creating more ways for customers to acquire and use census systems. We are seeing increased interest across a wider range of customers, including independent dermatology practices, group networks, hospital systems, and private equity-backed platforms. To support this, we recently launched census healthcare financial services, which provides a streamlined pathway for customers to acquire our systems through flexible financing options. Since launch, we have begun actively engaging with prospective customers to utilize through this platform and are seeing improved conversion rates on late-stage opportunities. We are also seeing a shift in customer preference towards purchase compared to prior periods where fair deal agreement program participation was the primary entry point. We now have to ask the question, why do you want to give up 50% of your revenue when one patient procedure per month represents your breakeven? Profitability. Our priority is translating stronger demand, a growing recurring revenue base, and disciplined expense management into profitability. We are entering the new phase with a strong balance sheet, including $18.3 million in cash and no debt. While our first quarter results continue to reflect transition away from historical customer concentration, we believe the combination of improved reimbursement, a more diversified customer base, expanding recurring revenue streams, and disciplined expense management positions us to deliver improved financial performance over the balance of 2026 with the objective of achieving full-year profitability. With that, I'll turn the call over to Michael to provide more detail on our commercial execution and growth initiatives.

Thanks, Joe. I'll focus on how our commercial model is evolving and how we are executing against the priorities Joe just outlined. The most important change we are seeing is that reimbursement clarity has fundamentally reshaped how customers evaluate and adopt SRT. Importantly, this is shifting SRT from a considered option to a financially actionable decision for more and more practices. Customers now have multiple pathways to adoption, including outright purchase, leasing structures, and the Fair Deal Agreement program. In the first quarter, approximately 70% of systems shift were purchase versus FDA. Average break-even for customers is now two patients per month, and we are seeing a higher percentage of customers electing ownership earlier in the adoption cycle. From a pipeline perspective, we are seeing increased conversion activity across the board as customers move from evaluation to decision-making. A key driver of this momentum has been our participation in several major dermatology conferences during the quarter. These conferences generated new leads, physician engagements and demos, and a meaningful increase in follow-up activity and site evaluations. Importantly, our decision to refine our conference and trade show strategy to prioritize high-yield events where purchasing decisions are actively being evaluated is paying off in our pipeline. Physicians are becoming more aware of the new CPT codes and the improved economics of SRT. On the recurring revenue side, our focus is on increasing utilization across the install base and expanding monetization through additional capabilities. Census Link is an important part of this strategy as it enables us to bring advanced functionality to both new and existing systems while also creating a pathway for ongoing service and software revenue tied to treatment workflow. On the install base, total shipped systems now stand at approximately 965 units globally. We expect the rollout of Census Link, which provides advanced operating capabilities to our SRT100 install base, to begin to take shape and increase interest in SRT significantly this year. Over time, we believe this will support increased utilization, improve customer retention, and create a recurring revenue stream tied directly to system usage. International markets continue to represent an important growth opportunity for Census. We are seeing continued demand in key markets such as China and expect additional diversification over time as we expand into new regions. International sales also provide attractive margin characteristics due to lower servicing requirements. requirements. Domestically, we are taking a disciplined approach to scaling our sales organization in 2026. Our focus is on expanding selectively, increasing market education, and improving conversion efficiency. Overall, the underlying performance of our business will continue to improve as a combination of reimbursement clarity, expanded adoption pathways, and a more diversified commercial strategy positions us well for sustained growth and profitability. With that, I'll turn the call over to Javier for a review of the financials.

Thank you, Michael, and good afternoon, everyone. I will briefly review our financial results for the first quarter of 2021-26, starting with revenue. Revenue for the quarter was $3.4 million compared to 8.3 million in the prior year period. The year-over-year decrease was primarily driven by the absence of sales to our historically largest customer, as well as lower number of total units shipped. As a reminder, the prior year period included a significant number of direct sales to that customer. In the current quarter, we had no sales to that customer, which reflects our ongoing transition towards a more diversified customer base. Importantly, excluding sales to that customer in the prior year period, revenue increased compared to $2.7 million, demonstrating underlying growth driven by a broader mix of customers. In addition, a portion of systems shipped during the quarter were under Ferdula grooming program and rental arrangements, where revenue is recognized over the term of the agreement rather than at the time of shipment. As a result, displacements contribute to revenue over time rather than up front. Turning to cost of sales. Cost of sales was $2.4 million compared to $4 million in the prior year period. The decrease was primarily driven by lower unit volumes, again reflecting the absence of sales to our historically largest customer as well as a shift towards FDA and rental placement. Moving to gross profit and margin. Gross profit was $1 million compared to $4.4 million in the prior year period, and gross margin was 29.2% compared to 52.2% in the first quarter of 2025. The decline in gross margin was primarily driven by product mix. This includes a higher proportion of international shipments, which carry lower average selling price, as well as costs associated with the new system placement under our first deal agreement program. As utilization increases, these arrangements are expected to contribute more meaningfully to revenue on margin over future periods, turning to operating expenses. General and administrative expense was $2 million compared to $2.2 million in the prior year period, with the decrease primarily driven by lower professional fees. Selling and marketing expenses was $1.7 million compared to $2.2 million in the prior year period. The decrease was primarily due to our decision to lower threshold-related spending to focus on events with the highest potential for sales generation. Fishes on development expense was $1.6 million compared to $2.6 million in the prior year period. The decrease reflects lower lobbying costs related to reimbursement efforts as well as reduction in headcount and product development spending for the next generation systems. Adjusted EBITDA for the first quarter of 2026 was negative $4.2 million compared with negative $2.5 million for the first quarter of 2025. Adjusted EBITDA, a non-GAAP financial measure, is defined as earnings before interest, taxes, depreciation, amortization, and stock compensation expense. Please see our earnings release issued earlier today for a reconciliation between GAAP and non-GAAP financial measures. Other income was $0.1 million compared to $0.2 million in the prior year period and relates primarily to interest income. Net loss for the quarter was $2.6 million, or $0.16 per share, consistent with the prior year period. Finally, we continued to maintain a strong balance sheet ending the quarter with $18.3 million in cash, no debt, an inventory of $16.5 million, an increase from $14.6 million as of December 31, 2025. This inventory level positions us to continue to meet the demand in upcoming quarters for both direct and for placements under the Deferred Deal Agreement Program. Before I turn the call back to Joe, I'd like to provide some perspective on how we're thinking about the remainder of the year. We expect second quarter revenue to be higher than first quarter, and we also expect revenue in the second half of the year to be higher than the first half, as we continue to build on the momentum we're seeing in our pipeline and customer engagement. From a margin perspective, as we discussed earlier, first quarter gross profit and margin reflect the impact of product mix, including higher proportion of international shipments, as well as costs associated with the new system placement under our referral deal agreement program. As utilization under this arrangement increases and revenue is recognized over time, we will expect these dynamics to evolve over the course of the year. With that, I'll turn the call back to you.

Thank you, Javier and Michael, and for those updates. Before we open the call for questions, I want to reiterate that we believe SRT is increasingly being viewed as a compelling non-invasive treatment option that allows practices to expand patient access, improving workflow efficiency, and offer an alternative for treating patients with non-melanoma skin cancer. The new dedicated CPT codes for superficial radiotherapy significantly improve physician reimbursement and support broader adoption of our technology while benefiting patients with certainty of coverage for non-invasive treatment options. As we move through 2026, we remain focused on executing against our five priorities, education and training, accelerating customer adoption, expanding recurring revenue, broadening our commercial reach, and driving senses toward profitability. We believe we are still in the early stages of this transition and look forward to updating you on our progress throughout the year. Thank you for your continued support, and now we'd be happy to take your questions. Operator?

We will now begin the question and answer session. To ask a question, you may press star than 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star than 2. At this time, we'll pause momentarily to assemble our roster. And your first question today comes from Anthony Venditti with Maxim Group. Please go ahead.

Close enough, Venditti. But, hey, Joe, how are you doing? I'm good. How are you, Anthony?

Good, guys.

So I guess, you know, my first question is, it's a little bit of a two-part question, is, you know, your largest customer, which I think you had 15 units sold to in the first quarter of 25, So I guess it's with zero in first quarter 26, not too surprising that revenue is down over 50%. But should we look at, you know, when you said, you know, second quarter should be higher than first quarter, should we look at if your largest customer who's, you know, not buying any units right now comes back? Is that upside? Are you internally assuming they don't come back? And if, like I said, they do, it's upside. And then I have a follow-up question.

And if they do come back, it is upside. We haven't included them in our model for this year, but it doesn't say that they can't figure out the new model that they have to come up with so that they can remain strong in the market.

Okay. All right. So I guess it's still a possibility. And then obviously it was good news that back on January 1st, there was a new CPT code which took effect. It's a 300% increase in the per fraction delivery code. And I guess the question is, obviously a positive development, but are you seeing that translate into either shorter sales cycles or a pipeline of new business? And if there is a pipeline in a new business, is it just hasn't yet converted into revenues and you expect it to over time, or is it taking a while for the pipeline to build, you know, even though the code has significantly increased?

I'll give you an overview, and then I'll let Michael handle it since he was responsible working directly with CMS to gain those codes. But what we're seeing on an overall basis is tremendous interest has increased because of the guaranteed coding system, the dedicated and guaranteed coding system for SRT towards dermatology. We have to remember that in the past that didn't exist. They were kind of orphan codes that mostly came from Astro, and these new codes are specific to dermatology and to SRT. So we're excited for all of that. Regarding the interest from the field, there are more and more and more offices that are contemplating SRT bringing it into their practice because of those codes. Very, very clear, very, very obvious. Still a lot are deciding whether they want to go with an FDA or whether they want to go with an outright purchase or whether they want to go with a fair market value lease. All of those things are being considered. They're taking it seriously because now all of these sites can consider this a long-term decision for their practice since those codes are in place. Michael, I'll hand it over to you if there's further comments on what you're seeing every day with the prospects.

Sure, yeah, thanks. Anthony, great question. Joe, you did a great job of answering it, I think, that you covered most of it. The thing that I'll add that kind of went to your point, Anthony, is that, you know, January 1st, 2026, all of the codes, you know, changed. They took place. But when it comes to coding and reimbursement, you don't know whether or not you're going to get paid or not or how the structure works until after you bill that patient and wait the four to six weeks. So really, people weren't able to see the EOBs of these patients until mid-February to even early March when you started treating patients. So with those EOBs coming in, now we have actual proof, like Joe said on the call, that we're getting paid. all of the private insurances, all of the Medicare, Medicaid, CMS, et cetera, all of these insurances are paying these new codes the way they're supposed to. And now that we have that black and white proof, now it's in my sales guys' and girls' hands, and we're giving it out to the market. A big point that we didn't touch on in the call, we had our largest show of the year, which is the AAD. It's the annual meeting that took place the end of March, literally the last weekend of March, so March 27th through the 31st. So all of those leads that were generated, we obviously couldn't close right there in Q1. So those leads and everything that we mentioned are going into Q2. I'm very, very confident comparatively to Q1 going into Q2. I think that, as I said in the call, we're going to continue to grow and improve throughout the year, quarter over quarter over quarter. And the way Javier mentioned it as well was the fact that we have more recurring revenue shipments than we ever, ever had before. From an FDA standpoint and also this rental model, you're going to see that as we get 10 rental contracts, then that turns into 30 and then that turns into 40 or 50, we're quickly transitioning to a more recurring revenue base that we're just going to have to be patient with. Unfortunately, I'm going to have to ask the investors to just be patient with us and realize that we're transitioning greatly. And everything that we've been asking for for the last 10 years. Why can't you guys get more recurring revenue and not be sole focused on one revenue source? Now we're actually achieving that. So that's what we're asking right now. I think we're going to see improvement on that. Does that make sense? Yeah, no, that makes

a lot of sense. And maybe just as best you can sort of try to, if you could, timeline it for us. I mean, as you build this pipeline of this recurring revenue and the fair lease agreement, fair jail agreement. Do you feel like, you know, whether it's this quarter, next quarter, or sometime in 26, you sort of lap that pipeline and then it's much easier to see the revenues grow? Is there an inflection point in particular you're looking for?

yeah as the education continues to roll out for instance we just had two or three more meetings this past april with large roll-up groups in addition to florida-based meetings arizona california-based meetings so as that happens you're going to see the education coming out the black and white codes greatly helps us this is the first time in our 16 years that i've been able to go into a room and tell a doctor that these are black and white codes there's literally no gray area whatsoever. So as that comes in, you're going to see a lot of people that were not interested over the last 10 years. Now, all of a sudden, they're interested because their accountants, their lawyers can make sense of it. And I think that that is just about education. And the longer you give us, the longer we're going to be able to educate and more people will adopt SRT. It's here to stay now. CMS has given us exclusive codes for SRT for the first time ever. So this is something that's like a brand new territory for us from a regulatory environment. I don't have to go up to Washington as much anymore. So that's a good thing from a money standpoint and just a time. So we're really excited. The sales team is fired up. We've already hired three more salespeople as well into territories that are kind of new and some of them that are rehires. So we're very excited to keep going here. Let me add one thing to your,

Anthony, to your question about the recurring revenue piece, one of the things that we don't want to overlook here is one of the codes which is involving radiation physics and the consult for radiation physics. This code has to be applied to every patient, and our introduction of Census Link is a main focus for our customer base. They can charge that code once per week. So if we're looking at, as an example, if they use 20 treatments for their protocol, they do two patients or two treatments a week. That covers 10 weeks. This radiation physics code can be charged $93.85 on average across the country per week. So that's 10 weeks of treatment. That's $930. With our software, we will be sharing that revenue with our customers. It's the only way that they can access that reimbursement is through Census Link. So that's an important piece of our business that we, quite frankly, didn't have before.

And when did Census Link officially go live?

We've got it live now, and it's performing in several accounts already.

Okay, great.

Yep.

Okay, great. That was great, Collin. I'll hop back in the queue.

appreciate it. Thanks, Anthony. Again, if you have

a question, please press star, then 1. Seeing no additional questions, this concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

I think everybody heard where we're headed this year. We feel that we're going to have a profitable year with each and every quarter being better than the previous. So I think that we've got a very good, solid start to the business year, and we're looking for increased revenues throughout. With that being said, we look forward to a very successful second quarter, and we look forward to talking to you again at the next earnings call. Thank you so much. The conference has now

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