Welcome to the Census Healthcare's second quarter 2026 financial results conference call. All participants will be in a 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 then one on your telephone keypad. To withdraw your questions, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Alex Sharif with New Street Investor Relations. Please go ahead.

Good afternoon, and thank you all for joining today's call to discuss Census Healthcare's second 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 Officer. As a reminder, some of the matters that will be discussed during today's call contain forward-looking statements within the meanings of federal security laws. All statements other than historical facts that address activities Census Healthcare 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 beliefs based upon current available information as of the date of this conference call, August 13th, 2026. Census Healthcare undertakes no obligations 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, Alex, and good afternoon, everyone. We appreciate you joining us today. I'll start with the issue that had the biggest impact on our second quarter financial results. During the quarter, we secured equipment orders that we expected to be recognized in Q2. Third party financing approval was not completed before June 30th, as was promised several times, which prevented us from recognizing 19 units and related revenue in the quarter. The good news is that the eight units in question have since been approved and the related revenue will be recognized in the third quarter. This bank clearly overcommitted while attempting to oppress us to earn and further gain ongoing business from us. They were unable to execute on their promises. We will no longer be working with this bank. More importantly, our commercial momentum strengthened during the quarter. At the beginning of the year, we laid out five priorities for 2026. Education and training, which is ongoing, accelerating customer adoption, which is occurring, expanding recurring revenue, broadening our commercial reach, and driving census towards sustainable profitability. We spent much of the first half educating the market around the new CPT codes and helping physicians understand what the new reimbursement environment means for their practices. We are now seeing that work translate into commercial momentum. Our pipeline is stronger. We are seeing more inbound interests. We are engaging with a broader range of customers, including independent dermatology practices, larger physician groups, and health systems. And we are increasingly seeing opportunities with larger organizations that have the potential to adopt SRT across multiple locations during our multiple models. That is the future of our business. We are not looking simply to replace revenue from one customer with revenue from another. We are building a broader, more diversified customer base that can support sustainable, more predictable growth in a wider geography. The dedicated CPT codes remain a major catalyst for that transition. physicians now have greater reimbursement clarity and a much better understanding of the economics associated with providing SRT as a non-invasive alternative to Mohs surgery. As practices gain experience with the codes and see reimbursement working in the real world, the conversation increasingly moves from whether they should consider SRT to how they want to incorporate it in their practices. They're also seeing increasing utilization within our Fair Deal Agreement program. For larger groups in particular, the shared service model remains an attractive way to bring SRT into multiple practices while allowing us to participate directly in treatment utilization. At the same time, we continue to see customers evaluating direct ownership as they understand the economics under the new reimbursement environment. Internationally, we are also seeing growing interest, particularly across Asia Pacific. Michael spent considerable time in the region during the quarter, including Australia, and he'll talk more about what we are seeing there in a moment. We entered the second half with a considerably more commercial activity than we had entering the year. Our job now is to convert that activity into revenue, and that is exactly where our focus is. With that, I'll turn the call over to Michael to provide more detail on what we are seeing in the market and how we are converting these opportunities. Michael?

Thanks, Joe. I'd like to start by giving some color on what we're actually seeing in the market, as the nature of our customer conversations has changed considerably since the beginning of the year. When the dedicated CPT codes took effect January 1, our first job was education. Physicians needed to understand the codes, understand the economics, and most importantly, see that reimbursement was actually being paid out. That conversation has changed. Increasingly, we're no longer explaining whether reimbursement works. We're speaking with practices about how they want to bring SRT in. We are seeing growing engagement across independent dermatology practices, larger physician groups, and healthcare systems. Our pipeline strengthened during the quarter as a result of physician education, inbound customer inquiries, and follow-up from the commercial initiatives we have undertaken throughout the year. We are increasingly engaging with larger physician organizations and healthcare systems. These opportunities naturally take longer to develop than a single practice sale, but the potential is also much greater because one relationship can ultimately represent multiple locations and multiple systems. We are spending more time with these organizations because we believe they can become an important part of the next phase of Census' growth. Customers also have more ways than ever to access our technology. They can purchase a system outright, utilize financing, enter into a rental arrangement, or participate in our fair deal agreement program. Having those different pathways allows us to meet customers where they are and removes barriers that historically may have delayed adoption. Internationally, I spent a significant amount of time during the quarter developing our opportunities across the Asia Pacific, particularly in Australia, New Zealand, China, and Hong Kong, We're seeing growing physician interest in SRT and believe there are attractive opportunities to build the business in these markets over time. China is as strong as ever, but Australia in particular has generated strong engagement in just the two conferences that we have attended, and we are actively developing relationships that can support our commercial presence there. To give you some facts, nearly 70% of all Australians will have skin cancer before the age of 70. making it the highest rate of skin cancer on earth. New Zealand trails close behind with no other country anywhere near them. This is a market that is prime for growth in SRT. We are going to be disciplined about international expansion, but we see it as another meaningful avenue for diversifying the census business. Our priorities for the second half are straightforward. Convert the pipeline, expand adoption across a broader customer base, increased utilization of the systems already in the field, and give customers the flexibility they need to bring SRT into their practices. We have considerably more opportunities in front of us today than we did at the beginning of the year. Now it's about conversion. With that, I'll turn the call over to Javier for review of the financials. Javier.

Thank you, Michael, and good afternoon, everyone. I will briefly review our financial results for the second quarter of 2026. Revenue for the quarter was $2.3 million, compared with $7.3 million in the prior year period, a decrease of approximately $5 million. The year-over-year decrease was primarily driven by a lower number of units sold, with 11 units sold during the second quarter of 2026, including furlough agreements and rentals, compared with 19 units during the second quarter of 2025. Revenue associated with fair deal agreements and rentals is recognized over the term of the agreement rather than at the time of the shipment. Cost of sales was $1.5 million compared with $4.4 million in the prior year period. The decrease was primarily related to lower number of units sold. Gross profit was approximately $0.8 million compared with $2.9 million due to the second quarter of 2025. Gross margin was 34.8% compared with 39.7% in the prior year period. The decrease in gross profit and margin was primarily driven by product mix, including a higher proportion of international shipments, which carry low average selling prices, as well as costs associated with the new system placement under our Fair Deal Agreement Program. As utilization increases, we expect those placements to contribute revenue over future periods. Turning to operating expenses. General and administrative expense was $1.8 million compared with $2 million in the prior year period. The decrease was primarily attributable to lower compensation costs, partially offset by higher professional fees. Serial and marketing expense was $1.1 million compared with $1.4 million in the prior year period. The decrease was primarily driven by lower threshold expenses, commission expenses, and clinical research costs. Research and Development Expense was also $1.1 million compared with $1.5 million in the prior year period. The decrease primarily reflected lower product development costs related to next generation system and reduced headcount. Adjusted EBITDA for the second quarter of 2026 was negative $3 million compared with negative $1.8 million for the second quarter of 2025. Adjusted EBITDA, a non-cash financial measure, is defined as earning before interest, taxes, depreciation, amortization, and stock compensation expense. Please see our earnings release issue earlier today for a consideration between GAAP and non-GAAP financial measures. Other income was approximately $2.1 million compared with approximately $2.2 million in the prior year period and relates primarily to interest income. Net loss for the quarter was $8.7 million or $0.53 per share compared with a net loss of $1 million or $0.06 per share during the second quarter of 2025. The second quarter of 2026 included a $5.7 million valuation allowance against net deferred tax assets. Turning to the balance sheet, we ended the quarter with $15.2 million in cash and cash equivalents compared with $18.3 million as of March 31, 2026. The company had no outstanding borrowings on its revolving hour credit as of June 30. Inventory was $18.4 million as of June 30, compared with $16.5 million as of March 31, while prepaid inventory was approximately $0.6 million as of June 30. Our inventory position provides us with the ability to support both direct equipment sales and continued placement as we were to convert the commercial pipeline. Before turning the call back to Joe, I'd like to provide some perspective on the second half. As we have discussed, second quarter results were affected by timing of revenue recognition on eight units. That equipment now has been sold and the related revenue recognized in the quarter. We also entered the quarter with continued commercial activity across our domestic and international markets. As a result, we continue to remain confident in our ability to deliver stronger performance during the second half of 2026. With that, I'll turn the call back to Joe.

Thank you, Javier and Michael. The message I want to leave with you today is straightforward. We spent the first half building the foundation of this new reimbursement environment, and we're now seeing that translate into stronger commercial momentum. Our pipeline is growing, our customer base is broadening, utilization is increasing, and we are working closely with larger organizations in the U.S., as well as new opportunities internationally. We remain focused on the same five priorities we established at the beginning of the year, ongoing education and training, accelerating customer adoption, expanding recurring revenue, broadening our commercial reach, and driving census toward profitability. We remain confident that the second half of 2026 will be stronger than the first, and our focus is on execution and conversion. Thank you for your continued support, and now we're happy to take questions. Operator?

Thank you. We will now begin the question and answer session. To ask a question, you may press star then 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 then 2. The first question comes from Anthony Vendetti from Maxim Group. Please go ahead.

Thanks. So I just want to just focus on those eight units. Sounds like obviously didn't have a good situation with that one particular bank that was responsible for financing those eight. Joe, I thought you mentioned 19 units. Were you talking about the 19 units that were sold in second quarter 2025, and these were the only eight units that were shifted into the third quarter?

No, this relates to the 11 units that we booked and have marked as booked for Q2. Had we been able to get this bank to meet the deadline as they promised, that would have been eight more. We would have had 19 units for the quarter. And that would be relative to what we did in the first quarter, which was 14. So we would have had 19. Those eight units now have fallen into the third quarter. They've already been... approved, sold, and it didn't take long for a bank to come in and get it done for us.

Okay, so you had another bank do that. On those eight units, I don't know if they were just Vision 100s or Vision 100+, should we assume an ASP on those, an aggregate of around 200,000 each? Is that about right, or was it a little more than that?

they were all the visions, not the visions, they were all the 100s and we're expecting to have an average selling price of closer to 250. 250.

Okay, great. Okay. Okay. And then, you know, you're talking about, you know, delivering a strong second half performance. It sounds like, you know, in terms of your at least pipeline of activity, You're seeing an increased level of interest. When you look at that pipeline, are these earlier conversations or is that pipeline filled with customers that are about to place orders and you're just looking to cross the T's and dot the I's or is this pipeline just starting to build?

for the second half. The pipeline really started from day one of this year when we started going through the education and training process of what the new CPT codes represented. And so it's a combination of a lot of new customers but a lot of customers that we've been talking to over the last six to nine months, quite frankly. So we're excited for that pipeline and I think that we're going to see a lot of that come to fruition here in the second half, which was the reason why we always said that we were going to get better as the year went on.

Okay, and then lastly, without naming the largest customer you used to have, is that customer still not purchasing any units from you? And maybe just an update on whether or not You think there could be some units purchased by that former customer in the second half of 2016?

No units are being purchased by them, and I would say that we're not expecting any units to be purchased by them. I think that they're still going through what they have to discuss amongst themselves to reevaluate their models.

Understood, understood. And then maybe one last one on the FDA, the Fair Deal Agreement. As you look at the pipeline, are most of these potential contracts going to be under the Fair Deal Agreement? I know internationally they're usually sales, so if we had a look at sort of the revenue mix, how would you very broadly sort of break that out in terms of expectations?

I think we're seeing the recurring revenue model at about a 50-50 pace with outright purchase. We still have a lot of customers that want to buy the units, and we still have a lot of the larger groups that only want to go through the recurring model phase. And so that's what we're experiencing right now. So I think that that bodes well for not just the present, but also the future.

Okay, great. Thanks for all that color, and I'll hop back in the queue.

Thanks, Anthony. Thanks, Anthony. Thank you, Anthony.

As a reminder, if you have a question, please press star 1. The next question comes from Ben Hainer from Lake Street Capital Markets. Please go ahead.

Good afternoon, gentlemen. Thanks for taking the questions. Just curious, on 11 sales, you mentioned also that about half and half are kind of sales versus recurring slash rental. How did those shake out? I apologize if I missed this, between rental, sales, FDA agreement, or Fair Deal agreement.

Out of the 11, six were direct sales. Okay.

Got it. And then on, you know, you had 14 in Q1. You would have had 19 in Q2. Maybe I misread the way you couched it earlier this year, but my recollection was that you expected to kind of have more units each quarter sequentially throughout the year. Is that still the case? And should we expect, you know, 20-plus units in Q3 and Q4?

Very clear yes, and I appreciate you looking at that math that way because that's exactly the way we're looking at it. So we're expecting a nice third quarter to come from all of them.

Okay, great. And then on the census link activations, anything you can discuss there?

We're seeing a lot of activity in it. We're making some sales on it, so that continues to increase. and contribute to the recurring revenue piece. Michael?

Dan, I just want to add color to what Joe said. Great question. All of the new customers that are coming in to do either a direct purchase or recurring revenue are getting CensusLink. Almost every single one of them. I haven't had one that hasn't. As far as the expansion of CensusLink, we have hired inside salespeople. to go and call current customers that have an SRT 100 or a vision out in the field. And we're actively trying to get as many people on CensusLink as possible. So from a percentage standpoint and from a margin standpoint, it's a very big growth area that I think that we're very excited about expanding.

Does that become meaningful, you think, later this year, or does it take a couple few quarters to get people up and running?

Yeah, it's going to build. Obviously, being a software, it's a monthly type charge. It's a smaller number, but margins are much larger, right? So it's going to be meaningful, and it's going to get the user experience kind of like, you know, I always analogize to cars, pardon me. but if you're driving around in your car from 10 years ago, you don't have anything other than maybe OnStar that has like an experience of software with it. If you drive a new age Tesla, everyone that drives a Tesla will know that there's constantly software updates and the user interface and the user interaction is just much different. It's like playing with a computer and downloading the new app or downloading the new software. It really changes the whole car experience and that's what we're trying to do with our SRT devices. It keeps the user engaged daily and also it helps the user operate much, much easier.

Okay, great. Sounds pretty slick. And then lastly on the kind of post-reimbursement, I know the hospital reimbursement you commented on in the press releases up. Anything on the physician fee schedule? I know dermatology I think took kind of a hit overall, but what are you guys seeing there?

Yeah, so the hospital physician fee schedule level one radiation, which affects SRT, anything under 150 kV, that is being proposed to increase 26%. As far as anything dermatology, nothing that I'm aware of is hindering anything from dermatology. We just got the new code started January 1, so.

Okay, great. Well, thanks for taking the questions, gentlemen. Thanks, Ben.

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

Okay. Well, thank you, everybody, for joining us today. Again, we've outlined what we did here in the second quarter, and we are very excited for our third and fourth quarters coming up. So we look forward to touching base with you again at the end of the third quarter during the call at that time. In the meantime, stay healthy and we look forward to talking to you then. Thank you.

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