Sensus Healthcare, Inc. Stock

Thank you. Welcome to the Census Health Care'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 1 on your telephone keypad. To withdraw your questions, please press star then 2. Please note this event is being recorded.

I would now like to turn the conference over to Alex Sharif with New Street Investor Relations.

Good afternoon and thank you all for joining today's call to discuss Census Health Care's second quarter 2026 financial results. Joining me from census are Joe Serdano, Chairman and Chief Executive Officer, Michael Serdano, President, Chief Commercial Officer, General Counsel, and Javier Rompola, 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 CONDITIONS. information as of the date of this conference call, August 13, 2026. Census Healthcare undertakes no obligations to revise or update any forward-looking statements AS REQUIRED BY LAW. ALL FORWARD LOOKING STATEMENTS ARE SUBJECT TO RISK, 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-GAP FINANCIAL MEASURES. CENSUS BELIEVES THAT THE THESE MEASURES PROVIDE USEFUL INFORMATION FOR INVESTORS, YET THEY SHOULD NOT BE CONSIDERED AS A SUBSTITUTE FOR GAP, NOR SHOULD THEY BE VIEWED AS A SUBSTITUTE FOR OPERATING RESULTS DETERMINED IN ACCORDANCE WITH GAP. A REQUIREMENT FOR INVESTORS TO 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 Cerdano. 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 secure 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 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 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 goes 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 noninvasive 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. We'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 re-employment. and 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 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. The 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. Importantly, 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, increase 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 full deal agreements and rentals. 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 .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 present growth 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. If 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. CERELA market and expense was 1.1 million compared with 1.4 million in the prior year period.

The decrease was primarily driven by lower trade show 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 earlier, earnings release issue earlier today for a consideration between GAAP and non-GAAP financial measures. Other income was approximately 0.1 million compared with approximately 2.2 million in the prior year period, and relates primarily to interest income. 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 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 continue placement as we work 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 wanna 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 US as well as new opportunities internationally. We remain focused on the same five priorities we established at the beginning of the year. We will continue to work on 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.

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 one 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 to 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. Sure. 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 you know,.

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-plus, are there...

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

$250, okay, great. Okay. Okay. And then... You know, you were 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 –.

you know, looking to like, you know, 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 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 goes on.

went on. Okay and then lastly, you know, 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 26? 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.

David Plylar, 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... you know, sort of the revenue mix, how would you, you know, 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. Um, 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. Thank you.

Okay, great. Thanks for all that, Culler, 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. I'm 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 one. 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, you know, looking at that math that way because that's exactly the way we're looking at it. We're expecting a nice third quarter to come from all of us. Okay, great. And then on the census link activations, anything you can discuss there?.

We're making some sales on it so that it can continues to increase and contribute to the recurring revenue piece. Michael. Dan, I just want to add color what Joe said. The great question. All of the new customers that are coming in to do either a direct purchase or reoccurring revenue are getting CensusLink. Almost every single one of them. I haven't had one that has. 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 as we can. on census link 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.

And does that become meaningful, you think, later this year? Does it take a couple few quarters to get people up and running? Yes, 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 be 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. You drive a new age Tesla, everyone that drives a Tesla will know that there's constantly software updates and the user interface and 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 do you guys see in there? Yes, 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.

Thank you everybody for joining us today. Again, we will be back with more information 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.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Welcome to Sensus Healthcare's First Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Leigh Salvo with New Street Investor Relations. Please go ahead.

Good afternoon, and thank you all for joining today's call to discuss Sensus Healthcare's first quarter 2026 Financial results. Joining me from Sensus 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 meaning of federal securities laws. All statements other than historical facts that address activity Sensus 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, May 7, 2026. Sensus 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. Sensus 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, Leigh, and good afternoon, everybody. We appreciate you joining us today. The first quarter of 2026 represents an important transition period for Sensus Healthcare. 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 4 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 a 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 noninvasive alternative to most surgery. Patients are deciding more and more 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 4 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 nine 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 Sensus 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%, 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 Sensus 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 Sensus 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 you want to give up 50% of your revenue when 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. Michael?

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 shipped were purchased versus FDA. Average breakeven 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 installed base and expanding monetization through additional capabilities. Sensus 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 workflows. On the installed base, total shipped systems now stand at approximately 965 units globally. We expect the rollout of Sensus Link, which provides advanced operating capabilities to our SRT-100 installed 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 Sensus. 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. 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 2026, 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 agreement program and rental arrangements, where revenue is recognized over the term of the agreement rather than at the time of shipment. As a result, these placements contribute to revenue over time rather than upfront.

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 FPA and rental placements. 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 Fair Deal Agreement program. As utilization increases, these arrangements are expected to contribute more meaningfully to revenue and 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.

Research and 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 continue to maintain a strong balance sheet, ending the quarter with $18.3 million in cash, no debt and 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 Fair 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 a higher proportion of international shipments as well as costs associated with the new system placement under our Fair Deal Agreement program.

As utilization under this arrangement increases and revenues recognized over time, we will expect these dynamics to evolve over the course of the year. With that, I'll turn back -- the call back to Joe.

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 noninvasive 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 noninvasive treatment options. As we move through 2026, we remain focused on executing against our 5 priorities: education and training, accelerating customer adoption, expanding recurring revenue, broadening our commercial reach and driving Sensus 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 may -- we'd be happy to take your questions. Operator?

[Operator Instructions] And your first question today comes from Anthony Vendetti with Maxim Group.

Sure. Close enough -- so I guess my first question is 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 0 in first quarter '26, not too surprising that revenue is down over 50%. But should we look at -- when you said second quarter should be higher than first quarter, should we look at -- if your largest customer who's 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 haven't -- 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 1, 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, what -- 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 of new business, is it -- 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 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 were -- 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. Yes. 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 January 1, 2026, all of the codes 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 4 to 6 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 the private insurances, all the Medicare, Medicaid, CMS, et cetera, all 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 27 to 31. 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 on 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 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 had been asking for, for the last 10 years, why can't you guys get more recurring revenue and not be so focused on the 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?

Yes. No, that makes a lot of sense. And then maybe just as best you can sort of try to, if you could time line it for us. I mean, as you build this pipeline of this recurring revenue and the fair lease agreement, Fair Deal Agreement, do you feel like 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?

Yes. 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 in 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 the 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 -- 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 consoles for radiation physics. This code is -- has to be applied to every patient and our introduction of Sensus 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. The only way that they can access that reimbursement is through Sensus Link. So that's an important piece of our business that we, quite frankly, didn't have before.

And when did Sensus Link officially go live?

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

[Operator Instructions] 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.

Good afternoon, and welcome to the Sensus Healthcare Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Tirth Patel with Alliance Advisors IR. Please go ahead.

Good afternoon. This is Tirth Patel with Alliance Advisors IR. Thank you all for joining today's call to discuss Sensus Healthcare's Fourth Quarter and Full year 2025 financial results.

Joining me from Sensus 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 meaning of federal securities laws. All statements other than historical facts that address activities Sensus 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 currently available information as of the date of this conference call, February 12, 2026. Sensus 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. Sensus 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, Tirth, and good afternoon, everyone. Thank you for joining us today. Let me start by providing some context around our end of year activities and the wonderful news received from CMS. SRT and IG-SRT are noninvasive technology that was exclusively designed, developed and distributed by Sensus Healthcare. Our SRT technology has been awarded exclusive and dedicated CPT codes that provide physicians unequivocal and clear reimbursement for treating patients with non-melanoma skin cancer. Let's be reminded that the American Academy of Dermatology states that 1 in 5 people in America will have skin cancer. After 16 years of relentless pursuit, these codes provide Sensus with a fresh start, a clear path forward for physicians and patients who continuously seek a noninvasive alternative to scarring and the lengthy healing times caused by surgery.

This demand for a nonsurgical choice is clearly becoming an increasingly popular choice of patients as they learn of their treatment options as the Medicare statistics have indicated over the past several years. We begin in 2026 with new codes, $22 million in cash on hand, 0 debt and a motivated sales force that we intend to expand during the course of Q1. As we continue to educate the physicians of these new reimbursement codes, we feel that adoption will grow steadily and continuously for years to come.

You will notice that the 14 units we shipped in the quarter did not include any sales to our very large customer. Although we believe they will continue to contribute to our business in the future, our growth will come from direct sales and shared services with the end users. We will no longer have to rely on any one entity. We also expect that our international business will continue to grow along with our primary U.S. market. For quite some time, 2 factors have weighed heavily on our business. customer concentration and the absence of reimbursement codes dedicated specifically to our technology. With CPT codes for our SRT and IG-SRT technology to treat non-melanoma skin cancer now being used and with a more diversified customer base emerging, both of these factors have been addressed.

Turning to our Fair Deal Agreement program. This continues to be an important strategic component of our business. We ended the year with 18 active FDA sites and 10 additional sites pending activation. More importantly, utilization across the program increased substantially year-over-year. During 2025, treatments were up more than eightfold versus 2024 and the number of patients treated increased by more than 250%. While the market was awaiting news from CMS regarding the codes, we responsibly advised our prospects and customers to place a hold on moving forward until the new codes were made public. All of our customers appreciated the honesty of us informing them of these developments. While the broader market was awaiting reimbursement clarity, in several cases, FDA placements have served as a bridge to ownership with customers electing to purchase systems outright once they did the math on purchase economics.

International demand was strong in the fourth quarter as we shipped 6 systems internationally, including shipments to China. International sales continues to be attractive from a margin perspective due to lower installation, commissioning and servicing requirements, and we expect international markets to remain an important part of our growth strategy. Looking ahead, we are encouraged by early activity in the first quarter of 2026.

Based on our current pipeline and customer engagement, we expect first quarter system shipments to exceed fourth quarter levels even without any contribution from our historically largest customer. More broadly, 2026 represents a fundamentally different operating environment for Sensus Healthcare. With reimbursement certainly now established, a more diversified customer base and expanding international opportunities, our objective is to achieve full year profitability in 2026.

With that, I'll turn the call over to Michael to discuss our strategic initiatives and commercial outlook in more detail. Michael?

Thanks, Joe. I'll focus on how our commercial model is evolving and how these changes position Sensus for sustained growth in 2026 and beyond. Reimbursement certainty and highly attractive economics have expanded adoption pathways for SRT. Small and midsized practices are increasingly evaluating outright purchases and fair market value leases driven by rapid breakeven, flexible financing structures and tax considerations. Customers now have multiple ways to adopt our technology, and we are able to support Fair Deal Agreements, ownership, renting or leasing depending on practice needs.

Internationally, momentum continues to build. In addition to ongoing demand in China, we expect more diversification due to the opportunity created by our MDSAP certification. International markets provide both growth and margin benefits and remain an important component of our long-term strategy. Taken together, these developments position Sensus to scale more efficiently with improved visibility, stronger economics and a broader set of monetization levers than at any point in the company's history.

From a commercial perspective, we are taking a deliberate and disciplined approach to scaling our sales organization in 2026. We have already added one new sales representative and plan to hire an additional 3 to 5 reps as soon as possible. This expansion is focused on increasing market education and accelerating lead conversions as customers work through the reimbursement framework and evaluate the most attractive acquisition model for their practices. In parallel, we have refined our trade show and conference strategy for 2026.

Compared to prior years, we are placing greater emphasis on select national and regional meetings that consistently generate high-quality leads and decision-maker engagement while reducing participation in lower-yield events. This more targeted approach allows us to concentrate resources on forums where purchasing decisions are actively being evaluated and where reimbursement clarity is now translating into actionable demand.

Overall, due to the new CMS codes, Sensus is able to make these adjustments that allow for a more focused and efficient commercial model that balances an expanded market presence with operational discipline and positions us to efficiently convert interest into system placements as the year progresses.

I'll now turn the call over to Javier for a review of our financial performance. Javier?

Thank you, Michael, and good afternoon, everyone. I will review our financial performance for the fourth quarter and full year ended December 31, 2025, starting with our fourth quarter results. Revenues for the fourth quarter of 2025 were $4.9 million compared with $3.1 million in the fourth quarter of 2024. The decrease was primarily driven by a lower number of units sold, reflecting reduced sales to our largest customer, slightly offset by revenue recognized from new placements under our Fair Deal Agreement program.

Cost of sales for the fourth quarter were $3 million compared to $6 million in the prior year quarter. The decrease was primarily related to a lower number of units sold, offset by higher cost of service and costs associated with placement under the FDA program. Gross profit for the fourth quarter was $1.9 million or 38.8% of revenues compared with $7.1 million or 54.2% of revenues in the fourth quarter of 2024. These decreases were primarily driven by lower sales, higher cost of servicing systems and costs associated with the new placement under the FDA program.

General and administrative expenses for the fourth quarter were $1.8 million compared with $2.4 million in the prior year quarter. The decrease was primarily due to lower professional fees and compensation costs. Selling and marketing expenses were $1.4 million for the fourth quarter, remaining consistent with the prior year quarter. Research and development expenses for the fourth quarter were $1.9 million compared with $1.6 million in the prior year quarter. The increase was primarily due to higher product development costs related to the next-generation systems.

Our income net was $0.2 million, remaining consistent with prior year quarter. Net loss for the fourth quarter of 2025 was $3.2 million or a loss of $0.19 per share compared with a net income of $1.5 million or $0.09 per diluted share for the fourth quarter of 2024. Adjusted EBITDA for the fourth quarter was negative $3 million compared with $1.9 million in the fourth quarter of 2024. The decline reflects the net loss in the current quarter compared to net income in the prior year period.

Turning to our full year results. Revenues for 2025 were $27.5 million compared with $41.8 million in 2024. The decrease was primarily driven by a lower number of units sold, reflecting reduced sales to our largest customer, slightly offset by revenue recognized from new placements under the FDA program. Cost of sales for the year were $15.6 million compared with $17.4 million in 2024. The decrease was primarily related to lower unit volumes, partially offset by higher cost of service and costs associated with the new placements under the FDA program.

Gross profit for 2025 was $11.9 million or 43.3% of revenues compared with $24.4 million or 58.4% of revenues in the prior year. The decrease were primarily driven by lower sales volumes, higher servicing costs and FDA program related expenses. General and administrative expenses for the year were $7.9 million compared with $7.1 million in 2024. The increase was primarily due to higher professional fees, insurance costs and compensation.

Selling and marketing expenses for 2025 were $6.5 million compared with $5 million in 2024. The increase was primarily driven by higher travel costs and increased payroll expenses associated with higher headcount. Research and development expenses for the year were $7.8 million compared with $4.2 million in 2024. The increase was primarily due to significant legal costs related to billing code reimbursement efforts in 2025 as well as increased headcount and higher product development costs related to the next-generation systems.

Other income net was $0.7 million for 2025 compared with $0.9 million in 2024 related primarily to interest income. The net loss for 2025 was $7.7 million or a loss of $0.47 per share compared with net income in 2024 of $6.6 million or $0.41 per diluted share. Adjusted EBITDA for 2025 was negative $9.6 million compared with $8.7 million in 2024. We ended the year with $22.1 million in cash and cash equivalents, unchanged from the year-end 2024 and no outstanding borrowings under our revolving line of credit.

We're delighted to have such a strong clean balance sheet as we enter 2026. Prepaid inventory was $1.5 million at year-end compared with $3.3 million at December 31, 2024. Inventories totaled $14.6 million compared with $10.1 million in the prior year, reflecting inventory build in support of anticipated future demand. And lastly, as Joe mentioned, we expect Q1 revenues to exceed Q4 revenues, and we look to be profitable for full year 2026.

With that, I'll turn the call back to Joe.

Thank you, Javier and Michael, for those updates. Before we open the call for questions, I want to reiterate that Sensus is entering 2026 with greater clarity, better control over our business, strong customer economics and more commercial flexibility than at any point in the company's history. 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 a noninvasive treatment option.

Combined with a more diversified customer base, our expanding international opportunities, we believe Sensus is well positioned to deliver stronger and more predictable growth and improved operating leverage. We appreciate your continued support, and we look forward to reporting our progress throughout 2026. Thank you for joining us today.

And now we'd be happy to take your questions. Operator?

[Operator Instructions] The first question comes from Anthony Vendetti with Maxim Group.

So I wanted to talk -- so obviously, this is a major positive news with the new schedule started 01/01/26, 300% per fraction increase. And you did ship 14, 8 in the U.S., 6 internationally, as you said, none to the largest customer. In your guidance of growth -- sequential growth in the first quarter revenue growth, does that assume nothing from the largest customer? And as you think about 2026, are you expecting any orders from them? Or should we look at any orders from the largest customer in any quarter in '26 as upside?

Thanks, Anthony. That's a good question. And as we put together our model for 2026 based on the new CPT codes, we made sure that we didn't include any expectations from our biggest customer because of the fact that they have to really reevaluate their model moving ahead. So we didn't know what they were going to do or how they were going to do it, but everything that we're going to be projecting for 2026 excludes them for the moment. And if there's anything that they can contribute will only make it better for us. So we're looking forward to 2026. We look forward to working with them in 2026, if that allows us, if the circumstances allow us to work together. But if not, we're very, very comfortable moving ahead with these CPT codes because it's a major, major impact for us.

Okay. And in terms of TDI, do you have any update on that? And where that's at? And do you expect to get FDA approval for that product sometime in '26?

Yes. TDI has been a long attenuous program for us, and we're working closely with the FDA and continuing to work through the situation that they seem to lack an understanding. And so I don't know when that's going to happen, but we're going to continue to pursue it wherever we possibly can and see what we might be able to come up with. But it's an interesting dilemma right now for the FDA, and we'll continue to pursue.

Okay. And then maybe on the international front, can you talk about the demand outlook internationally in any particular country that would be a positive in '26 or any concerns internationally in '26?

Yes. Great question, Anthony. I think I'll take that one. So obviously, China has been our bread and butter internationally for years. That still is the case. They're obviously the largest country outside of the United States to purchase something like this. In addition to that, I've seen firsthand Taiwan and how that's been growing. We have 4 or 5 installations there now over the last 2 years. Asia, in general, continues to adopt SRT technology. I know that South Korea is coming in. Japan eventually will trickle in with our MDSAP certification now. As soon as we get through all of the secondary regulatory hurdles from the MDSAP, you'll start to see SRT coming in. But I know that there's tons of demand from Asia due to the keloid market.

And additionally, we're holding out hopes for the Middle East as well. That's starting to trickle in and then India and then, of course, South America, Brazil, where we're still working right now on our regulatory, the secondary regulatory, and we expect to get Brazil clearance this year. So we're very excited to finally take a step into South America as well.

Okay. And yes, historically, obviously, Brazil is a pretty large market.

Yes.

The next question comes from Ben Haynor with Lake Street Capital Markets.

So just to start off for me, any more color you can kind of add to the reaction that folks have had to reimbursement in terms of what you think it does to system mix, SRT versus IG-SRT and then also kind of FDA versus sale versus other financing options.

Good question, Ben. I think that we're going to see a couple of tendencies shift here. Number one, the FDA still remains a priority for all of the private equity-backed roll-up groups because that's just the way they would prefer to do business. However, they still are contemplating how they want to get into the market, considering whether it's a Fair Deal Agreement, which is a shared service program or if they want to enter into some kind of a leasing program, which we will be able to provide them. Clearly, on the single customers, the customers that I would say are anywhere between 1 to 20 centers, the smaller centers, which is quite frankly, what we had not -- what our bigger customer was working with, we're seeing a much stronger influence regarding the actual purchase of the equipment or actually going to a lease.

With the reimbursements as they are and with the reimbursements guaranteed as they are, they don't -- they're not in the tendency of wanting to share revenue. They want it all. And I don't blame them, especially the bigger users, they're going to want to keep all the money and be more reluctant to split the volumes with anybody.

Okay. And then when it comes to the product mix, the product mix, because there is -- we still have an opportunity on the ultrasound side, even though there's only one code that reimburses for the ultrasound, but we see more of a tendency to work with the SRT-100 product and the customer acquiring a handheld ultrasound device to give them the one code that they're going to have reimbursement for. So it's a cost saving for the customer overall. And quite frankly, it's much better margin for us as well.

Okay. Got it. And then just any change to the level of interest that you've seen from the private equity-backed groups just given the more certainty for reimbursement going forward?

We've talked to pretty much all of them, and they're very seriously reevaluating how they want to acquire it. And we're seeing more interest in some of the other groups that weren't necessarily involved in looking at the device or skin cancer. But now it's hard to say. But quite frankly, on average, the reimbursement that we're getting from the CPT codes that we've been given actually pays more than those certainly.

Yes. Demand across the board -- just to add color to Joe, the demand across the board is more clear. People have, in general, in the past with gray area type codes have always been on the fence or not and then they wait and they wait. Now it's black and white coding. It's just -- it's a much easier environment to work with black and white coding. And it's just a matter of us getting the loud speaker out there and getting that out there to make sure that everyone understands that going forward. And we haven't had enough time to do that yet. It just started January 1, 2026. And Q4, which we're announcing right now, obviously had the leftovers of how we were built in general with the old world. Now it's kind of like a brand-new company again, and we can push from there. We already have the inventory paid for and no debt.

Got it. And then on Sentinel 2.0, how is that coming along? And then remind me, is that something that you guys are going to keep for yourself with the FDA program or maybe leasing? Or does that get rolled out more broadly?

I think we're looking at a more broad rollout for it. And I think that we'll see these things rolling out in the near future. So it's exciting for us. It's coming out at the right time. And so you'll hear more about it in the future.

Got it. And then lastly on service revenue. How do you see that this year? I know that, obviously, the former largest customer has quite a few units out there that will need service at some point. What's the right way to kind of think about that line?

So service revenue still is like 10% of the total revenue for the company.

So no change there kind of past?

No, no, no change.

Those are all the questions we have for today. I would like to turn the conference back over to Joe Sardano for any closing remarks.

Well, I'd like to thank everyone for joining us today, and we look forward to updating you on our progress in the quarters ahead. If you have additional questions following today's call, please feel free to reach out to our Investor Relations team. Thank you again for your time and continued support of Sensus Healthcare.

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

Good day, and welcome to the Sensus Healthcare Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Tirth Patel with Alliance Advisors IR. Please go ahead.

Good afternoon. This is Tirth Patel with Alliance Advisors IR. Thank you all for joining today's call to discuss Sensus Healthcare's third quarter 2025 financial results. Joining me from Sensus are Joe Sardano, Chairman and Chief Executive Officer; Michael Sardano, 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 Sensus Healthcare 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. Sensus 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. Sensus 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, Tirth, 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 nonmelanoma, skin cancer and keloids. Not only do these codes validate SRT for this indication while providing reimbursement certainty, but they also represent an increase in SRT delivery codes 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 coding 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 his 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 3 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. Michael?

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 nonsurgical 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 in 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 Sensus' 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. Sensus 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 road map designed to introduce additional analytics, reporting capabilities, and customer-facing tools. This multiphase 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 3 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, Sensus will be exhibiting at its first trade show in Japan, JASTRO, the largest radiation oncology conference in the country, in 2 weeks, and 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. Javi?

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 offset by revenue recognized from the new placement program under the Fair 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 costs of servicing system, and the costs 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 research and 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 diluted share for the third quarter of 2024. Adjusted EBITDA for the third quarter of 2025 was negative $2.4 million compared with $1.6 million in the year ago period. Please see the tables in today's news release for a reconciliation of GAAP to non-GAAP financial measures.

Turning now to our year-to-date results. Revenues for the first 9 months of 2025 were $22.5 million compared with $28.7 million for the first 9 months of 2024. The number of units sold in the first 9 months of 2025 was 56, compared to 76 in the prior year period. The decrease in revenue was primarily driven by a lower number of units sold to a large customer, slightly offset by revenue recognized from the new placement program under the Fair Deal Agreement in 2025. Cost of sales for the first 9 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 revenue for the first 9 months of 2024. These declines are largely due to a lower number of SRT systems sold in 2025 period and higher cost of servicing system and the costs associated with the Fair Deal Agreement program.

General and administrative expense for the first 9 months of 2025 was $6.1 million compared with $4.7 million for the first 9 months of 2024, with the increase primarily due to higher professional fees and insurance costs. Selling and marketing expense for the first 9 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. Research and development expense for the first 9 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 lobbying 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 9 months ended September 30, 2025, was $0.5 million compared to $0.7 million for the same period in 2024 and relates to primarily interest income. For the first 9 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 prior year period. The prior year period net income was $5.1 million, or $0.31 per diluted 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 continue 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. Joe?

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 Sensus Board member, Mr. Bill McCall. Bill was an extraordinary leader and a wonderful person, and his insights were foundational to Sensus. 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 Sensus 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 noninvasive 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.

[Operator Instructions] Our first question comes from Anthony Vendetti of Maxim Group.

So just 2 questions. One is on the LCD reimbursement for ultrasound guided on your ultrasound-guided SRT system. What has been the impact on that, if any, this quarter? And what's your update on what you think will be the impact? Any change to that? And then just in terms of -- I know you gave the system sales, but any utilization trend metrics that you can provide for this quarter?

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.

Yes. Just to add some color on that. Again, I differentiate between SRT and IG-SRT. 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 billed an SRT code for the delivery code, you'd get $125 per fraction, whereas the dermatologists 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 SRT-100 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 a delivery code standpoint get a massive, massive increase, one that we've never seen before in my days in health care of 15 years. Does that make sense?

And then just on the utilization trends, any metrics you can provide that would be great.

As Javi indicated, we've seen 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. 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 could see in terms of your pipeline or business activity?

We all know, and 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. 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 online to either hit breakeven or [ preprofitable ] 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 -- sales force nationally for going to these 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 not told everyone and sold them all these IG-SRT 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.

The next question comes from Ben Haynor of Lake Street Capital Markets.

Just on the reimbursement codes. It sounds to me based upon your commentary that there may be some shift between the SRT-100 -- [ based on SRT-100 ] Visions in terms of what goes out there with these shared services agreements with the FDA and it 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 -- the Vision product decrease, I think we're going to see an uptick in the SRT-100. 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 -- 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 SRT-100, which will literally give the SRT-100 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 [ is now 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 1 when they see how deep and what it looks like under the water, kind of like the iceberg effect with the Titanic, right? Well, 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 of weeks after, they can see that it's gone. There is very big value in that clinically.

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 is going to say, "Yes, 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 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.

And then just for clarity's sake, the LCD is basically completely nonoperative at this point.

We believe so. I mean, I can't definitively say that. But what it was, was 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 a 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.

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

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

I went English on that one, I know.

And then just 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 pending? I know there's unique circumstances here recently, but do those 11 get -- go live during Q4? Or 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.

[Operator Instructions] Our next question comes from Yi Chen of H.C. Wainwright.

This is Eduardo on for Yi. Just on the topic of CPT code, the reimbursement, I'm curious are you anticipating how that might impact deal flow and utilization, specifically whether you're going to see increased utilization in existing sites or increased accounts. You mentioned those 11 pending sites. I imagine there are going to be 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 SRT-100 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 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, 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.

And a question on the international sales. What you anticipate the ramp to be there? And how should we model margins for those sales?

Yes, great question. This is Michael. So with the MDSAP certification we announced earlier this year, that gets us automatically into 5 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 2 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 the new -- with everything with MDSAP, this is going to -- from a distributor standpoint, once we get those locked in, I think that, that was the 6-to 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 base 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 2 Visions now, and there is some demand in Asia for the SRT-100 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 SRT-100 was for the last 6, 7 years.

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 Sensus Healthcare. We appreciate your support, and we look forward to speaking with you again in a little more than 3 months when we report our Q4 financial results. Have a nice evening. Thank you.

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