Q2 2024 Sensus Healthcare Inc Earnings Call and Bussiness Update

Speaker Change: Good day and welcome to the Sensus Health Care Second Quarter 2024 Financial Results Conference Call.

Operator: 24 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad.

Speaker Change: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad.

Operator: After to these presentations, there will be an opportunity to ask questions. To ask a question, you must press star, then one on your telephone keypad. To withdraw your question, please press star, then two.

Speaker Change: 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 question, please press star, then 2. Please note this event is being recorded.

Operator: Please note this event is being recorded.

Kim Golodetz: I would now like to turn the conference over to Kim Golodetz for opening remarks. Please go ahead.

Operator: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad. 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 question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Kim Golodetz for her opening remarks. Please go ahead.

Speaker Change: I would now like to turn the conference over to Kim Golodetz for opening remarks. Please go ahead.

Kim Golodetz: Thank you.

Kim Golodetz: Thank you. This is Kim Golodetz with LHA.

Kim Golodetz: This is Kim Golodetz with LHA. Thank you all for participating in today's call.

Speaker Change: Thank you. This is Kim Golodetz with LHA. Thank you all for participating in today's call.

Kim Golodetz: Joining me from Census Healthcare are Joseph 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 these 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 on currently available information as of the date of this conference call, August 8, 2024.

Kim Golodetz: Thank you all for participating in today's call. Joining me from Sensus Health Care 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. For example, all statements other than historical facts that address the Sensus Hlthcr assumes, plans, expects, believes, intends, or anticipates, and other similar expressions, will, should, or may occur in the future.

Speaker Change: Joining me from Sensus Hlthcr are Joe Sardano, Chairman and Chief Executive Officer, Michael Sardano, President and General Counsel, and Javier Rampolla, Chief Financial Officer.

Speaker Change: 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.

Speaker Change: All statements other than historical facts that address the Sensus Hlthcr assumes, plans, expects, believes, intends or anticipates, and other similar expressions, will, should, or may occur in the future, are forward-looking statements.

Kim Golodetz: The forward-looking statements are management's beliefs based on currently available information as of the date of this conference call, August 8, 2024. 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 and 10-Q. During today's call, references will be made to certain non-GAAP financial measures. Census believes these measures provide useful information for investors, yet they should not be considered as a substitute for GAAP, nor should they be viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non-gap-to-gap results is included in today's financial results press release.

Speaker Change: The forward-looking statements are management's beliefs based on currently available information as of the date of this conference call, August 8, 2024.

Kim Golodetz: Census Healthcare undertakes no obligation to revise or update any looking, 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 and 10-Q.

Speaker Change: Sensus Hlthcr 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 and 10-Q.

Kim Golodetz: During today's call, references will be made to certain non-GAAP financial measures. Census beliefs 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 press release.

Speaker Change: During today's call, references will be made to certain non-GAAP financial measures. Census believes these measures provide useful information for investors, yet they should not be considered as a substitute for GAAP, nor should they be viewed as a substitute for operating results determined in accordance with GAAP.

Speaker Change: A reconciliation of non-GAAP-to-GAAP results is included in today's financial results press release.

Kim Golodetz: With that said, I'd like to turn the call over to Joe Sardano. Joe?

Kim Golodetz: With that said, I'd like to turn the call over to Joe Sardano. Okay?

Joseph Sardano: Thank you, Kim, and good afternoon, everyone. Our sales momentum continued in the second quarter of 2024 with very strong year-over-year revenue growth along with positive net income and positive adjusted EBITDA. We continue to drive sales as our customers appear to have adjusted to the current macroeconomic environment. We shipped 23 systems during the quarter, with three going to international markets. This compares with 13 systems shipped a year ago to a quarter.

Joseph Sardano: Thank you, Kim, and good afternoon, everyone. Our sales momentum continued in the second quarter of 2024 with very strong year-over-year revenue growth, along with positive net income and positive adjusted EBITDA. We continue to drive sales as our customers appear to have adjusted to the current macroeconomic environment. We ship 23 systems during the quarter with three-going international markets. This compares with 13 systems shipped in the year ago at a quarter. We were pleased that many of the shipments were for our SRT vision systems with image-guided SRT, with a higher number of such systems sold to a very large customer.

Speaker Change: With that said, I'd like to turn the call over to Joe Sardano. Joe?

Joe Sardano: Thank you, Kim, and good afternoon, everyone. Our sales momentum continued in the second quarter of 2024 with very strong year-over-year revenue growth along with positive net income and positive adjusted EBITDA.

Speaker Change: We continue to drive sales as our customers appear to have adjusted to the current macroeconomic environment.

Speaker Change: We ship 23 systems during the quarter with three going international markets.

Joseph Sardano: We were pleased that many of the shipments were for our SRT vision systems with image-guided SRT, with a higher number of such systems sold to a very large customer. We appreciate the dedication of this customer in choosing a far more patient-friendly and equally efficacious option versus Mohs surgery. Our fair deal agreement, which reflects our new recurring revenue model, is off to a fantastic start. We launched this option in March at the American Academy of Dermatology annual meeting, and it augments our leasing programs as well as outright sales.

Speaker Change: This compares with 13 systems shipped in the year ago to a quarter. We were pleased that many of the shipments were for our SRT vision systems with image-guided SRT, with a higher number of such systems sold to a very large customer.

Joseph Sardano: We appreciate the dedication of this customer in choosing a far more patient-friendly and equally efficacious option versus most surgery.

Speaker Change: We appreciate the dedication of this customer in choosing a far more patient-friendly and equally efficacious option versus Mohs surgery.

Joseph Sardano: Our fair deal agreement, which reflects our new recurring revenue model, is off to a fantastic start. We launched this option in March at the American Academy of Dermatology Annual Meeting, and it augments our leasing programs as well as upright sales. As I speak with you today, we have 15 signed contracts under this program, and I wouldn't be surprised if the total number reaches up to 50 by the end of the year based on our current activity levels. Our fair deal agreement addresses customer needs to deploy capital to other areas of their businesses, especially under challenging macroeconomic conditions.

Speaker Change: Our fair deal agreement, which reflects our new recurring revenue model, is off to a fantastic start. We launched this option in March at the American Academy of Dermatology annual meeting, and it augments our leasing programs as well as outright sales.

Joseph Sardano: As I speak with you today, we have 15 signed contracts under this program, and I wouldn't be surprised if the total number reaches up to 50 by the end of the year, based on our current activity levels. Our fair deal agreement addresses customers' needs to deploy capital to other areas of their businesses, especially under challenging macroeconomic conditions. Given the growing utilization of SRT to treat non-melanoma skin cancer and keloids and the interest we've generated to date, we expect this option to contribute to our growth for years to come.

Speaker Change: As I speak with you today, we have 15 signed contracts under this program, and I wouldn't be surprised if the total number reaches up to 50 by the end of the year based on our current activity levels.

Speaker Change: Our Fair Deal Agreement addresses customer needs to deploy capital to other areas of their businesses, especially under challenging macroeconomic conditions.

Joseph Sardano: Given the growing utilization of SRT to treat non-melanoma skin cancer and keloids, and the interest we've generated to date, we expect this option to contribute to our growth for years to come. All these agreements will begin to provide recurring revenues to Census beginning in 2025 with significant volumes projected for the second half.

Speaker Change: Given the growing utilization of SRT to treat non-melanoma skin cancer and keloids, and the interest we've generated to date, we expect this option to contribute to our growth for years to come.

Joseph Sardano: All these agreements will begin to provide recurring revenues to Census beginning in 2025, with significant volumes projected for the second half. During the second quarter, I was honored to be asked to join the Industry Advisory Council of the American Society of Dermatologic Surgery. In that role, I participated in a small but select seminar with important KOLs.

Speaker Change: All these agreements will begin to provide recurring revenues to Census beginning in 2025 with significant volumes projected for the second half.

Joseph Sardano: During the second quarter, I was honored to be asked to join the Industry Advisory Council of the American Society of Dermatologic Surgery. In that role, I participated in a small but select seminar with important KOLs. At the event, there was keen interest in our Fair Deal program, and we generated a number of leads. That responds, along with the signed agreements to date, underscores my optimism about our prospects.

Speaker Change: During the second quarter, I was honored to be asked to join the Industry Advisory Council of the American Society of Dermatologic Surgery. In that role, I participated in a small but select seminar with important KOLs.

Joseph Sardano: At the event, there was keen interest in our fair deal program, and we generated a number of leads. That response, along with the signed agreements to date, underscores my optimism about our prospects. Turning now to Transdermal Infusion, or TDI, recall that we filed our 510K application with the U.S. FDA in the fourth quarter of 2023. However, response times have been impacted from the agency due to the overwhelming number of submissions by the healthcare industry since COVID.

Speaker Change: At the event, there was keen interest in our fair deal program, and we generated a number of leads.

Speaker Change: That response, along with the signed agreement to date, underscores my optimism about our prospects.

Joseph Sardano: Turning now to TransDermal Infusion or TDI, we call that we filed our 510(k) application with the US FDA in the fourth quarter of 2023. The response times have been impacted from the agency due to overwhelming number of submissions by the healthcare industry since COVID. Our engineers have continued to develop this product with feedback from our KOLs and the many pharma companies interested in this technology. As a result, we've decided to add many new features, which were considered to be faced to development, to the current product. Therefore, we will resubmit our application with a more robust, features-rich technology.

Speaker Change: Turning now to Transdermal Infusion or TDI, recall that we filed our 510k application with the US FDA in the fourth quarter of 2023.

Speaker Change: The response times have been impacted from the agency due to overwhelming number of submissions by the healthcare industry since COVID.

Joseph Sardano: Our engineers have continued to develop this product with feedback from our KOLs and the many pharma companies interested in this technology. As a result, we've decided to add these many new features, which were considered to be phase two development to the current product. Therefore, we will resubmit our application with a more robust, feature-rich technology. We feel that we will submit this application in Q3. It's pretty much past the bottleneck period at the FDA. With those remarks, I'll turn the call over to Michael Sardano for a brief update on our international business. Michael.

Speaker Change: Our engineers have continued to develop this product with feedback from our KOLs and the many pharma companies interested in this technology.

Speaker Change: As a result, we've decided to add these many new features, which were considered to be phase two development to the current product.

Speaker Change: Therefore, we will resubmit our application with a more robust, features-rich technology.

Joseph Sardano: We feel that we will submit this application in Q3, which is pretty much past the peak bottleneck period at the FDA.

Speaker Change: We feel that we will submit this application in Q3.

Michael Sardano: With those remarks, I'll turn the call over to Michael Sardano for a brief update on our international business. Thanks, Joe.

Michael Sardano: Thanks, Joe. As I stated in our last call, over the past couple of years, we have been pushing to open up new international territory. During that span, we have opened with sales to Ireland, Guatemala, and Turkey, and now I am proud to announce that Sensus has sold the first ever image-guided SRT100 vision system into Asia at Far Eastern Memorial Hospital in Taipei, Taiwan. Far Eastern is one of the largest private hospitals in the region, and we are optimistic this sale will lead to future sales of Sensus' image-guided SRT100 vision system into the Asian market.

Speaker Change: which is pretty much past the peak bottleneck period at the FDA.

Speaker Change: With those remarks, I'll turn the call over to Michael Sardano for a brief update on our international business. Michael. Thanks, Joe. As I stated in our last call, over the past couple of years, we have been pushing to open up new international territories.

Michael Sardano: As I stated in our last call, over the past couple of years, we have been pushing to open up new international territories. During that span, we have opened with sales to Ireland, Guatemala, and Turkey. Now I am proud to announce that Census has sold the first ever image-guided SRT-100 vision system into Asia, as far Eastern Memorial Hospital in Taipei, Taiwan. Far Eastern is one of the largest private hospitals in the region, and we are optimistic this sale will lead to future sales of Census's image-guided SRT-100 vision system into the Asian market. I had the privilege of visiting with our distributor and physician customers as far eastern in Taipei in June, and they are very proud to be offering their patients with the best technology possible to treat skin cancer and keloids.

Michael Sardano: During that span, we have opened with sales to Ireland, Guatemala, and Turkey, and now I am proud to announce that Sensus has sold the first ever image-guided SRT100 vision system into Asia at Far Eastern Memorial Hospital in Taipei, Taiwan.

Speaker Change: Far Eastern is one of the largest private hospitals in the region, and we are optimistic this sale will lead to future sales of Census' image-guided SRT100 vision system into the Asian market.

Michael Sardano: I had the privilege of visiting with our distributor and physician customers at Far Eastern in Taipei in June, and they are very proud to be offering their patients the best technology possible to treat skin cancer and keloids. We are also thrilled that Far Eastern is planning to conduct research on new indications utilizing the vision in addition to publishing their patient data and cure rates for skin cancer and keloids. We also shipped another two SRT-100 systems to China, as they continue to be our largest market outside of the United States.

Speaker Change: I had the privilege of visiting with our distributor and physician customers at Far Eastern in Taipei in June , and they are very proud to be offering their patients with the best technology possible to treat skin cancer and keloids.

Michael Sardano: We are also thrilled that Far Eastern is planning to conduct research on new indications utilizing the vision in addition to publishing their patient data and cure rates with skin cancer and keloids. We also shipped another two SRT-100 systems to China, as they continue to be our largest market outside of the United States. While in Asia, I also visited with distributors in South Korea and Japan as we continue our work to expand the international markets. Our goal remains to open two to three new territories per year, which we achieved over the past two years.

Speaker Change: We are also thrilled that Far Eastern is planning to conduct research on new indications utilizing the vision in addition to publishing their patient data and cure rates with skin cancer and keloids.

Speaker Change: We also shipped another two SRT100 systems to China as they continue to be our largest market outside of the United States.

Michael Sardano: While in Asia, I also visited with distributors in South Korea and Japan as we continue our work to expand the international market. Our goal remains to open two to three new territories per year, which we have achieved over the past two years. With that, I'll turn the call over to our CFO, Javier Rampolla, for a discussion of our financial results.

Speaker Change: While in Asia, I also visited with distributors in South Korea and Japan as we continue our work to expand the international markets.

Javier Rampolla: Our goal remains to open two to three new territories per year, which we achieved over the past two years. With that, I'll turn the call over to our CFO , Javier Rampolla, for a discussion of our financial results.

Javier Rampolla: Thank you, Michael, and good afternoon, everyone. Revenues for the second quarter of 2024 more than doubled to $9.2 million, up 104% from $4.5 million in the second quarter of 2023, as we achieved 23 SRT units versus 13 a year ago. The increase was primarily driven by a higher number of SRP systems sold to a large customer. Gross profit for the second quarter of 2024 was $5.4 million, or 58.7% of revenues, compared with $2.6 million or 57.9% of revenues for the second quarter of 2023.

Javier Rampolla: Thank you, Michael, and good afternoon, everyone.

Michael Sardano: In 2004, more than double to 9.2 million of 104% from 4.5 million is the second quarter of 2023, as we achieved 23 SRT units versus 13 a year ago. The increase was primarily driven by a higher number of SRT systems sold to a large customer.

Speaker Change: Revenues for the second quarter of 2024 more than doubled to $9.2 million, up 104% from $4.5 million in the second quarter of 2023, as we achieved 23 SRT units versus 13 a year ago.

Speaker Change: The increase was primarily driven by a higher number of SRP systems sold to a large customer.

Michael Sardano: Rose profit for the second quarter of 2024 was 5.4 million, or 58.7% of revenues, compared with 2.6 million, or 57.9% of revenue for the second quarter of 2023. The increase was primarily due to the higher number of units sold in the 2024 quarter.

Speaker Change: rose profit for the second quarter of 2024 was 5.4 million or 58.7% of revenues compared with 2.6 million or 57.9% of revenue for the second quarter of 2023.

Javier Rampolla: The increase was primarily due to the higher number of units sold in the 2024 quarter. Selling and marketing expense for the second quarter of 2024 was $1,000,000 compared with $1,600,000 for the second quarter of 2023. The decrease was primarily attributable to a decline in marketing agency expense, lower headcount, and a decrease in actuarial costs.

Speaker Change: The increase was primarily due to the higher number of units sold in the 2024 quarter.

Michael Sardano: Selling a market and expense for the second quarter of 2024 was 1 million compared with 1.6 million for the second quarter of 2020. The decrease was primarily attributable to a decline in marketing agency expand, lower headcount, and an increase in industrial cost.

Speaker Change: Selling and marketing expense for the second quarter of 2024 was $1 million, compared with $1.6 million for the second quarter of 2023.

Speaker Change: The decrease was primarily a three-foot-a-volt to a decline in marketing agents in X-Fan. Lower head count on a decrease in a traditional cost.

Michael Sardano: As I mentioned during our conference call this past May, this year we shifted our focus to emphasize products and self-options versus hosting key opinion leader's events. General analyst of the expense for the second quarter of 2024 was 1.6 million compared with 1.3 million a year ago. The increase was primarily due to higher professional pre-centre compensation. Research on development expense for the second quarter of 2024 was 1.9 million compared with 1.8 million in the same quarter of last year. The increase was primarily due to expenses related to a project to develop a drug delivery system for aesthetic use.

Javier Rampolla: As I mentioned during our conference call this past May, this year we shifted our focus to emphasize products and sales options versus hosting key opinion leader events. General and administrative expense for the second quarter of 2024 was $1.6 million compared with $1.3 million a year ago. The increase was primarily due to higher professional fees and compensation. Research and Development Expense for the second quarter of 2024 was $0.9 million, compared with $0.8 million in the same quarter last year. The increase was primarily due to expenses related to a project to develop a drug delivery system for aesthetic use.

Speaker Change: As I mentioned during our conference call this past May, this year we shifted our focus to emphasize product and sales options versus hosting key opinion leaders events.

Speaker Change: General and administrative expense for the second quarter of 2024 was $1.6 million compared with $1.3 million a year ago. The increase was primarily due to higher professional fees and compensation.

Speaker Change: Research and development expense for the second quarter of 2024 was $0.9 million compared with $0.8 million in the same quarter last year. The increase was primarily due to expenses related to a project to develop a drug delivery system for aesthetic use.

Michael Sardano: Other income of 22 million for the second quarter of 2024 was mostly related to interest income and was unchanged from the prior year.

Javier Rampolla: Other income of $0.2 million for the second quarter of 2024 was mostly related to interest income and was unchanged from the prior year. Net income for the second quarter of 2024 was $1.6 million, or $0.10 per dollar share, and this compares with a net loss of $0.4 million, or $0.02 per share, for the second quarter of 2023. Adjusted EBITDA, which we define as earnings before interest, taxes, depreciation, amortization, and stock compensation expense, was $2.1 million for the second quarter of 2024, compared with negative $1 million for the second quarter of 2023.

Speaker Change: Other income of $0.2 million for the second quarter of 2024 was mostly related to interest income and was unchanged from the prior year.

Michael Sardano: Net income for the second quarter of 2024 was 1.6 million for 10 cents per dollar a share, and this compares with a net loss of 0.4 million or 2 cents per share for the second quarter of 2020.

Speaker Change: Net income for the second quarter of 2024 was $1.6 million or $0.10 per dollar share, and this compares with a net loss of $0.4 million or $0.02 per share for the second quarter of 2023.

Michael Sardano: I just have to give it up, which we defined as earnings before infinite taxes, depreciation, and more decision, and start compensation expense was 2.1 million for the second quarter of 2024, compared with negative 1 million for the second quarter of 2023.

Speaker Change: I just said Evidad, which we defined as earnings before Internet. That's the appreciation I'm of decision, I'll start conversation at Spend, was 2.1 million for the second quarter of 2024, conferred with negative 1 million for the second quarter of 2023.

Michael Sardano: Turning down to financial results for the first half of 2024. Revenues for the first half of 2024 were 20 million compared with 8 million for the first half of 2023. The increase was primarily driven by a higher number of units sold to a large customer. The cost of sale was 7.8 million for the first half of 2024, compared with 3.7 million for the first half of 2023. The increase was primarily related to higher sales in the 2024 period. The first profit was 1.1 million or 60.7% of revenue, compared with 4.2 million or 53.4% of revenue for the first half of 2023.

Javier Rampolla: Turning now to our financial results for the first half of 2024. Revenues for the first half of 2024 were $20 million compared with $8 million for the first half of 2023, an increase of $12 million, or 152%. The increase was primarily driven by a higher number of units sold to a large customer.

Speaker Change: Turning now to our financial results for the first half of 2024.

Speaker Change: Revenues for the first half of 2024 were $20 million, compared with $8 million for the first half of 2023, an increase of $12 million, or 152%.

Javier Rampolla: Total sales were $7.8 million for the first half of 2024 compared with $3.7 million for the first half of 2023. The increase was primarily related to higher sales in the 2024 period. Gross profit was $12.1 million, or 60.7% of revenue, compared with $4.2 million, or 53.4% of revenue, for the first half of 2023. The increase was primarily driven by a higher number of units sold in the 2024 period. We expect gross margin to be at the 16% level for the remainder of the year.

Speaker Change: The increase was primarily driven by a higher number of units sold to a large customer.

Speaker Change: Total sales was $7.8 million for the first half of 2024, compared with $3.7 million for the first half of 2023. The increase was primarily related to higher sales in the 2024 period.

Speaker Change: First profit was 1.1 million or 6.7% of revenue compared with 4.2 million or 6.4% of revenue for the first half of 2023.

Michael Sardano: The increase was primarily driven by a higher number of units sold in the 2024 period.

Speaker Change: The increase was primarily driven by a higher number of units sold in the 2024 period.

Michael Sardano: We expect more than to be in the 60% level for the remainder of the year. Telling and marketing expand was 2.3 million for the first half of 2024, compared with 3.7 million for the first half of 2023. The decrease was primarily available to a declining marketing agency to expand lower sales and decrease in threshold costs. General and an increase in expense was 3.2 million for the first half of 2024, compared with 2.7 million for the first half of 2023. The increase was primarily due to higher professional profit and compensation. This is on development expand was 1.8 million for the first half of 2024, compared with 1.9 million in the year with the prior year period.

Speaker Change: We expect us more than to be in the 60% level for the remainder of the year.

Javier Rampolla: Selling and marketing expense was $2.3 million for the first half of 2024 compared with $3.7 million for the first half of 2023. The decrease was primarily attributable to declining marketing agency expenses, lower headcount, and a decrease in threshold costs. General and Administrative Expense was $3.2 million for the first half of 2024, compared with $2.7 million for the first half of 2023. The increase was primarily due to higher professional fees and compensation.

Speaker Change: Selling and marketing expense was $2.3 million for the first half of 2024, compared with $3.7 million for the first half of 2023. The decrease was primarily attributable to a decline in marketing agency expense, lower headcount, and a decrease in threshold costs.

Speaker Change: General and Anadix Gervin's experience was 3-1-2 million for the first half of the document 24. Go on board with 2-1-7 million for the first half of the document 24.

Javier Rampolla: Reach on development expenditure was $1.8 million for the first half of 2024, compared with $1.9 million in the prior year period. The decrease was primarily due to expenses related to a project to develop a drug delivery system for a study group.

Speaker Change: The increase was primarily due to higher professional grief and compensation.

Speaker Change: Reaches on development expense was $1.8 million for the first half of 2024, compared with $1.9 million in the prior year period.

Michael Sardano: The decrease was primarily due to expand related to a project to develop a drug deliverance system for study groups. Already income of 1.4 million and 1.5 million for the first half of 2024 and 23, respectively, relates primarily to interest income. Many income for the first half of 2024 was 3.9 million or 24 cents for double the share, compared with a net loss of 2.3 million or a loss of 14 cents per share for the first half of 2023. I just said either after the first half of 2024 was 5.1 million, compared with negative 3.7 million for the first half of 2023.

Speaker Change: The decrease was primarily due to expenses related to a project to develop a drug delivery system for aesthetic use.

Javier Rampolla: Other income of $4.4 million and $4.5 million for the first half of 2024 and 2023, respectively, relates primarily to interest income. May revenue for the first half of 2024 was $3.9 million or $0.24 per diluted share, compared with a net loss of $2.3 million or a loss of $0.14 per share for the first half of 2023. Adjusted EBITDA for the first half of 2024 was $5.1 million compared with $3.7 million for the first half of 2023. Now, turning now to Obamacare.

Speaker Change: Other income of $4.4 million and $4.5 million for the first half of 2024 and 2023 respectively relates primarily to interest income.

Speaker Change: May income for the first half of 2024 was $3.9 million or $0.24 per dollar a share, compared with a net loss of $2.3 million or a loss of $0.14 per share for the first half of 2023.

Speaker Change: Adjusted EBITDA for the first half of 2024 was $5.1 million compared with negative $3.7 million for the first half of 2023.

Michael Sardano: Turning now to our balance sheet. Cash and cash equivalents were 19 million after June 30, 2024, compared with way 3.1 million after December 31, 2023. And we had no outstanding borrowings under our revolving credit line. Accounts receivable was 18.2 million after June 30, 2024, compared with 10.6 million after December 31, 2023. At this time, approximately 8 million of those receivables have been collected. For the past seven quarters, we have been building inventory in anticipation of growing unit placements. As a result, we pay inventory worth 3.3 million compared with 3 million, and inventory's worth 12.8 million compared with 11.9 million after December 31, 2021.

Joseph Sardano: Cash and cash equivalents were $19 million after June 30, 2024 compared with $23.1 million after December 31, 2023, and we had no outstanding borrowings under our revolving credit line. Accounts receivable was $18.3 million as of June 30, 2024, compared with $10.6 million as of December 31, 2023. At this time, approximately $8 million of those receivables have been collected. For the past several quarters, we have been building inventory in anticipation of growing unit placement.

Speaker Change: Dirty Nose, what we're about to do.

Speaker Change: Cash and cash equivalents were $19 million after June 30, 2024, compared with $23.1 million after December 31, 2023, and we had no outstanding borrowings under our revolving credit line.

Operator: 24 Financial Results Conference Call All participants will be in listen only mode. Should you need assistance please signal a conference specialist by pressing the star key followed by zero on your telephone keypad.

Speaker Change: At Countries Cvoval was 18.3 million out of June 30, 2024, compared with the 16 million out of December 31, 2013. At this time, approximately 8 million of those receivables have been collected.

Speaker Change: For the past several quarters, we have been building inventory in anticipation of growing unit placements.

Operator: After to these presentations there will be an opportunity to ask questions. To ask a question you must press star then one on your telephone keypad. To withdraw your question please press star then two.

Joseph Sardano: As a result, prepaid inventory was $3.3 million, compared with $3 million, and inventories were $12.8 million, compared with $11.9 million as of December 31, 2023. Our cash spend continues to be very focused and highly disciplined. We maintain a strong balance sheet to position us to take advantage of the growth opportunities we may come across or create. And as a final comment, please see the table in the news release we issued earlier today for our consideration of gaps and unguessed financial measures. With that, I'll turn the call back to Joe.

Speaker Change: As a result, prepaid inventory was $3.3 million compared with $3 million, and inventories were $12.8 million compared with $11.9 million as of December 31, 2023.

Michael Sardano: Our cash spend continues to be very focused and highly disciplined. We maintain a strong balance sheet of position to take advantage of the compelling growth opportunities we may come across or create.

Operator: Please note this event is being recorded.

Kim Golodetz: I would now like to turn the conference over to Kim Golodetz for opening remarks. Please go ahead. Thank you.

Speaker Change: Our cash spend continues to be very focused and highly disciplined. We maintain a strong balance sheet of positions offered to take advantage of the compelling growth opportunities we may come across or create.

Michael Sardano: In the final comment, we see the table in the news.

Kim Golodetz: This is Kim Golodetz with LHA. Thank you all for participating in today's call.

Michael Sardano: We need to be sure earlier today for our observation of gaps and on death by national measures.

Speaker Change: As a final comment, please see the table in the news release we issued earlier today for our consideration of gaps and untapped financial measures.

Joseph Sardano: With that, I'll turn the call back to Joe. Thanks, Michael and Javier. Our excitement for the future of Sensus Healthcare is supported by our financial results for the first half of the year. Our products offer excellent solutions for treating non-millonomous skin cancer and keyloids, and I applaud our talented staff for doing the hard work to get us to this point. We never rest on our roles, and with the state-of-the-art consistently upgraded technology, along with three different purchase options, we believe we have a compelling offering for all types of practices. SRT offers a patient-friendly alternative to most surgery with curates that are as good or better.

Kim Golodetz: Joining me from Census Healthcare are Joseph 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 these 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.

Joseph Sardano: Thanks Michael and Javier. Our excitement for the future of Sensus Hlthcr is supported by our financial results for the first half of the year. Our products offer excellent solutions for treating non-melanoma skin cancer and keloids, and I applaud our talented staff for doing the hard work to get us to this point. We never rest on our laurels, and with the state-of-the-art, consistently upgraded technology along with three different purchase options, we believe we have a compelling offering for all types of practices. SRT offers a patient-friendly alternative to Mohs surgery with cure rates that are as good or better.

Speaker Change: with that, also on the south-back to Javier.

Speaker Change: Thanks Michael and Javier. Our excitement for the future of Sensus Hlthcr is supported by our financial results for the first half of the year. Our products offer excellent solutions for treating non-melanoma skin cancer and keloids, and I applaud our talented staff for doing the hard work to get us to this point.

Speaker Change: We never rest on our laurels and with the state of the art consistently upgraded technology along with three different purchase options, we believe we have a compelling offering for all types of practices.

Kim Golodetz: The forward looking statements are management's beliefs based on currently available information as of the date of this conference call August 8, 2024. Census Healthcare undertakes no obligation to revise or update any looking, any forward looking statements except as required by law. All forward looking statements are subjects to risk and uncertainties as described in the company's forms 10K and 10Q. During today's call references will be made to certain non-gap financial measures. Census beliefs 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.

Speaker Change: SRT offers a patient-friendly alternative to Mohs surgery with cure rates that are as good or better.

Joseph Sardano: These cure rates have not gone unnoticed by hospital radiation oncology departments, and although this channel has a longer selling cycle, it continues to be an area of focus as interest and inquiries continue to increase. Our FDA-approved Fair Deal Agreement Program continues to draw attention. With 15 contracts already in-house since our introduction at the American Academy of Dermatology Conference this past March, our prospect base is growing, and we should have as many as 50 contracts by year-end. Although we are very tight on inventory, ensuring that we are able to meet the demands of all of our customers, we will have inventory delivered and available in Q4 to accommodate this demand.

Joseph Sardano: These curates have not gone unnoticed by hospital radiation oncology departments, and although this channel has a longer selling cycle, it continues to be an area of focus as interest and inquiries continue to increase. Our FDA or Fair Deal Agreement Program continues to draw attention. With 15 contracts already in-house since our introduction to the American Academy of Dermatology Conference this past March, our prospect base is growing. We should have as many as 50 contracts by year-end. Although we are very tight on inventory, ensuring that we are able to meet the demand of all of our customers, we will have inventory delivered and available in Q4 to accommodate this demand.

Speaker Change: These cure rates have not gone unnoticed by hospital radiation oncology departments, and although this channel has a longer selling cycle, it continues to be an area of focus as interest and inquiries continue to increase.

Speaker Change: Our FDA or Fair Deal Agreement Program continues to draw attention. With 15 contracts already in-house since our introduction at the American Academy of Dermatology Conference this past March, our prospect base is growing.

Kim Golodetz: A reconciliation of non-gap to GAP results is included in today's financial results press release.

Speaker Change: We should have as many as 50 contracts by year-end. Although we are very tight on inventory, ensuring that we are able to meet the demands of all of our customers, we will have inventory delivered and available in Q4 to accommodate this demand.

Joseph Sardano: This will ensure a significant volume at the beginning of 2025, encompassing an entire year of recurring revenues building up to significant revenues for the second half of 2025. Recall that our survey of six years of Medicare claims documented a 27% annual growth rate for SRT. As we continue to survey our customer base, we are seeing continued and consistent growth in this area. With this rate continuing, SRT will soon become the treatment of choice for non-melanoma skin cancer. Further, an estimated one in five Americans will develop skin cancer during their lifetime, representing some 70 million people.

Joseph Sardano: This will ensure a significant volume at the beginning of 2025, encompassing an entire year of recurring revenues, building up to significant revenues for the second half of 2025. Recall that our survey of six years of Medicare claims documented a 27% annual growth rate for SRT. As we continue to survey our customer base, we are seeing continued and consistent growth in this area. With this rate of growth, SRT will soon become the treatment of choice for non-melanoma skin cancer.

Joseph Sardano: With that said, I'd like to turn the call over to Joe Sardano. Joe?

Speaker Change: This will ensure significant volume at the beginning of 2025, encompassing an entire year of recurring revenues, building up to significant revenues for the second half of 2025.

Joseph Sardano: Thank you, Kim, and good afternoon, everyone. Our sales momentum continued in the second quarter of 2024 with very strong year-over-year revenue growth, along with positive net income and positive adjusted EBITDA. We continue to drive sales as our customers appear to have adjusted to the current macroeconomic environment. We ship 23 systems during the quarter with three-going international markets. This compares with 13 systems shipped in the year ago at a quarter. We were pleased that many of the shipments were for our SRT vision systems with image-guided SRT with a higher number of such systems sold to a very large customer. We appreciate the dedication of this customer in choosing a far more patient-friendly and equally efficacious option versus most surgery.

Speaker Change: We call that our survey of six years of Medicare claims documented a 27% annual growth rate for SRT. As we continue to survey our customer base, we are seeing continued and consistent growth in this area.

Speaker Change: With this rate continuing, SRT will soon become the treatment of choice for non-melanoma skin cancer.

Joseph Sardano: Furthermore, an estimated 1 in 5 Americans will develop skin cancer during their lifetime, representing some 70 million people. So whether Medicare or private insurance, we are in the early stages of tapping the enormous opportunity for SRT, chest and non-melanoma skin cancer, and keloids. With those comments, I thank you for your time and attention. And now, operator, we're ready to take questions.

Speaker Change: Further, an estimated 1 in 5 Americans will develop skin cancer during their lifetime, representing some 70 million people.

Joseph Sardano: So, whether Medicare or private insurance, we are in the early stages of tapping the enormous opportunity for SRT just in non-melanoma skin cancer and keelies.

Speaker Change: So, whether Medicare or private insurance, we are in the early stages of tapping the enormous opportunity for SRT, chest and non-melanoma skin cancer, and keloids.

Joseph Sardano: With those comments, I thank you for your time and attention, and now, operator, we're ready to take questions.

Joseph Sardano: Our fair deal agreement, which reflects our new recurring revenue model, is off to a fantastic start. We launched this option in March at the American Academy of Dermatology Annual Meeting, and it augments our leasing programs as well as upright sales. As I speak with you today, we have 15 signed contracts under this program and I wouldn't be surprised if the total number reaches up to 50 by the end of the year based on our current activity levels.

Speaker Change: With those comments, I thank you for your time and attention, and now, operator, we're ready to take questions.

Operator: 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 speaker phone, please pick up the handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up the handset before pressing the key. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Jason Wittes with Roth. Please go ahead.

Speaker Change: We will now begin the question and answer session.

Speaker Change: To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up the handset before pressing the keys.

Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then too. At this time, we will pause momentarily to assemble our roster.

Operator: At this time, we will pause momentarily to assemble our roster.

Joseph Sardano: Our fair deal agreement addresses customer needs to deploy capital to other areas of their businesses, especially under challenging macroeconomic conditions. Given the growing utilization of SRT to treat non-melonomous skin cancer and keloids and the interest we've generated to date, we expect this option to contribute to our growth for years to come. All these agreements will begin to provide recurring revenues to census beginning in 2025 with significant volumes projected for the second half.

Jason Wittes: The first question comes from Jason Wittest with Roth. Please go ahead. Hi, thanks for taking the questions, and congrats on a solid quarter here. Maybe some questions on, yeah, sure. So, on a fair deal agreement, it sounds like you're off to a pretty fast pace here. A couple of things.

Speaker Change: The first question comes from Jason Wittes with Roth. Please go ahead.

Jason Wittes: Hi, thanks for taking the questions and congrats on a solid quarter here. Maybe some questions on, yeah, so on the fair deal agreement. Sounds like you're off to a pretty fast pace here. A couple things. One, are these placements for Fair Deal going to be this year or fall into next year? And secondly, can you kind of characterize the type of customers that are buying into the program?

Jason Wittes: Hi thanks for taking the questions and congrats on a solid quarter here. Maybe some questions on, yeah sure, so on fair deal agreement

Joseph Sardano: One, when are these placements for Fair Deal going to be in this year or fall into next year, and secondly, can kind of characterize the type of customers that are buying into the program. Yeah, these are all going to be installed this year. Most of them will be installed in the fourth quarter due to inventory. So we're going to have most of these, or all of these accounts prepared to provide us with revenue starting from day one when you begin 2025 and a little earlier. So we should have a full year of about 50 units generating that revenue as we continue to add more to the base.

Jason Wittes: Sounds like you're off to a pretty fast pace here. A couple of things. Are these placements for Ferdial going to be in this year or fall into next year? And secondly, kind of characterize the type of customers that are buying into the program.

Joseph Sardano: During the second quarter, I was honored to be asked to join the Industry Advisory Council of the American Society of Dermatologic Surgery. In that role, I participated in a small but select seminar with important KOLs. At the event, there was keen interest in our fair deal program and we generated a number of leads. That responds along with the signed agreements to date, underscores my optimism about our prospects.

Joseph Sardano: These are all going to be installed this year, and most of them will be installed in the fourth quarter due to inventory.

Speaker Change: These are all going to be installed this year. Most of them will be installed in the fourth quarter due to inventory.

Jason Wittes: So we're going to have most of these or all of these accounts prepared to provide us with revenue.

Joseph Sardano: So we're going to have most of these or all of these accounts prepared to provide us with revenue starting from day one when you begin 2025 and a little earlier. So we should have a full year of about 50 units generating that revenue as we continue to add more to the base. The type of customer that is looking at this is a customer who wants to use their cash for other things within their practice, whether it's an additional office that they're opening up or additional equipment that they're opening up.

Speaker Change: Starting from day one when you begin in 2025 and a little earlier so we should have a full year of about 50 units generating that revenue as we continue to add more to the base.

Joseph Sardano: Turning now to TransDermal Infusion or TDI, we call that we filed our 510K application with the US FDA in the fourth quarter of 2023. The response times have been impacted from the agency due to overwhelming number of submissions by the healthcare industry since COVID. Our engineers have continued to develop this product with feedback from our KOLs and the many pharma companies interested in this technology. As a result, we've decided to add many new features which were considered to be faced to development to the current product. Therefore, we will resubmit our application with a more robust features rich technology. We feel that we will submit this application in Q3, which is pretty much past the peak bottleneck period at the FDA.

Joseph Sardano: The type of customer that is looking at this is a customer who wants to use their cash for other things within their practice, whether it's an additional office that they're opening up or additional equipment that they're opening up. It also helps out with the larger private equity back groups that want to use their cash for buying more clinics rather than buying medical devices. So we're seeing a big advantage in those areas, and the customers that I think are the onesies and twosies, they continue to buy and use our fair market value lease program. So we provide them now with this fair deal agreement along with the fair market value lease.

Speaker Change: The type of customer that is looking at this is a customer who wants to use their cash for other things within their practice, whether it's an additional office that they're opening up or additional equipment that they're opening up. It also helps out with the larger private equity-backed groups.

Joseph Sardano: It also helps out with the larger private equity-backed groups that want to use their cash for buying more clinics rather than buying medical devices. So we're seeing a big advantage in those areas. And the customers that I think are the onesies and the twosies, they continue to buy and use our fair market value lease program. So we provide them now with this fair deal agreement along with the fair market value lease. It's pretty much a great opportunity for them to take advantage of all of the opportunities they have from us in acquiring equipment. We're just giving them every option that they can to utilize SRT in their practice. For more information, visit www.fema.gov.

Jason Wittes: And can you remind us what the total number of agreements signed to date is, as of this quarter? Is it 15, or were there others? I think there were some last quarter as well.

Speaker Change: that want to use their cash for buying more clinics rather than buying medical devices.

Speaker Change: So we're seeing a big advantage in those areas.

Speaker Change: The customers that I think are the onesies and twosies, they continue to buy and use our fair market value lease program.

Speaker Change: So, we provide them now with this fair deal agreement along with the fair market value lease.

Joseph Sardano: It's pretty much a great opportunity for them to take advantage of all of the opportunities they have from us in acquiring equipment. We're just giving them every option that they can't utilize Sartee in their practice.

Michael Sardano: With those remarks, I'll turn the call over to Michael Sardano for a brief update on our international business. Thanks, Joe. As I stated in our last call over the past couple of years, we have been pushing to open up new international territories. During that span, we have opened with sales to Ireland, Guatemala, and Turkey.

Speaker Change: is pretty much a great opportunity for them to take advantage of all of the opportunities they have from us in acquiring equipment. We're just giving them every option that they can to utilize SRT in their practice.

Jason Wittes: Can you remind us what the total number of agreements signed to date are as of this quarter is at 15, or whether I think there were some last quarter as well? Yeah, but we have 15, keeping in mind that we've introduced this in March at the AAD. So when you look at it, it's pretty much since that time for now, which is very much the second quarter. So 15 units.

Speaker Change: and can you remind us what the total number of agreements signed to date are as of...

Joseph Sardano: We have 15, keeping in mind that we introduced this in March at the AAD, so when you look at it, it's pretty much since that time to now, which is very much the second quarter. So 15 units. And based on the prospect and activity levels that we have, we're anticipating up to 50 before the end of the year.

Michael Sardano: Now I am proud to announce that Census has sold the first ever image-guided SRT-100 vision system into Asia as far Eastern Memorial Hospital in Taipei, Taiwan. Far Eastern is one of the largest private hospitals in the region, and we are optimistic this sale will lead to future sales of Census's image-guided SRT-100 vision system into the Asian market. I had the privilege of visiting with our distributor and physician customers as far Eastern in Taipei in June, and they are very proud to be offering their patients with the best technology possible to treat skin cancer and kiloids.

Speaker Change: As of this quarter, is it 15 or were there, I think there were some last quarter as well.

Speaker Change: We have 15, keeping in mind that we've introduced this in March at the AAD, so when you look at it, it's pretty much since that time to now, which is very much the second quarter, so 15 units.

Joseph Sardano: And based on the prospect and activity levels that we have, we're anticipating up to 50 before the end of the year. And then you kind of alluded to this, but are you supply constraint this year because of all these orders, or is that some of you can make up in the fourth quarter? I think that we have had an ample supply to supply our customers up until now, and we placed an order for additional units, anticipating the activity levels that we're seeing now, with a lot of those units starting to be delivered towards the end of the third quarter and the start of the fourth quarter.

Speaker Change: And based on the prospect and activity levels that we have, we're anticipating up to 50 before the end of the year.

Joseph Sardano: And then you kind of alluded to this, but are you supply constrained this year because of all these orders, or is that something you can make up in the fourth quarter?

Speaker Change: And then you kind of alluded to this, but are you supply constrained this year because of all these orders or is that something you can make up in the fourth quarter?

Joseph Sardano: I think that we have had an adequate supply to supply our customers up until now, and we placed an order for additional units anticipating the activity levels that we're seeing now, with a lot of those units starting to be delivered towards the end of the third quarter and the start of the fourth quarter. So we anticipate being able to address all of the needs of all of our customers for this year when they give us an order, whether it's for an outright purchase, a lease, or a fair deal agreement.

Speaker Change: I think that we have had an ample supply to supply our customers.

Michael Sardano: We are also thrilled that far Eastern is planning to conduct research on new indications utilizing the vision in addition to publishing their patient data and cure rates with skin cancer and kiloids. We also shipped another two SRT-100 systems to China as they continue to be our largest market outside of the United States. While in Asia, I also visited with distributors in South Korea and Japan as we continue our work to expand the international markets.

Speaker Change: Up until now, and we placed an order for additional units anticipating the activity levels that we're seeing now, with a lot of those units starting to be delivered towards the end of the third quarter and the start of the fourth quarter. So we anticipate to be able to address all of the needs of all of our customers for this year when they give us an order, whether it's for an outright purchase, a lease, or the fair deal agreement. Thank you. Thank you. Thank you.

Joseph Sardano: So, you know, we anticipate to be able to address all of the needs of all of our customers for this year when they give us an order, whether it's for not right purchase, the lease, or the fair deal agreement.

Jason Wittes: Got it. Let me get one last question, and that is in terms of how we should think about modeling these fair deal agreements. Can you give us some parameters that we should be thinking about, especially going into next year?

Joseph Sardano: I'm going to ask one last question, and that is in terms of how we should think about modeling these fair deal agreements. Can you give us some parameters that we should be thinking about, especially going into next year? Well, I would think that, you know, as you look at it, you're going to see more and more customers wanting to go into this area where the fair deal agreement meets their needs. And the reason why we call it the third deal agreement is because it provides our customers with very reasonable terms and conditions that are amenable to add to their practice.

Michael Sardano: Our goal remains to open two to three new territories per year which we achieved over the past two years. In 2004, more than double to 9.2 million of 104% from 4.5 million is the second quarter of 2023, as we achieved 23 SRT units versus 13 a year ago. The increase was primarily driven by a higher number of SRT systems sold to a large customer. Rose profit for the second quarter of 2024 was 5.4 million or 58.7% of revenues compared with 2.6 million or 57.9% of revenue for the second quarter of 2023.

Speaker Change: Got it. Maybe one last question and that is in terms of how we should think about modeling these fair deal agreements.

Speaker Change: Can you give us some parameters that we should be thinking about, especially going into next year?

Joseph Sardano: Well, I would think that, as you look at it, you're going to see more and more customers wanting to go into this area where the fair deal agreement meets their needs. And the reason why we call it the Third Deal Agreement is because it provides our customers with very reasonable terms and conditions that are amenable to add to their practice. So there's not a lot of high risk involved for them, and it's just a lot easier to implement without any restrictions or anything hanging over their heads for both the short term or the long term. So I think it's a much more user-friendly type of agreement.

Speaker Change: Well, I would think that, you know, as you look at it, you're going to see more and more customers wanting to go into this area where the fair deal agreement

Speaker Change: And the reason why we call it the Fair Deal Agreement is because it provides our customers with very reasonable terms.

Joseph Sardano: So, there's not a lot of high risk involved for them, and it's just a lot easier to implement without any restrictions or anything hanging over their head for both the short term or the long term. So, I think it's a much more user-friendly type of agreement.

Speaker Change: and Conditions.

Speaker Change: that are amenable to add to their practice.

Speaker Change: So, there's not a lot of high risk involved for them, and it's just a lot easier to implement without any restrictions or anything hanging over their head for both the short term or the long term. So, I think it's a much more user-friendly type of agreement.

Jason Wittes: Thank you. Got it. I'll jump back and cue. Thanks again. Okay. Thanks, Jason.

Operator: Got it. I'll jump back in queue. Thanks again. Okay. Thanks, Jason.

Speaker Change: [inaudible]

Speaker Change: I'll jump back in queue. Thanks again. Okay. Thanks, Jason. Thanks, Jason.

Michael Sardano: The increase was primarily due to the higher number of units sold in the 2024 quarter. Selling a market and expense for the second quarter of 2024 was 1 million compared with 1.6 million for the second quarter of 2020. The decrease was primarily attributable to a decline in marketing agency expand, lower headcount and an increase in industrial cost.

Anthony Vendetti: The next question is from Anthony Vendetti with Maxim Group.

Anthony Vendetti: The next question is from Anthony Vendetti with Maxim Group. Please go ahead.

Anthony Vendetti: Please go ahead. Sure. Thank you. Yeah, just following up on the fair deal agreement. So, since March at AD, you've signed 15, and that's to date. So right up until today is how we should look at that. Correct. Okay, great. And so that's in addition. So 15 of those plus you shipped 23 and the quarter, including three to Asia. So, and that compares with 13. So the 23 over 13 is the growth in ship systems. These 15 fair deal agreements are separate and will be installed throughout the remainder of this year. Correct. Exactly. Excellent. Okay.

Speaker Change: The next question is from Anthony Vendetti with Maxim Group. Please go ahead.

Anthony Vendetti: Sure, thank you. Yeah, just following up on the Fair Deal Agreement, so since March at AAD, you've signed 15 and that's to date, so right up until today is how we should look at that, correct? Correct. Okay, great. And so that's in addition to, so 15 of those plus you shift 23 and a quarter, including three to Asia. So, and that compares with 13. So the 23 over 13 is the growth in ship systems.

Anthony Vendetti: Sure, thank you. Yeah, just following up on the on the Fair Deal Agreement, so since March at AAD you've signed 15 and that's to date, so right up until today is how we should look at that, correct?

Speaker Change: Correct.

Michael Sardano: As I mentioned during our conference call this past May this year we shifted our focus to emphasize products and self-options versus hosting key up in opinion leader's events. General analyst of the expense for the second quarter of 2024 was 1.6 million compared with 1.3 million a year ago. The increase was primarily due to higher professional pre-centre compensation. Research on development expense for the second quarter of 2024 was 1.9 million compared with 1.8 million in the same quarter of last year.

Speaker Change: including three to Asia, so, and that compares with 13. So, the 23 over 13 is the growth in ship systems. These 15 fair deal agreements are separate, and we'll be installed throughout the remainder of this year, correct?

Joseph Sardano: These 15 fair deal agreements are separate and will be implemented throughout the remainder of this year, correct? Exactly. Excellent. Okay, good, good, good. Okay, so this is all in addition. Maybe just to delve in, I know each one of these may be slightly different, but how do we look at, you know, the utilization of these systems? And, you know, is there, as part of this agreement, a sort of minimum, or is the way it works based on how much they use it? Maybe just, if you could give us just some general parameters around that, and others.

Anthony Vendetti: Good.

Anthony Vendetti: Okay. So this is all in addition.

Anthony Vendetti: And then maybe just to delve in, I know each one of these may be slightly different. But, but how do we look at, you know, the utilization of these systems? And, and you know, is there is there as part of this agreement? Is there a sort of a minimum? Or, you know, the way the way it works is based on the on how much they use it. Maybe just if you can give us just some general parameters around it. Sure.

Speaker Change: and I'll be back with it.

Speaker Change: Excellent, okay, good, good, all right, so this is all in addition and then

Speaker Change: Maybe just to delve in I know each one of these may be slightly different, but but how do we look at

Michael Sardano: The increase was primarily due to expenses related to a project to develop a drug delivery system for aesthetic use. Other income of 22 million for the second quarter of 2024 was mostly related to interest income and was unchanged from the prior year.

Speaker Change: You know, the utilization of these systems.

Speaker Change: And, you know, is there, as part of this agreement, is there sort of a minimum or, you know, the way it works is based on how much they use it? Maybe just, if you can give us just some general parameters around that.

Michael Sardano: Net income for the second quarter of 2024 was 1.6 million for 10 cents per dollar a share and this compares with a net loss of 0.4 million or 2 cents per share for the second quarter of 2020. I just have to give it up which we defined as earnings before infinite taxes, depreciation and more decision and start compensation expense was 2.1 million for the second quarter of 2024, compared with negative 1 million for the second quarter of 2023.

Michael Sardano: Let Michael talk to that one.

Joseph Sardano: to talk about that one. They make money as we make money, and vice versa. I think it's a win-win arrangement for both the practice and us, and it takes the operational headaches away from the practice and puts them on us, which we've been doing for 10 to 15 years already, and we know it as the proprietors of SRT. We put it back in.

Anthony Vendetti: Thank you very much. Thank you.

Michael Sardano: Hey, I think it's Michael. Hey, Michael. So the way that this fair deal agreement works is it's really just they make money as we make money, and vice versa. I think it's a win-win arrangement for both the practice and us. And it takes the operational headaches away from the practice and puts it on us, which we've been doing for 10 to 15 years already. Okay. Okay no, you got the right idea there. Without Sentinel, without this technology, no company could achieve what we can under the third deal of them, or we couldn't offer it. The technology is vital to operationally making this simplified from both a regulatory standpoint and from an operational standpoint with patients and the ease of use for the practice.

Speaker Change: Sure, let Michael in to talk to that one. Hey, Anthony, it's Michael. Hey, Michael. So, the way to just share the other grain and work, is it's really just...

Speaker Change: They make money as we make money and vice versa. I think it's a win-win arrangement for both the practice and us. And it takes the operational headaches to away from the practice and puts it on.

Speaker Change: which we've been doing for 10-15 years already and we know it as the proprietors of SRT. We put it back into the market in 2010 and we've been doing this for 15 years now.

Michael Sardano: Turning down to financial results for the first half of 2024. Revenures for the first half of 2024 were 20 million compared with 8 million for the first half of 2023. The increase was primarily driven by a higher number of units sold to a large customer. The cost of sale was 7.8 million for the first half of 2024, compared with 3.7 million for the first half of 2023. The increase was primarily related to higher sales in the 2024 period.

Joseph Sardano: Okay, okay, so the more they utilize it, obviously, the more money they make, and you get a piece of that, depending on your percentage of that. It sounds like it's a scale.

Michael Sardano: The first profit was 1.1 million or 60.7% of revenue, compared with 4.2 million or 53.4% of revenue for the first half of 2023. The increase was primarily driven by a higher number of units sold in the 2024 period.

Speaker Change: Okay, so the more they utilize it, obviously the more money they make, and you get the piece of that depending on your point of view, it sounds like it's a scale, sliding scale depending on the actual number of procedures performed.

Joseph Sardano: Right, and it allows the practice complete maneuverability, and they get to treat the patients the way that they want to. A lot of people out there would like to dictate how the practices treat patients. We do not do that. The practices love the fact that they can have complete autonomy over the way they treat their patients and utilize great technology. The support has been overwhelming, and the receptiveness of the dermatology industry has been great so far.

Speaker Change: Right, and it allows the practice complete maneuverability and they get to treat the patients the way that they want to.

Speaker Change: A lot of people out there would like to...

Speaker Change: dictate how the practices treat, we do not do that. The practices love the fact that they can have complete autonomy over the way they treat their patients and utilize great technology and

Speaker Change: The support has been overwhelming and the receptiveness of the dermatology industry has been great so far.

Anthony Vendetti: And then I know this is probably tied to Sentinel, right? In terms of utilization and so forth, are these systems more tightly tied to your Sentinel system that tracks all usage and utilization and whether or not there's downtime and how quickly you can fix it? Sometimes it's a software fix, or is it that Sentinel is separate and works with this as the same way it works with the ones you shipped?

Speaker Change: and then I know this is probably tied to Sentinel or in terms of utilization and so forth. Are these systems more tightly tied to your Sentinel system that tracks all these?

Michael Sardano: We expect more than to be in the 60% level for the remainder of the year. Telling and marketing expand was 2.3 million for the first half of 2024, compared with 3.7 million for the first half of 2023. The decrease was primarily available to a declining marketing agency to expand lower sales and decrease in threshold costs. General and an increase in expense was 3.2 million for the first half of 2024, compared with 2.7 million for the first half of 2023.

Speaker Change: and they also have a lot of questions on usage and utilization and whether or not there's downtime and how quickly you can fix it. Sometimes it's software fix. Or is it that's Sentinel is separate and works with this as the same way it does with the ones you shipped?

Joseph Sardano: No, you got the right idea there. Without Sentinel and without this technology, no company could achieve what we can under the fair deal agreement. We couldn't offer it.

Speaker Change: No, you got the right idea there. Without Sentinel and without this technology, no company could achieve what we can under the fair deal agreement. We couldn't offer it. The technology is vital.

Michael Sardano: The increase was primarily due to higher professional profit and compensation. This is on development expand was 1.8 million for the first half of 2024, compared with 1.9 million in the year with the prior year period. The decrease was primarily due to expand related to a project to develop a drug deliverance system for study groups. Already income of 1.4 million and 1.5 million for the first half of 2024 and 23 respectively relates primarily to interest income.

Joseph Sardano: The technology is vital to operationally making this simplified from both a regulatory standpoint and from an operational standpoint with patients and the ease of use for the practice.

Speaker Change: to operationally making this simplified from both a regulatory standpoint and from an operational standpoint with patients and the ease of use for the practice.

Anthony Vendetti: Okay, that's what I thought. That's great. That's helpful. And then lastly, just on the transdermal infusion product, TDIs, it sounds like you, based on feedback, there are a couple features. I don't know if you can elaborate on what additional features or what are the main features that this new product will have or that were requested that you're now going to include in the new application to the

Michael Sardano: Okay, that's what I thought. That's great; that's helpful.

Joseph Sardano: And then lastly, just on the Trans-Dermal Infusion Proud at TDIs, it sounds like you, based on feedback, there's a couple of features. I don't know if you can elaborate on what additional features or what are the main features that this new product will have or that was requested that you're now going to include in the new application to the FDA. Yep, well, you know, the progress on the R&D continued to evolve with the TDI product as we were waiting for the FDA to move on a lot of these things. And so, as these things, as time went on, we started moving even faster with TDI, and the progress became even greater.

Speaker Change: [inaudible]

Speaker Change: the transdermal infusion product, TDIAs. It sounds like you, based on feedback, there's a couple of features. I don't know if you can elaborate on what additional features or what are the main features that this new product will have or that was requested that you're now going to include in the new application to the FDA.

Michael Sardano: Many income for the first half of 2024 was 3.9 million or 24 cents for double the share, compared with a net loss of 2.3 million or a loss of 14 cents per share for the first half of 2023.

Joseph Sardano: Well, you know, the progress and the R&D continued to evolve with the TDI product as we were waiting for the FDA to move on a lot of these things. And so, as time went on, we started moving even faster with TDI, and the progress became even greater. We had a lot of feedback from a lot of the pharmaceutical companies that are interested in it, along with a lot of our KOLs, and they started giving us ideas on how we could improve the software attached to the TDI.

Michael Sardano: I just said either after the first half of 2024 was 5.1 million compared with negative 3.7 million for the first half of 2023.

Speaker Change: Yep, well, you know, the progress and the R&D continue to evolve with the TDI product as we were waiting for the FDA to

Michael Sardano: Turning now to our balance sheet. Cash and cash equivalents were 19 million after June 30, 2024, compared with way 3.1 million after December 31, 2023. And we had no outstanding borrowings under our reborging credit line. Accounts receivable was 18.2 million after June 30, 2024, compared with 10.6 million after December 31, 2023. At this time, approximately 8 million of those receivables have been collected. For the past seven quarters, we have been building inventory in anticipation of growing unit placements.

Speaker Change: to move on a lot of these things and...

Speaker Change: So, as time went on, we started moving even faster with TDI and the progress became even greater. And we had a lot of feedback from a lot of the pharmaceutical companies that are interested in it, along with a lot of our KOLs.

Joseph Sardano: And we had a lot of feedback from a lot of the pharmaceutical companies that are interested in it, along with a lot of our KOLs. And they started giving us ideas on how we could improve the software attached to the TDIs. So we've improved that point to help them manage their business, their drugs, their passing those drugs through to their physicians who are utilizing them. So we're just implementing a lot more features that adhere to what they want to do with their practices and with the way they want to manage their inventory. So I, and inclusive of that, is billing and so on.

Speaker Change: and they started giving us ideas on how we could improve.

Joseph Sardano: So we've improved that point to help them manage their business, their drugs, as they're passing those drugs through to their physicians who are using them. So we're just implementing a lot more features that adhere to what they want to do with their practices and with the way they want to manage their inventory. And inclusive of that is billing, and so on. So we just decided, since our R&D was moving so fast, we just may as well pull back, put all these features in, which we would call a phase two upgrade, if you will, put it all in one, and resubmit it to the FDA, and get everything approved all at the same time, rather than wait or have a second phase for it.

Speaker Change: the software attached to the TDI. So we've improved that point to help them manage their business, their drugs, their passing those drugs through to their...

Michael Sardano: As a result, we pay inventory worth 3.3 million compared with 3 million and inventory's worth 12.8 million compared with 11.9 million after December 31, 2021. Our cash spend continues to be very focused and highly disciplined. We maintain a strong balance sheet of position to take advantage of the compelling growth opportunities we may come across or create.

Speaker Change: Physicians who are utilizing them. So we're just implementing a lot more features that adhere to what they want to do with their practices and with the way they want to manage their inventory.

Joseph Sardano: So we just decided, since our R&D was moving so fast, we just may as well pull back, put all these features in, which we would call a phase two upgrade, if you will, put it all in one and re-submit it to the FDA and get everything approved all at the same time rather than wait or have a second phase for it. So this is what we've done. And I guess we have to thank or not thank the FDA for the bottlenecks that they've created, which really isn't them. It's all the companies that have decided to throw everything at them since COVID.

Speaker Change: And inclusive of that is billing and so on. So we just decided...

Speaker Change: Since our R&D was moving so fast.

Speaker Change: We just may as well pull back, put all these features in, which we would call a phase two upgrade if you will, put it all in one and resubmit it to the FDA and get everything approved all at the same time rather than wait or have a second phase for it. So this is what we've done, and I guess we have to thank for not thanking the FDA for the bottlenecks that they've created, which

Michael Sardano: In the final comment, we see the table in the news.

Joseph Sardano: So this is what we've done. I guess we have to thank or not thank the FDA for the bottlenecks that they've created, which really aren't them. It's all the companies that have decided to throw everything at them since COVID. So it's created that bottleneck, but it's given us this time to add all those new features. Okay.

Michael Sardano: We need to be sure earlier today for our observation of gaps and on death by national measures.

Joseph Sardano: With that, I'll turn the call back to Joe. Thanks, Michael and Javier.

Joseph Sardano: Our excitement for the future of Sensus Healthcare is supported by our financial results for the first half of the year. Our products offer excellent solutions for treating non-millonomous skin cancer and keyloids, and I applaud our talented staff for doing the hard work to get us to this point. We never rest on our roles and with the state-of-the-art consistently upgraded technology along with three different purchase options, we believe we have a compelling offering for all types of practices.

Speaker Change: It really isn't them, it's all the companies that have decided to throw everything at them since COVID. So it's created that bottleneck, but it's given us this time to add all those new features.

Joseph Sardano: So it's created that bottleneck, but it's given us this time to add all those new features. Okay, good. Understood.

Anthony Vendetti: Okay, understood. And then, and then lastly, is that this is the last question for Javier on housekeeping. Javier, you mentioned something about the gross margin as we go forward. I missed that. What was the number you said that we should look at as a go-forward number? Sixty?

Michael Sardano: And then lastly, this is the last question for Javier: housekeeping.

Javier Rampolla: okay good understood and then and then lastly is that this is the last question for Javier housekeeping Javier you mentioned something about the gross margin as we go forward I missed that what was the number you said that we should look at as a go-forward number

Michael Sardano: Javier, you mentioned something about the gross margin as we go forward. I missed that. What was the number you said that we should look at as a go-forward number? Six to percent. Sixty? Okay. Great. Okay. Thank you so much. Appreciate it.

Joseph Sardano: SRT offers a patient-friendly alternative to most surgery with curates that are as good or better. These curates have not gone unnoticed by hospital radiation oncology departments, and although this channel has a longer selling cycle, it continues to be an area of focus as interest and inquiries continue to increase. Our FDA or Fair Deal Agreement Program continues to draw attention. With 15 contracts already in-house since our introduction to the American Academy of Dermatology Conference this past March, our prospect base is growing.

Javier Rampolla: Okay, great. Okay, thank you so much. I appreciate it. I'll hop back in the queue. Thank you. Thank you.

Speaker Change: Thank you for your time.

Anthony Vendetti: I'll hop back in the queue.

Javier Rampolla: Sixty? Okay, great.

Operator: Thank you. Again, if you have a question, please press star, then one.

Operator: Thank you. Thanks, Anthony.

Javier Rampolla: Okay, thank you so much. Appreciate it. I'll hop back in the queue. Thank you. Thank you. Thanks, Anthony. Take care.

Operator: Again, if you have a question, please press star then 1. The next question comes from Eduardo Martinez with HC Wainwright. Please go ahead.

Eduardo Martinez: The next question comes from Eduardo Martinez with HC Wainwright. Please go ahead. Hi there. Thanks so much for taking the question. I was hoping to get a little bit more color on domestic and international sales for the SRT systems. You say domestic and international? Correct. So as we announce in the, in the thing, there's 23 total sales, with three going to international. Yeah. So that meant 20 domestic, domestic. Got it. Okay. And then do you guys have the breakdowns for revenue? That came directly from, so obviously nothing yet from the fair market leases. You guys have alluded to expecting that to come in probably beginning of 2025.

Speaker Change: Again, if you have a question, please press star then 1. The next question comes from Eduardo Martinez with HC Wainwright. Please go ahead. Thank you.

Eduardo Martinez: Hi there. Thanks so much for taking the question. I was hoping to get a little bit more color on domestic and international sales for the SRT systems. Do you guys have that available? Yes.

Eduardo Martinez: Hi there. Thanks so much for taking the question. I was hoping to get a little bit more color on domestic and international sales for the SRT systems. Do you guys have that available?

Joseph Sardano: We should have as many as 50 contracts by year end. Although we are very tight on inventory, ensuring that we are able to meet the demand of all of our customers, we will have inventory delivered and available in Q4 to accommodate this demand. This will ensure a significant volume at the beginning of 2025, encompassing an entire year of recurring revenues building up to significant revenues for the second half of 2025. Recall that our survey of six years of Medicare claims documented a 27% annual growth rate for SRT.

Operator: Did you say Domestic and International? Correct.

Eduardo Martinez: Yep

Speaker Change: You said Domestic and International? Correct. Also?

Operator: Okay, so as we announced in the thing, there were 2023 total sales with three going to international. Yeah. So that meant 20 domestic.

Speaker Change: Okay, so as we announced in the thing, there's 23 total sales with three going to international. Yeah.

Eduardo Martinez: So I meant 20 to that, it was a message.

Eduardo Martinez: And then, do you guys have the breakdowns for revenue? That came directly from.

Speaker Change: Got it.

Eduardo Martinez: Okay.

Speaker Change: and then you let have the breakdowns for revenue.

Eduardo Martinez: So obviously, nothing yet from the fair market leases you guys have alluded to is expecting that to come in probably the beginning of 2025. But do you guys have anything else in the recurring revenue stream versus outright equipment sales? Kind of get a feel for the breakdown of how revenue in the second quarter goes either through recurring or through outright equipment.

Speaker Change: That came directly from, so obviously nothing yet from the fair market leases you guys have alluded to, expecting that to come in.

Joseph Sardano: But do you guys have anything else in the recurring revenue stream versus outright equipment sales? Kind of get a feel for the breakdown of how revenue in the second quarter goes either in recurring or through outright equipment sale. Well, you know, as we stated, we've got 15 units that we just started. Okay. So there's the revenue for the Fair Deal Agreement is insignificant. There is a little revenue because we have a few units installed. But it's going to be more significant towards the end of the year. And as this builds up, as we put more units in, of course, we're going to see an impact. As we've always said, in 2025, with the second half of 2025 showing significant revenues at that time.

Joseph Sardano: As we continue to survey our customer base, we are seeing continued and consistent growth in this area. With this rate continuing, SRT will soon become the treatment of choice for non-melanoma skin cancer. Further, an estimated one in five Americans will develop skin cancer during their lifetime representing some 70 million people. So, whether Medicare or private insurance, we are in the early stages of tapping the enormous opportunity for SRT just in non-melanoma skin cancer and keelies.

Speaker Change: Probably the beginning of 2025.

Speaker Change: But you guys have anything else in the recurring revenue stream versus outright equipment sales. Kind of get a feel for the breakdown of how revenue in the second quarter goes either in recurring or through outright equipment sales.

Joseph Sardano: Well, you know, as we stated, we've got 15 units that we just started, okay? So the revenue for the fair deal agreement is insignificant. There is a little revenue because we have a few units installed, but it's going to be more significant towards the end of the year. And as this builds up, as we put more units in, of course, we're going to see an impact, as we've always said, in 2025, with the second half of 2025 showing significant revenues at that time.

Speaker Change: Well, you know, as we stated, we've got 15 units that we just started, okay, so there's the revenue for the fair deal agreement is insignificant. There is a little revenue because we have a few units installed.

Eduardo Martinez: But it's going to be more significant towards the end of the year, and as this builds up, as we put more units in, of course, we're going to see an impact, as we've always said, in 2025, with the second half of 2025 showing significant revenues at that time.

Operator: With those comments, I thank you for your time and attention and now operator, we're ready to take questions. 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 speaker phone, please pick up the handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.

Joseph Sardano: Got it. So you would say that the bulk of revenue right now is generated from instrument sales. Right. Correct. It's out of my sales. Yes. Yeah. Total revenue. Got it. That's helpful.

Eduardo Martinez: Got it. So you would say that the bulk of revenue right now is generated from instrument sales outright, correct?

Speaker Change: Got it. So you would say that the bulk of revenue right now is generated from instrument sales outright, correct? Correct. It's outright sales, yes. Total revenue.

Joseph Sardano: Correct, it's outright sales, yes, total revenue.

Eduardo Martinez: Got it. Got it. That's helpful. That's all the questions for me. Thanks so much. Great, thanks.

Eduardo Martinez: That's all the questions for me. Thanks so much. Great. Thanks.

Operator: Great, thanks Eduardo.

Eduardo Martinez: Thank you, Eduardo.

Speaker Change: Got it, got it. That's helpful. That's all the questions for me. Thanks so much.

Joseph Sardano: This concludes the question and answer session. I would now like to turn the conference over to Joe Sardano with any closing remarks. Thank you, Debbie. And thank you once again for your time this afternoon and for your interest in Census Healthcare. We plan to conduct virtual one-on-one meetings with the investment community in the coming days and weeks. Please contact LHA, our investor relations firm, if you'd like to request a meeting.

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

Speaker Change: Great. Thanks, Eduardo.

Operator: At this time, we will pause momentarily to assemble our roster.

Speaker Change: This concludes the question and answer session. I would now like to turn the conference over to Joe Sardano with any closing remarks.

Jason Wittes: The first question comes from Jason Wittest with Roth. Please go ahead. Hi, thanks for taking the questions and congrats on a solid quarter here. Maybe some questions on, yeah, sure. So on a fair deal agreement, it sounds like you're off to a pretty fast pace here. A couple of things.

Joseph Sardano: Thank you, Debbie, and thank you once again for your time this afternoon and for your interest in Sensus Health Care. We plan to conduct virtual one-on-one meetings with the investment community in the coming days and weeks. Please contact LHA, our investor relations firm, if you'd like to request a meeting.

Joe Sardano: Thank you, Debbie, and thank you once again for your time this afternoon and for your interest in Sensus Healthcare. We plan to conduct virtual one-on-one meetings with the investment community in the coming days and weeks.

Joseph Sardano: We'll speak with you again when we report the third quarter financial results in November. In the meantime, thanks again for joining us. Appreciate it. Thank you.

Joseph Sardano: One, when are these placements for fair deal going to be in this year or fall into next year, and secondly, can kind of characterize the type of customers that are buying into the program. Yeah, these are all going to be installed this year. Most of them will be installed in the fourth quarter due to inventory. So we're going to have most of these are all of these accounts prepared to provide us with revenue starting from day one when you begin 2025 and a little earlier.

Operator: The conference has now concluded. Thank you for attending today's presentation.

Operator: You may now disconnect.

Joseph Sardano: So we should have a full year of about 50 units generating that revenue as we continue to add more to the base. The type of customer that is looking at this is a customer who wants to use their cash for other things within their practice, whether it's an additional office that they're opening up or additional equipment that they're opening up. It also helps out with the larger private equity back groups that want to use their cash for buying more clinics rather than buying medical devices.

Joseph Sardano: So we're seeing a big advantage in those areas and the customers that I think are the onesies and twosies, they continue to buy and use our fair market value lease program. So we provide them now with this fair deal agreement along with the fair market value lease. It's pretty much a great opportunity for them to take advantage of all of the opportunities they have from us in acquiring equipment. We're just giving them every option that they can't utilize Sartee in their practice.

Jason Wittes: Can you remind us what the total number of agreements signed to date are as of this quarter is at 15 or whether I think there were some last quarter as well? Yeah, but we have 15 keeping in mind that we've introduced this in March at the AAD. So when you look at it, it's pretty much since that time for now which is very much the second quarter. So 15 units. And based on the prospect and activity levels that we have, we're anticipating up to 50 before the end of the year.

Joseph Sardano: And then you kind of alluded to this, but are you supply constraint this year because of all these orders or is that some of you can make up in the fourth quarter? I think that we have had an ample supply to supply our customers up until now and we placed an order for additional units anticipating the activity levels that we're seeing now with a lot of those units starting to be delivered towards the end of the third quarter and the start of the fourth quarter.

Joseph Sardano: So, you know, we anticipate to be able to address all of the needs of all of our customers for this year when they give us an order, whether it's for not right purchase, the lease or the fair deal agreement.

Jason Wittes: I'm going to be one last question and that is in terms of how we should think about modeling these fair deal agreements. Can you give us some parameters that we should be thinking about especially going into next year? Well, I would think that, you know, as you look at it, you're going to see more and more customers wanting to go into this area where the fair deal agreement meets their needs. And the reason why we call it the third deal agreement is because it provides our customers with very reasonable terms and conditions that are amenable to add to their practice.

Jason Wittes: So, there's not a lot of high risk involved for them and it's just a lot easier to implement without any restrictions or anything hanging over their head for both the short term or the long term. So, I think it's a much more user friendly type of agreement. Thank you. Got it. I'll jump back and cue. Thanks again. Okay. Thanks Jason.

Anthony Vendetti: The next question is from Anthony Vendetti with Maxim Group. Please go ahead. Sure. Thank you. Yeah, just following up on the on the fair deal agreement. So since March at AD, you've signed 15 and that's to date. So right up until today's is how we should look at that. Correct. Okay, great. And so that's in addition. So 15 of those plus you shipped 23 and the quarter, including three to Asia. So and that compares with 13.

Anthony Vendetti: So the 23 over 13 is the growth in in ship systems. These 15 fair deal agreements are separate and will be installed throughout the remainder of this year. Correct. Exactly. Excellent. Okay. Good. Okay. So this is all in addition.

Anthony Vendetti: And then maybe just to delve in, I know each one of these maybe slightly different. But but how do we look at, you know, the utilization of these systems. And, and you know, is there is there as part of this agreement? Is there a sort of a minimum? Or, you know, the way the way it works is based on the[inaudible] Okay. Okay. [inaudible] No, you got the right idea there. Without Sentinel, without this technology, no company could achieve what we can under the third deal of them, or we couldn't offer it.

Anthony Vendetti: The technology is vital to operationally making this simplified from both a regulatory standpoint and from an operational standpoint with patients and the ease of use for the practice. Okay, that's what I thought, that's great, that's helpful.

Anthony Vendetti: And then lastly, just on the Trans-Dermal Infusion Proud at TDIs, it sounds like you, based on feedback, there's a couple of features, I don't know if you can elaborate on what additional features or what are the main features that this new product will have or that was requested that you're now going to include in the new application to the FDA. Yep, well, you know, the progress on the R&D continued to evolve with the TDI product as we were waiting for the FDA to move on a lot of these things.

Anthony Vendetti: And so as these things, as time went on, we started moving even faster with TDI and the progress became even greater. And we had a lot of feedback from a lot of the pharmaceutical companies that are interested in it, along with a lot of our KOLs. And they started giving us ideas on how we could improve the software attached to the TDIs. So we've improved that point to help them manage their business, their drugs, their passing those drugs through to their physicians who are utilizing them.

Anthony Vendetti: So we're just implementing a lot more features that adhere to what they want to do with their practices and with the way they want to manage their inventory. So I, and inclusive of that is billing and so on. So we just decided since our R&D was moving so fast, we just may as well pull back, put all these features in, which we would call a phase two upgrade, if you will, put it all in one and re-submit it to the FDA and get everything approved all at the same time rather than wait or have a second phase for it.

Anthony Vendetti: So this is what we've done. And I guess we have to thank or not thank the FDA for the bottlenecks that they've created, which really isn't them. It's all the companies that have decided to throw everything at them since COVID. So it's created that bottleneck, but it's given us this time to add all those new features. Okay, good.

Anthony Vendetti: Understood.

Javier Rampolla: And then lastly, this is the last question for Javier, housekeeping. Javier, you mentioned something about the gross margin as we go forward. I missed that. What was the number you said that we should look at as a go-forward number? Six to percent. Sixty? Okay. Great. Okay. Thank you so much. Appreciate it.

Anthony Vendetti: I'll hop back in the queue. Thank you.

Operator: Again, if you have a question, please press star then one.

Eduardo Martinez: The next question comes from Eduardo Martinez with HC Wainwright. Please go ahead. Hi there. Thanks so much for taking the question. I was hoping to get a little bit more color on domestic and international sales for the SRT systems. You say domestic and international? Correct. So as we announce in the, in the thing, there's 23 total sales with three going to international. Yeah. So that meant 20 domestic, domestic. Got it. Okay.

Eduardo Martinez: And then do you guys have the breakdowns for revenue? That came directly from, so obviously nothing yet from the fair market leases. You guys have alluded to expecting that to come in probably beginning of 2025. But do you guys have anything else in the recurring revenue stream versus outright equipment sales? Kind of get a feel for the breakdown of how revenue in the second quarter goes either in recurring or through outright equipment sale.

Eduardo Martinez: Well, you know, as we stated, we've got 15 units that we just started. Okay. So there's the revenue for the fair deal agreement is insignificant. There is a little revenue because we have a few units installed. But it's going to be more significant towards the end of the year. And as this builds up as we put more units in, of course, we're going to see an impact as we've always said in 2025 with the second half of 2025 showing significant revenues at that time. Got it. So you would say that the bulk of revenue right now is generated from instrument sales. Right. Correct. It's out of my sales. Yes. Yeah. Total revenue. Got it. That's helpful.

Eduardo Martinez: That's all the questions for me. Thanks so much. Great. Thanks. Thank you, Eduardo. This concludes the question and answer session.

Joseph Sardano: I would now like to turn the conference over to Joe Sardano with any closing remarks. Thank you, Debbie. And thank you once again for your time this afternoon and for your interest in Census Healthcare. We plan to conduct virtual one-on-one meetings with the investment community in the coming days and weeks. Please contact LHA, our investor relations firm if you'd like to request a meeting. We'll speak with you again when we report the third quarter financial results in November. In the meantime, thanks again for joining us. Appreciate it. Thank you.

Operator: The conference has now concluded. Thank you for attending today's presentation.

Operator: You may now disconnect.