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Good morning, ladies and gentlemen, and welcome to the APEX Medical Third Quarter 2026 Earnings Conference Call. At this time, all lines are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, Please press the star then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeremy Pfeffer from LifeSci Advisors. Please go ahead.

Thank you and welcome everyone to our third quarter 2026 earnings call. Representing the company on the call are Charlie Goodwin, Chief Executive Officer, and Matt Hill, Chief Financial Officer of APICS. Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including, without limitation, those identified in the risk factor section of our most recent annual report on Form 10-K, our most recent 10-Q filing, and the company's other filings with the Securities and Exchange Commission. Such factors may be updated from time to time in our filings with the SEC, which are available on our website. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events, or otherwise. This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the investor relations portion of our website. I would now like to turn the call over to Mr. Charlie Goodwin, Apex Medical's president and chief executive officer. Please go ahead.

Thank you, Jeremy, and thank you all for joining us today. Per our usual format on these quarterly calls, I will begin with a review of our performance over the past several months and then turn the call over to Matt for a review of our third quarter 2026 financial results along with our guidance for the full year 2026. We will then open the call for your questions. Let me begin with a review of a few key highlights from our third quarter 2026 performance. We delivered another quarter of strong year-over-year growth with total revenue of $14 million, an increase of 9% compared with the third quarter of 2025. Growth was driven primarily by sales of Aon in the United States and Renuvion outside the United States, reflecting continued demand for our body contouring technologies. For the three and nine months ended September 30th, 2026, our surgical aesthetic segment grew over 17% and 26% respectively as compared to the same periods last year. We are pleased by the progress we have made with Aon in the one year since its full commercial launch. During the time we have continued to build awareness of the platform and demonstrate the value of bringing fat removal, closed loop contouring, Renuvion tissue Thank you for joining us. We estimate approximately 70% of plastic surgeons use power liposuction, making this an important addition that broadens Aon's appeal. Therefore, the recent clearance and commercial launch of power liposuction was a pivotal catalyst in driving Aon's adoption. While the rollout remains in the early stages, feedback from surgeons has been very positive. PowerLipo was designed directly into every Aon and activation requires only a simple software update and the purchase of the handpiece and cannula. Clinicians can seamlessly deploy the full clinical Aon solution with no downtime. The legacy liposuction products on the market haven't moved the needle on safety and efficacy in two decades. The Aon system designed by surgeons to specifically close these clinical gaps by embedding next generation safety and workflow optimization into a single elegant system, we believe Aon establishes a new benchmark for surgical performance. It is uniquely positioned to be the global standard of care for plastic surgeons. Renuvion remains central to our strategy, both as a standalone system and as an integrated part of Aon. Its tissue contraction capability complements fat removal, helping surgeons address skin laxity that remain after liposuction or significant weight loss. Continued demand for Aon and Renuvion reflects the value surgeons see in having these complementary technologies available for their patients. Our commercial strategy is supported by our continued commitment to building clinical evidence. Last quarter, we discussed studies reporting higher patient satisfaction and lower rates of abdominoplasty and surgical revision with Renuvion plus liposuction compared with liposuction alone, as well as improvements in cellulite appearance and skin laxity following combined Avali and Renuvion treatment. In September, we added to this evidence with a prospective study evaluating Renuvion's effect on biological markers associated with skin quality published in Plastic and Reconstructive Surgery Global Open. The study enrolled seven patients undergoing facelift surgery with six completing the six-month follow-up. Tissue analysis at the visit showed 30% greater elastin fiber density and 34% less inflammation in treated tissue compared to untreated control areas. All six patients reported improvements in skin quality and satisfaction with their outcomes. These findings add direct human tissue evidence supporting the improvements surgeons and patients have observed with Renuvion and reinforced the value of evaluating tissue quality alongside tissue contraction. We believe this is an important consideration in body contouring where achieving the desired results depend not only on removing the fat but also addressing the quality and laxity of the skin that remains. Looking ahead, the continued adoption of GLP-1 medications is reshaping the body contouring patient population and creating what we believe is a meaningful long-term opportunity for our business. While these therapies are helping a growing number of patients achieve substantial weight loss, many are left with loose or lax skin and residual areas of fat that they want to address. As these patients reach or approach their target weight, we believe many will seek procedures that address these concerns more comprehensively. By combining advanced fat removal with Renuvion's tissue contraction capabilities, Aon positions us to help surgeons meet these needs. Our focus remains on transitioning this opportunity into broader adoption through continued commercial execution. Before I turn the call over to Matt, I want to recognize the APICS team. We have successfully achieved our product development, regulatory, and sales goals, all while maintaining strict cost discipline. To that end, I am pleased to report that on a cumulative trailing 12-month basis, the company has achieved positive EBITDA. Now I will turn the call over to Matt for a review of our third quarter 2026 financial results in more detail, along with our financial guidance for 2026.

Thanks, Charlie. Before I get started, please note that all references to our third quarter financial results will be on a gap and a year-over-year basis unless noted otherwise. As Charlie mentioned, total revenue for the third quarter 26 increased 9% to $14 million compared to $12.9 million in the prior year period. Revenue for the surgical aesthetic segment increased 17% or $1.9 million to $13 million compared to $11.1 million for the prior year period. This growth was driven by sales of Aon as we commenced our commercial launch in the third quarter of 25 and increased sales of Generators International. These increases were partially offset by decreases in domestic sales of standalone generators and sales of single-use handpieces globally. Turning to the OEM segment, sales decreased 41.5% for approximately $0.7 million to $1.1 million for the third quarter of 26, compared to $1.8 million for the third quarter of 25. The decrease in OEM sales was due to a decrease in sales volume to existing customers. With the increased focus on surgical aesthetics, we expect OEM segment revenue will decrease for the year. Domestic revenue increased 4% year over year to $9.7 million, and international revenue increased 22% year over year to $4.3 million for the third quarter of 2026. Gross profit for the third quarter 26 increased 9% to $9 million compared with $8.3 million in the prior year period. Gross profit margin for the third quarter 26 decreased to 64.2% compared to 64.4% in the prior year period. The decrease is primarily attributable to geographic mix with international sales comprising a higher percentage of total sales and product mix within both the surgical aesthetics and OEM segments. These decreases were partially offset by an increase due to mix between our segments with surgical aesthetics comprising a higher percentage of total sales. Operating expenses increased to $9.6 million for the third quarter of 26 compared to $9.1 million for the prior year period. The increase was mostly driven by a $.4 million increase in salaries and related costs and a $0.2 million increase in selling general and administrative expenses, which was partially offset by a $0.2 million decrease in professional services. Loss from operations was $0.6 million compared with a loss from operations of $0.8 million for the third quarter of 2025. Net loss attributable to shareholders was $1.8 million or 4 cents per share for the third quarter of 26 compared with $2 million or 5 cents per share in the prior year period. Adjusted EBITDA was $0.4 million for the third quarter of 26 compared to an adjusted EBITDA loss of $0.1 million for the third quarter of 25. As a reminder, we provided detailed reconciliation from net loss attributable to stockholders to non-GAAP adjusted EBITDA in our earnings press release. For the three months ended September 30, 2026, net cash used in operating activities was $1.6 million compared to $3.5 million used in prior year period. The decrease was primarily due to changes in working capital combined with a reduction in net loss. As of September 30, 2026, the company had cash and cash equivalents of $25.8 million. We have maintained a solid cash position managing to an average cash burn of approximately $2 million a quarter this year, providing substantial flexibility to support our ongoing operations and execute our strategic plan. As you can see from our financial performance, we're very focused on growing the top line while prudently holding the line on operating expenses. Our continued focus on operating discipline, cash management and financial Performance positions us to navigate our upcoming obligations while maintaining our commitment to long-term value creation. Turning to our 2026 guidance, we are reaffirming our full-year revenue guidance in the range of $59 million to $60 million, compared with $52.8 million reported for the year ended December 31, 2025. Our guidance continues to assume surgical aesthetic segment revenue in the range of $54 million to $55 million compared with approximately $45.3 million for 2025 and OEM revenue of approximately $5 million compared with approximately $7.5 million for 2025. In addition, we now expect gross margins in the range of 63% to 64% and updated our total operating expense targets in the range of $41 million to $42.5 million for the full year. Previously, we stated operating expenses would be less than $45 million. This completes our prepared remarks. Charlie and I will now open the call for questions. Operator?

Thank you. And ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press the star then the number 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press the star then the number 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We will wait for a moment while we pull up our questions. and your first question comes from the line of Alex Furman with Lucid Capital Markets. Please go ahead.

Hey guys, thanks very much for taking my questions here and congratulations on the strong results. Can you talk a little bit more about the lower operating expense target for the year and what's driving the improved profitability here. Obviously, it sounds like a very strong demand here, especially with the addition of PowerLipo here, but would love to get a better understanding of the improved profitability here as well.

Yeah, no, I appreciate the question. Look, we've stated that we want to get this business to profitability as quickly as we can, and we're very proud of the effort that the team has put forward for the last trailing were actually EBITDA-positive. and so we've done a very good job of growing the top line but also managing the bottom line and you're seeing the growth go straight to the bottom line and that's why you get the improvement and we had always at the beginning of the year that we weren't going to spend more than $45 million and obviously through the first three quarters we're way under that and so now we just tightened that range of what we will spend between now and the end of the year.

Okay, that's really helpful. And then, you know, obviously, you know, not trying to, you know, get you to give us, you know, formal guidance for next year or anything, but just can you give us a little bit of kind of understanding of just kind of how to frame up where you are in the rollout of the new all-in-one system? Is that expected to be, you know, continued tailwind into the first half of next year?

Well, I would say that the tailwind for Aon is for multiple years. Remember, we're just getting started in the United States. We actually just got power lipo out to everybody that had bought it. And so we think that Aon will have growth for a lot of years to come. and the other side of that is right now we are only selling it in the United States and obviously we're working on registration in a lot of the key markets outside the United States and would expect to have those at some point to be able to start selling Aon on a worldwide basis. Doctors all over the world are seeing Aon at the shows, they're talking about it, they're hearing about it and we're just excited to get it registered and to get it out there.

Yeah, that'll be really exciting to see that. Thank you, Charlie, and congratulations again on the strong results. Thanks, Alex.

And your next question comes from the line of Sam Iver with U.S. Bancorp BTIG. Please go ahead.

Hey, good morning, Charlie and Matt. Thanks for taking the questions here. Maybe just following up on that last question, is there any key markets we should be looking out for in terms of timelines when Aon might get the necessary regulatory approvals. I know Renuvion has been doing well in certain markets, but I'm curious if you're able to give us any timelines on Aon and some of the larger OUS markets you plan today.

Yeah, timelines, the answer to that is no. Obviously, when we get registration in some of these key areas, we'll obviously let the market know if it's important. But obviously, the markets that we were really after and really want right away are obviously Europe, the Middle East, and then key countries in Latin America. And those key countries in Latin America are namely Brazil, Colombia, and Mexico.

Okay, very good, fair enough. And then maybe I can just use a follow-up question here on what's resonating maybe more with some of the doctors that have adopted Aon at this point. Is it more so the clinical benefits that they're seeing? Is it the economics on the faster procedures and greater patient throughput? Or maybe it's a combination of the two, but curious what you're hearing from the field.

Yeah, it's all of the above. Doctors are really noticing the technological advances in the liposuction and the doctors that see it and have it are talking a lot about it. They are seeing that their patients actually recover faster because they have less bruising and less downtime from traditional lipo that they were using before. and so there's definitely that clinical aspect of it and having the integrated system for fat transfer and everything else is key to them. And then there are doctors that are using it to actually bring in new patients and talk to patients that they've got the latest and greatest and are able to either convert more patients into having procedures with them or even in some cases charging more for those procedures because they're using the latest and greatest technology. And then there's the whole efficiency piece for the doctors and their teams where they're able to save time and to do that. And so Aon has a lot of drivers for the doctors, their patients, and their practices. It's now our job on the commercial side to make sure that everybody understands that, the doctors themselves, their staff, and the patients also. So we've still got work to do from a worldwide basis, but we are even more excited as we sit here today that we think that Aon will be the standard of care for body contouring all over the world. It really is being received that well in the field.

Okay, very good. Thanks for taking the questions, guys.

All right, thank you.

And your next question comes from the line of Talib Korman with Craig Helen. Please go ahead.

Hello, and thank you for taking the question. So for Aon Growth, how much of that was competitive conversions? And then for my second question, could you speak to the pipeline of PowerLipo? Thank you very much.

Yeah, so I'll do the second one first. So PowerLipo, we were able to fulfill all the orders of PowerLipo just within the end of this last quarter. So everybody that had a PowerLipo system could actually get their handpiece, at least one of them. And I think now we've been able to get everybody all of theirs since then. and now is the first time that if you actually bought an Aon today, you could actually get PowerLipo with it. Okay, so that's the first one. As far as new customers, if you look at where we've done so far, about 75% of our Aon sales have been to existing Renuvion customers and about 25% to brand new customers that have never been part of Apex.

Great, thank you.

All right, thank you.

And your next question comes from the line of Danny Stauder with Citizens Bank. Please go ahead.

Yeah, great. Thanks for the questions. This is my first one. I wanted to ask on 4Q, you know, just wanted to see how should we be thinking about capital versus handpiece mix in terms of what's implied for fourth quarter sales? As we think out to 2027, what's a good way to frame that, just considering some of the puts and takes we saw in 2026? Thank you.

Yeah, so if you look at hand pieces in particular, it's always tough to look at it on a quarter-by-quarter basis. We obviously look at it on a year-by-year basis because it depends on whether some large customers, when they place their order, to where it is. And so for the first three quarters from a handpiece perspective, we're right where we thought we were going to be. And we would expect Q4 obviously to be a very good handpiece quarter because that's where the greatest number of procedures are done in Q4 as opposed to Q3. We think that Q4 will be a good handpiece quarter as well as a good capital quarter. It's always our best capital quarter and so we're looking for both of those things to happen. As far as like the comparison in Q4, remember that last year we started pre-selling Aon in May when we got approval and so we were selling Aons basically for over half of a year, and we didn't actually ship those aeons until Q3 and Q4. So from a comparison basis, there was six months of sales that were put into the last quarter, basically. So from a comparison, it's not an apple to an apple comparison on a regular quarter, but we would that's the last quarter of this. And then as we move into 27, obviously it'll be the comparisons will be a lot easier to go after.

That's really helpful. Thank you. And then just one follow up on some of the questioning in terms of the international opportunity. Just in terms of Aon, could you talk about those markets? I mean, is that 70% of plastic surgeons using PowerLypo? Is that consistent? abroad, and is there any reason that Aon might be more or less attractive in some of these international markets, just depending on the different trends and idiosyncratic characteristics there? Thank you.

Yeah, no, it's a good question because there is some differences there. Power lipo is about the same. That is not different. but what is different in Europe especially and in various other countries is a lot of the liposuctions are done in the hospital setting and done by teams of doctors and that makes Aon even that much more of a of a value to the doctors and their teams because of the simultaneous activation. Remember, you can do up to four things at the same time with Aon. So that simultaneous activation is a huge benefit in places like Europe where doctors and their teams do that. The other side of it is too, is because they're done in the hospital, a lot of the reconstructive doctors can be using Aon also. And that is an area that, you know, quite honestly they weren't really using Renuvion before. Now they're going to get exposure to Renuvion too on the reconstructive market. And so the reconstructive market is obviously a upside for us all over the world because it's really not a market that we have called on before. So there are some differences outside the United States because of where the body contouring procedures are done.

Great. Thanks so much for the question. Thank you.

And your next question comes from the line of Yi-Chen Reed, HC Wainwright. Please go ahead.

Good morning. This is Kitty on for Yi. Thinking about Aon, for the systems that were installed earlier in the launch, do you find that customers are adopting the full workflow or selectively using different pieces of it? Are they using Renuvion tissue contraction in a greater proportion of their cases? And what kind of gives you a clue that one of these customers is going to be a broader utilizer versus more selective.

Yeah, so the answer to that is yes, more doctors are using the full suite of Aon where we're seeing that especially as on the two different liposuctions. There's a lot of doctors that only used power liposuction and didn't have ultrasonic liposuction. And now we're seeing them use the ultrasonic liposuction also because it is a great tool for them to use in these procedures. So we are seeing that. As far as the Renuvion usage, as I stated earlier, about 75% of the Aeons that we've sold have been to Renuvion customers. And obviously they were using Renuvion before and so that utilization is basically the same that it was. But where we are obviously seeing an uptick in Renuvion and them using the whole system is into the 25% of those that are new customers, new to Apex. and we know that they're using Renuvion obviously because they're buying hand pieces.

Quick follow up. You had at one point mentioned a mechanism paper that will be published for Renuvion. Do you guys have any update on that?

Yeah, that paper was, I don't think it was a mechanism paper. I think it was the paper that we highlighted in the prepared remarks. It was for skin quality. And if you look at Renuvion, we have done a very good job of publishing and talking about Renuvion for skin retraction. Okay. And that is obviously very important skin tightening. It's used after liposuction, it's used in body contouring, and that will remain obviously important. But we've done two other studies that show versatility of the Renuvion itself. and one is the pretreatment of areas before fat transfer. And if you pretreat the area with Renuvion before fat transfer, we have papers that show up to 40% higher retention of the fat graft. And so that is incredibly important when you're doing fat transfer. and then the last part of that was the study that just came out in September that talked about the skin quality and that skin quality is incredibly important and we think is going to be a driver for Renuvion for new users for Renuvion because the skin is your largest organ and as you're doing the skin tightening What actually helps is if the quality of your skin can get better. And in this study, we had over a 30% improvement of elastin and about the same improvement in inflammation. And that improves the quality of the skin. and there hasn't been anything that has shown an improvement in elastin out there. So we think that that is going to be a very important paper for us and to keep talking about how Renuvion will keep being a driver of this business for many years to come also.

Thank you very much.

Thank you. And your next question comes from the line of Jeremy Perlman with Maxim Groups. Please go ahead.

Thank you, good morning. Just firstly, are there any remaining investments that are either planned or required to support the AONs now that you've moved into the full commercial launch?

Yeah, now that we've made a full commercial launch, we've made all the investments that we're going to make for that. The only thing that we have ever mentioned before is, as I alluded to on one of the other questions, there is an opportunity in the reconstructive space in the hospitals in the United States. And, you know, we need to figure out how we're going to actually do that. So more on that when it comes. But as far as investments come for this year, that is all baked into what we're doing. And then we've stated that getting to profitability for this company is incredibly important for us, and we're going to do it as fast as we can.

Okay, understood. And then just another question. Maybe you could help us understand some of the divergence between domestic revenue grew this year only 4% and then international was 22% this quarter. So is that just because of the way the winding down of the OEM business and then the transition from the limited to the full commercial launch is just a timing issue? And should we expect that gap to be covered up by the domestic revenue going forward? Thanks.

yeah so if you if you remember from our guidance we've given guidance for the year that we will grow the surgical aesthetics business 20 percent and um we're at 26 percent i think after three quarters and so what you're seeing in the u.s business is as i stated last year when we launched aeon we got approval in may and we started to sell aeon units that we could not ship till September, October, November and December. So when you're looking at a comparison, all of the months that we've had before September, there was no Aon in that number and now you're getting Aon in that number for September, October, November and December and that's why the growth rate appears to be going down. It is from a mathematical point of view, but we were selling AONs all last year and shipped them all just in four months. So that's really the difference and why you're seeing that now in the third quarter. And then obviously in the fourth quarter, you'll see that the growth rate in the United States won't be as high either because of those comparisons of AON that were shipped in October, November, and December. As far as outside the United States, that still remains, especially Korea has been having a very good year, their first year of obviously launching Renuvion. And that's where a lot of the growth is from outside the United States.

Okay. Thank you for answering my question.

I'll hop back in the queue. Yep.

And I'm showing no further questions at this time. Thank you, ladies and gentlemen. This concludes our question and answer session. I will now hand the conference back to Charlie Goodwin for his closing comments.

Thank you everybody for joining us today. We are pleased with the momentum in the business this quarter and look forward to executing on the expanded commercial strategy we discussed as we continue to build market share for the Aon platform. I appreciate the continued support of our shareholders, our staff, and thank you all for joining the call today.

Thank you, and the conference for Apex Medical has now concluded. Thank you for your participation. You may now disconnect your lines.