Jefferies Global Healthcare Conference in New York. I'm Michael Sarcone. I'm an analyst on the medical supplies and devices team here, and this is a session with FocalTherics. With us from the company, we've got Ryan Rhodes, CEO, and Ken Mobeck, CFO. Gentlemen, thanks for joining us. Just to kick it off, Ryan's going to give a presentation, then if we have time at the end, we'll have some Q&A. Go ahead, Ryan. Thank you. Welcome. I'm Ryan Rhodes, CEO of FocalTherics. Combining focal therapy and therapeutics, we've rebranded our company, it was announced last Friday, to FocalTherics. Focal meaning to target, Therics, a derivative of therapeutics to treat and heal. We are transforming into a high-growth, pure-play, robotic focal therapy company with a leading position in both large and growing markets. We identify as the global leader in therapeutic ultrasound for the treatment of cancer and benign disease, and we accomplish this by redefining the treatments of cancer and benign disease through organ-sparing, function-preserving focal therapy. Our markets are large and growing across urology and prostate cancer and BPH, as well as endometriosis and women's health. We've had sustainable year-over-year growth that has, of recent, shown notable growth coming from 2025 into this year, 2026, with our proprietary HIFU business. It's important when you talk about focal therapy that we talk about prostate cancer. It is, again, the number one cancer diagnosed in men with 1.4 million newly diagnosed cases globally on an annual basis. This disease state is growing. In 14 years, by the year 2040, there'll be nearly 3 million newly diagnosed cases around the world. Today, 330,000 men will be diagnosed in the U.S., and important to understand, 3.5 million men are actually living with their disease. When a man is diagnosed with prostate cancer, they have a dilemma. On the left-hand side of this equation, they have to weigh treatment, active surveillance or active monitoring, surgery, radiation, but they also have to think about the outcomes. Is this treatment effective? What will my complications possibly be in my recovery? Will I experience loss of urinary control? Will I experience loss of sexual function or possibly both? We all know in prostate cancer, common treatments are surgery or radiation. Surgery is a whole gland treatment. Whether performed open, laparoscopic, or robotic, we're cutting into the body. We're cutting and ligating burning tissue, disrupting planes in our dissections, and we're reconstructing the urine channel. Robotic surgery has its own complication profile. It also has debilitating functional outcomes for most patients. Radiation as well, commonly a whole gland treatment, whether it's IMRT or SBRT, we're introducing radiation and radiation toxicity in the body, which may lead to other cancers, rectal cancer, bladder cancer, and has a failure rate in the clinical literature anywhere between 15%-30%. Many men are left with long-term functional outcomes, such as loss of sexual function and urinary control. With robotic focal HIFU ablation, we know where the cancer is. We can see it in real-time. We can treat and delineate around the boundaries of treatment of that tumor, and thus spare the organ and preserve its function. Another way to look at it is a patient value equation. On the x-axis is quality of life preservation, specifically preserving sexual function and urinary control. On the y-axis is proven efficacy, cancer control. If we look at active surveillance, which is really not a treatment, it's a monitoring protocol, it scores very high on quality of life preservation, but scores very low on proven efficacy as it is not a treatment. When we look at radiation and surgery, they're highly efficacious treatments and have been around for many, many years, but many patients suffer in terms of quality of life preservation. We all know there's complications associated with these radical treatments. What the patient really wants is a highly efficacious treatment, and they want to preserve their baseline quality of life, and that's what FocalTherics delivers. FocalTherics robotic HIFU. This is an important thing to understand, the problem we solve. There's a large gap between no treatment and radical treatment. Remember, prostate cancer is a heterogeneous cancer. It's not one cancer. It's millions of cancers. At time of your diagnosis, you may be classified as low risk, intermediate risk, or even high risk. As noted, previously there's been really no options other than active surveillance or radical treatments to address intermediate risk disease, this very large audience of patients. This is the problem we solve with FocalTherics robotic HIFU. We address low and intermediate risk patients and represent a TAM of nearly $4 billion. This market is moving now. On the left is the traditional market, radiation surgery, and active surveillance. We're now in this emerging market. It's happening now. At maturity in the coming years here, it will be a large contribution of cases and will represent a category larger than either of the standalone categories of radiation or surgery, and could grow to 40% or even higher of the entire addressable market. There's a patient audience today that is already there. We know this data's real because this is Medicare data that supports this growth. If you look at calendar years 2022-2024, you see HIFU is growing. Radical prostatectomy is flat, brachytherapy radiation declining, cryoablation, freezing the prostate, declining. If we look closer, specifically at focal therapies categorically and by product, HIFU is the fastest-growing focal therapy treatment and is the number one ablation technology for prostate cancer. This is based on new updated CMS data through calendar years 2025. Our treatment with FocalTherics robotic HIFU is non-invasive. There's no cutting into the body, no surgery, no needles, and no radiation. It is a non-invasive procedure. By combining advanced imaging, proprietary high-intensity focused ultrasound, HIFU, along with precise robotic energy delivery, we thus spare the organ and preserve its vital functions. The FocalTherics i platform was launched last year. It was a groundbreaking launch for the company. We were able to increase our selling price, but importantly, add more value into this new platform. HIFUsion is our proprietary fusion software. We can bring images directly in from multiple sources, including now PSMA PET imaging. We have a robotic positioning system, five-axis robot, dynamic focusing probe with electronic beam steering, and other proprietary componentry. It's an integrated, flexible workstation that can work in any outpatient setting of the hospital. Our treatment times are short. Single treatment, running machine time 40 minutes, commonly 60 minutes. We have some hospitals that can treat a patient wheels in and wheels out in 90 minutes or an hour and 40 minutes. We have the shortest treatment time as compared to other focal therapies. Our proprietary technology also focuses on HIFU, robotics, AI, advanced imaging, and telecollaboration. We can connect to our machine, as we've shown the world's first transatlantic focal therapy procedure using HIFU from Cleveland Clinic Ohio to Cleveland Clinic Abu Dhabi. We were able to prove this. We're now seeing hospitals that are interested in using this across their own possible networks. HIFU is important, and it's in our DNA. We are a company rooted in extracorporeal shock wave lithotripsy, and as such, on Monday of this week at our Investor Day conference, we announced the exciting work we're doing in histotripsy because there's a brother and sister relationship here. We filed some very interesting intellectual property, and we believe that we are best suited to offer both technologies on a single platform, HIFU and histotripsy. Turning our attention to clinical evidence, there are several important clinical studies that reinforce the value proposition of FocalTherics HIFU. First, the HI-FI study, which compared HIFU to radical prostatectomy. HIFI-2, which specifically targeted or discussed HIFU in use with salvage post-radiation patients who fail primary radiation therapy, which demonstrated high cancer control as compared to hormone deprivation therapy or use of hormone deprivation therapy, ADT. The C.G.R.D. study, which was published in Asia in International Urology and Nephrology that compared HIFU to radiation, showing HIFU demonstrated a higher overall survival rate at 10 years versus radiation. There's also a couple of important studies that have been completed, have been presented at notable scientific meetings, and will soon be published shortly here. FARP, which is a level 1 evidence trial, Focal Ablation versus Radical Prostatectomy, which proved exactly what the HI-FI study proved. That we're not inferior to surgery, the gold standard treatment, but patients will do far better in terms of preservation of quality-of-life outcomes as compared to surgery, with far fewer complications. HIFU-AS was presented at a meeting in Europe last year and will soon be published. This compares a subset of patients. It's across 14 centers, HIFU versus active surveillance in a low-risk population of patients. HIFU demonstrating superior progression-free survival as compared to active surveillance. It's important to go deeper on the value and utility around the HI-FI study. It is the largest comparative study in prostate cancer, demonstrating efficacy-based outcomes as compared to radical prostatectomy. This study was paid for by the French government to look and evaluate the efficacy in order to award reimbursement in France. The price tag on this study was approximately $25 million. It was not paid for by the company, it was paid for by the government, and it was looking specifically at efficacy-based outcomes. It's also exclusive to our technology, FocalTherics, HIFU, specifically FocalTherics, and our prior generation platform, Ablatherm. 3,328 patients across 46 centers, 80 urologists. We proved our primary endpoint. We're not inferior to surgery, but we prove superiority in functional outcomes, those patients being preserved and maintaining sexual function and urinary incontinence. Looking at reimbursement, we have a category 1 CPT code, CPT code 55880, and this is a published national average number. In many areas of the U.S., it's actually higher, as such here in New York, where it's nearly $14,000. We've had a consecutive increase year-over-year, each January for the last three years, in the reimbursement of this CPT code. It's in very close proximity to surgery, being the fact that surgery takes much longer, involves more staffing, and has a higher amount of supply cost. Turning to the physician reimbursement, HIFU is the highest-paid urologist focal therapy, as shown here, awarding 17.29 work RVUs. Only a $200 difference from surgery. Bear in mind, commercial payers commonly pay anywhere from 1.5 to 2X of this number. We are accelerating our growth and adoption in the U.S. and outside the U.S., as shown here. FocalTherics has been embraced by some of the top cancer hospitals and community hospitals around the U.S. Mayo Clinic, Cleveland Clinic, Memorial Sloan Kettering Cancer Center, MD Anderson. Here in New York, we have multiple leading academic centers. We're in every University of California teaching hospital. We're in Kaiser. We're in HCA hospitals, 11 IDN regional hospitals have bought a second FocalTherics system to add capacity to their other campuses. As such, our rankings are at the top as a focal therapy. U.S. News will report seven out of 10 hospitals. Society of Urologic Oncology Fellowship, nearly 70% of them are running FocalTherics. National Comprehensive Cancer Network hospitals, nearly 60%. We're not done. Our pipeline shown here is growing. We have 300 deals qualified in our pipeline, we have a lot of upside runway to grow in the U.S. Let's turn our attention to outside the U.S. We're growing there as well. As shown here, fixed systems throughout Europe and notable centers. In the light blue are mobile clinical sites that are now converting to fixed system placements with FocalTherics. We're excited. We've entered new markets, the U.K., Scandinavia, sold our first systems into India. We're growing in Latin America and beyond. Turning our attention to new indications, BPH. We're working on BPH as a new indication. We all know this is a very large disease state that affects men. Our solution will be non-invasive. It will require no bleeding, no foreign body, no quality-of-life trade-offs. In importance, 30%-40% of men who are seeking treatment for BPH are on some form of anticoagulant therapy or antiplatelet therapy, where blood loss is a concern. Our approach will involve no blood loss. We're making notable progress across three studies. In the U.S., we have an IRB opened here in New York with Mount Sinai Hospital. We're recruiting patients now for that. We've just treated another subset of patients in Latin America. 14 patients were treated recently. We're running a concurrent phase I-II study in the outside U.S. in Europe. We expect to have a data readout by the end of the year with the launch of the pivotal study in the beginning of 2027. I might add today, we already have a category 3 CPT code for HIFU for treating BPH. We believe the pathway is straightforward and well-organized for winning that clearance. Turning our attention to endometriosis, women's health, 6.5 million U.S. women have endometriosis, and it's a large disease state, as we know, that affects women commonly. 91% of women that are treated with stage 4 endometriosis do not want a surgical option. They want something less invasive or ideally non-invasive. We have CE Mark in outside U.S. CE Mark countries. We're in a limited launch. We have 11 accounts going through our training pathway now, and we're also soon to see the publications from the phase II and phase III randomized controlled trials. Those will be pivotal papers and will be an important data set to finalize our strategy for regulatory pathway through the FDA, which we'll embark on by the end of this year. Looking at our summation of TAMs, a large TAM for prostate cancer, 1.7 million men. BPH nearly doubles that or more than doubles that. Then adding endometriosis, you're looking at 4.3 million procedures that we can target and go after with a revenue potential of $10 billion. In closing, I want to share with you our target model we showed on Monday at our Investor Day, comparing calendar year 2025 to some modeling projections, again, in our target by the end of year 2028. As you can see here, notable revenue growth year-over-year, but important improvement in gross margin, and then break even in operating income and positive EBITDA by the end of the year 2028 with a larger growing install base. In closing, we address a large, underserved, growing market. We have differentiated technology leading the category of robotic focal therapy. We have expanding and favorable reimbursement already in place, robust clinical evidence and more growing, accelerated global commercial execution, and growing revenue and a pathway to profitability. I'll stop there. Great. Thanks very much, Ryan. That was a great presentation. Maybe a follow-up there. You showed us some of the CMS data where HIFU has been growing rapidly. For FocalTherics, the last few quarters, we've seen growth acceleration in your U.S. HIFU procedure growth. I think 1Q was 53% year-over-year. Can you just give us a breakdown of what are the key drivers of growth and maybe how that shakes out across existing accounts that are ramping utilization versus some of the newer accounts that you've been opening up? Yeah. A couple things. We're seeing a lot more accounts today. When we're engaging them in the sales process, they're commonly already booking patients in advance of treatment. That's a key data point. We ramp faster today. Our teams in the field do an excellent job of building these programs, and we build it as a program. The other thing I think that's important, and it has a direct correlation to our procedure growth, is we're training more doctors. It's not uncommon to start with a couple doctors but grow rapidly to more doctors. Now, we have some accounts that may have a single physician contributing a very large summation of cases, but we always like to expand the program because we believe all men should have this option if they fit and qualify based on their risk assessment. As we saw earlier, it is a large market that is underserved today, a very large market. I think we ramp better. We see hospitals launch this more effectively, and I will give you an example. In Boise, Idaho, a population approximately 264,000 people, the surrounding market, that MSA, if you expand its boundaries, is ranked 74th in the country. We launched a program this past year, and through a single physician in four quarters, we were getting to 100 procedures as a program. The question is, what did they do different? They launched the program, and we have a very prescriptive way that we roll these programs out. They did the marketing as appropriate. They did the outreach, the education. They communicated to referring physicians to let them know they were offering this. We see other areas and opportunities, and I point out Boise, and I point out St. Alphonsus Hospital because I believe this model can be replicated in multiple areas of the country. That's helpful. Just a follow-up there on the Boise account. You had one surgeon ramping to 100 procedures. Can you give us any color on, I guess, how does that surgeon kind of optimize procedures? Is there one day a month or two days a month where they stack a bunch of FocalTherics procedures or? In this case, he's part of a group, he becomes a referral for all his colleague partners, that's fairly common because urology is a large field, a lot of people specialize. That's important in the way he is, call it, fed procedures or patients in this case. Additionally, he does operate. My understanding is he has a day open every week. He can take more time or days if he needs to. There's ample capacity typically on these machines to grow. When we look at best-in-class programs, we have some programs are doing north of 120 or 130 procedures, we also have hospitals that may do less. The good thing is the reimbursement is strong enough that a hospital should make an investment, meaning that the numbers are there. The prostate cancer patient is a valuable patient. They may start off moving a little slow, but they'll ramp very quickly over time. I think we've gotten better as a company in our execution. Now, I came from Intuitive Surgical. We have a number of our employees that worked at Intuitive. We know how to ramp and build programs. We're kind of borrowing best-in-class approaches to do that with FocalTherics. Awesome. Maybe we'll loop Ken in here. Ken, you provided some longer-term guidance through 2028 at the recent Investor Day, you're calling for a 60% gross margin target by 2028, which is pretty impressive. I think 2025 was about 48%. Maybe you can kind of break down what are the key drivers of that margin improvement over the next few years. Sure. Thank you for the question. Just to kind of level set, our Q1 2026 HIFU gross margins were 51%. As Michael alluded to, our target model is 60%. We kind of plan to get there in kind of the following four categories. Number one, continued good price discipline. Okay. We recently launched our FocalTherics i product in 2025, and so we want to retain our good price discipline there. Number two, as our business ramps in the future volume-wise, right, we will continue to see some economies of scale in purchasing, as well as we'll take advantage of positive absorption in our factories. Our mix will change. The way we sell our product today, we sell the piece of capital, then we have a consumable that we sell for every procedure, and then we have a service element of our business. When you look at that 51%, our consumable piece is the highest piece of the gross margin. As we sell more consumables, we'll see our gross margins go up. Finally, we're always going to be focused on reducing our bill of material cost. Actually, that was one element we definitely saw happen between last year and this year. We introduced a few new pieces of our subassemblies into our BOM cost. We continue to focus on those four elements. We will drive our margins up going forward. Great. That's helpful, Ken. Maybe Ryan, you highlighted efforts in BPH, right? You're progressing these clinical studies. When you think about FocalTherics right to win there, because BPH, like prostate cancer, is also a competitive space. Can you highlight how you're going to pitch that value proposition? Then the follow-up there is, you've clearly made inroads in prostate cancer. Do you view the kind of key addressable patient as a man with comorbid BPH and prostate cancer, or do you expect you'll also be able to attack or make some headway in just BPH patients alone? Yeah. I'll address that. First of all, our approach, remember, we're non-invasive, transrectal, and in this case, we won't violate the integrity of the prostatic urethra, we'll preserve the prostatic urethra. There will be no bleeding in our procedure because we're ablating within the prostate gland, and by doing so, we're relaxing or reducing the pressure placed on the prostatic urethra. Our procedure will be non-invasive as described, and we believe we can deliver it in a very short amount of treatment time. That's already been demonstrated in the clinical studies that we're doing now. Back to your question, and maybe I should answer it this way. How we got into BPH is as we've treated prostate cancer patients, the byproduct has been their urinary symptom scores on their own have improved. That was never the intent of that procedure. It was obviously to ablate prostate cancer. Looking at the different markets or the different market segments, I think we'll have an opportunity from the same machine to deliver multiple treatments, and that includes endometriosis. In the case of urology, we're at the same call point, of course, urologist, and it may even be the same physician that will do the procedures. There'll be no shortage of hospitals that I think will want to pursue this upon getting a future clearance. I think of the mix, we've modeled into Ken's model, and I showed those numbers. We've been pretty conservative in our model. There's no dominant commercial player today in BPH, and so we think that we can grab some notable market share and offer something that other treatments can't offer. I mentioned earlier the anticoagulant therapy. That could be a huge inroad and a huge win for us. Great. Well, that basically puts us at time. Ryan, Ken, thank you very much for joining us, and for the audience, thanks for your interest. Thank you. Thank you.