This article first appeared on GuruFocus .
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Total Revenue (Q2 2026):$2.8 million, up 22% year-over-year.
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First Half Revenue (H1 2026):$5 million, up nearly 10% year-over-year.
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Base Business Revenue:$2.4 million in Q2, with approximately $500,000 in upside from international orders.
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Medical Segment Revenue:Grew 231% year-over-year in Q2.
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Gross Profit (Q2 2026):$1.9 million, compared to $1.6 million in the prior year period.
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Gross Margin (Q2 2026):67.2%, down from 69.6% in Q2 2025, due to product/customer mix and increased product costs including tariffs.
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Operating Expenses (Q2 2026):Approximately $3 million, down 4.2% year-over-year.
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Net Loss (Q2 2026):$1.1 million, or negative $0.01 per share, compared to a net loss of $1.5 million in Q2 2025.
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First Half Gross Profit (H1 2026):$3.5 million, or 69.4% of revenue, compared to $3.3 million or 71% of revenue in H1 2025.
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First Half Operating Expenses (H1 2026):Approximately $5.4 million, down 20% year-over-year.
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Cash and Cash Equivalents (as of June 30, 2026):$2.1 million.
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Working Capital (as of June 30, 2026):$3.7 million.
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Convertible Outstanding Debt (as of June 30, 2026):$466,000.
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2026 Revenue Guidance:Reaffirmed at $9.8 million to $10.2 million, representing double-digit growth for the year.
Release Date: August 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Total revenue increased 22% year-over-year in Q2 2026, with first-half revenue up nearly 10%.
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Medical segment revenue grew 231% year-over-year, driven by strong CompuFlo adoption.
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Established Medicare reimbursement under Novitas and First Coast MACs, covering 13 states and 30-35% of the U.S. population.
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Peer-reviewed study showed CompuFlo reduced composite complications by 91% in spinal cord stimulator procedures.
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New distribution agreement with Red One Medical opens access to federal healthcare markets (VA, DoD, IHS) serving over 18 million beneficiaries.
Negative Points
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Gross margin declined to 67.2% from 69.6% due to product mix and increased costs from tariffs and import duties.
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Q3 2026 revenue is expected to decline sequentially to $2.3-$2.5 million due to non-recurring international orders and seasonal slowdown.
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Cash position remains low at $2.1 million, with no current plans to raise capital, limiting financial flexibility.
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Medical segment growth is from a small base, and scaling is constrained by limited staff capacity.
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Federal distribution agreement with Red One Medical has no minimum commitments and is still pending FSS schedule approval, with orders not expected until Q4.
Q & A Highlights
Q: How many Medicare Administrative Contractors (MACs) currently have reimbursement in place, and are more expected? A: CEO Eric Hines confirmed the company has reimbursement established under two MACsNovitas and First Coastcovering three jurisdictions across 13 states, representing roughly 30% to 35% of the U.S. population. The company is actively working with Palmetto next and plans to pursue other MACs like CGS, WPS, and Noridian to expand coverage.
Q: What is the revenue guidance for the third quarter of 2026, given the strong second quarter? A: CEO Eric Hines provided a Q3 2026 revenue projection in the range of $2.3 million to $2.5 million. This reflects a sequential decline from Q2's $2.8 million, driven by the non-recurrence of two large international dental orders and typical seasonal softness during the summer months.
Q: Can you elaborate on the peer-reviewed study showing CompuFlo reduced composite complications during spinal cord stimulator procedures? A: CEO Eric Hines explained that the study, published in Operative Neurosurgery by UTMB researchers, demonstrated a 91% reduction in the odds of composite complications. He attributed this to CompuFlo's precision, which reduces the number of needle sticks and misplacements compared to traditional loss-of-resistance syringes, leading to more accurate epidural access.
Q: What is the current status of the CompuFlo Advisor program, and how is it scaling? A: CEO Eric Hines stated the program has grown to approximately 10 to 11 active physician advisers, up from 8 in Q1. However, the company is pausing active recruitment to focus on claims submissions, which drive reimbursement. The team will resume adding advisers as it expands into new MAC jurisdictions like Palmetto and the Western U.S., though capacity is currently limited by a small medical sales staff.
Q: Has the digital marketing campaign sustained its lead generation momentum, and what is the conversion strategy? A: CEO Eric Hines confirmed the campaign continues to generate 150 to 200 leads per month, consistent with or higher than Q1 levels. To manage this demand, the company launched Milo, an AI-enabled digital engagement platform, and is hiring two additional staff members solely dedicated to lead follow-up. The Aspen 2026 conference alone generated over 40 qualified leads.
Q: What is the structure of the Red One Medical distribution agreement for federal markets, and when will orders begin? A: CEO Eric Hines clarified there are no minimum purchase commitments under the agreement. The company is working to add CompuFlo to the Federal Supply Schedule (FSS), which will allow all federal agencies, including the VA and DoD, to purchase off that schedule without separate negotiations. The goal is to begin taking orders in Q4 2026.
Q: How will the new direct sales efforts and distribution partners work together in regions like Florida? A: CEO Eric Hines detailed a multi-layered approach: the company controls pricing, and distributors will act as additional salespeople and clinical specialists. In Florida, Milestone will deploy a team of 4-5 people, including a strategic rep to manage multiple distributors across different parts of the state. This model will be replicated in New Jersey, Pennsylvania, and Texas over the coming months.
Q: What is the key difference between the current strategy and the previous approach to Medicare reimbursement? A: CEO Eric Hines emphasized a more systematic and methodical approach. Instead of "spraying and praying" across the country, the company is focusing on getting the right systems and processes in place in Florida first, including reimbursement teams to help offices prosecute claims. Once success is demonstrated, the model will be replicated across other MAC regions to accelerate growth.
Q: Will there be dedicated support to train office staff on proper claims submission for CompuFlo procedures? A: CEO Eric Hines acknowledged the importance of this and noted the company is working with Evelyn and her team at OmniAir, a company specializing in product approvals and reimbursement processes. He jotted down the suggestion to provide more comprehensive training for office billing staff to ensure claims are coded correctly and paid faster, which is critical for tracking and adoption.
Q: Can you confirm the $500,000 in international orders was dental-related and non-recurring? A: CEO Eric Hines confirmed the $500,000 upside in Q2 came from large international dental orders that are not expected to recur in Q3. This was factored into the company's Q3 guidance of $2.3 million to $2.5 million, while the company reaffirmed its full-year 2026 revenue guidance of $9.8 million to $10.2 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
