[Preamble and Parties](index=7&type=section&id=Preamble%20and%20Parties) This section introduces the Credit Agreement, dated May 1, 2024, establishing a $100 million senior term loan facility for MDXHEALTH, INC. from ORC SPV LLC and other Lenders [Credit Agreement Overview](index=7&type=section&id=Credit%20Agreement%20Overview) This Credit Agreement, dated May 1, 2024, establishes a senior term loan facility of $100 million for MDXHEALTH, INC. (Borrower) from ORC SPV LLC (Initial Lender and Administrative Agent) and other Lenders, structured with an initial funding and two delayed draws, subject to specific terms and conditions - The Credit Agreement is dated **May 1, 2024**, and involves MDXHEALTH, INC. as the Borrower, MDXHEALTH SA as Parent, and ORC SPV LLC as the Initial Lender and Administrative Agent[15](index=15&type=chunk) Senior Term Loan Facility Details | Feature | Amount | | :------ | :----- | | Aggregate Principal Amount | $100,000,000 | | Initial Funding (Closing Date) | $55,000,000 (with $52,541,120.33 funded and $2,458,879.67 as original issue discount) | | First Delayed Draw | $25,000,000 | | Second Delayed Draw | $20,000,000 | [DEFINITIONS AND ACCOUNTING TERMS](index=7&type=section&id=Article%20I) This article provides comprehensive definitions for terms used throughout the Credit Agreement and specifies accounting standards for financial determinations [Defined Terms.](index=7&type=section&id=SECTION%201.1) This section provides comprehensive definitions for numerous terms used throughout the Credit Agreement, ensuring clarity and consistent interpretation of legal, financial, and operational concepts - The section defines various terms to be used consistently throughout the Agreement, applicable to both singular and plural forms[19](index=19&type=chunk) Key Defined Terms (Examples) | Term | Definition/Value | | :--- | :--------------- | | Administrative Agent | ORC SPV LLC | | Applicable Margin | 8.50% | | Commitment Amount | $100,000,000 | | Closing Date | May 1, 2024 | | Maturity Date | May 1, 2029 | | SOFR Rate | Forward-looking one-month term rate based on secured overnight financing rate | [Use of Defined Terms](index=30&type=section&id=SECTION%201.2) This section clarifies that terms defined in the Credit Agreement will retain their specified meanings when used in other Loan Documents and attached schedules, unless the context explicitly requires otherwise - Defined terms from this Agreement apply to all other Loan Documents and schedules, unless context dictates otherwise[213](index=213&type=chunk) [Cross-References](index=30&type=section&id=SECTION%201.3) This section specifies that references to Articles, Sections, or clauses within a Loan Document refer to those within that specific document, unless otherwise indicated - References to Articles, Sections, or clauses within a Loan Document are specific to that document unless otherwise specified[214](index=214&type=chunk) [Accounting and Financial Determinations](index=30&type=section&id=SECTION%201.4) This section mandates that all accounting terms and financial determinations within the Loan Documents must adhere to International Financial Reporting Standards (IFRS) on a consolidated basis for Parent and its Subsidiaries - All accounting terms and financial determinations (including Section 8.4 calculations) must be made in accordance with **IFRS**, consistently applied on a consolidated basis for Parent and its Subsidiaries[215](index=215&type=chunk) - If IFRS changes, either Borrower or Lenders can request an amendment to eliminate the effect of such change on the operation of provisions, interpreting them based on IFRS in effect before the change[215](index=215&type=chunk) [COMMITMENT AND BORROWING PROCEDURES](index=30&type=section&id=Article%20II) This article details the Lenders' commitment to provide the term loan facility, outlines borrowing procedures, and specifies conditions for commitment termination and reduction [Commitment](index=30&type=section&id=SECTION%202.1) This section details the Lenders' commitment to provide the term loan facility, specifying the initial loan amount and two subsequent delayed draw loans, with obligations being several and non-reborrowable Loan Commitment Amounts | Loan Type | Amount | | :-------- | :----- | | Initial Loan | $55,000,000 (with $52,541,120.33 funded and $2,458,879.67 as original issue discount) | | First Delayed Draw Loan | $25,000,000 | | Second Delayed Draw Loan | $20,000,000 | - Each Lender's obligation to make loans is **several, not joint**, meaning no Lender is responsible for another's default[220](index=220&type=chunk) - Amounts paid or prepaid with respect to the Loans may not be reborrowed[217](index=217&type=chunk) [Borrowing Procedure](index=31&type=section&id=SECTION%202.2) This section outlines the irrevocable request procedures for the Initial Loan and the two Delayed Draw Loans, specifying the required notice periods for delivering a Loan Request to the Administrative Agent - Borrower must deliver an irrevocable Loan Request to the Administrative Agent for each loan[219](index=219&type=chunk) Loan Request Notice Periods | Loan Type | Notice Period Before Proposed Closing Date | | :-------- | :--------------------------------------- | | Initial Loan | At least one Business Day | | First Delayed Draw Loan | At least 12 Business Days | | Second Delayed Draw Loan | At least 12 Business Days | [Funding](index=31&type=section&id=SECTION%202.3) This section describes the process by which Lenders make loan proceeds available to the Administrative Agent, who then disburses them to the Borrower upon satisfaction or waiver of conditions, reiterating that Lenders' obligations are several, not joint - Administrative Agent notifies Lenders of their portion of the loan after receiving a Loan Request[220](index=220&type=chunk) - Lenders make requested proceeds available to the Administrative Agent on the Closing Date or applicable Delayed Draw Closing Date[220](index=220&type=chunk) - Administrative Agent disburses funds to the Borrower via wire transfer upon satisfaction or waiver of Article V conditions[220](index=220&type=chunk) [Termination and Reduction of the Commitment Amounts](index=31&type=section&id=SECTION%202.4) This section specifies the automatic and permanent reduction of the Initial Commitment Amount to zero on the Closing Date, details the automatic reduction of Delayed Draw Commitment Amounts on their respective termination dates, and grants the Borrower the right to voluntarily terminate these amounts with notice - The Initial Commitment Amount is automatically and permanently reduced to zero on the Closing Date immediately after the Initial Loan is made[221](index=221&type=chunk) - The First and Second Delayed Draw Commitment Amounts are automatically and permanently reduced to zero on their respective Commitment Termination Dates[221](index=221&type=chunk) - The Borrower has the right to terminate the Delayed Draw Commitment Amounts at any time with notice to the Administrative Agent, typically in connection with full payment of Obligations[221](index=221&type=chunk) [REPAYMENTS, PREPAYMENTS, INTEREST AND FEES](index=32&type=section&id=Article%20III) This article details the terms for loan repayments, prepayments, interest calculation, and various fees associated with the credit facility [Repayments and Prepayments; Application](index=32&type=section&id=SECTION%203.1) This section stipulates that all loan repayments and prepayments, along with accrued fees and interest, must be made exclusively in U.S. dollars and in accordance with the terms outlined in Article III - All Loans, fees, and interest must be repaid and prepaid solely in **U.S. dollars**[224](index=224&type=chunk) [Amortization; Repayments and Prepayments](index=32&type=section&id=SECTION%203.2) This section details mandatory amortization payments triggered by revenue thresholds, outlines the Borrower's right to make optional prepayments, and specifies mandatory prepayments from certain proceeds, along with the requirement for full repayment on the Maturity Date or upon acceleration - If the trailing 12-month Revenue Base does not meet minimum thresholds on a Test Date, the Borrower must make equal monthly amortization payments of the outstanding principal, plus applicable Repayment Premium and Exit Fee[225](index=225&type=chunk) Minimum Revenue Base for Amortization Trigger | Test Dates (Fiscal Quarter Ending) | Minimum Revenue Base for the 12-month period ending on such Test Date | | :--------------------------------- | :------------------------------------------------------------------ | | June 30, 2025 | $[***] | | September 30, 2025 | $[***] | | December 31, 2025 | $[***] | | March 31, 2026 | $[***] | | June 30, 2026 | $[***] | | September 30, 2026 | $[***] | | December 31, 2026 and each Fiscal Quarter ending thereafter | $[***] | - The Borrower has the right to prepay any unpaid principal amount of the Loans, in whole or in part, with at least three Business Days' notice, along with the applicable Repayment Premium and Exit Fee[227](index=227&type=chunk) - Mandatory prepayments are required within three Business Days of receiving Net Casualty Proceeds or Net Asset Sales Proceeds, if requested by the Lenders, equal to **100% of such proceeds** (or a lesser amount specified by Lenders), plus applicable Repayment Premium and Exit Fee[228](index=228&type=chunk) [Application](index=33&type=section&id=SECTION%203.3) This section specifies that amounts repaid or prepaid on the outstanding principal of the Loans will be applied in the inverse order of maturity and pro rata across the Initial Loan, First Delayed Draw Loan, and Second Delayed Draw Loan - Repaid or prepaid principal amounts are applied in inverse order of maturity and pro rata to the Initial Loan, First Delayed Draw Loan, and Second Delayed Draw Loan[230](index=230&type=chunk) [Interest Rate](index=33&type=section&id=SECTION%203.4) This section defines the cash interest rate for the Loans, which accrues at a per annum rate equal to the higher of the SOFR Rate or 2.50%, plus the Applicable Margin, subject to recalculation and adjustment for each Interest Period - Cash interest accrues at a per annum rate equal to the higher of (x) the SOFR Rate for the Interest Period and (y) **2.50%**, plus the Applicable Margin[231](index=231&type=chunk) - The interest rate is recalculated and adjusted for each Interest Period[231](index=231&type=chunk) [Default Rate](index=33&type=section&id=SECTION%203.5) This section stipulates that the Applicable Margin will increase by 4.00% per annum from the date any Event of Default occurs and continues - The Applicable Margin increases by **4.00% per annum** at all times on and after the date any Event of Default occurs[232](index=232&type=chunk) [Payment Dates](index=33&type=section&id=SECTION%203.6) This section specifies the dates on which accrued interest on the Loans is payable in cash, including on the Maturity Date, upon any principal payment or prepayment, on the last day of each month, and immediately upon acceleration due to default - Interest accrued on Loans is payable in cash on the Maturity Date, on the date of any principal payment or prepayment, on the last day of each month (or next Business Day), and immediately upon acceleration[233](index=233&type=chunk)[234](index=234&type=chunk) - Interest accrued after the due date (Maturity Date, acceleration, etc.) is payable upon demand[235](index=235&type=chunk) [Repayment Premium](index=34&type=section&id=SECTION%203.7) This section outlines the Repayment Premium payable upon any repayment or prepayment of principal, with the premium percentage decreasing over time based on the anniversary of the Closing Date or respective Delayed Draw Closing Dates, and including a Make-Whole Amount for early prepayments Repayment Premium Structure | Prepayment/Repayment Timing | Premium Percentage | | :--------------------------- | :----------------- | | On or prior to 24-month anniversary | 3.0% + Make-Whole Amount | | After 24-month, on or prior to 36-month anniversary | 2.0% | | After 36-month, on or prior to 48-month anniversary | 1.0% | | After 48-month anniversary | 0% | - The Repayment Premium is applicable to any repayment or prepayment of principal, except for repayments made on the Maturity Date[235](index=235&type=chunk) [Exit Fee](index=34&type=section&id=SECTION%203.8) This section establishes an Exit Fee of 3.00% of the principal amount of Loans, payable upon any prepayment or repayment of principal, including on the Maturity Date or upon acceleration, in addition to other Obligations - An Exit Fee of **3.00%** of the principal amount of Loans is payable upon any prepayment or repayment of principal[236](index=236&type=chunk) - The Exit Fee is due whether the prepayment/repayment occurs on the Maturity Date, due to acceleration, or otherwise[236](index=236&type=chunk) [Upfront Fee](index=34&type=section&id=SECTION%203.9) This section details the upfront fees payable by the Borrower for the Initial Loan and each Delayed Draw Loan, which are 2.00% of the respective loan amounts, paid in U.S. Dollars, fully earned, nonrefundable, and not creditable against other costs Upfront Fee Structure | Loan Type | Fee Amount | Payment Date | | :-------- | :--------- | :----------- | | Initial Loan | 2.00% of Initial Loan | Closing Date | | First Delayed Draw Loan | 2.00% of First Delayed Draw Loan | First Delayed Draw Closing Date (if applicable) | | Second Delayed Draw Loan | 2.00% of Second Delayed Draw Loan | Second Delayed Draw Closing Date (if applicable) | - All upfront fees are paid in U.S. Dollars, fully earned upon their respective closing dates, nonrefundable, and in addition to other payable fees[237](index=237&type=chunk) [Undrawn Fee](index=35&type=section&id=SECTION%203.10) This section specifies an Undrawn Fee of 0.50% per annum on the undrawn portions of the First and Second Delayed Draw Commitment Amounts, calculated daily, payable monthly, fully earned, and nonrefundable - The Borrower must pay an Undrawn Fee of **0.50% per annum** on the sum of the undrawn First Delayed Draw Commitment Amount and the undrawn Second Delayed Draw Commitment Amount[239](index=239&type=chunk) - The Undrawn Fee is calculated daily, payable on the last day of each month (or next Business Day), fully earned, and nonrefundable[239](index=239&type=chunk) [Administration Fee](index=35&type=section&id=SECTION%203.11) This section requires the Borrower to pay a quarterly Administration Fee of $10,000 in aggregate to the Administrative Agent for the Lenders, payable in advance, prorated for the initial fiscal quarter, fully earned, and nonrefundable - The Borrower pays a quarterly loan administration fee of **$10,000** in aggregate to the Administrative Agent for the Lenders[240](index=240&type=chunk) - The Administration Fee is payable in advance, prorated for the Closing Date fiscal quarter, fully earned, and nonrefundable[240](index=240&type=chunk) [SOFR RATE AND OTHER PROVISIONS](index=35&type=section&id=Article%20IV) This article addresses increased costs, capital costs, taxes, payment mechanics, setoff rights, and procedures for when the SOFR Rate is not determinable [Increased Costs, Etc](index=35&type=section&id=SECTION%204.1) This section obligates the Borrower to reimburse Lenders for increased costs or reduced sums arising from Changes in Law affecting commitments or loans, excluding increased capital costs and taxes, with Lenders required to provide written notification - Borrower agrees to reimburse Lenders for increased costs or reduced sums due to Changes in Law affecting commitments or loans[242](index=242&type=chunk) - This section excludes increased capital costs (Section 4.2) and Taxes (Section 4.3)[242](index=242&type=chunk) - Lenders must notify the Borrower in writing, and the Borrower must pay within five days of receipt of notice, with a **180-day look-back period** for claims[242](index=242&type=chunk) [Increased Capital Costs](index=36&type=section&id=SECTION%204.2) This section requires the Borrower to compensate Lenders for any reduction in their or their controlling Person's rate of return on capital due to a Change in Law affecting capital requirements related to the commitments or loans, with Lenders determining the amount in their sole discretion - If a Change in Law reduces a Lender's or its controlling Person's rate of return on capital related to commitments or loans, the Borrower must pay additional amounts to compensate[244](index=244&type=chunk) - The Lender determines the amount in good faith and its sole discretion, and a statement from the Lender is conclusive[244](index=244&type=chunk) - Compensation is not required for periods more than **180 days** prior to notification, unless the Change in Law is retroactive[244](index=244&type=chunk) [Taxes](index=36&type=section&id=SECTION%204.3) This section details the Borrower's obligations regarding taxes, including making payments free of withholding for Non-Excluded Taxes, indemnifying Lenders for such taxes, complying with VAT, addressing U.S. federal income tax treatment of original issue discount, Lender tax documentation requirements, and mitigation steps for Belgian tax deductibility - Payments by Borrower, Parent, or Subsidiaries under any Loan Document must be made without setoff, counterclaim, or deduction for Taxes, except as required by law[246](index=246&type=chunk) - If Non-Excluded Taxes are withheld, the payment amount must be increased so that the net amount received by the Lender is not less than the amount provided for in the Loan Document[246](index=246&type=chunk) - The Borrower indemnifies the Administrative Agent and Lenders for Non-Excluded Taxes and Other Taxes, including those imposed on indemnification payments[250](index=250&type=chunk) - The Loans are deemed to be made with original issue discount for U.S. federal income tax purposes[252](index=252&type=chunk) - Lenders must deliver appropriate IRS forms (e.g., W-9, W-8BEN, W-8ECI, W-8IMY) to claim exemptions or reductions from U.S. federal withholding tax, including a U.S. Tax Compliance Certificate for portfolio interest exemption[255](index=255&type=chunk)[257](index=257&type=chunk)[259](index=259&type=chunk) - Lenders agree to take reasonable steps, in consultation with Parent and at Borrower's expense, to mitigate circumstances that would prevent payments from being deductible for Belgian tax purposes due to a Non-Cooperative Jurisdiction Secured Party[265](index=265&type=chunk) [Payments, Computations; Proceeds of Collateral, Etc](index=41&type=section&id=SECTION%204.4) This section outlines the mechanics for payments, including requirements for same-day funds, computation of interest and fees, and the application of funds received from collateral, clarifying the several nature of Lenders' obligations and addressing pro rata sharing of payments among Lenders - All payments by the Borrower must be made without setoff, deduction, or counterclaim by **10:00 a.m.** on the due date in same-day funds[266](index=266&type=chunk) - Interest and fees are computed on the basis of the actual number of days over a **360-day year**[266](index=266&type=chunk) - Amounts received from exercising remedies under Loan Documents (including collateral proceeds) are applied according to Section 9.4[267](index=267&type=chunk) - Lenders' obligations to make Loans and payments are **several, not joint**[268](index=268&type=chunk) - If a Lender receives a disproportionate payment, it must purchase participations in other Lenders' portions of the Loans to ensure pro rata sharing[271](index=271&type=chunk) [Setoff](index=42&type=section&id=SECTION%204.5) This section grants each Lender the right to appropriate and apply any balances, credits, deposits, or accounts of the Borrower held with that Lender to the payment of Obligations, upon the occurrence and continuance of specific Defaults or any Event of Default - Each Lender has the right to set off against the Borrower's balances, credits, deposits, or accounts held with that Lender to pay Obligations[273](index=273&type=chunk) - This right is exercisable upon the occurrence and continuance of specific Defaults (Section 9.1(h)(i)-(iv)) or any Event of Default[273](index=273&type=chunk) - The Borrower grants each Lender a continuing security interest in such balances, credits, deposits, and accounts[273](index=273&type=chunk) [SOFR Rate Not Determinable](index=43&type=section&id=SECTION%204.6) This section outlines procedures if the SOFR Rate cannot be determined for an Interest Period, initially using the Prime Rate and then establishing an alternate interest rate if the issue is not temporary - If the SOFR Rate cannot be ascertained, the Loans will bear interest calculated using the **Prime Rate** instead of the SOFR Rate[275](index=275&type=chunk) - If the SOFR Rate issue is unlikely to be temporary, the Administrative Agent (at Lenders' direction) and Borrower will establish an alternate rate and amend the Agreement[276](index=276&type=chunk) [CONDITIONS TO MAKING THE LOANS](index=43&type=section&id=Article%20V) This article specifies the conditions that must be satisfied or waived before the Lenders are obligated to make the Initial Loan and subsequent Delayed Draw Loans [Credit Extensions](index=43&type=section&id=SECTION%205.1) This section specifies the conditions precedent for the Lenders' obligation to make the Initial Loan and the subsequent First and Second Delayed Draw Loans, with the Initial Loan requiring satisfaction of most Article V conditions and Delayed Draws having a more limited set - The Initial Loan is subject to the execution of the Agreement, delivery of a Loan Request, and satisfaction of all conditions in Article V (except Sections 5.18 and 5.19)[278](index=278&type=chunk) - The First and Second Delayed Draw Loans are subject to the prior making of the Initial Loan, delivery of a Loan Request, and satisfaction of Sections 5.3, 5.8, 5.18(a)/(b), 5.19(a)/(b), and 5.20[278](index=278&type=chunk) [Secretary's Certificate, Etc](index=44&type=section&id=SECTION%205.2) This section requires the Borrower and each Guarantor to provide a good standing certificate and a Secretary's Certificate (or equivalent) on the Closing Date, attesting to corporate resolutions, incumbency, and the validity of organizational documents - Borrower and each Guarantor must provide a good standing certificate and a Secretary's Certificate (or equivalent) on the Closing Date[280](index=280&type=chunk) - The certificate must confirm resolutions authorizing Investment Documents, incumbency of officers, and validity of organizational documents[280](index=280&type=chunk) - Resolutions for the issuance of Warrants and Parent's ordinary shares are to be passed after the Closing Date[280](index=280&type=chunk) [Closing Date Certificates](index=44&type=section&id=SECTION%205.3) This section requires the Borrower to deliver a Closing Date Certificate, executed by an Authorized Officer, on the Closing Date or applicable Delayed Draw Closing Date, affirming the material truth and correctness of representations and warranties, the absence of any continuing Default, and the satisfaction of all applicable conditions in Article V - A Closing Date Certificate, executed by an Authorized Officer of the Borrower, is required on the Closing Date or applicable Delayed Draw Closing Date[281](index=281&type=chunk) - The certificate must affirm that representations and warranties are true and correct in all material respects, no Default has occurred or would result from the loans, and all Article V conditions are satisfied[281](index=281&type=chunk) [Payment of Outstanding Indebtedness, Etc](index=45&type=section&id=SECTION%205.4) This section mandates that all indebtedness listed in Schedule 8.2(a), including interest and prepayment premiums, must be fully paid from the Initial Loan proceeds, with commitments terminated and all related Liens released - All indebtedness identified in Schedule 8.2(a) must be paid in full from the proceeds of the Initial Loan[283](index=283&type=chunk) - Commitments for such indebtedness must be terminated, and all Liens securing them released[283](index=283&type=chunk) - The Administrative Agent must receive UCC Form UCC-3 termination statements or other suitable instruments[283](index=283&type=chunk) [Delivery of Note](index=45&type=section&id=SECTION%205.5) This section requires each Lender to receive a duly executed Promissory Note from an Authorized Officer of the Borrower as a condition to making the loans - Each Lender must receive a Promissory Note, duly executed by an Authorized Officer of the Borrower[284](index=284&type=chunk) [Financial Information, Etc](index=45&type=section&id=SECTION%205.6) This section specifies the financial information that must be provided to the Administrative Agent and Lenders, including audited consolidated financial statements for recent fiscal years, unaudited consolidated statements for recent fiscal quarters, and a statement of unrestricted cash-on-hand and Cash Equivalent Investments - Audited consolidated financial statements of Parent and Subsidiaries are required for Fiscal Years ended **December 31, 2021, 2022, and 2023**[285](index=285&type=chunk) - Unaudited consolidated statements of financial position, profit or loss, comprehensive income, changes in equity, and cash flows are required for Fiscal Quarters ended **September 30, 2023, and December 31, 2023**[285](index=285&type=chunk) - A statement of unrestricted cash-on-hand and Cash Equivalent Investments of Parent and Subsidiaries as of **March 31, 2023**, is also required[285](index=285&type=chunk) [Compliance Certificate](index=45&type=section&id=SECTION%205.7) This section requires the delivery of an initial Compliance Certificate on a pro forma basis, assuming the Initial Loan was made as of December 31, 2023, executed by an Authorized Officer with financial responsibilities and satisfactory to the Administrative Agent and Lenders - An initial Compliance Certificate is required on a pro forma basis, assuming the Initial Loan was made as of **December 31, 2023**[286](index=286&type=chunk) - The certificate must be duly executed by an Authorized Officer of Parent with chief financial or accounting responsibilities[286](index=286&type=chunk) [Solvency, Etc](index=45&type=section&id=SECTION%205.8) This section requires the delivery of a solvency certificate, executed by the chief financial or accounting Authorized Officer of Parent, on the Closing Date or applicable Delayed Draw Closing Date, in a form and substance satisfactory to the Administrative Agent and Lenders - A solvency certificate, executed by the chief financial or accounting Authorized Officer of Parent, is required on the Closing Date or applicable Delayed Draw Closing Date[287](index=287&type=chunk) - The certificate must be in a form and substance satisfactory to the Administrative Agent and Lenders[287](index=287&type=chunk) [Guarantee](index=45&type=section&id=SECTION%205.9) This section requires the Administrative Agent and Lenders to receive executed counterparts of the Guarantee, dated as of the date of the Agreement, from each Guarantor - Executed counterparts of the Guarantee, dated as of the Agreement date, must be received from each Guarantor[288](index=288&type=chunk) [Security Agreements](index=46&type=section&id=SECTION%205.10) This section mandates the delivery of executed Security Agreements from the Borrower and each Guarantor, along with documentation to perfect security interests, including certificates for Capital Securities, financing statements, UCC termination statements, and, subject to certain conditions, landlord access agreements and evidence of Controlled Accounts - Executed counterparts of the Security Agreement are required from the Borrower and each Guarantor[290](index=290&type=chunk) - Certificates evidencing Capital Securities owned by Borrower/Guarantors in Subsidiaries, accompanied by undated instruments of transfer, or confirmation of perfected security interest for uncertificated securities[290](index=290&type=chunk) - Financing statements (UCC) and other instruments necessary to perfect security interests of Secured Parties[290](index=290&type=chunk) - UCC Form UCC-3 termination statements to release all Liens on assets or securing indebtedness identified in Schedule 8.2(a)[290](index=290&type=chunk) - Subject to Section 7.17, landlord access agreements and bailee letters from landlords/persons possessing Collateral, and evidence that all deposit/disbursement/investment accounts (other than Excluded Accounts) are Controlled Accounts[290](index=290&type=chunk) [Intellectual Property Security Agreements](index=46&type=section&id=SECTION%205.11) This section requires the Borrower or any Guarantor, as applicable, to deliver executed Patent Security Agreements and Trademark Security Agreements to the Administrative Agent for the benefit of the Secured Parties on the Closing Date - Executed Patent Security Agreements and Trademark Security Agreements are required from the Borrower or any Guarantor on the Closing Date[291](index=291&type=chunk) [Belgian Security Agreements](index=46&type=section&id=SECTION%205.12) This section mandates the delivery of executed counterparts of a Belgian law-governed omnibus pledge agreement from the Parent to the Administrative Agent and Lenders on the Closing Date - Executed counterparts of a Belgian law-governed omnibus pledge agreement are required from the Parent on the Closing Date[292](index=292&type=chunk) [Opinions of Counsel](index=46&type=section&id=SECTION%205.13) This section requires the Administrative Agent and Lenders to receive legal opinions, dated the Closing Date, from K&L Gates LLP (counsel to Borrower/Guarantors), Baker McKenzie BV/SRL (Belgian counsel to Borrower/Guarantors), and NautaDutilh BV/SRL (Belgian counsel to Administrative Agent/Lenders) - Legal opinions are required from K&L Gates LLP, Baker McKenzie BV/SRL, and NautaDutilh BV/SRL, dated the Closing Date[293](index=293&type=chunk) [Insurance](index=47&type=section&id=SECTION%205.14) This section, subject to Section 7.17, requires the Administrative Agent and Lenders to receive certified copies of insurance policies (or binders) from satisfactory insurance companies, evidencing coverage required by Loan Documents, with the Administrative Agent named as loss payee or additional insured - Certified copies of insurance policies (or binders) are required, evidencing coverage per Loan Documents[295](index=295&type=chunk) - The Administrative Agent must be named as loss payee or additional insured, as applicable[295](index=295&type=chunk) [Closing Fees, Expenses, Etc.](index=47&type=section&id=SECTION%205.15) This section stipulates that all fees, costs, and expenses due and payable under Section 10.3, the Initial Upfront Fee, and the initial Administration Fee (as per Section 3.11) must be received by the Administrative Agent and each Lender on the Closing Date - All fees, costs, and expenses due under Section 10.3, the Initial Upfront Fee, and the initial Administration Fee (Section 3.11) must be received on the Closing Date[296](index=296&type=chunk) [Anti-Terrorism Laws](index=47&type=section&id=SECTION%205.16) This section requires the Administrative Agent and Lenders to receive all documentation and information mandated by bank regulatory authorities under applicable 'know your customer' and anti-money laundering rules and regulations, including the U.S.A. Patriot Act - All documentation and information required by 'know your customer' and anti-money laundering rules (e.g., U.S.A. Patriot Act) must be provided[297](index=297&type=chunk) [Satisfactory Legal Form](index=47&type=section&id=SECTION%205.17) This section states that all documents executed or submitted by Parent or any Subsidiary must be satisfactory in form and substance to the Administrative Agent and Lenders, and all requested information, approvals, resolutions, opinions, and instruments must be received - All documents executed or submitted by Parent or any Subsidiary must be satisfactory in form and substance to the Administrative Agent and Lenders[298](index=298&type=chunk) - All requested information, approvals, resolutions, opinions, documents, or instruments must be received[298](index=298&type=chunk) [Revenue Base](index=47&type=section&id=SECTION%205.18) This section sets specific Revenue Base thresholds as conditions for the First and Second Delayed Draw Closing Dates, requiring the Administrative Agent and Lenders to be satisfied that the trailing 12-month Revenue Base meets these minimums prior to each respective delayed draw Minimum Revenue Base for Delayed Draws | Condition | Minimum Trailing 12-Month Revenue Base | | :-------- | :------------------------------------- | | First Delayed Draw Closing Date | At least $[***] (ending month prior to closing) | | Second Delayed Draw Closing Date | At least $[***] (ending month prior to closing) | [Disclosure Schedules](index=47&type=section&id=SECTION%205.19) This section requires the Borrower to deliver updated disclosure schedules immediately prior to the First and Second Delayed Draw Closing Dates, pertaining to Intellectual Property, Material Agreements, Transactions with Affiliates, Deposit and Disbursement Accounts, and Security Agreement schedules - Borrower must deliver updated Schedules 6.15(a), 6.16, 6.19, and 6.22, along with Schedules III through VI of the Security Agreement and Schedule 1 to the Belgian Security Agreement[301](index=301&type=chunk)[303](index=303&type=chunk) - These updates are required immediately prior to the First and Second Delayed Draw Closing Dates, and must be complete and accurate as of those dates[301](index=301&type=chunk)[303](index=303&type=chunk) [Material Adverse Change](index=48&type=section&id=SECTION%205.20) This section establishes a condition that no event, change, circumstance, effect, or other matter shall have occurred between December 31, 2023, and the Closing Date or applicable Delayed Draw Closing Date that could reasonably be expected to have a Material Adverse Effect - No event or change that could reasonably be expected to have a Material Adverse Effect must have occurred between **December 31, 2023**, and the Closing Date or applicable Delayed Draw Closing Date[304](index=304&type=chunk) [Excluded Subsidiaries](index=48&type=section&id=SECTION%205.21) This section identifies the specific entities that are designated as Excluded Subsidiaries as of the Closing Date: MDxHealth B.V., MDxHealth Research B.V., and MDxHealth Servicelab B.V - As of the Closing Date, the only Excluded Subsidiaries are MDxHealth B.V., MDxHealth Research B.V., and MDxHealth Servicelab B.V[304](index=304&type=chunk) [[***]](index=48&type=section&id=SECTION%205.22) This section is redacted in the provided document [REPRESENTATIONS AND WARRANTIES](index=48&type=section&id=Article%20VI) This article outlines the representations and warranties made by Parent and its Subsidiaries regarding their organization, authorization, financial condition, legal compliance, and other material aspects of their business [Organization, Etc.](index=48&type=section&id=SECTION%206.1) Parent and each Subsidiary represent and warrant that they are validly organized, existing, and in good standing under applicable laws, duly qualified to do business where required, and possess full power and authority to execute and perform Investment Documents and conduct their business - Parent and each Subsidiary are validly organized, existing, and in good standing under their respective jurisdictions[306](index=306&type=chunk) - They possess full power and authority, and all requisite governmental licenses and approvals, to enter into and perform Investment Documents and conduct their business[306](index=306&type=chunk) [Due Authorization, Non-Contravention, Etc.](index=49&type=section&id=SECTION%206.2) Parent and each Subsidiary represent and warrant that the execution, delivery, and performance of Investment Documents are within their corporate powers, duly authorized, and do not contravene organizational documents, court orders, or laws, nor do they create unpermitted Liens or result in defaults under other agreements - Execution, delivery, and performance of Investment Documents are within corporate powers and duly authorized[308](index=308&type=chunk) - These actions do not contravene organizational documents, court decrees, or laws, nor do they create unpermitted Liens or defaults under other agreements[308](index=308&type=chunk) - Resolutions for the issuance of Warrants and Parent's ordinary shares are to be passed after the Closing Date[308](index=308&type=chunk) [Government Approval, Regulation, Etc.](index=49&type=section&id=SECTION%206.3) Parent and each Subsidiary represent and warrant that no further governmental authorizations, approvals, or filings are required for the due execution, delivery, or performance of any Investment Document to which they are a party, beyond those already obtained or to be obtained on the Closing Date - No additional governmental authorization, approval, or filing is required for the execution, delivery, or performance of Investment Documents, beyond those already obtained or to be obtained on the Closing Date[309](index=309&type=chunk) [Validity, Etc.](index=49&type=section&id=SECTION%206.4) Parent and each Subsidiary represent and warrant that each Investment Document to which they are a party constitutes their legal, valid, and binding obligations, enforceable in accordance with its terms, subject to standard bankruptcy, insolvency, and equity limitations - Each Investment Document is a legal, valid, and binding obligation of Parent or any Subsidiary party thereto, enforceable in accordance with its terms[310](index=310&type=chunk) - Enforceability is subject to applicable bankruptcy, insolvency, reorganization, or similar laws and principles of equity[310](index=310&type=chunk) [Financial Information](index=49&type=section&id=SECTION%206.5) Parent and the Borrower represent and warrant that the consolidated financial statements provided to the Administrative Agent and Lenders were prepared in accordance with IFRS, consistently applied, and fairly present the financial condition and results of operations of Parent and its Subsidiaries - Consolidated financial statements of Parent and Subsidiaries were prepared in accordance with **IFRS**, consistently applied[311](index=311&type=chunk) - The financial statements fairly present the consolidated financial condition and results of operations as of the dates and for the periods presented[311](index=311&type=chunk) [No Material Adverse Change](index=49&type=section&id=SECTION%206.6) Parent and the Borrower represent and warrant that since December 31, 2023, no event, change, circumstance, effect, or other matter has occurred that has had a Material Adverse Effect - No event, change, circumstance, effect, or other matter has had a Material Adverse Effect since **December 31, 2023**[312](index=312&type=chunk) [Litigation, Labor Matters and Environmental Matters](index=49&type=section&id=SECTION%206.7) Parent and the Borrower represent and warrant that, except as disclosed, there is no pending or threatened litigation, labor controversies, or environmental liabilities that would reasonably be expected to result in significant liabilities or adversely affect the Agreement, and affirm compliance with Environmental Laws and Permits - No pending or threatened actions, suits, or proceedings against Parent or any Subsidiary that are reasonably likely to result in liabilities exceeding **$[***]** or adversely affect the Agreement, except as described on Schedule 6.7(a)[313](index=313&type=chunk) - No labor controversies pending or threatened against Parent or any Subsidiary that are reasonably likely to result in liabilities exceeding **$[***]** or adversely affect the Agreement[315](index=315&type=chunk) - Parent and Subsidiaries have complied with Environmental Laws and Permits, are not subject to Environmental Liability, and have no knowledge of any basis for such liability that would exceed **$[***]** in aggregate[316](index=316&type=chunk) [Subsidiaries](index=50&type=section&id=SECTION%206.8) Parent represents and warrants that it has no Subsidiaries other than those identified in Schedule 6.8 or those permitted to be organized or acquired after the Closing Date in accordance with the Agreement - Parent has no Subsidiaries except those identified in Schedule 6.8 or permitted to be organized/acquired after the Closing Date per Sections 8.5 and 8.7[317](index=317&type=chunk) [Ownership of Properties](index=50&type=section&id=SECTION%206.9) Parent and each Subsidiary represent and warrant that they own good and marketable fee title to owned real property, good and valid title to owned personal property, or valid and enforceable leasehold interests in leased property, all free and clear of unpermitted Liens or claims - Parent and each Subsidiary own good and marketable fee title to owned real property and good and valid title to owned personal property[318](index=318&type=chunk) - They hold valid and enforceable leasehold interests in leased real or personal property[318](index=318&type=chunk) - All properties and assets are free and clear of all Liens or claims, except for Liens permitted by Section 8.3[318](index=318&type=chunk) [Taxes](index=50&type=section&id=SECTION%206.10) Parent and each Subsidiary represent and warrant that they have filed all required federal and other material tax returns and reports and paid all federal and other material Taxes due, except for those being diligently contested in good faith with adequate reserves - Parent and each Subsidiary have filed all required federal and material tax returns and reports[319](index=319&type=chunk) - They have paid all federal and material Taxes due and owing, except for those contested in good faith with adequate IFRS reserves[319](index=319&type=chunk) [Benefit Plans, Etc.](index=50&type=section&id=SECTION%206.11) Parent and its Subsidiaries represent and warrant that they do not sponsor or have material liability with respect to Benefit Plans, are not party to collective bargaining agreements, and all existing employee benefit plans comply with terms and law, and are fully insured where applicable - None of Parent, Subsidiaries, or ERISA Affiliates sponsors, maintains, contributes to, or has actual/potential liability with respect to any Benefit Plan[320](index=320&type=chunk) - No party is subject to collective bargaining agreements[320](index=320&type=chunk) - All employee benefit plans comply materially with their terms and applicable law, and those providing medical, dental, vision, or long-term disability benefits are fully insured by a third-party insurance company[320](index=320&type=chunk) [Accuracy of Information](index=51&type=section&id=SECTION%206.12) Parent and the Borrower represent and warrant that information furnished in writing to the Administrative Agent or Lenders in connection with Investment Documents, when taken as a whole, does not contain any untrue statement of material fact or omit any material fact necessary to prevent it from being misleading, and projected financial information was prepared in good faith based on reasonable assumptions - Information furnished in writing to the Administrative Agent or Lenders in connection with Investment Documents, taken as a whole, does not contain any untrue statement of material fact or omit any material fact[322](index=322&type=chunk) - Projected financial information was prepared in good faith based upon assumptions reasonably believed to be reasonable at the time made[322](index=322&type=chunk) [Regulations U and X](index=51&type=section&id=SECTION%206.13) Parent and each Subsidiary represent and warrant that they are not engaged in the business of extending credit for margin stock, and no loan proceeds will be used to purchase or carry margin stock or for any purpose violating F.R.S. Board Regulation U or Regulation X - None of Parent or any Subsidiary is engaged in the business of extending credit for buying or carrying margin stock[323](index=323&type=chunk) - No loan proceeds will be used to purchase or carry margin stock or for any purpose violating F.R.S. Board Regulation U or Regulation X[323](index=323&type=chunk) [Solvency](index=51&type=section&id=SECTION%206.14) Parent and the Borrower represent and warrant that, individually for the Borrower and on a consolidated basis for Parent and its Subsidiaries, they are Solvent both before and after giving effect to the Loans - Borrower (individually) and Parent and its Subsidiaries (consolidated) are **Solvent** both before and after giving effect to the Loans[324](index=324&type=chunk) [Intellectual Property](index=51&type=section&id=SECTION%206.15) Parent and the Borrower represent and warrant regarding their Intellectual Property (IP), affirming that Owned and Licensed IP are necessary for business operations, free of unpermitted Liens, in full force, and protected, with no material infringement claims pending or threatened, and commercially reasonable efforts taken to maintain confidentiality - Schedule 6.15(a) lists all Patents, registered/unregistered Trademarks, registered Copyrights, and commercially significant unregistered IP owned by, purportedly owned by, or licensed to Parent or any Subsidiary[325](index=325&type=chunk) - The Owned Intellectual Property and Licensed Intellectual Property together constitute all IP necessary for the operation of Parent's and Subsidiaries' business as currently conducted and proposed[327](index=327&type=chunk) - Parent or a Subsidiary owns or has valid rights to all Owned and Licensed IP, free and clear of Liens other than those permitted by Section 8.3[328](index=328&type=chunk) - All Owned IP and, to Parent's/Borrower's knowledge, Licensed IP is in full force and effect, and no material unpaid maintenance or renewal fees are overdue[329](index=329&type=chunk)[330](index=330&type=chunk) - No actual or threatened proceedings challenge the ownership, validity, or enforceability of Owned or Licensed IP, and no Third Party is committing infringement[331](index=331&type=chunk)[333](index=333&type=chunk) - Parent and Subsidiaries have taken commercially reasonable actions to protect Confidential Business Information and commercially significant unregistered IP, with employees and others subject to confidentiality agreements[337](index=337&type=chunk) [Material Agreements](index=53&type=section&id=SECTION%206.16) Parent and the Borrower represent and warrant that Schedule 6.16 provides a complete and accurate list of all Material Agreements, which are in full force and effect, legally binding, and have not suffered any material default or breach, with full copies provided to the Administrative Agent and Lenders - Schedule 6.16 provides a complete and accurate list of all Material Agreements of Parent or any Subsidiary as of the Closing Date or applicable Delayed Draw Closing Date[338](index=338&type=chunk) - Each Material Agreement is in full force and effect, legal, valid, and binding, and has not been materially defaulted or breached by any party[338](index=338&type=chunk) - Full, complete, and correct copies of all Material Agreements (including exhibits and schedules) have been provided to the Administrative Agent and Lenders[340](index=340&type=chunk) [Permits](index=54&type=section&id=SECTION%206.17) Parent and the Subsidiaries represent and warrant that they possess all necessary Permits, including Key Permits and Environmental Permits, for the ownership, operation, and conduct of their business and the testing and distribution of Products, and all such Permits are valid with no defaults thereunder - Parent and Subsidiaries have all necessary Permits, including Key Permits and Environmental Permits, for their business operations and Product activities[340](index=340&type=chunk) - All such Permits are validly held, in full force and effect, and without defaults[340](index=340&type=chunk) [Regulatory Matters](index=54&type=section&id=SECTION%206.18) Parent and the Borrower represent and warrant that their business and Products comply materially with all applicable U.S. and foreign laws and Regulatory Authorizations, affirming the absence of material regulatory actions, product recalls, or investigations, and that all submissions to Governmental Authorities were truthful and complete - The business of Parent and Subsidiaries is conducted in material compliance with all applicable U.S. federal, state, local, or foreign laws (including Privacy Laws, FD&C Act, CLIA, IVDR) and Regulatory Authorizations[341](index=341&type=chunk) - Products and laboratory testing services comply materially with applicable regulations, and no written notice of action to withdraw Product approval or accreditation has been received[342](index=342&type=chunk)[343](index=343&type=chunk) - Parent and Subsidiaries own or hold all necessary Key Permits, which are valid and in full force, and have not received notice of revocation, withdrawal, or suspension[344](index=344&type=chunk) - All applications, submissions, and information provided to Governmental Authorities for Key Permits were truthful, complete, and accurate in all material respects[346](index=346&type=chunk) - No Product or facility has been subject to Governmental Authority shutdown or import/export prohibition, nor have 'warning letters' or similar correspondence been received[347](index=347&type=chunk) - No recalls, safety notices, or material product complaints have occurred, and no facts exist that would likely result in such actions or a Material Adverse Effect[348](index=348&type=chunk) - No investigation by any Governmental Authority is pending or threatened, and no noncompliance with Laws or quality concerns have been communicated[349](index=349&type=chunk) - No unlawful rebates or kickbacks, and all billings for services are materially true, correct, and compliant with applicable Laws[352](index=352&type=chunk) - No officer, director, manager, employee, stockholder, or agent has been convicted, charged, or investigated for health program-related offenses or fraud, nor excluded from participation in such programs[353](index=353&type=chunk) - Products were researched, developed, designed, and validated in material compliance with applicable Laws, and all studies/trials were conducted in material compliance with Laws and good clinical/laboratory practices[354](index=354&type=chunk) - No clinical investigators have been disqualified or sanctioned by the FDA or other Governmental Authority, and no notices threatening termination or suspension of clinical trials have been received[356](index=356&type=chunk) [Transactions with Affiliates](index=57&type=section&id=SECTION%206.19) Parent and the Borrower represent and warrant that, during the three-year period prior to the Closing Date or applicable Delayed Draw Closing Date, no transactions with Affiliates have occurred, except for specific permitted types such as intercompany transactions, director/employee compensation, and equity incentive arrangements in the ordinary course of business - No transactions with Affiliates occurred in the **three-year period** prior to the Closing Date or applicable Delayed Draw Closing Date, except for permitted transactions[357](index=357&type=chunk) - Permitted transactions include those among Borrower and Guarantors, director fees/expenses, employment/equity incentive arrangements in the ordinary course, and equity holder agreements[357](index=357&type=chunk) [Investment Company Act](index=57&type=section&id=SECTION%206.20) Parent and each Subsidiary represent and warrant that they are not an 'investment company' and are not 'controlled' by an 'investment company,' as defined in, or subject to regulation under, the Investment Company Act of 1940 - None of Parent or any Subsidiary is an 'investment company' or 'controlled' by an 'investment company' under the Investment Company Act of 1940[358](index=358&type=chunk) [OFAC](index=57&type=section&id=SECTION%206.21) Parent, its Subsidiaries, and Related Parties represent and warrant that they are not subject to Sanctions, located in Designated Jurisdictions, or engaged in transactions with sanctioned persons/jurisdictions, and affirm that loan proceeds will not be used in violation of Sanctions - None of Parent, any Subsidiary, or any Related Party is currently subject to Sanctions, located in any Designated Jurisdiction, or has engaged in transactions with sanctioned persons/jurisdictions within the past **five years**[359](index=359&type=chunk) - Loan proceeds will not be used to fund activities in Designated Jurisdictions or for sanctioned persons, or in any manner that violates Sanctions[359](index=359&type=chunk) [Deposit and Disbursement Accounts](index=58&type=section&id=SECTION%206.22) Parent and the Borrower represent and warrant that Schedule 6.22 provides a complete and accurate list of all bank accounts maintained by Parent or any Subsidiary, confirming that each account (other than Excluded Accounts) is a Controlled Account as required by Section 7.12 - Schedule 6.22 provides a complete and accurate list of all deposit, lockbox, disbursement, investment, or similar accounts maintained by Parent or any Subsidiary[361](index=361&type=chunk) - Each such account (other than Excluded Accounts) is a Controlled Account to the extent required by Section 7.12[361](index=361&type=chunk) [Data Privacy and Information Security](index=58&type=section&id=SECTION%206.23) Parent and the Subsidiaries represent and warrant that they maintain appropriate data security policies and a comprehensive privacy program materially compliant with applicable law, affirming that privacy statements are not misleading, transactions will not violate privacy laws, and no material security incidents or unauthorized access to Personal Data or Confidential Business Information have occurred, also confirming contractual obligations with Data Processors and the sufficiency and security of IT Assets - Parent and Subsidiaries maintain appropriate data security policies, processes, controls, and a comprehensive privacy program materially compliant with applicable Law[362](index=362&type=chunk) - No privacy statements or disclosures are materially misleading, and contemplated transactions will not violate privacy statements or Laws[362](index=362&type=chunk) - No pending/past **five-year** actions regarding privacy/data security, and no material security incidents involving unauthorized access to Personal Data or Confidential Business Information[362](index=362&type=chunk) - Data Processors are contractually obligated to appropriate terms for Personal Data and IT Assets protection[363](index=363&type=chunk) - IT Assets are sufficient, operate as necessary, and do not contain malicious software; backup and disaster recovery policies are consistent with industry standards[364](index=364&type=chunk) - Reasonable and appropriate organizational, physical, administrative, and technical measures are implemented to protect Confidential Business Information, Personal Data, and IT Assets[366](index=366&type=chunk) [HIPAA](index=59&type=section&id=SECTION%206.24) Parent and the Borrower represent and warrant regarding their compliance with HIPAA, clarifying which entities are Covered Entities, confirming the existence and compliance of Business Associate agreements, affirming material compliance with all applicable HIPAA requirements, stating that no security incidents or breaches of Protected Health Information requiring notification have occurred, and that security risk analyses are periodically performed and remediated - Parent and Foreign Subsidiaries are not Covered Entities; Borrower and each Domestic Subsidiary are Covered Entities[368](index=368&type=chunk) - Parent, Borrower, and each Subsidiary have entered into Business Associate agreements as required by HIPAA and are in material compliance with them[369](index=369&type=chunk) - To the extent they are Covered Entities or Business Associates, they are in material compliance with all applicable HIPAA requirements[370](index=370&type=chunk) - No security incident or breach of Protected Health Information requiring notification under **45 C.F.R. Part 164, Subpart D** has occurred[372](index=372&type=chunk) - Security risk analyses are periodically performed and meet requirements, with all material threats and deficiencies fully remediated[373](index=373&type=chunk) [AFFIRMATIVE COVENANTS](index=60&type=section&id=Article%20VII) This article outlines the ongoing obligations of the Borrower and Parent to provide financial information, maintain existence, comply with laws, protect properties, and adhere to various operational and regulatory requirements [Financial Information, Reports, Notices, Etc.](index=60&type=section&id=SECTION%207.1) This section outlines the Borrower's and Parent's ongoing obligations to furnish various financial information, reports, and notices to the Administrative Agent and Lenders, including monthly, quarterly, and annual financial statements, compliance certificates, and prompt notification of defaults, material adverse developments, and other significant events, with specific provisions for handling Material Non-Public Information (MNPI) - Borrower must furnish monthly unaudited reports (within **30 days**) including Revenue Base (total and by Product), Liquidity, employee count, and a Monthly KPI Report[376](index=376&type=chunk) - Quarterly unaudited consolidated financial statements and Revenue Base reports are required within **45 days**[377](index=377&type=chunk) - Annual audited consolidated financial statements are required within **120 days**, without Impermissible Qualification[377](index=377&type=chunk) - A Compliance Certificate, showing compliance with Section 8.4 and reporting defaults, new Subsidiaries, or acquired real property, must be delivered concurrently with financial information[377](index=377&type=chunk) - Prompt notice (within **three days**) is required for Defaults, material adverse developments in litigation/labor, product-related claims over **$[***]**, and certain Benefit Plan liabilities or unionization efforts[377](index=377&type=chunk)[378](index=378&type=chunk) - Procedures are established for handling Material Non-Public Information (MNPI) to ensure compliance with securities laws, allowing Lenders to refuse or direct delivery of such information[381](index=381&type=chunk) [Maintenance of Existence; Compliance with Contracts, Laws, Etc](index=64&type=section&id=SECTION%207.2) Parent and each Subsidiary covenant to preserve their legal existence (with permitted exceptions), perform material obligations under Material Agreements, and comply materially with all applicable laws, rules, regulations, and orders, including timely payment of material Taxes (unless diligently contested with adequate reserves) - Parent and each Subsidiary will preserve their legal existence (except as permitted by Section 8.7)[383](index=383&type=chunk) - They will perform in all material respects their obligations under Material Agreements and comply in all material respects with all applicable Laws, rules, regulations, and orders[383](index=383&type=chunk) - This includes the timely payment of all material Taxes, unless diligently contested in good faith with adequate IFRS reserves[383](index=383&type=chunk) [Maintenance of Properties](index=64&type=section&id=SECTION%207.3) Parent and each Subsidiary covenant to maintain, preserve, protect, and keep their properties in good repair and working order, making necessary repairs and replacements to ensure proper business conduct, unless continued maintenance is no longer economically desirable or disposition is permitted - Parent and each Subsidiary will maintain, preserve, protect, and keep their properties in good repair, working order, and condition (ordinary wear and tear excepted)[384](index=384&type=chunk) - They will make necessary repairs, renewals, and replacements to ensure proper business conduct[384](index=384&type=chunk) - This obligation applies unless continued maintenance is no longer economically desirable, necessary, or useful, or disposition is permitted by Section 8.7 or 8.8[384](index=384&type=chunk) [Insurance](index=64&type=section&id=SECTION%207.4) Parent and each Subsidiary covenant to maintain customary property, casualty, business interruption, and worker's compensation insurance with reputable companies, with all required policies (excluding D&O and workers' comp) naming the Administrative Agent as mortgagee/lender loss payee and additional insured, and providing 30 days' prior written notice for cancellation or material modification - Parent and each Subsidiary will maintain insurance on property against business interruption, loss, and damage, and worker's compensation/employer's liability insurance[385](index=385&type=chunk) - All required insurance policies (except D&O and workers' comp) must name the Administrative Agent as mortgagee/lender loss payee and additional insured[386](index=386&type=chunk) - Policies must provide at least **30 days' prior written notice** to the Administrative Agent for any cancellation or material modification[386](index=386&type=chunk) [Books and Records](index=65&type=section&id=SECTION%207.5) Parent and each Subsidiary covenant to maintain IFRS-compliant books and records accurately reflecting business affairs, and permit the Administrative Agent, Lenders, or their representatives to visit offices, discuss financial matters with officers and accountants, and examine/photocopy books and records upon reasonable notice, with the Borrower paying independent public accountant fees incurred by such access - Parent and Subsidiaries will keep **IFRS-compliant** books and records accurately reflecting business affairs and transactions[388](index=388&type=chunk) - They must permit the Administrative Agent, Lenders, or their representatives to visit offices, discuss financial matters, and examine/photocopy books and records upon reasonable notice[388](index=388&type=chunk) - Borrower will pay any fees of the independent public accountant incurred in connection with the Administrative Agent's or Lender's exercise of these rights[388](index=388&type=chunk) [Environmental Law Covenant](index=65&type=section&id=SECTION%207.6) Parent and each Subsidiary covenant to operate their businesses and properties in material compliance with all Environmental Laws, maintain all Environmental Permits, and promptly notify the Administrative Agent of any material claims or non-compliance, and promptly resolve and mitigate any such issues - Parent and each Subsidiary will operate their businesses, facilities, and properties in material compliance with all Environmental Laws and maintain all Environmental Permits[389](index=389&type=chunk) - They will promptly notify the Administrative Agent of, and provide copies of material claims relating to, any actual or alleged non-compliance or Environmental Liabilities[389](index=389&type=chunk) - They will promptly resolve, remedy, and mitigate any such non-compliance or Environmental Liabilities[389](index=389&type=chunk) [Use of Proceeds](index=65&type=section&id=SECTION%207.7) The Borrower covenants to use the proceeds of the Loans to repay certain existing indebtedness of Parent and Subsidiaries, for general corporate purposes, to pay transaction fees and expenses, and to satisfy obligations under the GH Agreement - Loan proceeds will be used to repay certain existing indebtedness of Parent and Subsidiaries[390](index=390&type=chunk) - Proceeds will also be used for general corporate purposes and to pay fees and expenses associated with the transactions[390](index=390&type=chunk) - Proceeds will be used to satisfy obligations under the GH Agreement[390](index=390&type=chunk) [Future Guarantors, Security, Etc](index=65&type=section&id=SECTION%207.8) Parent, the Borrower, and each other Subsidiary (excluding Excluded Subsidiaries) covenant to execute necessary documents to grant, preserve, protect, and perfect first-priority Liens on their assets for the Obligations, including causing newly acquired/organized Subsidiaries to become Guarantors and pledge their Capital Securities, and promptly notifying the Adm

MDxHealth Reports Q1-2024 Results and Announces Growth Capital from OrbiMed Year-over-year Q1 revenues increase by 35% to $19.8 millionIncreasing 2024 revenue guidance to $83-85 million, previously $79-81 million Conference call with Q&A today at 08:30 AM ET / 14:30 CET IRVINE, CA, and HERSTAL, BELGIUM – May 1, 2024 (GlobeNewswire) – MDxHealth SA (NASDAQ:MDXH) (the "Company" or "mdxhealth"), a commercial-stage precision diagnostics company, today announced its financial results for the first quarter ended ...

FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 19 ...

Financial Data and Key Metrics Changes - Fourth quarter revenue was $19.4 million, an increase of 50% year-over-year, while full year revenue reached $70.2 million, representing an 89% increase year-over-year [4][15] - Gross margin improved to 65.3% in Q4 2023 from 56% in Q4 2022, a year-over-year improvement of 9.3 percentage points; for the full year, gross margins were 62.6% compared to 51.9% in the prior year, an improvement of 10.7 percentage points [9][17] - Operating loss for Q4 was $6.3 million, a reduction of 30% compared to the same period last year; full year operating loss was $27.3 million, down 28% year-over-year [18] Business Line Data and Key Metrics Changes - Q4 revenues comprised $8.8 million from GPS, $5.9 million from Confirm, $3.2 million from Resolve, and $1.3 million from Select [15] - Full year revenue excluding GPS increased by 42% year-over-year [4][15] Market Data and Key Metrics Changes - The company is projecting 2024 revenues of $79 million to $81 million, indicating a five-year compound annual growth rate (CAGR) of over 50% [11] Company Strategy and Development Direction - The company is focused on commercial execution and operating discipline, which are seen as foundational drivers of business performance [7] - MDxHealth aims to deliver sustainable growth leading to adjusted EBITDA profitability in the first half of 2025 [8] - The company is expanding its test menu and payer coverage, which are expected to create multiple sources of growth [7][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the balance of their test menu and the sustainable growth of their sales force [30] - The company is focused on maintaining operating expenses while driving revenue growth, indicating a disciplined approach to cost management [34][38] Other Important Information - Cash and cash equivalents as of December 31, 2023, were $22.4 million, with a total cash use of $10.3 million in Q4, influenced by non-recurring cash payments related to the transition to NASDAQ [19] Q&A Session Summary Question: Guidance on test level growth and pricing - Management indicated confidence in balanced growth across their test menu and the ability to drive unit and revenue growth [30][31] Question: Leverage on P&L and cost management - Management emphasized that revenue growth is key, and they have maintained operating expenses through disciplined cost management [34][38] Question: High-growth opportunities and business development - Management noted a shift from outbound to inbound opportunities, focusing on rigorous evaluation of potential partnerships and acquisitions [44][48] Question: Revenue guidance for 2024 and precision - Management explained that improved historical data allows for more precise revenue guidance, confident in meeting or exceeding expectations for 2024 [50] Question: Volume growth from specific tests - Management confirmed consistent growth across tests, with ASP accretion contributing to revenue growth [55][56] Question: Growth potential of Resolve test - Management acknowledged that Resolve has exceeded internal expectations, with room for growth in the urology market [66][68] Question: Cash utilization in 2024 - Management expressed confidence in maintaining a strong balance sheet and funding growth opportunities without excessive capital investment [88]

Michael McGarrity - Chief Executive Officer Ron Kalfus - Chief Financial Officer Operator Michael McGarrity Company Participants Dan Brennan - TD Cowen Andrew Brackmann - William Blair Jason Bednar - Piper Sandler Thomas Vranken - KBC Securities Francois Brisebois - Oppenheimer & Co Before we begin, I would like to remind everyone that we will make forward-looking statements during today's call. Whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent r ...

[PART I](index=8&type=section&id=PART%20I) [Key Information](index=8&type=section&id=Item%203.%20Key%20Information) This section details significant risks across business, operations, intellectual property, and regulatory environment, including financial losses and market dependence [Risk Factors](index=8&type=section&id=D.%20Risk%20Factors) The company faces substantial risks across business, industry, intellectual property, operations, and regulatory landscape, including financial losses and market dependence - The company has a significant history of financial losses, with an accumulated deficit of **$288.3 million** as of December 31, 2022, and a net loss of **$44.0 million** for the fiscal year 2022, expecting continued losses due to R&D and sales & marketing costs[31](index=31&type=chunk) - Commercial success is highly dependent on market acceptance and adequate reimbursement for its tests from third-party payors like Medicare and private insurers, which is an uncertain and complex process[30](index=30&type=chunk)[50](index=50&type=chunk)[56](index=56&type=chunk) - The business operates in a heavily regulated industry, subject to oversight from bodies like the FDA and CMS, where potential changes could lead to substantial costs and delays[33](index=33&type=chunk)[104](index=104&type=chunk)[113](index=113&type=chunk) - The company faces intense competition from other molecular diagnostics firms, some with substantially greater financial and marketing resources, including OPKO Health, Myriad Genetics, and Veracyte[43](index=43&type=chunk)[44](index=44&type=chunk)[47](index=47&type=chunk) [Information on the Company](index=41&type=section&id=Item%204.%20Information%20on%20the%20Company) This section details the company's history, business operations, and corporate structure, focusing on urologic precision diagnostics [History and Development of the Company](index=41&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) MDxHealth SA was incorporated in Belgium in 2003, listed on Euronext in 2006, and its ADSs began trading on Nasdaq in 2021 - The company was incorporated in Belgium in 2003, listed on Euronext Brussels in 2006, and its ADSs began trading on the Nasdaq Capital Market on **November 4, 2021**[173](index=173&type=chunk)[15](index=15&type=chunk) Capital Expenditures and R&D Costs (2020-2022) | Metric | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | | Capital Expenditures | $0.54M | $1.2M | $2.8M | | R&D Costs | $4.5M | $6.7M | $7.6M | [Business Overview](index=41&type=section&id=B.%20Business%20Overview) MDxHealth is a precision diagnostics company specializing in urologic solutions, primarily for prostate cancer, with a focus on the U.S. market - The company is a commercial-stage precision diagnostics firm focused on providing non-invasive, clinically actionable urologic solutions, particularly for prostate cancer[177](index=177&type=chunk) - Core products include Select mdx (pre-biopsy risk assessment), Confirm mdx (post-negative biopsy analysis), and GPS (post-diagnosis treatment guidance) to improve treatment decisions[177](index=177&type=chunk)[179](index=179&type=chunk)[182](index=182&type=chunk) - In August 2022, the company acquired the **GPS (Genomic Prostate Score) test** from Exact Sciences, expanding its portfolio into cancer management[180](index=180&type=chunk) - The company's primary commercial focus is the **U.S. market**, which accounts for over **95% of its revenues** and where over **90% of its staff** is based[183](index=183&type=chunk) - A key strategy is expanding reimbursement, with Select mdx, Confirm mdx, and GPS tests all receiving positive Medicare Local Coverage Determinations (LCDs)[191](index=191&type=chunk)[242](index=242&type=chunk) [Organizational Structure](index=64&type=section&id=C.%20Organizational%20Structure) MDxHealth SA, a Belgian entity, is the parent company with direct wholly-owned subsidiaries in Delaware and The Netherlands Subsidiary Structure as of December 31, 2022 | Subsidiary Name | Jurisdiction | Ownership Interest | | :--- | :--- | :--- | | MDxHealth, Inc. | Delaware | 100% (held directly) | | MDxHealth BV | The Netherlands | 100% (held directly) | | MDxHealth Servicelab BV | The Netherlands | 100% (held through MDxHealth BV) | | MDxHealth Research BV | The Netherlands | 100% (held through MDxHealth BV) | | Delta Laboratories LLC | Texas | 100% (held through MDxHealth, Inc.) | [Property, Plant and Equipment](index=64&type=section&id=D.%20Property%2C%20Plant%20and%20Equipment) The company operates from leased facilities, with its main U.S. lab in Irvine, California, and European operations in Nijmegen, The Netherlands - The main U.S. headquarters and laboratory is a **38,000 sq. ft.** leased facility in Irvine, California, with the lease expiring in **2026**[293](index=293&type=chunk) - European operations are based in a **7,800 sq. ft.** leased facility in Nijmegen, The Netherlands, with the lease expiring in **2027**[294](index=294&type=chunk) - The company also operates a smaller laboratory in Plano, Texas, and its corporate headquarters is in Herstal, Belgium[293](index=293&type=chunk)[294](index=294&type=chunk) [Operating and Financial Review and Prospects](index=65&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) This section analyzes the company's financial performance, condition, and liquidity, highlighting revenue growth and persistent net losses [Operating Results](index=68&type=section&id=A.%20Operating%20results) Operating results show significant revenue growth to **$37.1 million** in 2022, alongside widening net losses to **$44.0 million** Operating Results Summary (2021 vs. 2022) | (in Thousands) | 2022 | 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $37,054 | $22,239 | $14,815 | 67% | | Gross Profit | $19,219 | $10,564 | $8,655 | 82% | | Operating loss | ($37,900) | ($26,841) | ($11,059) | 41% | | Loss for the year | ($44,044) | ($29,002) | ($15,042) | 52% | | Basic and Diluted EPS | ($0.28) | ($0.24) | ($0.04) | 17% | - Revenue for 2022 increased by **67%** year-over-year, driven by the GPS test acquisition and volume growth in Confirm mdx and Resolve mdx, with **25% growth** excluding GPS[323](index=323&type=chunk) - Gross margin improved to **51.9%** in 2022 from **47.5%** in 2021, a **440 basis-point increase** attributed to a better product mix with the GPS test[325](index=325&type=chunk) - Operating expenses increased significantly in 2022, with selling & marketing up **50%** and G&A up **66%**, including **$3.7 million** in one-time expenses for the GPS acquisition[327](index=327&type=chunk)[328](index=328&type=chunk) [Liquidity and Capital Resources](index=72&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company manages liquidity through equity financing and debt, holding **$15.5 million** in cash as of December 31, 2022, and raising **$43.0 million** in early 2023 - As of December 31, 2022, the company had **$15.5 million** in cash and cash equivalents and an accumulated deficit of **$288.3 million**[343](index=343&type=chunk) - In February and March 2023, the company raised a total of **$43.0 million** in gross proceeds from a public offering of ADSs, which management believes will be sufficient for at least the next 12 months[344](index=344&type=chunk)[345](index=345&type=chunk)[351](index=351&type=chunk) - In August 2022, the company entered into a **$70 million** loan and security agreement with Innovatus, drawing an initial **$35 million**, with an additional **$35 million** available in 2024 and 2025 subject to conditions[347](index=347&type=chunk) Cash Flow Summary (2021 vs. 2022) | (in Thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operations | ($34,118) | ($22,548) | | Net cash used in investing activities | ($29,163) | ($896) | | Net cash from financing activities | $20,841 | $66,509 | [Trend Information](index=75&type=section&id=D.%20Trend%20information) Key trends include expanding ordering physicians, securing broader reimbursement, and menu expansion, all crucial for revenue growth and market acceptance - Revenue growth depends on expanding the base of ordering physicians and increasing penetration with existing customers[365](index=365&type=chunk) - Securing and maintaining adequate reimbursement from third-party payors, including Medicare and commercial insurers, is essential for commercial success, with Medicare LCDs secured for Confirm mdx, GPS, and Select mdx tests[367](index=367&type=chunk)[368](index=368&type=chunk) - Increasing market acceptance requires educating clinicians and patients about the clinical benefits of the company's tests, supported by peer-reviewed publications[370](index=370&type=chunk) - The company is actively expanding its test menu to cover the full continuum of prostate cancer care, with pipeline products like Monitor mdx for active surveillance monitoring[372](index=372&type=chunk) [Directors, Senior Management and Employees](index=77&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) This section details the company's leadership, compensation practices, board structure, and employee base, including key personnel and their roles [Directors and Senior Management](index=77&type=section&id=A.%20Directors%20and%20Senior%20Management) The Board of Directors consists of eight members, with five independent, and the executive management team is led by CEO Michael K. McGarrity - The Board of Directors consists of **8 members**, with Koen Hoffman as Chairperson, and **five** out of the eight members are determined to be independent[376](index=376&type=chunk)[381](index=381&type=chunk) - The executive management team is composed of Michael K. McGarrity (CEO), John Bellano (CCO), Ron Kalfus (CFO), and Joseph Sollee (EVP, Corporate Development & General Counsel)[395](index=395&type=chunk) [Compensation](index=81&type=section&id=B.%20Compensation) Compensation for non-executive directors is fixed, while executive management receives a fixed salary, performance-based bonus, and long-term incentives - Non-Executive Directors receive fixed annual fees (**€35,000**) and additional fees for committee roles, but no performance-based bonuses[403](index=403&type=chunk) - Executive management remuneration includes a fixed salary and a variable bonus linked to personal and company performance objectives, such as budget adherence, revenue targets, and test volume goals[415](index=415&type=chunk)[416](index=416&type=chunk)[432](index=432&type=chunk) 2022 Executive Management Compensation (Excluding Stock Options) | Executive(s) | Total Compensation (EUR) | Total Compensation (USD) | | :--- | :--- | :--- | | Michael K. McGarrity (CEO) | €533,396 | $561,932 | | Other Executive Management (3 persons) | €1,196,446 | $1,260,456 | - The total remuneration for the entire executive management team (including the CEO) was **€1,729,842 ($1,822,389)** in 2022, compared to **€1,526,037 ($1,814,834)** in 2021[428](index=428&type=chunk) [Board Practices](index=88&type=section&id=C.%20Board%20Practices) The Board of Directors operates with an Audit Committee and a Nomination and Remuneration Committee, both with independent director representation - The Board of Directors has established two primary committees: an Audit Committee and a Nomination and Remuneration Committee[442](index=442&type=chunk) - The Audit Committee consists of three independent directors, with Regine Slagmulder and Hilde Windels qualifying as "audit committee financial experts," monitoring financial reporting and internal controls[443](index=443&type=chunk)[445](index=445&type=chunk)[446](index=446&type=chunk) - The Nomination and Remuneration Committee consists of five non-executive directors, with a majority being independent, responsible for recommending candidates and proposing remuneration policies[448](index=448&type=chunk)[449](index=449&type=chunk)[450](index=450&type=chunk) [Employees](index=92&type=section&id=D.%20Employees) As of December 31, 2022, MDxHealth had **258 employees**, predominantly based in the United States, with no collective bargaining agreements Employee Headcount as of Dec 31, 2022 | Category | Number of Employees | | :--- | :--- | | Total Employees | 258 | | Full-time | 252 | | Location: United States | 244 | | Location: Europe | 14 | - None of the company's employees are covered by a collective bargaining agreement[452](index=452&type=chunk) [Major Shareholders and Related Party Transactions](index=92&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section identifies major shareholders and details transactions with related parties, including compensation and equity participation [Major Shareholders](index=92&type=section&id=A.%20Major%20Shareholders) As of March 31, 2023, significant shareholders include MVM Partners LLP (**16.8%**), Bleichroeder LP (**14.3%**), and Valiance Asset Management Limited (**7.7%**) Major Shareholders (as of March 31, 2023) | Shareholder | Percentage Ownership | | :--- | :--- | | MVM Partners LLP | 16.8% | | Bleichroeder LP | 14.3% | | Valiance Asset Management Limited | 7.7% | | Biovest NV | 4.4% | | All current directors and executive management (as a group) | 1.9% | - The percentage ownership is based on **270,380,936 ordinary shares** outstanding as of March 31, 2023[458](index=458&type=chunk) [Related Party Transactions](index=94&type=section&id=B.%20Related%20Party%20Transactions) Related party transactions primarily involve executive compensation agreements with severance clauses and major shareholder participation in equity offerings - Executive employment agreements for the CEO, CFO, and CCO include severance provisions for termination without cause, generally equal to **twelve months of base salary**[471](index=471&type=chunk) - The company has a subscription agreement with MVM Partners LLP that entitles MVM to have one observer at Board of Directors meetings as long as it holds at least **5%** of the company's shares[473](index=473&type=chunk) - Several major shareholders, including Bleichroeder LP, MVM Partners LLP, and Valiance Asset Management Limited, purchased a significant number of ADSs in the February 2023 public offering[474](index=474&type=chunk) [Financial Information](index=96&type=section&id=Item%208.%20Financial%20Information) This section contains consolidated financial statements, legal proceedings, and the company's dividend policy, emphasizing no anticipated cash dividends [Consolidated Statements and Other Financial Information](index=96&type=section&id=A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) The company's audited consolidated financial statements are appended, with no material legal proceedings, and a policy of retaining earnings rather than paying dividends - The company is not a party to any pending material legal proceedings[477](index=477&type=chunk) - A dispute exists with the former owners of NovioGendix over milestone payments totaling approximately **$880,000**, which the company believes have not been earned and are not payable[478](index=478&type=chunk) - The company has never paid cash dividends and intends to retain all future earnings to fund business operations and expansion[479](index=479&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=110&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to credit risk from receivables, minimal interest rate risk due to fixed-rate debt, and foreign currency risk from Euro-denominated operations - Credit risk arises from cash equivalents and receivables from over **1,000 customers**. This includes reimbursement risk from third-party payors and credit risk from patients' co-payments and deductibles[560](index=560&type=chunk)[561](index=561&type=chunk)[562](index=562&type=chunk) - As of December 31, 2022, trade accounts receivable amounted to **$9.4 million**, and no allowance for expected credit loss was recorded[563](index=563&type=chunk) - Interest rate risk is minimal as the company's long-term debt bears a fixed interest rate, and its cash portfolio is relatively insensitive to rate changes[565](index=565&type=chunk) - Foreign currency risk is present due to Euro-denominated operations in Europe, but exchange rate fluctuations have not been significant to date[566](index=566&type=chunk) [PART II](index=115&type=section&id=PART%20II) [Controls and Procedures](index=115&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, despite an interim material weakness - Management concluded that the company's disclosure controls and procedures were effective as of **December 31, 2022**[579](index=579&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of **December 31, 2022**[580](index=580&type=chunk) - A material weakness in internal control over financial reporting related to interim financial close was identified as of **September 30, 2022**, but was subsequently corrected and did not affect year-end reporting[583](index=583&type=chunk) - As an emerging growth company, this annual report does not include an attestation report from the registered public accounting firm on internal control over financial reporting[581](index=581&type=chunk) [Principal Accountant Fees and Services](index=116&type=section&id=Item%2016C.%20Principal%20Accountant%20Fees%20and%20Services) BDO Réviseurs d'Entreprises SRL served as the independent auditor, with total fees of **$471,766** in 2022, all pre-approved by the Audit Committee Principal Accountant Fees (2021-2022) | Fee Category | 2022 | 2021 | | :--- | :--- | :--- | | Audit fees | $238,500 | $182,125 | | Other audit fees | $191,455 | $183,652 | | Audit-related and other fees | $41,811 | $16,569 | | **Total** | **$471,766** | **$382,346** | - The Audit Committee's policy is to pre-approve all audit and permissible non-audit services performed by the independent registered public accounting firm[591](index=591&type=chunk) [Corporate Governance](index=118&type=section&id=Item%2016G.%20Corporate%20Governance) As a foreign private issuer, the company follows Belgian home country governance practices, differing from Nasdaq rules in areas like quorum and shareholder approval - The company, as a foreign private issuer, follows Belgian home country governance practices in lieu of certain Nasdaq listing rules[595](index=595&type=chunk) - Key areas of difference from Nasdaq rules include: * **Quorum at Shareholder Meetings:** No general quorum requirement under Belgian law, unlike Nasdaq's **33.33%** rule[596](index=596&type=chunk) * **Committee Composition:** The Nomination and Remuneration Committee requires only a majority of independent directors, not solely independent directors[599](index=599&type=chunk) * **Shareholder Approval:** The board has authority to issue shares under the 'authorized capital' framework without prior shareholder approval for certain transactions that would require it under Nasdaq rules[599](index=599&type=chunk) [PART III](index=120&type=section&id=PART%20III) [Financial Statements](index=120&type=section&id=Item%2018.%20Financial%20Statements) This section presents the company's audited consolidated financial statements for 2020-2022, prepared under IFRS, detailing profit/loss, financial position, and cash flow [Consolidated Statement of Profit or Loss](index=126&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) The consolidated statement shows revenue increased to **$37.1 million** in 2022, but the loss for the year widened to **$44.0 million** Consolidated Profit or Loss (in Thousands USD) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Revenues | 37,054 | 22,239 | 18,460 | | Gross profit | 19,219 | 10,564 | 8,044 | | Operating loss | (37,900) | (26,841) | (27,123) | | Loss for the year | (44,044) | (29,002) | (28,662) | | Basic and diluted loss per share | ($0.28) | ($0.24) | ($0.34) | [Consolidated Statement of Financial Position](index=128&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) Total assets increased to **$119.1 million** in 2022, driven by the GPS acquisition, while total equity decreased and liabilities substantially increased Consolidated Financial Position (in Thousands USD) | Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Total non-current assets | 89,986 | 8,466 | | Total current assets | 29,149 | 66,606 | | **Total Assets** | **119,135** | **75,072** | | **Equity & Liabilities** | | | | Total equity | 9,315 | 46,899 | | Total non-current liabilities | 91,542 | 11,741 | | Total current liabilities | 18,278 | 16,432 | | **Total Equity and Liabilities** | **119,135** | **75,072** | [Consolidated Statement of Cash Flow](index=130&type=section&id=Consolidated%20Statement%20of%20Cash%20Flow) Net cash used in operations increased to **$34.1 million** in 2022, with a **$42.4 million** decrease in cash and cash equivalents for the year Consolidated Cash Flow (in Thousands USD) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash outflow from operating activities | (34,118) | (22,548) | (20,244) | | Net cash outflow from investing activities | (29,163) | (896) | (537) | | Net cash inflow from financing activities | 20,841 | 66,509 | 14,290 | | **Net Change in cash and cash equivalents** | **(42,440)** | **43,065** | **(6,491)** | | **Cash and cash equivalents at end of year** | **15,503** | **58,498** | **15,953** | [Notes to Consolidated Financial Statements](index=131&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, the going concern assumption, critical estimates, the **$80.5 million** GPS acquisition, and revenue breakdown by geography - The financial statements are prepared on a going concern basis, supported by a **$43 million** gross proceeds capital raise in February/March 2023, providing sufficient cash for at least the next 12 months[636](index=636&type=chunk)[637](index=637&type=chunk) - The August 2022 acquisition of the GPS test from Exact Sciences was accounted for as a business combination with total consideration of **$80.5 million**, including **$25 million** cash, **$5 million** in stock, and **$50.5 million** in contingent consideration, resulting in **$35.9 million** of goodwill[716](index=716&type=chunk)[720](index=720&type=chunk) - In 2022, **99.8% of revenue** was from external customers, with **99%** generated from clinical laboratory testing in the U.S.[736](index=736&type=chunk) - As of December 31, 2022, the company had **$35.5 million** in loans and borrowings, primarily from a new **$35 million** facility with Innovatus, replacing a previous facility with Kreos Capital[788](index=788&type=chunk)[789](index=789&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of April 2023 Commission File Number 001-40996 MDXHEALTH SA (Translation of registrant's name into English) CAP Business Center Zone Industrielle des Hauts-Sarts 4040 Herstal, Belgium +32 4 257 70 21 (Address of principal executive office) Indicate by check mark whether the registrant files or will file ann ...

MDxHealth SA (MXDHF) Q4 2022 Earnings Conference Call March 8, 2023 4:30 PM ET Company Participants Michael McGarrity - CEO Ron Kalfus - CFO Conference Call Participants Francois Brisebois - Oppenheimer Mark Massaro - BTIG Thomas Franken - KBC Securities Operator Greetings. Welcome to the MDxHealth Fourth Quarter and Full Year 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note th ...

Introduction [Company Overview](index=4&type=section&id=Company%20Overview) MDxHealth SA, a Belgian limited liability company, was founded on January 10, 2003, listed on Euronext Brussels in June 2006, and operates with wholly-owned subsidiaries in Delaware, USA, and the Netherlands, with its primary business and executive team based in Irvine, California - MDxHealth SA was incorporated in Belgium on January 10, 2003, and listed on Euronext Brussels in June 2006[13](index=13&type=chunk) - The company has two wholly-owned subsidiaries: MDxHealth, Inc. (Delaware, USA) and MDxHealth B.V. (Netherlands)[13](index=13&type=chunk) - The company's headquarters are in Herstal, Belgium, with its main administrative offices, most business operations, and employees concentrated in Irvine, California, USA[14](index=14&type=chunk) [Special Note Regarding Forward-Looking Statements](index=5&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements Disclaimer](index=5&type=section&id=Forward-Looking%20Statements%20Disclaimer) This annual report contains numerous forward-looking statements regarding the company's future strategy, operations, financial condition, revenue, costs, prospects, and market growth, which are based on current expectations and assumptions, subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements in this report cover the company's strategy, future operations, financial condition, revenue, costs, prospects, management objectives, and anticipated market growth[19](index=19&type=chunk) - These statements are subject to specific risks and uncertainties that could cause actual results to differ materially from historical experience and current expectations, with detailed risks provided in "Item 3.D. Risk Factors"[19](index=19&type=chunk) - Plans for commercialized products and services and their market acceptance[21](index=21&type=chunk) - The market opportunity size for ConfirmMDx and SelectMDx tests and future tests[21](index=21&type=chunk) - The ability to obtain and maintain adequate coverage or reimbursement for products[21](index=21&type=chunk) - Existing regulatory and legislative developments[21](index=21&type=chunk) - The timing, progress, and results of research and development programs[21](index=21&type=chunk) - The ability to attract and retain qualified employees and key personnel[21](index=21&type=chunk) - The scope of intellectual property protection[21](index=21&type=chunk) - The impact of the COVID-19 pandemic on business, financial condition, and operating results[21](index=21&type=chunk) PART I [Item 1. Identity of Directors, Senior Management and Advisers](index=7&type=section&id=Item%201%2E%20Identity%20of%20Directors%2C%20Senior%20Management%20and%20Advisers) This section is not applicable [Item 2. Offer Statistics and Expected Timetable](index=7&type=section&id=Item%202%2E%20Offer%20Statistics%20and%20Expected%20Timetable) This section is not applicable [Item 3. Key Information](index=7&type=section&id=Item%203%2E%20Key%20Information) [A. [Reserved]](index=7&type=section&id=A%2E%20%5BReserved%5D) This section is not applicable [B. Capitalization and Indebtedness](index=7&type=section&id=B%2E%20Capitalization%20and%20Indebtedness) This section is not applicable [C. Reasons for the Offer and Use of Proceeds](index=7&type=section&id=C%2E%20Reasons%20for%20the%20Offer%20and%20Use%20of%20Proceeds) This section is not applicable [D. Risk Factors](index=7&type=section&id=D%2E%20Risk%20Factors) The company's business faces multiple significant risks, including the impact of the COVID-19 pandemic, sustained losses, funding needs, market acceptance, reliance on a single test, reimbursement uncertainties, intellectual property protection, operational challenges, stringent industry regulations, and risks related to ADS and ordinary share ownership - The COVID-19 pandemic led to a significant decline in ConfirmMDx and SelectMDx test sales in 2020, adversely affecting 2021 sales, with potential continued impact on volumes in 2022[32](index=32&type=chunk) - The company has incurred continuous losses since its inception, expects to continue incurring losses in the future, and may never achieve profitability[32](index=32&type=chunk) - The company may require substantial additional capital to sustain operations, address business needs, or seize new opportunities, which may not be available on acceptable terms or at all[32](index=32&type=chunk) - The company's commercial success will depend on the market acceptance and adoption of current and future tests[32](index=32&type=chunk) - The company's financial performance primarily relies on the sales of one test, requiring sufficient revenue from this test and other future solutions to grow the business[32](index=32&type=chunk) - The company faces uncertainty regarding third-party payer reimbursement for its tests[32](index=32&type=chunk) - The billing and collection process for tests is complex and time-consuming, and any delays in claim transmission and collection could adversely affect revenue[32](index=32&type=chunk) - The company faces intense competition in the molecular diagnostics industry, including from competitors with greater financial resources, sales and laboratory resources, and stronger market penetration[48](index=48&type=chunk)[49](index=49&type=chunk) - Intellectual property protection is crucial to the company's competitive position, and patent expirations, patent litigation, and failure to maintain strategic collaborations could weaken its competitive advantage[65](index=65&type=chunk)[68](index=68&type=chunk)[72](index=72&type=chunk) [Risks Related to Our Business and Industry](index=8&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) The company's business and industry face multiple risks, including the ongoing negative impact of the COVID-19 pandemic on test volumes and operations, continuous losses with uncertain future profitability, and significant reliance on the single ConfirmMDx test, alongside uncertainties in third-party payer coverage and reimbursement and complex billing and collection processes - The COVID-19 pandemic led to a **18% and 39% decrease** in billed ConfirmMDx and SelectMDx tests in 2020, respectively, and remained **16% and 37% lower** in 2021 compared to 2019[34](index=34&type=chunk) - As of December 31, 2021, the company had accumulated losses of **$244.3 million**, a net loss of **$29 million** in 2021, and cash outflows from operating activities of **$22.5 million**, with continued losses expected in the future[38](index=38&type=chunk) 2021 and 2020 ConfirmMDx Proportion of Total Revenue | Year | ConfirmMDx Proportion of Total Revenue | | :--- | :--- | | 2021 | 91% | | 2020 | 94% | - The company faces uncertainty regarding coverage and reimbursement for ConfirmMDx and SelectMDx tests from third-party payers, including Medicare and commercial payers, with SelectMDx Medicare reimbursement still awaiting a final decision[59](index=59&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) [Risks Related to Our Intellectual Property](index=14&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company relies on US and foreign patents, trademarks, and confidentiality agreements to protect its intellectual property, but patents may not be granted or could be circumvented, and infringement litigation may arise; recent US Supreme Court rulings have narrowed the scope of diagnostic method patents, potentially diminishing the value of the company's patents, and reliance on third-party collaborations and license agreements for key intellectual property means their termination or non-renewal could adversely affect the business - As of December 31, 2021, the company owned or exclusively licensed over **22 patent families** related to molecular technologies and cancer-specific biomarkers, totaling **116 granted or pending patent applications**[65](index=65&type=chunk) - Two US patents used for the ConfirmMDx test are set to expire in **November 2022 and 2024**, respectively, while one patent used for the SelectMDx test expires in **2036**[65](index=65&type=chunk) - Recent US court decisions, such as Univ. of Utah Research Found. v. Ambry Genetics Corp., have narrowed the scope of diagnostic method patents, potentially negatively impacting the validity of the company's existing or pending patents[67](index=67&type=chunk) - The company relies on licensing agreements with academic institutions to integrate licensed technologies into ConfirmMDx tests and pipeline products, making the continuity and terms of these agreements critical to the company[72](index=72&type=chunk) [Risks Related to Our Operations](index=16&type=section&id=Risks%20Related%20to%20Our%20Operations) The company's operations face multiple risks, including complex billing and collection processes that could impact revenue, inherent product liability claims, and challenges in attracting and retaining key talent; additionally, laboratory facilities could be shut down due to disasters or regulatory sanctions, reliance on a few third-party suppliers poses supply chain disruption risks, information technology system failures and data security breaches could harm reputation and lead to liability, and new test development is speculative and uncertain - Billing and collection for molecular diagnostic testing services are complex, time-consuming, and expensive, and non-compliance with intricate billing requirements could severely impede collection efforts and potentially lead to recoupment of payments already received[75](index=75&type=chunk) - Product or professional liability claims may arise if tests fail to perform as designed or results are misinterpreted, potentially leading to financial implications and reputational damage[77](index=77&type=chunk) - The company's success depends on attracting and retaining key executives and scientific collaborators, and losing these individuals could adversely affect operations and strategy implementation[79](index=79&type=chunk) - Labor shortages, employee turnover, and increased labor costs could negatively impact the company's operational efficiency and costs[81](index=81&type=chunk) - Laboratory facilities could be shut down due to natural or man-made disasters or regulatory sanctions, with all tests performed in laboratories in Irvine, California, Plano, Texas, and Nijmegen, Netherlands[86](index=86&type=chunk) - The company relies on a limited number of third-party suppliers for components and services required for its testing solutions, some of which are single-source, and supply chain disruptions could lead to service delays and impaired profitability[90](index=90&type=chunk) - Information technology, telecommunications, or other system failures could severely disrupt operations, and data security breaches could harm reputation and lead to legal liability[92](index=92&type=chunk) - The company invests significantly in new test development, but new products may not be successful, and clinical validation studies may be delayed or yield unfavorable results[94](index=94&type=chunk) - Obtaining human samples and timely recruitment of clinical trial patients are crucial for R&D, and a lack of these resources could delay product development and commercialization[97](index=97&type=chunk)[98](index=98&type=chunk) [Risks Related to Regulation of Our Business](index=20&type=section&id=Risks%20Related%20to%20Regulation%20of%20Our%20Business) The company's business is strictly regulated, and non-compliance with government payer rules could lead to exclusion from Medicare/Medicaid programs; federal and state healthcare laws and regulations (such as CLIA, HIPAA, anti-kickback laws, Stark Law) are complex and constantly changing, with violations potentially resulting in significant fines, criminal penalties, and business disruption; the FDA's uncertain regulatory stance on Laboratory Developed Tests (LDTs) may require the company's tests to obtain market approval, increasing costs and delays, and changes in tax laws and limitations on tax assets (such as NOLs) could also adversely affect financial performance - Non-compliance with Medicare, Medicaid, and other government payer regulations could result in the company's exclusion from programs, recoupment of payments, civil monetary penalties, and criminal sanctions[99](index=99&type=chunk) - The company's business is subject to various federal and state healthcare laws and regulations, including CLIA, FDA regulations, HIPAA, the Anti-Kickback Statute, the Stark Law, and the False Claims Act[100](index=100&type=chunk) - The Eliminating Kickbacks in Recovery Act (EKRA) is an all-payer anti-kickback statute whose broad language could impact laboratory services, and it lacks clear regulatory interpretation[102](index=102&type=chunk) - The FDA's regulatory policy on Laboratory Developed Tests (LDTs) is uncertain, and future requirements for premarket approval or clearance of the company's tests could lead to substantial costs and delays[108](index=108&type=chunk)[114](index=114&type=chunk) - The sample collection kits provided by the company are currently considered Class I medical devices, but the FDA may reclassify them as non-exempt or Class II devices, requiring premarket review[116](index=116&type=chunk) - Unexpected changes in tax laws and regulations, adjustments to tax reserves, additional tax exposure risks, or the loss of tax assets (such as net operating loss carryforwards) could significantly and adversely affect the company's operating results[117](index=117&type=chunk) - As of December 31, 2021, the company had consolidated net tax loss carryforwards of **$305 million**, with federal NOLs generated on or before December 31, 2017, having a 20-year carryforward period and potentially expiring unused; federal NOLs generated after 2017 can be carried forward indefinitely but are limited to **80% of taxable income**[117](index=117&type=chunk) [Risks Related to Ownership of the ADSs and Ordinary Shares](index=25&type=section&id=Risks%20Related%20to%20Ownership%20of%20the%20ADSs%20and%20Ordinary%20Shares) The trading price of the company's ADSs and ordinary shares may fluctuate due to various factors, including financial performance, competition, market sentiment, and macroeconomic conditions; major shareholders may exert control over company decisions, and a lack of analyst coverage or negative reports could impact share price; the company does not intend to pay dividends, so investor returns will depend on share price appreciation; as a Belgian company, ADS holders' rights differ from those of US company shareholders and may face dilution risk; furthermore, the company's status as an "emerging growth company" and "foreign private issuer" may result in reduced disclosure and governance requirements, potentially making ADSs less attractive to investors, and losing these statuses in the future could increase costs; US federal income tax rules may classify the company as a "passive foreign investment company" (PFIC), leading to adverse tax consequences for US holders, and dual listing and regulatory compliance also incur significant costs and administrative burdens - The market price of ADSs and ordinary shares may fluctuate significantly due to factors such as financial condition, new data releases, competition, merger and acquisition announcements, analyst reports, exchange rate fluctuations, changes in key personnel, reimbursement policy changes, financing activities, the COVID-19 pandemic, and macroeconomic conditions[121](index=121&type=chunk) - As of March 31, 2022, major shareholders including MVM Partners LLP, Bleichroeder LP, Valiance Asset Management, and Biovest NV collectively held approximately **58% of the company's ordinary shares**, giving them significant control over company decisions[124](index=124&type=chunk) - The company has never declared or paid any cash dividends and intends to retain all available funds and future earnings for business development, thus ADS holders' investment returns will depend on share price appreciation[126](index=126&type=chunk) - As a Belgian company, the rights of ADS holders under Belgian company law and the company's articles of association differ from those of shareholders in US companies[128](index=128&type=chunk) - Future issuance of a large number of ordinary shares or ADSs could result in dilution of existing ADS holders' equity and adversely affect the ADS price[131](index=131&type=chunk) - The company's status as an "emerging growth company" and "foreign private issuer" provides exemptions from reduced disclosure and governance requirements, which may make ADSs less attractive to certain investors, and losing these statuses in the future could increase compliance costs[138](index=138&type=chunk)[140](index=140&type=chunk) - If the company is classified as a "passive foreign investment company" (PFIC), US holders may face adverse US federal income tax consequences, including unfavorable capital gains tax rates, interest charges, and additional reporting requirements[145](index=145&type=chunk) - The company's dual listing on Nasdaq and Euronext Brussels results in significant legal, accounting, and compliance costs and requires substantial management time to address new compliance initiatives[152](index=152&type=chunk) - ADS holders may be unable to exercise their voting rights, and the transfer of ADSs and withdrawal of underlying ordinary shares may be restricted[166](index=166&type=chunk) - The deposit agreement may contain a jury trial waiver provision, which could lead to unfavorable litigation outcomes for plaintiffs[168](index=168&type=chunk) - Acquisition provisions in Belgian national law may make it difficult for the company to be acquired, thereby depriving shareholders of the opportunity to sell their shares at a premium[172](index=172&type=chunk) [Item 4. Information on the Company](index=29&type=section&id=Item%204%2E%20Information%20on%20the%20Company) - MDxHealth is a commercial-stage precision diagnostics company dedicated to providing non-invasive, clinically actionable, and cost-effective urology solutions to improve patient care[179](index=179&type=chunk) - The company's core products, SelectMDx and ConfirmMDx, are prostate cancer genetic testing solutions designed to enhance early detection of clinically significant prostate cancer and reduce unnecessary invasive procedures[179](index=179&type=chunk)[182](index=182&type=chunk) Key Financial Data (2019-2021) | Metric | 2021 (Million USD) | 2020 (Million USD) | 2019 (Million USD) | | :--- | :--- | :--- | :--- | | Revenue | 22.2 | 18.5 | 11.8 | | Net Loss | (29.0) | (28.7) | (43.1) | | Cash Flow from Operating Activities | (22.5) | (20.2) | (22.3) | | Cash and Cash Equivalents at Period End | 58.5 | 15.9 | 22.0 | - In 2021, the US market contributed **97%** of the company's total revenue, compared to **95%** in 2020 and **89%** in 2019, indicating its primary commercial focus in the United States[185](index=185&type=chunk) [A. History and Development of the Company](index=35&type=section&id=A%2E%20History%20and%20Development%20of%20the%20Company) MDxHealth SA was founded in Belgium on January 10, 2003, listed on Euronext Brussels in June 2006, and rebranded as MDxHealth SA in 2010; the company has wholly-owned subsidiaries in the US and Netherlands, with its headquarters in Belgium, and from 2019 to 2021, capital expenditures and R&D costs were continuously invested, primarily in laboratory equipment, IT, and product development - MDxHealth SA was founded in Belgium on January 10, 2003, listed on Euronext Brussels in June 2006, and rebranded as MDxHealth SA in 2010[175](index=175&type=chunk) Capital Expenditures and R&D Costs (2019-2021) | Metric | 2021 (Million USD) | 2020 (Million USD) | 2019 (Million USD) | | :--- | :--- | :--- | :--- | | Capital Expenditures | 1.2 | 0.54 | 0.073 | | R&D Costs | 6.7 | 4.5 | 9.0 | - R&D costs primarily include personnel costs, reagents and consumables, clinical studies, external services, patent fees, laboratory equipment depreciation, facility occupancy, and information technology costs, with absolute amounts expected to increase in the future but decrease as a percentage of revenue in the long term[177](index=177&type=chunk) [B. Business Overview](index=35&type=section&id=B%2E%20Business%20Overview) MDxHealth is a commercial-stage precision diagnostics company focused on providing non-invasive, clinically actionable, and cost-effective urology solutions to improve patient care; the company's core products, SelectMDx and ConfirmMDx, are used for early detection and management of prostate cancer, with new pipeline products actively under development; the primary market is the United States, where product adoption and reimbursement are driven by a direct sales team and strategic collaborations, but the business faces intense market competition and a strict regulatory environment [Overview](index=35&type=section&id=Overview) MDxHealth is a commercial-stage company focused on precision diagnostics in urology, utilizing genetic testing solutions like SelectMDx and ConfirmMDx to help physicians accurately identify prostate cancer and reduce invasive procedures; since their commercial launch in 2012 and 2016, over 200,000 tests have been performed and included in NCCN guidelines, with the company's main market in the US, committed to sustained growth through commercial execution and operational discipline - MDxHealth provides non-invasive, clinically actionable, and cost-effective urology solutions, with its prostate cancer genetic testing solutions, SelectMDx and ConfirmMDx, designed to improve patient care[179](index=179&type=chunk) - Since their commercial launch in 2012 and 2016, ConfirmMDx and SelectMDx have completed over **200,000 tests** in the US and are included in the NCCN guidelines for prostate cancer early detection[182](index=182&type=chunk) - The company's primary commercial focus is in the US, with over **95% of tests and revenue** originating from the US, and its executive team and over **90% of employees** located in Irvine, California, USA[183](index=183&type=chunk) [Our Product Portfolio](index=37&type=section&id=Our%20Product%20Portfolio) MDxHealth's product portfolio primarily addresses unmet clinical needs in prostate cancer diagnosis and treatment; SelectMDx is a non-invasive urine test used to help physicians decide whether to perform an initial prostate biopsy, boasting a **95% negative predictive value (NPV)**; ConfirmMDx is an epigenetic test used to detect occult prostate cancer after a negative biopsy, with a **96% NPV** for clinically significant prostate cancer; both tests are included in NCCN and EAU guidelines and supported by extensive clinical validation studies; the company is also developing a non-invasive urine test for urinary tract infections (UTI) - Prostate cancer is the most common cancer among men in the US and the second leading cause of cancer death, with approximately **25 million PSA tests** performed annually, of which over **15% show elevated PSA levels**[187](index=187&type=chunk) - SelectMDx is a non-invasive urine test used to assess whether a patient needs an initial prostate biopsy, with a **95% negative predictive value (NPV)** and a predictive accuracy (AUC) of **0.85** for high-grade prostate cancer[188](index=188&type=chunk)[197](index=197&type=chunk)[200](index=200&type=chunk) - ConfirmMDx is an epigenetic test used to detect occult prostate cancer after a negative prostate biopsy, with a **96% NPV** for clinically significant prostate cancer[188](index=188&type=chunk)[206](index=206&type=chunk)[216](index=216&type=chunk) - Both SelectMDx and ConfirmMDx are included in the NCCN guidelines for early prostate cancer detection (since 2020 and 2016, respectively) and the European Association of Urology (EAU) guidelines (since 2018)[198](index=198&type=chunk)[213](index=213&type=chunk) - The company is developing a non-invasive urine test to identify and quantify infectious bacteria in urinary tract infections (UTI) and their antibiotic sensitivities, with the estimated US UTI testing market approximately **2 million men annually**, valued at **$1 billion**[219](index=219&type=chunk) [Pipeline](index=44&type=section&id=Pipeline) MDxHealth is developing AS-MDx and Monitor-MDx, two pipeline products for prostate cancer diagnosis and treatment; AS-MDx aims to risk-stratify patients with localized prostate cancer to decide between immediate intervention or active surveillance, while Monitor-MDx serves as a non-invasive alternative for monitoring patients under active surveillance to assess disease progression; these products aim to provide a comprehensive prostate cancer testing solution from early detection to treatment management - The company is developing AS-MDx and Monitor-MDx to expand its test menu across the prostate cancer diagnostic and treatment pathway[220](index=220&type=chunk) - AS-MDx aims to improve risk stratification for localized prostate cancer patients to help decide between active surveillance or immediate intervention, with an estimated US market of approximately **134,000 men annually**, valued at **$134 million**[220](index=220&type=chunk)[223](index=223&type=chunk) - Monitor-MDx is being developed as a non-invasive test to monitor patients under active surveillance for cancer progression, with an estimated US market of approximately **1.5 million men annually**, valued at **$1.5 billion**[220](index=220&type=chunk)[224](index=224&type=chunk) [Our Competitive Strengths](index=37&type=section&id=Our%20Competitive%20Strengths) MDxHealth's competitive strengths include a targeted prostate cancer diagnostic and treatment test menu, strong commercial focus and market presence, commercial channel advantages leveraging existing customer relationships, compelling reimbursement strategies, robust and reliable technology, an experienced leadership team, and continuous education for physicians and patients; the company is committed to achieving sustained growth by expanding its test menu and reimbursement coverage - Provides a targeted prostate cancer diagnostic and treatment test menu, with SelectMDx and ConfirmMDx offering clear clinical pathways for urologists[189](index=189&type=chunk) - Possesses a strong direct sales team and commercial presence in the US, focusing on high-volume community urology centers and building long-term relationships with key physicians and practice groups[190](index=190&type=chunk) - ConfirmMDx test has secured Medicare MolDX LCD coverage and is included in NCCN and EAU guidelines; SelectMDx is also expected to achieve similar payer coverage[191](index=191&type=chunk) - Owns a proprietary intellectual property portfolio and maintains high-quality laboratory operations, including CAP-accredited, CLIA-certified, and NYSDOH-approved molecular laboratories[191](index=191&type=chunk) - The management team has extensive experience in medical device, diagnostics, and biotechnology sectors, with a proven track record of execution and value creation[191](index=191&type=chunk) - Enhances physician and patient awareness of tests through clinical studies, peer-reviewed publications, collaborations with opinion leaders, and patient education activities[191](index=191&type=chunk) - Plans to expand its test menu by developing new products like AS-MDx and Monitor-MDx to cover the entire prostate cancer diagnostic and treatment pathway[191](index=191&type=chunk) - Committed to expanding reimbursement coverage for SelectMDx and ConfirmMDx tests, leveraging Medicare LCDs and existing commercial payer contracts as a foundation to secure more major payer contracts[191](index=191&type=chunk) [Market Opportunity](index=39&type=section&id=Market%20Opportunity) Prostate cancer is the most common cancer among men in the US and the second leading cause of cancer death, with approximately **3 million men annually** having elevated PSA levels and **300,000 men** receiving negative biopsy results; the company's products, SelectMDx and ConfirmMDx, aim to address the insufficient sensitivity and specificity of existing diagnostic tests, with an estimated US addressable market of approximately **$1.5 billion for SelectMDx** and **$500 million for ConfirmMDx** - Prostate cancer is the most common cancer among men in the US and the second leading cause of cancer death, with over **260,000 men** projected to be diagnosed with prostate cancer in 2022[192](index=192&type=chunk) - Approximately **25 million PSA tests** are performed annually, with over **15% showing elevated PSA levels**, leading to about **3 million undiagnosed men** at risk for prostate cancer[193](index=193&type=chunk) Estimated US Addressable Market for SelectMDx and ConfirmMDx | Test | Annual Target Male Population | Average Revenue Per Test | Addressable Market (Billion USD) | | :--- | :--- | :--- | :--- | | SelectMDx | 3 million (elevated PSA) | $500 | 1.5 | | ConfirmMDx | 300,000 (negative biopsy) | $1,600 | 0.5 | [Commercial Products](index=40&type=section&id=Commercial%20Products) MDxHealth's commercial products, SelectMDx and ConfirmMDx, play crucial roles in the prostate cancer diagnostic pathway; SelectMDx is a non-invasive urine test for assessing the necessity of an initial biopsy, featuring a high negative predictive value; ConfirmMDx is an epigenetic test for detecting occult cancer after a negative biopsy, offering high negative predictive value and predictive accuracy; both tests are endorsed by NCCN and EAU guidelines and supported by extensive clinical studies demonstrating their analytical, clinical validity, clinical utility, and positive health economic benefits; the company is also developing a non-invasive urine test for urinary tract infections - SelectMDx is a non-invasive urine test that measures the expression of two mRNA biomarkers, HOXC6 and DLX1, combined with clinical risk factors, to help physicians determine if a patient needs a biopsy[197](index=197&type=chunk) - SelectMDx demonstrated a **95% negative predictive value (NPV)** and an accuracy (AUC) of **0.85** in clinical validation studies, outperforming other common biomarker tests and risk calculators[200](index=200&type=chunk) - ConfirmMDx is an epigenetic test that detects biomarkers (such as GSTP1, APC, and RASSF1 gene methylation) in negative biopsy tissue to help urologists identify occult prostate cancer, with a **96% NPV** for clinically significant prostate cancer[206](index=206&type=chunk)[209](index=209&type=chunk)[216](index=216&type=chunk) - Clinical utility studies for ConfirmMDx show its application can significantly reduce unnecessary repeat biopsy rates (from an expected **43% to 4.4%**) and lead to substantial healthcare cost savings[216](index=216&type=chunk)[217](index=217&type=chunk) [Laboratory Operations](index=46&type=section&id=Laboratory%20Operations) MDxHealth operates laboratory facilities in Irvine, California, Plano, Texas, and Nijmegen, Netherlands, for processing SelectMDx and ConfirmMDx tests and conducting R&D; the Irvine laboratory is a CAP-accredited, CLIA-certified, and NYSDOH-approved molecular laboratory with sufficient processing capacity and expansion space - The company operates laboratory facilities in Irvine, California (**32,379 square feet**), Nijmegen, Netherlands (**7,836 square feet**), and Plano, Texas (**837 square feet**)[228](index=228&type=chunk) - The Irvine laboratory is a CAP-accredited, CLIA-certified, and NYSDOH-approved molecular laboratory with sufficient processing capacity and incremental expansion space[228](index=228&type=chunk) [Sales and Marketing](index=46&type=section&id=Sales%20and%20Marketing) MDxHealth's sales and marketing strategy focuses on promoting ConfirmMDx and SelectMDx tests through their clinical and economic benefits, supported by peer-reviewed literature; the sales team, comprising molecular diagnostics specialists, reimbursement account managers, clinical liaisons, and customer service personnel, primarily aims to increase market awareness and adoption by educating urologists and their clinical staff, building relationships with key opinion leaders, supporting clinical research, and participating in industry trade shows and advertising campaigns - The sales approach focuses on the clinical and economic benefits of ConfirmMDx and SelectMDx tests, supported by peer-reviewed literature[229](index=229&type=chunk) - The sales team includes molecular diagnostics specialists, reimbursement account managers, clinical liaisons, and customer service personnel, primarily selling through direct sales representatives, strategic account managers, and regional sales managers[230](index=230&type=chunk) - Collaborates with large community group practices and academic urologists to educate them on the clinical and economic benefits of ConfirmMDx and SelectMDx[231](index=231&type=chunk) - Cultivates and strengthens relationships with key opinion leaders in the urology field[231](index=231&type=chunk) - Supports ongoing collaborations with leading universities and research institutions that have generated clinical validation data for ConfirmMDx and SelectMDx[231](index=231&type=chunk) - Encourages continuous exploration and research into expanded indications for tests[231](index=231&type=chunk) [Reimbursement](index=46&type=section&id=Reimbursement) MDxHealth's commercial success depends on coverage and adequate reimbursement for its tests from government and private payers; ConfirmMDx has received a positive local coverage determination (LCD) from the Medicare MolDX program, but Medicare coverage and reimbursement for SelectMDx are still awaiting a final decision; the company actively collaborates with commercial payers to secure coverage and reimbursement policies and contracts, and appeals denied claims; in the absence of payer policies or contracts, the company seeks third-party reimbursement on a case-by-case basis - The ConfirmMDx test received a positive local coverage determination (LCD) from the Medicare MolDX program in 2014, providing coverage and reimbursement for Medicare patients across the US[234](index=234&type=chunk) - The SelectMDx test currently lacks Medicare coverage and reimbursement, but the MolDX program issued a preliminary draft LCD supporting its clinical utility in May 2021, which, if finalized, would support nationwide Medicare coverage for SelectMDx[235](index=235&type=chunk) - The company actively collaborates with commercial payers to secure coverage and reimbursement policies and contracts for ConfirmMDx and SelectMDx, leveraging Medicare LCDs and existing commercial contracts as a foundation[236](index=236&type=chunk) [Materials Needed for Our Laboratory Services](index=47&type=section&id=Materials%20Needed%20for%20Our%20Laboratory%20Services) MDxHealth's ConfirmMDx and SelectMDx testing services rely on various custom components and third-party services, many of which come from a limited number of suppliers, with some being single-source; the company primarily procures equipment and materials through purchase orders, and contracts typically do not include long-term supply commitments from vendors; supply chain disruptions could lead to service delays and hinder commercialization activities - Most items and services required for ConfirmMDx and SelectMDx testing services come from multiple suppliers, but certain consumables and reagents are sourced from a limited number of suppliers, some of which are single-source[239](index=239&type=chunk) - The company primarily procures equipment and materials through purchase orders and typically does not have contracts with suppliers and manufacturers that commit to supply[239](index=239&type=chunk) [Competition](index=48&type=section&id=Competition) The molecular diagnostics industry is highly competitive, characterized by rapid technological changes and increasing market consolidation; MDxHealth faces competition from rivals with greater resources and market penetration, such as OPKO Health (4Kscore), ExosomeDx (ExoDx), and Beckman Coulter (phi score), whose products may offer advantages in price, FDA approval status, or sample collection convenience; additionally, diagnostic imaging technologies like multiparametric MRI (mpMRI) also pose competition, as physicians may prefer visual analysis or have financial incentives to use such procedures - The molecular diagnostics sector is highly competitive, with rapid technological changes and increasing market consolidation, where large clinical laboratory service providers benefit from cost efficiencies and higher service levels[241](index=241&type=chunk) - SelectMDx faces direct competition from OPKO Health's 4Kscore test, ExosomeDx's ExoDx (Intelliscore), and Beckman Coulter's Prostate Health Index (phi score)[243](index=243&type=chunk) - ConfirmMDx also faces competition from 4Kscore and ExoDx, which may have price advantages, and Hologic's PCA-3 test, which has FDA approval, could be considered a competitive advantage[244](index=244&type=chunk) - Competitors often possess greater financial, sales, logistics, and laboratory resources, as well as stronger market penetration and marketing budgets[245](index=245&type=chunk) - Multiparametric MRI (mpMRI), as a clinical diagnostic imaging procedure, also competes with ConfirmMDx and SelectMDx, as some physicians may prefer visual analysis or have financial incentives to use mpMRI[245](index=245&type=chunk) [Intellectual Property](index=49&type=section&id=Intellectual%20Property) MDxHealth's intellectual property protection is crucial for its business operations, and the company safeguards its technology through patents, copyrights, trademarks, confidentiality agreements, and trade secrets; as of December 31, 2021, the company owned or exclusively licensed over **22 patent families**, comprising **116 granted or pending patent applications**; key patents for ConfirmMDx and SelectMDx tests are set to expire in **2022, 2024, and 2036**, respectively; the company believes that even with patent expirations, its unpatented proprietary technology and clinical performance data still constitute a competitive barrier - The company protects its intellectual property through US and foreign patents, patent applications, copyrights, trademarks, confidentiality agreements, material transfer agreements, licenses, and consulting agreements[247](index=247&type=chunk) - As of December 31, 2021, the company owned or exclusively licensed over **22 patent families** related to molecular technologies and cancer-specific biomarkers, totaling **116 granted or pending patent applications**[249](index=249&type=chunk) - Two US patents used for the ConfirmMDx test are set to expire in **November 2022 and 2024**, respectively, while one patent used for the SelectMDx test expires in **2036**[249](index=249&type=chunk) [Collaboration and License Agreements](index=50&type=section&id=Collaboration%20and%20License%20Agreements) MDxHealth has entered into collaborative research and clinical study agreements with universities, medical centers, and external researchers to validate its technologies and products; the company has also secured intellectual property used in the ConfirmMDx test through exclusive license agreements with institutions like Johns Hopkins University; additionally, the company has established marketing and sales collaborations with commercial entities such as LabCorp, Inform Diagnostics, and Poplar Healthcare to expand product reach and market awareness - The company has entered into collaborative research and clinical study agreements with universities, medical centers, and external researchers to validate its technologies and products, with these agreements typically lasting one to three years[253](index=253&type=chunk) - The company has an amended and restated exclusive license agreement with Johns Hopkins University, granting it intellectual property rights used in the ConfirmMDx test, subject to mid-single-digit net sales royalties[255](index=255&type=chunk) - The company has established marketing and sales collaborations with commercial entities such as LabCorp, Inform Diagnostics, and Poplar Healthcare to expand the geographic reach and market awareness of ConfirmMDx and SelectMDx tests[256](index=256&type=chunk) [Government Regulations](index=50&type=section&id=Government%20Regulations) MDxHealth's operations are strictly regulated by US federal, state, and international healthcare laws and regulations, including CLIA, HIPAA, anti-fraud and abuse laws, anti-kickback laws, the Stark Law, and patient privacy laws; non-compliance with these regulations could lead to severe sanctions such as fines, exclusion from healthcare programs, or criminal prosecution; the FDA's regulatory stance on Laboratory Developed Tests (LDTs) is uncertain, and future requirements may necessitate market approval for the company's tests; additionally, the company must comply with the Sunshine Act, international anti-corruption laws (such as FCPA), and regulations concerning occupational safety and health and specimen transportation - The company's business is regulated by CMS under CLIA, as well as state laws and regulations (including California and New York), and must comply with federal, state, and international laws regarding anti-fraud and abuse, anti-kickback, and patient privacy[257](index=257&type=chunk) - HIPAA and its amendments, HITECH, impose comprehensive federal standards for the privacy and security of health information, which the company, as a covered entity, must comply with, and violations can result in civil and criminal penalties[261](index=261&type=chunk) - The FDA's regulatory authority over Laboratory Developed Tests (LDTs) is contentious, and future requirements may mandate premarket review or approval for the company's tests, increasing costs and delays[263](index=263&type=chunk)[265](index=265&type=chunk) - The federal False Claims Act imposes severe penalties for submitting false claims or retaining overpayments to government programs[271](index=271&type=chunk) - The federal Anti-Kickback Statute and Stark Law prohibit offering or accepting remuneration to induce referrals or services reimbursable by federal healthcare programs, with violations potentially leading to civil and criminal penalties[276](index=276&type=chunk)[278](index=278&type=chunk) - The Eliminating Kickbacks in Recovery Act (EKRA) is an all-payer anti-kickback statute whose broad language could impact laboratory services[282](index=282&type=chunk) - The Sunshine Act requires reporting payments or transfers of value to healthcare providers and teaching hospitals to CMS[283](index=283&type=chunk) - When marketing tests internationally, the company must comply with foreign regulatory requirements in each country regarding clinical trials, product marketing approvals, and test execution, including the EU's CE mark and the In Vitro Diagnostic Medical Device Regulation (IVDR)[287](index=287&type=chunk) - The company must also comply with Occupational Safety and Health Administration (OSHA) laboratory safety requirements and Department of Transportation, US Postal Service, and Centers for Disease Control and Prevention regulations regarding the transportation of clinical laboratory specimens[288](index=288&type=chunk) [C. Organizational Structure](index=55&type=section&id=C%2E%20Organizational%20Structure) MDxHealth SA is a Belgian limited liability company whose organizational structure includes two wholly-owned direct subsidiaries: MDxHealth Inc. (Delaware, USA) and MDxHealth B.V. (Netherlands), with the latter owning two wholly-owned subsidiaries, MDxHealth Servicelab BV and MDxHealth Research BV - MDxHealth SA is a limited liability company in Belgium[289](index=289&type=chunk) MDxHealth SA Organizational Structure (as of December 31, 2021) | Subsidiary Name | Jurisdiction of Incorporation | MDxHealth SA Ownership Percentage | | :--- | :--- | :--- | | MDxHealth Inc | Delaware | 100% (Directly Held) | | MDxHealth BV | Netherlands | 100% (Directly Held) | | MDxHealth Servicelab BV | Netherlands | 100% (Held via MDxHealth BV) | | MDxHealth Research BV | Netherlands | 100% (Held via MDxHealth BV) | [D. Property, Plant and Equipment](index=55&type=section&id=D%2E%20Property%2C%20Plant%20and%20Equipment) MDxHealth maintains laboratory and office facilities in Irvine, California, Plano, Texas, and Nijmegen, Netherlands; the Irvine facility, spanning **32,379 square feet**, is leased until 2026 and holds CLIA and CAP certifications; the Nijmegen facility, covering **7,836 square feet**, is leased until 2027; the company believes its current facilities are sufficient for near-term needs and can acquire additional space on commercially reasonable terms in the future - The company's US headquarters and laboratory facility in Irvine, California, span **32,379 square feet**, are leased until 2026, and hold CLIA and CAP certifications[291](index=291&type=chunk) - The company maintains a **7,836 square foot** laboratory and office facility in Nijmegen, Netherlands, leased until 2027[292](index=292&type=chunk) - The company also operates a small CLIA-certified laboratory facility in Plano, Texas[291](index=291&type=chunk) [Item 4a. Unresolved Staff Comments](index=55&type=section&id=Item%204a%2E%20Unresolved%20Staff%20Comments) This section is not applicable [Item 5. Operating and Financial Review and Prospects](index=56&type=section&id=Item%205%2E%20Operating%20and%20Financial%20Review%20and%20Prospects) This section provides a detailed review of MDxHealth's operating and financial condition, including the company's continuous losses since inception, primary capital sources, revenue composition, cost structure, operating expenses, liquidity and capital resources, R&D investments, market trends, and critical accounting estimates; the company's main revenue derives from ConfirmMDx and SelectMDx testing services, and it faces challenges such as the COVID-19 pandemic, reimbursement uncertainties, and market competition - The company has incurred continuous losses since its inception in 2003, with accumulated losses of **$244.3 million** as of December 31, 2021, a net loss of **$29 million** in 2021, and cash outflows from operating activities of **$22.5 million**[298](index=298&type=chunk) - The company's primary capital sources include public offerings of ordinary shares and American Depositary Receipts, private placements, debt financing agreements, and product sales revenue, having raised approximately **$340 million** in equity financing since inception[298](index=298&type=chunk) Key Financial Data (2019-2021) | Metric | 2021 (Million USD) | 2020 (Million USD) | 2019 (Million USD) | | :--- | :--- | :--- | :--- | | Revenue | 22.2 | 18.5 | 11.8 | | Net Loss | (29.0) | (28.7) | (43.1) | | Cash Flow from Operating Activities | (22.5) | (20.2) | (22.3) | | Cash and Cash Equivalents at Period End | 58.5 | 15.9 | 22.0 | [Overview](index=56&type=section&id=Overview) MDxHealth is a commercial-stage precision diagnostics company focused on providing urology solutions; the company has incurred continuous losses since its inception, with accumulated losses of **$244.3 million** as of year-end 2021, a net loss of **$29 million**, and cash outflows from operating activities of **$22.5 million**; the company primarily obtains funding through equity issuance, debt financing, and product sales, and while it anticipates continued losses and significant cash outflows over the next 12 months, management believes existing cash and expected cash flows are sufficient to support operations - The company has incurred continuous losses since its inception in 2003, with accumulated losses of **$244.3 million** as of December 31, 2021, a net loss of **$29 million** in 2021, and cash outflows from operating activities of **$22.5 million**[298](index=298&type=chunk) - The company's primary capital sources include equity issuance, debt financing, and product sales revenue, having raised approximately **$340 million** in equity financing since inception[298](index=298&type=chunk) - Management expects the company to continue incurring losses and significant cash outflows for at least the next 12 months but believes, based on current business plans, that existing cash and expected cash flows are sufficient to support ongoing operations[299](index=299&type=chunk) [Financial Operations Overview](index=56&type=section&id=Financial%20Operations%20Overview) MDxHealth's revenue primarily stems from laboratory services for ConfirmMDx and SelectMDx tests, with revenue recognized upon transfer of service control (typically test result delivery); Medicare provides fixed-price reimbursement for ConfirmMDx, while other commercial insurers estimate revenue based on historical collection data; costs include materials, labor, shipping, and overhead; gross margin is influenced by average selling price and order volume; R&D expenses, sales and marketing expenses, and general and administrative expenses are expensed as incurred, with R&D and G&A expenses expected to increase in absolute terms but decrease as a percentage of revenue long-term; other operating income/expenses include government grants and fair value adjustments for contingent consideration, while finance income/expenses primarily comprise interest and foreign exchange gains/losses - Most of the company's revenue is derived from laboratory services for ConfirmMDx and SelectMDx tests, with revenue recognized when control of the service is transferred, typically upon delivery of test results[300](index=300&type=chunk) - Medicare reimbursement for ConfirmMDx is determined by a fixed price, while other commercial insurers estimate revenue based on historical collection data, or recognize revenue on a cash basis if data is insufficient[301](index=301&type=chunk)[302](index=302&type=chunk) - Cost of sales includes materials, labor, shipping, collection kits, and allocated overhead, irrespective of revenue recognition timing[304](index=304&type=chunk) - Gross margin is influenced by average selling price and order volume and is expected to increase in the future with revenue growth and higher average selling prices[305](index=305&type=chunk) - Research and development expenses include personnel, reagents, clinical studies, external services, patent fees, and more, with absolute amounts expected to increase but decrease as a percentage of revenue in the long term[306](index=306&type=chunk)[307](index=307&type=chunk) - Sales and marketing expenses include costs for the sales organization, medical affairs, customer service, and marketing, with absolute amounts expected to increase but decrease as a percentage of revenue in the long term[308](index=308&type=chunk)[309](index=309&type=chunk) - General and administrative expenses include costs for executives, accounting, legal, IT, and human resources, with absolute amounts expected to increase, particularly due to IPO-related costs[310](index=310&type=chunk)[311](index=311&type=chunk) - Other operating income/expenses include government grants, fair value adjustments for loan facilities, and revaluation of contingent consideration[313](index=313&type=chunk) - Finance income/expenses primarily include interest income on deposits, interest expense on Kreos Capital long-term debt, and foreign exchange gains/losses[314](index=314&type=chunk)[315](index=315&type=chunk) [A. Operating results](index=58&type=section&id=A%2E%20Operating%20results) MDxHealth's operating results show a **20% year-over-year revenue increase** to **$22.2 million** in 2021, driven by higher test volumes and average selling prices, with ConfirmMDx still accounting for **91% of total revenue**; gross margin improved from **43.6% in 2020 to 47.5% in 2021**; R&D expenses increased by **47%** due to pipeline investments, sales and marketing expenses by **6%**, and general and administrative expenses by **1%** due to IPO-related professional fees; 2020 revenue grew by **57%**, primarily offsetting the negative impact of 2019 accounting estimate adjustments, though COVID-19 led to decreased test volumes; 2020 R&D expenses decreased by **50%** due to intangible asset impairment losses, sales and marketing expenses by **6%** due to pandemic travel restrictions, and general and administrative expenses by **8%** due to professional fees and patent fee reclassification Operating Results Comparison (2021 vs 2020) | Metric (Thousand USD) | 2021 | 2020 | Change Amount | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 22,239 | 18,460 | 3,779 | 20 | | Cost of Sales | (11,675) | (10,416) | 1,259 | 12 | | Gross Profit | 10,564 | 8,044 | 2,520 | 31 | | R&D Expenses | (6,673) | (4,543) | (2,130) | 47 | | Sales and Marketing Expenses | (17,744) | (16,752) | (992) | 6 | | General and Administrative Expenses | (14,149) | (13,990) | (159) | 1 | | Other Operating Income, Net | 1,161 | 118 | 1,043 | 884 | | Operating Loss | (26,841) | (27,123) | 282 | (1) | | Finance Income | 11 | 4 | 7 | 175 | | Finance Expenses | (2,172) | (1,543) | (629) | 41 | | Loss Before Tax | (29,002) | (28,662) | (340) | 1 | | Loss for the Year | (29,002) | (28,662) | (340) | 1 | | Basic and Diluted Loss Per Share | (0.24) | (0.34) | 0.1 | (29) | - 2021 revenue increased by **20%**, primarily due to higher test volumes and average selling prices; ConfirmMDx accounted for **91% of total revenue**[318](index=318&type=chunk)[319](index=319&type=chunk) - 2021 gross margin improved from **43.6% in 2020 to 47.5%**, mainly driven by higher average selling prices[320](index=320&type=chunk) Operating Results Comparison (2020 vs 2019) | Metric (Thousand USD) | 2020 | 2019 | Change Amount | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 18,460 | 11,785 | 6,675 | 57 | | Cost of Sales | (10,416) | (11,755) | 1,339 | (11) | | Gross Profit | 8,044 | 30 | 8,014 | >1000 | | R&D Expenses | (4,543) | (8,997) | 4,454 | (50) | | Sales and Marketing Expenses | (16,752) | (17,809) | 1,057 | (6) | | General and Administrative Expenses | (13,990) | (15,196) | 1,206 | (8) | | Other Operating Income (Expenses), Net | 118 | (1,197) | 1,315 | (110) | | Operating Loss | (27,123) | (43,169) | 16,046 | (37) | | Finance Income | 4 | 10 | (6) | (60) | | Finance Expenses | (1,543) | (516) | (1,027) | 199 | | Loss Before Tax | (28,662) | (43,675) | 15,013 | (34) | | Loss for the Year | (28,662) | (43,100) | 14,438 | (33) | | Basic and Diluted Loss Per Share | (0.34) | (0.69) | 0.35 | (51) | - 2020 revenue increased by **57%**, primarily due to the offset of a **$10.1 million negative impact** from 2019 accounting estimate adjustments, but the COVID-19 pandemic led to a **18% and 39% decrease** in ConfirmMDx and SelectMDx test volumes, respectively[328](index=328&type=chunk) - 2020 R&D expenses decreased by **50%**, mainly due to a **$5.1 million intangible asset impairment loss** in 2019 and the reclassification of patent fees from G&A to R&D[332](index=332&type=chunk)[333](index=333&type=chunk) [B. Liquidity and Capital Resources](index=61&type=section&id=B%2E%20Liquidity%20and%20Capital%20Resources) MDxHealth has incurred continuous losses since its inception, primarily funding operations through equity issuance and debt financing; as of December 31, 2021, the company held **$58.5 million in cash and cash equivalents**, along with a **€9 million (approximately $10.2 million) Kreos Capital senior secured loan** and a **$2.3 million PPP loan**; the company anticipates existing cash and expected cash flows will meet funding needs for the next 12 months, but may require additional financing to support business expansion and new product development; cash outflows from operating activities increased to **$22.5 million** in 2021, mainly due to negative changes in working capital - As of December 31, 2021, the company held **$58.5 million in cash and cash equivalents** and had accumulated losses of **$244.3 million**[339](index=339&type=chunk) - The company primarily obtains funding through equity issuance (approximately **$350 million**) and long-term debt financing[339](index=339&type=chunk) - In September 2019, the company entered into a **€9 million (approximately $10.2 million)** senior secured loan agreement with Kreos Capital, which has been amended multiple times to extend the interest-only period until July 2022, with the loan maturing in October 2023[342](index=342&type=chunk) - In April 2020, the company secured a **$2.3 million loan** through the PPP program at an annual interest rate of **1.0%**, with a five-year repayment term and deferred payments for the first 18 months[343](index=343&type=chunk) - The company expects existing cash and anticipated cash flows to meet funding needs for at least the next 12 months but may require additional equity or debt financing to support business expansion and new product development[344](index=344&type=chunk) - Cash outflows from operating activities increased to **$22.5 million** in 2021, up from **$20.2 million** in 2020, primarily due to negative changes in working capital[345](index=345&type=chunk)[349](index=349&type=chunk) - Cash inflows from financing activities totaled **$66.5 million** in 2021, mainly from a **€25 million ($30.4 million) private equity financing** and a **$45 million US ADS initial public offering**[351](index=351&type=chunk) [C. Research and development, patents and licenses](index=65&type=section&id=C%2E%20Research%20and%20development%2C%20patents%20and%20licenses) MDxHealth continuously invested in research and development from 2019 to 2021, with R&D expenses of **$9 million, $4.5 million, and $6.7 million**, respectively; R&D activities primarily focus on product development and technology validation, with further discussion available in "Item 4.B Business Overview" and "Item 5.A. Operating results" R&D Expenses (2019-2021) | Year | R&D Expenses (Million USD) | | :--- | :--- | | 2021 | 6.7 | | 2020 | 4.5 | | 2019 | 9.0 | [D. Trend information](index=65&type=section&id=D%2E%20Trend%20information) MDxHealth's business trends are continuously affected by the COVID-19 pandemic, leading to decreased test volumes, though laboratory operations and R&D activities remain uninterrupted; the company's revenue growth depends on attracting new physicians and increasing penetration among existing ones; third-party payer reimbursement for genetic testing, particularly Medicare coverage for SelectMDx, remains uncertain; the company plans to expand its test menu by developing new prostate cancer management tests to address unmet clinical needs, which will increase R&D investment - The COVID-19 pandemic continues to impact company operations, leading to a **18% and 39% decrease** in ConfirmMDx and SelectMDx test volumes in 2020, respectively, and remaining **16% and 37% lower** in 2021 compared to 2019[360](index=360&type=chunk) - The company's revenue growth depends on attracting new physicians, increasing penetration among existing physician clients, and increasing the number of tests ordered by physicians on an ongoing basis[361](index=361&type=chunk) - Medicare coverage and reimbursement for SelectMDx remain uncertain, despite the MolDX program having issued a preliminary draft LCD[364](index=364&type=chunk) - The company plans to expand its test menu by developing new prostate cancer management tests (such as AS-MDx and Monitor-MDx) to address unmet clinical needs, which is expected to increase R&D expenses[367](index=367&type=chunk) [E. Critical Accounting Estimates](index=66&type=section&id=E%2E%20Critical%20Accounting%20Estimates) MDxHealth's critical accounting estimates include revenue recognition (based on historical collection data and probability of future collection), deferred income taxes (based on availability of future taxable profits), asset impairment testing (based on cash flows and weighted average cost of capital), share-based payments (fair value estimated using the Black-Scholes model), and going concern assumption and financial liabilities (fair value of contingent consideration and derivative financial liabilities); these estimates involve significant management judgment and assumptions, which may differ from actual results - Revenue Recognition: Under IFRS 15, revenue is recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur in the future, primarily relying on historical collection data to estimate future collections[647](index=647&type=chunk)[648](index=648&type=chunk) - Deferred Income Taxes: Estimates are made for unused tax credits and tax losses based on the availability of future taxable profits; as of December 31, 2021, the company had not recognized deferred tax assets[649](index=649&type=chunk) - Asset Impairment Testing: Intangible and tangible assets are regularly assessed for impairment indicators, and recoverable amounts are estimated based on the higher of fair value less costs to dispose and value in use[650](index=650&type=chunk) - Share-Based Payments: The fair value of share-based payments is estimated using the Black-Scholes option valuation model, considering dividend yield, expected volatility, risk-free interest rate, and expected term[651](index=651&type=chunk) - Going Concern: Management is required to make significant judgments regarding the company's ability to continue operations with sufficient liquidity for the next 12 months[652](index=652&type=chunk) - Financial Liabilities: Contingent consideration and derivative financial liabilities are measured at fair value, with valuations based on risk-adjusted future cash flows and probability estimates for different scenarios[653](index=653&type=chunk) [Item 6. Directors, Senior Management and Employees](index=67&type=section&id=Item%206%2E%20Directors%2C%20Senior%20Management%20and%20Employees) This section details MDxHealth's board members, senior management, and their compensation structures, including fixed remuneration, bonuses, and equity incentives; the board comprises independent and non-independent directors and has an Audit Committee and a Nomination and Remuneration Committee; the company also discloses total employee count, human capital objectives, and equity holdings of directors and executives - As of December 31, 2021, the company's board of directors consisted of **9 members**, with **5 identified as independent directors**[370](index=370&type=chunk)[373](index=373&type=chunk) - The company's executive management team includes CEO Michael K. McGarrity, Chief Commercial Officer John Bellano, Chief Financial Officer Ron Kalfus, and Executive Vice President of Corporate Development and General Counsel Joseph Sollee[384](index=384&type=chunk)[385](index=385&type=chunk) - The company's compensation policy is based on performance and a sense of ownership, aiming to incentivize directors and executives through performance rewards to enhance shareholder value[390](index=390&type=chunk) - As of December 31, 2021, the company had a total of **191 employees**, with **187 full-time**, **177 in the US**, and **14 in Europe**[448](index=448&type=chunk) [A. Directors and Senior Management](index=67&type=section&id=A%2E%20Directors%20and%20Senior%20Management) MDxHealth's board of directors consists of **9 members**, with **5 independent non-executive directors** serving terms until 2023 or 2024; the executive team includes CEO Michael K. McGarrity, Chief Commercial Officer John Bellano, Chief Financial Officer Ron Kalfus, and Executive Vice President of Corporate Development and General Counsel Joseph Sollee; there are no family relationships among directors and executives Board of Directors (as of December 31, 2021) | Name | Age | Position | Term | | :--- | :--- | :--- | :--- | | Koen Hoffman | 53 | Independent Non-Executive Director (Chairman of the Board) | Until 2024 | | Michael K. McGarrity | 59 | Executive Director (Chief Executive Officer) | Until 2023 | | Rudi Mariën | 76 | Non-Executive Director | Until 2024 | | Jan Pensaert | 50 | Non-Executive Director | Until 2024 | | Lieve Verplancke | 62 | Independent Non-Executive Director | Until 2024 | | Hilde Windels | 56 | Independent Non-Executive Director | Until 2023 | | Regine Slagmulder | 55 | Independent Non-Executive Director | Until 2023 | | Eric Bednarski | 50 | Non-Executive Director | Until 2023 | | Donnie (Don) M. Hardison | 71 | Independent Non-Executive Director | Until 2023 | Executive Management Team (as of December 31, 2021) | Name | Age | Position | | :--- | :--- | :

Financial Data and Key Metrics Changes - Q4 2021 revenue grew by 46% compared to Q4 2020, while full-year 2021 revenue increased by 20% over the previous year, reaching $22.2 million [4][11] - Services revenue amounted to $21.9 million, a 21% increase from $18.1 million in 2020, with ConfirmMDx representing over 90% of service revenue [11][12] - Gross margins improved to 47.5% in 2021 from 43.6% in 2020, reflecting a growth margin improvement of 390 basis points [12] Business Line Data and Key Metrics Changes - The company experienced modest test volume increases in 2021 despite pandemic challenges, with accelerated revenue growth attributed to improved revenue cycle management and higher average selling prices [7][11] - The introduction of a urinary tract infection (UTI) testing service in Q4 2021 is expected to contribute to revenue in 2022, with early adoption indicators being positive [9][10] Market Data and Key Metrics Changes - Prostate cancer screening rates were estimated to be down 50% due to the pandemic, impacting patient flow and sales rep access [4][5] - The company anticipates a return to pre-pandemic volumes for both Confirm and Select tests as restrictions ease and patient flow returns [5][6] Company Strategy and Development Direction - The company aims to expand its menu into active surveillance, providing additional growth opportunities, with updates expected mid-year [16][17] - The management emphasizes a commitment to execution and sustainable growth, aiming to drive adoption of clinical pathways and enhance payer coverage [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that headwinds from the pandemic will turn into growth-driving tailwinds in 2022, with expectations for revenue between $25 million and $27 million [3][16] - The management highlighted the importance of the final Medicare coverage decision for SelectMDx tests, which is expected to contribute to revenue in the second half of 2022 [16][27] Other Important Information - The company ended 2021 with $58.5 million in cash, bolstered by equity raises and an initial public offering [14] - Operating expenses for 2021 were $37.4 million, up 6% from 2020, primarily driven by R&D expenses related to future product pipelines [12][13] Q&A Session Summary Question: Impact of Omicron on Test Volumes - Management acknowledged challenges from Omicron but noted a return in patient flow and sales rep access, expecting improvements as they move into Q2 [20][21] Question: Timing for Active Surveillance Program Launch - Management indicated that visibility on key drivers will improve by mid-year, but no revenue contribution from active surveillance is expected in 2022 [22][23] Question: UTI Testing Reimbursement and ASP - Management confirmed positive early experiences with UTI testing and is gathering data on reimbursement rates to provide future guidance [31][34] Question: Sales Force Expansion Opportunities - Management stated that current revenue guidance does not imply additional sales force expansion, but they are prepared to accelerate growth if patient flow returns [35][37] Question: SelectMDx and ConfirmMDx Adoption - Management expressed confidence in the growth potential of both tests, with SelectMDx expected to drive unit growth due to its larger market size [41][42] Question: UTI Testing Volume and Reimbursement - Management confirmed that UTI testing has been fully launched and is expected to contribute to revenue, with ongoing analysis of reimbursement landscapes [49][50] Question: Select Test and LCD Coverage - Management views the anticipated LCD coverage as a catalyst for broader commercial payer coverage, similar to past experiences with ConfirmMDx [53][54]