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INTERIM REPORT TABLE OF CONTENTS I. INTERIM MANAGEMENT REPORT 1 II. INTERIM CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS MDXHEALTH SA 3 1. CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER C

Key Takeaway: MDxHealth reported its interim financial results for the six months ending June 30, 2024, indicating a revenue increase of 34% year-over-year to $42.0 million. The company demonstrated improved gross profit margins, though it still faces net losses totaling $20.0 million. Management acknowledges significant risks, including an accumulated deficit of $351.5 million, casting doubt on its ability to continue operations. Nevertheless, the company believes it can sustain operations for the next twelve months due to available cash and access to additional financing.

Market Sentiment Analysis

POSITIVE FACTORS

  • Revenue increased by 34% year-over-year to $42.0 million.
  • Gross profit rose by 36%, demonstrating improved financial performance.
  • Operating loss was reduced by 15% compared to the previous year.
  • The company believes it has sufficient cash to continue operations for at least the next twelve months.

CONCERNS & RISKS

  • The company continues to incur significant net losses.
  • There is substantial doubt about its ability to continue as a going concern.
  • Accumulated deficit reached $351.5 million.
  • The company faces uncertainties regarding cash flows and operational funding.

Full Press Release Details

I. INTERIM MANAGEMENT REPORT 1
II. INTERIM CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS MDXHEALTH SA 3
1. CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 3
2. CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 4
3. CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 5
4. CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS 6
5. EXPLANATORY NOTES 7
III. CORPORATE INFORMATION 18
This Interim Report contains forward-looking
statements and estimates with respect to the anticipated future performance of MDxHealth SA and its wholly-owned subsidiaries (hereinafter
"MDxHealth" or the "Company") and the market in which it operates. Such statements and estimates are based on
assumptions and assessments of known and unknown risks, uncertainties and other factors, which were deemed reasonable but may not prove
to be correct. Actual events are difficult to predict, may depend upon factors that are beyond the company's control, and may turn
out to be materially different. Important factors that could cause actual results, conditions and events to differ materially from those
indicated in the forward-looking statements include, among others, the following: the Company's plans relating to commercializing
its tests and related diagnostic products and services (collectively "tests", "testing solutions" or "solutions")
and the rate and degree of market acceptance of its solutions; the size of the market opportunity for the Company's Confirm mdx,
Select mdx, Resolve mdx, Monitor mdx and Genomic Prostate Score ("GPS") tests and other future tests and solutions it may
commercialize or develop; the acceptance of the Company's testing solutions by healthcare providers; the willingness of health
insurance companies and other payers to cover the Company's testing solutions and adequately reimburse the Company for such solutions;
the Company's plans relating to the further development of testing solutions; existing regulations and regulatory developments
in the United States, Europe and other jurisdictions; the Company's ability to obtain and maintain regulatory approvals and comply
with applicable regulations; timing, progress and results of the Company's research and development programs; the period over which
the Company estimates its existing cash will be sufficient to fund future operating expenses and capital expenditure requirements; our
ability to remain in compliance with financial covenants made to and make scheduled payments to our creditors; the Company's ability
to attract and retain qualified employees and key personnel; the scope of protection the Company is able to establish and maintain for
intellectual property rights covering its testing solutions and technology; the Company's ability to operate its business without
infringing the intellectual property rights and proprietary technology of third parties; the possibility that the anticipated benefits
from the Company's business acquisitions will not be realized in full or at all or may take longer to realize than expected; costs
associated with defending intellectual property infringement, product liability and other claims; and uncertainties associated with global
macroeconomic conditions. The risks included above are not exhaustive. Other important risks and uncertainties are described in the Risk
Factors section of the 2023 Annual Report on Form 20-F and under the heading "Principal risks related to the business activities"
in "Section I. Interim Management Report" below. You are further cautioned not to place undue reliance upon any such forward-looking
statements, which speak only as of the date made. MDxHealth expressly disclaims any obligation to update any such forward-looking statements
in this Interim Report to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances
on which any such statement is based unless required by law or regulation. This Interim Report does not constitute an offer or invitation
for the sale or purchase of securities or assets of MDxHealth in any jurisdiction. No securities of MDxHealth may be offered or sold
within the United States without registration under the U.S. Securities Act of 1933, as amended, or in compliance with an exemption therefrom,
and in accordance with any applicable U.S. securities laws.
I. INTERIM MANAGEMENT REPORT
Key non-audited financials, as of June 30,
Key unaudited consolidated figures for the six
months ended June 30, 2024 and 2023 (thousands of U.S. dollars, except per share data):
For the six months ended June 30, 2024 June 30, 2023 $ Change % Change
Revenue 41,993 31,445 10,548 34 %
Gross Profit 25,349 18,705 6,644 36 %
Operating expenses (39,371 ) (35,165 ) (4,206 ) 12 %
Operating loss (14,022 ) (16,460 ) 2,438 (15 %)
Net loss (20,039 ) (22,335 ) 2,296 (10 %)
Basic and diluted loss per share (0.73 ) (0.91 ) 0.18 (20 %)
Revenue increased 34% to $42.0 million compared
to $31.4 million for the prior year.
Gross profit increased 36% to $25.3 million compared
to $18.7 million for the prior year. Gross margins were 60.4% as compared to 59.5% for the prior year, an improvement of 90 basis points.
Operating loss decreased 15% to $14.0 million
compared to $16.5 million for the prior year, driven by higher revenues and gross profit.
Net loss decreased 10% to $20.0 million compared
to $22.3 million for the prior year, primarily driven by the factors mentioned above.
Justification to continue using the accounting
rules on the basis of going concern
The Company has experienced net losses and significant
cash used in operating activities since its inception in 2003, and as of and for the period ended June 30, 2024, had an accumulated deficit
of $351.5 million, a net loss of $20.0 million, and net cash used in operating activities of $9.8 million. Management expects the Company
to continue to incur net losses and have significant cash outflows for at least the next twelve months.
While these conditions, among others, could raise
substantial doubt about its ability to continue as a going concern, these consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. This basis of accounting contemplates the recovery of its assets and the satisfaction
of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving
a level of positive cash flows adequate to support the Company's cost structure.
As of June 30, 2024, the Company had cash and
cash equivalents of $21.3 million. Taking into account the above financial situation and on the basis of the most recent business plan,
including the Company's expected ability to access additional cash through debt, equity, or other means, the Company believes that
it has sufficient cash to be able to continue its operations for at least the next twelve months from the date of issuance of these financial
statements, and accordingly has prepared the consolidated financial statements assuming that it will continue as a going concern. This
assessment is based on forecasts and projections within management's most recent business plan as well as the Company's expected
ability to maintain adequate levels of cash as required by certain financial covenants present in the new OrbiMed Loan Facility (described
in Note 9), and to access additional cash through debt, equity or other means, for which at this moment, a material uncertainty exists
that casts substantial doubt on the Company's ability to continue as a going concern.
Principal risks related to the business
MDxHealth operates in a rapidly changing environment
that involves a number of risks that could materially affect its business, financial condition or future results, some of which are beyond
the Company's control. In addition to the other information set forth in this section and elsewhere in this Interim Report, the
risks and uncertainties that the Company believes are most important for you to consider have been outlined in the 2023 Annual Report
on Form 20-F, which is available on the Securities and Exchange Commission's website as well as the Company's website at www.mdxhealth.com/investors/financials.
Our credit facility contains restrictions
that limit our flexibility in operating our business, and if we fail to comply with the covenants and other obligations under our credit
facility, the lenders may be able to accelerate amounts owed under the facility and may foreclose upon the assets securing our obligations.
1, 2024, the Company entered into a $100 million Credit Agreement (the "Credit Agreement") with certain funds managed by
OrbiMed Advisors LLC ("OrbiMed"). The Company and OrbiMed entered into amendments to the Credit Agreement in July and
August 2024, pursuant to which certain financial covenants were amended and certain amendment fees became payable. The Credit
Agreement provides for a five-year senior secured credit facility in an aggregate principal amount of up to $100 million (the
"Loan Facility"), of which (i) $55 million was advanced on May 1, 2024, (ii) $25 million will be made available, at the Company's discretion, on or prior to March 31, 2025, subject to certain net revenue
requirements and other customary conditions, and (iii) $20 million will be made available, at the Company's discretion, on or prior
to March 31, 2026, subject to certain net revenue requirements and other customary conditions. Subsequent amendments to the Credit Agreement
added a minimum liquidity level condition to the $25 million additional loan draw. All obligations under the credit agreement are secured
by substantially all of the Company's assets, including intellectual property rights.
The Company is subject to a number of
affirmative and restrictive covenants pursuant to the Credit Agreement, which limit or restrict its ability to (subject to certain
qualifications and exceptions): create liens and encumbrances; incur additional indebtedness; merge, dissolve, liquidate or
consolidate; make acquisitions, investments, advances or loans; dispose of or transfer assets; pay dividends or make other payments
in respect of their capital stock; amend certain material documents; redeem or repurchase certain debt; engage in certain
transactions with affiliates; enter into certain restrictive agreements; and engage in certain other activities customary for a
senior secured credit facility. In addition, if, for any quarter beginning on June 30, 2025 and until the maturity date of the Loan
Facility, the Company's net revenue does not meet certain minimum amounts, then, subject to certain cure rights specified in
the Credit Agreement, MDxHealth shall be required to begin to repay the outstanding principal amount of the Loan Facility in equal
monthly installments, together with accrued interest on the principal repaid and a repayment premium and other fees, until the
maturity date of the Loan Facility. In addition, the Company will be required to maintain certain levels of unrestricted cash and
cash equivalents during various time periods, including monthly assessments thereof, initially at a minimum level of $20 million and
subsequently reducing to a $5 million minimum level following the achievement of certain milestones, as further described in the
Credit Agreement filed as exhibit 4.1 to Form 6-K, dated May 1, 2024. Subsequent amendments to the Credit Agreement, filed as
exhibits 4.1 and 4.2 to Form 6-K dated August 21, 2024, have temporarily reduced the initial minimum level of unrestricted cash and
cash equivalents to $12.5 million until the end of the current calendar year.
The Company's obligations under the Credit

Frequently Asked Questions

What are the key financial figures for MDxHealth as of June 30, 2024?

MDxHealth reported revenue of $41.99 million, a gross profit of $25.35 million, and a net loss of $20.04 million.

How much did MDxHealth's revenue increase from the previous year?

Revenue increased by 34% from $31.45 million in the prior year.

What is the accumulated deficit for MDxHealth as of June 30, 2024?

MDxHealth's accumulated deficit is $351.5 million.

What is the current cash position of MDxHealth?

As of June 30, 2024, MDxHealth had cash and cash equivalents totaling $21.3 million.

What risks does MDxHealth face in its business operations?

MDxHealth faces risks related to market acceptance, regulatory compliance, and financial obligations, among others.

Last updated: Aug 21, 2024