Good morning, and welcome to the Lucid Diagnostics First Quarter 2025 Business Update Conference Call. Please note this event is being recorded. I would now like to turn the conference call over to Mr. Matt Riley, Lucid Diagnostics Senior Director of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone. Thank you for participating in today's business update call. Joining me today on the call are Dr. Lishan Aklog, Chairman and Chief Executive Officer of Lucid Diagnostics; along with Dennis McGrath, Chief Financial Officer. The press release announcing our business update and financial results is available on Lucid's website. Please take a moment to read the disclaimers about forward-looking statements in the press release. The business update, press release and the conference call all include forward-looking statements, and these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made. Factors that could cause actual results to differ are described in the disclaimer and in our filings with the SEC. For a list and a description of these and other important risks and uncertainties that may affect our future operations, see Part 1, Item 1A entitled Risk Factors in Lucid's most recent Annual Report on Form 10-K filed with the SEC and any subsequent updates filed in quarterly reports on Forms 10-Q and subsequent Forms 8-K. Except as required by law, Lucid disclaims any intentions or obligations to publicly update or revise any forward-looking statements to reflect changes in expectations or in events, conditions or circumstances on which the expectations may be based or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. I would now like to turn the call over to Dr. Lishan Aklog, Chairman and CEO of Lucid. Lishan?

Thank you, Matt, and good morning, everyone. Thank you all for joining our quarterly update call today. As always, I'd like to thank our long-term shareholders for your ongoing support and commitment. Our team here at Lucid remains singularly focused on driving this enterprise towards its substantial commercial potential and to enhance our long-term shareholder value. We really believe we're now better-positioned than ever to capitalize on EsoGuard's really huge clinical and market opportunity. We continue to make steady progress since the last update, which was just 6 weeks ago. Perhaps most importantly, we've secured capital to extend our runway past some reimbursement milestones, and we are continuing to drive our cash-pay and contracted programs that we launched earlier this year, targeting concierge medicine practices and employers. We continue to have momentum in our engagements with regional commercial insurers on securing EsoGuard coverage. We're waiting to hear back from the MolDX program on EsoGuard Medicare coverage, which we continue to believe is imminent. Thanks to our recent financings, we have plenty of runway and we're well-positioned to accelerate our commercialization once we secure Medicare coverage. So let's start with some key highlights related to our commercial execution. So we performed 3,034 EsoGuard tests in the first quarter. That's the upper end of our range of 2,500 to 3,000 tests per quarter. And as we've mentioned before, we're happy to have maintained that volume while transitioning our commercial team to these new sales channels to drive revenue such as concierge practices and employers. Our revenue of $800,000 fell a bit short due to external headwinds and greater concentration of testing through our healthcare events, and Dennis will provide some more details and color on that a bit later. We also launched our Embrace the Future campaign, showcasing EsoCheck's groundbreaking Collect+Protect cell collection technology relative to antiquated sponge-on-a-string devices, and we'll provide some more details on that a bit later. We have had a successful partnership with a major health system to launch a comprehensive EsoGuard esophageal precancer testing program, and this will expand access to at-risk patients across the full spectrum of their digestive health teams, including gastroenterology and primary care, and for the first time, a concierge medicine program that is housed within a major health system. We'll have a more formal announcement coming in the very near-term on this. And we have continued momentum executing our concierge medicine program to expand EsoGuard access on a cash-pay basis. We doubled our total number of contracts in the past 6 weeks. And our team is starting to build the critical procedures and materials, marketing materials and other patient materials to drive patient volume once contracts are in place. We continue to expect an impact on revenue from this effort in the second half of this year. And we're also making meaningful progress executing employer market contracts, and we have a strong pipeline of opportunities, both with employers as well as with fire departments. We doubled the number of employer contracts in the first quarter. And of course, these two efforts, the cash-pay concierge medicine practice as well as our direct contracting with employers and fire departments really serve to complement our ongoing efforts at traditional reimbursement through coverage and positive medical policy from private payers and with Medicare. So now let's discuss some of our recent strategic accomplishments. As I noted earlier, we're extremely happy that we strengthened our balance sheet with an underwritten public offering of common stock that netted approximately $16.1 million in proceeds. This really significantly bolsters our balance sheet with over $40 million in pro forma cash at the end of the first quarter. And this importantly extends our runway well into 2026 and past key milestones. And this really mitigates our risk from the perspective of external factors. And it also provides us the resources to immediately ramp up our commercial efforts after we receive Medicare approval. We're also happy to report that a new piece of clinical data from the NCI-sponsored study showed that EsoGuard was effective at detecting esophageal precancer in at-risk patients without heartburn GERD symptoms and that this will ultimately support an expanded indication and market opportunity. This was the initial study that led to the larger ongoing 5-year NIH study for which a large NIH grant was secured, and it showed 100% negative predictive value, so no false negatives and a prevalence in this population of patients without GERD symptoms who otherwise have risk factors consistent with the American Gastroenterological Association. The prevalence was about 8%, which is really not that much lower than in the heartburn population. So it really demonstrates that this is a target population that could emerge in the future. If the NIH study replicates this and in fact, the target population expands to patients without symptoms of heartburn, then our already large $60 billion total addressable market could increase by as much as 70%. So before turning the call over to Dennis, I just want to provide a bit more detail on a couple of select topics. So I'd like to review a bit more detail our ongoing reimbursement efforts and talk a bit about our Embrace the Future campaign related to EsoCheck and our experience with that at the big DDW conference earlier this month. So let's start with commercial payers. As we announced in March, we secured our first positive policy coverage from Highmark Blue Cross Blue Shield of New York, and that policy will be active just in a couple of weeks later this month. And our expectations with regard to that have played out. So this clearly is helping us in our conversations with other regional plans, including other regional Blue Cross Blue Shield plans. It serves as a precedent to drive additional positive policy coverage decisions, and that's played out in the field as we continue to engage, and we remain deeply engaged with a robust pipeline of regional plans. As we've clearly expressed in the past and just to reiterate that we believe there's plenty of opportunity to pursue in the regional plan territory, but that the larger plans, the nationwide ones like United and Anthem and others will likely wait for us to secure Medicare coverage. Another big area, again, just in the last 6 weeks that we've noticed is that as we announced in March, the NCCN National Comprehensive Cancer Network updated its clinical practice guidelines to include for the first time a section on esophageal precancer screening that mimics the GI guidelines. And we knew this is highly influential. It's something that payers pay a lot of attention to. But what we've already learned just again in the field is that this has been very helpful already in our conversations with payers. We've already had multiple meetings where medical directors at regional plans have acknowledged the importance of these NCCN guidelines and have acknowledged that us having it would be helpful. So we really do believe, just even on the early experience from just a few weeks into this, that the NCCN clinical practice guidelines will really be a valuable tool in helping us drive positive commercial insurance policy coverage decisions in the coming months. And on to Medicare; so just to remind people a little bit of history here, we previously, at the end of last year, submitted our complete EsoGuard clinical evidence package in support of a request for reconsideration of an existing Medicare LCD that seeks to cover EsoGuard and tests in this category based on existing coverage criteria that align with the American College of Gastroenterology guidelines. And we really believe that this package is outstanding. It's complete and provides unprecedented data. And as I mentioned, really aligns with the criteria for coverage that are already in the existing LCD. And so we really remain optimistic about the outcome. The next step will be the issuance of a draft LCD proposing Medicare coverage. And we really, again, believe this is imminent. And we're in good shape with plenty of runway to navigate this process before ultimately accelerating commercialization once we secure Medicare coverage, which again, we believe is imminent. Moving on to our Embrace the Future campaign; thought to give you a little bit of a highlight of what we're doing in this space. Historically, our marketing efforts to the physician community have focused on EsoGuard, and that's appropriate because that's the actual test that's delivering the results and giving the positive and negative results that drive patient care. But there's really an opportunity that we've decided to highlight — to really highlight the outstanding performance of not just EsoGuard, but our cell collection in over now 30,000 patients to date and to really contrast them to these legacy sponge-on-a-string devices, which are decades old and it's sort of the equivalent of a Brillo pad versus our soft balloon — modern soft balloon device. There have been publications out there for other tests. There have been some presentations, molecular tests that seek to enter the space using the sponge-on-a-string devices. So we thought that this was the opportunity to highlight to the GI community what the future of esophageal cell collection is. And so we've put forth a variety of marketing materials that demonstrate the pristine safety record, really high patient satisfaction, very high success rates of over 95% to 96%, the fact that EsoCheck can be performed in less than 3 minutes — we're really down to less than 2 in our hands — and contrast that to the safety profile and the FDA recalls that have occurred with multiple sponge-on-a-string devices. And so this has been successful. This really positive experience at DDW, highlighting this in a pretty assertive ad campaign that highlights this contrast, and we'll continue to do that really to just remind the gastroenterology community, in particular, of the unique features of EsoCheck that we think ultimately play a critical role in the performance of EsoGuard and the data, the clinical data we've been able to generate. So with that, before handing it over to Dennis, I'd like to summarize by saying we really believe we're set up very well from a commercial point of view and based on our financial resources and balance sheet to really advance EsoGuard through our efforts to gain Medicare and commercial coverage as well as through our new sales channels where we seek to drive revenue. And so we really do look forward to continuing to maintain our test volume and grow revenue over the coming quarters. So with that, let's pass the call on to Dennis.

Thanks, Lishan, and good morning, everyone. The summary financial results for the first quarter were reported in our press release that has been distributed. On the next three slides, I'll emphasize a few key financial highlights from the first quarter, but I encourage you to consider those remarks in the context of full disclosures covered in our Annual Report and on Form 10-Q. With regard to the balance sheet; cash at the end of the quarter on March 31 was $25.2 million. Obviously, this does not include the net proceeds from the recent $16 million market public offering completed on April 11, which when added to the above would give us the pro forma cash of about $41 million as we entered the second quarter. You'll recall that during the fourth quarter, we refinanced our convertible debt, which is a 5-year note interest-only at 12% with a dollar conversion price and is held by long-term shareholders. The fair value of the convertible notes at $32.8 million at quarter end is really the only other substantive change from the previous reported balances at the end of December. The fair value increase reflects a mark-to-market quarterly adjustment in parallel with the common stock price increase of 82% from December 31 to March 31. The quarterly burn rate was $11.3 million, which is slightly higher than the average burn rate for the four preceding quarters of $11.1 million, part of which is due to a full quarter's interest charge on the convertible debt, mostly paid in cash. The burn in the first quarter included $8.2 million from ongoing operations and $3.1 million from the quarterly management services agreement. Shares outstanding, including unvested RSAs as of last week are approximately 108 million. The GAAP outstanding shares as of March 31 of 84.4 million are reflected on the slide as well as on the face of the balance sheet in the 10-Q. GAAP shares do not reflect unvested restricted service awards. At present, PAVmed continues to be the single largest shareholder of Lucid Diagnostics with ownership of approximately 29% of the common shares outstanding. Although PAVmed no longer has voting control of Lucid, PAVmed together with the Board and management still have significant influence over Lucid with more than 27% of the voting interest. As you're aware, Lucid's financing last year included the issuance of a series of voting convertible preferred securities, whereby the preferred shareholders are significantly incentivized to delay conversion of the preferred shares into common shares until 2026, namely the second anniversary from closing. If all of the preferred shares outstanding were converted to common shares as of today, there would be an additional 49.6 million shares outstanding. With regard to the P&L; this slide compares this year's first quarter to last year's first quarter on certain key items. I trust you'll review the information in my comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-GAAP information. With over 3,000 tests for the first quarter, we invoiced more than $7.5 million and recognized revenue of approximately $800,000, largely based on the amounts collected during the quarter. Collections were lower sequentially and year-over-year, mostly related to delayed cash collections from UnitedHealthcare, who generally pays us at the Medicare rate and within a reasonable timeframe, but had a national issue with rolling out its new system DEX Z-Code for molecular pathology claims that delayed processing these claims. They're still working through the backlog with a 60- to 90-day time delay from the initial Z-Code assignment to final CPT code pairing and claim readiness. Additionally, the quarterly test mix included some larger testing events that involve Kaiser, and we're still working through claim denials with that insurer. With new investors once again joining us for this call, it's worth repeating what we have communicated in the past quarters about revenue recognition. Key determinant in how revenue is recognized at this point in our reimbursement journey is the probability of collection. Therefore, due to the fact that we are in the early stages of the reimbursement process means revenue recognition of claims submitted to traditional government or private health insurers will be recognized when the claim is actually collected versus when the patient report is delivered, invoiced and submitted for reimbursement. You'll see in our 10-Q, this is called variable consideration in the jargon of GAAP's ASC 606 revenue recognition guidelines; presently, there is insufficient predictive data to reflect revenue when the test report is delivered to the referring physician. For billable amounts contracted directly with employers or through concierge medicine and that are fixed and determinable, revenue will be recognized as revenue when our contracted service is delivered. Generally, that means when the report is delivered to the referring physician. Our non-GAAP loss for the first quarter of $11.2 million is slightly higher than the trailing 4-quarter average of $10.8 million. However, if adjusted for the $800,000 of financing costs incurred in the quarter it would have been modestly lower than the fourth quarter average. The non-GAAP net loss per share of $0.16 is lower sequentially as well as in each of the last four quarters with a trailing 4-quarter average of $0.20 per share. On a GAAP EPS basis, the first quarter noncash charges accounting for approximately $0.36 per share include $0.13 per share related to the Series B preferred dividend issued on March 13. With regard to our operating expenses, this slide is a graphic illustration of our operating expenses after eliminating noncash expenses for the periods reflected. Non-GAAP operating expenses were flat sequentially and after normalizing for deal expenses and interest expense for both fourth quarter and first quarter are in line with the last 6 quarters. Let me close with a few reimbursement highlights for the first quarter. In the first quarter, we billed 3,034 tests, reflecting just over $7.5 million in pro forma revenue. During the first quarter, we collected $800,000 from traditional reimbursement claims. Of that amount collected, about 20% was for claims submitted in the first quarter, about 60% from claims submitted in the previous quarter and the balance from claims submitted more than 6 months ago with the longest-dated item roughly 21 months ago. Of the claims submitted in the first quarter, about 60% have been adjudicated, 40% are pending. Out of the 60% that have been adjudicated, about 30% resulted in an allowable amount by the insurance company with an average of about $1,362 per test. Importantly, the median was right at the Medicare rate, $1,938.01. Of those denied, about 50% are either, A, deemed not medically necessary; B, require prior authorization or C, required additional medical records. Additionally, about 30% were deemed to be not covered. So with that, operator, let's open it up for questions.

Operator instructions. And your first question comes from Mark Massaro from BTIG.

So yeah, I just figured I'd start with the Q1 volumes. Obviously, you did come in above the high end of that 2,500 to 3,000 threshold that you've talked about to get a large enough number of claims for payers. So that's good. Can you just give us a sense if weather was an impact in the quarter? And then as we think about Q2, would it be reasonable to think that, that number might increase or is it still a little too early based on the timing of events?

Yeah. Thanks Mark. So you characterized it correctly. As we said before, during this period, while we're waiting for broader coverage, our goal is to protect our cash burn and operating expenses and to maintain a volume in this range that gives us sufficient volume to remain engaged with the regional payers and other payers, and that's held up. The one thing that Dennis hinted at, which may be worth emphasizing, is that as we've made this transition with our sales team to have a subset of them focus on new sales channels such as concierge medicine and increasing emphasis on contracted and revenue-generating targets, the proportion of the volume that is represented by these larger healthcare events has increased. And that's just sort of a natural effect of that as those events are much more efficient. They allow us to reach these numbers and drive the number of claim submissions to the traditional plans. One thing that comes with that is they tend to be lumpier, right? So if you have 10,000 tests that are being ordered by a whole variety of physicians versus a handful of fire departments where there's a single payer typically for that, it tends to be lumpier. And so that can make the revenue number a little bit lumpier. But overall, no, we don't believe weather was a factor. Things are pretty steady beyond that shift more towards the larger healthcare events. And I would still recommend that we sort of assume that we'll be in this range until either we get Medicare and are able to drive volume towards elderly populations or as the commercial coverage broadens, at which point we'll look to drive volume beyond these levels.

Okay, great. And then I think, Lishan, you indicated that you think the Palmetto GBA decision for Medicare coverage could be imminent. I was just curious if you could provide any color with respect to whether or not there is active dialogue or is this more of like you had a conversation or meeting months ago and you're just waiting to hear something?

Yeah. That's a good question. Yeah. No, we haven't gone back and engaged with the MolDX group recently. We had multiple meetings and multiple engagements heading up to the submission. And our expectations with regard to how long it would take them to process this request for reconsideration are based on the details of those conversations. As a reminder, the substance of that is that what we submitted was a request to reconsider the previous LCD, which was written as a coverage LCD but was non-covered because there were no tests that had sufficient data at the time that it was published two years ago. And so the work that's required for them is very different and substantially less than a typical new LCD or even a typical reconsideration which seeks to change the coverage criteria or change other meaningful aspects of the LCD. We did not do that. We just said, here's our data, here's a summary of our data. We provided a detailed summary and, frankly, a redline of the existing LCD that simply incorporates our data and asks that the test now be covered based on that. So because of that, because the group had already done all of the hard work that typically takes periods of time assessing the space and understanding the underlying clinical and scientific basis for all of this, that's where our estimates as to how long it would take them to complete that process of reviewing our data and acknowledging that it aligns with the coverage criteria come from. And that's why we still think it's coming soon.

Okay, great. And then I'll ask one more and then hop back in the queue. It was great to see the NCI-sponsored study, which showed the value of EsoGuard in patients without symptomatic GERD. I'd be curious to understand what is next? I imagine that additional studies or data would have to be presented in order to longer term potentially gain Medicare coverage. And I think there was an NIH grant that was associated with that. So how are you thinking about investing in additional data? And what are your thoughts about timelines?

Yeah, exactly. So let's make sure we put this in the right perspective. Right now, our goal is to target the 30 million-plus patients who fulfill the more conservative American College of Gastroenterology guidelines, which require that the patient have long-standing heartburn plus three out of six risk factors. There's plenty of room for us to pursue that space. And our conversations with payers, including Medicare, are limited to that. So the Medicare LCD criteria match those more conservative criteria. However, there's a growing understanding within the GI community that GERD heartburn is not as powerful a risk factor and also very hard to document accurately. And the reason for that is a variety of things, including that patients are taking PPI medications that are effective at suppressing symptoms and also the development of these precancerous conditions can blunt symptoms. So there's an increasing realization of that. That was first manifested in the fact that another GI society, the American Gastroenterological Association, removed a requirement for GERD and just made it a risk factor. So it's that momentum within the GI community and the understanding of the clinical situation here that in order for us to really have maximal effect at preventing cancer we have to look at these asymptomatic patients. This NCI-sponsored study was the first step towards that. And it showed, as I said, two really critical things. One, that EsoGuard works in patients who don't have heartburn. We were not surprised by that, but it showed 100% negative predictive value for EsoGuard. But perhaps the more important — at least as important — data point was that 8% prevalence. You might wonder if you remove heartburn that maybe that's a lower-risk population, maybe they're at 3% or 4% and the long-term opportunity to justify testing in someone in a group of patients that have less precancer might be lower. So that 8% number is really right up there in a similar range to those who have GERD. So that first box has been checked. You're right, that's not going to be sufficient for expanded indications. For universal clinical guidelines to change and for payers to adopt that, that's going to require more data. And that's where the NIH study comes in. So the group led by Case Western, which includes multiple major academic centers, received an NIH $8 million grant to replicate the data from this pilot study on a larger basis. I believe the number is about 800 patients over the coming years. And that data will be the sort of definitive data that will drive the expansion of the clinical indications and therefore, the expansion of the market opportunity. I don't think we'll need any more data beyond that.

And your next question comes from Kyle Mikson with Canaccord Genuity.

I wanted to talk about volume, that's helpful. On ASP, though, I know just collecting cash and it's not a perfect system right now given the lack of reimbursement. But you are working with more concierge medicine, more contracting and the payment rate should be a little more elevated, I thought. And now it looks like ASP declined quarter-over-quarter, the effect of ASP. So what could you just talk about mix in the quarter? I know you got the events and everything, but just mix and then how that flows into pricing and everything. And again, how should we think about it for the rest of the year?

Yeah. Let me have Dennis talk about that. But just to start off, a reminder that the institutional concierge activity and the expanded targeting of contracted employers happened pretty recently. The shift in the sales team happened at the beginning of the year. We just started pulling in contracts in the past couple of months. And we've expanded the number of contracts where we've demonstrated that we can get concierge practices on board, but translating that into patients who are actually getting tested even with those lower bars to recognize revenue, we're still somewhat early in that process. So I think Dennis can probably comment on sort of the contribution to the current revenue numbers and the ASP is minimal for this quarter. Dennis?

Yeah. That is absolutely true. Kyle, I don't want to put too much undue weight on this topic because if we were in network, this wouldn't even be a discussion point as it would not even affect our revenue or even our analysis of business performance; it would not even be an issue other than an uptick in our receivables. So the only issue is that we are still working through reimbursement and the central actor here in the storyline is still Medicare approval. But with that, let me give you a couple of stats. The Z-Code issue has been a chronic issue with United. But in any case, both United and Kaiser in the last two quarters generated each $1.3 million in billable amounts. Specifically with United, the collection rate for United in the third quarter last year was 30-plus percent, 32% I think. In the first quarter it was only 10%. And that Z-Code issue related to a number of denials and resubmissions and working through it. Kaiser, on the other hand, was about 10% of our volume in the first quarter, a little bit less than that in the fourth quarter. That $1.3 million, we have collected zero on, and our teams are working through that. Kaiser and other IDNs like it will be important long-term. So it's important we start filing claims. We engage with them. We start that process to get into their network, but that resulted in zero of our collections. So those are some of the stats related to the mix. But like I said, I don't want to put a whole lot of weight on this topic simply because it's not an indication of the performance of the business. It's an indication of where we stand with the reimbursement journey.

Maybe I could just emphasize one other thing, Kyle, if you don't mind. I know your focus was around concierge and employers, and that is, again, there was not any meaningful concierge activity in the first quarter. But the IDN question is really an interesting one because they're not traditional just commercial payers, but they have health plans as well. And we have had a handful of them, the notable one being Kaiser and a handful of others. And our ability to engage with them as a result of the increased volume of activity within them has been positive. So we've had some positive engagements with the larger IDNs, and we look forward to securing contracted coverage with them while we're in the same vein as we're doing with the regional plans.

Okay. Perfect. That was great. And can you actually just talk about the Medicare mix and how that's trended recently and how you expect it to go going forward?

We should always— Dennis, go ahead please.

Interesting question. I'll expand upon that. We have about $19 million total in our backlog that our reimbursement teams are working on collecting. About $15 million of that is in the last 12 months. And the Medicare percentage changes every quarter. We focus on this because when we get final approval, you've got 12 months of backlog that you can submit claims for. And that varies quarter-by-quarter. Given that we are now awaiting the approval and our teams have been focused on concierge medicine, the percentage of Medicare is lower. It's probably right now 12% to 15% of our volume. But obviously, the goal there is 40%. When you think about the 30 million patients that are symptomatic that are part of the ACG guidelines and what we're seeking for Medicare coverage, 40% of that 30 million is our targeted audience. It could be even higher than that, but that's generally the way we think about it. And with Medicare approval, we already have plans in place and tactics that are ready to go to start hunting for that particular patient that is in the Medicare group. And our goal will be as quickly as possible to take that 12% to 15% up to 40% of our test volume and a growing test volume.

Perfect. And finally, I guess you're alluding to partnering with a major health system to do a comprehensive EsoGuard testing program. Do you have a lot of those health systems in the pipeline or is this more of like a pilot and you'll try it out and you'll see if others make sense to partner with?

We have a good pipeline of those, but these are long lead-time projects. I think this particular one we've been working on for about a year. We've had positive engagements with the gastroenterologists. We also haven't announced every time we have a major health system; we've been careful to wait and see how they develop in terms of traction. What's interesting about this one — we'll provide a more detailed announcement once we have sign-off from the health system — is that they have a very large concierge medicine practice. So this was the first time where we've gone into a health system and said we'd like not only to implement broad-based esophageal precancer testing that includes EsoCheck and EsoGuard and work out exactly who's going to do the cell collection and how we're going to target patients and communicate with primary care physicians and all the things that go into building that kind of a program, but this particular health system also houses a concierge medicine practice. The work we've done in learning how to engage with concierge medicine practices over the last couple of months really paid off. So this engagement covers all of the above, and it requires some slight tweaks to how it's done within the concierge group versus the broader group. It does serve as a template for the future, and we do have a significant pipeline of others that we're working on, but they're longer lead times. So we have to pursue these as well as the other paths to engaging employers, fire departments and individual and smaller practices.

And your next question comes from Mike Matson from Needham & Company.

Glad to hear that you're feeling positive about the MolDX. I guess, not to sound negative here, but just do you have any contingency plans or what would you do if for some reason you don't get it when you expect it?

Well, I think the key thing is that we've already started building a parallel pipeline of concierge and employer contracted revenue to drive revenue. That is not so much a contingency plan but a parallel approach because we do expect to get Medicare coverage. Dennis talked last time about our expectations for how that will register in the second half and cut our burn. The most important mitigating factor is that we raised capital to get us through these milestones. And so we're well-positioned to handle any delays, but we really are expecting it as the time has come, given the amount of work that we expect they needed to do in order to do the analysis and proceed with the draft coverage.

Okay, got it. And then it leads into my next question just on the concierge program. I'm not real familiar with how those things work, but how do the patients that are enrolled in those kinds of practices hear about EsoGuard and decide whether or not that's something they want to opt-in for? And is there anything you can do to market the test or provide information to those people in those practices?

Yeah. That's exactly what we're doing and we're not inventing this from scratch. There are other companies that have engaged concierge practices and figured out the approach to go from having a concierge practice that you've won over and convinced to offering this to their patients on a cash-pay basis along with other testing attractive to this patient population. It's exactly what I mentioned earlier: our team can secure contracts, our talk track and the data we've built up has worked very well in our ability to engage the physicians to say, 'This is something I'd like to offer my concierge patients.' Now we are optimizing and fine-tuning our patient-facing materials to target this particular patient population and our processes by which we work hand-in-hand with the practice to let their patients know that this is available, why it might be valuable, who is at risk and who would be appropriate to test. This is a very active process that we're engaged in, and we have a robust methodology for doing this from our traditional approach targeting primary care physicians that includes helping them identify at-risk patients in their EHRs and contacting them proactively to suggest testing. We're tailoring those processes and materials to the unique aspects of concierge medicine practices.

And your next question comes from Jeremy Pearlman from Maxim Group.

So this shift in commercial strategy more towards cash-pay and concierge medicine, is that more short-term to just bridge the gap to potential Medicare coverage or is that market in the cash-pay concierge large enough that you've seen it's worthwhile to continue that commercial push even after a potential approval for Medicare? At that point, would you supplement sales reps and target additional insurers?

Let's be careful about words because I don't want to characterize this as a shift. It's really supplemental alongside everything else. We're targeting coverage and payments and revenue everywhere we can. On the traditional side, we are engaging with regional plans that we believe we can secure even before Medicare, and we think that will continue to be fruitful. Larger national plans will likely wait for Medicare. But on top of that, we have allocated resources toward areas where patients can pay out of pocket or institutions like employers and fire departments can pay on a contracted basis, guaranteeing revenue. So that's what we're doing now. We're not abandoning the traditional pathway; we've simply shifted some resources to pursue those additional channels. Once we get Medicare coverage and that leads to broader commercial coverage, the vast majority of the opportunity, the 30 million patients, will be within traditional plans, and that's where we'll focus resources. But don't underestimate the opportunity among self-insured employers — about half of the population is in self-insured plans — and the concierge medicine sector is growing. Given the economics, I suspect we'll continue those efforts even after coverage ramps.

Understood. And then just one last question. There's some legislative efforts underway in some states—I think it's been enacted in some states—to cover biomarker testing, particularly in cancer patients. Does that have any effect on your business? Are you helping with that? How would that work?

We're actively engaged in those state-level efforts. We're participating in relevant advocacy groups and working to support legislation that broadens access to biomarker testing. New Jersey just passed one such law nearby. There are examples where that can be helpful, but there are implementation challenges. Translating a state mandate into payers actually paying for a specific test can take time. Larger advocacy groups are helping to narrow implementation so it becomes more straightforward. We're actively involved, but we don't view that as the panacea; it will be helpful but not a complete solution.

And your next question comes from Ross Osborn from Cantor Fitzgerald.

So looking at your growing body of clinical utility data, I would be curious to hear feedback from physicians on what they're excited about for recent publications and how you're now feeling about general awareness of EsoGuard from the clinical community?

That's a great question. It's not something we talk about enough probably because the clinical validity data is the sexier part of the clinical evidence package. But what's exciting is that we have a full chain of evidence now. We have published evidence that physicians use the EsoGuard test appropriately to triage patients who are positive to endoscopy and negative to avoid further testing. The concordance of that is nearly 100%. We have published data that shows when patients have a positive EsoGuard test, there's 85% compliance with getting the endoscopy, which is really high relative to other tests where you triage patients to a more invasive test. Notably, that's double the compliance rate compared to recommending endoscopy without EsoGuard, where about 40% of patients complete the endoscopy. If they have a positive EsoGuard test, compliance doubles. And when patients do get their endoscopy, the yield from that endoscopy in terms of the number of positive precancers detected is 2.5- to threefold higher. All three of those points are important and appeal to different physician groups. Primary care doctors want to know how to use the test appropriately. Gastroenterologists are excited that their endoscopies will have a higher diagnostic yield and that they'll detect more patients who need surveillance or interventional ablation. Awareness has been increasing. As a small company, we have to work hard to get attention. DDW is the biggest gastroenterology meeting in the world, a massive meeting this year in Seattle, and we had a very strong presence. We had an active booth and a second area where we discussed EsoCheck advantages. Traffic and engagement showed better awareness and understanding of the availability of testing. We're in the final stages of collecting a very large 12,000-patient real-world experience dataset with EsoGuard and EsoCheck that provides outstanding data on how EsoCheck has performed and the types of patients being tested. That real-world evidence, given its size, will be useful and will help our efforts. Overall, those efforts are going well.

And your last question comes from Ed Woo from Ascendiant Capital.

My question is what's your visibility for large testing events for the rest of the year? And is there any seasonality to them?

The pipeline for the large testing events is great. We have a deep pipeline and are scheduling months in advance. Our goal is to transition those larger testing events, which are still dominated by fire departments, to increasingly include self-insured employers to have those be contracted in advance. Our team now has a dedicated group working with fire departments on grants and other ways to ensure that when we do these larger events, we get paid without having to go through the traditional claims process. Visibility has been strong; just about every week there's local media coverage, particularly for fire department testing. We get strong local media coverage on testing of fire departments and firefighters and thus increasing visibility. The key aspect is transitioning those high-volume events to ones where we have contractually guaranteed payment in advance.

There are no further questions at this time. I will now turn the call back over to Dr. Lishan Aklog. Please continue.

Great. So thank you all for your time and attention this morning. Thanks for all the great questions. I hope you got a sense that we are confident and well-positioned to capitalize on the opportunity we have in front of us with EsoGuard. There are a variety of things that are imminent. We believe Medicare coverage is imminent. We believe we're going to continue to get momentum with the regional commercial insurers and that the larger insurers will follow with Medicare. And we have really good early signs with the cash-pay and contracted sales channels. Those efforts that began in the first quarter, we believe will start reflecting in our revenue numbers over time. And I'm happy that we have a stronger balance sheet to be able to navigate this process over the coming quarters. So with that, again, I appreciate your time. We encourage you to keep abreast of our progress via our news releases and these calls as well as on our website and through social media on Twitter and LinkedIn. So thanks again, everybody, and have a great day.

Ladies and gentlemen, this concludes your conference call for today. We thank you very much for your participation and ask that you please disconnect. Have a great day.