Good morning, ladies and gentlemen, and welcome to the PAVmed First Quarter 2024 Business Update Conference Call. This call is being recorded on Tuesday, May 14, 2024.

Thank you, operator, and 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 PAVmed, along with Dennis McGrath, Chief Financial Officer of PAVmed. The press release announcing our business update and financial results is available on PAVmed'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 Securities and Exchange Commission. For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part I, Item IA entitled Risk Factors in PAVmed'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, PAVmed 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 PAVmed. Lishan, you can take it away.

Thank you, Matt, and good morning, everyone. Thank you for joining our PAVmed quarterly update call. Before proceeding, I'd like to thank our long-term shareholders for your ongoing support and commitment. We continue to leave no stone unturned to enhance long-term shareholder value. We continue to be pleased that Lucid, PAVmed's strongest and most advanced asset, is making such great commercial progress and it continues to successfully finance its operations through long-term fundamental investors. Lucid has a runway to advance through key upcoming reimbursement milestones on its pathway to profitability. As we discussed during our last call, we have updated PAVmed's overall strategy to drive shareholder value through independently financed subsidiaries, which, like Lucid, can leverage PAVmed's shared infrastructures. The initiatives we announced in furtherance of this strategy, specifically Veris' updated commercial strategy and the PMX Incubator, are progressing well. Let's begin with some highlights starting with Lucid. As we noted in yesterday's Lucid quarterly update call, first quarter EsoGuard revenue was flat quarterly. First quarter test volume grew 10% quarter-on-quarter. Lucid further strengthened the EsoGuard clinical data evidence base supporting ongoing engagement to secure commercial and Medicare payer coverage. Very importantly, a date for a MolDx pre-submission meeting was secured for July 17, 2024. On Veris Health, we're executing on our new strategy, which is focusing on large academic cancer centers. I am very excited that we were able to complete a memorandum of understanding with the Ohio State James Cancer Hospital to implement a pilot program, enrolling their patients onto our Veris Cancer Care platform. We have made solid progress on pursuing financing of Veris, and we have a clear path to FDA clearance of our implantable monitoring pending independent financing. The PMX Incubator launched last quarter. And as we reported last time, it's a wholly owned incubator that we developed in partnership with Hatch Medical. Our first target is to raise capital for PortIO, and we've done so by creating a separate entity for PortIO as a wholly owned subsidiary in the incubator, which I will discuss in more detail shortly. But I think that the strategy is consistent with PAVmed's overall vision, but with some adjustments. Our strategy is to drive shareholder value through holdings in independently financed subsidiaries like Veris, Lucid, PMX, and PortIO that are managed through a shared services structure that is held at the PAVmed level. Our strategy is to follow the successful Lucid path and seek financing opportunities directly into Veris and the subsidiaries based on the PMX technologies and future subsidiaries. We're also actively seeking out new groundbreaking independently financeable technologies with large market opportunities that can leverage existing PAVmed infrastructure, and we hope to announce such a transaction in the not-too-distant future. The overall mission is to utilize these modern remote patient monitoring tools to improve care through early detection of complications, longitudinal trends, and risk management. As I previously noted, we updated our strategy for Veris to shift from cancer practices to large cancer centers, including academic cancer centers, and we're really excited that we've had our first memorandum of understanding signed with the Ohio State University Comprehensive Cancer Center at the James Hospital. This is an NCI-designated comprehensive cancer center and the third-largest cancer hospital in the nation. They have over 10,000 patients per year who receive infusion therapy, which is our primary target, and we look forward to launching a pilot of the Veris Cancer Care platform in approximately 100 patients. We're actively raising capital triggered by the announcement of this engagement and look forward to consummating that soon. We also remain engaged with numerous other strategic institutions. These institutions are those that have large staff and a large number of patients on infusion therapy and are located in typically concentrated metropolitan areas. We focus on those that are also NCI-designated comprehensive cancer centers, many of which have venture arms, similar to Ohio State University James. To mention the key part of our long-term vision with Veris, we are developing an implantable monitor to be implanted at the time of the vascular access port. This monitor will provide continuous cardiac monitoring and relay additional data through Bluetooth connectivity to the platform. We have made excellent progress on this and have a clear path to FDA clearance and commercial launch. We intend to proceed with that development towards FDA submission once we secure independent financing. Finally, let's discuss the PMX Incubator, which we announced last quarter. PMX is an incubator created in partnership with our colleagues at Hatch Medical. The aim here is to take individual products that we had previously put on pause in 2023 and bring them into individual subsidiaries to raise capital for their advancement to commercialization. Our first target is PortIO, and we've established a separate corporate entity as a subsidiary of the incubator, PortIO Corp., that is now actively raising capital to advance this project. PortIO is the first implantable intraosseous vascular access device designed for long-term use. It provides direct long-term access to the bone marrow, analogous to long-term implantable vascular access ports. A key feature is that its insertion into the bone marrow is maintenance-free, hence there are no costly or labor-intensive flushing requirements like traditional long-term vascular access ports. We expect it to have reduced complications, including reduced infection rates, relative to traditional venous access. We anticipate that the total addressable market for this technology is upwards of $3 billion. We have robust IP protection. Before we put the project on pause, we completed our first-in-human study in Colombia, South America, which had excellent results with no complications and excellent functionality. We expect to proceed to FDA submission following a de novo pathway once we secure financing. The target margins for this technology are at least 85%, and we expect reimbursement under existing codes for the insertion of vascular access devices. With that, I'll pass the baton on to Dennis to give us a financial update.

Thanks, Lishan, and good morning, everyone. Our summary financial results for the first quarter were reported in our press release published last night. On the next three slides, I will emphasize a few key highlights from the quarter, but I encourage you to consider those remarks in the context of the full disclosures covered in our quarterly report on Form 10-Q. Regarding the balance sheet, cash at quarter end March 31st was $25.5 million. We added $11.6 million to that amount with the Lucid financing completed last week, giving us pro forma cash of $37.1 million. The average quarterly burn rate over the trailing four quarters is $11.7 million per quarter. We disclosed in the 10-Q that our ability to fund operations beyond one year from today is largely dependent upon how revenues ramp over the next four quarters, which is reliant on how the reimbursement landscape for both government and private health insurers continues to improve for EsoGuard. Additionally, our direct contracting efforts with self-insured employers and/or corporate finance activities, including refinancing any outstanding debt at the time can also help meet that threshold. Furthermore, as we advance initiatives with the PMX Incubator and Veris Health, particularly regarding the Ohio State University Cancer Care Center, any direct financing into either of these subsidiaries will further satisfy that threshold. The change in other assets is largely related to the normal amortization of certain intangibles, prepaid insurance, and the application of advanced vendor deposits to the current period incurred expenses. Convertible debt reflects a balance of $37.3 million in face value principal plus $8.2 million in fair value accounting convention, a noncash amount. The face value principal is split between PAVmed and Lucid at approximately $26.4 million and $10.9 million, respectively. During the first quarter, face value principal was reduced by about $400,000, inclusive of the issuance of approximately 113,000 PAVmed common shares. Subsequent to quarter end, an additional $280,000 of face value principal was paid, inclusive of another 113,000 PAVmed common shares. Other long-term liabilities are from capitalized leases related to our lab and office spaces. Shares outstanding, including unvested RSAs as of last week, are 9.4 million. The GAAP outstanding shares of 8.9 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 RSA amounts. 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 provided; my comments in light of the cautionary disclosures are on the bottom of the slide regarding supplemental information, particularly non-GAAP information. Revenue for the first quarter largely reflects Lucid's actual cash collections for the quarter for insurance reimbursable claims, plus invoiced EsoGuard tests to the VA and about $25,000 in direct contracting, as well as about $9,000 for the Veris Cancer Care platform. As detailed in our Lucid quarterly call yesterday, recognized Lucid revenue just over $1 million is sequentially about even with the fourth quarter and reflects more than a twofold increase over the prior year’s first quarter and is in line with our prior previews. Test volume at 2,420 tests for the quarter represent just over $6 million in submitted claims at our $2,499 ASP. Lucid's revenue recognition, which is a key determinant, is based on the probability of collection. Given that we are in the early stages of the reimbursement process, revenue recognition for claims submitted to traditional government or private health insurers will be recognized when the claim is actually collected rather than when the patient report is invoiced and submitted for reimbursement. As we mentioned in our 10-Q, this is called variable consideration within GAAP ASC 606 revenue recognition guidelines, and presently, there is insufficient predictive data to reflect revenue at the time the test report is delivered to the referring physician. For billable amounts contracted directly with employers that are fixed and determinable, revenue will be recognized when the contracted service is delivered, meaning when the report is delivered to the referring physician. Our non-GAAP loss for the first quarter of $8.6 million reflects about a $2 million sequential improvement compared to the fourth quarter loss and approximately a $2.5 million improvement year-over-year from the prior year’s quarter. Regarding the non-GAAP operating expenses on this slide, you'll see a graphic illustration of our operating expenses over time as presented in detail in our press release. Total non-GAAP operating expense is $12.6 million for the first quarter of 2024 and reflects a $2.2 million improvement sequentially and a $2.4 million improvement year-over-year. Clinical research costs are the primary driver for the first quarter reduction, amounting to approximately $1.7 million of the reduced spend since the fourth quarter. The non-GAAP loss per share for the first quarter was $0.99 per share. On a GAAP EPS basis, noncash charges accounted for approximately $1.63 per share in the first quarter, of which $0.86 was directly related to the noncash dividend connected to the March financing of $18.2 million, and $0.52 per share was related to the convertible debt charges. Also worthy of repeating are some reimbursement stats as mentioned on the Lucid call yesterday, focusing on the reimbursement stats for the last two quarters, the first quarter and the fourth quarter of last year. Just under 4,000 claims, representing just under $10 million in pro forma revenue, have been submitted for reimbursement. About 75% have been adjudicated, and 25% are pending. Out of the 75% that have been adjudicated, approximately 46% resulted in an allowable amount by the insurance company with a mean average of about $1,700 per test; with a longer aging time of about 6 months with appeals, the average is approximately $1,800 per test. Of those denied, about 53% are deemed not medically necessary or require prior authorization, while about 28% were deemed to be non-covered. So with that, operator, let's open it up for questions.

Your first question comes from the line of Anthony Vendetti from Maxim Group.

Just on the memorandum of understanding with Ohio State, what are the milestones or expectations for that to go to some type of definitive agreement? And then how many others like Ohio State do you have in the pipeline at this point?

Yes. Great question. So to backtrack a little bit, we've had really fruitful discussions with the team at Ohio State. There's a strong shared vision for the role of digital health tools in advancing cancer care that goes beyond initial efforts within remote patient monitoring. Lots of discussions around long-term goals and opportunities to collaborate exist. We are still waiting; the memorandum of understanding focuses on a pilot study that we expect to launch in the coming weeks. It will involve up to 100 patients in two units within the medical center. The goals for the pilot are to demonstrate feasibility and showcase key aspects of this platform, such as ensuring that patients are on the platform, connected to monitoring tools through Bluetooth, and able to provide data to physicians and caretakers to impact cancer care. We look forward, following that, to hopefully expanding our engagement on the commercial side upon the completion of an active RFP. We have about a half-dozen other large centers with which we have active conversations, several of whom are progressing toward more comprehensive discussions. As we've described, we're operating under a strategy where Veris is raising capital to expand its efforts beyond the initial sites. We expect to advance these individual centers after proving feasibility here and securing capital to scale our commercial activity.

Your next question comes from the line of Frank Takkinen from Lake Street Capital Markets.

Just one more follow-up on the Ohio State MOU. Maybe walk us through what the total revenue opportunity looks like. I understand you're going into a pilot, but how large is their cancer center? And if you were to be successful in that pilot and roll it out across that entire network through Ohio State, what kind of revenue opportunity could that look like? And then as a second part to that question, how should we think about how many players are out there similar to Ohio State that you could partner with?

Yes. I'll address that at a high level. A significant portion of cancer care, particularly for patients diagnosed with and entering systemic therapy, primarily those receiving infusion therapy, is provided at large comprehensive cancer centers like Ohio State. They have 10,000 patients receiving infusion therapy each year. Hence, should the pilot program transition into a full program, we will have the opportunity to expand our engagement to encompass a growing number of those patients. As we've previously discussed, the revenue opportunities for the remote patient monitoring billing model at individual centers can provide approximately $1,000 to $1,200 per patient per year. Overall, the revenue potential is considerable at these large centers. That's the reason behind our transition from smaller practices to larger centers as part of our strategy.

Got it. And then the second half of that, how should we think about the opportunity of players like this? Or maybe more specifically, how should we think about your current funnel of opportunities like this?

Yes. As I mentioned, we have several dozen on our target list and approximately five institutions have engagements, with Ohio State being one of the largest. The pace of sealing these agreements will depend on the pilot's success and our ability to raise adequate capital to scale our commercial efforts concurrently at multiple sites.

Perfect. And then just last one for me. I think you referenced it briefly in your prepared comments—many of these centers have venture arms. How could some sort of strategic investment from them be structured and look like?

Yes. We've had prior engagements beyond Veris with academic centers. You're right to point out that many large academic centers, not just in the cancer sector, have venture arms and are interested in investments alongside strategic collaborations. This offers us greater opportunities for partnership, not only on the clinical side but also for venture collaboration. These institutions commonly invest through their venture arms as a measure of confidence in the commercial potential of their partners, thus providing a potential avenue for us.

Your next question comes from the line of Edward Woo from Ascendiant Capital.

Congratulations on all of the progress. My question is on PortIO and the PMX Incubator initiatives. Can you talk about the fundraising environment? How difficult is it or how easy it is to raise money? And also, is there a strategy to focus on PortIO versus EsoCure and CarpX at the same time or to do it in a linear process?

Yes. Raising capital is never easy, but our engagement with Hatch is promising as they have a distinct network of investors eager to fund assets like this at the right investment size. We're optimistic about our ability to raise the capital needed to advance PortIO through this collaboration. As far as the other products in the incubator like EsoCure and CarpX, we're pursuing capital for each one sequentially, but we are not limited to completing one project before moving to the next. Once we successfully raise sufficient funding for PortIO to move toward commercialization and FDA submission, we will then focus on pueshing forward with EsoCure, then CarpX, with the objective of advancing all these projects continually toward commercialization in the near future.

We do not have any further questions at this time. I would now like to turn the conference back to Lishan Aklog.

Great. Thank you all for joining today. As always, thank you for the great questions and discussion. Hopefully, you have a sense that we're excited to continue executing on this updated PAVmed strategy. We hope that alongside the successes at Lucid, we can see similar outcomes with our subsidiaries, including Veris, PMX, and potentially others in the near future. We look forward to providing updates on our progress through press releases and conference calls like this one, so please sign up for our email alerts at both the PAVmed and Lucid Investor Relations sites, follow us on social media, and feel free to contact Matt with any specific questions. Thank you very much, everyone, and have a great day.

This concludes today's conference call. Thank you for your participation. You may now disconnect. Happy Tuesday, everyone.