PAVmed, Inc. Aktie

Good morning. I call the Annual Meeting of Stockholders of PAVmed Inc. to order. I'm Dennis McGrath, President and Chief Financial Officer. Also present are Michael Gordon, our General Counsel; Jin Dong of CBIZ CPAs, our auditors; Eric Schwartz of Graubard Miller, our outside counsel; and Alwyn Burton of Continental Stock Transfer & Trust Company, our transfer agent. Mr. Schwartz will act as Secretary of the meeting. In addition, I hereby appoint Mr. Burton to act as the inspector of the meeting and request him to execute his oath of office. Mr. Schwartz, please attach the oath to the minutes of the meeting.

As you all know, we're holding this meeting via live webcast. To help the meeting run smoothly, Mr. Gordon will now review a couple of housekeeping items before we begin.

Thanks, Dennis. First, until the polls are closed towards the end of the meeting, you will have an opportunity to vote through the webcast platform. If you wish to vote, simply click on the voting link and follow the instructions. Voting through the webcast platform will revoke any previously delivered proxy. Second, during the meeting, you will have the opportunity to submit questions to management and our auditors. You may submit questions for us or our auditors through the questions pane in the webcast platform. We will review the questions to management, and if appropriate, we'll respond to them after the meeting. Our auditors will review and respond to the questions directed at them. Third, those attending the meeting via the live webcast may also access a list of the certified stockholders of the company. The certified stockholder list can be accessed by clicking the appropriate link in the webcast platform.

Thank you. With those matters addressed, we will now proceed to the substantive portion of the meeting. Mr. Schwartz, please present the affidavit of mailing.

I present the affidavit sworn to by Robert Zubrycki of Continental Stock Transfer & Trust Company, showing that the notice of Internet availability of proxy materials was mailed on May 4, 2026, to all stockholders of record at the close of business on April 27, 2026.

I order the affidavit to be filed in the minute book immediately following the minutes of this meeting.

I also present the list of stockholders of record as of the close of business on April 27, 2026, as certified by Continental Stock Transfer & Trust Company.

Will the inspector please report on the number of shares eligible to vote, the number present and the presence of a quorum?

As of the close of business on April 27, 2026, there were 7,272,739 shares of common stock outstanding and eligible to vote. A majority of the shares are present at this meeting by proxy or in person, which constitutes a quorum.

Legal notice of the meeting having been given and a quorum being present, the meeting is regularly and lawfully convened and ready to transact business. The polls are now open. The first order of business is to elect 2 members of the Board as Class A directors to hold office until the third succeeding annual meeting and until their respective successors are duly elected and qualified. Management nominates Ronald M. Sparks and Timothy Baxter for reelection as Class A directors. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of the stockholders who have submitted proxies in accordance with the instructions set forth in their proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a plurality of shares was voted for each of Mr. Sparks and Mr. Baxter, which is sufficient to elect them as directors.

The second order of business is to consider and vote upon a proposal to approve amendments to the company's employee stock purchase plan to: one, increase the total number of shares of the company's common stock available under the ESPP by an additional 200,000 shares from 15,774 shares to 215,774 shares; and two, raise the annual limit for increases under the evergreen provision from 5,556 to 500,000 shares. The amendments and the proposal are more fully described in the proxy statement. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of the stockholders who have submitted proxies in accordance with the instructions set forth on their proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a majority of the shares present and entitled to vote on this proposal was voted in favor of the proposal, which is sufficient for its approval.

The third and last order of business is to consider and vote upon a proposal to ratify the appointment of CBIZ CPAs as the company's independent registered certified public accounting firm for the year ending December 31, 2026. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of stockholders who have submitted proxies in accordance with the instructions set forth in their proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a majority of the shares present and entitled to vote on this proposal was voted in favor of the proposal, which is sufficient for its approval.

The items of business to be considered at this meeting are now completed. The polls are now closed. Based on preliminary vote tallies, management nominees have been elected as directors. The amendments to the ESPP plan have been approved and the appointment of the company's independent registered certified public accounting firm has been ratified.

The exact vote tallies will be publicly disclosed after the meeting in our public filings with the SEC. Once the final tallies are completed, I order that the report of the inspector be filed in the minute book immediately following the minutes of the meeting. Thank you all for your attendance at the meeting. As a reminder, you may submit questions for us or our auditors through the questions pane in the webcast platform. We will respond to appropriate questions after the meeting. I will now entertain a motion to adjourn the meeting.

So moved.

I second the motion. The meeting is now adjourned.

Good morning, and welcome to the PAVmed's First Quarter 2026 Business Update Conference Call.

[Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference call over to Matt Riley, PAVmed's Vice President of Investor Relations. Please go ahead.

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 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 description of these and other important risks and uncertainties that may affect future operations, see Part I, Item 1A entitled Risk Factors in PAVmed's most recent annual report on Form 10-K filed with the SEC and any subsequent updates filed in the quarterly reports on Form 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 the changes in expectations or 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.

Thank you, Matt, and good morning, everyone. Thank you for joining our quarterly update call today. At our last business update call, we discussed the 2-year process we undertook to permanently fix PAVmed's legacy capital structure and strengthen its balance sheet. The final step has been completed in the last couple of weeks, and the cap table is now clean. Dennis will discuss this in more depth, but our cap table now just consists of common stock and term debt. And with that, we now truly believe that PAVmed is really well positioned to execute on its founding mission for us to operate as a high-growth, diversified commercial life sciences company with multiple independently financed subsidiaries operating under our shared services model, and that we are well positioned to evaluate new opportunities as they come along. And I'll talk a little bit about how that has accelerated since the restructuring took place.

As we described on our last call, part of one major initiative that's followed this restructuring has been the relaunching of our medical device portfolio under Joe Virgilio. He's been on board now and has hit the ground running. He's actively focusing on advancing multiple medical device opportunities, including PortIO and the endoscopic imaging technology we licensed from Duke under the Octeris umbrella, as well as broader responsibilities across our entire medical device portfolio, utilizing his expertise on building and scaling growth-based businesses and raising capital for these individual medical device initiatives.

As I mentioned, the pipeline has definitely opened up. We are evaluating business development assets that are being brought forth to us. We're on our second major diligence exercise. We did pass on the first opportunity as attractive as it was. And we really do expect those to bear fruit for us to bringing in commercial assets into our portfolio.

So now let's move on to Lucid Diagnostics. So Lucid is on the cusp of transformative milestones, including what we believe is impending Medicare coverage. As we discussed on our previous call, we're awaiting Medicare. We've a bit of frustration that this has dragged on but our confidence has not wavered. And I encourage you to listen to yesterday's Lucid business update call for greater details on this and other aspects of Lucid's business. As a reminder, PAVmed remains Lucid's largest shareholder. Lucid's progress and upcoming major inflection points will benefit PAVmed. Just a couple of highlights from the call yesterday, in addition to Medicare, it's clear that we're not remaining idle on the Lucid front. As we discussed, the VA is off to a good start following us securing the federal supply schedule and pricing.

First orders are being placed. The pipeline is being expanded, and we look forward to driving volume and revenue along that segment. We also discussed our direct engagement with commercial payers that we have received positive coverage under one of the laboratory benefit managers, and that will be public soon. And of course, with all that, Lucid was also able to successfully raise a round of capital that extended our runway well into 2027.

So now let's move on to Veris. So as we discussed in our last call, Veris is now well into the commercial phase of our strategic engagement with Ohio State University. That process is well underway. The clinical rollout has been focused on the 3 clinical departments that had participated in the successful pilot study, and we're now on the cusp of adding additional departments according to our rollout schedule that OSU leadership developed in collaboration with us. As we announced last time, the EHR integration is now live. It's working well. And just overall, the feedback, both on the clinical and the administrative side from our partners at OSU remains excellent, and we look forward to continuing to drive towards the targets that were established with them as part of our strategic partnership with them.

Of course, a major focus right now is on the implantable physiologic monitor. That development is progressing towards planned submission by the end of this year. As we discussed last time, we have a new contract development and manufacturing partner firm. That partnership is going well. That's Valentium. And the design and development efforts leading to design freeze and the transition to the final presubmission development work and testing is going well. A lot of the most recent efforts have been around the technical aspects of optimizing the battery life to get a full 2 years of battery life, and we've made excellent progress on that and look forward to continuing the work towards submitting by the end of the year.

We're also continuing to work on this expanded strategic vision for the company that we spent a bit of time on discussing during our last call. That includes ultimately expanding our commercial efforts beyond our single strategic partner and a variety of initiatives that are focused on transforming Veris beyond simple remote patient monitoring into additional strategic areas. We're looking to leverage our commercial success at OSU to support this expansion into additional centers the other strategic -- the other aspects of the strategic transformation that we are working on, although within the limited confines of our capital resources today, are additional work on clinical support services and development efforts around AI-based projects beyond remote patient monitoring.

So with that, I'll hand the call over to Dennis for an update on the financials.

Thanks, Lishan, and good morning, everyone. Our summary financial results for the first quarter were reported in our press release that has been distributed. On the next 3 slides, I'll emphasize a few key highlights from the first 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 as filed with the SEC.

So with regard to the balance sheet, you'll recall from our last investor update that in February, we completed a $30 million Series D preferred stock offering. Concurrently, the company issued a $15 million senior secured note to an existing investor. The company used the proceeds from these financings consisting of $22.3 million cash payment and a $15 million senior secured note with a February 2029 maturity date to redeem all of the outstanding shares of the Series C convertible preferred stock and fully retire its previously existing convertible debt. The $15 million replacement note nominally has a conversion price of $450 per share. It was done this way to protect the investors' tax status but in every substantive sense, this is a long-term 3-year note with interest-only quarterly payments and a balloon payment at the maturity in February of 2029.

Upon shareholder approval obtained just a couple of weeks back on March 27, the newly issued Series D preferred were mandatorily converted to PAVmed common stock. As a result, the Series D preferred stock has been eliminated. In connection with this financing, the company also issued $30 million in warrants now convertible into common stock, which are callable by the company upon publication of a positive EsoGuard LCD.

So a couple of things to point out on each of these balance sheets. Cash at March 31 is $6.5 million, which obviously is not inclusive of the expected $30 million to be received upon the warrants being exercised post LCD publication nor does it reflect the $2.5 million from the Veris warrants issued last year that are callable upon the Veris implantable device being cleared by the FDA. The equity method investment balance of $36 million, that reflects the 31.3 million Lucid shares mark-to-market, indicative of a $1.9 million increase in the quarter.

At present, as Lishan indicated, PAVmed continues to be the single largest shareholder of Lucid Diagnostics with ownership of approximately 15% of the common shares outstanding. And although PAVmed no longer has voting control of Lucid, PAVmed together with its Board and management still have a significant influence over Lucid with approximately a 25% voting interest. Shares outstanding today, including unvested RSAs are approximately 7.3 million shares. The GAAP quarter ending outstanding shares of 6.3 million are reflected on the slide as well as on the face of the balance sheet in the 10-Q. You'll recall GAAP shares do not reflect unvested RSA amounts.

Next slide. Similar to past presentations, the P&L slide provides some GAAP and non-GAAP year-over-year quarterly comparisons. On a pro forma basis and purely for illustrative purposes on this slide only, the Veris revenue and the Lucid management fee income are combined collectively more than $3 million per quarter, simply to visually align PAVmed's income sources versus operating expenses. For SEC reporting purposes, the MSA income is a below-the-line item.

Furthermore, for the first quarter, you see on the slide a GAAP net loss of $1.1 million before noncontrolling interest and preferred dividends versus the prior year profit of $18.6 million. The driving force of this difference is the change in the fair value of the Lucid shares mark-to-market for each period. There are a few other income and expense noncash pluses and minuses that all relate to the accounting for the securities issued versus the securities redeemed, but are largely noncash items together with out-of-pocket financing costs related to the Series D issuance and the conversion to common shares.

The GAAP net loss attributable to PAVmed, as reflected in the 10-Q and also shown in the press release is $60,000 for the quarter, and as disclosed, prior to the effect of the preferred dividends of approximately $6.9 million. The result after the preferred dividends is a GAAP loss per share of $4.42 per share. Without the preferred dividend, the pro forma GAAP net loss per share would have been $0.04 per share.

Next slide. With regard to the non-GAAP operating expenses, on this slide, you'll see a graphic illustration of our operating expenses over time as presented in more detail in our press release. The first quarter non-GAAP OpEx of $5.9 million is above the average of the previous 4 quarters by about $1.1 million, which reflects about $300,000 in incremental Veris R&D expenditures and the balance in G&A costs that were incurred in connection with the recapitalization financing and other professional fees.

OpEx increases moving forward are likely to be tied mostly to the R&D efforts to get the Veris implantable device submitted and cleared by the FDA for which the 2025 Veris-related financings are supporting.

With that, operator, let's open it up for questions.

[Operator Instructions] Our first question is from Ed Woo from Ascendiant Capital.

Congratulations on all the progress. As you guys are evaluating possible new potential opportunities, have you considered looking at opportunities outside of North America or outside of the U.S.?

We've always been open. We have historically gotten inquiries from -- particularly in Europe on occasion. But I would say the source -- and even Israel, the source of most of the technologies that are brought forth to us come from the U.S. Many of them come from academic medical centers. The founders of PAVmed, including myself, have a strong history in academic medicine and have maintained those ties. So that's been a catalyst for inquiries. I'll remind people that Lucid Diagnostics came from a partnership with academic medicine and the Octeris technology that we're launching is in conjunction with Duke and investigators at UNC. Also, the ecosystem for physician-led innovation also is particularly robust here as well. And so those are the sources. But we're open to other sources, but the majority comes from within the U.S., including the ones that I had mentioned that we're actively pursuing. As I mentioned, we did a deep dive on one asset, which we passed on and are in the process of doing another.

And my last question is, have you guys decided to focus either on devices, diagnostics or therapeutics? Or are you open to all 3 areas?

It's a great question, Ed. I think it's maybe a good opportunity to talk a little bit about the history of PAVmed and one of the things we're proud about, which is our willingness to be kind of bold and explore new areas. PAVmed was launched initially exclusively as -- to operate in the medical device space. The initial assets were all focused on traditional medical devices. And -- but because of the way we had set things up in its structure, and frankly, our mission was to look at -- to be open to viewing and looking at and evaluating opportunities across the life sciences. And when just a few years after PAVmed was founded, the opportunity for the technologies underlying Lucid were brought to us from relationships with an academic medical center. Even though this was in the diagnostic space, Lucid obviously has a cell collection device, which is a medical device. But at the heart of it, Lucid is a diagnostic company. And we chose to make that leap, and we're obviously happy we did. And it continued on from there.

When the Veris opportunity was brought to us, again, although Veris obviously has a -- central to its future is an implantable medical device. At the end of the day, the foundation for it is around digital health and software. And the Veris platform is rooted in that. And similarly, we decided, okay, there's a big future here in digital health and expanding the way physicians care for patients with more aggressive monitoring, and we chose to expand our horizons from there into digital health.

So right now, digital health devices, diagnostics are on the table. But I think I've said this on previous calls that we have been open to leverage our model, the shared services model and the resources that are concentrated within PAVmed that are available to its subsidiaries to therapeutics as well. One of our Board members, Sundeep Agarwal, has deep experience in the therapeutic side. And we've relayed previously that we've looked at numerous assets in the therapeutic space. We just haven't pulled the trigger on those. We continue -- we expect to continue to look in the therapeutic space. The challenge is we had -- the opportunity there is that we have the infrastructure with regard to clinical research. So the opportunity to acquire or license a therapeutic asset in a Phase I or early Phase II situation. We have the resources to do that in terms of running the clinical trials necessary to create value there.

The challenge previously prior to this restructuring was that the availability of the capital needed to enter license fees and so forth to acquire assets. We were just -- it was our capital structure just didn't allow it. And so now that we have -- we're in a better position, we feel like we'll have an opportunity to look at therapeutic assets as well.

Your next question is from Jeremy Pearlman from Maxim Group.

Just while we're talking about the new relaunched device portfolio, is that -- how does that differ from the incubator you had set up? Is that -- or is it the same thing just rebranded? I'm just curious.

Yes. I guess fair enough to call it that. The slight difference is as follows that when we were -- as we were going through this, again, 2-year restructuring, ultimately recapitalization, we were obviously motivated to start taking product lines that we had in IP and assets that we had that we had put on the shelf during [indiscernible] if now 3 years ago, we're obviously motivated to do that. And what we sought to do initially was to put those assets in that case, starting with PortIO and an incubator, and that gave us the opportunity to go out and spin assets out of the incubator and try to raise capital accordingly.

It was tough to do that, frankly. We went through multiple angel processes and so forth to try to raise capital for PortIO. And the structure just didn't work. People who are investing in super early-stage technologies really want to know that there's someone dedicated and articulating our shared services model in that funding environment did not yield the results that we were hoping for. And also, we were not well positioned because we hadn't completed the restructuring and the recapitalization.

Now that the latter is completed, we decided to tweak the relaunch of the medical device portfolio, learning the lessons that we acquired during the -- when we were trying to do this in the form of an incubator and the importance of having an experienced highly skilled person at the helm for the entire portfolio. And that's why we went this route, and we were fortunate enough to be able to bring somebody with prior CEO experience and a deep experience in the medical device industry in the form of Joe to manage that relaunch. So he's working on PortIO, which as I mentioned, was the first -- was a technology that we were leading with when we were trying to do this in more of an incubator form. And now in the interim, we've licensed the technology for imaging of dysplastic Barrett's esophagus and the other -- and there will be other opportunities in medical device, but very much integrated within the PAVmed infrastructure.

We still have -- Joe obviously has access to the full shared services model but we have a dedicated person working on those technologies every day. And we expect that, that will facilitate our ability to put capital into subsidiaries that are advancing those individual medical device technology.

Okay. Understood. Then maybe one more on the new device portfolio. What are some of the criteria you look for in a potential technology to license or to take under into this portfolio? Maybe just if you could share some, that would be helpful.

Yes. We've tried to be consistent with that from the very onset from inception of this company. What's changed, as we talked about with that is the expansion of our horizons into areas beyond our traditional medical devices. But it's a little bit cliche, right? It's technologies that address an unmet -- meaningful unmet clinical need. That's important. This is a physician-founded company. We feel like we have really good perspectives on identifying what that is and getting to the heart of that. We look for substantial market opportunities, which both Lucid and Veris have and PortIO and Octeris have as well.

And our bias is towards high-margin, less commoditized products because our infrastructure, we believe, is better suited to that. Other than that, we're pretty open and flexible, and I think that's one of our strengths is that we're willing to look at assets. Obviously, more broadly beyond medical devices, we have a substantial infrastructure through Lucid and the ability to partner with Lucid in the molecular diagnostics space. So many of the assets that we've looked at recently have been really fascinating opportunities in the molecular diagnostic space. So those are the areas. I think medical devices that fulfill the criteria that I mentioned but also opportunities to synergize with the resources we have within Lucid on the diagnostics side.

I guess I'll add one other thing, which is obvious with Octeris that where we've evolved with Lucid and with Veris are 2 clinical areas, gastroenterology. Lucid is at the intersection between gastroenterology and cancer, oncology. And obviously, Veris is focused on cancer. So those technologies that intersect with those spaces, obviously would have an advantage, and we'd have even more acute interest in those. And I think the example of that is Octeris, which is a technology to -- an imaging technology that enhances the diagnosis of an esophageal precancer, right? So that obviously, the synergies there with the work we're doing in Lucid is -- should be obvious.

Understood. Okay. Great. And then just maybe moving to the Veris platform. how many patients have you signed up? I think in the past, you mentioned you had a target enrollment by the end of this year of 1,000 patients. Is that -- how is the ramp trending? Any headwinds you see or everything is smooth sailing?

Yes. No, we're not going to put forth specific numbers. But yes, it's trending and on target. When we launched once the pilot was completed and launched the commercial phase of our strategic engagement with OSU, they put forth a very detailed plan, rollout plan to get to their -- the target of 1,000 patients within the first year of the registry. And obviously, that trajectory is not linear, right? There were certain things at the beginning, particularly some of the delays with regard to getting EHR integration on board that took a little bit more time than we had hoped for.

But overall, on target to hit that -- those goals, as I mentioned just a bit more specifically, we're very soon going to expand to the next phase of departments within the cancer center. So the first 3 departments that were launched in the commercial phase were the same departments that participated in the successful pilot. And now the next phase are new departments that did not participate in the pilot, again, all consistent with the well laid out rollout plan.

Okay. Understood. And I think you mentioned in your prepared remarks, the feedback has been really positive. Is there any feedback that you're getting that you -- that's maybe not so positive that you're just using to incorporate to enhance the platform that you might be in the next iteration or that's a constant learning process?

Yes. I would say the latter, right? Because just if you think about it, what we're doing here to work within the capital constraints that Lucid has is to make sure that we -- that we're pushing full steam ahead on the implantable because as we've said from the very beginning, the value proposition here is deeply rooted in both the software platform as well as the implantable. And so that's where the bulk of our capital resources is going right now. So -- but we wanted to make sure during the period of time that development work and the pathway to submission and clearance was underway that we were engaging with a single large -- third largest cancer center to do exactly what you're saying to show that we can create value.

We can generate enthusiasm locally. We can ramp up to very meaningful numbers for a center of the size and to get the kinks out with regard to the EHR integration, for example, other process issues about how does -- this is not trivial, right? You're taking patients who have newly diagnosed cancer entering into a system, complex therapies, complex clinical events that are going on and how that -- how our platform communicates with the team, there's a lot to be learned in just sort of the real-world use of that.

One particular example with OSU is that they have a dedicated call center. So all alerts go through a call center and just sort of how to manage that, how to staff that, how to get the flow of information correct in a way that optimizes care is as you -- I would absolutely describe it like you said, it's a continuous learning process. And we're focusing those lessons at one center so that when we are in a position, both from development point of view, but also from a capital point of view to expand commercially subsequent centers will benefit from the lessons that we've learned in this initial engagement, commercial engagement with OSU.

Okay. Great. And then just maybe just last question, just segueing right off what your last comment about further commercialization. What -- maybe any sort of time line you can give clarity on when you think that might be, when you could start? Are you still engaged with conversations with other large cancer centers? Or are still...

Yes, yes. We have had conversations certainly with other academic medical centers. We've even had conversations with other entities that are engaged in the care of cancer patients, including sort of practice networks. There are a lot of networks of oncologists out there. And so we've had plenty of discussions. We're unlikely to pull the trigger on another major engagement until we're in a position to raise additional capital that we can allocate so we can do it right, right? So the next phase with regard to commercialization will be aligned with our ability to raise additional capital to support an expanded commercial footprint. That could happen prior to the submission and clearance of the implantable. We're not opposed to that. It really just depends on how well we're positioned to fund commercial expansion.

Thank you. There are no further questions at this time. I will now hand the call back to Dr. Lishan Aklog for the closing remarks.

Great. Thank you, operator, and thanks all of you for taking the time and for your attention this morning. Obviously, I really appreciate the questions and enjoy the opportunity to have substantive discussions with our covering analysts. Hopefully, that you all found that enlightening as well.

Just to kind of summarize, as we discussed, we believe we're really now in a strong position to advance PAVmed's strategic plan and original mission. Our 2 independently financed commercial subsidiaries, Lucid and Veris are progressing well. They're both approaching key milestones. And as importantly, as we've really discussed in some depth, the completion of our restructuring and recapitalization process has allowed us to start beginning to expand our horizons consistent with PAVmed's original mission. And of course, this includes relaunching our medical device portfolio under Joe Virgilio and aggressively evaluating and pursuing additional assets and opportunities that align with our model and growth just as we just discussed with Jeremy and Ed.

So with that, as always, we encourage you to continue to keep abreast of our progress. Please follow our news releases, these update calls and continue to follow us on our website and through social media. As always, obviously, feel free to reach out with any specific questions.

So with that, I hope everybody has a great day, and thanks for your participation.

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may now disconnect your lines.

Good morning, and welcome to the PAVmed's Fourth Quarter 2025 Business Update Conference Call. [Operator Instructions] This call is being recorded on Monday, March 30, 2026. I would now like to turn the conference over to Matt Riley, PAVmed's Vice President 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 CEO of PAVmed; along with Dennis McGrath, Chief Financial Officer. 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 SEC. For a list and description of these and other important risks and uncertainties that may affect future operations, see Part 1, Item 1A 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 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 Chief Executive Officer of PAVmed. Lishan?

Thank you, Matt, and good morning, everyone. Thank you for joining our quarterly update call. Before we get into our recent operational highlights, I'd like to kind of frame where PAVmed is today. On our last quarterly call, I described how over the past now 2 years, we've undertaken a series of very deliberate and systematic actions to effectively permanently fix PAVmed's legacy capital structure and ultimately strengthen its balance sheet and improve our ability to execute on our strategic plan.

I had mentioned that time, we have one more step to go, and that step was completed in February with the completion of a restructuring recapitalization and financing. The toxic convertible securities that had held down -- have held us down for a while were removed. And we -- upon completion of this financing exercise, we'll have a very clean cap table. So with PAVmed now fixed, we believe we are now very well positioned -- exceptionally well positioned to execute on our founding mission. What's that mission? It's to operate as a high-growth, diversified commercial life sciences company with multiple independently financed subsidiaries that are operating under a shared services model.

With that work now complete, we're executing that model across our core businesses, which you can see here in 3 different buckets. The most prominent one, of course, is Lucid, which is a publicly traded diagnostic company. Lucid continues to succeed at raising its own capital. It's obviously our strongest and most advanced asset. As we discussed in the Lucid earnings call, and we'll highlight later today, Lucid is on the cusp of transformative milestones, which include a very important recent VA win and a pending Medicare coverage. A reminder that PAVmed remains Lucid's largest shareholder, holding approximately 31 million shares of Lucid common stock. And as such, it's positioned now under this new capital structure to benefit from Lucid's upcoming major value inflection points.

Moving on to Veris. Veris is our majority-owned digital health company that's advancing a cancer care platform that's designed to enhance personalized cancer care along with an implantable physiologic monitor. As again, we'll discuss in more detail, we are continuing to see early commercial traction with our major strategic partner and are advancing the implantable towards FDA submission planned for later this year. We're poised to accelerate the execution of that strategic -- of an expanded strategic plan as we'll discuss in a bit.

Having completed the steps to fix PAVmed with the new capital structure and resources available, a very important part of our future plan is to relaunch our MedTech portfolio. For those of you who've been with us for a long time, we started in medical devices, and we've always intended to reengage in that sector. So we've taken a couple of steps towards doing that. The most important of which is that we've engaged a new leader, Chief Business Officer that will have oversight over this portfolio, and that will involve bringing in the technology that we've licensed from Duke, an endoscopic imaging technology, reinvigorating PortIO and looking at an exciting pipeline of opportunities in the medical device space that we really do believe will enhance long-term shareholder value. Again, more on this in a bit.

So let's start with Lucid's operational highlights from the fourth quarter and recent weeks. As always, I encourage you to listen to Lucid's business update call for greater detail on each of these areas, and I'll keep these comments high level. Lucid reported fourth quarter 2025 EsoGuard revenue of approximately $1.5 million and EsoGuard test volume of 3,664 EsoGuard tests. The volume has increased by 29% from the third quarter and revenue has increased by 24% over the third quarter. The volume exceeded our target range of approximately 2,500 to 3,000 tests per quarter, and we're entering 2026 with really solid momentum on that front.

A very important highlight that we're incredibly excited about at Lucid is that Lucid was awarded a U.S. Department of Veterans Affairs contract for EsoGuard that expands our access across the nation's largest integrated health care system, that gives Lucid the opportunity to engage with numerous medical centers across the country and target the 9 million enrolled veterans who have a particularly high elevated risk of GERD and esophageal cancer.

Another exciting development that we discussed is the announcement of positive data for the largest real-world experience of esophageal precancer detection that evaluated EsoGuard and EsoCheck. And as we discussed in these 12,000 patients, we were able to show excellent performance across multiple metrics, technical success, the procedural times, safety, et cetera, and also the appropriateness of physician use. And we contrasted that with other technologies that purport to be capable of operating in this space.

So now let's discuss Veris. So Veris is now well -- the commercial phase of our engagement with Ohio State University is well underway, and it just initiated when we -- during our last call. An important -- very important step of that in recent weeks, we completed the full Epic integration with OSU. The feedback in this early phase has been extremely positive, starting from the senior leadership all the way down to the clinician leaders and the clinicians in the individual departments within OSU.

The integration with Epic is really a critical part of this. This is a bidirectional flow of information. So Veris data is available to the clinicians within Epic. But as importantly and perhaps more importantly, the patient -- the clinician and the patients can access their record within the workflow that we offer within our platform. And so that's been really helpful in improving engagement with the clinical team, and we expect to really leverage that and show increasing growth and increasing adoption across an increasing number of departments within the OSU cancer center.

In addition, as we discussed at the last earnings call, we're making really solid progress with the implantable physiologic monitor and expect to have a launch date in late submission in the latter part of this year to the FDA under the 510(k) designation. Right around the time of our last call, we had engaged with a new vendor that was capable of not just the design and development of all aspects of the electronics and the structure of the device itself of the implantable device, but is also the entity that will be the early manufacturer of this device. That work is going extremely well. It's under budget, and it's focused on completing all of the success -- all of the design work to capture the physiologic signal. We are -- and put us in a position to enter design freeze, completion of the development process and submission to FDA for clearance and subsequent commercial launch.

Veris is sufficiently capitalized to fund that development as Veris raised capital last year to do so. In addition, to highlight, again, the topic we've discussed before, as we're gearing up to, on the commercial phase with our strategic engagement with OSU and as we're making solid progress on the development of the implantable device, we're developing and looking forward to executing on an expanded strategic vision for Veris. Really fundamentally, this is a transformation of Veris from a pure-play remote patient monitoring company to one that's more broadly focused on AI and AI-based tools, clinical decision tools.

We have a project that we're launching on developing a risk stratification tool for cancer patients to identify those at risk of developing complications and readmissions. And in addition, we're expanding the offering to include clinical support services so that will -- our own clinical team will be able to provide the ability to offer triage services for alerts as they come into the system. We've learned that, that's an important part of adoption as physicians -- sorry, the clinicians are already somewhat overwhelmed with data.

That activity as well as the learnings and our experience with OSU will put us in a position later this year to begin leveraging that commercial success to additional systems, initially additional large cancer centers in the form of OSU, we're also looking to explore engagements with PE-backed networks of smaller oncology practices. So that work is ongoing. And again, we're really excited both on the development of the implantable on expanding our activities with OSU and putting us in a position to execute on this expanded strategic vision as we enter the latter half of the year.

Now let's talk about some details of our relaunching of our MedTech portfolio. As I mentioned, we feel like a key aspect of this, a key element of this has been hiring the right leader for this. And so we're excited and we'll announce this in more detail in the coming days that Joe Virgilio is joining us as Senior Vice President and Chief Business Officer for Medical Devices for PAVmed, and he will lead as Chief Executive Officer, the Medical Device subsidiaries under PAVmed. That will start with 2 companies, PortIO, which we've talked about before. We've made some effort to raise capital there, but we clearly realized that in order to do so, in order to reboot PortIO and reengage on the IDE study that will lead to FDA submission, clearance and commercial launch that we need a dedicated leadership for that. And with Joe, we now have that.

We have previously announced that we had engaged with Duke University to license exciting technology in the endoscopic space, in the GI endoscopy space that allows the operator to diagnose late-stage precancer stages without the need for biopsy. That license agreement has now been fully executed, and it's now resides within a new subsidiary called [ Arcteris ], and we'll be providing additional details on that. And Joe Virgilio will be running that project as well, which is now proceeding along a sponsored research agreement with the laboratory at Duke that's been developing this technology.

And our vision here is goes beyond these 2 entities. So we have an active and expanding pipeline. I do have to say upon completion of the restructuring that we immediately started getting inbound inquiries from bankers, from other companies that have sought to partner with us on various medical technologies, and we are actively evaluating those and looking for ones that fit nicely within our pipeline, and those will enter our pipeline and our portfolio under Joe Virgilio's leadership.

And with that, I'll hand the call over to Dennis for an update on the financials.

Thanks, Lishan, and good morning, everyone. Our summary financial results for the fourth quarter and the year were reported in our press release that has been distributed. On the next 4 slides, I'll emphasize a few key highlights from the fourth quarter and the year, but I encourage you to consider those remarks in the context of the full disclosures covered in our annual report on Form 10-K as filed with the SEC. A couple of reminders as our financials, particularly the income statement with year-over-year comparisons will for this last annual report, illustrate periods before September 10, 2024, with Lucid's operating results being consolidated into the presented PAVmed results versus the 2025 periods without Lucid's operating results being consolidated into the PAVmed financials.

We do present some supplementary information in Footnote 4 of the 10-K that will provide some help in the comparisons. So with regard to the balance sheet, you'll recall from our investor update call since this time last year that the company has engaged in a multistep process to regain compliance with the NASDAQ listing standard for minimum equity, which it did in February of last year and again this year in January for compliance with the minimum bid price standard. Our focus throughout was to position the company for longer-term financial stability. This was a multistep process that Lishan highlighted that spanned nearly 18 months with 3 key recapitalization steps landing PAVmed on firm financial footing with its recent financing that closed on February 3rd.

The steps included deconsolidating Lucid from PAVmed's consolidated financial statements in September 2024 and an interim phase of restructuring our convertible debt in January 2025 whereby we exchanged about 80% of our outstanding convertible debt for a new Series C preferred equity. And lastly, just recently in February, redeeming the convertible debt and the Series C with an infusion of equity capital plus some long-term debt. This slide reflects the balance sheets for year-end 2025 and 2024, both after deconsolidation, which occurred on September 10, 2024.

So a couple of key things to point out on each of these balance sheets. Cash burn rate of $1.5 million for the fourth quarter reflects the Veris operating costs, including approximately $600,000 of outside contractor development costs associated with the implantable device, which has been funded by the two Veris-related financings, namely $2.3 million in the first quarter of '25 and $2.5 million in the second quarter of '25 to support the development toward the FDA submission of Veris' implantable device.

Additionally, there was approximately $200,000 in Delaware franchise taxes and $300,000 of annual compensation expenses that were paid. The equity method investment balance of $34 million at the end of last year reflects the 31.3 million Lucid shares mark-to-market and shows an $8.5 million year-over-year increase consistent with the 33% increase in Lucid's stock during 2025. At present, PAVmed continues to be the single largest shareholder of Lucid Diagnostics with ownership of approximately 18% of the common shares outstanding.

Although PAVmed no longer has voting control of Lucid, PAVmed, together with its Board and management still have significant influence over Lucid with approximately 25% voting interest. Shares outstanding today, including unvested RSAs are approximately 6.4 million shares, including approximately 4.6 million shares issued upon the conversion of the Series D upon the approval from the shareholders this past Friday. The GAAP year-ending outstanding shares of 900,000 are reflected on the slide as well as on the face of the balance sheet in the 10-K. GAAP shares do not reflect unvested RSA amounts. Approximately 433 shares were issued, reflecting conversions of the Series C preferred prior to the redemption on February 3rd.

Next slide, please. We thought it might be helpful to walk you through how the recent financing changes the financial strength of the company. So we put this non-GAAP pro forma balance sheet together to illustrate the changes. What you see in the first column is a condensed balance sheet derived directly from the published 10-K without change. Next, we highlight the 2 securities and their balances that were redeemed and replaced with $30 million of equity in the form of short-term preferred security that has been converted into common concurrent with the shareholder approval.

Additionally, $15 million of long-term 15% interest-only 3-year debt was put in place to complete the redemption of the convertible securities. Accompanying the Series D preferred security is a $30 million warrant with an exercise price of $6.50 per common share. The warrants are callable 30 days after the CMS publication of the draft EsoGuard coverage policy. Additionally, Veris has about $2.5 million of warrants that are exercisable after the implantable device is FDA cleared. We added a Veris column to show the recent pre-money value of $35 million, reflecting the valuation at the time of the direct financing into the subsidiary.

Comparatively, the GAAP financials in the 10-K reflect $38 million of assets, which are completely offset by the sum total of the convertible debt and the Series C preferred. After the financing in February, the far right column now illustrates a company with total assets over $100 million and $15 million of long-term debt. There were 6 key investment themes that were attractive to the investors in this transaction, including valuation disconnect, which presented an opportunity, PAVmed's market cap did not reflect the sum of the parts of the underlying assets.

Second, there was an overhang from legacy securities driving mispricing. The structure of these legacy securities no longer aligned with the company's future development plans. Investors also saw that with recapitalization, they believe that it would unlock value. A clean cap table would align market cap and enterprise value combined with a limited supply of stock in the market. Fourth, inexpensive leverage to Lucid Diagnostics. This is a pure arbitrage opportunity in advance of the Medicare announcement. Fifth, additional optionality across high potential health care assets was a driving interest, Veris, [ Arcteris ], PortIO and others.

And lastly, a balanced capital structure to maximize strategic flexibility. The right mix of equity, $60 million in this case for the exercise of the warrants and debt $15 million, was a key premise in financially engineering for future success while extending the cash runway of the company to be opportunistic while also developing and commercializing the non-Lucid asset portfolio.

Next slide on the P&L. Similar to past presentations, this P&L slide provides some GAAP and non-GAAP year-over-year and quarterly and annual comparisons. As cautioned earlier in my comments, there are some significant differences in how the information is compared between the comparative periods, given the changes in PAVmed's financial control of Lucid and importantly, the GAAP construct for deconsolidating Lucid on September 10, 2024, which somehow somewhat blurs the historical understanding of the information for PAVmed as a stand-alone entity. GAAP does not allow the presentation for prior periods on the face of financial statements to be similarly adjusted. Although as mentioned, there are some supplemental information in the footnotes of the financials in the 10-K.

So on a pro forma basis and purely for illustrative purposes on this slide only, the Veris revenue and the Lucid management fee are combined, collectively more than $3 million per quarter. It visually aligns PAVmed's income sources versus its operating expenses. For SEC reporting purposes, the MSA income is below the line item. Furthermore, for the fourth quarter, you see on the slide a GAAP net loss of $2.8 million before NCI, noncontrolling interest and preferred dividends. This includes noncash charges of about $1 million, which then reconciles to a non-GAAP loss of $942,000. That loss is comprised of about $500,000 of Veris contractor development costs for the implantable device and about $200,000 of annual Delaware franchise taxes that occurs once a year.

Happy to answer any detailed questions on the slide in the Q&A, but I think it's more informative to look at the fourth quarter stand-alone information presented not only in the slide, but in the full fourth quarter information presented in our press release that shows the company baseline bias of operating at near cash flow breakeven and incurring incremental PAVmed expenses for development activities that are offset by dedicated financing or funding.

Next slide. With regard to the non-GAAP operating expenses. On this slide, you see a graphic illustration of our operating expenses over time as presented in more detail in our press release. Total non-GAAP OpEx since the Lucid deconsolidation in 2024 has been nearly flat for the 4 previous quarters. The fourth quarter OpEx were offset by approximately $1.2 million in a onetime reimbursement for Lucid for annual compensation expenses allocable to Lucid with the balance reflecting the franchise taxes and the Veris R&D costs just mentioned. OpEx increases moving forward are likely to simply be tied to the R&D efforts to get the Veris implantable device submitted and cleared by the FDA for which the 2025 Veris-related financings are supporting.

With that, operator, let's open it up for questions.

[Operator Instructions] Your first question comes from Jeremy Pearlman with Maxim Group.

So just first, I wanted to focus on the commercial relationship with OSU. You said you're well underway. What are some of the key metrics you're trying to keep track of and learn before you feel comfortable rolling this out to other large institutions? Is there a time frame for that? Maybe help us understand how -- what you hope the current commercial relationship to become before you roll it out to other institutions.

Yes. That's great. Thanks for the question. Happy to elaborate on that a bit. So in terms of the clinical value of the Veris platform, we established that during a pilot that occurred, and that's actually last year, and that was what led to the commercial engagement. The commercial engagement has fairly high expectations. It involves a target of 1,000 -- a minimum of 1,000 patients within the first year. And we are in a very structured plan on rolling out the platform across various departments, starting with the 3 departments that were under the pilot program and then expanding to new departments along the way.

So our internal engagement with OSU as to how that's proceeding as it really relates to executing on that project plan, bringing on the new departments and according to that plan and also the trajectory towards that goal of 1,000 patients during the first year. We call this a strategic partnership because beyond just simply utilizing the platform in a commercial setting, it's also -- we've also developed a registry. So those patients will be enrolled and data will be collected, and we'll be able to provide future target -- commercial targets data on this adoption during the commercial phase beyond the pilot phase.

So that's -- we're not -- we haven't been reporting sort of month-to-month numbers with regard to that, but I can tell you at a high level that we're on track and on schedule to do so. The planning on that was, in fact, based on when we completed EHR integration. So it should be clear to everybody being integrated, EHR is really a central depot for the flow of information within -- particularly within large medical centers. And so now that we are on the platform, there's a full visibility of the Veris data on Epic as well as our preferences for the clinicians to use our platform as a primary portal to the patient's care because it provides the real-time physiologic data that comes through our platform and it does so in a cancer-specific way beyond what they can get using Epic.

And so that's -- that launched fairly recently, and we expect with that launch that they'll be able to now start accelerating the trajectory towards that target 1,000 and again, their goal -- that's a minimum, the goal and expectation is that we will exceed that. I would just -- to your second point about how that relates to expanding our commercial team, we have the information that we need. We have the data -- initial data from the pilot program in terms of the clinical benefit that we would need to expand to other sites.

What's holding us back on that is really, we're focusing our limited capital resources at this point to getting the implantable across the finish line to FDA submission and clearance. And that's what we -- the capital that we raised last year was really targeting that. And we will -- although we have some legacy engagements with some other -- a dozen or so other academic cancer centers, we're not deploying kind of the commercial resources and hiring the commercial resources that would be necessary to really do a broader commercial launch, and we would expect to do that in full force after the clearance of the implantable, although we're not ruling out some limited expansion of that over the interval of time between now and then now that things are well off the ground.

One aspect of that, that we think will be important, and I've mentioned this in engagement with other centers and will require some capital resources, although we believe we can charge for this service is the clinical support side of things. OSU has a very sophisticated call center mechanism. So they already have resources in place that can triage and screen alerts and information so that the individual care and clinicians are not overwhelmed. And many other centers, including major other cancer centers don't necessarily have that full-fledged system.

So one of the things that we've concluded and we've learned from our experience with OSU and in previous discussions with other cancer centers is to have that functionality available so that we can offer our -- members of our own clinical team to provide sublevel to various levels depending on what's desired by the center, various levels of triage. And so that's something we have -- we do have a clinician already on our team that's helping us build that. That's learning from the -- from her engagements with interacting with OSU as to how to develop that. But that's something that would be really a predicate to a broader expansion, and that's something we intend to develop over time.

So a bit of a long-winded answer, but hopefully gives you some perspective on what -- how we're viewing our future commercial expansion.

Yes. That was really helpful. Great information. Then maybe just one more question related to the -- you said you mentioned there's new risk stratification tools and other tools that you could integrate into the system to the Veris platform. Is that -- are those -- I don't know, whenever they -- whenever these tools -- when they're ready, are they -- as part of the contract with OSU to allow them you to integrate them into already the patients that are using the device? Or do you have to amend or you're planning on finalizing those and then rolling those out maybe further down the line?

Yes. So there's -- I think there's two aspects to your question. One is kind of the development work, and that's not trivial. So I don't want to give the impression that we have these tools ready to go and to implement and to integrate within our platform. Those AI-based tools require data -- extensive data, and we are in discussions with OSU on how exactly to utilize the data that we're collecting as well as legacy data they have to inform the development of these technologies. And part of our strategic engagement with them contemplated a partnership on the development of these kinds of tools.

So the way I would view this perspective is really a broader kind of strategic vision to evolve Veris from its original vision of being primarily focused on remote patient monitoring, which is really just serving as a conduit for important physiologic and symptomatic data from the patient to the clinicians to do so in a very timely way to bring up -- to highlight potential risks that may arise. And we know from our experience to date that Veris works extraordinarily well at doing that.

But we believe that in this era, the value added from going beyond just as being a conduit for information, but to provide truly sophisticated AI-based clinical decision support tools are really becoming standard practice when it comes to digital health offerings, and that's what we're seeking to do. That requires time and that does require resources and capital. And so we're in the early stages of that. So I would view that as articulating sort of a near-term and medium-term vision, partnership with OSU on the development of that.

Certainly, at the time we would launch that, whether it's in a preliminary phase on the research side, any patient that was already on the platform would be obviously -- we would integrate it within the platform, and they would have -- their care could be impacted by those additional support tools.

Okay. Understood. Great. And then just maybe just last question, jumping to the new imaging technology that you licensed from Duke. I know you mentioned you're going to provide some more information shortly, but maybe you could just right now on the call, is there anything clinically that needs to be done with that technology? And then what -- before you could roll it out? And then maybe what type of commercial plans you might have for that?

Yes. That's still in the early phases. So let's be clear about that. That's a technology as we described in the sort of the press release when we entered into the letter of intent, we will provide a full press release announcing the full license agreement that was executed and Joe Virgilio's role in overseeing [ Arcteris ] falls under that. But just as a reminder, that's a little bit more detail on our technology. The technology is an optical technology that combines well-established technology called OSC with newer technology called a/LCI.

And the combination of the two implemented at the end of an endoscope, a tool that can be deployed through an endoscope can at the time of an endoscopy of the lower esophagus can image abnormal tissue, tissue that has -- that appears to be -- to have Barrett's esophagus, the precancerous condition in order to discriminate between early and late precancer. So non-dysplastic Barrett's esophagus, which is the earliest precancer to dysplastic Barrett's esophagus, which is the later precancer that requires intervention to prevent cancer.

Obviously, those of you who follow along on Lucid understand how an important part of the paradigm of the management of esophageal precancer that distinction is that when someone has this precancerous condition. So it's critical to distinguish in early and late because late is where we intervene. Right now, that distinction is made purely on a biopsy. And so the patient gets a biopsy and then they come back. If the biopsy comes back for dysplasia for the late-stage precancer, they undergo a definitive ablation or eradication therapy to prevent cancer.

The promise of this technology is that it's capable with a very, very high sensitivity in their early clinical experience as a part of a partnership between Duke and UNC at detecting using these optical techniques, dysplasia. It does that by measuring the diameter of the nuclei in a very clever and sophisticated way with incredibly excellent performance that, frankly, will likely outperform any molecular diagnostic test based on the initial data. And the advantage of that is that if you can diagnose it on the spot, on endoscopy then you can, in the future, prove that you can bypass biopsies and do an ablation on the spot.

So that would be very transformational for how esophageal precancer is managed. You would look, you would have visible evidence of precancer. You would use this technology, the [ Arcteris ] technology to image and determine whether that patient had a high likelihood of that area being dysplastic and then right off the -- right there, do the ablation procedure on the spot. So that would be transformational. So this work is still in the early phases. It was used in the clinical setting that documented in real patients with real precancer, its efficacy. That data is published now.

And so there is work to be done to modify the technology to be more where the form factor size and form factor can be more applicable to a broad commercial launch. So that was the first step, and that's happening under a sponsored research agreement in the laboratory, Dr. Wax's Laboratory at Duke, where those revisions and that redesign of the probe is underway. Once that's done, then the probe will be deployed in another round of patients in partnership with Dr. Shaheen at UNC. And once we have design freeze and have demonstrated that, then we'll complete the product development process, secure what we believe is a 510(k) FDA pathway for clearance and then subsequent commercialization. So that's a bit down the road.

[Operator Instructions] Your next question comes from Ed Woo with Ascendiant Capital.

Yes. Congratulations on all the progress. I had a quick question. You mentioned that you guys are now ready to kind of engage in expanding your medical device portfolio with new technology. Is there any particular areas or products that you might be interested in?

Yes. Thanks, Ed. Glad you gave me a chance to kind of maybe flesh out my previous comment about that. It's been -- it was really quite remarkable, honestly, after we closed the last restructuring and financing frankly, within days, we were getting calls. And I'll actually highlight something that wasn't clear in my prepared remarks. It's not just in the medical device side, it's actually across the board. We've gotten inquiries on really interesting diagnostic companies, molecular diagnostic companies, medical devices as well as pharma assets. So a good number.

And just -- I believe it's just been a month since we completed that transaction. And it's really because this really goes back to the roots of PAVmed where we were also in a position where people contacted us as possible partners. That's what led to Lucid and Veris of us having access to those technologies. And it's really exciting that folks now view us in a position to be able to continue that legacy that brought those other assets into the fold.

I would say on the medical device side, we are -- there's obviously interest in technologies that align with the GI space, right? So our interest in [ Arcteris ] and the interest of the folks at Duke in inquiring about that obviously has to do with the fact that we have in Lucid extensive experience with esophageal disease, with Barrett's esophagus and otherwise. And so I would say we're open for inquiries across the board. PortIO is in the vascular access space. There's been activity in a broader sense. So we're not limiting ourselves to any particular specialty, but certainly, GI things related to gastroesophageal reflux to Barrett's esophagus and so forth, obviously capture our attention because we have obviously a substantial amount of internal expertise there.

There are no further questions at this time. I will now turn the call over to Dr. Lishan Aklog for closing remarks.

Great. Thanks, operator, and thank you all for taking the time and for your attention this morning. We appreciate, as always, the thoughtful and informed comments and questions from our covering analysts. And hopefully, you found those -- that discussion useful as well. Really, I hope my goal and our hope is that you leave today with a pretty clear set of takeaways here that PAVmed's corporate structure and balance sheet is now fixed. It was a long and somewhat painful process to get here, but we're here. It's two subsidiaries, commercial subsidiaries are both making strong commercial progress and approaching key milestones.

Obviously, they're at different points in their corporate life cycles, but really good progress on both of those. Both of them have been also capable of showing their ability to raise capital independent of PAVmed over time. The new -- obviously, news that we're focused on today is that our medical device portfolio is relaunching. We're really excited to have Joe on board and his leadership not only to move [ Arcteris ] and PortIO forward, but also puts us in a really good position to evaluate the inflow of opportunities that have been brought to us already in hardly a month after we've been in a position to do so.

And so the fact that we're getting those inquiries both from banks and from innovators and from academic medical centers, I think, is a testament to the hard work that's gone into fixing the structure and the balance sheet and the sort of sense of confidence that we're in a good position to go back to our roots there. So all I can say is that we believe PAVmed the back that our founding mission and our structure of subsidiaries and our shared services model and the economies of scale that go with that, that we really feel like we're now in a really good position to take advantage of that structure of that history and of the opportunities that are coming before us.

So with that, as always, we encourage you to continue to keep abreast of our progress. And please follow our news releases, our quarterly updates and calls in the future as well as through our website and social media. And of course, always feel free to reach out to us if you have any specific questions. So with that, I hope everyone has a great day. Thank you very much.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

I call the Special Meeting of Stockholders of PAVmed Inc. to order. I am Lishan Aklog, the company's Chairman and Chief Executive Officer. Also present are Dennis McGrath, the company's President and Chief Financial Officer; Michael Gordon, the company's General Counsel; Eric Schwartz of Graubard Miller, outside Counsel of the company; and Alwyn Burton of Continental Stock Transfer & Trust Company, the company's transfer agent. Eric will act as the Secretary of the meeting. As you all know, we're holding this special meeting via live webcast. To help the meeting run smoothly, Mr. Gordon will review a couple of housekeeping items before we begin.

Thanks, Lishan. First, until the polls are closed towards the end of the meeting, you will have an opportunity to vote through the webcast platform. If you wish to vote, simply click on the voting link and follow the instructions. Voting through the webcast platform will revoke any previously delivered proxy. Second, during the meeting, you will have the opportunity to submit questions to management. You may submit questions through the questions pane in the webcast platform. We will review these questions and if appropriate, we'll respond to them after the meeting. Third, during the meeting, you may view a list of stockholders of record as of the close of business on the record date as certified by Continental Stock Transfer & Trust Company. Simply click on the corresponding link in the webcast platform.

With those matters addressed, we will now proceed to the substantive portion of the meeting. I hereby appoint Mr. Burton to act as the inspector of this meeting and request him to execute his oath of office. Mr. Schwartz, please attach the oath to the minutes of the meeting. Mr. Schwartz, please present the affidavits of mailing.

I present the affidavits sworn to by a representative of Continental Stock Transfer & Trust Company, showing that notice of the special meeting and proxy statement was mailed on February 26, 2026, to all holders of record of common stock at the close of business on February 13, 2026. I also present the affidavit sworn to by a representative of Continental Stock Transfer & Trust Company, showing that notice of the special meeting and proxy statement was mailed on February 27, 2026, to all holders of record of the Series D preferred stock at the close of business on February 13, 2026.

I order the affidavits to be filed in the minute book immediately following the minutes of this meeting.

I also present the list of stockholders of record as of the close of business on February 13, 2026, as certified by Continental Stock Transfer & Trust Company.

Will the inspector please report on the number of shares eligible to vote, the number present and the presence of a quorum?

As of the close of business on February 13, 2026, there were 1,496,696 shares of common stock outstanding and eligible to vote. In addition, there were 30,000 shares of Series C preferred stock outstanding and eligible to vote, which represented the right to vote the equivalent of an additional 213,272 shares of common stock. A majority of the total voting power is represented at the meeting by proxy or in person, which constitutes a quorum.

Legal notice of the meeting having been given and a quorum being present, the meeting is regularly and lawfully convened and ready to transact business. The polls are now open. The first item of business is to consider a proposal to approve for the purposes of NASDAQ Listing Rule 5635, the issuance of shares of the company's common stock upon conversion of the company's Series D preferred stock and pursuant to the company's amended and restated senior secured convertible note issued on February 3, 2026.

The company sold 30,000 shares of Series D preferred stock in a private placement consummating on February 3, 2026. An additional 30,000 shares of Series D preferred stock are issuable upon exercise of warrants sold in the private placement. The company also issued the note on February 3, 2026, in connection with the redemption of the company's Series C preferred stock and the refinancing of certain of its net existing debt. The proposal is more fully described in the proxy statement. Do I have a motion?

So moved.

I second the motion. Management has voted on behalf of the stockholders who have submitted proxies in accordance with the instructions set forth on their proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Inspector?

My apologies. I got disconnected. Based on the preliminary vote tallies, a majority of the voting power presented and entitled to vote on the proposal was voted in favor of the proposal. This is sufficient for its approval.

The second item of business is to consider a proposal to approve an amendment to the company's certificate of incorporation to permit the removal of any director with or without cause by an affirmative vote of the holders of the majority of the company's outstanding voting power. The proposal is more fully described in the proxy statement. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of the stockholders who have submitted proxies in accordance with the instructions set forth on their proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a majority of the voting power entitled to vote on the proposal was voted in favor of the proposal. This is sufficient for its approval.

The third item of business is to consider a proposal to approve an amendment to the company's 2014 long-term incentive equity plan to increase the total number of shares of common stock available under the plan by an additional 1,500,000 shares from 213,517 shares to 1,713,517 shares. The proposal is more fully described in the proxy statement. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of the stockholders who have submitted proxies in accordance with the instructions set forth on their proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a majority of the voting power present and entitled to vote on the proposal was voted in favor of the proposal. This is sufficient for its approval.

Thank you, Mr. Burton. Because these proposals have been approved, the proposal to adjourn the meeting will not be presented. Accordingly, the business to be considered at this meeting is now completed. The polls are now closed. The exact vote tally on each proposal will be publicly disclosed after the meeting in our public filings with the SEC. Once the final tally is completed, I order the report of the inspector to be filed in the minute book immediately following the minutes of this meeting. As the business of the meeting has been completed, I will entertain a motion to adjourn the meeting.

So moved.

I second the motion. Meeting adjourned. Thank you all for your attendance and your continued support of the company.

I call the Special Meeting of Stockholders of PAVmed Inc. to order. I am Lishan Aklog, the company's Chairman and Chief Executive Officer. Also present is Michael Gordon, the company's General Counsel; Eric Schwartz of Graubard Miller, outside counsel to the company; and Alwyn Burton of Continental Stock Transfer & Trust Company, the company's transfer agent. Eric will act as Secretary of the meeting. As you all know, we are holding this special meeting via live webcast. To help the meeting run smoothly, Mr. Gordon will review a couple of housekeeping items before we begin.

Thanks, Lishan. First, until the polls are closed towards the end of the meeting, you will have an opportunity to vote through the webcast platform. If you wish to vote, simply click on the voting link and follow the instructions. Voting through the webcast platform will revoke any previously delivered proxy. Second, during the meeting, you will have the opportunity to submit questions to management. You may submit questions through the questions pane in the webcast platform. We will review these questions and if appropriate, we'll respond to them after the meeting. Third, during the meeting, you may view a list of stockholders of record as of the close of business on the record date as certified by Continental Stock Transfer & Trust Company. Simply click on the corresponding link in the webcast platform.

With those matters addressed, we will now proceed to the substantive portion of the meeting. I hereby appoint Mr. Burton to act as the inspector of this meeting and request him to execute his oath of office. Mr. Schwartz, please attach the oath to the minutes of the meeting. Mr. Schwartz, please present the affidavit of mailing.

I present the affidavits sworn to by a representative of Continental Stock Transfer & Trust Company, showing that notice of the special meeting and proxy statement was mailed on October 31, 2025, to all stockholders of record at the close of business on October 23, 2025.

I order the affidavit to be filed in the minute book immediately following the minutes of this meeting.

I also present the list of stockholders of record as of the close of business on October 23, 2025, as certified by Continental Stock Transfer & Trust Company.

Will the inspector please report on the number of shares eligible to vote, the number present and the presence of a quorum?

As of the close of business on October 23, 2025, there were 27,887,090 shares of common stock outstanding and eligible to vote. In addition, there were 21,398 shares of Series C preferred stock outstanding and eligible to vote, which represented the right to vote an equivalent of an additional 2,959,178 shares of common stock. A majority of the total voting power and a majority of the common stock is represented at this meeting by proxy or in person, which constitutes a quorum.

Legal notice of the meeting having been given and a quorum being present, the meeting is regularly and lawfully convened and ready to transact business. The polls are now open. The first and only item of business is to consider a proposal to amend the company's certificate of incorporation to effect the following two changes: First, the amendment will affect reverse stock split of the company's outstanding shares of common stock at a specific ratio ranging from 1:10 to 1:30 to be determined by the company's Board of Directors in its sole discretion.

Second, the amendment will affect an associated reduction in the number of shares of common stock the company is authorized to issue from 250 million shares to 25 million shares. The proposal is more fully described in the proxy statement. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of the stockholders who have submitted proxies in accordance with the instructions set forth on their proxies. Stockholders who are present may vote on the matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a majority of the voting power present and entitled to vote on the proposal was voted in favor of the proposal. In addition, a majority of the votes of common stock present and entitled to vote on the proposal was voted in favor of the proposal. This is sufficient for this approval.

Thank you, Mr. Burton. Because the proposal to amend the company's certificate of incorporation has been approved, the proposal to adjourn the meeting will not be presented. Accordingly, the business to be considered at this meeting is now completed. The polls are now closed.

The exact vote tally on the proposal to amend the company's certificate of incorporation will be publicly disclosed after the meeting in our public filings with the SEC. Once the final tally is completed, I order that the report of the inspector be filed in the minute book immediately following the minutes of this meeting. As the business of the meeting has been completed, I entertain a motion to adjourn the meeting.

So moved.

I second the motion. Meeting adjourned. Thank you all for your attendance and your continued support of the company.

Good morning, and welcome to the PAVmed's Third Quarter 2025 Business Update Conference Call.

[Operator Instructions] This call is being recorded on Thursday, November 13, 2025.

I would now like to turn the call over to Mr. Matt Riley, PAVmed's Senior Director of Investor Relations. Please go ahead.

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 Pratt, 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 SEC. For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part 1, Item 1A entitled Risk Factors in PAVmed's most recent annual report on Form 10-K filed with the SEC and any subsequent updates filed in the 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.

Thank you, Matt, and good morning, everyone. Thank you for joining our quarterly update call. As always, I'd like to thank our long-term shareholders for your ongoing support and commitment. Before we delve into our recent operational highlights, as I've done in the last couple of calls, I want to just remind you that over the past now 18 months, we've been taking some really critical steps to stabilize PAVmed's corporate structure and balance sheet. We did a restructuring of debt in the early part of this year, and we've been working on that.

But there's still work to be done on that front. We have a couple of additional steps that we think we're going to be able to consummate in the very near future, whereby following that, we think PAVmed will be fixed, and we'll be back to the original proposition where PAVmed will be really well positioned to operate per our vision as a diversified commercial life sciences company with multiple independently financed subsidiaries operating under a shared services model and it will give us the opportunity to start building that portfolio beyond our 2 major main commercial subsidiaries right now.

So let me just talk about that briefly and provide a brief overview of PAVmed's portfolio. So PAVmed is a vehicle to deliver innovative medical technologies, and we operate -- continue to operate under a shared services model. And as our subsidiaries succeed, particularly Lucid, PAVmed should also succeed.

So let me just start with Lucid. Lucid is obviously our main asset. It's a publicly traded diagnostic company. And it's on the cusp of a transformative milestone, particularly Medicare coverage and continues to succeed at raising its own capital, including this past quarter, and it has sufficient runway to accelerate its commercialization once Medicare coverage is secured.

I'll talk more about Veris in much more detail later, but Veris is our digital health company that offers a cancer care platform to enhance personalized care for cancer patients who are initiating and undergoing systemic treatment with chemotherapy and immunotherapy. We made some big progress earlier in this year where we're able to secure financing that's allowed us to bring our project plan forward to develop the key implantable device and an FDA submission is planned for next year.

As we have talked about on previous calls, we have started to make some effort to bring other technologies within our portfolio as well as others that we have access to. And we are in the process of organizing around that and seeking to raise capital around that. And the sort of final steps of our restructuring that I mentioned earlier, we think will put us in a very strong position to be able to continue to build these subsidiaries to finance them and to pursue very promising assets across the life sciences sector that we're actively pursuing.

One of those technologies, which we mentioned in the press release earlier this year was an exciting technology that involves a licensing agreement, a partnership with Duke University and the University of North Carolina, and it's a breakthrough endoscopic imaging technology for esophageal precancer that can provide real-time detection of dysplasia or advanced precancer with the potential to completely transform the way that's treated and to do so at the same time as a diagnostic procedure.

We're partnering with Dr. Dr. Adam Wax at Duke, who pioneered this technology and Dr. Nick Shaheen from UNC, who is working with them closely. This fits within our partnership model, the same one that we launched Lucid and Veris. We have -- we're in the late stages of finalizing the license agreement and looking for building a team around this technology and a pathway towards the early stages of product development, finalizing regulatory strategy and really just sort of getting this project that's what we're really excited about off the ground.

Let's get into the operational side of things. I do encourage you to, as always, to listen to yesterday's Lucid business update call for greater detail on some of these areas. But the main takeaway for Lucid is that we are now better positioned than ever to capitalize on EsoGuard's large market opportunity and a large clinical opportunity and their near-term milestones, which we believe will ultimately positively impact PAVmed as PAVmed remains the largest shareholder of Lucid.

EsoGuard revenue was $1.2 million for the quarter and test volume is just over 2,800. Both of those are in line with last quarter, and our volume is consistent -- has been consistent with the target range of 2,500 to 3,000 tests that we've articulated that we are seeking to maintain to facilitate our engagement with commercial payers while we await Medicare coverage.

The big highlight, as we talked about in our Lucid call, was the Medicare contractor meeting that was held in September. It was wildly successful. The experts unanimously endorsed Medicare coverage for EsoGuard, and this is really the final step towards what we believe is a near-term Medicare coverage for that test.

We also raised capital, strengthened the balance sheet for Lucid with an underwritten public offering of just under $27 million in proceeds. And so as I mentioned earlier, it extends Lucid runway through 2026 with a very strong investor interest and confidence, including institutional investors and insiders and bodes well for Lucid's ability to execute on a strategic plan.

So let's move on to Veris. So the most important development this past quarter was that we launched the commercial phase of our strategic partnership with OSU. If you may recall, we've had a long-standing working relationship with OSU, where we completed a pilot study. That study was very successful. It was found to be -- the technology was found to be valuable to their patients by all objective measures and predefined performance criteria, and so we are in the commercial phase. We are finalizing EHR integration but we've already started to proceed with building the commercial side of things with the initial 3 departments within OSUs, James Cancer Center, now launching this in a broader patient population beyond the pilot. And the agreement targets 1,000 patients in the first year that will be enrolled in the registry.

We've also, after completing our financing, have fully relaunched the development work on the implantable physiologic monitor to work towards the 2026 FDA submission. We've locked down the -- or restarted or locked down new vendors for that product development, and it's actually going quite well. And there is sufficiently capitalized to fund that development all the way through FDA clearance and subsequent commercial launch. So that's going really extremely well, and we're looking forward to getting that wrapped up in 2026.

So beyond that, now that Veris is stabilized, it's well capitalized, the implantable is on its way. We've gotten our -- really a very solid proof of concept with regard to our commercial partnership with OSU. We do -- we are working on executing an expanded vision for Veris, and we're not necessarily going to wait for the implantable to do so. So we have an opportunity to now that we have the template from OSU to expand our commercial offering to include other academic medical centers. And as part of that, we're incorporating the lessons that we've learned from our engagement with OSU to -- as we launch engaging with other centers to provide value added to these centers, an offering that goes beyond simply remote patient monitoring and the economics and the business model around that.

So one of the things that we've learned over the past year is that clinical support services are really important. Ohio State has a call center, and we've learned how to interface with them so that the alerts that come from the platform are processed in an efficient way. But many centers don't have that -- don't have call centers and any type of digital health tool can actually be somewhat overwhelming to the personnel with regard to alerts and so forth.

So we've hired our first full-time physician assistant, and we're looking to build a clinical support team around that to provide such clinical support services as a value-added service to our commercial partners, whereby our team will be able to provide varying levels. We have a menu of varying levels of clinical support to triage alerts that come through the system and to make the process of incorporating our platform much more efficient and consistent with the personnel needs that these centers have. So that's a really important additional value-added offering that we're looking to provide.

Another one is really we're seeking to transform Lucid beyond -- sorry, Veris beyond just remote patient monitoring to actually become a modern AI-based company where we can provide AI-based clinical decision tools that help the physicians just manage their patients better, manage them more cost effectively, improve outcomes, improve the economics of health care delivery and so forth. And we've had a very intense internal process where we have mapped out what we intend to do, and we are looking to build risk stratification tools that will provide such input -- AI-based input to the practitioners, and we're looking to partner with OSU to build and train such a decision tool that will be ultimately fully integrated within the platform and again, provide value to the center beyond the simple billing around remote patient monitoring.

So with that, I'll hand the call over to Dennis for an update on our financials.

Thanks, Lishan, and good morning, everyone. Our summary financial results for the third quarter were reported in our press release that has been distributed. On the next 3 slides, I'll emphasize a few key highlights from the third 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 as filed with the SEC. As a couple of reminders as our financials, particularly the income statement with year-over-year comparisons, we'll for this last quarter, illustrate periods before September 10, 2024, with Lucid's operating results being consolidated into the PAVmed results versus the presentation of the 2025 periods, they are without Lucid's operating results being consolidated into the PAVmed financials.

We do present some supplementary information in Footnote 4 of the 10-Q that will help with some of those comparisons. So with regard to the balance sheet, you'll recall from our investor update call since this time last year that the company was engaged in a multistep process to regain compliance with NASDAQ listing standard for minimum equity, which it did in February and also position the company for longer-term financial stability.

The 2 key components were deconsolidating Lucid from PAVmed's consolidated financial statements and restructuring our debt, whereby we exchanged about 80% of our outstanding debt for a new Series C preferred equity. The slide reflects the balance sheets for the third quarter and second quarter of this year, both after deconsolidation, which again occurred in the third quarter of 2024.

So a couple of key things to point out in each of these balance sheets. First, the cash burn rate of $900,000 for the third quarter reflects the Veris operating costs, including approximately $500,000 of outside contractor development costs associated with the implantable device, which have been funded by the 2 Veris related financings, namely $2.4 million in the first quarter and $2.5 million in the second quarter to support the development and FDA submission of Veris' implantable device.

Secondly, the equity method investment balance of $32 million at September 30 reflects the 31.3 million Lucid shares mark-to-market and reflects a $4.4 million sequential reduction consistent with the change in Lucid stock price. This amount was previously eliminated from PAVmed's balance sheet prior to the deconsolidation for most of the quarterly periods in 2024. Note, there's plenty of information in the 10-Q and 10-K on both the debt exchange of Series C preferred stock and the equity method treatment of PAVmed's investment in Lucid shares.

At present, PAVmed continues to be the single largest shareholder of Lucid Diagnostics with ownership of approximately 23% of the common shares outstanding. Although PAVmed no longer has voting control of Lucid PAVmed, its Board and its management still have significant influence over Lucid with approximately a 28% voting interest. Shares outstanding today, including unvested restricted stock awards are approximately 29.7 million shares. The GAAP quarter ending outstanding shares of 23.1 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.

Additionally, we issued 25,000 Series C preferred shares as part of the debt restructure at the beginning of the year. To date, approximately 4,300 Series C have been converted to approximately 11 million common shares. If the balance were converted at the contractual $1.07 conversion price, an additional 20.5 million common shares would be issued.

Next slide, please. Similar to the past presentations, this P&L slide provides some GAAP and non-GAAP year-over-year quarterly and annual comparisons. As cautioned earlier in my comments, there are some significant differences in how the information is compiled between the comparative periods given the changes in PAVmed's financial control of Lucid Importantly, the GAAP construct for deconsolidating Lucid on September 10 of last year somewhat blurs the historical understanding of the information for PAVmed as a stand-alone entity and GAAP does not allow the presentation for prior periods on the face of the financial statements to be similarly adjusted.

Although as mentioned, there is some supplemental information in the footnotes. On a pro forma basis and purely for illustrative purposes on the slide only, the Veris revenue and the Lucid management fee income are combined collectively more than $3 million per quarter to visually align PAVmed's income sources versus its operating expenses. For SEC reporting purposes, the MSA income is a below-the-line item. Furthermore, for the third quarter, you see on the slide and in the 10-Q, a GAAP net loss of $6 million before NCI and before preferred dividends. This includes a noncash loss of $4.4 million for the change in fair value of the equity investment and together with the preferred dividend and stock-based comp reconciles to a non-GAAP loss of $446,000, basically the equivalent to the incremental contractor development cost for the Veris implantable device.

Happy to answer any detailed questions on the slide in the Q&A but I think it's more informative to look at the third quarter stand-alone information presented in this slide and the full third quarter information presented in our press release that shows the company baseline bias of operating at cash flow breakeven and incurring incremental PAVmed expenses for development activities that are offset by dedicated funding. So in the third quarter, you see a non-GAAP loss of $446,000, which has been funded in part by the NIH grant proceeds of $1.1 million since the end of last year and $4.9 million of PAVmed Veris financing earlier this year. Non-GAAP operating expenses for the last 4 quarters have averaged approximately $4.4 million with very small variation from quarter-to-quarter.

Next slide, please. With regard to non-GAAP operating expenses on the slide, you see a graphic illustration of our operating expenses over time as presented in more detail in our press release. The non-GAAP OpEx since the Lucid deconsolidation last year has been nearly flat for the last 4 quarters. OpEx increases moving forward are likely to be tied directly to the R&D efforts to get the Veris implantable device submitted and cleared by the FDA for which the recent Veris-related financings are supported.

With that, operator, let's open it up for questions.

[Operator Instructions] At this time, there are no questions. I will now turn the call over to Mr. Dr. Lishan Aklog. Please go ahead.

Great. Thank you, operator, and thank you all for joining today. Let me just restate something that I stated earlier that Dennis highlighted. PAVmed was founded to be an engine of innovation that's capable of ingesting groundbreaking technologies and advancing them. And although Lucid is really in a great position and Veris is progressing well, our ability to consummate this broader vision has been constrained by capital markets and structural challenges. It's taken a series of steps, which Dennis has outlined over a period of time to address these challenges. And we really feel like we are now poised to complete that work so we can reignite the broader vision and continue to pursue the next Lucid, the next Veris.

And we really have some excellent prospects, some of which we've talked about, the Duke technology and others waiting in the wings for us to finally transition back to the original vision of PAVmed. So we look forward to that, and we look forward to continuing to address those opportunities and finalize this restructuring that has put us in a position to expand those horizons.

So with that -- actually, it looks like we have somebody back in the Q&A. Should we bring them -- let's -- so let me go back to the operator. I believe we have one question around the Q&A that we'd like to bring on.

We do have one question. It does come from Anthony Vendetti from Maxim Group.

Lishan, I was wondering if you could just talk about where you exactly are with the implantable monitor. Are there any other clinical steps necessary other than the OSU trials and so forth?

Yes. Let me just in, if that's okay, Anthony. So this -- the development of the implantable, remember, the implantable is an implantable device that allows the physician to implant an intracardiac -- implantable cardiac monitor in conjunction with a port at the time of beginning of therapy. Although we have part of our strategic partnership with OSU involves them being the first site and then doing the initial pilot work once the implantable is cleared. The development work actually is unrelated to our relationship with OSU.

So we -- with the financing that we secured earlier this year, we have relaunched the work that had been on pause when we were awaiting access to capital to do so. And that relaunch actually included us transitioning to a new development and manufacturing partner who has extensive experience with making such implantable devices such as stimulators and others. And so we've transitioned. We've launched that product development work with this new partner, going extremely well. And there's a variety of just bread and butter engineering work that's required to get us to a final -- to complete that product development work and get us into a position to submit with FDA to FDA.

You had mentioned -- you had asked about the -- any clinical trial. So one of the things that we had been doing was we've had an ongoing engagement with FDA over many, many meetings. to establish, first, our preclinical requirements, so animal studies that have been ongoing and will continue to be ongoing as part of this work. And that was already previously locked down. The final step, which I think we talked about on our last call was to get a final sign-off from FDA on any clinical work we would need to do.

Since the predicate here -- this is a 510(k). So since the predicate here is an existing implantable cardiac monitor, the clinical requirements were actually quite modest. And we did eventually work with the FDA to establish that the only clinical data we'd need is a -- what we refer to as a skin study. So instead of having to implant the device to perform this study, it's -- we can actually just stick it on the skin and measure its ability to detect primarily the cardiac rhythm and show that it's equivalent to the predicate.

So it's a pretty straightforward simple small study that will be required as part of that. That's not the rate limiting factor. Frankly, the rate limiting factor between us and a submission is all of the development work, the traditional biocomp packaging, things like that, that are things that typically use that use up the clock.

Okay. Great. So it sounds like with the predicate it should be -- I'm not saying anything with the FDA is routine but it should be relatively routine versus if you were using.

Yes, yes. I think it's fair to say that the path is very clear. The requirements are clear. We just need to execute on it. I think there's very little uncertainty as to what's required. There's really good guidance from FDA on what they expect for these kinds of devices. So we have a very carefully tuned regulatory strategy that's designed to really leverage this predicate carefully. And there's always opportunities in the future to seek additional indications, expanded language and things like that. So we're pretty -- we're extremely happy, frankly, with the pathway that we have ahead of us and expect it to be straightforward.

And I know the focus is on that and OSU but -- is it too early to start having commercialization conversations with other cancer centers? Or are you going to wait a little bit longer until -- even though like you said, it should be relatively straightforward with the FDA. Are you going to start having those conversations...

So that was what I was trying to -- yes, that was -- sorry, to interrupt, Anthony. That was what I was ending at earlier. So let me just kind of restate it a little bit more directly. So the answer to your question is yes. When earlier in this year, as we were able to finally secure some capital to develop this, our strategy had been one of just sort of sticking to the OSU partnership, getting a bunch of commercial experience there and waiting until implantable to broaden our commercial activity. We've shifted that strategy.

So that's no longer -- we really do believe, given how well things have gone with OSU, that we are in a position likely starting in the first quarter after we've had some volume at OSU to start looking to expand at other centers. And the key factor there, it's not like we hadn't had ongoing conversations and solicited other centers. We just didn't do it very aggressively because we knew that we had limited capital to -- for commercial expansion over the last couple of years.

But one of the things that we learned will be key in that is one of the things I mentioned, which is to offer not just the software platform ultimately not just the implantable, which is economically a very attractive thing for them, but to offer some additional value added, have a bit of an expanded vision for the offering from Veris. And one of those things includes offering clinical support services, as I mentioned earlier, to really streamline and make more efficient the process of using our platform.

Hospitals, cancer centers, including cancer centers are pretty overwhelmed. The clinicians are pretty overwhelmed. They're understaffed. And although there's clear clinical value in the data and having this continuous data that is sent to them to monitor their patients, often they're strapped for personnel time to be able to interpret these alerts and so forth. And within -- while we were soliciting other accounts, it became clear that us being able to centralize that and offer clinical support services was essentially to be able to triage alerts.

So if there's alert on our system that says the patient's temperature is rising or they're reporting certain symptoms that may be consistent with the complication of chemotherapy to have -- to be able to offer the account value-added service that they can kind of select from a menu to have a clinician -- our clinician be the frontline to check in with the patient and sort it out and then pass the baton on to the clinical team. Lots of interest in that. And so we're going to start building that. We have our first PA who's going to be working closely with OSU on that, and we think there's a real opportunity and a real revenue opportunity around that as well.

And then the other thing which we're going to not wait for the implantable on, and we're going to start working on our AI-based tools that can provide value-added both from a clinical point of view and an economic point of view for the client. That we do expect to work closely with OSU on because those products, as I see you know, require clinical data to train models and so forth. So for us to build a risk stratification tool that can predict, which patients on which -- on a particular chemotherapy and immunotherapy are at risk for rehospitalization or for complications, that's extremely valuable, but that will require training with data that we would expect that we'd be able to partner with -- that we're planning on trying to partner with OSU on that.

So all those activities are going to start gearing up in the first quarter even before we have the implantable already.

Okay. Great. Great. No, that's great clarity. I appreciate that. And then lastly is the letter of intent for the endoscopic imaging technology. And I know LOI sometimes doesn't result in a definitive agreement. But do you have some exclusivity with this LOI? And what's the timing do you believe that it could lead to a definitive agreement? And then would you first take that in -- it sounds like because it's in the PAVmed press release, would that first go into the PAVmed portfolio? And then would there be a plan to eventually shift that to Lucid Diagnostics?

Great. A lot to unpack there. So just let me know if I miss anything. So the first answer to your question is that, no, this LOI will translate into a licensing agreement, and it's -- it will be forthcoming very, very soon. We're in the final stages of ironing out that language. So we expect to sign the definitive license agreement for this technology very, very, very shortly. That will -- and that will be within a subsidiary, a separate subsidiary of PAVmed to advance the technology through some additional development work and then ultimately to -- through an FDA submission and clearance.

That work will begin immediately upon us signing the license agreement. There is development work to be done that will be done at the laboratory where this technology is being developed at Duke to try to make some adjustments to sizing. Just maybe a little bit of background. We haven't spent a lot of time on this. This is a technology that has actually been used in humans. One of our long-time colleagues and partners, Dr. Nick Shaheen, who's a PI in our studies and the Head of Lucid MAB, is the clinical gastroenterologists who's been working with on this. So they've used this in humans and have demonstrated its efficacy in being able to detect dysplasia at the time of a diagnostic endoscopy.

There's additional design work to kind of from a form factor point of view and how it's sort of snaps together with the endoscope and so forth that will be supporting at Duke. And once that has been completed, we'll transition it into a commercial product development pathway and then ultimately submit. We do have a regulatory -- we've kind of finalized our regulatory strategy around how to pursue this. We are convinced this is also a 510(k). It will likely require a small clinical study but nothing too large or resource intensive. So that's the plan. So it's coming. We're going to get this thing done. It's just dotting i's and crossing t's on the document.

Understood. Perfect.

And sorry, you had mentioned the relationship with Lucid, Sorry, I forgot. So look, the -- obviously, Lucid is in this space, these are patients that EsoGuard will be finding, right, who will be undergoing a confirmatory endoscopy based on a positive EsoGuard test that will require endoscopy to determine whether they're a true positive and if they're a true positive, where they are along the spectrum for further follow-up, right? So clearly, the work of Lucid is linked to the application of this technology. We've decided for the time being to keep it separate. Lucid has plenty on its plate. It's really kind of positioned as a molecular diagnostic company. Lucid, there is an agreement between Lucid and PAVmed for a modest equity position in the subsidiary.

So Lucid will have upside on that. And then when it's near commercialization, we'll decide sort of what the right pathway for it. If there are synergies that make sense at the time with Lucid, we'll pursue that. If it's a distraction to Lucid, we'll pursue it separately.

Great. Thanks, Anthony. So with that said, let's wrap things up. Just would like to, again, encourage you to remain connected to us and our progress, follow our press releases and these quarterly update calls, subscribe to our e-mail alerts and just contact us by phone if necessary.

So thank you very much, and everybody, have a great day.

Ladies and gentlemen, this does conclude your conference call for today. We thank you very much for your participation, and you may now disconnect. Have a great day.

Good morning, and welcome to the PAVmed Second Quarter 2025 Business Update Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference call over to Mr. Matt Riley, PAVmed's Senior Director, Investor Relations. Please go ahead.

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 CEO of PAVmed; along with Dennis McGrath, CFO, 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 SEC.

For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part 1, Item 1A entitled Risk Factors in PAVmed's most recent annual report on Forms 10-K filed with the SEC and any subsequent updates filed in the 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?

Thank you, Matt, and good morning, everyone. Thank you for joining our quarterly update call. As always, I'd like to thank our long-term shareholders for your ongoing support and commitment. We'll be diving into our operational highlights in a bit. But before doing that, just a reminder that we've taken some critical steps over the past year to stabilize PAVmed's corporate structure and balance sheet. There's some -- still work to be done on that front. But despite that, we believe we're now -- we remain well positioned to operate as a diversified commercial life sciences company with multiple independently financed subsidiaries that operate under our shared services model.

Let me just give a brief overview of PAVmed's portfolio. So PAVmed is a vehicle to deliver innovative medical technologies. As I mentioned, we operate under a shared services model. And as our subsidiaries succeed, PAVmed will also succeed.

So Lucid is our publicly traded diagnostics company. It's obviously our strongest, most advanced asset, and it's on the cusp of key reimbursement milestones, including Medicare, which we'll talk about in a little more detail later. And Lucid has been able to raise its own capital and has sufficient runway to accelerate commercialization once we secure Medicare coverage.

Veris Health is our digital health company that has a cancer care platform that enhances personalized care, and I'll go over some of the updates in a bit. Veris has also been able to secure some financing, and that has given us the ability to restart development of the device, the implantable physiologic monitor, which works in conjunction with the cancer care platform.

PMX, our incubator, which houses some internal projects like PortIO, we've been working to try to raise capital for these internal projects. That really remains an ongoing challenge. However, we also, in parallel, continue to be solicited regarding other very promising assets, which we continue to aggressively pursue. So we do remain active in this front and are trying to find -- trying to balance incorporating new assets with the availability of capital.

And on the biopharma side, we talked a bit last -- on our last call about us exploring opportunities within the biopharma space. At our last call, we thought we were close with regard to one asset that fits well within our shared services model and could leverage our clinical research team, which is one of the reasons why we did -- we have decided in conjunction with one of our Board members to explore in this space. Unfortunately, that asset fell through, but the pipeline actually remains robust, and we continue to explore interesting assets in this vertical.

And so, let's just do a brief update on Lucid. Obviously, I encourage you to listen to yesterday's Lucid business update call for greater detail on each of these areas. But the main takeaway is that Lucid is now better positioned than ever to capitalize on the large market opportunity that the EsoGuard provides. And there are some real concrete near-term milestones that we believe will drive Lucid's success and therefore, will positively impact PAVmed.

Just to highlight some numbers, EsoGuard test volume was 2,756 tests, which was within the target range of 2,500 to 3,000 tests per quarter. And revenue was up about 40% from Q1 at a record level of $1.2 million for the quarter. As I went through in a lot of detail on our call yesterday, the big event is -- the upcoming event for Lucid is this MolDX Contractor Advisory Meeting, the CAC meeting, which is a critical step in the LCD process for Medicare coverage. We believe we're in the final stages of that and indicates a strong evidence of progress towards positive Medicare coverage policy.

Lucid also announced a partnership with Hoag, a world-class health system in Southern California to launch a comprehensive integrated EsoGuard esophageal pre-cancer testing program across the entire hospital health care delivery network, including gastroenterologists, primary care physicians and concierge medicine. And we're very excited about this model -- we're excited about this engagement, which really provides a model for additional health systems, which we are now engaging with to try to replicate the Hoag model.

As Dennis will talk about in more detail, we've also strengthened our -- Lucid also strengthened its balance sheet with an underwritten public offering and has sufficient capital to get through these upcoming milestones. And consistent with the PAVmed model, Lucid continues to succeed at raising its own capital.

Finally, on the commercial side, Lucid secured its first private commercial coverage policy from Highmark Blue Cross Blue Shield, and that became effective in late May. And as I noted on the call, this has been a very positive experience for us. It establishes a precedent, both with regard to our commercial insurance engagements and with Medicare as well. And it really points to the value of our clinical evidence, clinical validity, utility as well as the economic argument supporting EsoGuard. So we remain deeply engaged with our commercial payers and are already seeing traction within the Highmark coverage area.

Let's move on to Veris Health. Some recent highlights include that Veris completed a second financing, a $2.5 million direct equity financing that supplemented an earlier $2.4 million financing at a very attractive pre-money valuation of $35 million. We're very excited about that. It really shows investor confidence in Veris' commercial potential and the progress we've made to date.

And most importantly, it provides sufficient capital to fund the development of the implantable physiologic monitor, which had been on pause and to get that through FDA clearance and subsequent commercial launch, so it can service a purpose as a value-add in conjunction with the platform. That development has restarted as soon as we completed that financing, and we have a clear path with FDA. We had our final meeting with FDA, many, many meetings we've had with them. That feedback was favorable. We were actually able to bypass an in-person meeting, and we look forward to completing the development work and filing for FDA in 2026.

Our long-term strategic partnership with Ohio State University, the James Cancer Center, really progressed nicely during this quarter. We completed our partnership agreement with them and are heading towards a commercial launch. Right now, the electronic health record integration step is in process. It's gone a little bit slower than we expected, but should be wrapping up, and it will allow us to do a broad launch across the Cancer Center to onboard patients across a variety of condition-specific groups with a target of enrolling over 1,000 patients within the first year.

We've also begun on a variety of components of a longer-term strategic plan that we will look to start implementing upon completion of the submission and clearance of the implantable. This includes a commercial strategy that builds on the model that we have established with the James Cancer Center at Ohio State and continue to target new accounts. It also includes the commercial model for the implantable, and we're working through pricing and our commercial strategy on the implantable. And so far, that looks very attractive from a pricing point of view. And then we look towards commercial expansion after the implantable is clear beyond that.

We're also hard at work at developing an internal program to put us in a position where we can expand beyond simple remote patient monitoring to embrace AI, artificial intelligence-based clinical decision support tools that are targeted towards cancer care. And we really believe we have a good opportunity to do that and are putting in the resources and the effort to develop a strategic plan that we would seek to launch upon completion of the implantable.

Our focus right now, as I mentioned, is to complete the OSU engagement and to get the implantable across the finish line, and that's the primary focus of our team, but there's a lot of strategic work going on behind the scenes to make sure when that's completed, that we'll be in a position to really create some significant value over the long term. So with that, I'll pass the call on to Dennis.

Thanks, Lishan, and good morning, everyone. Our summary of financial results for the second quarter were reported in our press release that has been distributed.

On the next 3 slides, I'll emphasize a few key highlights from the second quarter. I encourage you to consider those remarks in the context of the full disclosures covered in our quarterly report on Form 10-Q as filed with the SEC. A couple of reminders as our financials, particularly the income statement with year-over-year comparisons will, for the next couple of quarters, illustrate periods before September 10, 2024, with Lucid's operating results being consolidated into the presented PAVmed results versus this year's, the 2025 period, without Lucid's operating results being consolidated into PAVmed financials.

We do present some supplementary information in the footnotes of the financial statements, particularly in Footnote 4 of the 10-Q that helps with some of the comparisons. With regard to the balance sheet, you will recall from our last 3 investor update calls in November, March and May that the company was engaged in a multistep process to regain compliance with NASDAQ listing standard for the minimum equity level, which it did in February and also position the company for longer-term financial stability.

The 2 key components were deconsolidating Lucid from PAVmed's consolidated financial statements and restructuring our debt, whereby we exchanged about 80% of our outstanding debt for a new Series C preferred equity. The slide reflects the balance sheets for the second quarter and the first quarter, both after deconsolidation, again, that occurred on September 10, 2024. But now the March balance sheet also reflects the impact of the debt exchange, which occurred after December 31. Notably, the liability reduction of about $25 million coming in large part from a significant reduction in the convertible notes in exchange for an increase of approximately $25 million in preferred stock and the balance sheet inclusion for the first time of the equity value of PAVmed's 31.3 million shares of Lucid stock.

The June 30 balance sheet reflects the impact during the second quarter of the Lucid stock price changes on the value of the Lucid shares mark-to-market as well as any conversions of the preferred securities to common stock. So a couple of key things to point out on each of these balance sheets. Cash does not include any Lucid cash. However, it does include the 2 Veris-related financings, namely the $2.4 million in the first quarter and the $2.5 million in the second quarter to support the development of the FDA submission of Veris' implantable device.

The equity method investment balance of $36 million at June 30 reflects again the 31.3 million Lucid shares mark-to-market, representing a $10 million gain since year-end from a 40% rise in the Lucid stock price between the periods. This amount was previously eliminated from PAVmed's balance sheet prior to deconsolidation. Note, there's plenty more information in the 10-Q on both the debt exchange, the Series C preferred stock and the equity method treatment of PAVmed's investment in Lucid shares.

At present, PAVmed continues to be the single largest shareholder of Lucid Diagnostics with an ownership of approximately 29% of the common shares outstanding. Although PAVmed no longer has voting control of Lucid, PAVmed, its Board and management still have significant influence over Lucid with more than 27% voting interest. Shares outstanding today, including unvested RSAs are approximately 21.9 million shares. The GAAP quarter ending outstanding shares of 20.1 million are reflected on the slide as well as the face of the balance sheet in the 10-Q. GAAP shares do not reflect unvested RSA amounts.

Additionally, we issued 25,000 Series C preferred shares as part of the debt restructure at the beginning of the year. To date, approximately 1,850 Series C have been converted to approximately 4.7 million common shares. If the balance of the Series C were converted at the contractual $1.07 conversion price, an additional 21.7 million shares would be issued. The Z warrants after having been extended for 1 year beyond their initial 5-year term expired on April 30.

Next slide, please. Similar to past presentations, this P&L slide provides some GAAP and non-GAAP year-over-year and quarterly and annual comparisons. As cautioned earlier in my comments, there are some significant differences in how the information is compiled between the comparative periods given the changes in PAVmed's financial control of Lucid. Importantly, the GAAP construct for deconsolidating Lucid on September 10 of last year somewhat blurs the historical understanding of the information for PAVmed as a stand-alone entity, and GAAP does not allow the presentation for the prior periods on the face of the financial statements to be similarly adjusted. Although as mentioned, there is some supplementary information in the footnotes.

On a pro forma basis and purely for illustrative purposes of this slide only, the Veris revenue and the Lucid management fee are combined, collectively more than $3 million per quarter, to visually align PAVmed's income sources versus operating expenses. For SEC reporting purposes, the MSA income is below-the-line item.

Furthermore, for the second quarter, you see on the slide and in the 10-Q, a large GAAP net loss of $12.3 million before NCI, the noncontrolling interest and preferred dividends, opposed to the 6-month total reflecting $6.3 million of income. This results from the mark-to-market of the 31.3 million Lucid shares for the periods resulting in a second quarter noncash expense of $10.6 million in the line item titled Change in Fair Value of Equity Investment and an income pickup of $21 million in the first quarter.

Happy to answer any detailed questions on the slide in the Q&A, but I think it's more informative to look at the second quarter stand-alone information presented in this slide and the full second quarter information presented in our press release that shows a company baseline bias of operating at cash flow breakeven and incurring incremental PAVmed expenses for development activities that are offset by the dedicated funding.

So in the second quarter, you see a non-GAAP loss of $845,000, which has been funded in part by the NIH grant proceeds of $900,000 in the fourth quarter and a PAVmed-Veris $2.4 million financing in the first quarter and a Veris direct subsidiary financing of $2.5 million in the second quarter. Non-GAAP operating expenses for the first quarter and second quarter were nearly identical at $4.5 million, a change of $53,000 between the 2 quarters.

Next slide, please. With regard to non-GAAP operating expenses, on this slide, you see a graphic illustration of our operating expenses over time as presented in more detail in our press release. The non-GAAP OpEx since the Lucid deconsolidation has been nearly flat for the last 9 months. OpEx increases moving forward are likely tied directly to the R&D efforts to get the Veris implantable device submitted and cleared by the FDA for which the recent Veris-related financings are supporting. With that, operator, let's open it up for questions.

[Operator Instructions] Your first question comes from Anthony Vendetti from Maxim Group.

So a couple of things, on the rollout with OSU, I know there has to be integration with EHRs, and I used to follow the health care information technology industry very closely and having those integrations with different systems within a hospital, sometimes takes longer than expected. Where is that specific process with integrating Veris' remote monitoring in with that EHR? And is that what's taking a little bit longer? Or have you overcome that?

And then the AI component, just a little more clarity on that clinical decision support piece of it, it sounds like that's early stage but could be very interesting going forward to add to the Veris platform.

Yes. Both great questions, Anthony. Thanks for the opportunity to flesh those out a little bit. So the EHR integration has been a bit of a gating item for us to kind of transition to a full commercial expansion across the network. It's not -- I don't think it's -- yes, it is challenging. It takes some work. It's not quite as onerous as I think the models that you were talking about where you're really in effect, altering their EHR. There are third-party vendors that -- one of which we're using that have a sort of an established turnkey way to take an external platform and have it communicate with various hooks and links within the EHR system. So it's not really built into the EHR. It's just getting these third-party applications that can interrogate and deliver information bidirectionally to the EHR in a streamlined way.

So the amount of work is modest or moderate. It's mostly just the challenge of overcoming kind of bureaucratic hurdles within an academic medical center. But we're making progress. We expect it to get wrapped up soon, and then we'll be able to launch. We're actually considering seeing about -- the goal was to kind of get it up and running before launching it all, but we may actually proceed with an early rollout as the EHR integration process is proceeding. But -- so it's coming, but it's just taking a little bit longer than we had hoped for.

On the strategic side, you're right. When we founded this company, the platform itself, the software platform itself and even the implementation and the platform's utilization of data from an implantable monitor were really firmly rooted in the remote patient monitoring or RPM paradigm, where the patient's physiologic information, whether through the external devices that they currently have or through the implantable, are relayed effectively just directly into the platform for the clinical team to see and for them to make clinical decisions.

There are some elements of highlighting and color coding, things to give folks a sense of prioritization of different alerts. But it's really just that. RPM is literally remote patient monitoring. It does include some patient -- the patient's own reported symptoms and incorporates that in a nice -- in an interface that is very user-friendly and allows the clinical team to view the information and utilize it in their decision-making.

But obviously, I don't think it's a mystery to anyone that over the years since we launched Veris that there's been an explosion of power, expertise and activity in the health care space with regard to AI tools. And so we've initiated really a formal process within Veris to map out how that can -- we can incorporate more AI into the process in a way to enhance the care of these patients even further. And our target really is not sort of just sort of just throwing out an incredibly wide net around operational efficiency or other elements. There are plenty of other companies that are doing that, and that doesn't -- that's not on our wheelhouse. Our wheelhouse here is really in the clinical care of cancer patients who are being exposed to treatments that can lead to complications, and it's more narrowly focused on clinical decision support tools.

And that can go anywhere from smart alerts. So you're not just simply saying, hey, this -- the temperature is rising, patients getting a fever or there's some reports of certain symptoms that might trigger just an alert based on the value of the data, but making alerts smarter so they can provide some level of clinical risk or information -- additive information through AI that would be useful to the clinicians.

And then it goes all the way to more advanced tools that are actually propping out quite extensively in other areas and other specialties. But here within cancer, it would be tools that could predict, that could utilize data and could train off of data. And one of the expectations with regard to this partnership at OSU, which is the third largest cancer center in the country is to be able to work with them on using their vast data resources to train models that can provide clinical decision support. So let me -- sort of concrete example of that would be their pay -- one of the dreaded complications of patients undergoing chemotherapy, for example, is neutropenic sepsis, white blood count gets low from the chemo, and they have a risk of developing infection.

So algorithms that are trained on data in cancer patients undergoing chemotherapy that utilize the data that our system provides to provide a more comprehensive risk profile, where a patient -- where the risk of sepsis can be predicted well in advance of the typical clinical picture and interventions can be made in order to prevent those complications from going further. So it's tools like that rather than narrowly focused on cancer care in these patients who are -- the opportunity to get sick and to provide a layer of clinical decision support on top of just the reporting of the physiologic monitor.

So we are working internally, mapping it out, identifying potential products and tools, and we'll be working with ASU on mapping out ways to use their data and potentially other data sources to start to train models. So that's something that we're pretty excited about and will be a real value added to the platform.

Just to maybe -- just in closing, the platform now is really great. It's an excellent tool. Even though we are doing EHR integration, frankly, when we've deployed our platform, the clinicians typically use our platform as the kind of the front end for the way they care for their patients. And that will be supplemented by the physiologic data from the monitor. And then the next step in that would be to supplement the value proposition further by adding AI-based clinical decision support tools. So hopefully, that answers your question, Anthony.

Yes. No, that's great. And then just on the funding component, is Veris still funded at this point through FDA submission and expected clearance? And then any additional color around that time line in '26 would be...

The answer is yes. I'll let Dennis map out the details of that. There's -- including the opportunity to use additional cash through a warrant that's linked to one of the financings.

Yes, that's correct. With the funding it certainly, through clearance and the warrant exercise, which also has a call feature within 60 days of an FDA clearance is expected to support the commercial launch afterwards.

And your next question comes from Edward Woo from Ascendiant Capital.

Congratulations on all the progress. My question is on the biopharma opportunity. Is there a specific area that you have been looking at that you may continue to focus on for the next opportunity that you're evaluating?

Sure. So as we said last time in a little bit more detail, we've been -- there's a little bit of noise there. Is that Ed? Yes, thanks, Ed. As we mentioned last time, we've been sourcing assets at quite a decent clip now actually for over a year. We've made some progress on some. And I would say the majority have been in the cancer space. There's just a lot of activity, both on small molecules and on biologic immunotherapies in a variety of areas of cancer, and it is attractive because the -- much more so than med tech and diagnostics, the pathways through FDA, the FDA process and clearance and reimbursement is much more streamlined.

Recently, we've been viewing assets outside that space. The one asset that we were hopeful that we might get across the finish line last time was in cardioimmunology and in the cardiac heart failure space. And it should be no surprise to anyone that the biopharma initiatives around obesity are exploding. So we're getting to view some assets just at the very early stages in that space.

So it's an interesting process. Again, there's a lot of assets out there. There's -- we have a lot to offer as a public company parent with access to longer-term capital, that's attractive. But the devil's in the details. It's really a question of how much upfront capital these -- the holders of these assets are looking for and so forth. So we remain optimistic over the long term, and we'll keep looking -- working our way through that pipeline.

There are no further questions at this time. I would now like to turn the conference call over to Dr. Lishan Aklog for closing remarks.

Great. Thank you, operator, and thank you all for joining today, and thanks, Anthony and Ed, for the great questions. So really just want to close on similar to my opening comments that at the end of the day, PAVmed's success within -- given the model we have and given that we've stabilized things from a corporate point of view, ultimately is going to depend on the success of its subsidiaries. And there it's really their commercial success and their ability to finance their operations ultimately through profitability.

And both Lucid and Veris are on solid footing on both fronts. There are some really important strategic milestones, obviously, especially at Lucid with the potential to drive significant value at the PAVmed level over the coming months. And we do -- as I've said, again, and just in response to the last question, we continue to aggressively pursue opportunities with very strong commercial potential, and we're always looking to expand the portfolio of subsidiaries to find the next Lucid, the next Veris to ultimately drive PAVmed's value.

I am bullish about one such near-term opportunity with academic medical centers and particularly intriguing because it's around innovative technologies that would leverage both Lucid and PAVmed's expertise in esophageal disease. So we're looking forward to see if we can get that opportunity locked down.

So with that said, again, just do encourage you to remain connected with us and our progress through our press releases, these calls. Please sign up for e-mail alerts if you haven't done so already on our website and follow us on social media. So thank you very much, and everybody, have a great day. Thank you.

Ladies and gentlemen, this concludes your conference call for today. We thank you very much for your participation. You may now disconnect.

Good morning, and welcome to the Lucid Diagnostics Second Quarter 2025 Business Update Conference Call. [Operator Instructions]

Please note that this event is being recorded.

I would now like to turn the conference over to Matt Riley, Lucid Diagnostics Senior Director of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone, and thank you for participating in today's business update call.

Joining me today on the call are Dr. Lishan Aklog, Chairman and CEO 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 disclaimer 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 the 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 future operations, see Part I Item 1A entitled Risk Factors of Lucid's most recent annual report on Form 10-K filed with the SEC and any subsequent updates filed in quarterly reports on Form 10-Q and subsequent Form 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?

Thanks, Matt, and good morning, everyone. Thank you for joining our quarterly update call today.

As always, I'd like to thank our long-term shareholders for your ongoing support and commitment. The team really remains singularly focused on driving this enterprise towards its substantial commercial potential and enhance our long-term shareholder value.

Since our last update, the biggest development and near-term milestone is the upcoming LCD CAC meeting, which will be the main focus of today's call. We're really excited about this. We see this meeting as a very strong indicator of progress towards a positive Medicare coverage policy outcome. And we really believe that we're in the final stages of this process.

We're excited that we've kind of reached this moment in time with very clear and now concrete steps ahead of us -- ahead of us to navigate and to succeed.

Thanks to our financing earlier this year, we have plenty of runway and we are well positioned to successfully navigate these final steps.

Talk about this a little bit more later, but we've already begun to take proactive steps to ensure that once Medicare coverage is secured, we will be able to accelerate EsoGuard's commercialization and ultimately capitalize on this very large market opportunity that we face.

Let's start with some key highlights related to our commercial execution. EsoGuard test volume for the second quarter was 2,756 tests. This is within our target range of 2,500 to 3,000 tests per quarter. And really happy that the team continues to be successful at maintaining this level of volume, this target volume, while focusing on contractually guaranteed revenue opportunities and now with a new focus on Medicare patients.

Revenue was $1.2 million, that's a 40% increase in revenue from the first quarter and matches our previous quarterly high.

We're very excited to partner with Hoag, a large health system -- a world-class health system in County, California, and we've launched a comprehensive EsoGuard pre-cancer testing program in partnership with them. What's really exciting about this program is that it's system-wide across the health care delivery network. So it includes partnerships between gastroenterologists, including the lead, Dr. Kenneth Chang, has become a very passionate advocate for their mission to eradicate esophageal cancer in their region. It includes primary care, there are 200 primary care physicians that we'll be engaging with as well as their concierge medicine part of the health system.

I really believe this is a model for additional leading health systems, both in that region as well as elsewhere about -- basically related to building comprehensive programs around using EsoGuard esophageal precancer testing.

We continue to drive our cash-paying contract programs that we launched earlier this year. These target concierge medicine practices of self-insured entities, which include fire departments, municipalities and employers. Very steady progress on this front. We have a robust pipeline that is continuing to fill. We are getting traction on both fronts. We're learning -- our team is learning how to engage these concierge medicine practices, how to establish contracts and then how to drive patients within the practice to EsoGuard testing. And that's generating good traction so far.

Same on the contracting side, particularly with contracting with fire departments and municipalities.

And we look forward to seeing some yield from these efforts in the coming quarters.

Of course, this effort is designed to complement our traditional reimbursement pathways with commercial payers as well as Medicare.

Now let's discuss our recent strategic accomplishments. As I mentioned, we have a Contractor Advisory Committee or CAC meeting that's scheduled for September 4, that notice went out a few weeks ago. And I'm really excited about this and look forward to providing you with a lot greater context a little bit later on this call.

We were excited to see that the Highmark Blue Cross Blue Shield positive coverage policy for EsoGuard that we had announced earlier actually became effective. This is our first positive commercial coverage policy. It covers Upstate New York. And it serves as a precedent, first for commercial payers. We've been able to fight this in our ongoing engagements with other commercial payers, including other regional Blue Cross Blue Shield plans and our engagement with the broader Blue Cross Blue Shield Association. So we've seen significant value in having this one under our belt.

And actually even potentially for Medicare. We've highlighted the fact that we're starting to secure commercial coverage in our conversations with the leadership of the program.

It also validates the strength of our clinical evidence base, including the clinical utility of this test and that the overall health care economic arguments that we're making with other commercial payers. It's not just a theoretical policy, we are already seeing patients in this region that have Highmark that were billing under this policy, and we remain deeply engaged on this front.

Dennis will talk about it a little bit further. Of course, we strengthened our balance sheet with an underwritten public offering in the past quarter that netted $16.1 million in proceeds. This significantly bolsters our balance sheet. We have $30 million in pro forma cash at the end of the second quarter. The key goal for this financing was to extend our runway well into 2026 and past the now concrete milestones that we are facing, particularly as it relates to Medicare and can mitigate risk from external factors.

It also provides us with sufficient resources to ramp up our commercial efforts after we secure a Medicare approval.

Another important development -- strategic development over this past quarter was, ultimately, the publication in the American Journal of Gastroenterology of the pilot study that was performed studying the EsoGuard in a target population of patients without significant recurrent symptoms. This publication, if you recall from our previous call, led to a larger ongoing 5-year study sponsored and funded by an $8 million grant by the National Institute of Health.

And it had 2 key findings: one, that EsoGuard performed extremely well with no degradation in performance in patients without significant GERD symptoms that had a 100% negative predictive value. And the prevalence in this population without symptoms of GERD remained high at 8.4%, approximately the same as in the traditional -- in the traditional target population with standard criteria.

So we really see this as a future opportunity not in the near term, but in the medium to long term, that if the NIH can replicate this result we really do view that the large total addressable market of about $60 million could increase by a substantial amount beyond that if we include ultimately patients without GERD symptoms or at least without exhibiting GERD symptoms are included in guidelines and encourage policies.

So I really want to focus the rest of my comments on the upcoming September 4 CAC meeting and its critical role in our efforts to secure a positive Medicare coverage policy outcome for EsoGuard. As I said, we're really excited about this. We view this as a very positive development. And I want to really give some -- go in a bit of depth on what this means for our pathway.

And in order for us to do so, this process of securing local coverage determinations through the -- through the MolDX program is not straightforward. And I thought it would be helpful to go through in some detail the history of how we got to this point, understand what we expect from this meeting, the motivation for this meeting based on our conversations with leadership at MolDX and then what we expect to happen after this September 4 meeting.

So let's go ahead and get started. Our first engagement with the MolDX program was in 2020. The MolDX program is run by one of the Medicare administrative contractors, Palmetto GBA. And they work with several other of the Medicare administrative contractors, other MACs that are MolDX participants in essentially outsourcing the review of molecular diagnostics for payment and coverage to the MolDX program. That includes Noridian, which is the MAC that our laboratory falls under in Orange County, California.

That first engagement led to several meetings, a submission for payment and coverage. We secured our payment rate very soon thereafter in early 2021 at $1,938. And we submitted our request for a coverage policy based on the availability of non-endoscopic biomarker tests.

At that time, we didn't have significant data. We had no clinical utility data. We had just the original science translational medicine paper. And we went to work to collect more data. But fortunately, our efforts to trigger the LCD process were successful. There was somewhat of a lull from COVID, but ultimately, the process of actually putting forth a proposed draft and ultimately a final LCD started going into fact.

In late 2021, there was an actual first CAC meeting analogous to the CAC meeting that's coming up in September. And that meeting went well. It was an early effort by MolDX to get expert opinion to get a sense as to whether they felt -- whether the experts, the clinical experts, they were gastroenterologists primarily on that group and optologist as to whether the evidence for -- broadly for non-endoscopic biomarker testing supported identifying these patients with esophageal precancer.

And that means it was positive. And it led, we believe, directly to a decision to actually publish a draft LCD in the spring of 2022. That draft LCD wasn't perfect. It had issues with regard to the way the coverage criteria were outlined. It was listed as a noncoverage LCD because there was no data. We didn't have any data, and there were no other tests that fall into this category.

But we saw that as a very important development of that indicated motivation for the group to actually get in the game and start establishing the groundwork for coverage of these kinds of tests by Medicare.

There was sort of the obligatory processes that go with the draft LCD. There was a comment period and a public meeting and written public comments were submitted. Had a 60 LCD and that was successful. About a year later, a final LCD was published. Again, we remained not covered, but the body of it was really written as a coverage LCD. It said we will cover tests like this and it fits the criteria, the criteria match the standard criteria for that the American Gastro -- American College of Gastroenterology has published.

And we were off to the races at that point. We had a clear road map ahead of us as to how to secure coverage based on the data that we collected. By mid last year -- by the summer of last year, a year ago, we had essentially completed much of the clinical research that we needed to provide in order for us to secure our coverage under this coverage determination.

That data consists of 3 types of data, clinical validity, which is the actual intrinsic performance of the test; clinical utility, which is the evidence, published evidence, that the test can be -- is used appropriately to manage patients; and then an validity, which is about how it actually operates in the laboratory, that's less important.

So we requested and had a very successful pre-submission meeting with -- in person with the MolDX leadership and went through our data and presented what we had. And that began a several month period, a very close engagement and discussions with the leadership at MolDX about the process by which we should put our data together, how to collect it, how to actually go ahead and submit for what -- for the process, which is called a reconsideration of the LCD that had been previously published.

That engagement was very positive. It was very collaborative and it culminated at the end of the year in November of us submitting and then ultimately them accepting the formal request for consideration that included all of our data. That was in December of last year.

There was a bit of a waiting game, which we were all waiting for. And we waited through the first half of the year to -- for the MolDX team to review our submission, to review the updates to the data. The request was very straightforward. It was just simply that we now have data. We believe we have sufficient clinical validity, clinical utility and analytical validity data and that we are ready to be granted coverage for this.

We know in retrospect now that there were some delays related to the change in administration and cuts at CMS that delayed the overall activity level at the program. But a few weeks ago, we reengaged with MolDX leadership in person, had discussions just prior to the publication of this meeting notice. And we're excited when the meeting notice was published as an indication that we are well on our way to the final stages of this process.

Let me talk a little bit about the meeting itself. The MolDX process has very sort of concrete -- some portions of which are step by statutory requirement processes by which local coverage determinations can be provided. These coverage determinations can incorporate 2 buckets of information. One is published peer reviewed data as well as expert opinion from these public meetings, expert opinion that is by key opinion leaders in this space.

So that's the purpose of this meeting. The purpose of this meeting is to provide clinical context to the clinical evidence, which we firmly believe is complete to show how the utility of our type of test, the non-endoscopic biomarker testing, enhances the care of patients. And it's important to note that we've been asked this question a bit that this is not an FDA panel. This is an advisory committee. There's no thumbs up/ thumbs down decision at the end of it. It's informative. It's intended to 2-hour meeting intended that we'll have questions in advance that's intended to engage the experts and provide clinical context of the evidence that's already presented -- that we already presented in our package.

And so we have very high expectations for this meeting. We think it will be positive. We are highly confident not just in our clinical evidence, but in the clinical utility of this test. We've performed 40,000 tests so far today in all sorts of settings, whether, as we mentioned, with Hoag, in building broad programs with the health systems, in individual practices, whether they be primary care or gastroenterology. And so we're very confident that, that message will come out by the experts, which we think will be a diverse group of both the gastroenterologists and primary care physicians as well as a mix of academic experts and patients -- and folks in practice.

So what happens after the meeting? The meeting is again designed to, on the record, have the experts at time on the utility of our test and the clinical validity. From that point on, the results of that meeting will be incorporated into what we believe is the work that's already been performed to date.

And the next step in the process will be, as was the case in the initial proposed LCD, there will be a publication of the draft LCD. Again, we have every reason to think based on our discussions that this is -- that we are in the late stages of this, and we are certainly hopeful that a draft LCD will be forthcoming in the early period after the completion of the CAC meeting.

Then after that -- sorry, the draft LCD itself is really, from our point of view, is the milestone itself. Draft LCD means that the group -- that the MolDX Group on behalf of the other contractors has committed has made a determination that the test should be covered. And then there's the mandatory process that we went through the last time. There will be a comment period, a public meeting to get public comments and then a final LCD will be published after incorporating those comments.

We have no reason to expect that there will be any pushback with regard to the comment period. We and others in the industry are supportive, obviously, of this moving forward. So that's what we expect.

Again, just to summarize, we are really looking forward to this, just a few weeks away. Everyone is really excited about it. And based on ongoing conversations with folks within MolDX and elsewhere in our consultants, we have really a strong expectations for a very positive outcome.

So as we really now do believe that Medicare coverage is coming, and as a testament to that, we are already positioning resources within our company to focus on increasing our Medicare population. We've already taken some proactive steps to ensure once coverage is secured, that we'll be able to accelerate our commercialization and capitalize on this market opportunity.

Of course, in parallel, we -- as I said earlier, we are continuing to drive our market access efforts that are in commercial payers. We've had some very encouraging engagement even in the last couple of weeks with regional and larger plans. And we're looking forward to starting to secure some additional positive coverage policies even before the final Medicare process is complete, and we have final coverage there.

And we're also looking forward to starting to see our concierge and contracting pipeline, which, as I said, is robust, start to yield tangible results in the coming quarters.

And so with that, let's pass the call over to Dennis.

Thanks, Lishan, and good morning, everyone. The summary of financial results for the second quarter was reported in our press release that has been distributed.

On the next 3 slides, I'll emphasize a few key financial highlights from the second quarter, which I encourage you to consider these remarks in the context of the full disclosures covered in our quarterly report on Form 10-Q.

With regard to the balance sheet, cash at quarter end June 30 was $31.1 million. During the quarter, we completed a CMTO with net proceeds of $16 million. The quarterly burn rate was $10.3 million, which is slightly better than the average burn rate for the 4 preceding quarters of 10.5%. The burn in the second quarter included $7.2 million from ongoing operations and $3.1 million from the quarterly MSA with PAVmed.

You will recall at the end of last year, we refinanced our convertible debt into a $22 million 5-year note interest only at 12% with a dollar conversion price, which is held by long-term shareholders. The fair value of the convertible notes in the amount of $25.3 million at quarter end is really the only other subsequent change from the previous reported balances at the end of the first quarter.

The fair value decrease of $7.5 million reflects a mark-to-mark quarterly adjustment in parallel with common stock price changes between the periods. The fair value decrease also drives the corresponding income pickup of $6.8 million reflected in other income in the P&L.

The shares outstanding, including unvested RSAs as of last week, are approximately 108.5 million.

The GAAP outstanding shares as of June 30 of 101.8 million are reflected in the slide as well as on the face of the balance sheet in 10-Q.

GAAP shares do not reflect unvested RSA amounts.

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% voting interest.

Lucid has 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 the closing. If all of the preferred shares outstanding were converted to common shares as of today, there would be an additional 49.6 million common shares outstanding.

With regard to the P&L. This slide compares this year's second quarter to last year's second quarter and year-over-year on certain key items. I trust you'll review the information and my comments in light of the cautionary disclosed at the bottom of the slide about supplemental information, particularly non-GAAP information.

With over 2,700 tests for the second quarter, we invoiced only $7 million and recognized revenue of approximately $1.2 million, reflecting a 40% sequential revenue increase and a 19% year-over-year increase.

New investors once again joining us for this call, it's worth repeating that we've communicated in the past quarters about revenue recognition, key determinant how revenue is recognized at this point in our reimbursement journeys, the probability of collection. And therefore, due to the fact that we're in the early stages of the reimbursement process means revenue recognition for the majority of claims submitted to traditional government or private health insurance will be recognized when the claim is actually collected. First, when the patient report is delivered invoiced and submitted for reimbursement.

As you'll see in our 10-Q, this is called variable consideration in the jargon of GAAP's ASC 606 revenue recognition guidelines. And presently, there's insufficient predicted data to reflect revenue from all of our quarterly test volume at the point the test is delivered to the referring physician.

For billable amounts contracted directly with employers or through concierge medicine and that are fixed and determinable will be recognized as revenue when our contracted service is delivered. Generally, that means when the report is delivered to the referring physician.

It's important to note that a pending Medicare approval decision impacts 40% to 50% of our addressable patient population, and therefore, will have a significant impact on our future revenue recognition analysis.

Furthermore, for tests performed on Medicare patients with dates of service within 12 months and a final positive Medicare policy will also get paid within a reasonable time frame after the final policy is issued.

Our non-GAAP loss for the second quarter of $9.9 million is better sequentially by $1.2 million and better than the trailing 4 quarter average of $10.5 million.

The non-GAAP net loss per share of $0.10 is better sequentially as well as better than each of the last 4 quarters with a trailing 4-quarter average loss of $0.16 per share.

On a GAAP EPS basis, the second quarter noncash charges accounted for an income of approximately $0.02 per share, including $0.07 income per share from the change in the fair value of the debt and offsetting P&L charges of $0.05 per share related to the Series B-1 preferred dividend issued on May 6 as well as other noncash charges disclosed in the press release.

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 of $11.1 million are modestly lower than the average of $11.6 million for the last 4 quarters.

Let me close with a few reimbursement highlights for the second quarter as we've done in past calls. In the second quarter, we billed for 2,756 tests, reflecting about $6.9 million in pro forma revenue.

During the second quarter, we recognized revenue of about 17% of that amount or $1.2 million. Of that amount, about 4% was from claims submitted in prior quarters with the longest dated item from about 24 months ago. Of the claims submitted in the second quarter, about 65% have been adjudicated, 35% or pending.

Out of the 65 that have been adjudicated, about 30% resulted in an allowable amount by the insurance company with an average of about $1,786 per test, which obviously is bumping up against the Medicare rate all of it out of network.

Although denied, about 40% fit into 1 of 3 buckets: deemed not medically necessary or require a prior authorization or require medical records. Additionally, 49% were deemed to be noncovered.

With that, operator, let's open it up for questions.

[Operator Instructions] And we now have our first question. This comes from Mark Massaro from BTIG.

Congrats on the quarter. I guess the first one is for Lishan. I thought it was interesting that the Medicare contractors are meeting together.

And so I was just curious, I think it's your MAC is in California, that's Noridian. And then it's sort of -- this appears to be almost like a coordinated group effort. I was just curious if there's anything that you could perhaps opine on about the fact that these contractors are coming together.

And then related to that, you guys are in a series of medical guidelines. And so I was trying to think back on a time where a test was not granted Medicare coverage being included in multiple guidelines across the board.

Do you think I'm interpreting this reasonably well? And just can you share your perspective on perhaps why these Medicare contractors are all coming together?

Great. Yes. Thanks, Mark. Great question. So you're right. This is -- the official term is this is a multi-jurisdictional CAC meeting. And so that means, as you said, that all 4 MolDX participating MACs, including Palmetto, which is where MolDX is as well as Noridian, which is the MAC that our laboratories under are co-hosting this event.

And so yes, I think that's a really positive sign. I think it's an indication that they're coming together at the late stages of this process. Although the MolDX program is run by Palmetto, ultimately for the program to work for the other MolDX-participating MACs, ultimately, they have to provide their own version of the local coverage determination.

It only works if they're all identical. If you look back at the LCD that was previously published, they were [indiscernible] identical between the 3 MACs that we're participating at the time. And so having them all come together is really -- I would view that very positively as that they are coming together at the late stages and looking to hear the expert opinions to sort of have on the public records.

As I mentioned these meetings are an ability officially on the public record for the experts to opine on the clinical utility.

You're right, as it relates to the fact that this test not only has outstanding clinical validity data on its performance; clinical utility, both the published data and just the intrinsic implicit clinical utility based on the guidelines, is clear. We have guidelines from the 2 major GI societies that clearly indicate that endoscopic biomarker testing such as EsoGuard as an acceptable alternative to endoscopy with an equivalent level of evidence.

And recently, the NCCN, which is very powerful in payer circles and market access circles, for the first time, published a section on screening for esophageal precancer that mimics -- that really mimics those guidelines.

So we think really, at the end of the day, that's a pretty fundamental vote of confidence by the expert community on the clinical utilities of test. We expect that at least one of the experts will, in fact, be one of the co-authors with the guidelines and that person will be able to reiterate that in a public setting.

So that is the foundation at the end of the day, the physician experts, the KOLs have published their opinion with regard to quality utility, and we expect that to be reflected during the meeting.

Okay. That's really helpful. And then I think I heard you guys talk about how you're taking steps now, early steps, to begin to target the Medicare population. It might be helpful just to get a refresher on what percentage of your business today is Medicare of that 2,756 volumes, how much of that was Medicare or of the revenue?

And what steps are you taking? Of course, I could guess, but I would just be curious if you could expand on how you're sort of repositioning perhaps some of your salespeople? Or are you looking to make some head count additions?

Yes. Great question. So let's start with the portion of -- let's start with the target population. So as you know, there are 30 million patients at the moment who are recommended for screening under existing guidelines. The estimates are 40% to 50% of those are Medicare population patients.

Now our experience to date hasn't reflected that. And that's because we've made no particular effort to target Medicare patients. In fact, a lot of our activity, as you know, one of the most efficient ways for us to drive volume has been through these health care type events, these check your event, which have been focused on firefighters. And that's been a nice way for us to keep our sales team lean and to keep our OpEx down while still maintaining sufficient volume to drive engagement with commercial payers.

As you know, that sort of the baseline of how we've been trying to operate here. And again might imagine the fire departments tend to be employed, not nonretiree. So sometimes we test a retiree, but for the most part, those are working people and they're not a Medicare population.

So the portion of our testing that has been Medicare over the years has vacillated a bit. I don't believe it's ever been much higher than 20%. Right now, it's running in the kind of 10% to 15% range, again, specifically because we made no effort to target them and the areas we have targeted tend to be a bit on the younger side.

So we do think -- and this is one of the reasons why we're getting geared up here, once we have Medicare coverage, then we do have the ability to get that 10% to 15% number substantially higher just from our own sales execution.

It won't have anything to do with how quickly we can turn over our commercial coverage policies or things that are really dependent on third parties. Ultimately, that will be within our control once we have Medicare coverage. So we -- there's no reason we can't go out and find these patients.

And you asked about the steps we're taking. There are other companies, and I think others even in your coverage universe who've done this and it's a combination of what you just said, which is positioning resources. We already have a pretty strong presence in the states where that have higher concentrations of Medicare patients, Florida, Texas, Arizona and Southern California.

And so, yes, there's some element of reallocated resources. We don't have any plans to increase our head count and increase our OpEx to burn until we actually secure Medicare coverage. And at that point, we'll do so judiciously as we see growth and revenue coming in from that.

There are other ways. So there's lots of opportunities for digital targeting. We've started some of that right now already, where we can work with data partners to identify through heat maps, areas that have high concentrations of Medicare population, physicians that have a combination, for example, of a large Medicare practice as well as those combining that the intersection of that with, let's say, people who have physicians who have a high rate of ordering proton pump inhibitors, which would suggest that they have a group population.

So this is 2025. There's lots of data out there that we can utilize to help our team better target positions where they -- where we'll encounter more Medicare patients.

Okay. Great. And then maybe one last one for me, I'll hop back in the queue after. I think I was getting some investor questions about perhaps some more expectations around timing on -- after the CAC meeting.

I know you talked about how there's a comment period and then you expect a draft LCD after CAC meeting. I'm just curious, I mean, is that perhaps roughly the fall or so where we could get the draft? And then as far as it relates to the final, is that perhaps either late '25, early '26? Or how are you guys thinking about that?

Yes. So one thing just to correct, I'm not sure if you misspoke. The comment period is after the draft, right? So the sequence is the CAC mating is completed. They go back and hopefully finalize things into the form of a draft. The draft gets published. And then there's a 45-day window for a comment period and a public meeting, a comment meeting, just like we did last time, a public meeting for comment. Then they are expected at that point to incorporate those comments. Again, we just have no reason to think there'll be any comments beyond what the CAC meeting will said what we've already said. And then some period of time to get to the final.

Now again, just to reiterate, if there's a draft, they want to cover this. And so we view the steps and the time between a draft and a final is really just a bit of a bureaucratic formality in terms of timing. I mean, look, it's hard to know, that's out of our hands after this meeting is completed. But everything is pointing to the fact, both based on our conversations with the leadership as well as other folks who have a lot of experience in this space, everything is pointing to the fact that the bulk of the work is done. And that this -- the fact that they're convening, as you said, from the very beginning, multiple MACs together gaining the experts to opine would suggest that we're really quite late in the process, and we're certainly hopeful that the time between the CAC meeting and the publication of the draft is relatively short.

How long that will be? I have no -- really would rather not speculate at this point, but we think it will be relatively quick.

And the next question comes from Anthony Vendetti from Maxim Group.

Just as a follow-up to that. So without knowing exactly how long they're going to make a decision after the 45-day comment period, if as we assume right now that the decision is positive, and like you said, there's no reason to assume it wouldn't be based on everything that's to date been published in the common period and so forth. But assuming that happens, it looks like it's bumping up against 1/1/26 and it's not likely.

It sounds like that it would be a decision would be made and a wait decision or a decision to move forward would be as of 1/1/26. Could that happen right after that? What's the likelihood that this gets, once it's decided, implemented across the board?

Yes. So let me just clarify a few things. One, just to be, again, to be 100% clear. The comment period happens after the draft, right? So that's a 45-day window. So there's nothing -- the CAC meet will happen and the next thing we'll hear is a published draft. And so the unknown really is how long that will take.

We believe there's some urgency to get these done. I mean, there is a sort of a cadence to the overall productivity of the MolDX Group with regard to getting LCDs and TAs out and so forth and as the year wraps up. I think there'll be some urgency to get it done.

The time between the draft getting through the comment period and completing the comment period and getting that to a final, I think I've said this before, I think there's probably at least 3 months if you include the comment period to go from a draft ultimately to a final.

But as long as we get the draft reasonably soon, we'll feel quite good about our prospects. And let's just say hope -- let's just say, we certainly hope that we'll get a draft before the end of the year.

Before the end of the year. Okay. And when you were talking about the initial draft before the year, a 45-day comment period and then the final draft. So we're into somewhere in the beginning of '26, correct?

Yes. But I just want to remind you something. So again, the reason why we're focused on the draft as the sort of the actual milestone and we will feel confident that this process has come to a successful outcome is that, if you remember, I don't recall if Dennis mentioned this or not, we have a year of backlog of a year that we can bill upon the issuance of the final LCD from date backwards.

So look, we love the draft to convert to a final as quickly as possible. But all of the things that we need to do to extend the activities, the initiatives that we started and accelerate them, there'll be time to do that. And so once we know the draft is done, we'll start working on that. And we'll be able to submit those claims going back a year once we get a final.

So that's kind of why our focus is really on the time between the CAC meeting and the draft and then we certainly hope that things will move quickly after that. But there'll be pretty of work to do upon completion of the draft to get things geared up and those -- and that activity will ultimately -- we'll get paid for those ultimately.

Right. Okay. So you have the year's worth of claims you can submit, which is helpful, too. But I mean, if we were looking at like -- and maybe it's tough to pin down because we don't know exactly how long it will take to do the draft and how long before the final draft is done, but is it possible that it's somewhere around 4/1/26, where you think, okay, boom, everything is ready to go? Or could it drag on into second half '26 as a possibility?

We certainly would be disappointed if that -- if it dragged on. I don't expect it will -- we don't expect that.

Okay. Okay. And then in terms of your commercial pipeline, maybe talk -- if you could just give us a little more color on that because you...

Talking about commercial payers? Commercial payers, yes.

Yes.

Yes, I think my perspective on that has evolved a little bit. Once we've gotten Highmark -- let's just backtrack a second. So we didn't really have a final package to engage with the commercial payers until the beginning of this year. So this -- all of our activities, we've had engagements with them. We've talked about them. They know our test. We submitted test to them. We've engaged, as Dennis has mentioned before, with their Chief Medical Officers because they're reviewing our claims out of network and so forth.

But the actual sort of meaningful policy, please give us positive medical policy, discussions have really begun earlier this year once we have -- based on our full data package. And with the commercial payers, you actually have to do healthcare economic data that's not required by Medicare, but that's generally part of that process. And so that culminated in our first -- fairly quick turnaround for our first commercial plan in Highmark Blue Cross Blue Shield with that policy becoming effective in May.

Now as I said, that getting the first one through the door has had a very significant effect in our ongoing conversations. And we have a pretty significant pipeline. We -- just about every week, literally every week, myself and the Chief Medical Officer and our Chief Operating Officer are on phone calls with medical directors of plans to push them towards securing policy decisions.

Now those won't happen overnight, sometimes they happen in discrete cycles through the year. But those conversations have really been going well because now we have data and we can engage -- it's helpful that myself and we have 2 physicians on our side on the call talking to physicians on the other side. And the conversations have been very positive.

And so we still think that to get broad coverage and particularly to secure the larger plans, particularly the ones that operate under these laboratory benefit manager constructs where they outsource some of the technical analysis to these third parties, I think those will need to secure those -- will probably need to wait for Medicare. But I really do expect we're going to start filling the pipeline that'd be on Highmark with these regional plans. And even some other national plans that are not that are not on sort of the typical top 5, but that do have broader coverage beyond regions.

Those calls are going well. And it's not surprising that they're going well because the data is pretty overwhelming. I mean, we just got really strong data. As Mark mentioned, the guidelines are there. People are really -- the notion that this test operates very effectively as a triage test, that the first thing that people hear is that you're taking 80% to -- 75% to 80% of people are recommended for testing and saying they don't need an invasive test. And that's the kind of -- those are the kind of clinical utility endpoints that really resonated with payers.

So it's all positive. It takes time to lock these things down. Highmark has broken ground for us, and we expect to continue to have success in that regard.

Yes. No, that's really helpful, Lishan. And that's kind of how I was trying to tie it together as yet Highmark in May of this year and the commercial pipeline is building. And the coming Medicare termination here, it sounds like it should accelerate and some may be waiting for that determination.

So the combination of Highmark coming on and now this determination, which is on the near-term horizon, that should increase probably the conversion of that pipeline into actual contracts, right?

Yes, I think that's...

Yes, Anthony, another example of Medicare triggering some of the reimbursement. The biomarker legislation, which is still working its way through 3 or 4 states now have adopted. And as you read through some of those policies, many of them require or one of the evidence to get covered under is an LCD with Medicare. So that will also have some benefit for us once Medicare is onboard.

But the point I was making at the beginning is that my sense previously that really most of them were way for Medicare has evolved really been on our discussions over the last few months now that we have a full package.

The package is pretty powerful. And I do think there'll be a subset a meaningful subset of payers that especially the regional plans and especially the Blue Cross plans that won't wait for Medicare. Yes, there'll be probably some that do. But the notion that kind of everybody is going to hold off and say, well, that sounds great, but call me when you have Medicare. That just doesn't seem to be -- my thinking is really on that, but doesn't seem to be a universal hurdle. Our hurdle previously was the data package and now we have a data package that we can sink our teeth into these conversations. And all of those with regard to the data, all those conversations have been really positive.

And the next question comes from Mike Matson from Needham & Co.

So just curious what sort of feedback you've received from MolDX on the decision to hold the CAC because earlier this year it didn't sound like that was something that you guys were expecting. So I guess, why are you choosing to do this versus just taking the evidence that -- the data you already have and just going ahead with it.

Yes. I think we have had -- as I said, we've had very good relationship, very good engagement, very open conversations with the MolDX leadership. But as you know, once we submitted , there was a lot of activity prior to the submission of the request reconsideration just to make sure that, that was all buttoned up and consistent with their expectations.

And during the first half of the year, while they were working on it, we didn't really get in their way. I mean, we let them do their work. But after the publication of the notice, we've had quite a bit of ongoing engagement with them. And it's really -- honestly, I feel like it's checking all -- it's an opportunity to kind of check all the boxes to make sure that when everybody convenes together, that every piece of information that can be brought forth to this decision is officially available.

And one of the things that I didn't realize really until this notice came out was how important the CAC meeting is to supplement clinical evidence with key expert opinions beyond just the guidelines and just having them having physicians, including private practice physicians talk about how they incorporate their practice. And how the intrinsic utility of EsoGuard is allowing them to what they otherwise previously were not doing, which is screening these patients who are well identified and under guidelines were recommended or recommended for testing.

So there's a bit of a narrative in a clinical context, it's not -- that is not immediately -- it's not sort of necessarily immediately available in the published literature. But they understand that clinical evidence, they can read the papers. It's more providing clinical contact from specialists who actually are engaged in this day to day. And so having that supplemental information is really just an important part of locking down the arguments that I think are going to see a consensus among the 4 MACs that all of them can sign on to the coverage determination.

Okay. Got it. And then just want to clarify, I think I know the answer to this, but in case any investors are wondering, there's no description or potential change resulting from this CAC meeting around the amount that $1,938 payment amount? I mean, that's a separate thing, correct?

Right, yes. There's no -- this is about coverage. The payment side goes through the CLFS process, so that's locked in.

Okay. And then just given that this is likely going to take 6-plus months longer than you had thought to get the LCD, are you going to do anything to reduce your cash burn rate? Would you consider scaling back the test volume some in the meantime. And I mean, I imagine you've got a backlog, you could still collect some revenue from the tests you've already done.

Yes. I think -- I'm sure Dennis has some thoughts on this. So the answer to that is no. I mean, we don't want to slow down just as we're entering a phase where we expect to start seeing some commercial contracts and policies come into play as well as Medicare.

If anything, we want to be -- look, I'd love to be in a position we're not going to do this where we can free start dialing off some of our resources in anticipation of expanded commercialization. We're not going to do that. We're looking to maintain our burn and perhaps have a decline a little bit by contributions from contracting and concierge medicine.

But this is coming, and so we don't want to be -- we want to be in a position where we're operating on all cylinders as these coverage policies start to come in.

I don't know, Dennis, if you have any other thoughts on that.

Yes, a couple. So beginning the current quarter, the third quarter with $31 million in cash and average burn around $10 million of runway without considering any reduction of the burn from any of the cash pay activities, which we think will be more meaningful in the second half of the year.

So it makes sense to continue along this trajectory. We also have optionality on the capital market side. We're no longer baby shelf limited. We have an ATM that we've barely used. And so with these meaningful events coming up, it makes sense, particularly knowing that anything that we engage on the Medicare side in terms of test volume will ultimately get paid during that 12-month look back.

It just seems to make sense to continue on in this path. And we expect that the realization gap between what we feel and what we collected to continue to shrink. We also have a backlog of committed claims that's around $15 million that our teams are continuing to pursue collection in my comments in terms of analyzing the revenue for the current quarter.

The oldest data item that was part of the revenue base was from 24 months ago. So hopefully, that time lag will shrink as we continue to move forward. But working that backlog will also help us as well.

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

Congrats on the progress. So just on the Hoag partnership, would you provide some more color on the organization in terms of the amount of patients on board? What those patients look like and how you will fit into the workflow, allowing patients to get access to your Eso products?

Yes. Thanks for giving the opportunity to talk about that a little bit further because it's really an exciting model and it's an exciting template. And it's great when you have -- when you're working with a group that has a passionate leader in Dr. Ken Chang. He literally has billboards up and down the highway in Orange County saying how he's going to eliminate esophageal cancer and in Orange County. So it's been great.

This is a true multidisciplinary program across the whole health system. It's being led by Dr. Chang and his GI colleagues. But the plan is to extend throughout the system, including, as I mentioned, there are 200 primary care physicians in addition to the gastroenterologists, and they have a fairly robust concierge medicine practice as well.

So the logistics of that are what you might imagine. We are working through with them on who will do the cell collection, we're going to help with that. We'll help with the training and will help with some of the actual cell collection portions. The outreach, the patient acquisition efforts in terms of determining where to find these patients at risk working within their EHR systems to identify patients at risk, educating the primary care physicians on the risk factors on the guidelines to drive patients within this practice.

So it's a large system. There are a lot of patients, a lot of primary care physicians, but a very comprehensive systematic program that will go out and find these patients and pull them through in a very systematic way. So it's really a template for how we are talking. We're already talking to other local with the news. Hope is quite good at telling their story publicly, and that uses touted the region and we've gotten inquiries from other large systems within the region about their interest in replicating what Hoag is doing. And we even have some activity all the way across the East Coast centers here in the Northeast that are looking to replicate this model. And obviously, they'll all be tailored to their individual health system structures, but the model is the same.

Okay. Great. And then, Dennis, what is the business model like here for you guys? And how should we think about margin contribution?

Yes. So it roughly a $2,000 test using the Medicare rate as kind of the benchmark. The next patient in the door drives a 90% contribution margin. The cost of the collection device is in the $55 range. The cost of consumption of lab supplies, the process to report, you're talking less than $125, so under $200 to process the next patient in the door. You're talking about pretty high margins.

The fixed cost to run the lab is pretty consistent quarter-to-quarter, it's about $1.2 million per quarter.

So as we continue to grow volume that we get paid for at or around the Medicare rate and that 90% contribution margin will continue to drive the actual GAAP and non-GAAP margins that are reflected on our P&L as you absorb those fixed costs.

So volume-dependent pathway to profitability is pretty straightforward. We've got -- for the last several quarters, our OpEx has been pretty flat. We don't see a significant increase in the overall OpEx to drive that process. We think G&A and R&D will be pretty steady as we move forward.

Obviously, we'll make some investments in the sales and marketing area. But even if you were to go full bore with full reimbursement, you're talking about the cost of acquisition for a patient even with a very active kind of outreach program probably less than $400 per patient, you can still drive 70% margins. Obviously, we won't spend that money. And so we have great assurance that we're going to get paid for it. But that's, overall, what the pathway to profitability looks like is sustaining.

And the next question comes from Ed Woo from Ascendiant Capital.

Congratulations on the progress. My question is on capacity of tests. Assuming you do get approval for Medicare, what is the current capacity of tests you could do per quarter? And will you need to significantly invest to ramp it up?

Great question. You're a little bit breaking up there, but the question was around capacity.

Operator, we have issue -- okay. Great. So yes, so we've touched on this before, but it's worth reiterating that the laboratory has plenty of excess capacity, fivefold capacity, even within the physical location with very minimal additional personnel that would be required to increase that capacity.

So that same is true on the manufacturing side. The bulk of the manufacturing right now is happening on our high-volume manufacturer, Coastline, in Tijuana. And that can be scaled in an unlimited way. I mean, it's just adding manufacturing lines along the way. So our -- and also with regard to the cell collection kits, the vials, that we've transferred that to a high-volume manufacturer.

So all 3 of those, none of those will be, in any way, a limiting factor and won't require a significant capital investment to get us to be able to handle upcoming increases of volume.

And as Dennis mentioned, it will really come down to how we -- sort of an incremental fashion of how we dial up the marketing team in parallel with volume growth and revenue growth.

No further questions that came through at this time. I'll now turn the call over back to Dr. Lishan Aklog for closing remarks. Please go ahead, sir.

Great. Thanks, operator, and thank you all for taking the time and for your attention this morning. Thanks for all the great questions.

I really hope you leave today with a better understanding of the LCD process, the role of the CAC meeting, our expectations from the meeting, and to the best of our ability, our expectations with regard to events after the CAC meeting.

And appreciate your patience. There's a lot to talk about there. And we spent quite a bit of time on it, but hopefully, that it was worth getting into the details.

Again, really, this is a key milestone. We really are confident that we are going to get Medicare coverage. not a matter of if, but when. And this CAC meeting is sort of an indicator that we're in the late stages.

So we encourage you to keep in touch, to listen in on the call. Feel free to reach out to Matt, if you'd like to -- if you don't have the information for the CAC meeting. If you'd like to listen to that, I remember it's a public meeting. We expect that it will be useful. The clinical experts will provide very strong support for the clinical utility of the test. They'll talk about the experience to date and tens of thousands of patients based on their own experience. And then also, obviously, as we discussed during the questions, emphasizing that the guidelines recommend and there is a need for this that's been universally accepted within the community.

So with that, really appreciate it. We appreciate your time again. We encourage you to keep abreast with our progress. The news release, our calls like this as well as our website and social media. So thanks again, and everybody, have a great day.

Thank you. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

Good morning. I call the Annual Meeting of the Stockholders of PAVmed Inc. to order. I am Dennis McGrath, our President and Chief Financial Officer. Also present are Dr. Lishan Aklog, our Chairman and Chief Executive Officer; Michael Gordon, our Secretary and General Counsel; Jim Dong of CBIZ CPAs, our auditors; Eric Schwartz of Graubard Miller, our outside counsel; and Alwyn Burton of Continental Stock Transfer & Trust Company, our transfer agent.

Mr. Schwartz will act as Secretary of the meeting. In addition, I hereby appoint Mr. Burton to act as the inspector of the meeting and request him to execute his oath of office. Mr. Schwartz, please attach the oath to the minutes of the meeting.

As you all know, we're holding this meeting via live webcast. To help the meeting run smoothly, Mr. Gordon will now review a couple of housekeeping items before we begin.

First, until the polls are closed towards the end of the meeting, you will have an opportunity to vote through the webcast platform. If you wish to vote, simply click on the voting link and follow the instructions. Voting through the webcast platform will revoke any previously delivered proxy. Second, during the meeting, you will have the opportunity to submit questions to management and our auditors.

You may submit questions for us or our auditors through the Questions Pane in the webcast platform. We will review the questions to management, and if appropriate, we'll respond to them after the meeting. Our auditors will review and respond to the questions directed at them.

Third, those attending the meeting via the live webcast may also access a list of the certified stockholders of the company. The certified stockholder list can be accessed by clicking the link to the right of the text box for submitting questions.

With those matters addressed, we will now proceed to the subsequent portion of the meeting. Mr. Schwartz, please present the affidavit of mailing.

I present the affidavits sworn to by Amanda Ramnauth of Continental Stock Transfer & Trust Company, showing that the notice of Internet availability of proxy materials was mailed on April 30, 2025, to all stockholders of record at the close of business on April 22, 2025.

I order the affidavit to be filed in the minute book immediately following the minutes of this meeting.

I also present the list of stockholders of record as of the close of business on April 22, 2025, as certified by Continental Stock Transfer & Trust Company.

Will the inspector please report on the number of shares eligible to vote, the number present and the presence of a quorum?

As of the close of business on April 22, 2025, there were 17,168,034 shares of common stock outstanding and eligible to vote. In addition, there were 24,685 shares of Series C preferred stock outstanding and eligible to vote, which represents the right to vote the equivalent of an additional 1,694,780 shares of common stock. The majority of the stock is represented at this meeting by proxy or in person, which constitutes a quorum.

Legal notice of the meeting having been given and a quorum being present, the meeting is regularly and lawfully convened and ready to transact the business. The polls are now open.

The first order of business is to elect 2 members of the Board as Class C directors to hold office until the third succeeding annual meeting and until their respective successors are duly elected and qualified. Management nominates Dr. Lishan Aklog and Michael J. Glennon for reelection as Class C directors. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of stockholders who have submitted proxies in accordance with the instructions set forth on their proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a plurality of shares was voted for each of Dr. Aklog and Mr. Glennon, which is sufficient to elect them as directors.

The second order of business is to consider and vote upon a proposal to approve for the purposes of NASDAQ Listing Rule 5635 the issuance of shares of the company's common stock upon exercise of prefunded warrants sold by the company in a private offering in February 2025. The issuance and the proposal are more fully described in the proxy statement. The shares of common stock issued in the private offering are not entitled to vote on this matter. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of the stockholders who have submitted proxies in accordance with the instructions set forth on their proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a majority of the shares present and entitled to vote on this proposal was voted in favor of the proposal, which is sufficient for its approval.

The third order of business is to consider and vote upon a proposal to approve an amendment to our 2014 Long-Term Incentive Plan to increase the total number of shares of common stock available under the 2014 plan by an additional 2,500,000 shares, from 2,412,140 shares to 4,912,140 shares. The amendment and the proposal are more fully described in the proxy statement. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of stockholders who have submitted proxies in accordance with the instructions set forth in the proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a majority of the shares present and entitled to vote on this proposal was voted in favor of the proposal, which is sufficient for its approval.

The fourth order of business is to consider and vote upon a proposal to approve, on an advisory basis, the compensation of our named executive officers as disclosed in the proxy statement. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of stockholders who have submitted proxies in accordance with the instructions set forth on their proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a majority of the shares present and entitled to vote on this proposal was voted in favor of the proposal, which is sufficient for its approval.

The fifth and last order of business is to consider and vote upon a proposal to ratify the appointment of CBIZ CPAs as the company's independent registered certified public accounting firm for the year ending December 31, 2025. Do we have a motion?

So moved.

I second the motion. Management has voted on behalf of the stockholders who have submitted proxies in accordance with the instructions set forth on the proxies. Stockholders who are present may vote on this matter through the webcast platform. Inspector, please announce the preliminary results on this matter.

Based on the preliminary vote tallies, a majority of the shares present and entitled to vote on this proposal was voted in favor of the proposal, which is sufficient for its approval.

The items of business to be considered at this meeting are now completed. The polls are now closed. Based on the preliminary vote tallies, management's nominees have been elected as directors, the appointment of the company's independent registered certified public accounting firm has been ratified and the other proposals have been approved. The exact tallies will be publicly disclosed after the meeting in our public filings with the SEC.

Once the final tallies are completed, I order the report of the inspector to be filed in the minute book immediately following the minutes of this meeting. Thank you all for your attendance at the meeting. As a reminder, you may submit questions for us or our auditors through the Questions Pane in the webcast platform. We will respond to appropriate questions after the meeting. I will now entertain a motion to adjourn the meeting.

So moved.

I second the motion. The meeting is adjourned. Thank you, everyone.