Q4 2021 PAVmed Inc Earnings Call

Greetings. Welcome to the PavMed Inc. Business Update Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the form

Greetings welcome to the pad met ink business update conference call. At this time, all participants are in a listen only mode.

A question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad and please note that this conference is being recorded.

press star zero on your telephone keypad and please note that this conference is

I will now turn the conference over to Adrienne Miller, Vice President of Investor Relations for PavMed. Thank you.

I will now turn the conference over to Adrian Miller, Vice President of Investor Relations for <unk>. Thank you you may begin.

Adrienne Miller: Thank you, Operator. Good afternoon, everyone. This is Adrian Miller, Vice President of Us Relations at PadMed. Thank you for participating in today's business update call. Joining me today on the call are Dr. LaShon Aglog, Chairman and Chief Executive Officer of PadMed, along with Dennis McGrath, President and Chief Financial Officer of PadMed. The press release announcing our business update and financial results is available on PadMed's website. Please take a moment to read the disclaimer about forward-looking statements in the press release.

Thank you operator, good afternoon, everyone. This is Adrian Butler, Vice President best relation to pay but thank you for participating in today's business update call. Joining me today on the call, our doctor or La Shawn Eclogue, Chairman and Chief Executive Officer, Pat Pat met along with Dennis Mcgrath, President and Chief Financial Officer.

The press release announcing our business update and financial results is available on patent website. Please take a moment to read the disclaimer about forward looking statements in the press release.

Adrienne Miller: The business update press release and this conference call both 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.

This update press release and this conference call. Both 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 factor.

Adrienne Miller: factors that could cause actual results to differ are described in a disclaimer and in our filings with the Securities and Exchange Commission.

Factors that could cause actual results to differ are described in the disclaimer and in our filings with the Securities and Exchange Commission for a list and a description of these and other important risks uncertainties that may affect future operations see part one item one a entitled risk factors in <unk> most recent annual.

Adrienne Miller: for a list and a description of these and other important risks, uncertainties.

Adrienne Miller: that may affect future operations. See part one item 1A entitled risk factors in Padme's most recent annual report on form 10K, followed with the Securities and Exchange Commission and any subsequent updates filed in quarterly reports on form 10Q and subsequent form 8K filing.

Report on Form 10-K filed with the Securities and Exchange Commission and any subsequent updates filed in quarterly reports on Form 10-Q , and subsequent form 8-K filings, except as required by law <unk> disclaims any intention or obligation to publicly update or revise any forward looking statements.

Adrienne Miller: except as required by law, Padme disclaims any intention or obligation to publicly update or revise any forward-looking statements to reflect changes in expectations or in events, conditions, or circumstances on which those expectations may be based or that may affect the likelihood that actual results will differ from those contained in the forward-looking statement.

To reflect changes in expectations or in events conditions or circumstances on which those expectations may be based or does that may affect the likelihood that actual results will differ from those contained in the forward looking statements.

With that said I'd like to turn the call over to Alicia nightclub Doug Haughey.

Lican Acclubdraggl: With that said, I'd like to turn the call over to LaShawnau Club, Dr. Acklub.

Lican Acclubdraggl: Thank you, Adrienne, and good afternoon, everyone. Thank you for joining us on this PadMED quarterly update call. As many of you know, we have decided moving forward to hold a separate quarterly call focused entirely on lucid, which was held yesterday. Of course, since lucid remains a dominant part of PadMED's business, we will continue to provide substantive lucid updates during the PadMED call. I am, however, looking forward to having some extra time during these calls to provide a bit more of a global overview of PadMED and provide some more detail on other aspects of PadMED.

Thank you Adrian and good afternoon, everyone. Thank you for joining us on this pattern of quarterly update call. As many of you know we have decided moving forward to hold a separate quarterly call focused entirely looser, which was held yesterday.

Of course since lucid remains a dominant part of <unk> business. We will continue to provide substantive lucid updates during the patent that call I am however, looking forward to having some extra time. During these calls to provide a bit more of a global overview of pad men and provide some more detail on other aspects of patents.

Lican Acclubdraggl: Happy to report that PadMet and its subsidiaries are making excellent progress on all fronts and are laying a foundation for us to continue driving our long-term growth strategy and mission to create a leading diversified medical technology company. Before proceeding, I'd like to thank our long-term shareholders for your ongoing support and commitment. Our combined team has grown to over 100 employees and every day, every member of this team is single and focused on growing the PadMet enterprise while enhancing long-term shareholder values.

Happy to report that <unk> and its subsidiaries are making excellent progress on all fronts and are laying a foundation for us to continue driving our long term growth strategy and mission to create a leading diversified medical technology company.

Before proceeding I would like to thank our long term shareholders for your ongoing support and commitment.

<unk> team.

Has grown to over 100 employees and everyday every member of this team is singularly focused on growing the enterprise, while enhancing long term shareholder value.

Lican Acclubdraggl: I'll start by providing an overview of our business and we'll then pass the baton over to Dennis who will provide our financial update before opening it up to question.

I'll start by providing an overview of our business and we will then pass the baton over to Dennis who will provide our financial update before opening it up to questions.

Lican Acclubdraggl: First, some background on PadMet and its mission. Typically, I would practice this introductory overview with a quote for those of you new to the PadMet story, end quote, or something along those lines. I do, however, think this overview of PadMet today is equally relevant for those of you who have been part of the PadMet family for a long time.

First some background on patent and its mission.

I would preface this introductory overview when they quote for those of you knew that.

The patent story and quote or something along those lines I do however think this overview of Padma today is equally relevant for those of you who have been part of the patent family for a long time.

Lican Acclubdraggl: Patent hasn't just substantially grown in headcount over the past several quarters, it has, in several important ways, fundamentally transformed itself in its business model, driven on large part by the needs of its subsidiaries, lucid and now very.

Haven't been Hasnt, just substantially grown in headcount over the past several quarters.

As in several important ways fundamentally transformed itself and its business model driven in large part by the needs of its subsidiaries lucid inaugurate.

Lican Acclubdraggl: Our board and management have been engaged in a comprehensive strategic overview over the past few quarters heading into and since the Lucid IPO to more clearly define what PadMet is today and lay out a strategic plan for the coming years. So let me spend a bit

Our board and management have been engaged in a comprehensive strategic overview over the past few quarters heading into and since <unk> IPO.

Clearly defined what pattern that is today and lay out a strategic plan for the coming years. So let me spend a bit of time reviewing this with you.

Lican Acclubdraggl: Padment is a diversified commercial stage medical technology company operating in the medical device diagnostics and digital health.

Patent as a diversified commercial stage medical technology company operating in the medical device diagnostics and digital health centers.

Lican Acclubdraggl: It's not as I'm often asked, merely thank you, Baker, for holding

It's not as well.

I'm, often asked nearly an incubator or a holding company.

Lican Acclubdraggl: Our mission is to utilize state of the art technologies and the service of patients by providing innovative and disruptive products and solutions which significantly improve or save lives while enhancing health care quality efficiency and cost effective.

As to utilize state of the art technology them to service their patients by providing innovative and disruptive products and solutions, which significantly improve or save lives, while enhancing healthcare quality efficiency and cost effectiveness.

Lican Acclubdraggl: Our vision is to build a growing and profitable diverse wide medical technology leader across all across the three majors.

Our vision is to build a growing and profitable diversified medical technology leader across all across the three major sectors.

Lican Acclubdraggl: Padmet's business model has evolved significantly in recent quarters to support Lucid and Menveris. Padmet now operates as a central engine, which provides a broad range of shared services to its subsidiaries and business units, as well as to its R&D team.

<unk> business model has evolved significantly in recent quarters to support lucid and members.

<unk> now operates as a central engine, which provides a broad range of shared services to its subsidiaries and business unit as well as to its R&D team.

Lican Acclubdraggl: This allows each of these to be laser focused on the development, commercialization, and clinical evidence for its product or product.

This allows each of these to be laser focused on the development commercialization and clinical evidence for its product or products.

Lican Acclubdraggl: The subsidiaries and business units are managed and financed by PADMED until a subsidiary reaches a commercial growth phase and can raise its own growth capital, as Lucid did this fall. We believe this centralization of shared services provides numerous benefits to facilitate value creation across the enterprise, including economies of scale, risk mitigation through diversification, a lower cost of capital and much greater growth.

The city areas and business units are managing financed by patented until a subsidiary reached the commercial growth phase and could raise its own growth capital and Felicia This fall.

We believe the centralization of shared services provides numerous benefits to facilitate value creation across the enterprise, including economies of scale risk mitigation through diversification and lower cost of capital and much greater growth potential.

Lican Acclubdraggl: The list of centralized services that PadMet provides to broader enterprise is long and has grown in recent years.

The list of centralized services that <unk> provides the broader enterprises longer and has grown in recent years. It includes general administration human resources finance functions.

Lican Acclubdraggl: It includes general administration, human resources, and finance function.

Lican Acclubdraggl: Product design and development, protection of intellectual property, regulatory affairs and quality management also operate at the PadNet level. We recently brought much of our critical clinical research operations in-house, effectively providing more efficient and less costly internal CRO support across the portfolio. We'll soon be bringing our own small to medium volume manufacturing online and are expanding our internal clinical and medical affairs.

Developed product design and development protection of intellectual property regulatory affairs and quality management also operate at the parent level.

We recently brought much of our critical clinical research operations in house, effectively providing more efficient and less costly internal CRO support across the portfolio will soon be bringing our own small to medium volume manufacturing online and are expanding our internal and clinical our internal clinical and medical affairs support.

Lican Acclubdraggl: These efforts are the culmination of what has been a fundamental transition at PADMED from being technology focused to commercially focused.

These efforts are the combination of what has been a fundamental transition of patented from being technology focus to commercially focused.

Lican Acclubdraggl: During our early years, we were heavily outsourced and focused on expanding our portfolio and advancing it through regulatory experience. During the past couple of years, especially in 2021, we've undergone a major transition focused on expanding our internal human systems and physical infrastructure, laying the foundation for commercial success, as well as optimizing and rationalizing our portfolio.

During our early years, we were heavily outsourced and focused on expanding our portfolio and advancing it through regulatory experience. During the past couple of years, especially in 2021, we've undergone a major transition focused on expanding our internal human systems and physical infrastructure laying the foundation for commercial success as well.

Optimizing and rationalizing our portfolio.

Lican Acclubdraggl: The infrastructure expansion has included expanding and strengthening our senior management team, securing our own R&D facility, securing our own R&D manufacturing and laboratory facilities, adding our internal CRO, data, and analytic systems. We believe this transition.

Infrastructure expansion is included expanding and strengthening our senior management team securing our own R&D facility.

Securing our own R&D manufacturing and laboratory facilities.

Our internal CRM data and analytics.

We believe this transition is essentially complete.

Lican Acclubdraggl: The expanded infrastructure is mostly in place, and we are now entirely focused on commercial expansion and execution, reimbursement, and revenue growth in the coming quarters and years.

The expanded infrastructure is mostly in place and we are now entirely focused on commercial expansion and execution reimbursement and revenue growth in the coming quarters and years.

Lican Acclubdraggl: Although we will continue to grow and strengthen our technology and expand our portfolio, we will do so with a greater focus on synergies with our existing commercial and pre-commercial portfolio and opportunities which have the potential to be accretive in the near and medium term.

Although we will continue to grow and strengthen our technology and expand our portfolio. We will do so with a greater focus on synergies with our existing commercial and pre commercial portfolio and opportunities, which have the potential to be accretive in the near and medium term.

Lican Acclubdraggl: The Patent Enterprise today consists of two subsidiaries, Lucid Diagnostics and Veris Health.

Cause hybrid enterprise today consists of two subsidiary lucid diagnostics compare yourself.

Lican Acclubdraggl: and two business units, Carpex and Nexpo, and an R&D pipeline of products at various stages of development towards commercialization. Lucid is a NASDAQ-listed majority-owned subsidiary.

And to business to business units cutbacks in Mexico, and an R&D pipeline of products at various stages of development towards commercialization.

Lucid is a NASDAQ listed majority owned subsidiary of patented and.

Lican Acclubdraggl: PADMED owns approximately 76% of Lucid's estates.

<unk> owns approximately 76% of lucid that standing shares.

Lican Acclubdraggl: Veris is a privately-held majority-owned subsidiary of Padmed, and Padmed owns approximately 81% of Veris' assets.

<unk> is a privately held a majority owned subsidiary of patented and patent owns approximately 81% comparison outstanding shares among.

Lican Acclubdraggl: Among the business units, Carpex is in early commercialization, and Nexlo is targeted for commercial launch in the second half of this year.

Among the business units <unk> and early commercialization and next one is targeted for commercial launch in the second half of this year.

Lican Acclubdraggl: I'll now proceed with an update of the subsidiaries, business units, and R&D pipeline, starting with Lucid, which remains Pavement's dominant.

I'll now proceed with an update of the subsidiaries business leaders that R&D pipeline, starting with lucid, which remains have met dominant business.

Lican Acclubdraggl: My discussion of LUCID will be a distillation of my remarks during yesterday's call focused on commercial and laboratory operations.

My discussion of loose it'll be a distillation of my remarks during yesterday's call focused on commercial and laboratory operations.

Lican Acclubdraggl: I would encourage you to read the transcript or listen to the recording of the LUCID Call for additional details, and feel free to contact Adrienne to help with this if you need it.

I would encourage you to read the transcript or listening to the recording of the looser call for additional details and feel free to contact Adrian to help with this if he likes.

Lican Acclubdraggl: Lucid Diagnostics is a commercial stage cancer prevention diagnostic company focused on the millions of chronic heartburn patients at risk of developing highly lethal stuff.

Mr Diagnostics as a commercial stage cancer prevention diagnostics company focused on the millions of chronic heartburn patients at risk of developing highly lethal esophageal cancer.

Lican Acclubdraggl: We believe our ESA-Guard methylated DNA assay and our ESA-Check cell collection device together constitute the first and only commercially available diagnostic...

Believe our Isa guard methylated DNA assay.

And are you sort of textile collection device together constitute the first and only commercially available diagnostic test capable of serving as a widespread screening told to detect precancer.

Lican Acclubdraggl: capable of serving as a widespread screening tool to detect esophageal pre-cancer and prevent thousands of tragic.

Pre cancer and prevent thousands of them.

Tragic soften youll cancer deaths per year.

Lican Acclubdraggl: We're very encouraged by the progress Lucid is making with e-cigar commercialization. We processed 303 commercial e-cigar tests in the fourth quarter of 2021. That represents an approximately 50% increase sequentially from the third quarter and a nearly 200% increase annually for the fourth quarter of 2020. And this growth has continued nicely into the new year.

We're very encouraged by the progress lucid was making with each of our commercialization. We processed 303 commercially CCAR test in the fourth quarter of 2021 that represents an approximately 50% increase sequentially from the third quarter and nearly 200% increase annually for the fourth quarter of 2020.

This growth has continued nicely into the new year.

Lican Acclubdraggl: Although our commercial focus has been on targeting primary care physicians to send patients to our test centers for using our testing and gastroenterologists and foregast surgeons to set up their own user guard program. We are making encouraging strides across multiple non.

Although our commercial focus has been on targeting primary care physicians to send patients to our test centers for you said very testing and gastro neurologist and forgive surgeons to set up their own Isa guard programs, we are making encouraging strides across multiple non Gi specialty.

Lican Acclubdraggl: We've also made steady progress engaging with large practices, academic medical centers, community hospitals, and integrated.

Also make steady progress engaging with large practices academic medical centers community hospitals and integrated health systems. These sites are embracing the potential for Easter guard to increase engagement with GERD of chronic heartburn patients and create downstream revenue opportunities.

Lican Acclubdraggl: These sites are embracing the potential for e-cigar to increase engagement with GERD or chronic heartburn patients and create downstream revenue opportunities.

Lican Acclubdraggl: The pillar of Lucid's growth strategy is our expanding network of Lucid test centers. The test centers have very modest fixed cost and attractive margins operating almost entirely as marginal variable cost business.

Pillar of lucid is growth strategy as our expanding network of lucid testers.

<unk> had very modest fixed cost and attractive margins operating almost entirely as marginal variable cost businesses. The program has completed its first phase having advanced from a pilot program in Phoenix to original program covering seven seven metropolitan areas in the southwestern Pacific Northwest. We're now launching the second the next stage of the program with accelerated expansion.

Lican Acclubdraggl: The program has completed its first stage, having advanced from a pilot program in Phoenix to a regional program covering seven metropolitan areas in the southwest of Pacific Northwest. We are now launching the next stage of the program with accelerated expansion in nine larger states across the nation. Our experience has validated the test center model as a key driver of the e-cigar testing policy.

The nine largest states across the nation.

Experience has validated the test center model is a key driver of <unk>.

Testing volume.

Lican Acclubdraggl: The pilot of our ESAGAR telemedicine program launched in December with a limited direct to consumer advertising program in Phoenix. It is off to a good start and we are seeing a steady flow of self-referring patients.

The pilot of our Isa Guard Telemedicine program launched in December with a limited direct to consumer advertising program in Phoenix.

After a good start and we are seeing a steady flow of self referring patients.

Lican Acclubdraggl: Lucid significantly expanded its sales infrastructure and operations during the fourth quarter in recent months. The team now consists of 22 sales professionals, including 10.

Lucid significantly expanded its sales infrastructure and operations during the fourth quarter and in recent months. The team now consists of 22 sales professionals, including 10 sales reps. We expect the overall sales team to double in size and the number of sales reps to triple by the end of the calendar year.

Lican Acclubdraggl: We expect the overall sales team to double in size and the number of scales for us to triple by the end of the calendar.

Lican Acclubdraggl: We've also made substantial progress in honing the sales process and sales training. The sales process has become entirely data and analytics driven, utilizing Salesforce and other sophisticated tools. Our sales training program has also become quite robust, combining an intense 5-day educational source and extensive field training.

We've also made substantial progress in honing the cell processing sales training sales process has become entirely data and analytics driven utilizing salesforce and other sophisticated tools. Our sales training program has also become quite robust combining an intense five day educational source and extensive field training.

Lican Acclubdraggl: On the laboratory operation side, last month we announced that Lucid DX Labs, a wholly owned subsidiary of Lucid Diagnostics, had acquired the assets to operate its own new CLIA certified and CAP accredited clinical laboratory in Lake Forest, California. Lucid DX Labs is now performing all ESAGAR testing at this new laboratory.

On the laboratory operation side last month, we announced that lucid Dx lab, a wholly owned subsidiary lucid diagnostics has acquired the assets to operate its own new CLIA certified cap accredited clinical laboratory in Lake Forest, California.

Lucid Dx labs is now performing all that you took are testing this new laboratory.

Lican Acclubdraggl: This is a critical milestone which markedly streamlines and simplifies numerous e-cigar testing processes and provides us with a scalable infrastructure to accommodate long-term growth.

This is a critical milestone, which markedly streamlines and simplifies numerous east regarding testing processes and provides us with a scalable infrastructure to accommodate long term growth.

Lican Acclubdraggl: In conjunction with us taking over the laboratory, we've been able to upgrade Lucid's Revenue Cycle Management Provider and are now in a position to start submitting Medicare claims using the effective $1,938 Medicare payment.

In conjunction with us taking over the laboratory, we have been able to upgrade lucid revenue cycle management provider and are now in a position to start submitting Medicare claims you can be effective Nike 138 dollar Medicare payment rate on.

Lican Acclubdraggl: On the Medicare coverage side, we continue to await a response to our submission to the Moldex program of the Medicare Administrative Contractor, Palmetto GBA, which has been slowed by the pandemic.

On the Medicare coverage side, we continue to await a response to our submission to the <unk> program.

The Medicare administrative contractor Palmetto, GBA, which has been slowed by the pandemic.

We remain encouraged by the October 2021, multi contract Advisory Committee or CAC meeting, which covered Isa Guard, who we believe is a strong indication that a draft.

Lican Acclubdraggl: We remain encouraged by the October 2021 multi-contract advisory committee or CAC meeting, which covered ESAGARD, and we believe with a strong indication that a draft LCD should be formed.

These should be forthcoming on.

Lican Acclubdraggl: On the private pair side, the laboratory has been submitting claims and has been receiving approximately $1,150 per test, representing approximately 60% out of network coverage of the full price submitted.

On the private payer side. The laboratory has been submitting claims and it has been receiving approximately.

$1150 per test, representing approximately 60% out of network coverage of the full price submitted.

Lican Acclubdraggl: We're just reaching the critical threshold of submitted and processed claims in certain locales, which will allow us to have meaningful conversations with select private payers and these locales on in-network payment and coverage. We're collecting the, we're also collecting the critical, the critical, the critical utility data that payers are seeking in these.

We are just reaching the critical threshold is submitted and processed claims in certain locales it'll allow us to have meaningful conversations with select private payers and he's locales an in network payment and coverage. We're collecting the credit were also collected in clinical the critical clinical utility data that payers are seeking in these negotiations.

Lican Acclubdraggl: Now let's move on to Padme's other majority on subsidiary, very

Now, let's move on to patent, but other majority owned subsidiary various health.

Lican Acclubdraggl: Varys was launched 10 months ago as our first foray into the dynamic and rapidly growing digital health factor. Anyone paying attention?

<unk> was launched 10 months ago as our first foray into the dynamic and rapidly growing digital health.

Anyone paying attention to the medical technology.

Lican Acclubdraggl: industry would agree that even if we apply some discount for hype and frothiness we're in the midst of a digital health revolution. This includes the digitalization of increasingly smart quote quote unquote smart and connected medical devices for which the term internet of medical things or IOMT has been.

Industry would agree that even if we apply some discount for heightened frothiness. We are in the midst of a digital health Revolution. This includes the digitalization of increasingly smart quote quote unquote smart.

Medical devices for which the term internet of medical things of the IOM T has been quake.

Lican Acclubdraggl: It also includes sophisticated FDA regulated purely digital technologies referred to as digital therapeutics or BTX as well as modern approaches.

It also includes sophisticated FDA regulated purely digital technologies referred to as digital therapeutics or <unk>.

Well as modern approaches to health information management systems.

Lican Acclubdraggl: Some common features of these trends include an intense focus on data and analytics, including artificial intelligence and machine learning.

Some common features of these trends include an intense focus on data and analytics, including artificial intelligence and machine learning we.

Lican Acclubdraggl: We decided that our foray into this sector should land right at the intersection between traditional medical devices and health information management system.

We decided that our foray into this sector should land right at the intersection between traditional medical devices and health information management systems.

Lican Acclubdraggl: Thus, in May of 2021, Ferris acquired OncoDisk, a digital health company with groundbreaking tools to improve personalized cancer.

Thus in May of 2021 curious acquired Unco disk, a digital health company with groundbreaking tools to improve personalized cancer care.

Lican Acclubdraggl: Verisly developing a remote cancer care platform that integrates an intelligent implantable vascular access port with physiologic sensing, software with symptom reporting and telehealth functions, and advanced data analytics.

We're also developing a remote cancer care platform that integrates and intelligent implantable vascular access port with physiological sensing.

Software was simply reporting and telehealth function and advanced data analytics, today's aggressive outpatient cancer treatments in Q&A, including immunotherapy and chemotherapy. These patients are monitored and at risk of serious avoidable complications.

Lican Acclubdraggl: Today's aggressive outpatient cancer treatments including immunotherapy and chemotherapy leave patients unmonitured and at risk of serious avoidable complications.

Lican Acclubdraggl: The various technology is designed to allow oncologists to detect early signs of common cancer-related complications, provide longitudinal trends of physiologic and clinical data, offer data-driven risk management tools for precision oncology, and incorporate additional prospects for substantial value creation through data monetization and biotherapeutic clinical trials.

The various technology is designed to allow oncologists to detect early signs of common cancer related complications provide longitudinal trends the physiologic and clinical data offer data driven risk management tools for precision oncology and incorporate additional prospects for substantial value creation through data monetization and biotherapeutic clinical trial support.

Lican Acclubdraggl: The technology contains the biologic sensors capable of generating continuous data on key physiologic parameters that are known to predict adverse outcomes in cancer patients undergoing treatment. Wireless communication to the patient's smart phone and it's cloud-based digital healthcare platform will deliver actual real-time data to patients and physicians efficiently and effectively.

The technology contains a biologic sensors capable of generating continuous stayed on key physiologic parameters that are known to predict adverse outcomes in cancer patients undergoing treatment wireless communication to the patient smartphone phone and it's cloud based digital health care platform will deliver actionable real time data to patients and physicians.

<unk> effectively.

Lican Acclubdraggl: The various business model is based on software as a subscription service, which leverages existing reimbursement codes from remote patient monitoring versus advanced.

The various business model is based on software as a subscription service, which leverages existing reimbursement codes for remote patient monitoring.

First is advancing and missed its mission on three fronts.

Lican Acclubdraggl: software, device, and data with the help of a world-class technology advisory board consisting of Silicon Valley luminaries and a distinguished medical advisory board.

Software device data with the help of a world class Technology Advisory Board, consisting of Silicon Valley luminaries and it just kind of distinguish medical advisory Board.

Lican Acclubdraggl: among colleges from leading cancer centers and busy practices. We're also working very closely with Microsoft as a member of its global partner. As a global partner, PadMet and Veris have committed to build its future software and data platforms within the Microsoft ecosystem, specifically on its Azure Health Data Services

Oncologists from leading cancer centers and busy practices. We're also working very closely with Microsoft as a member of its global partner.

As a global partner pattern that <unk> committed to build a future software data platforms within the Microsoft ecosystem, specifically on it to Asia or health data services.

Lican Acclubdraggl: across FHIR, IOMT and DICOM as well as other services and other relevant cutting-edge technology.

Across fire I O T a dichotomy.

As well as other.

Other services and other relevant cutting edge technologies.

Lican Acclubdraggl: Let's cover each of these three areas that Varys is working on. On the software front, we're working with our outstanding development partner LOCA to build three interconnected software elements. First, a patient smartphone app designed to communicate with the intelligent implantable monitoring device and allow the patient to enter and track symptoms and other clinical data.

Let's cover each of these three areas at various is working on on the software front, we're working with our extended our outstanding development partner Loca to build three interconnected software elements first a patient smartphone app designed to communicate with the intelligence implantable monitoring device and allow the patient to enter and tract symptoms and other clinical data.

Lican Acclubdraggl: The second is a cloud-based software platform to which the patient app uploads its data and provides the oncology team with its clinical data to facilitate patient care. The platform is designed to integrate with common electronic health records and to include sophisticated telemedicine features.

The second is a cloud based software platform to which.

The patient have upload that data and provides the oncology team with the clinical data to facilitate patient care.

The platform is designed to integrate with common electronic health records and to include sophisticated telemedicine features.

Lican Acclubdraggl: The third platform is a smartphone app for the team, the oncology team, to engage with the cloud-based platform.

The third platform is a smartphone app for the team colleague team to engage with the cloud based platform remotely.

Lican Acclubdraggl: The software development platform is progressing extremely well with functional alpha prototypes of the software being circulated internally for testing. We're on schedule for an initial commercial launch in the second half of this year. We're also in the final stages of hiring a chief commercial officer for various who will immediately begin laying the groundwork for this launch.

Elsewhere development platform is progressing extremely well with functional alpha prototypes of the software being circulated internally for testing we're on schedule for an initial commercial launch in the second half of this year.

We're also in the final stages of hiring a chief commercial officer for various who immediately begin laying the groundwork for this launch.

Lican Acclubdraggl: We're also making good progress on the smart device site. We successfully completed feasibility animal testing of multiple prototypes of a planable device to measure the physiologic parameters of a first-generation device.

We're also making good progress on the smart device side, we successfully completed feasibility animal testing of multiple prototypes of an implantable device can measure the physiologic parameters.

A first generation device.

Lican Acclubdraggl: We also completed an informative FDA pre-submission meeting, which has allowed us to develop a well-defined device pipeline strategy.

We also completed an.

And informative FDA pre submission meeting, which has allowed us to develop a well defined device pipeline strategy the.

Lican Acclubdraggl: The FDA indicated that the implantable vascular access port with integrated sensors would likely be designated as a new device category, and therefore require someone longer to know the clearance.

The FDA indicated that the implantable vascular access port with integrated sensors would likely be designated as a new device category and therefore require a somewhat longer de novo clearance process.

Lican Acclubdraggl: Based on this feedback, we have split our pipeline development strategy into prefixes.

Based on this feedback we have split our pipeline development strategy into three phases.

Lican Acclubdraggl: what we're referring to internally as Veris Solar combines the software platform with existing wearable and connected medical devices. This will allow us to launch the first commercial product this year and get valuable initial real-world experience with the software platform and engage with early adopters.

With web referred what we're referring to internally as various solar combines our software platform with existing wearable and connected medical devices. This will allow us to launch the first commercial product this year and get valuable initial real world experience with the software platform and engage with early adopters.

Lican Acclubdraggl: What we're referring to is various mercury as our own implantable monitoring device, the device will include all of the first generation biasing features contemplated, but will be a separate device that will be implanted alongside a traditional port. By separating the device from the port, we expect to be able to leverage existing implantable monitors as a predicate and proceed down the FDA's 510K path with a target submission launch in 2023.

What we're referring to as various mercury as our own implantable monitoring device. The device will include all of the first generation biosensors features contemplated but will be a separate device that will be implanted alongside a traditional port.

By separating the device from the court, we expect to be able to leverage existing implantable monitors as a predicate and proceed down the FDA five 10-K path with a target submission and launch in 2023.

Ferrous Mercury Standalone monitor will also be the foundation for future products beyond cancer care, such as heart failure and renal disease.

Lican Acclubdraggl: Varis mercury standalone monitor will also be the foundation for future products beyond cancer care, such as heart failure at the needle.

Lican Acclubdraggl: Finally, Venus will offer the fully integrated Intelligent Vascular Access Board, utilizing many of the same parts as Venus Birkin.

Finally various.

Venus well offer though Paul.

Fully integrated intelligent vascular access port utilizing many of the same parts as being as perfect. We will seek to advance this product through the Fda's de Novo pathway, but also believe that EU regulations for the integrated device will be less onerous and could allow a classic Europe first strategy for the fully integrated intelligent vascular access.

Lican Acclubdraggl: We will seek to advance this product through the FDA's Banova pathway, but also believe that EU regulations for the integrated device will be less onerous and could allow a classic Europe for a strategy for the fully integrated IntelliJovascular Act.

Mark.

Lican Acclubdraggl: Finally, a few words about our data and analytics work. We believe that as with nearly all digital health endeavors, Veris has the opportunity to create substantial value through data monetization. Our Veris Chief Technology Officer, Sunny Webb, has been tasked with building a world-class data team with expertise in data science, data engineering, and analytics, so that we have the infrastructure in place to do the data and analytics work once Veris is deployed and generating data. We hired our first,

Finally, a few words about our data and analytics work, we believe that as with nearly all digital health and beverage mirrors has the opportunity to create substantial value for data monetization.

Our various chief technology officers, sending weapons been tasked with building a world class data team with expertise in data science data engineering analytics. So that we have the infrastructure in place to do the data and analytics, where we.

Once <unk> is deployed and generating data.

We hired our first lead data engineers this month.

Lican Acclubdraggl: Let's now move on to CARPEX. CARPEX is our SDA 510K cleared minimally invasive device to treat carpal tunnel.

Let's now move onto Capex.

<unk> is our FDA 500, 10-K cleared minimally invasive device to treat carpal tunnel syndrome.

Lican Acclubdraggl: Carpex continues with its limited commercial release utilizing early adopter key opinions.

<unk> continues with its limited commercial release utilizing early adopter key opinion leaders, we have a very experienced team that has a commercial team that's leading this effort, including a director of sales of clinical specialists and sales.

Lican Acclubdraggl: We have a very experienced team that is a commercial team that's leading this effort, including a director of sales, a clinical specialist, and a sales representative. The goal of this effort is to advance procedural and product improvements before full commercial launch. Eight new surgeons have been trained, and five more are scheduled for cadaver lab training.

Sales representative the goal of this effort is to advance procedural and product improvements before full commercial launch eight new searches have been trained and five more scheduled for cadaver lab training.

Lican Acclubdraggl: Seven CARPEX procedures were performed in the fourth quarter of 2021, and this effort resulted in improvements to the procedure and led us to hold clinical cases to implement certain product improvements based on the experience of the search. It's the first set of improvements that have been made, including addressing a problem with one of the electrodes that leads to the need to fire the device more times than had been experienced previously. We will restart clinical cases this coming quarter.

Seven comp ex procedures were performed in the fourth quarter of 2021 and this effort resulted in improvements to the procedure and let us hold led us to decide the whole clinical cases to implement certain product improvements based on the experience of the searches.

So first set of improvements have been made including addressing a problem with one of the electrodes that lead to the meet the part of the device more times than had been experienced previously we won't restart clinical cases, this coming quarter second quarter.

Lican Acclubdraggl: Suffolkan product improvements are slated to be completed later this year, at which point we should be in a position to expand commercialization more broadly. Development of a next-generation CARB-X device incorporating integrated ultrasound imaging is also progressing well, with a target FDA submission in 2023. On to the next slide.

Subsequent product improvements are slated to be completed later this year at which point, we should be in a position to expand commercialization more broadly development of a next generation <unk> device incorporating integrated ultrasound imaging is also progressing well with a target of FDA submission in 2023.

On to next slide that shows the platform infusion technology first product incorporates incorporating that as our next slide he set which seeks to revolutionize care by eliminating the need for complex expensive and error prone electronic infusion pumps for most of the 1 million infusions performed in this country each day as.

Lican Acclubdraggl: The first product incorporating it is our next YAD set, which seeks to revolutionize care by eliminating the need for complex, expensive, and air-prone electronic infusion pumps for most of the 1 million infusions performed in this country each day.

Lican Acclubdraggl: As we discussed during our last call, Nexel's progress to FDA submission was delayed due to manufacturing issues related to a molded part. That issue has been corrected through a small redesign, and we are back on track to complete pre-DV and proceed to final pre-submission testing. We are currently on schedule to submit a launch in the

As we discussed during our last call an excellent excellent progress to FDA submission was delayed due to manufacturing issues related to our molded part that issue has been corrected to a small redesigned and we are back on track to complete <unk> and proceed to final.

Submission testing.

Were currently on schedule to submit a launch in the second half of this year, we have hired a VP of sales for next slow is working closely with the rest of the management team and with the Deloitte consulting to lay out a foundation for the commercial launch targeting inpatient outpatient and home infusions.

Lican Acclubdraggl: We have hired a VP of sales for next low who is working closely with the rest of the management team and with the Deloitte consulting to lay out a foundation for the commercial launch targeting inpatient outpatient and home infusion.

Lican Acclubdraggl: Now a few comments on a couple of other key products in our R&D pipeline.

Now a few comments on a couple of other key products in our R&D pipeline.

Lican Acclubdraggl: As we recently announced, Port IO are implantable interosseous vascular access device, once it's first in human clinical study in Columbia, South America with three successful.

As we recently announced our implantable interosseous vascular access devices once its first in human clinical study in Colombia, South America with three successful implants, we believe portio, which does not require a flushing. The first is maintenance free long term vascular access device.

Lican Acclubdraggl: We believe Port IO, which does not require flushing, is the first maintenance-free long-term vascular accident.

Lican Acclubdraggl: Although we remain engaged with FDA regarding its requirements for a U.S. ID study, our success in Columbia has led us to expand port is regulatory strategy we intend to pursue.

Although we remain engaged with FDA regarding its requirements for our U S. IDE study our success in Colombia has led us to expand core diagnose regulatory strategy, we intend to pursue a European study.

Lican Acclubdraggl: to support EU CE Mark Clairs and provide additional human data for US approval.

To support <unk>, CE, Mark clearance and provide additional human data for U S approval.

Lican Acclubdraggl: Our E-Secure device to endoscopically treat esophageal pre-cancer is also progressing well. We completed another successful animal study.

R E secure device to endoscopic Lee you treat esophageal Precancer is also progressing well we completed another successful animal study.

Lican Acclubdraggl: including head-to-head comparisons with Medtron Xperix devices. Feedback from key opinion leaders who participate in the animal studies and our busy esophageal ablators has been universally positive and really very encouraging.

Including head to head comparisons with Medtronic device.

Payback from key opinion leaders, who participated in the animal studies and are busy esophageal ablator has been universally positive and really very encouraging.

Lican Acclubdraggl: So let me close my portion of these remarks of the two business development updates. As we disclosed on yesterday's Lucid call, Padme and Lucid have entered into two agreements.

So let me close my portion of these remarks of a business development update as we disclosed on yesterday's looser Kalb had met and lucid have entered into two agreements this month.

Lican Acclubdraggl: First, Padmet and Lucid decided to enter into a formal intercompany license agreement, whereby Lucid will have exclusive worldwide rights to commercialize E-Secure, which is tightly synergistic, of course, with Ipsiguard and EtherCheck products.

First patented and Lisa decided to enter into a formal intercompany license agreement whereby lucid will have exclusive worldwide rights to commercialize <unk> secure.

We took it just took a course with Easter guard and Easter check products.

Lican Acclubdraggl: And second, PADMED and LUCID entered into an agreement for LUCID to acquire the capnostics asset, including esophic cap, under the same terms under which PADMED acquired capnostics in the fall. Esophic cap is a non-endoscopic sponge-based esophageal cell collection device, which has been used in pre-commercial clinical research of esophageal pre-cancer biomarkers at major academic medical centers, including Mayo Clinic and Johnson & Johnson.

And second patent and lucid entered into an agreement for <unk> to acquire the Caf gnostics athletes, including yourself a cap under the same terms under which had been acquired kept asking from the fall south of cap is it non endoscopic sponge based esophageal cell collection device, which has been used in pre commercial clinical researcher of esophageal cancer Biomarkers.

Academic medical centers, including Mayo clinic, and Johns Hopkins and finally, we continue to receive a steady inflow of business development opportunities and carefully carefully assess each in terms of synergy with our current portfolio has the potential to be accretive in the near and medium terms with.

Lican Acclubdraggl: And finally, we continue to receive a study of flow of business development opportunities and carefully, carefully assess each in terms of synergy with our current portfolio and the potential to be a creative in the near and medium.

Speaker Change: With that, I will hand the reins on to Dennis to provide an update on our financial before proceeding to

With that I will hand, the greens onto Dennis to provide an update on our financials before.

Before proceeding to questions.

Thanks, Lisa and good afternoon, everyone. Our preliminary in summary financial results for the fourth quarter and the full year ended December 31, 2021 were reported in our press release that was published earlier this afternoon.

Ren: Thank you, Lee Shannon. Good afternoon, everyone. Our preliminary and summary financial results for the fourth quarter and the full year end at December 31, 2021 were reported in our press release that was published earlier this afternoon. We plan to file our annual report for Pavman on 4 and 10-K with the SCC in the coming days. At that time, it would be available at scc.gov and on our website, our PavMed website.

We plan to file our annual report for patent on Form 10-K , what you have see in the coming days and at that time, he will be available at <unk> dot Gov and on our website.

<unk> web site.

Ren: As we outlined during Lucid's earnings call, as a rule, ESO Guard tests performed are recognized as gap revenue when cash is actually collected by the company.

As we outlined during loosens earnings call as a rule <unk> Gard tests performed are recognized.

As GAAP revenue when cash is actually collected by the company.

Ren: As previously mentioned, this will more than likely be true during the transition period of negotiating third-party

As previously mentioned.

This will more than likely be true during the transition period is negotiating third party.

Yeah.

Ren: third-party private payer reimbursement contracts and related coverage.

A third a third party private payer reimbursement contracts and related coverage.

Ren: As reported to you last quarter for compliance purposes during this reimbursement transition period, we negotiated a short-term month-to-month

Reported to you last quarter for compliance purposes. During this reimbursement transition period, we negotiated a short term month to month.

Ren: fixed payment arrangement with the contract laboratory that was processing the ESAGARD assay and was performing the insurance company billing and collections function.

<unk> payment arrangement with contract laboratory that was processing Isa Guard assay and was performing the insurance company billing and collections function. This commercial agreement became effective on August one 2021 and terminated concurrently with the opening of our own laboratory at the end of February 2022.

Ren: This commercial agreement became effective on August 1st, 2021 and terminated concurrently with the opening of our own laboratory at the end of February , 2022. We recognized $500,000 of revenue as part of this ESA Guard commercial agreement with ResearchDX.

We recognized $500000 of revenue as part of this Easter Guard commercial agreement with research Dx.

Ren: Now that we are operating our own laboratory following the February 2022 agreement, we're lucid DX labs and purchased certain assets from research DX.

Now that we are operating our own laboratory. Following the February 2022 agreement, where lucid Dx Labs, Inc. Purchased certain assets from research Dx, Inc. Loose.

Ren: Lucid will have the ability to directly invoice CMS as well as private payers.

Lucy will have the ability to directly invoice CNS as well as private payors future revenues will be recognized based upon actual collections until such time that coverage policies are in place with CMS and payment contracts with private payers.

Ren: Future revenues will be recognized based upon actual collections until such time that coverage policies are in place with CMS and payment contracts with private payers.

Ren: This obviously can result in the timing of revenues recognized versus the time they are submitted for third-party reimbursement until these future conditions are met.

This obviously can result in the timing of revenues recognized first the time. They are submitted for third party reimbursement until these future conditions are met.

Ren: Consequently, it is our expectation that we will begin to recognize gap revenue related to our Lucid DX Lab in the second quarter of this year.

Consequently, it is our expectation that we will begin to recognize GAAP revenue related to our lucid Dx lab in the second quarter of this year.

Ren: And it will be adjusted based upon actual collections received for tests submitted for reimbursement by the laboratory.

And it will be adjusted based upon actual collections received for tests submitted for reimbursement by the laboratory.

Ren: The number of e-cigar tests performed and submitted for payment are provided in the press release and was discussed earlier by Leisha.

The number of visa Guard test performance submitted for payment are provided in the press release and as discussed earlier by Alicia.

Ren: Obviously, we're in the early stages of our commercial launch, particularly with our test centers.

Obviously, we're in the early stages of a commercial launch, particularly with our test centers will continue to evolve our reporting metrics as various sales and marketing efforts further influence adoption, particularly with the ramp up of our lucid test centers and our Isa Guard telemedicine program in cooperation with up script.

Ren: continue to evolve our reporting metrics as various sales and marketing efforts further influence adoption, particularly with the ramp up of our lucid test centers and our ESA Guard telemedicine program in cooperation with UPScript.

Ren: Presently, there are now four banking analysts who have issued coverage on PATHMED and others are doing their diligence as well. The 2022 revenue estimates provided by the analysts are achievable. The quantity and collections are highly dependent upon the evolving reimbursement landscape.

Presently there are now four banking analysts who have issued coverage on <unk>.

And others are doing their diligence as well the 2022 revenue estimates provided by the analysts.

Are achievable.

Quantity and collections are highly dependent upon the evolving reimbursement landscape.

Ren: If you're likely aware from our last corporate update, the local coverage decision or LCD for CMS-related reimbursement is still not been published, but as Lee-Shon previously described, we have reason to expect action on this soon.

As youre likely aware from our last corporate update the local coverage decision or LCD for CNS related reimbursement has still not been published but as we've shown previously described we have reason to expect action on this soon.

Ren: So provide some summary comments on PADMED and then follow with similar comments of elusive diagnostics as a standalone company.

So I'll provide some summary comments on some pad met and then follow with similar comments on lucid diagnostics as a Standalone company.

Ren: PAVMED remains the controlling shareholder holding approximately 75% of the voting interest of lucid. Lucid's operating results will continue to be consolidated into PAVMED's financial results.

<unk> remains the controlling shareholders holding approximately 75% of the voting interest of lucid loses operating results will continue to be consolidated into <unk> financial results.

Ren: The statement of operations will reflect a line item to show the non-controlling interests or of profits or losses to non-PAVMED shareholders of its majority owned subsidiaries.

<unk> of operations will reflect a line item to show the Noncontrolling interest.

Or of profits or losses to non <unk> shareholders.

Of its majority owned subsidiaries as well there'll be a corresponding offset in the equity section as balance sheet for amounts attributable to the minority interest equity.

Ren: As well, there will be a corresponding offset in the equity section balance sheet for amounts attributable to the minority interest equity.

Ren: The methodology is unchanged as a result of the IPL will continue to be applicable as long as Padman remains the controlling shareholder.

The methodology is unchanged as a result of the IPO will continue to be applicable as long as Padma remains the controlling shareholder.

Ren: As mentioned, the revenue recognized to $500,000 relates to ESA Guard for the year end of December 2021. Despite the negative gross profit for last year, which reflects the initial test center startup related costs, at very moderate volumes, incremental gross margins can be around 90% and contribution margins can be 60 to 65%.

As mentioned revenue recognized a 500000 relates to Isa guard for the year ended December two.

2021.

Despite the negative gross profit for last year, which reflects the initial test centre startup related cost at very moderate volumes incremental gross margins can be around 90%.

And contribution margins can be 60% to 65%.

Ren: Regarding operating expenses, during yesterday's Lucid Earnings Call, we discussed the three components that make up Lucid's operating expenses, naming sales and marketing, general administrative, and research and development.

Regarding the operating expenses during yesterday's lucid earnings call. We discussed the three components that make up lucid operating expenses, mainly sales and marketing general and administrative and research and development.

Ren: Since lucid operating expenses represent approximately 50% of PABMED's consolidated expense for the full year, respectively, we'll summarize the operating expenses. For the year end of December 31st, 2021, PABMED's consolidated operating expenses were 54.3 million compared to 23.4 million during the same period in 2020.

Lucid operating expenses represent approximately 50% of Pat minutes consolidated expense for the full year, respectively summarize the operating expenses for the year ended December 31 two.

2021 have minutes consolidated operating expenses were $54 3 million compared to $23 4 million. During the same period in 2020 with 78% of the net increase attributable to compensation related to head count increases stock based compensation from RSA grants to loosen and Padma and employee.

Ren: with 78% of the net increase attributable to compensation related to headcount increases, stock-based compensation from RSA grants to Lucid and Pavman employees, consulting services and development costs, particularly in the clinical trial activities and outside professional services.

<unk> consulting services and development costs, particularly in the clinical trial activities and outside professional services.

Ren: There is a table in the PadMed Press release published today and the Lucid Press release yesterday that adjusts each of these three components of operating expenses for the embedded non-cash stock-based compensation expense.

There is a table in the pad that press release published today in the elusive press release yesterday that adjust each of these three components of operating expenses for the embedded noncash stock based compensation expense.

Ren: Without the SBC operating expenses for PadMED and Lucid Fan alone, we're 39.3 million and 17.7 million for 2021 and 2020 respect.

Without the SBC operating expenses for <unk> and lucid standalone.

$39 3 million and $17 $7 million for 2021 and 2020, respectively.

Ren: PapMed reported the fourth quarter 2021 and the full year 2021, that loss attributed to common stockholders of $17.3 million and $50.6 million or a loss of $0.20 and $0.65 per common share for each of those periods. And that compares to a loss of $8 million, $8.8 million or $0.14 and $34.6 million or $0.73 in the same periods in 2020.

Pat Med reported fourth quarter 2021, and the full year 2021, net loss attributable to common stockholders of $17 3 million and $50 6 million or a loss of 20.

65 cents per common share for each of those periods and that compares to a loss of 8 million $8 8 million or 14 cents.

And $34 6 million or <unk> 73 in the same periods in 2020.

Ren: The press release also provides a table entitled non-GAAP , which highlights these amounts along with interest expense and other non-cash charges, namely depreciation, stock-based compensation, and financing-related costs to enable better understanding of the company's financial performance.

The press release also provides a table entitled non-GAAP , which highlights these amounts along with interest expense and other noncash charges, namely depreciation stock based compensation and financing related cost to enable better understanding of the company's financial performance.

Ren: You will notice from the table that after adjusting the fourth quarter and the full year of 2021, the gap loss by approximately 4.6 million and 17.4 million respectively for non-cast charges, the company reported non-gap adjusted loss for the fourth quarter and the full year 2021.

You'll notice from the table that after adjusting the fourth quarter and the full year of 2021, the GAAP loss.

Our GAAP loss by approximately $4 6 million and $17 4 million, respectively for non cash charges. The company reported non-GAAP adjusted loss for the fourth quarter and full year 2021 of.

Ren: 12.7 million and 33.2 million respectively, or 15 cents and 43 cents per common share.

$12 7 million and $33 2 million respectively.

15th and 43 cents per common share.

<unk> has consolidated.

Ren: cash of $77.3 million as of December 31, 2021, which compares to $17.3 million at the same time in 2020 and is debt-free.

Cash of $77 3 million as of December 31st 2021, which compares to $17 3 million at the same time in 2020 and is debt free.

Speaker Change: Thank you for your attention, operator. We can now open the call up for questions.

Thank you for your attention operator, we can now open.

The call up for questions.

Thank you at this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that Youre line is in the queue. You May press star two if you would like to remove your question from the queue and for participants using speaker equipment and may be necessary to pick up your handset before pressing any sarkies.

Speaker Change: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star 2.

Speaker Change: Since it's been using speaker equipment, it may be necessary to pick up your handset before pressing any star keys.

One moment, please while we poll for questions.

Our first question comes from the line of Ross Osborne with Cantor Fitzgerald You May proceed with your question.

Speaker Change: Our first question comes from the line of Ross Osborne with Canter Fitzgerald. You may proceed with your question.

Goodbye everyone.

Fitzgerald: So maybe we'll start off on the macro level with COVID. Did you guys see any different trends with regards to CARPEX versus the ESA product that we discussed last night? And if so, how did those play out over the quarter and also year-to-date?

Maybe we'd start off on the macro level.

Did you guys see any different trends with regards to the car back person that you said product that we discussed last night.

Now how does this play out every quarter and also year to date.

Fitzgerald: No. CARPEX, COVID has had no impact on CARPEX at all. The pace and cadence of CARPEX, as I described, is really based on getting

Carpets that Covid has had and has had no impact on opex at all.

What were the pace and cadence of Capex as I described is really based on on getting surgeons trained and performing cadaver cadaver labs, and having them do clinical cases to help US a limited number of clinical cases to help us with our procedural product development work, which is which was.

Fitzgerald: surgeons trained and performing cadaver labs and having them do clinical cases to help us, a limited number of clinical cases to help us.

Fitzgerald: with our procedural and product development work, which has paid off. And as I mentioned, we are getting ready to launch clinical cases again after making the improvements that came out of that activity. So COVID has had no impact on that.

Paid off because I mentioned, we are we are.

Getting ready to launch court on cases again after making the improvements that came out of that that activity. So COVID-19 has had no impact on that at all.

Speaker Change: Okay, great. And then maybe could you just lay out how the company defined full commercial launch relative to the limited funds right now? And if you're able to quantify that, that'd be great.

Okay great.

And then maybe could you just lay out how the company defined full commercial launch relative to eliminate long right now.

If you're able to quantify that that'd be great.

Speaker Change: Sure. Yeah. I mean, let me just redefine the limited launch. The limited launch, we'd like to get up to 15 to 20 surgeons who are trained, who are doing cases and are fully engaged with providing feedback on the procedural development.

Sure Yeah, I mean, yeah, let me just redefined the limited launch the limited launch we'd like to get up to 15 to 20 Surgeons, who were trained to we're doing cases.

<unk> fully engage with providing feedback on the procedural development and product improvement side of things.

Speaker Change: and product improvement side of things, but full commercial launch will be a full commercial launch. We'll expand our commercial team beyond adding sales reps.

But well commercial launch will be a full commercial launch we will expand our commercial team.

Adding sales reps.

Speaker Change: various locations and also using, as is commonly the case in the orthopedic space, using distributors to target head searches across the country.

Various locations, but also using as is commonly the case in the orthopedic space using distributors to target, hence searches across the country.

Okay. Thank you for the additional color and then maybe just to your point Yale.

Speaker Change: Okay. Thank you for that additional color. And then maybe switching to Port EO, could you walk us through the different use cases between the ER inpatient and out and at home? And if there are any different dynamics there that we should be thinking about, could you maybe highlight this as well? How are you referring to the next flow or to Port EO? I just want to make sure.

Could you walk us through the different use cases between the E R inpatient and out and that and if there are any different dynamic there that we should be thinking about could.

Could you maybe highlight as well how are you referring to next slower to port IRA I, just want to make sure because.

Speaker Change: Okay, for Port IO, Port IO is really designed to be a long-term vascular access device.

Okay, Yeah reported what I was really designed to be a long term vascular access device that can provide patients who require such devices with access over over weeks and months for various things antibiotics.

Speaker Change: that can provide patients who require such devices with access over weeks and months for various things, antibiotics and other medications that have to be delivered over time. So, it's really all…

Other medications that have to be delivered over time.

So it's really all.

Speaker Change: really on an outpatient basis, not.

Really on an outpatient basis, not because we don't expect this to be like.

Speaker Change: We don't expect this to be of much use on an inpatient basis where access is really limited to days or a week or two. The target populations include patients who have

Well, it's an inpatient basis, where access is really limited to days or a week or two.

Target populations include patients, who have poor poor veins as a result of repeated access or other hardware and there being a system like pacemaker leads and long term catheters.

Speaker Change: poor veins as a result of repeated access or other.

Speaker Change: hardware in their venous system like pacemaker leads and long-term catheters who need long-term access but have poor veins. And this is a really a perfect solution for those folks.

Two new long term access, but how important it is and this is a really a perfect solution for the for those folks the other target population or renal failure patients. These are patients who needs to protect them, even if they have a they need to protect their ratings for future dialysis.

Speaker Change: The other target population are renal failure patients. These are patients who need to protect their veins, even if they have any, they need to protect their veins for future dialysis.

Speaker Change: And so the option, and these are also patients who are frequently in the hospital, frequently require procedures, and having a long-term access device that doesn't require any maintenance of flushing to utilize to allow the clinicians to protect their veins is very, very attractive. So, those are really the two primary target populations, and these would be implanted for long-term use over a period of weeks.

The option and these are also patients who are frequently in the hospital frequently require procedures and having a long term access device that doesn't require any maintenance or flushing to utilize to allows us allows the clinicians to protect their bank is very very attractive. So that those are really the two primary.

Target populations and these would be compliant for long term use.

Over a period of weeks and months.

Speaker Change: Okay, got it. And then last one for me, could you help us think about OPEC spend this year, specifically for PASMET? I realize Lucid will still take the majority of it, but just any clarity there would be helpful as for thinking about the rest of the year.

Okay got it and then last one for me could you help us think about Opex spend this year.

For pad that I realized.

So I'll take the majority of it by just any out any clarity there would be helpful for thinking.

Thinking about the rest of the year.

Hi, Dan.

Speaker Change: I'm sorry, I was on the as on a consolidated basis. We get through the year. The areas where op ex will continue to increase on the clinical trial side, which we categorize in our engineering and R. and D. Areas and as the as. Lucid.

I'm, sorry, I was on the as on a consolidate basically we go through the year.

Areas, where opex will continue to increase our on the clinical trial side, which we categorize in our engineering and R&D areas.

And as the as a lucid.

Speaker Change: landscape for reimbursement continues to evolve, you will see some increased spend on patient adoption, patient education through a variety of means, including continuing to expand, which is now limited only to a pilot program in Phoenix, our direct patient advertising campaign. And they are pretty variable expenses.

The inscape for reimbursement continues to evolve.

You will see some increased spend on.

Ah patient adoption patient education.

Through a variety of means including continuing to expand which is now limited only to a pilot program in Phoenix, our direct to patient advertising campaign.

And they are.

Pretty variable expenses and will increase significantly.

Speaker Change: and will increase significantly once reimbursement's fully in place.

Once reimbursement is fully in place.

Speaker Change: So, what you've seen in the fourth quarter, X, the stock based compensation, so the non cash charges will continue to steadily increase over the over the course of the year. Got it. Thank you. Congrats.

So what you've seen in the fourth quarter ex the the the stock based compensation that oil. So the noncash charges will continue to steadily increase over the over the course of the year.

Got it. Thank you congrats on the progress.

Thanks, Matt.

Thanks Ross.

Speaker Change: Our next question comes from the line of Frank Takenin with Lake Street Capital Markets. You may proceed with your question.

Our next question comes from the line of Frank <unk> with Lake Street Capital Markets. You May proceed with your question.

Good afternoon.

Hi, Brian .

For taking my questions guys. A couple for me I wanted to start with one a little bit more specific to the.

Frank: I wanted to start with one a little bit more specific to the LucidDX lab now. Can you talk about the transition process? I understand that happened at the end of February . Just curious if there's any disruption from when the contract dollars were coming in from the previous owner of the lab to when you may start to see cash flow.

The lucid Dx lab now can you talk about the transition process I understand that happened at the end of February just curious if theres any disruption from when the contract dollars were coming in from the previous owner of the lab to when you may start to see cash come in the door on a cash collection basis for test.

Frank: the door on a cash-collection basis for TouchStars? Yeah. I'll let – yeah, thanks, Frank. I'll let Dennis answer that question, but just at a high level, the way we designed this transaction and this process was to be seamless as it relates to the actual operation of the laboratory and the processing of ESAGuard tests.

Okay. Thanks, Frank I'll, let Dennis answer that question, but just just at a high level. The way. We designed this transaction and this process was to be seamless as it relates to the actual operation of the laboratory in the processing of visa card tasks. So we were able to get the cap accreditation and true.

Frank: So we were able to get the CAP accreditation and transfer the laboratory functions to the new facility without really missing a beat. And with now all of the testing performed had the

We're going to transfer the laboratory functions to the new facility without really missing a beat and with now all of the testing performed at the.

Frank: as a new laboratory. As it relates to filing claims and processing claims, I did mention that we are now able to control that process completely internally because we control the billing and collections.

Anthony Laboratory as it relates to.

Finally in claims and processing claims I did mention that we are now able to control that process completely internally because where we.

We control the billing and collections.

Frank: and we've been able to upgrade our revenue cycle manager provider as well. So, as it relates to the flow, how the transition is going on.

And we've been able to upgrade our.

Revenue cycle management provider as well so as it relates to the the float how the transition is going on.

Frank: With regard to receive fellow dentists take over that part of the question

With regard to receive pharma Dennis take over that part of the question.

Frank: So, Frank, through the, through the February 25th.

So frank through the through the February 25th.

Frank: transaction. We had continued the commercial agreement and from our comments you know that it was about $100,000 a month. So the month of March may be a little bit of a transition but through the second quarter we're expecting to recognize our own gap revenue. It will be not as systematic. We will be filing claims with CMS and with with private payers.

Transaction.

We had continued the commercial agreement and from our comments you know that it was about 100000 a month. So the month of March may be a little bit of a transition but through the second quarter, we're expecting to recognize her own GAAP revenue it will be not as systematic.

We will.

We'll be filing claims with CMS and with with private Payors.

Frank: Based upon the experience that we have seen at the research DX level the private payer side are paying at out at network rates

Upon the experience that we have seen at the research Dx level.

The private payer side are paying at out of network rates, which is encouraging in that even though the dollar mountain, which Lisa reported was a little over $1100 11 50 to be exact.

Frank: Which is encouraging in that even though the dollar amount, which we reported was a little over $1,100, $1,150 to be exact.

Frank: They're benchmarking it off the list price that CMS established at just under $2,000.

The they're benchmarking it off the list price that CMS established at just under $2000. We will also be billing CMS, we have not.

Frank: We will also be billing CMS. We have not.

Frank: received any payments under the CMS as the LCD is still in pending format. We will be able to collect on past CMS

Received any payments under the CMS as the LCD is still.

In in pending format.

We will be able to collect on.

Past CMS.

Frank: or Medicare patients. Once that LCD is in place, technically we should be able to now, but they aren't dispensed until we believe that LCD gets published. So the collection side will be a little bit more variable than the systematic revenue we've recognized since last August .

Our Medicare patients once that LCD is in place technically we should be able to now but they they arent suspense until we believe that LCD gets published.

The collection side will be a little bit more variable than the systematic revenue. We've recognized since last August simply because the amount we will bill will be the $19 38, the amount we collect.

Frank: simply because the amount we will bill will be the 1938, the amount we collect until such time that those payer contracts are in place will be somewhat variable. And the timing of such.

Till such time that those payer contracts are in place we will be <unk>.

Somewhat variable.

And the timing of such we will not be able to record revenue when we invoice at least for the early part of this transition period that transition period.

Frank: we will not be able to record revenue when we invoice, at least for the early part of this transition period. That transition period will last until such time.

Until such time.

Frank: that it becomes highly probable on the GAAP rules, that's the term they use, that the amount you invoice will be the amount you collect. And that will take some experience to establish that standard.

It becomes highly probable.

GAAP rules, that's the term they use that the amount you invoice will be the amount you collect and that will take some experience to establish that that standard that's probably a 12 month to 18 month period of time in total that is not unique to us many of the other companies with new codes like this new reimburse.

Frank: It's probably a 12-month to 18-month period of time in total. That is not unique to us, many of the other companies with new codes like this.

Frank: a new reimbursement landscape have gone through the same exact.

Landscape have gone through the same exact.

Frank: recognition period. So it's a really short window in terms of the transition as Lee-Shun.

Recognition period so.

It's a really short window in terms of the transition is as least Shawn.

Indicated and a lot of that was bolstered by the fact that the agreement included in negotiated management services agreement, where much of the personnel that were performing the activities. Prior are performing the activities for us now and that management services agreement.

Is in place for up to 36 months, but at our discretion. We can continue to add our own staff and replacement of staff from research Dx so that over time, it'll be entirely our own personnel and drive utilization and efficiency of our costs.

Frank: but at our discretion, we can continue to add our own staff in replacement of staff from Research DX so that over time, it'll be entirely our own personnel and drive utilization and efficiency of our costs.

Speaker Change: Got it, okay, very helpful. Wanted to shift over to Veris and ask one a little bit more specifically to that platform. We just hope we.

Got it okay very helpful. I wanted to shift over to various and ask one a little bit more specifically to that platform. I was just hoping you guys could just.

Just simplify it a little bit more for us on the software platform side I was under the impression the port in the platform are.

Married in a way that they run best together, but it feels like the platform is going to launch first and then the port is going to come in afterwards, just help us understand the business model and if we can't see any revenue recognition in that call. It 612, 18 months' time framework for waiting for the port until we start to see that.

Yes.

So you got that correct. So what we're what we've done is we've basically taken this pipeline and taking the long term vision of having the port fully integrated with all the sensors.

Right now it looks like it's going to be a de novo. Although we think we can get them into Europe earlier.

<unk>.

But doing it in steps along the way and sort of the initial launch of the software platform with Wearables and.

Connected devices connected blood pressure cuffs, codexis that probes connected scales, and so forth, which ultimately you're going to have to be part of the overall care platform for both care classroom anyway will allow us to launch the <unk>.

Speaker Change: scales and so forth, which ultimately you're going to have to be part of the overall care platform, the remote care platform anyway, will allow us to launch the commercial

Commercial.

Speaker Change: launch commercially and within the same business model using remote patient monitoring in a similar way that the final version of this will have contemplated. So yeah, we decided that we didn't want to delay the launch of the software platform.

Launched commercially and within the same business model using remote patient monitoring.

In a similar way that the final version of this rule.

I had contemplated so.

So yeah, we decided that we didn't want to delay the launch of the software platform.

Speaker Change: if the time through FDA was extended because of the de novo pathway, and this allows us to do that.

If the time through FDA was extended because of.

The level of pathway and this allows us to do that.

Speaker Change: The intermediate step where we have a separate.

The intermediate step, where we have a a separate <unk>.

Speaker Change: flammable monitoring device that's implanted alongside a port at the same time, it's sort of an intermediate step, is one that we think will have a much more straightforward 510k path and allow us to have the actual integration of the physiologic parameters communicating with the platform in real time. So, that's – yeah, I mean, hopefully that's a little bit clearer than how I described it at all.

<unk> monitoring device, that's implanted alongside a court at the same time, it's sort of an intermediate step is one that we think will have a one.

Much more straightforward five 10-K pass and allow us to have the actual integration of the physiologic parameters.

Indicating with the platform.

Time.

So.

Hopefully, that's a little bit clearer than than I already described earlier.

Okay. That's helpful. And then just wanted to finish up with one big picture, one and it's a.

Speaker Change: Yep, that's helpful. And I just wanted to finish up with one big picture one, and it's a...

Maybe more subjective today, but I was hoping you could just help us rank the different opportunities I know, it's not a.

Speaker Change: today but was hoping you could just help us rank the different opportunities I know it's not a there's no

No no.

Speaker Change: quote-unquote less favorable or less loved child in the portfolio, but if you can help. You took the words out of my mouth. It's like asking which is your favorite kid. No, it's a, look, I'll try, okay? I mean, I think clearly,

Quote unquote less favorable or less loved a child in the portfolio, but.

You took the words out of my math, it's like asking which of your favorite kit.

Look I'll try okay, I mean, I think clearly.

Speaker Change: The Lucid Opportunity, certainly on paper, has the largest market opportunity at $25 billion with the largest target population and so forth. So it's hard not to argue that that remains, you know, far and away, the largest commercial opportunity. And it's obviously the one that's furthest along. I think amongst Varus, Carpex, and Nexlo,

The lucid opportunity certainly on paper has the largest market opportunity got $25 billion with the largest.

Target population and so forth. So it's hard not to argue that that that remains.

In a way the largest commercial opportunity and it's obviously the one that's furthest along I think amongst our various cutbacks and next one.

Speaker Change: I think, I think if we can, if we can really develop the data aspects of varus and generate

It's tough call I think I think if we can if we can really develop the data.

Aspects of various and generate the opportunity to monetize data like yeah.

Speaker Change: the opportunity to monetize data like, you know, like some other wildly successful digital health companies have done. I think that certainly could be, you know, in a similar ballpark.

Some other wildly successful.

It will help companies have done I think I think that certainly could be.

In a similar ballpark.

Speaker Change: Um, you know, between next, well, next low and carpets are quite different, right? Carpets is a kind of a traditional surgical interventional device that, you know, takes.

Between Mexico next LOE and Capex are quite different right capex as a kind of a traditional surgical interventional device that takes time to get.

Speaker Change: time to get physicians to adopt and has a, you know, has a sort of more of a steady

Physicians to adopt and has it has you know has a more of a steady.

Speaker Change: growth opportunity. It is a large target market with 600,000 patients every year undergoing carpal tunnel.

Growth opportunity.

It is a large target market with 600000 patients every year.

Undergoing carpal tunnel surgery.

Speaker Change: Surgery, we think we have an opportunity, particularly with the next generation version of this that has ultrasonic imaging built in to be the default treatment for those patients. So, that is a large opportunity as well, but I think it's not quite.

We think we have an opportunity, particularly with the next generation version of this in house.

Ultrasonic imaging built in to be the default treatment for those patients. So.

That is a large large opportunity as well, but I think it's not quite.

Speaker Change: what the ultimate potential of LUCID and VERUS would be. And the next slide is a bit of a...

But the ultimate potential of lucid and various would be and then next one is a bit of a.

Speaker Change: bit of a ringer in there because, you know, there are a million infusions of that and next low in many ways may be the most disruptive technology if it.

The ringer in there because there are a million infusions of day and next slow in many ways may be the most disruptive.

Technology if it.

Speaker Change: if it performs like we expect it to where, you know, 80% or so according to our Deloitte analysis of those million effusions a day.

If it <unk>.

It was like we expected to wear.

80% or so according to our Deloitte analysis of those million infusions, a day that are performed at electronic infusion pumps.

Speaker Change: that are performed with electronic infusion pumps can't transition over time to our technology. So, you know, it's a very, but it's a very different type of commercial.

Good transition over time to our technology.

So.

It's it is it's a very but it's a very different type of commercial launch it's very much at a hospital system, driven that's where our focus is in our workings with Joel Sparks as our new.

Speaker Change: It's very much of a hospital system driven. That's where our focus.

Speaker Change: is in our workings with Joel Sparks, who's our new VP of sales, who's been working successfully with Deloitte on mapping out how to target both inpatient facilities, outpatient facilities, like ambulatory surgery centers.

<unk> been working extensively with the Lloyd on mapping out how to target both inpatient facilities outpatient facilities like articulatory surgery centers dusk.

Speaker Change: Bosque Suites as well as the increasing effort to move care into the home and where infusions are currently fairly labor-intensive and require a nurse and electronic infusion pump. So there's a big, big opportunity there. It's a different commercial pathway to get there. There are some hurdles along the way, which includes the sort of the entrenched infrastructure around electronic infusion pumps, but I think long-term it's a very big opportunity.

<unk> suites as well as the increasing effort to move care into the home.

We're infusions are currently.

Currently fairly labor intensive and require a nurse and electronic confusion. So there is a big big opportunity there its a different commercial pathway to get there.

There are some hurdles along the way, which was which includes just sort of the entrenched infrastructure around electronic infusion pumps.

But I think long term it.

The big opportunity.

Speaker Change: Hopefully that's helpful. Yeah, absolutely. Thanks for taking my question. So I'll stop there and congrats on all the progress. Great, really appreciate it. Thanks very much.

So hopefully that's helpful.

Yeah, absolutely. Thanks for taking my question, So I'll stop there and congrats on all the progress.

Great really appreciate it thanks Frank.

Our next question comes from the line of Anthony Vendetti with Maxim Group You May proceed with your question.

Speaker Change: Thanks. Hey. Hey, Dennis. Hey, Lushan. How are you?

Hello.

Hey, Hey, Dennis Healy, Sean how are you.

Great.

Speaker Change: So I just want to get a little better handle on the Lucid Test Center. So once you identify a site for a center, how long does it take to get it up and running and start being able to perform the test?

So I just wanted to get a little better handle on the lucid test centers. So once you identify a site for center, how long does it take to get it up and running.

Start being able to perform perform the task.

Speaker Change: Right. So the answer is actually not very long to get to that point.

Right so.

The answer is actually not very long to that to get to that point would you just described so I.

Speaker Change: described. So, you know, identifying a city that we're going to target, identifying a physical location, leasing that office space, hiring a nurse practitioner and a medical assistant, you know, can be weeks to a month.

Identifying them.

City that we're going to target.

<unk>, a physical location leasing that office space hiring a nurse practitioner at a medical assistant.

Can be weeks to a month or so.

Speaker Change: But getting that, remember that test center is really there to receive.

But getting that you might remember that test centers really there to receive patients that are.

Speaker Change: patients that are being referred primarily from primary care physicians. And so that activity, the activity at that center is gonna be driven as much by the time it takes to have.

Being referred primarily from primary care physicians and so that activity the activity at that center is going to be driven as much by the time it takes to have.

Speaker Change: good sales representative coverage in that area.

Good sales representative coverage in that in that area.

Speaker Change: Um, in the, in the cities that we've launched so far, we've, we've, um, um, tried to get to.

The in the cities that we've launched so far.

Trying to get to.

Speaker Change: sales reps per city, per test center, to drive cases to the test centers. That takes longer. Hiring a sales rep who has good experience.

Sales reps per per per city protest center to drive cases to the test centers.

That takes longer he would get hiring a sales rep, who has a good experience.

Speaker Change: calling on primary care physicians, you know, could take some time, getting them trained both in the field and on the sort of the didactic coursework, take some time, and getting them to actually generate referrals from their primary care contacts can take some time. So that's more on the order of, you know, I mean, historically in MedTech, I think, as you know, Anthony, it can be, you know, nine to 12 months before a REC is really operating at peak.

Calling on primary care physicians.

It takes them could take some time getting them trained.

Both in the field and on the sort of thing.

The tactic of course work takes some time and getting them to actually generate referrals from their primary care context can take some time. So that's more on the order of.

I mean, historically in med Tech I think because you don't have any it can be a nine to 12 months before a rep is really is really operating at peak peak efficiency. We've thought we found that to be quite a bit short of that no more like on the order of four months.

Speaker Change: peak efficiency. We thought we found that to be quite a bit shorter than that, you know, more like on the order of four

Speaker Change: One different, one thing that's going to be different with this next stage where we're targeting these nine larger states.

One different one thing thats going to be different with this next stage, where we're targeting.

These 90 larger states.

Speaker Change: in identifying one metropolitan area in each state to open our first test center at, is that several of these states actually already have lucid sales personnel there. They're the market development managers and sales reps who are calling on GIs, who are calling on large primary care and family practices that are performing the procedure themselves without lucidity.

And identifying one metropolitan.

And each state to open our first test center and is that several of these states actually already have.

At least it feels personnel they're there.

The market development managers and sales reps, who are calling on G is we're calling a large on large hum primary care and family practice practices that are performing the procedure of themselves without lucid test members and so so there'll be potentially some somewhat some shortening of the time before we start.

Speaker Change: And so there'll be potentially some shortening of the time before we start seeing cases at these test centers, because we, in several of these cases, for example, in California and in Ohio, we actually already have boots on the ground. And those folks are begging for us to have test centers in their locations, because they know it can actually really help them drive testing volume significantly.

King cases that the centers because we and several of these cases for example in California.

And in Ohio, we actually already have boots on the ground.

And those folks are begging for us to get there.

To have test centers and their locations because right now we can actually really help them drive them testing.

Testing volumes significantly.

Speaker Change: OK, so so it could if it's from scratch, it could take 9 to 12 months just because identifying the site and getting that up and running is one thing, but getting the field reps.

Okay. So so it could.

From scratch it could take nine to 12 months, just because identifying the site and getting that up and running is one thing, but getting the field reps.

Speaker Change: But you're saying so far, you're saying it's not taking as long as 9 to 12 months in your case? No, no, no. Yeah. I mean, we had our first rep in September in Phoenix. We have two reps now in Phoenix.

To get the price and rate.

References, but youre, saying, so far youre, saying its not taken as long as nine to 12 months and you're in your desk no no. Yeah. I mean, we had our first rep.

In September in Phoenix, we have two reps now in Phoenix.

Speaker Change: that was in September and that rep was generating patient, generating private care referrals at a decent clip, you know, several months later. And his counterpart, the second rep is even, is also now contributing with a shorter period of time and he just got trained in February . So, yeah, I don't mean to suggest that it'll stretch out.

That that was in September and that wrap was generating patient generating private care referrals at a decent clip several months later.

And his counterpart the second rapidly.

It is also now contributing with a shorter period of time and he just got trained and.

February so so yeah, I don't I don't mean to suggest that it will stretch out.

Speaker Change: out to nine to 12 months. But, you know, from the time we actually physically launched till we're generating, till we're generating

Nine to 12 months, but you know from the time, we actually physically launched Cobra generating cut we're generating.

Speaker Change: referrals and tests at those centers, you know, it's on the order of, you know, several months.

Referrals and test it at those centers.

On the order of several months, let's just say that.

Speaker Change: And just just remind me on the expansion plans, you know, how many test centers, ideally, would you like to.

And just remind me on the expansion plans.

You know how many test centers.

Ideally would you like to.

Have up and running are open.

Speaker Change: have up and running or open by the end of this year.

But by the end of this year.

Speaker Change: Yeah, so we would like to open a minimum of nine, perhaps more, but our first target is to get nine open.

So we'd like to open a minimum of nine perhaps more but our first target is to get nine open starting in these nine new states are really broadening our geography and broadening to larger states in states that have more complex laboratory regulations, which we're gonna dive headfirst into but it's interesting after we have.

Speaker Change: starting in these nine new states, so really broadening our geography and broadening to larger states and states that have more complex laboratory regulations, which we're gonna dive head first into. But it's interesting, after we have one site within each state, remember, this goes back to your question about, what you just said about the sales reps. If we have a sales rep, let's say in North Carolina, right? And we open our first center in Charlotte.

One site within each state remember this goes back to your question about that.

Or would you just said about the sales ramp so if we have a sales rep, let's say and you know it.

In North Carolina right.

And we opened our first center in Charlotte.

Speaker Change: you know, that'll give us the opportunity to open additional centers since that rep is gonna cover the entire state, additional centers in other cities within that geography, within that rep's geography.

That'll give us the opportunity to open additional centers since that rep is going to cover the entire state of additional centers in other cities within that geography within that geography. So there's it's not quite the same as the initial.

Speaker Change: So it's not quite the same as the initial, you know, the time to get to add other centers and the amount of effort it takes to add other centers is not going to be that great within a certain geography, as great within a certain geography.

The time to get to to add other centers in the amount of effort. It takes to add other centers is that it's not going to be that great within a certain geography.

But there are certain drugs.

Speaker Change: Yes. Okay, great. Thanks very much. I'll hop back in. Thank you. I appreciate it. Okay. Thank you.

Good.

Yes, okay, great. Thanks, very much I'll hop back in the queue. Appreciate it okay. Thanks.

Speaker Change: Our next question comes from the line of Ed Wu with Cindy and Cap.

Our next question comes from the line of Ed Woo with <unk> Capital You May proceed with your question.

Yeah.

Edou: My question is on, you know, what is your cost to open up these test centers? Is it very minimal?

Yeah. My question is on.

What is your cost to open up these test centers is very minimal.

Edou: So I'll let that answer with a bit more granularity, but.

So the I'll, let Dennis answer a.

A bit more granularity, but but the fixed cost as we've noted for these tests.

Edou: But, you know, the fixed costs, as we've noted, for these test centers is actually quite minimal. And we often do get...

Actually quite minimal.

Often do get sort of people asking us about well you know that's a big capital cost of the bricks and mortars, and and so forth right and there is some cost we have to get a lease up and running but these are these medical office suites really.

Edou: sort of people asking us about, well, you know, that's a big capital cost and it's bricks and mortars and so forth, right? And there is some cost, we have to get a lease up and running, but these medical office suites are really, even in more expensive areas, they're really not that expensive on a monthly basis. And then hiring a nurse practitioner and a medical assistant. And the overall economics of the operation of a test center is almost entirely

Even in more expensive areas are really not that expensive on a monthly basis.

And then hiring a nurse practitioner in the medical assistance and the overall economics of the operation.

That's better.

Almost entirely.

Edou: The fixed costs can be covered by two reimbursed procedures a week while the team could perform 20 days.

Variable.

Fixed cost can be covered by to reimburse procedures a week, while the team could perform 20 a day.

Edou: Dennis, did you want to add anything more specific around the six costs? Yeah, maybe just get a little bit more granular. Lishan said less than two treatment or tests a week, and that's true. And the way we get there is that a nurse practitioner, or at least these test centers are presently staffed with a nurse practitioner and a medical assistant.

Dennis do you want to add anything more specific around the fixed cost yeah, maybe just get a little bit more granular Felicia said lesson to treatment their tests, a week and Thats true and the way we get there is that a.

The nurse practitioner or at least.

Test centers are presently staffed with a nurse practitioner.

Medical assistant and <unk>.

Edou: their salaries combined with the lease cost and the lease cost is

Their salaries combined with the lease cost and lease causes the generally in the thousands of $10000 range per months.

Edou: they're generally in the $1,000 to $2,000 range per month. So they're not very costly sticks and bricks.

They're they're not very costly.

Sticks and bricks.

Edou: When you add that cost up, it's about $40,000 to $45,000 a quarter, and a nurse practitioner

When you add that cost up it's about 40 to $45000 a quarter.

And a nurse practitioner can do.

Edou: without breaking a sweat, 20 tests a day in an eight hour.

Without breaking a sweat 20 tests per day, our internet.

In an eight hour day and.

Edou: And as you're aware, the tests are just under $2,000. So you just simplify the math, $20,000 times $2,000 a day is $40,000 a day.

Youre aware that the tests are just under 2000, and so you just simplify the math 20 times $10000. A day is 40000, a day and we know that our costs are that in each quarter. So when you break that down at one seven tests per week to breakeven. So as <unk> said, it really is a marginal business.

Edou: and we know that our costs are that in each quarter. So when you break that down, it's 1.7 tests per week to break even. So as Gleason said, it really is a marginal business.

And we can open them up rather quickly and do so without a significant fixed cost burden.

Edou: and we can open them up rather quickly and do so without a significant fixed cost burden. The other piece parts to put in place, as Lee-Shun's explained, is finding the right salespeople that have the right relationships that can speed adoption and drive that test count up on a daily basis.

The other piece parts to put in places we should explain is finding the right salespeople that have the right relationships that can speed adoption and drive that test count up on a daily basis.

Speaker Change: Great, thanks for the details. And my last question is, how do you guys feel in a year that's going to have a very busy 2022, what's your view about adding potentially new products to your portfolio?

Great. Thanks for the details and my last question is how do you guys view your throat.

I'm just gonna have a very busy 2022, what's your view about adding potentially new products into your portfolio.

Speaker Change: Well, we don't have enough yet there. I think we have a pretty robust pipeline right now with the goal being to get NextFlow and the initial Verus software platform with connected devices launched this year. Our goal for next year is to launch vSphere and

Well, we don't have enough to get there.

[laughter].

I think we have a pretty robust pipeline right now with.

With the goal being to get next flow and the various with the initial software platform with connected devices launched this year. Our goal for next year is to launch <unk>.

Disappear and.

Speaker Change: subsequent generations of NexFlow and Verus and PortIO. It's a little bit hard to say. I think we could get PortIO in Europe next year, but you know, as I've described, we've had significant

Subsequent generations of <unk>.

Next slow and embarrass him.

And port I O with a little bit hard to say I think we could get for I O in Europe next year, but.

Described we've had significant.

Speaker Change: you know, challenges with regard to USFDA pathways there. And then, you know, there's some other products in our portfolio that are moving, that are, you know, still somewhat in the early R&D phases that I can't, you know, fully predict will be, will be heading into the pipeline in, you know, next year. But as I've mentioned, we also, and this is.

Challenges with regard to the U S FDA.

Pathways there.

And then there are some other products in our portfolio that are that are moving that are.

So I'm watching the early R&D phase is done I can't fully fully predictable will be we'll be heading into the pipeline and next year, but as I've mentioned, we also and this is real we also are constantly.

Speaker Change: real. We also are constantly being solicited and have active discussions for business, for opportunities to bring in new technology into our pipeline.

Being solicited and have active discussions for our business for opportunities.

To bring in new technology into our pipeline.

Speaker Change: And as I mentioned, you know, the way we look at those has changed over the recent quarters and over the past year or so, where we're more focused on not just, you know, viewing any.

And as I mentioned, you know the way we look at those has changed over.

Over the recent quarters and over the past year, or so where we're more focused on not just viewing any.

Speaker Change: you know, anything that can sit in the space. But now that we are, you know, fairly well established as having sort of laid an anchor, laid our roots in medical devices diagnostic.

Anything that can fit in this space, but now that we are fairly well established as having sort of late in Cleveland laid our roots in medical devices diagnostics and digital health that we are focused on.

Speaker Change: and digital health that we are focused on, you know,

Yep.

Speaker Change: expanding our portfolio within technologies that are synergistic with our current commercial or pre-commercial products, and that we at least can map out as being accretive in the near to medium term.

Handing our portfolio within technologies that are synergistic.

With technologies that are synergistic with our current commercial or pre commercial products.

And then we at least can map out as being accretive would be now in the in the near to medium term.

Speaker Change: So, you know, stay tuned on that. There's a lot going on in that space and we'll, you know, we'll obviously, you know, let you know if we end up consummating those. But I think, you know, as you know, we have, we have a pretty good record of bringing in technologies from the outside over the last couple of years.

So stay tuned on that there's a lot going on in that space and we'll you know, we'll obviously, let you know.

If we end up consummating those but I think it was you know we haven't we have a pretty good record of.

They are bringing in technologies from the outside over the last couple of years.

Great well thank you.

Great. Thanks, Ed.

Speaker Change: At this time, we have reached the end of the question and answer session, and I now turn the call back over to LaShawn for any

At this time, we have reached the end of the question and answer session and I'll now turn the call back over to Lesean for any closing remarks.

Speaker Change: Great. Hey, so thank you all for joining us today and, again, another day of really great questions. So I appreciate that. And as always, we look forward to keeping you abreast of our progress via news releases and periodic quarterly calls such as this one. The best way to keep up with PADMED news is to sign up for our email alerts on our Investor Relations website and to follow us on social media. You're also welcome to contact Adrian at akm at padmet.com with any questions. Thank you, everybody.

Great Hey, so thank you all for joining us today and again another day of really great questions. So I appreciate that and as always we look forward to keeping you abreast of our progress.

Really since then.

Periodically quarterly calls such as this one the best way to keep up with Pat.

To sign up for email alerts on our Investor Relations website and to follow US on social media. You are also welcome to contact Adrian.

At AK Ahmed patent Dot com with any questions. Thank.

Thank you everybody. Thanks, so much.

This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.

Speaker Change: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

[music].

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