Q4 2023 Lucid Diagnostics Inc Earnings Call & Business Update

Yes.

Good morning, and walk embassy the lucid diagnostics fourth quarter and full year 2023, they still sit.

Operator: Good morning, and welcome to the Lucid Diagnostics fourth quarter and full year 2023 business update conference call. At this time, all lines are in a listen only mode.

58 conference call at this time all lines are in a listen only mode. Following the presentation. We will conduct a question and answer session. You bet that this time during this call Uruguay immediate assistance. Please press as far as zero, but do you. Operator. Please note. This event is being recorded I would now like starting to call the French over to Dennis.

Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Please note this event is being recorded. I would now like to turn the conference over to Dennis McGrath, Lucid Diagnostics' Chief Financial Officer. Please go ahead. Thank you, Ludi. Good morning, everyone.

Dennis: Lucid diagnostics Chief Financial Officer. Please go ahead.

Dennis: Thank you Louise good morning, everyone. Thank you for participating in today's fourth quarter and year full year 2023, lucid diagnostics business update call.

Dennis M. McGrath: Thank you for participating in today's fourth quarter and full year 2023 Lucid Diagnostics business update call. The press release announcing our business update for the company and financial results for the fourth quarter and the year ending December 31, 2023 is available on our Lucid website. Please take a moment and read the disclaimer about forward-looking statements in the press. The business update, the press release, and this conference call 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 those made.

Dennis: The press release announcing our business update for the company and financial results for the fourth quarter and the year ending December 31, 2023 is available what are loosened website.

Dennis: A moment and read the disclaimer about forward looking statements in the press release.

Dennis: The business update the press release and this conference call include forward looking statements and these forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results differ.

Dennis: Differ materially from statements made.

Dennis M. McGrath: Factors that could cause actual results to differ are described in the disclaimer and in our filings with the U.S. Securities and Exchange Commission for a list. For a description of these and other important risk factors and uncertainties that may affect future operations, see Part 1, Item 1A entitled Risk Factors and Lucid's most recent annual report on Form 10-K filed with the SEC and subsequent updates filed in quarterly reports on Form 10-Q and any subsequent filings on Form 8-K. This step is required by law. It also does not disclose any intentions or obligations to publicly update or revise any forward-looking statements to reflect changes in expectations or in events, conditions, or circumstances on which the expectations may be based or that may affect the likelihood that actual results will differ from those contained in the forward-looking statement.

Dennis: Factors that could cause actual results to differ are described in the disclaimer and in our filings with the U S Securities and Exchange Commission for a list.

Dennis: These and other important risk factors uncertainties that may affect future operations see part one item one a entitled risk factors in loose. Its most recent annual report on Form 10-K filed with the SEC and subsequent updates filed in quarterly reports on Form 10-Q, and any subsequent filings on form 8-K.

Dennis: Except as required by law lucid disclaims any intention or obligation to publicly update or revise any forward looking statements to reflect changes in expectations or events conditions or circumstances on which the expectations may be based or they may affect the likelihood that actual results will differ from those contained in the forward looking statements.

Lishan Aklog: I'd like to turn the call over to Dr. Lishan Aklog, our Chairman and CEO of Lucid Diagnostics. Thank you, Dennis. And good afternoon, everyone.

Dennis: Turn it all on the call over to Dr. Lisa on backlog, our chairman and CEO of lucid diagnostics, we shouldnt.

Lisa: Oh, Thank you Alex and good afternoon, everyone. Thank you for joining our quarterly update call the day.

Lishan Aklog: Thank you for joining our quarterly update call today. Before proceeding, a couple things. First, I'd like to apologize. I have a bit of a scratchy throat.

Dr. Lisa: Before proceeding a couple of things first I'd like to apologize I have a bit of a scratchy throat I'm feeling under the weather so sorry about that.

Lishan Aklog: I'm feeling under the weather. So sorry about that. And I'd also like to thank our long-term shareholders for your ongoing support and commitment. Hopefully, you know, our team is singularly focused on driving the Lucid Enterprise towards its massive commercial potential and to enhance our long-term shareholder value. So I'm very pleased with the excellent progress Lucid has made on multiple fronts.

Dr. Lisa: And I'd also like to thank our long term shareholders for your ongoing support and commitment.

Dr. Lisa: Our team is singularly focused on driving the lucid enterprise towards the class a commercial potential and to enhance long term shareholder value.

Dr. Lisa: So I'm very pleased with the excellent process progress is made on multiple fronts.

Dr. Lisa: During the fourth quarter and the start of this year.

Dr. Lisa: Strengthening our balance sheet with about $18 million of financing from longstanding fundamental shareholders.

Lishan Aklog: .. .. .. .. ....

Lishan Aklog: We saw solid revenue growth on stable test volume, improving allowances, and stable out-of-network pricing. Our CYFT program, Health Fair Events, is thriving. Our now robust clinical validity and clinical utility evidence base are poised to drive positive medical coverage, and what I believe is line of sight to Medicare Canada.

Dr. Lisa: We saw solid revenue growth on stable test volume, improving allowances and stable out of network pricing.

Dr. Lisa: Our <unk> program helps fair event, that's driving our DAU robust clinical validity and clinical utility evidence base are poised to drive positive medical coverage and what I believe is in line of sight to Medicare coverage and I'm also particularly excited about our accelerating direct contracting of initiatives.

Lishan Aklog: And I'm also particularly excited about our accelerating direct contracting initiative. So, let me just offer a few highlights, and then I'll do a quick overview of the company for those of you who are new. On the commercial execution side, fourth-quarter revenues were just a hair over a million dollars.

Speaker Change: So just let me just.

Speaker Change: After a few highlights.

Speaker Change: And then I'll do a quick overview of the company for those of you who are new on the commercial execution side fourth quarter revenues were just a hair over $1 million, that's about 33% quarterly and 829% annually.

Lishan Aklog: That's up 33% quarterly and 829% annually. The E-Cigar test volume was 2,200 tests. I'll talk a bit more about those trends later. Our high volume health fair CYFT testing events continue to gain traction, and we're fully booked right now through July. We have active eSpare testing programs now with over a dozen strategic accounts, which include health systems, academic centers, and other related entities. And we have engagements with several dozen more. Meanwhile, our revenue cycle management process continues to deliver solid results for out-of-network payments. About 50% of adjudicated claims are now coming back as allowed, with stable payments averaging about $1,800.

Speaker Change: Test volume was 2200 peso I'll talk a bit more about those trends later, our high volume <unk> testing events continue to gain traction that we are fully booked right out through July.

Speaker Change: We have active customer programs now with over a dozen strategic accounts, which include health systems academic academic centers and other related entities.

Speaker Change: Engagements with several dozen more our revenue cycle management process continues to deliver solid results for out of network payments about 50% of adjudicated claims are now coming back with a loud with stable payments, averaging about eight to $800.

Lishan Aklog: Some key strategic accomplishments, as I mentioned, include the re-strengthening of our balance sheet with the $18.1 million preferred stock financing. We've had a significant expansion of our clinical validity, or CV, and our clinical utility, or CU data to support broad ESAGuard medical policy coverage, including re-engaging with MoldeX for the Medicare side, which I'll talk about a little bit later. We now have three clinical validity studies that document excellent ESAGuard sensitivity and negative predictive value.

Speaker Change: Next cycle.

Continued strategic accomplishments as I mentioned the <unk>.

Speaker Change: We strengthened our balance sheet with $18 $1 million preferred stock financing, which had a significant.

Speaker Change: Second expansion of our clinical validity of our CV and a clinical utility or see your data to support broad use of guard medical policy coverage, including <unk>.

Speaker Change: Engaging re engaging with multi XR for Medicare for the Medicare side, which I'll talk about a little bit later.

Speaker Change: We are now three clinical validity studies that document excellent east regard sensitivity and negative predictive value. We have three clinical utility studies that document near perfect Concordance with physician decision, making are using that data. We're now starting to hold meetings, we held meetings now over the last.

Lishan Aklog: We have three clinical utility studies that document near-perfect concordance with physician decision-making. Using that data, we're now starting to hold meetings. We've held meetings now for the last... a couple months with medical directors of major commercial payers to now, for the first time, formally request positive medical policy determination for ESAGuard. Similar to those efforts, we held a Blue Cross Blue Shield Association of America webinar that was intended by dozens of medical directors to advocate for ESAGuard coverage. And then finally, we'll talk a bit more about this later, we launched our direct contracting program with ESAGuard now offered as a benefit and just as a means to drive contractually guaranteed revenue. So just a few intro slides for those of you who are new or to update you on our company overall. Lucid is a commercial-stage cancer prevention medical diagnostics company. We're focused on early pre-cancer detection to prevent esophageal cancer deaths in targeted at-risk patients. Microsoft Office Word MSWordDoc Document Word.

Speaker Change: A couple of months with medical directors of major commercial payers to now for the first time formally request positive medical policy determination for Isa card.

Speaker Change: Similar to those efforts we holiday.

Speaker Change: Good Cross Blue Shield Association of America, Webinar that was intended bypass into their medical directors to advocate for EBITDAR coverage and then finally, we'll talk we'll talk a bit more about this later, we've launched our direct contracting program with regard to offer doesn't benefit.

Speaker Change: Just as a means to drive a contractually guaranteed revenues.

Speaker Change: So just a few intro slides for those of you who are in New York to update you on our company overall.

Speaker Change: <unk> is a commercial stage cancer prevention medical diagnostics company, we're focused on early pre cancer detection to prevent and esophageal cancer deaths and targeted at risk patients. Thanks, Mike.

Lishan Aklog: Document.8, The Isagard esophageal DNA test is the first and only commercially available test that's capable of serving as a widespread screening tool to prevent these deaths through the early detection of esophageal pre-cancer. Slide So now we have, as I mentioned, really solid clinical validity data that documents Esargard's performance. This is a bit of a summary slide here. Esargard's in blue, and comparing it to sort of the standards that we see for performance with other tests, particularly in the colorectal space with Coligard and the new blood test, GARDENT. Cancer sensitivity remains extremely high, as does pre-cancer sensitivity and early pre-cancer sensitivity.

Speaker Change: Easter Guard esophageal DNA test is the first and only commercially available test that's capable of serving as a widespread screening tool to prevent these steps through the early detection of esophageal pre cancer.

Speaker Change: Yeah.

Speaker Change: That's why I said that we have as I mentioned, we have really solid.

Speaker Change: Clinical what are the data that documents the east regards performance. This is a bit of a summary slide here.

Speaker Change: With regards to in Blue and comparing it to sort of the standards that we see.

Speaker Change: For our performance with other tests, particularly in the colorectal space with Cologuard and the new.

Speaker Change: Blood tests gardens cancer sensitivity remains extremely high.

Speaker Change: As the pre cancer sensitivity and early pre cancer sensitivity on those two numbers I'll note are really unprecedented to have a 90% pre.

Lishan Aklog: And those two numbers, I'll note, are really unprecedented. So to have a 90% pre-cancer sensitivity, again, you can note compared to other tests in the space, is unprecedented. There is no other molecular diagnostic test that can claim that.

Speaker Change: Pre cancer sensitivity, if again you could note compared to other tests in this space is unprecedented there is no other.

Speaker Change: There is no other molecular diagnostic test that can that can claim that and most notably our early pre Castro numbers also holding in that 90% range again no other tests.

Lishan Aklog: And most notably, our early pre-cancer numbers also hold in that 90% range. Again, no other tests, molecular tests, can detect an early pre-cancer with any sensitivity, much less at that 90% level. That results in an overall negative predictive value of 99%, so just a 1% false negative rate and an estimated positive predictive value of 30%, which increases the yield of endoscopies between two and threefold. Next slide. So just two slides summarizing this data. Again, this is the absolute foundation, the backbone of our.

Your task can detected early pre cancer with any sensitivity much left at that 90% level that results in an overall negative predictive value of 99%. So just a 1% negative rate at an estimated positive predictive value of 30%, which.

Speaker Change: Increases the yield of Endoscopies between two and three fold.

Speaker Change: Sure.

Speaker Change: So just two slides.

Summarizing this data again this is the absolute foundation the backbone.

Hum.

Lishan Aklog: The future is documenting the performance of the study. Clinical validity, again, is the performance of the assay here. I won't go through each detail here, but you can see that we have three studies, the original Case Western paper and the BetterNets study in Cleveland, VA. One is published; two are in preprint.

Speaker Change: The future is documenting the performance of the study are critical of what any again as the performance of the assay here.

Speaker Change: Won't go through each detail here, but you can see that we have three.

Speaker Change: Studies.

Speaker Change: The original case Western paper is it better in that study in Cleveland.

Speaker Change: One is published to our pre prints and coming soon we have a manuscript completed for the <unk> study, which is now.

Lishan Aklog: And coming soon, we have a manuscript completed for the BE-1 study, which is now heading towards preprint and submission for publication. Next slide. Similarly, on the clinical utility side, we have three studies that are published in the peer-reviewed literature and form again the foundation of our engagements with payers, commercial payers, and, in the near term, with Medicaid. Thanks, guys. Thanks. Thanks. The market opportunity here is really fantastic. It's massive.

Speaker Change: Heading towards.

Speaker Change: Posting on prepayments submission for Colocation excellent.

Speaker Change: Similarly on the utility side, we have now three studies that are published in the peer review literature and form but again the foundation of our engagements with.

Speaker Change: Payers commercial payers that will set us up.

Speaker Change: The near term with them kind of care.

Speaker Change: Alright.

Speaker Change: The market opportunity here is really fantastic is massive there are absolutely 30 million patients who are at risk are recommended for pre cancer testing by existing guidelines, which now include not endoscopic biomarker testing such as visa card.

Lishan Aklog: There are absolutely 30 million patients who are at risk and are recommended for pre-cancer testing by existing guidelines, which now include non-endoscopic biomarker testing such as ESAGARD. We have Medicare payment established at nineteen hundred thirty eight dollars. As I noted, our out of network payments are. [inaudible] Next slide. And our commercial strategy is multi-pronged. So our goal is to provide patients with access wherever we can. So we have our own physical Lucid Test Centers. A backbone, a major pathway for patient access, is the satellite Lucid Test Centers, where our practitioners go to physicians' offices on scheduled days and test patients in their offices. We also have physician practices, particularly GI practices and other specialists who perform the e-cigarette test using their own staff. That accounts for about 30% of our total volume. In Florida, we have a mobile Lucid Test Center, a van that can go to physician practices, park in the parking lot, pitch a tent, and offer testing on the spot.

Speaker Change: We have Medicare payment established at 19, $138 I think noted our out of network payments are.

Speaker Change: Backing up matching that quite closely at about $800. So that pricing is holding and that resulted in approximately $60 billion true total addressable market opportunity. Our gross margin is 90% at our current drilling so at our current level of efficiency X line.

Speaker Change: And our commercial strategy is multi pronged patients our goal is to provide patients access wherever we can.

Our own physical music test centers.

Speaker Change: Backbone.

Speaker Change: Sure.

Speaker Change: Way for patient access is.

Speaker Change: Satellite lucid test centers, where our practitioners go to physicians offices on scheduled days and test patients in their offices and we also have.

Speaker Change: Physician practices, particularly Gi practices and other specialists, who performed the ECR testing using their own staff that accounts for about 30% of our total volume in Florida, we have a mobile with the tests that are vanda can go to a physician practices park in the parking lot at offer testing on the spot and as we'll talk about it a little bit.

Lishan Aklog: And as we'll talk about a little bit more, we have our Check Your Food Tube health fair events, which have been focused initially over the past year. We've reached our one-year anniversary at these health fair-type events and are expanding into other areas.

Speaker Change: We have our.

Speaker Change: Check your fruit to health care events, which have been focused initially over the past year. We've reached our one year anniversary at these healthcare type of events.

Speaker Change: And our expanding into other areas as well.

Speaker Change: Alright.

Speaker Change: So this slide shows our.

Lishan Aklog: So this slide shows the progress over the last approximately three years with regard to revenue and test volume growth. So you can see revenue has been growing nicely since our transition in the late second quarter to our new revenue cycle management provider, so the late second quarter of 2023.

Speaker Change: The progress over the last.

Speaker Change: With approximately four years.

Speaker Change: With regard to revenue and test volume growth. So you can see revenue.

Speaker Change: It's been growing nicely since our transition and the.

Speaker Change: Late second quarter.

Speaker Change: To argue revenue cycle management providers in the late second quarter of 2023.

Speaker Change: The test volume growth has.

Speaker Change: Stabilized we think this is likely going to be approximately where things stabilize it it sort of in the 2300 2500 range I will note and remind you that we have not added any salespeople since.

Lishan Aklog: We think this is likely going to be approximately where things stabilize in sort of the 2300 to 2500 range. I will note and remind you that we have not added any new salespeople since the fourth quarter of 2022. So that growth from about 1000 tests to this 2400, plus or minus, level has been with the same Salesforce. And, as I hinted earlier, we've had increases in productivity. However, we have no plans at this point to expand our Salesforce platform until we continue to see some progress on the reimbursement. So that's our expectation. In the fourth quarter, we had three weeks that were when we weren't able to do anything between two holidays and one week for our national sales meeting.

Speaker Change: Since the fourth quarter of 2022, so that growth from about 1000 tested this 'twenty 'twenty 400, plus or minus level has been with the same sales force.

Speaker Change: Is it earlier we've had.

Speaker Change: <unk> and productivity. However, we have no plans at this point to expand our sales force until we continue to see some progress on the reimbursement side. So.

Speaker Change: That's our expectation of the fourth quarter, we had three weeks that were or weren't able suggesting between two holidays and one week for our national sales meeting and so we feel pretty comfortable that these volumes will hold and will show a potentially modest growth over the coming over the coming quarters I did indicate an estimated number for the quarter and that's just about.

Lishan Aklog: And so we feel pretty comfortable that these volumes will hold and will show potentially modest growth over the coming quarters. I did indicate an estimated number for the quarter that's just about. Next slide.

Speaker Change: Close.

Speaker Change: Excellent.

Speaker Change: So a little bit deeper dive on our commercial execution.

Lishan Aklog: So a little bit deeper dive on our commercial execution. The Check Your Feed Tube is a high healthcare type pre-cancer detection event that remains a significant contributor to our activity. You can see on the right that we're, these have been heavily focused on firefighters since we had our first event, now just over a year ago, in San Antonio. We've had steady growth. We have a very strong pipeline, and we're fully booked through July. Right now, our rate limiting factor is the number of clinical trials. Personnel we have to run these events, and we have a really great demand from entities, particularly the fire department. We're expanding our testing beyond just holding health fair events at firehouses to now targeted conferences. We actually had an event at the national conference for firefighter chiefs and tested several dozen firefighter chiefs on the spot during the conference and other types of symposiums.

Speaker Change: Checking for utilities health care type pre cancer detection events remain.

Speaker Change: A significant contributor to our activity you can see on the right there at that where it would be fair because these have been heavily focused on firefighters.

Speaker Change: Since we've had our first event now just over a year ago in San Antonio We've had steady growth we had a very strong pipeline and we're fully booked through July right now a rate limiting factor is the number of.

Speaker Change:

Speaker Change: <unk>.

Speaker Change: Personnel, we have to learn these events and we have a real.

Speaker Change: Great demand from.

Speaker Change: Entities, particularly the firefighters.

Speaker Change: Spanning our testing beyond just holding health care events that fire at firehouses targeted conferences, we actually.

Speaker Change: Had an event at the National conference for firefighter Chiefs and tested several dozen firefighter chiefs on the spot during the conference.

Speaker Change: And are there other types of symposium.

Lishan Aklog: We're increasing the efficiency of these events and the capacity by utilizing UpScript, our telehealth partner, so we no longer have to identify a local physician champion to get one of these off the ground. We can just jump in and get started with our telehealth partner. And really, perhaps most importantly, the last bullet here: we're now, as we launch these events, initiating contracting discussions in parallel with planning for the initial inaugural event. And we've found that the leaders are strongly motivated to engage.

Speaker Change: We're increasingly efficiency of these events of the capacity by utilizing our script, our telehealth partner, So we no longer have to.

Speaker Change: Identify a local physician champions to get one of these offer the ground. We can just jump in and get started with her telehealth partner and really perhaps most importantly, the last bullet here.

We are now.

Speaker Change: As we launch these events, we're now initiating contracting discussions in parallel with planning for the initial inaugural event and we've not we've found that the leaders are strongly motivated to engage for example, with the unions there is very much a.

Lishan Aklog: For example, with the unions, there's very much, particularly on the firefighter side, a strong motivation to offer testing and to show that they're providing something of value and they're focused on cancer prevention amongst their brothers and sisters. And that's been really encouraging and promising with regard to our ability to engage on contracts moving forward. As I mentioned last quarter, we've been pushing harder now with our commercial team on strategic accounts. These include IHS health systems, large multi-location group practices, and academic medical centers.

Speaker Change: Clearly the firefighters side strong motivation to offer testing and to show that they're providing something of value and their focus on cancer prevention.

Speaker Change: Amongst their brothers and sisters and that's been.

Speaker Change: Really encouraging and promising with regard to our ability to engage on contracts moving forward as.

Speaker Change: As I mentioned.

Speaker Change: Last quarter, we have been pushing harder now with our commercial team on strategic accounts. These include.

Speaker Change: Health systems are large.

Speaker Change: Multilocation group practices academic medical centers and now we have over a dozen such strategic accounts, including big academic medical centers that are testing proof of offering Ethernet testing and these are typically in the context of a.

Lishan Aklog: And now we have over a dozen such strategic accounts, including big academic medical centers that are testing and offering eSugary testing. And these are typically in the context of a structured overall program for esophageal cancer awareness for GERD, and so forth. And we have several dozen that remain in the. On the next slide, the next big area for us right now is direct contracting. As we mentioned in our last call, we are just getting started with this. We hired a VP of Employer Markets, and we are actually now expanding that team. So let me just give a few more details on the next slide about what this is. Next slide.

Speaker Change: Structured overall program for esophageal cancer awareness for GERD and so forth.

Speaker Change: And we have several dozen that remain in the pipeline.

Speaker Change: On the <unk>.

The next big Big area for US right now is direct contracting as we lessened our lap.

Speaker Change: A call where we're getting just getting started with US we hired a VP of Brooklyn player market and we actually are now expanding that team. So let me just give a few more details on the next slide of what what this is.

Speaker Change: Excellent.

Lishan Aklog: So we talked about direct contracting; we're talking about offering Visa Guard as a covered benefit to drive contractually guaranteed revenue. So this is different than the traditional path. The traditional path being a physician prescribes a test, and we submit a claim to the insurance policy and work through, work with the insurers to get coverage and payment for that.

Speaker Change: So we're talking about direct contracting and we're talking about offering Isa guard as a covered benefit to drive contractually guaranteed revenue. So this is.

Speaker Change: Different than the traditional path of traditional path being a physician prescribes the test and we submit a claim to the insurance policy and work through work with insurers to get coverage and payment for that.

Lishan Aklog: This essentially bypasses that, and we go directly to entities with whom we can engage, with whom we can contract to offer testing as a covered benefit, typically within a health and wellness benefit program. And our team, which is now about to expand, is engaged with this on multiple fronts. So there's a whole network of benefit brokers that work with third party administrators to offer benefit packages to employers across the country. And we have now deep engagement with these entities to offer ease of administration within the benefit packages that these brokers and, ultimately, the third party administrators are both providing to. A subset of that are self-insured entities, so with them, we can actually go directly to those entities. These, again, involve employers and other similar entities, such as unions, who can offer our tests as a service directly to their employees or members, really separate from the benefit process.

Speaker Change: Essentially bypass that and we go directly to entities that with whom we can engage with whom we can contract.

Speaker Change: To offer testing as a covered benefit typically within health <unk> wellness benefit program and our team.

Speaker Change: That's now about to expand is engaged with us on multiple fronts and so theres a whole network of benefit brokers that work with third party administrators to offer our benefit packages too.

Speaker Change: Employers across the country.

Speaker Change: And we.

Speaker Change: We have now.

Engagement with these entities to.

Speaker Change: Offer Isa guard within their benefit packages that these brokers that ultimately the third party administrators are both providing too.

Two employers so to offer you took on as a benefit.

Speaker Change: A subset of that are self insured entities. So with them. We can actually go directly to those entities. These again involve employers.

Speaker Change: And then entities other civil agencies, such as unions, who can offer.

Speaker Change: Our test as a service directly for their.

Speaker Change: Employees are members.

Speaker Change: Really separate from the benefit of the benefit process and we are active in that we previously announced we've had our first.

Lishan Aklog: And we're active in that. We previously announced we had our first contract there, and testing has proceeded. These testing events are very similar to the Check Your Food Tip events, where our team shows up at sites for employers and offers testing on-site to subgroups of employees or members who are candidates for testing.

Speaker Change: First contract there testing has proceeded on these type of these testing event is very similar to the check your food to commence where our team.

Speaker Change: So it's that that sites for the employers and offers testing.

Speaker Change: Site too.

Speaker Change: Subgroups of.

Speaker Change: Our employees our members who are candidates for testing and then there are other partners that we're working with we had previously announced that we are engaged with the 911 fund that has a large number of patients in the greater New York area, who are.

Lishan Aklog: And then there are other partners that we're working with. We had previously announced that we are engaged with the 9-11 Fund, which has a large number of patients in the greater New York area who receive treatment for conditions that are related to their exposure during 9-11. That process there We had to navigate a sort of clerical issue back a couple months ago, but that process is now back in full swing.

Speaker Change: To receive treatment for conditions that are related to their exposure during 911.

Speaker Change: That process.

Speaker Change: There was.

Speaker Change: We had to navigate sort of clinical issue back a couple of months ago, but that process is now back in full swing, we formally engaged with one of their clinical centres of excellence Mount Sinai and we look.

Lishan Aklog: We've formally engaged with one of the clinical centers of excellence, Mount Sinai, and we look forward to starting to engage and test patients within who are covered by the Fund. And there are a variety of other entities, for example, like residential communities in various parts of the country, particularly in the Sunbelt, that have concierge medicine practices that, again, offer specialized testing as a benefit for the residents in their community. And we're engaged in several of those right now and look forward to cultivating contracts there. By the way, what we offer with this direct contracting is really three flavors. One is a direct ongoing contract. So, we would basically charge per patient tested under the umbrella of one of these contracts. The second model is, particularly when it's in the context of a benefit plan and offers the use of guard as a covered benefit, it's a charge for a lifetime benefit per member, not necessarily those who are tested.

Speaker Change: Forward to starting to engage in test patients within who are covered by the fund and there are a variety of other entities for example, like residential communities.

Speaker Change: <unk> parts and particularly in the sunbelt.

Speaker Change: That have concierge medicine practices that again offer specialized testing as a benefit for the residents their community and we're engaged in sample logos right now on the CT tube.

Speaker Change: Consummating contracts there.

Speaker Change: We offer with this direct contracting are really three flavors.

Speaker Change: One is a direct ongoing contract. So we would basically charge per patient tested under the umbrella of one of these contracts.

Speaker Change: Our model is particularly what it is as a consequence in the context of a benefits plan and offering user guard as a covered benefit it's a charge for a lifetime benefit per member.

Speaker Change: Sort of tested and then we also are in discussions in several examples of just a service agreement, where we charge for a full or half a screening event.

Lishan Aklog: And then we also are in discussions on several examples of just a service agreement, where we charge for a full or half-day screening event that's up to a certain number, that can handle up to a certain number of patients in a given day, and those are scheduled accordingly. So that's our direct contracting initiative, big deal, we're pushing hard on this, and we really do expect this to be a meaningful contributor to test volume as well as revenue in the coming years. Just an update on the entire process by which we submit claims, receive payments on those claims, and generally pursue in-network coverage on the revenue cycle management side. Again, this represents a payment for out-of-network claims. And we've submitted about $20 million in pro forma revenue now, since we made our transition to Quadex, our new revenue cycle management provider, in June.

Speaker Change: That's up to a certain number that can handle up to a certain number of patients in the other day and dosing schedule accordingly.

Speaker Change: So that's a direct contracting initiatives big deal, we're pushing hard on this and we really do you expect there to be.

Speaker Change: Be a meaningful contributor too.

Speaker Change: To test volume as well as our revenue in the coming quarters excellent.

So just an update on the entire process by which we submit claims payments received payments on those claims and generally pursue and network coverage on the revenue cycle Madison side again. This represents out of payment for out of network claims.

Speaker Change: And we've submitted now since we made our transition to Quad X, our new revenue cycle management provider in June about $20 million of pro forma revenue. The claim submitted represent that we're now quite stable at about 80% are getting adjudicated.

Lishan Aklog: The claims submitted represent that. We're now quite stable at about 80 percent are getting adjudicated. And of those that are adjudicated, an increasing percentage, now a bit over 50 percent, are being allowed. So the claim is allowed, and the average allowed payment is $1,800.

Speaker Change: All of those that are dedicated and increasing percentage now that over 50% are being allowed so thus the claim is allowed.

Speaker Change: And the average allowed payment is $18 million and we can actually go and collect that either from the payer for the payers are ultimately for the patients.

Lishan Aklog: And we can actually go and collect that either from the payers or ultimately from the patient. We're also working very hard with Quadex on the appeals process, and we're starting to yield some wins.

Speaker Change: We're also working very hard with <unk> on the appeals process.

Speaker Change: We're starting to yield some wins, where we're putting about 25% of our appeals and theres an entire process by which we're that we're strengthening in optimizing and that includes for example, leveraging provider. So.

Lishan Aklog: We're winning about 25% of our appeals, and there's an entire process that we're strengthening and optimizing. And that includes, for example, leveraging providers. So in certain examples, we'll get a dozen or so providers, physicians in the local area, to submit to the local payer as part of an appeal to indicate that this is medically necessary and important for them to cover. And we're also working for the first time on a prior authorization program since about 18% of the denials are for lack of prior authorization, so we're incorporating a streamlined way for physicians to seek prior authorization. So the big push, of course, is on medical policy. So, in the last month or two, as I hinted earlier, we've held meetings with medical directors of the major commercial payers, names you would recognize, to formally request for the first time a positive medical policy determination for e-cigarette based on the data that we now have.

Speaker Change: Certain examples would get a dozen or so providers physicians in the local area to submit to the local player as part of an appeal to that to indicate the.

Speaker Change: This is medically necessary.

Speaker Change: And important for them to cover and we're also working out for the first time on a prior authorization programs. It's about 18% of the denials are for lack of a prior authorization and we're incorporating a streamline way for physicians to seek a prior authorization.

Speaker Change: So the big question of course is our medical policy coverage I mean, it's one thing for us to be collecting in the revenue that we're generating now as an out of network, but ultimately to take advantage of the full potential here, we need to cut and recover in network coverage, both from commercial payers and Medicare.

Speaker Change: So.

In the last month or two as I hinted earlier, we've held meetings with medical directors of the major commercial payers names you would recognize to formally request for the first time positive medical policy determination for Easter Guard based on now the data that we have now the result of those will be varied as well, but at least initially discussion.

Lishan Aklog: Now, the result of those will be varied, but at least it initiates a discussion. If we're fortunate, we'll get coverage. If we don't get immediate coverage, then our secondary goal is to get engaged in pilot programs to collect clinical utility data within that particular payer, and we have some really good prospects. We were really excited just last week that we participated in a Blue Cross Blue Shield Association of America webinar where dozens of medical directors were in attendance, and our Lead Advisor and Head of our Medical Advisory Board, Dr. Nick Shaheen, who's the lead author of the American College of Gastroenterology Guidelines, really gave an excellent presentation making a very strong argument based on guidelines that ESOGARD should be covered by the plants.

Before like for <unk>.

Speaker Change: We will get coverage, if we don't get immediate coverage that our secondary goal is to get <unk>.

Speaker Change: Engaged in pilot programs to collect clinical utility data within that particular payer and we have some really good prospects on that.

Speaker Change: Really excited just last week, we participated in a Blue Cross Blue Shield Association of America, Webinar, where dozens of medical directors, who are in attendance and are.

Speaker Change: Clean advisor and head of our medical Advisory Board in Ontario, Mexico, <unk>, who is the lead author of the American College of Gastroenterology guidelines really gave us excellent presentation, making a very strong argument based on guidelines on Aesop guards should be covered by the plants and so that was a very positive engagement on the Medicare side, where targa.

Lishan Aklog: And so that was very positive. On the Medicare side, we are targeting re-engagement with the MOLDI-X program, which is the entity that finalizes local coverage determinations. We are able to operate within the construct of a final and effective local coverage determination that's foundational for the category of test that's in effect. And we now believe we've collected sufficient clinical utility data to make that re-engagement. The timing of that, and our meeting, a pre-submission meeting with them, is triggered by the publication of one of the key clinical validity studies, the BetterNet study, which we expect to happen any day now, at which point we will ask for a meeting and, based on that meeting, proceed to a technical assessment submission.

Speaker Change: <unk> re engagement with the multi X program, which is the entity that.

Speaker Change: Finalizes local coverage determinations, we are able to operate within.

Speaker Change: The construct of a local a final and effective local coverage determination that foundational for the category of testing <unk> potential in effect.

Speaker Change: And we're now believe we've collected sufficient.

Speaker Change: Clinical validity and clinical utility data to make that re engagement the tightening of that of our of our meeting our pre submission meeting with them.

Speaker Change: Triggered on the publication of one of the key but what are your studies that better in that study.

Speaker Change: And that we expect to happen any day now in which point, we will ask for a meeting.

Speaker Change: And based on that meeting proceed to a technical assessment submission. So based on what's now a very concrete timeline and based on the <unk>.

Lishan Aklog: So based on what's now a very concrete timeline and based on the completion of what we believe is sufficient data to convert the foundational LCD into a coverage determination for Medicare, we really do believe that we now have a line of sight to Medicare coverage. And then one final area that's been an area of strong focus is that there is now biomarker legislation in over a dozen states where, by state statute, there is mandatory commercial coverage for certain biomarker tests. And that gives us the opportunity. Next slide, please. Next slide. So that gives us the opportunity to operate in those states. So these are the 16 states with biomarker legislation, including two that are limited to cancer.

Speaker Change: Completion of what we believe is sufficient data to convert their foundational LCD into.

Speaker Change: Coverage determination for Medicare, we really do believe that we now have a line of sight to Medicare coverage and then one final area. That's been a area of strong focus as there is now a biomarker legislation and over a dozen states where by by state statue either as a.

Speaker Change: Mandatory mandatory commercial coverage for certain biomarker test and that gives us the opportunity next slide please.

Yeah.

Speaker Change: It looks like.

So that gives us the opportunity to operate in these states. So these are the 16 states with with.

Speaker Change: With biomarker legislation, including two that are limited to cancer, we believe we and where we're getting we're starting to get feedback that we are covered under the states under under this legislation in certain states.

Lishan Aklog: We believe we are, and we're starting to get feedback that we are covered under these states, under this legislation in certain states. And we're going to continue to push hard on that. Again, it guarantees mandatory commercial coverage where this legislation occurs.

Speaker Change: And we're going to push continue to push hard on that again.

Speaker Change: I get it.

Speaker Change: Guarantees mandatory commercial coverage of where these where this legislation occurs and buy.

Lishan Aklog: And by achieving this, we're able to actually work on targeting our resources, whether they be our commercial team or other activities in those states. And that's something we're looking forward to yielding results in the next couple of quarters. So with that, I'll hand the reins over to Dennis to provide an update on. Thanks, Lishan. The summary financial results for the fourth quarter of a year were reported in our press release that was published last night.

Speaker Change: By achieving this we're able to actually work on targeting our resources, whether there'd be a commercial team or other other activities in those states and that's something we're looking forward to.

Speaker Change: Yielding.

Speaker Change: And the next couple of quarters, so with that I'll hand, the reins over to Dennis to provide an update on our financials.

Dennis: So Dennis take over.

Dennis: Thank you Felicia on the summary financial results for the fourth quarter and the year were reported in our press release that was published last night on the next three slides I'll emphasize a few key highlights from the quarter I'd encourage you to consider those remarks in the context of the full disclosures covered in our annual report on Form 10-K, which was filed with the SEC.

Dennis M. McGrath: On the next three slides, I'll emphasize a few key highlights from the quarter. I'd encourage you to consider those remarks in the context of the full disclosures covered in our annual report on Form 10-K, which was filed with the SEC last night and is available on our website. Joe.

Dennis: Last night it is available on our website.

Dennis: Joe.

Joe: On slide 18 here you see the balance sheet cash at year end was $18 9 million.

Dennis M. McGrath: On slide 18, here you see the balance sheet cash at year end was $18.9 million. Supplement at that balance. The financing that we completed just two weeks ago in the amount of $18.1 million. The average quarterly burn rate for last year was 8.2 million per quarter, as you can see in the statement of cash flows in our 10k. The burn in the fourth quarter was $6.7 million from operations and $3.4 million from paydown of intercompany debt. We disclose in the 10-K that our ability to fund operations beyond one year from today is largely dependent upon how revenues ramp over the next five quarters, which is highly dependent on how the reimbursement landscape for both government and private health insurers as well as successful efforts for direct contracting with self-insured employers shapes increases in payment realization of submitted claims and or corporate Beyond that, there's nothing substantively remarkable about the remainder of the September 31st ballot.

Joe: We supplemented that balance with the financing that we completed just two weeks ago and the amount of $18 1 million.

Joe: The average quarterly burn rate for last year was $8 $2 million per quarter. As you can see in the statement of cash flows in our 10-K the burn in the fourth quarter was $6 7 million from operations and $3 4 million for pay down of intercompany debt.

Joe: We disclosed in the 10-K that our ability to fund operations beyond one year from today.

Joe: It's largely dependent upon our revenues ramp over the next five quarters, which is highly dependent on how the reimbursement landscape for both government and private health insurers as well as successful efforts for direct contracting with self insured employers shapes increases in payment realization of submitted claims <unk>.

Joe: Corporate finance activities.

Joe: Beyond that there is nothing substantively remarkable about the remainder of that.

Joe: Number 31 balance sheet.

Dennis M. McGrath: However, subsequent to year-end, in addition to the incremental $18 million in cash infusion, Lucid settled approximately $4.7 million in debt to PavMed by the issuance of approximately 3.3 million shares of common stock. Chairman's Outstanding, including Unvested, Restricted Stock Awards. As of today, it's 48.2 million shares, which includes 242,000 chairs issued subsequent to year end in connection with conversion notices received from the Convertible Debt Holder. The gap shares outstanding, of 42.3 million, are reflected on the slide as well as on the face of the balance sheet in 10K. Gap shares do not reflect unvested restricted stock.

Joe: However.

Subsequent to year end in addition to the incremental $18 million of cash infusion loose.

Joe: Lucid settled approximately $4 7 million in debt to <unk> by the issuance of approximately $3 3 million shares of common stock.

Joe: Shares outstanding including Unvested.

Joe: Restricted stock awards.

Joe: As of today is $48 2 million shares which includes 242000 <unk>.

Joe: <unk> issued subsequent to year end in connection with the conversion notices received from the convertible debt holder.

The GAAP shares outstanding.

Joe: A $42 3 million are reflected on the slide as well as on the face of the balance sheet in 10-K gap.

Joe: GAAP shares do not reflect unvested restricted stock awards.

Joe: With regard to the P&L on Slide 19 compares this year's fourth quarter to last year's fourth quarter and similarly for the yearly totals on certain key items.

Dennis M. McGrath: With regard to the T&L on slide 19, it compares this year's fourth quarter to last year's fourth quarter and similarly for the yearly totals on certain key items. Trust you'll review the information, like comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-GAAP revenue of $1,040,000 for the quarter, is a 33% sequential increase over the third quarter and is in line with what was previously previewed. The amount reflects actual cash collections for the quarter, plus a small amount of invoiced e-cigarette tests delivered to the Veterans Administration, plus about $26,000 in initial billings under the direct contract with INSEERA Auto. The revenue increase reflects about a ninefold increase over the prior year quarter and about a sixfold annual increase over the prior year. Test volume, at 2,200 tests for the quarter, represented just over $5 million in submitted claims for the fourth quarter at our 24.99 standard price for the test.

Joe: Christie will review the information like comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-GAAP information.

Christie: Revenue of $1 million and 40000 for the quarter.

Christie: A 33% sequential increase over the third quarter and is in line with what was previously previewed the.

Christie: The amount reflects actual cash collections for the quarter plus a small amount of Invoiced <unk> test delivered to the veterans administration.

Christie: About $26000 in initial building billings under the direct contract with <unk> Auto group.

Christie: The revenue increase reflects about a nine fold increase over the prior year quarter added about a sixfold annual increase over the prior year.

Christie: Test volume at 'twenty 200 tests for the quarter represents just over $5 million in submitted claims for the fourth quarter at our 2499 standard pricing for the test.

Dennis M. McGrath: For the first quarter of 2024, revenues are tracking to be on par with the fourth quarter. Revenue Recognition. The key to determining the probability of collections.

Christie: For the first quarter of 2024 revenues tracking to be on par with the fourth quarter.

Christie: Revenue recognition is a key determinant of the probability.

Christie: Of collections and therefore due to the fact that we are in the early stages of the reimbursement process means revenue recognition for submitted claims.

Dennis M. McGrath: And therefore, due to the fact that we are in the early stages of the reimbursement process means revenue recognition for submitted claims to traditional government or private health insurance will be recognized when the claim is actually collected versus when the patient report is invoiced and submitted for reimbursement. As you'll see in our 10-K, this is called Variable Consideration. It's in the jargon of GAAP's ASC 606 Revenue Recognition Guidelines. Presently, there is insufficient predictive data to reflect revenue when the test report is delivered to the referring physician.

Christie: Submitted to traditional government or private health insurance will be recognized when the claim is actually collected versus when the patient report is invoiced and submitted for reimbursement.

Christie: Youll see in our 10-K, that's called variable consideration, it's in the jargon of gaps ASC 606 revenue recognition guidelines.

<unk> there is insufficient predictive data to reflect revenue when the test report is delivered to the referring physician.

Dennis M. McGrath: For billable amounts contracted directly with employers and are fixed and determinable, they will be recognized as revenue when the contracted service is delivered. Generally, that means when the report is delivered to the referring employer. Our non-GAAP loss for the quarter of $9.9 million reflects about $600,000 in sequential increase compared to the third quarter and about 700,000 decrease year over year. The increase in the fourth quarter was related to three specific one-time events, some clinical research costs of about $300,000, mostly related to the events leading up to the published clinical utility studies. $300,000 in sales and marketing, and some G&A patent expenses of about $250,000. These amounts were offset by a quarterly increase in revenue.

Christie: Were billable amounts contracted directly with employers and are fixed and determinable.

Christie: They will be recognized as revenue when the contracted services deliberate generally that means when the report is delivered to the referring physician.

Christie: Our non-GAAP loss for the quarter of $9 9 million reflects about $600000 in sequential increase compared to the third quarter and.

Christie: At about 700000 decrease year over year.

Christie: The increase in the fourth quarter was related to three specific one time events. Some clinical research costs of about 300000, mostly related to the events leading up to the published clinical utility studies three.

Christie: 300000 in sales and marketing and some G&A patent expenses.

Christie: Of about 250000 feet.

Christie: These amounts were offset by the quarterly increase in revenue.

Christie: On the next slide.

Dennis M. McGrath: On the next slide, slide 20 is a graphic illustration of our operating expenses for the periods reflected. Total non-GAAP OPEX is $10.9 million for the fourth quarter of 2023, and it's fairly flat year-over-year. An increase from the third quarter reflects clinical research, the one-time patent expenses, and that sales expense measure. The cost of revenue primarily consists of ESO-checked devices, lab supplies, and fixed lab facility costs. The variable cost for each test is approximately $200, or effectively 10 to 11% of the marginal cost of sales. Changes in Test Line Quarters. The non-GAAP net loss per share has been relatively flat for each of the last four quarters, plus or minus a penny between each of the four quarters of 2023. On a GAAP EPS basis, non-cash charges accounted for approximately three cents per share in the fourth quarter.

Christie: Slide 20 is the graphic illustration of our operating expenses for the periods reflected total non-GAAP Opex was $10 9 million for the fourth quarter 2023, and it's fairly flat year over year, an increase from the third quarter reflects the clinical research the onetime expenses that sales expense that I just mentioned.

Christie: Cost of revenue primarily consists of easily check devices lab supplies and fixed lab facility costs.

Christie: The variable cost for each test is approximately $200 or effectively 10% to 11%.

Christie: <unk> cost of sales for changes in test volume quarter to quarter.

Christie: The non-GAAP net loss per share has been relatively flat for each of the last four quarters, plus or minus a penny between each of the four quarters of 2023.

Christie: On a GAAP EPS basis noncash charges accounted for approximately <unk> <unk> per share in the fourth quarter.

Dennis M. McGrath: A little bit more about reimbursement details. So since the new Revenue Cycle Manager products took over in mid-June, Lishan's given you some details. There were 7,800 claims, representing approximately $20 million in pro forma revenue, have been submitted for reimbursement either to the government or to traditional health insurers.

Christie: A little bit more about reimbursement detail. So since that new revenue cycle management products took over in mid June we shouldnt, giving you. Some details there were 78 100 claims representing approximately $20 million in pro forma revenue.

Christie: Been submitted for reimbursement either to government or two traditional health insurers.

Dennis M. McGrath: About 82% have been adjudicated, and 18% are still pending. Out of the 82% that have been adjudicated, about 46% resulted in an allowable amount. That's basically what the insurance company says we should be entitled to be paid, with an average of $1,828 per test. Now, out of that amount,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, About 51% required one of three things either additional information, which was about 7% of those calls, or deemed not medically necessary, which is a bit puzzling considering that Patients are meeting the guidelines, that was 26% of those denials, or required prior authorization. That's 18% of those denials. About 29% were deemed to be non-covered.

Christie: About 82% have been adjudicated, 18% are still pending.

Christie: Out of the 82% that had been adjudicated about 46% resulted in an allowable amount that's basically what the insurance company says we should be entitled to be paid with that average of $1828 per test.

Christie: No.

Christie: Of that amount.

Still has to be reviewed with the patient what's their out of pocket, what's your deductible, which could lower that affect the amount, but the insurance companies are holding to the general pricing line and all out of network $1828 that should be viewed very positively in terms of the benchmark Medicare at $19 38.

Christie: Those denied.

Christie: About 51% require one of three things either additional information that was about 7% of those styles.

Christie: Or deemed not medically necessary, which is a bit puzzling considering that.

Christie: Patients are meeting the guidelines that was 26% of those denials.

Christie: Or require a prior authorization, that's 18% of those denials about 29% were deemed to be non covered.

Operator: So with that operator, let's open it up. Thank you. And ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your cell phone keypad. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. And if you're using a speaker phone, please keep the handset before pressing any keys.

Speaker Change: So with that operator, let's open it up for questions.

Thank you and ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the number one on your telephone keypad, you will hear from Victor Henderson based should you wish to declines in the polling process. Please press the star followed by the number two and if youre using a speaker phone.

Speaker Change: Please keep the handset before pressing any.

Operator: One moment, please for your first question. Your first question comes from the line of Kyle Mikson from TANACORG. Your line is open. Retiring Kyle.

Speaker Change: One moment. Please for your first question.

Speaker Change: Your first question comes from the line of Kyle Nixon from Canaccord. Your line is open.

Kyle Alexander Mikson: Currently titles.

Kyle Alexander Mikson: Hey guys, thanks for the question. Congratulations on the year and the quarter. So, just looking at the volume and, you know, I guess like the revenues. So, volume decreased quarter over quarter a little bit, maybe 15%. But you think you can kind of maintain these quarterly levels, you know, around 2,400 or so claims. I guess that makes some sense given the Salesforce situation. But the effect of ASP, that increased like, you know, over 50%. That's great!

Kyle Alexander Mikson: Hey, guys. Thanks for the question and congrats on the year in the quarter.

Kyle Alexander Mikson: Just looking at the at the volume and the.

Kyle Alexander Mikson: I guess like the revenue so volume decrease quarter over quarter, a little bit maybe 15% anything that you can kind of maintain these quarterly levels.

Kyle Alexander Mikson: Around 2400, or so claims I guess that makes some sense given the sales force situation, but.

Kyle Alexander Mikson: Do you have asps that increased like over 50% Thats, great. So how should we think about maybe volume and ASP.

Kyle Alexander Mikson: So, how should we think about maybe volume and ASP dynamics and metrics going forward, given you're now kind of hitting a nice kind of stable rate for both of those? I feel like you're honestly kind of progressing nicely, maybe on higher trajectories, especially on the ASP side. Let me start with volume, and then I'll hand it over to Dennis.

Dynamics and metrics going forward, given youre now kind of hitting like a nice.

Kyle Alexander Mikson: And a stable rate of for both of those if you look at it honestly kind of progressing nicely, maybe an upper trajectory, especially on the ASP side.

Speaker Change: Let me start with volume and then I'll hand, it over to Dennis I think you I think you've summarized it well Kyle that we're we've.

Lishan Aklog: I think you summarized it well, Kyle, that we've kind of peaking at our productivity of our existing sales force. Again, that doesn't mean that we want your test volume growth. The test volume growth is going to be driven more by other aspects as opposed to our sales force that's calling directly on physicians. So that will be driven by these check your food tube testing events, which are more efficient, as you might imagine, in terms of the manpower that's required to run an event that can generate a hundred or more or more tests without as much activity on the sales side and, importantly, on the direct contracting side. Right. So that could yield a significant test volume growth without depending on the productivity and the size of our sales force. So I think I think you're right.

Dennis: Kind of peaking on our productivity of our existing sales force again that doesn't mean that we want to test volume growth, but thus far in growth is going to be driven more by other asked about other aspects as opposed to our sales force that's calling directly on on physician. So there will be driven by.

Dennis: These check you're free to testing events, which are <unk>.

Dennis: More efficient as you might imagine in terms of the.

Dennis: The person power Thats required to run an event that can.

<unk>.

Dennis: There are more and more tests with not as much activity on the sales side and importantly on the.

Dennis: Direct contracting side right. So those could yield a significant significant test volume growth without depending on the productivity and the size of our sales force. So I think I think you're right I think we at the current size.

Dennis: Our baseline activity traditional.

Dennis: All of the marketing activity I think these numbers.

Dennis: Spectrum.

Dennis: And but we will obviously hope to see growth from the other.

Lishan Aklog: I think at the current size of our baseline activity, traditional sales and marketing activity, I think these numbers we expect them to hold. And we will obviously hope to see growth from the other pathways that I mentioned. So I'll let Dennis talk a bit more about that. Yes, so on collection realization, the trajectory, and secondary order to the extent it's dependent upon government and private health insurance that is tied to our sales force. That level should stay relatively flat with acceleration in the.

Dennis: The other pathways.

Dennis: I'll, let Dennis talk a bit more about okay.

Dennis: Good morning.

Yes, so on the on collection realization the trajectory and technical review of the first quarter to the extent, it's dependent upon the government and <unk>.

Dennis: Health insurance that is tied to our sales force.

Dennis: Debt levels should stay relatively flat with acceleration in the second half.

Dennis: To the extent that the volume picks up with the direct contracting and again that is not as limited as Alicia just pointed out by the amount of time and selling opportunity of our sales force there is.

Dennis: A multiplying effect with direct contracting and the fact that pain.

Dennis M. McGrath: The extent that the volume picks up with the direct, And again, that is not as limited as Lishan just pointed out by the amount of time and selling opportunity of our sales force. There is a multiplying effect with direct contracting. And the fact that... [inaudible] In terms of test volume, the increase in realization is significantly higher from those two periods. That's a reflection of the improvements with our revenue cycle manager. And the appeals process is just starting to take root, and in those cases where the appeals have been submitted, we are being successful with them. That will also help with the real...

Dennis: Payment is guaranteed as part of that contract.

Dennis: Tenant upon.

Dennis: Independent third party insurance companies that.

Dennis: It's not as predictable that we will increase realization as we move forward.

Dennis: If you just look at two data points.

Dennis: Second quarter.

Dennis: Fourth quarter, where volumes were about the same.

In terms of test volume the increase in realization is significantly higher from those two periods. That's a reflection of the improvements with our revenue cycle manager.

The appeals process is just starting to take root and in those examples where.

Dennis: The appeals have been submitted we are.

Dennis: Being successful with them that will also help with the realizations.

Dennis M. McGrath: So, we see as a general statement on third-party insurance collection, where revenue is depending upon actual cash collections, timing is an issue there in terms of how quickly from a submitted claim do we actually get cash, and that's less predictable for us, kind of maintaining that as a view of fairly flat. As direct contracting picks up, the realization will obviously go up because the payment's guaranteed, and we can recognize revenue when we deliver the reports or deliver the service that's been contracted for, which will help speed the revenue ramp. We see all of them converging in the second half, with greater momentum.

Dennis: So we see as a general statement.

Dennis: On the third party insurance collection, where revenues depending upon actual cash collections timing is an issue there.

Dennis: In terms of how quickly from a submitted claim do we actually get cash and thats less predictable for us kind of maintaining that as a fuel.

Dennis: <unk> fairly flat as the direct contracting picks up the realization will obviously go up because of the debt repayments guaranteed and we can recognize revenue when we deliver the reports or deliver the service that's been contracted for which will help speed the revenue ramp we see all of them.

Dennis: <unk> in the second half.

Having greater momentum so.

Kyle Alexander Mikson: Hopefully, that gives you enough color on that particular topic. Yeah, that was fantastic, guys. Thanks so much for that. And then just on the Check Your Food Tube events, you know, clearly, those are going pretty well. Originally, some of us may view that as like a risk, creating some lumpiness with the volume and so forth. Maybe if there is, you know, some concentration there. I mean, you have a good two to three month backlog, and it's pretty nice visibility, then you're expanding. Is it fair that it's definitely not, for lack of a better word, like an artificial or like inflated volume?

Speaker Change: Hopefully that gives you enough color on that particular topic.

Speaker Change: Yes that was fantastic guys. Thanks, so much for that and then just on the.

Speaker Change: Thank you for Youtube events.

Speaker Change: Clearly those are going pretty well.

Speaker Change: Originally.

Speaker Change: Some of US may view that as like a risk, creating some lumpiness with the volume and so forth maybe lucky there was some concentration there I mean do you have a good.

Speaker Change: Two to three month backlog and it's pretty much visibility then youre expanding.

Speaker Change: Is it fair that it's definitely not like.

Speaker Change: Just for lack of a better word artificially inflated volume at this point and how does that evolve over time, how could that funnel into like deeper penetration among the clinician base overtime.

Lishan Aklog: At this point? How will that evolve over time? How could that funnel into deeper penetration among the clinician base over time? Yeah. So that's a great, great insight, Kyle. And definitely, yeah. I think in the early stages, when we had our first event, and there were sort of 400, 400 patients who were tested over two weekends, representing what was that 20% of our, for example, more of our volume for that quarter, certainly there was an opportunity for me to be lumpy. That's just not true anymore.

Speaker Change: Yes.

Speaker Change: So that's a great great insight, Kyle and definitely yes, I think in the early stages. When we had our first event and there were sort of 400 400 patients who were tested over two weekends, representing well over that 20% of our president.

Speaker Change: Was it more of our volume for that quarter, certainly there was that opportunity can be lumpy and thats just not sure anymore. So we're doing dozens of events.

Speaker Change: Smaller events larger events and everything in between and right now we're limited the demand is high.

Lishan Aklog: So we're doing dozens of events, smaller events, larger events, and everything in between. And right now, we're limited. The demand is high, And we're really limited by our clinical team, you know; we have a certain number of clinicians, nurse practitioners, nurses, and other device administrators. And we are sort of, you know, the efficiency with which we utilize them in an efficient way, but getting them around to these events does limit how many we can do in a given month. So I think it's correct for you to perceive this as just, you know, another source of organic volume and growth, and the ability to grow that volume is going to, I guess what I would say is the way our willingness to invest in more clinicians to drive more events will be directly related to our success at converting these events from we go do, you know, test 100, 200 firefighters and submit for their insurance policy.

Speaker Change: We're really limited by our.

Our clinical team that we have a certain number of them.

Speaker Change: Clinicians nurse practitioners nurses and other device administrators, and we sort of.

Speaker Change: The efficiencies to which we are utilizing them in efficient way, but getting them around to these events.

Does limit we have sort of a cap on how many we can do.

Speaker Change: Given month, so I think it's correct for you for this for you to perceive this as just another source of organic volume growth and the ability.

Speaker Change: Two to grow that volume.

Speaker Change: Is going to.

Speaker Change: I guess, what I would say is the way our willingness to invest in more clinicians to drive more events will be directly related to our success at converting these events.

Speaker Change: We go do.

Speaker Change: 100 200 firefighters.

Speaker Change: Submit for their insurance policy, and we're sort of at the Mercy of the claims process there as well.

Speaker Change: We convert from that process, which has been how we've been focused in the early stages over the last year too as I had mentioned now we are at the same time.

Speaker Change: Sort of a typical scenario as we engage with the fire Department now.

Lishan Aklog: And we're sort of at the mercy of the claims process there, as we convert from that process, which has been how we've been focused in the early stages over the last year, to, as I mentioned, now we are at the same time. So typical scenarios, we engage with the fire department, now they're soliciting us because there's good visibility at the conferences and so forth. And we talk, at the same time as we're organizing our first event, about entering into a contract, particularly since most of these unions are self-insured and those dialogues are going really well. The leaders, particularly the union leaders, are motivated to offer a service to their personnel; they're very focused on cancer prevention, particularly in the firefighter group.

Speaker Change: Now theyre soliciting us because theres good visibility at the conferences and so forth and we talk at the same time as we are arranging our first event, we talk about engaging in a contract, particularly since most of these.

Speaker Change: Unions are self insured and those dialogues are going really well the the leaders, particularly the union leaders are motivated to offer a service to their to their personnel focused on cancer prevention in the particularly in the current quarter group and so as we start seeing really similar in many ways as we start seeing increases in.

Speaker Change: <unk> from.

Speaker Change: Realization of revenue from these events then we'll be justified in.

Speaker Change: And investing in.

Speaker Change: More personnel to drive our capacity to do these events.

Speaker Change: Okay, Yeah that was great that there's real good color there.

Speaker Change: Maybe just finally I'm wondering if that's what the timelines for the clinical validity studies.

Lishan Aklog: And so as we start seeing, it's really similar in many ways, Kyle, as we start seeing increases in realization from realization of revenue from these events, then we'll be justified in investing in more personnel to drive our capacity to do so. Okay. Yeah, that was great. That was a really good call there.

Speaker Change: Particularly maybe theres the VA study look I know.

Speaker Change: Pending publication everything, but just like the the relevant to that I feel that that's kind of an important that gives us a good proof point and then with B why don't want to be 102, I guess, one of the ones I kind of close to <unk>.

Speaker Change: Being announced everything with 102 is a little bit further.

Speaker Change: Further back so yes.

Speaker Change: These important what's the timeline like when do we get.

Kyle Alexander Mikson: Maybe just finally, I'm wondering about some timelines for the clinical validity studies, particularly maybe the VA study. Like, I know, pending publication, everything, but I mean, just like the relevance of that, I feel like that's kind of an important proof point. And then with BE-101 and BE-102, I guess 101 is kind of close to being, you know, announced and everything, while 102 is a little bit further back. So what's, yeah, just like, are these important? What's the timeline? And when do we kind of expect some color?

Speaker Change: Some color yes.

Speaker Change: Yes, why don't I talk about the timelines relative to our.

Speaker Change: Our plans with multi X so on the clinical what they say they're at their original STM paper. There is the better net study, which has released data. It's all pre print. It has gone through multiple cycles of review at a leading journal and we really expect that to be clear for peer review.

Speaker Change: Location very very shortly we're just kind of waiting on that on what we think is the last round of.

Speaker Change: Responses to reviewers comments as soon as that is.

Speaker Change: Published.

Speaker Change: Online then we will request a meeting with multiyear so that's what we built we believe that that is sort of a lynchpin gating item for the publication of that of that.

Speaker Change: Clinical validity study you mentioned the VA study as being a really important.

Kyle Alexander Mikson: Yeah, why don't I talk about the timelines relative to our plans with Multi-X. So on the clinical validity study, there's the original STM paper. There's the BetterNet study, which has released data.

Speaker Change: A complement to that which they got posted on preprint thats been submitted we're not going to wait for that for being for peer review I expect that there's a good chance that when we have our meeting it will either be in peer review and certainly for any technical.

Lishan Aklog: It's on preprint. It's gone through multiple cycles of review at a leading journal, and we really expect that to be clear for peer review and publication very, very shortly. We're just kind of waiting on what we think is the last round of responses to reviewers' comments. As soon as that is published online, then we will request a meeting with MOLDIAC. So that's what we believe that that is sort of the linchpin gating item for the publication of that clinical validity study. You mentioned the VA study as being a really important complement to that, which got posted preprint. It's been submitted, but we're not going to wait for that for peer review. I expect that there's a good chance that when we have our meeting, it will either be in peer review, and certainly for any technical, by the time we get around to doing a technical assessment submission, it will have been peer reviewed.

By the time, we get around to doing that.

Speaker Change: General assessment submission it would be peer reviewed the key thing I think you were hinting at with the VA study is our first study in a screening population. So the original SDN paper as well as the bedroom that study where both case control studies and you always wanted to be able to show that you can replicate your performance in the actual intended use population in a real world situation.

Speaker Change: And where you are taking people off the streets who've never had endoscopies before that are categorized as having at.

Speaker Change: At risk and recommended for screening by guidelines and showing that you can actually identify disease with a high with a high performance, where the high negative predictive value and really good.

Speaker Change: Positive predictive value so that is on preprint.

Speaker Change: And has been submitted and we'll wait for that to be to be published on the clinical utility side sorry, the remaining clinical validity studies. The next in line is the <unk>, one study which is our.

Lishan Aklog: The key thing I think you were hinting at with the VA study, it's our first study in a screening population. So the original STM paper as well as the BetterNet study were both case control studies, and you always want to be able to show that you can replicate your performance in the actual intended use population in a real world situation where you're taking people off the streets who've never had endoscopies before that are categorized as having at risk and recommended for screening by guidelines and showing that you can actually identify disease with a high performance, with a high negative predictive value and really good solid positive predictive value.

Speaker Change: Our study in a screening population that study the manuscript is complete and the data is.

Speaker Change: Been tabulated I will give a preview and that the data is nearly identical to the to.

To the VA study so both stud.

Speaker Change: Studies.

Speaker Change: Screening population have really nailed nearly identical and otherwise excellent results. So that manuscript is being finalized the lead author is Dr. Shaheen and so we're just getting the final sign off on that and it should be posted on pre print soon and submitted for publication again, we're not going to wait for that but the two screening population studies will be an important supplement to our.

Lishan Aklog: So that is on preprint and has been submitted, and we'll wait for that to be published. On the clinical utility side, sorry, the remaining clinical validity studies, the next in line is the BE1 study, which is our, Our Study in a Screening Population. That study, the manuscript is complete. The data is tabulated.

Speaker Change: Our current discussions with multi Exxon with the payers in general to be studying we're continuing to enroll in that study that's not that's not a lynchpin at this point of of our.

Speaker Change: Our market access efforts.

We still.

Lishan Aklog: I'll give a preview of that data, which is nearly identical to the VA study, so both studies in a screening population have really nearly identical and otherwise excellent results. So that manuscript is being finalized. The lead author is Dr. Shaheen.

Speaker Change: Enrollment has picked up a bit and it slowed down a little bit we've shifted to entirely U S studies. The U S centers and we are adding a few.

Speaker Change: That'll be just sort of additional complementary that'll be a third case control study on top of that as Tim and better in a study that will be supplemental, but not that it's not sort of a lynchpin of our market access strategy.

Lishan Aklog: And so we're just getting final sign-off on that, and it should be posted on preprint soon and submitted for publication. Again, we're not going to wait for that.

Speaker Change: Shawn Devine to as that case control or is that pretty.

Shawn Devine: Yes, that's close control that so that that's why it's so it'll just be sort of a third such case control study and will be supplementary, but it's not sort of at the heart of what we think we have sufficient.

Lishan Aklog: But the two screening population studies will be an important supplement to our discussions with Multi-X and with repairs in general. The BEU2 study, we're continuing to enroll patients in that study. That's not a linchpin at this point in our market access efforts. Enrollments picked up a bit, and it slowed down a little bit. We've shifted to entirely U.S. studies and U.S. centers, and we've added a few.

Shawn Devine: Case control CV data in now to screening population CV data.

To drive our market access efforts.

Speaker Change: Yeah, all right I'll hop off thanks, so much guys. Appreciate the time alright, thanks a lot.

Speaker Change: Questions.

Yes.

Speaker Change: Your next question comes from the line of Joseph Conway from Needham Your line is open.

Joseph Good morning, Hi, Joseph.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: You there Joseph.

Lishan Aklog: And that will be just sort of additional complementary. That will be a third case-control study on top of the STM and BetterNet studies that will be supplemental, but it's not sort of a linchpin of our market. You know, Lishan, the BE2, is that case control, or is that the screening population? Yeah, that's case control.

Speaker Change: Operator, why don't you put Joseph Spak.

Speaker Change: My apologies can you go you're back okay.

Joseph Spak: How are you doing my apologies I was on mute good morning, everyone and thanks for taking our questions.

Maybe just one on <unk>.

Joseph Spak: Yes.

Operating expenses, if you guys are planning to keep them volume fairly leveled as.

Lishan Aklog: So that's why it'll just be sort of a third such case control study. It'll be supplementary, but it's not sort of at the heart of what we think we have sufficient. Case Control CV Data, and now two screening populations to drive our market. Yeah, all right. I'll hop off.

Joseph Spak: As well as the sales force before reimbursement comes in but.

Maybe seeing more traction on these.

Joseph Spak: Please check your CHF events, and what have you I guess with all of that together is it safe to say that we should expect.

Joseph Spak: A modest increase maybe in operating expenses just on a run rate maybe on the last few quarters do you think that's maybe stabilized I guess is a better way to ask.

Kyle Alexander Mikson: Thanks so much, guys. Appreciate the time. All right. Thanks a lot, Kyle. Your next question comes from the line of Joseph Conway from Needham. Your line is open. Joseph, good morning. Hey Joseph. Are you there, Joseph?

Speaker Change: Ask that.

Speaker Change: Yes so.

Speaker Change: The opex.

Speaker Change: On a on a GAAP basis for the last couple of quarters, it's been in the.

Operator: Operator, why don't you put Joseph back in the queue? My apologies. Can you guys hear me?

Speaker Change: The $12 million range and the triggers for us are clearly on realization of payment.

Joseph Scott Conway: Yeah, I can hear you. How are you doing? My apologies. I was on mute.

Joseph Scott Conway: Good morning, everyone. Thanks for taking our questions. Maybe just one on, you know, operating expenses. If you guys are, you know, planning to keep volume fairly leveled, as well as, you know, the sales force before, you know, reimbursement comes in, but, you know, maybe seeing more traction on these, you know, check your food tube events and what have you. I guess with all of that together, is it safe to say that we should expect a modest increase, maybe in operating expenses, just on a runway, maybe in the last two quarters? Do you think that's maybe stabilized? I guess, is a better way to answer that question. Yeah, so the opex on a gap for the last couple quarters to get in the, you know, the $12 million. So, the triggers for us are clearly the realization of pain. And so with the multiple streams, the Revenue Stream.

Speaker Change: And so with the multiple streams.

Speaker Change: Our revenue streams, they will have different influences on where that Opex goes.

Speaker Change: The extent that.

Speaker Change: Policy.

Speaker Change: Insurance policy changes positively.

Speaker Change: Quicker rates, we will start adding additional salespeople because that means falling on physicians on the direct contracting side.

That typically requires less selling resources now.

Speaker Change: Adam.

Speaker Change: <unk> expanded that group from one to two or in the process of extending some ones too.

Speaker Change: Because that pipeline is growing rather SaaS sales cycle, there is a little bit longer.

But once it gets started.

Speaker Change: The test volume.

Speaker Change: Ability to increased test volume and therefore payment associated with that is more dependent upon the clinical side of things and we will add resources directly related to that because that payment is guaranteed we're not guessing in terms of what we're going to get paid during that period of time. So.

Dennis M. McGrath: They will have different influences on where that op-ex goes to the extent that policy. Insurance Policy changes positively at a quicker rate; we will start adding additional salespeople because, Following on physician, on the direct contracting side, that typically requires less selling resources.

Speaker Change: <unk>.

Speaker Change: Those two streams will influence what happens in sales and marketing I think on the marketing side, we're still a couple of quarters away from stepping on the gas pedal where.

Dennis M. McGrath: Now, we've added to expanded that group from one to two. We're in the process of expanding from one to two because that pipeline is growing rather fast. The sales cycle there is a little bit longer, but once it gets started, the test volume, the ability to increase test volume, and therefore payment associated with that, is more dependent upon the clinical side of things. And we will add resources directly related to that because that payment is guaranteed. We're not guessing in terms of what we're going to get paid during that period, so those two streams will influence what happens in sales and marketing. I think on the marketing side, we're still a couple quarters away from stepping on the gas pedal where advertising will be a component of. That's probably more of a 25%.

Speaker Change: Advertisement will be a component of Opex, that's probably more of a 25 beds.

Speaker Change: <unk>.

Speaker Change: Modest increases.

Speaker Change: For the next quarter or two the second half of the year I think that.

Speaker Change: You could start seeing some acceleration in sales cost line.

I think from a from a.

Speaker Change: Research and development or regulatory or clinical research standpoint, I think our level that we're presently yes, it stays fairly flat.

For the next couple of quarters.

Joseph Scott Conway: So modest increases for the next quarter or two, the second half of the year, I think that you could start seeing some acceleration in sales costs. But I think from a research and development or regulatory or, you know, clinical research standpoint, I think our level that we're presently at stays fairly flat for the next couple of quarters. Okay, great. Yeah, that's super helpful. Thanks for that, Kyler.

Speaker Change: Yeah.

Speaker Change: Okay great.

Speaker Change: Very helpful. Thanks for thanks for that color.

Speaker Change: Maybe and then maybe one on Medicare the technical assessment process.

Speaker Change: I guess you guys are expecting that.

After submission and that starts to take anywhere from six to two.

Speaker Change: At 12 months I don't know if you have like more narrow timing on that just given your relationships.

Lishan Aklog: Maybe, and then maybe one on Medicare, the technical assessment process. I guess you guys are expecting that, you know, after submission, and that starts to take anywhere from 6 to 12 months. I don't know if you have more narrow timing on that, just given your relationship, you know, the meetings that you've already had with Medicare. But I guess maybe some more color on that final approval date or final reimbursement decision that you think. Yeah, certainly we're not in a position to make any kind of hard prediction as to when that happens.

Speaker Change: It means that you've already had with Medicare.

Speaker Change: But I guess, just maybe some more color on that final approval date or final reimbursement decision that you think.

Speaker Change: Yes, certainly we are not in a position to make any kind of a hard prediction as to when that happens I sort of mapped out.

Speaker Change: What the triggers are for us to request a pre submission meeting and then based on the results of that meeting we will be ready to submit the technical assessment immediately following the.

Lishan Aklog: I sort of mapped out how, you know, what the triggers are for us to request a pre-submission meeting, and then based on the results of that meeting, we'll be ready to submit the technical assessment immediately following the pre-submission meeting with Moldy X. And we intend that to be an in-person meeting. So, technically, the TA process is to turn around in 60 to 90 days. Now, like FDA, anybody who's been involved in an FDA process that says it's 90 days, there's an opportunity to stop that clock, right? They can stop the clock and ask for more information and so forth.

The pre submission meeting with the multi extra and we intend that to be an in person meeting in Houston. So.

Speaker Change: So technically that CA process is to turn around in the 60 to 90 days now.

Speaker Change: Now like SBA anybody who has been involved in the FDA process, which is it's 90 days there is an opportunity to stop that clock right. They can stop the clock and ask for more information and so forth. So.

Speaker Change: It's a cumulative 60 to 90 days that constraint John for a period of time, but it's very hard to say.

Speaker Change: Once that process starts just like with an FDA submission, whether you've sort of through that 60 to 90 day window or as a result of inquiries along the way and pauses that stretches out beyond that so really no way for us to predict that at this point.

Lishan Aklog: So, it's a cumulative 60 to 90 days that can stretch on for a period of time. But it's very hard to say, you know, once that process starts, just like with an FDA submission, whether, you know, you've sort of looked through that 60 to 90 day window or as a result of inquiries along the way and pauses that stretch out beyond that. So, really, no way for us.

Speaker Change: Okay, great yeah. Thanks for thanks for taking our questions.

Speaker Change: Great. Thanks Pam.

Speaker Change: Your next question comes from the line of Anthony Vendetti from Maxim Group. Your line is open.

Anthony Vendetti: Hey, Anthony Good day, thank you.

Lishan Aklog: Okay, great. Yeah, thanks for taking our questions. Great, thanks. Your next question comes from the line of Anthony Vendetti from Maxim Group. Your line is open. Anthony, good morning.

Anthony Vendetti: Anthony John Hey, Dennis how are you doing.

Anthony Vendetti: Great.

Anthony Vendetti: So just wanted to I know you switched to a new revenue cycle manager I believe mid last year.

Anthony Vendetti: And.

Anthony Vendetti: Doing a much better job in terms of being able to get.

Anthony V. Vendetti: Hey Lishan, hey Dennis, how are you doing? Great So I know you switched to a new review cycle manager, I believe mid last year, and you are doing a much better job in terms of being able to get reimbursed. I think, I think in the, You've submitted approximately $20 million, and the commercial government pays $20 million, and the vast majority of those have been adjudicated with half, resulting in nearly half of the allowable amount of $1,800 per test, which seems very, very positive and much better than what you were doing originally.

Anthony Vendetti: Reimbursed.

Anthony Vendetti: I think I think in the.

Anthony Vendetti: <unk> submitted approximately the commercial and government payers 20 million and the vast majority has been.

Judicate it.

Anthony Vendetti: With half, resulting nearly half in the allowable amount of 1800 protests.

Anthony Vendetti: Which seems very very positive and much better than what you were doing originally.

Anthony Vendetti: Does that mean if we.

Anthony Vendetti: I guess the definition of vast majority of it does that mean, there's maybe.

Anthony V. Vendetti: Does that mean if we, you know, and I guess the definition of the vast majority, does that mean there's maybe 8 million maybe in revenue that you would expect in the pipeline, 8 million plus, or how should we look at what's left to be adjudicated? Yeah, I'll remember. No, go ahead, Dennis.

Anthony Vendetti: 8 million maybe in in.

Anthony Vendetti: Revenues that you would expect in the pipeline 8 million plus or how should we look at.

Anthony Vendetti: What's left to be adjudicated.

Speaker Change: Yeah, So remember Darko had dentistry.

So your thesis is correct. So when you look at $20 million of submitted claims in the adjudication of 80% and 40%.

Dennis M. McGrath: Sorry. So, your thesis is correct. So, when you look at $20 million of submitted claims and the adjudication of 80%, 40% in an allowable amount, you're talking about 8 or 9 million dollars of a possibility that

Speaker Change: Well now youre talking about eight or $9 million of.

Speaker Change: Possibility.

Dennis M. McGrath: Can be diminished by what the patient's share of that will be. Uh, it also should be reduced for what we have collected so far, which is nearly $2 million. There is a backlog of amounts awaiting for a collection that could be as much as $9 million.

Speaker Change: Can be diminished by what the patient share of debt will be.

Speaker Change: It also should be reduced for what we have collected so far which is nearly $2 million.

Speaker Change: There is a backlog of.

Speaker Change: Of amounts awaiting for collection that could be as much as $9 million I think.

Dennis M. McGrath: I think looking at that in the range of five to six is probably more of a realistic view, but there's uncertainty about it. So, um, you know, what gets paid for that? You know, we've got this average that the information we're getting from quad X puts the allowable amount right at 1828 in the last quarter, which is holding. I think the prior quarter was just slightly higher than that, maybe by 10 or 20 dollars more.

Speaker Change: Looking at that in the range of five to six is probably more of a realistic view.

Speaker Change: But there is uncertainty about it so.

Speaker Change: What gets paid on that.

Speaker Change: Got this average that the information we're getting from from Quad X puts the allowable amount right.

Speaker Change: $18 28 in the last quarter, which is holding I think the prior quarter was just slightly higher than that maybe by 10 or $20 more so.

Lishan Aklog: So, it's in that range, but there's still some uncertainty about that to try and figure out exactly what we're going to collect because of the patient's contribution and the timing related to when we'll be collecting. Can I reemphasize?

Speaker Change: It's in that range, but there's still some uncertainty about that to try and figure out exactly what we're going to collect because of the patient's contribution and the timing related to when we will get it.

Speaker Change: Yeah can I reemphasize that I think the way we looked at that $800 is pricing right. So we feel like okay.

Dennis M. McGrath: I think the way we look at that $1,800 is in terms of pricing, right? So we feel like, okay, you know, we're getting a lot of claims about half the time, and the price that they're sort of acknowledging is pricing in the vicinity of Medicare, which is great. Now, if this is the high-deductible patient, you know, patient with a high-deductible plan in January, you know, that's the patient responsibility could be all of that. And so that's not necessarily what we're going to, you know, the proportion of that average $1,800 that gets converted into revenue is really highly uncertain at this point.

Speaker Change: We're getting allowed claims about half the time and the price that they're sort of acknowledging pricing in the vicinity of Medicare which is great. Now. This is a high deductible patient the patient with a high deductible plan in January.

Speaker Change: The patient responsibility could be could be all of that and so that's not necessarily what we're going to the proportion of that average $800 that that gets gets converted into revenue is really highly uncertain at this point, but what we're gratified by and we're gratified in terms of the stability of is that pricing the acknowledgment that sort of that.

Lishan Aklog: But what we're gratified by and what we're gratified in terms of the stability of is that pricing, the acknowledgement that this is an acceptable price. This is an allowed price, which we can build our models around. But we still have time to see how much that allowed amount translates into payment. And it's not easy to track, right?

Speaker Change: An acceptable price that's allowed price, which we can which we can build our models around but we still have time to see we still have to see where what the.

Speaker Change: Hum.

Speaker Change: How much that allowed amount translates into payment and it's not easy to track right because the stuff that's been out of phase.

Anthony V. Vendetti: Because it's stuff that's a bit out of phase. Sure, sure. That's definitely helpful, Collar. And then my last question is about your marketing efforts. I look at it as a three-pronged effort between the Check Your Food Tube events that you've discussed, your Lucid Test Centers, and then your satellite offices. As you move, you know, as we move through 2024 and go into 2025, how would you look at, as best you can forecast, the breakout and what's driving more patients? Yeah, sure. Go ahead.

Speaker Change: Sure sure that's definitely helpful color and then my last question is.

Speaker Change: Around your marketing efforts I looked at it.

Speaker Change: <unk> three pronged effort.

Speaker Change: Between the check your food tube events that you've discussed your lucid test centers and then your satellite offices.

Speaker Change: As you move.

Speaker Change: As we move through 2024 and go into 2025.

Speaker Change: Would you look at.

Speaker Change: As best you can.

Speaker Change: <unk> forecast.

Speaker Change: Break out what's driving <unk>.

Speaker Change: More patients.

Speaker Change: Yes.

Speaker Change: Yeah sure. Thanks, Alright, that's great I'll, maybe tweak it a little bit just to focus on what is the patient acquisition strategy in those cases right. So what you described is really sort of more of a cell collection location like how it where we actually do in the summer collection and they are very much interrelated and as you'll as you also know from my comment here that some of this is.

Lishan Aklog: Thanks. Great. Yeah, no, that's great.

Anthony V. Vendetti: I'll maybe tweak it a little bit just to focus on, you know, what is patient acquisition? Right. So what you described is really sort of more the cell collection location, like how we're, And they're very much interrelated.

Speaker Change: Kind of starting to melt together, but the patient acquisition around our sales force, calling on physicians in various settings and getting them to order the test.

Lishan Aklog: And as you'll sort of note from my comment here, some of this is kind of starting to melt together. But patient acquisition, around our sales force calling on physicians in various settings and getting them to order the test, that still represents 70% or so of our activity. And of that, about 70% of that is being performed in the satellite test center model, where our practitioners will show up at a physician's office on a regularly scheduled basis and do the testing there.

Speaker Change: Still represents a.

Speaker Change: Yes, 70% or so of our activity and of that.

Speaker Change: About 70% of that is being performed in the satellite Test Center model, where our practitioners will show up at a physician's office on a regular schedule basis and do the testing there. So think about the patient acquisition and sort of how is the cell collection stuff being handled.

Lishan Aklog: So think about patient acquisition and sort of how the cell collection stuff is going. That's so that about a third of our volume right now is in these where the patient acquisition is centered around a Check Your Food Tube event where we are engaged with a firehouse or now increasingly other types of entities where we schedule a health fair-type event and do Accordingly, it's not a result of a direct sales call by our sales folks, right? And there the cell collection is in this in the check your food tube setting.

Speaker Change: So that's that about about a third of our volume right now is in these where the patient acquisition is.

Speaker Change: Centered around a check your accretive event, where we are engaged with a firehouse are now increasingly other types of entities.

Speaker Change: We're reschedule of health care type of sand into the testing.

Accordingly, it is not a result of a direct sales call by our IR sales folks right and they're the cell collection is in this in Turkey for Youtube.

Speaker Change: Setting now the third area, which I would encourage you to think of as a separate area, but it's now starting to kind of meld with the check your fleets of events is the direct contracting side. So when we engage with let's say an employer.

Lishan Aklog: Now the third area, which I would encourage you to think of as a separate area, but which is now starting to kind of meld with the check your fruit tube events, is the direct contracting side. So when we engage with, let's say, an employer, through a direct contract, that patient acquisition is done. We have the contract, and there's a certain number of people who are indicated for testing based on guidelines. We base it strictly on guidelines, and we proceed to test them in a way that's very similar to the Check Your Future events.

Speaker Change: That.

Speaker Change: Through a direct contract.

Speaker Change: That.

Speaker Change: The patient acquisition is done hopefully we have the contract and there is a certain number of people who work or indicated for testing based on guidelines will be basically strictly on guidelines.

Speaker Change: We proceed to test them in a way that's very similar to the checking fleets of events, we literally show up at the at the physical employer locations and test people upfront.

I'll first structure, so the patient acquisition side, it's direct contract with direct contact and engagement with physicians a traditional sales process.

Lishan Aklog: We literally show up at the physical employer locations and test people in our infrastructure. So on the patient acquisition side, it's direct contact and engagement with physicians, a traditional sales process, looking for Check Your Future events through our engagement with fire departments and others, and then there's a broader direct contracting pathway. Does that make sense? There's a slight difference between patient acquisition and the site where the cell collection is actually occurring. There's sort of a matrix of how actual collection occurs. Yeah, I know, Lishan. That's a very helpful color.

Speaker Change: Looking for check your food type events through.

Our engagement with fire departments, and others and then the broader direct contracting pathway.

Speaker Change: Does that does that makes us slight difference between patient acquisition.

Speaker Change: Right.

Speaker Change: Where the cell collection is actually kind of a sort of a matrix on the actual collection correct. Yes, no. That's very helpful color and just lastly on the on the <unk>.

Speaker Change: Contracts with employers.

Speaker Change: Commercial insurers.

Is that would you still say that is that in the nascent stage and is that something I know it takes us sometimes a while because they each have their own processes, but is that something that you expect to accelerate as you move through this year and into 2025.

Anthony V. Vendetti: Just lastly, on the contracts with employers or commercial insurers, is that, would you still say that, is that in the nascent stage? And is that something, I know it sometimes takes a while because they each have their own processes, but is that something that you expect to accelerate as you move through this year and into 2025? I think the answer to all of that is yes.

Speaker Change: I think all of the heads of the all of the assets in the early stages. We hired our first person dedicated to this just in November it seems like a lot of them that but in November.

Speaker Change: And he is filled up the pipeline with regard to engagements with brokers.

Speaker Change: Administrators entities like the 911 fund and the residential communities that pipeline is filling up very fast so to the point, where we actually are going to hire a second person to help them with that but.

Lishan Aklog: So it's in the early stages. We hired our first person dedicated to this just in November. It seems like it's been longer than that, but in November.

Speaker Change: The spike as Dennis mentioned the cycles for these are longer than just converting our individual physician account right and so and to some degree that it can be a little bit lumpy around around open enrollment periods twice a year.

Lishan Aklog: And he's filled up the pipeline with regard to engagements with brokers, third-party administrators, entities like the 9-11 Fund, and residential communities. That pipeline is filling up very fast. So to the point where we actually are going to hire a second person to help them with that. But the cycle, as Dennis mentioned, the cycles for these are longer than just converting an individual. Right. And so, and to some degree, they can be a little bit lumpy around open enrollment periods twice, particularly those that are related to benefit packages, right, where you have to line up, it has to align with open enrollment. So very busy, pipeline is filling up, putting more resources into it, but longer lead times that despite all that, we do really expect to start seeing some runs across the plate in the coming quarters.

Speaker Change: Particularly those that are related to benefit packages right, where you have to lineup. So in line with open enrollment so.

Speaker Change: Very busy pipeline is filling up putting more resources into it but longer lead times, but despite all that we do we do really start we really do expect to start seeing.

Speaker Change: So runs across the plate.

Speaker Change: The coming quarters, both in terms of test volume and revenue and contracts executed.

Speaker Change: Excellent. Thank you so much for the color I appreciate it I'll hop back in the queue.

Thanks Anthony.

Speaker Change: Your next question comes from the line of Mark Massaro from <unk>. Your line is open.

Speaker Change: Okay.

Mark Anthony Massaro: Hey, guys. This is Jamie.

Jamie: How are you there.

Jamie: Okay. Thanks for taking the questions and I'll actually maybe just keep it to one.

Speaker Change: Thank you.

Speaker Change: Is key.

Speaker Change: Talked about our history and appeal they needed.

Anthony V. Vendetti: Excellent. Thank you so much for the call. I appreciate it. I'll have that coming to you.

Speaker Change: To kind of lay the groundwork for commercial pay.

Speaker Change: Could you just reiterate some of your comments on the progress that you're seeing there I think you also called out for the first time, a prior off being somewhat of a hurdle.

Lishan Aklog: Thank you. Your next question comes from the line of Mark Massaro from BTIJ. Your line is open. [inaudible] Hey, guys, this is Vivian. How are you doing?

Speaker Change: So just how you're thinking about.

Thanks, Alright, so let me just jump in a bit on the on the process side and maybe Dennis has some additional comments so.

Mark Anthony Massaro: Good. Thanks for taking the questions. And I'll actually maybe just keep it to one.

Mark Anthony Massaro: So just as far as ASP is concerned, we talked about a history of denials and appeals being needed to kind of lay the groundwork for commercial pay. Could you just reiterate some of your comments on the progress that you're seeing there? I think you also called out for the first time prior auth being somewhat of a hurdle. So how are you thinking about some of the puts and takes to ASP?

Speaker Change: The prior off issue is simply one when you look at the denials and the percentage breakdown Dennis mentioned about 50% of those are our informational or medical necessity those are.

Speaker Change: There is an appeals process for that but some of that 18% our prior Hawks and remember this has nothing to do with our with it's.

Speaker Change: It's not directly related to our efforts to.

Speaker Change: Impact medical policy.

Speaker Change: Three out of every process. So we figured there are there is enough of a percentage ahmet denials that 18% that it was worth our while to put a streamlined prior off process together, so that physicians can easily see the prior offs for what is typically a nonrecurrent not urgent tests. So that's just simply a way to.

Mark Anthony Massaro: Thanks. All right. So let me just jump in a bit on the process side, and maybe Dennis has some additional comments. So the prior authorization issue is simply one of when you look at the denials and the percentage, you know, the breakdown Dennis mentioned, about 50% of those are informational or medical necessity. There's an appeals process for that.

Speaker Change: <unk>.

Speaker Change: We have access to the 18% of denials as it related to the lack of a prior authorization.

Lishan Aklog: But some, about 18%, are prior authenticated. That's different than I think the first part of your question was, which was around the engagement with commercial payers on medical policy, which is something that's now starting to accelerate now that we have what we believe is sufficient CV and CU data to have those conversations. Up until three or four months ago, we didn't really have enough data to be legitimately involved in those conversations. So, as I mentioned earlier, we've actually started directly making inquiries and requests for changes in medical policy with some of the big name larger payers with the hope that if it doesn't lead to immediate change, we can engage in pilot programs and so forth. So I would consider that as somewhat different than what we're doing on the prior side, which is really a revenue cycle management process.

Speaker Change: That's different than I think what the first part of your question was I think which is around the.

Speaker Change: The engagement with commercial payers on medical policy, which is something that's now starting to accelerate now that we have what we believe is sufficient CV MCU data to have those conversations we just up until three or four months ago. We didn't really have enough data to date to be legitimately involved in those conversations so as I mentioned earlier we've.

Speaker Change: He started.

Speaker Change: Directly making inquiries and requests for changes in medical policies.

Speaker Change: Some of the brand name larger payers with the hope that.

Speaker Change: If it doesn't lead to immediate change that we can engage in.

Speaker Change: And pilot programs and so forth. So I would see that as I would consider that is somewhat different than what we're doing on the on the.

Speaker Change: The.

Speaker Change: Prior outside which is really a revenue cycle management process. Dennis did you want anything to that.

Dennis M. McGrath: Dennis, did you want to add anything to that? Uh, yeah, just, uh, Vivian, just go back through the stats in case that's what you were looking at, you know, 54, 54% of those adjudicated were denied, and I gave some color on what half of them were.

Speaker Change: Yes.

Dennis: Maybe just go back through the stats and case, that's what you were looking at.

50, 454% of those adjudicated were denied and I gave some color on what half of them the reasons for them and there were three buckets right.

Dennis M. McGrath: The reasons for half of them, and they were 3 buckets. Right 7% just needed additional information. [inaudible] were deemed not medically necessary. And the question you asked about prior authorization was 18%. The ones that said they said they would like prior authorization before reviewing.

Dennis: 7% just need additional information.

Dennis: 26%.

Dennis: We're knee deep not medically necessary and the question you asked about prior off.

Dennis: Authorization was 18%.

Dennis: The.

Dennis: But that said.

Like prior authorization before reviewing the claim.

Dennis M. McGrath: So it was a smaller portion of the total, but nonetheless, it is showing up as one of the reasons for initial denial. Okay, perfect. Understood. Thanks for taking the question. Great. Thanks, everybody. And your next question comes from the line of Ed Woo from Ascension Capital. Your line is open.

Dennis: So it was a smaller portion of the total but nonetheless, it is showing up as one of the reasons for an initial denial.

Speaker Change: Okay perfect understood. Thanks for taking the question.

Speaker Change: Great. Thanks.

Speaker Change: And your next question comes from the line of <unk> from ascent topic, Doug Your line is open.

Edward Moon Woo: Thank you for joining us. Yeah, thank you for taking my question. On the high volume, you know, check your food tube type event.

Doug: Alright, Thank you for joining us Mike.

Doug: Yes. Thank you for taking my question on the high volume check your Fuchu type events have you gone to any event more than once and do you anticipate some of these events be annual events or what's your criteria for going back to these events. That's a great question and the answer is yes, we definitely have gone back like for example, the original San Antonio.

Edward Moon Woo: Have you gone to any event more than once? And do you anticipate some of these events being annual events? Or what's your time period for, you know, going back to these events?

Lishan Aklog: That's a great question, Ed, and the answer is yes, we definitely have gone back. Like, for example, the original San Antonio firefighter event that we did almost exactly a year ago, we went back and retested because, you know, the logistics of if you set up, let's say, three or four days, tie-ups where he's gone back and focused on retirees or different shifts and so forth. So that that's what we did. What I may just again use this opportunity to emphasize, which is that one of the aspects of this that we're starting to push a lot harder on is as we get started to talk about how we can enter into a contractual arrangement for further testing after the inaugural event, to your point. And we do see that as something that could be on a regular, periodic basis.

Doug: Firefighter event that we did almost exactly a year ago, we went back and retested because.

Doug: Logistics, if you set up let's say three or four days.

We're not going to necessarily get a 100% of those who are.

Doug: Interesting getting tested in our qualified are recommended for testing based on the risk factors. So we definitely have gone back.

Doug: We've even had.

Doug: Tysabri is gone back and focused on retirees or different shifts and so forth. So that's that's.

Doug: Thats.

Doug: We've done that.

Doug: Just again use this opportunity to emphasize which is that one of the aspects of this that were.

Sorry to push a lot harder on is as we get started to talk about how.

Doug: We can.

Doug: <unk> entered into a contractual arrangement.

Doug: For further testing after the inaugural event so to your point and and we do see that as something that could be on a regular periodic basis certainly.

Doug: Some of the conversations we're having on the.

Doug: The direct contracting side or would be would be periodically.

Doug: Okay.

Great well. Thank you for answering my questions and I wish you guys. Good luck. Thank you alright, thanks Ed.

Lishan Aklog: Certainly, some of the conversations we're having on the contracting side will be periodic. Great Well, thank you for answering my questions, and I wish you guys good luck. Thank you. Thanks, and take care. Thank you, and there are no further questions at this time. I would like to hand it over to Dr. Lishan Aklog for closing comments. So thank you all for joining us today and for the great questions. I did actually have one additional comment that came from one of our investors that they asked the question about EsoCure because of the PADMED release. PADMED level, and PADMED seeking financing to complete its development, including some non-dilutive financing, Lucid remains the, will be the commercial entity that commercializes it from when we're able to get that across to. So with that, as always, we look forward to keeping abreast of our progress via news releases, and periodic calls such as this one.

Thank you and there are no further questions at this time I would like to hand, it over to Dr. <unk> for closing comments.

Dr. <unk>: So thank you all for joining us today and for the great questions. I did actually have one additional comment that came from one of our investors that they ask the question of Aesop here because of the pattern that released.

A press release recently that indicated that it was re reviving some projects, which included E secure and.

Dr. <unk>: Just wanted to confirm and remind folks that <unk>, which is a soft gel ablation technology that fits very nicely within our portfolio of products used to treat the later stage pre cancers that we discover what he said.

That lucid continues to have a.

Dr. <unk>: A.

Dr. <unk>: Fully exclusive license to commercialize that so although it's being revised revived the department level.

Dr. <unk>: We have been seeking financing.

Dr. <unk>: <unk> completed development, including some non dilutive financing.

Dr. <unk>: Lucid remains the will be the commercial entity that commercialize it if and when we're able to get that across the finish line.

Dr. <unk>: So with that as always we look forward to keeping you abreast of our progress via news releases.

Dr. <unk>: A lot of calls such as this one and the best way to keep up with our news.

Dr. <unk>: Updates and events is to sign up for E Mail alerts on the lucid Investor Relations website and to follow us on Twitter Linkedin and on our website. So thank you everybody and have a great day.

Speaker Change: Thank you presenters, ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.

Lishan Aklog: And the best way to keep up with our news, updates, and events is to sign up for email alerts on the Lucid Investor Relations website and to follow us on Twitter, LinkedIn, and on our. So, thank you, everybody, and have a great day. Thank you, presenters, and ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: Yes.

Speaker Change: [music].