Q2 2024 Lucid Diagnostics Inc Earnings Call and Business Update

August 12, 2024

Operator: Good morning, and welcome to the Lucid Diagnostics second quarter 2024 business update conference call. At this time, all lines are in a listen only mode.

Good morning, and welcome to the lucid diagnostics second quarter 'twenty 'twenty for a business update conference call at this time all lines in a listen only mode. Following the presentation, we will conduct a question and answer session.

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 Matt Riley, Lucid Diagnostics' Director of Investor Relations.

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 Matt Wiley Lucid diagnostics director of Investor Relations. Please go ahead.

Matt Riley: Thank you, operator. And good morning, everyone.

Matt Riley: Thank you. Thank you, operator. And good morning, everyone.

Matt Wiley: Thank you operator, and good morning, everyone. Thank you for participating in today's business update call. Joining me today on the call our Doctor leash on alcoholic Chairman and Chief Executive Officer of Lucid diagnostics, along with Dennis Mcgrath, Chief Financial Officer of Lucid diagnostics.

Matt Riley: Thank you for participating in today's business update call. Joining me today on the call are Dr. Lishan Aklog, Chairman and Chief Executive Officer of Lucid Diagnostics, along with Dennis McGrath, Chief Financial Officer of Lucid Diagnostics. The press release announcing our business update and financial results is available on Lucid's website. Please take a moment to read the disclaimers about forward-looking statements in the press release. The business update, the press release, and the conference call all include forward-looking statements, and these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed.

Speaker Change: The press release announcing our business update and financial results is available on its website. Please take a moment to read the disclaimer about forward looking statements in the press release the business update press release and the conference call include forward looking statements and these forward looking statements are subject to known and unknown risks of uncertainties that may cause actual results to differ materially from.

Matt Wiley: Statements made.

Actors that could cause actual results to differ are described in the disclaimer and in our filings with the Securities and Exchange Commission.

Matt Riley: For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part 1, Item 1A, entitled Risk Factors in Lucid's most recent annual report on Forms 10-K filed with the SEC, and any subsequent updates filed in the quarterly reports on Forms 10-Q and subsequent Forms 8-K. As required by law, Lucid disclaims any intentions or obligations to publicly update or revise any forthcoming 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 state. I would now like to turn the call over to Dr. Lishan Aklog, Chairman and CEO of Lucid Diagnostics. Take it away, Lishan.

Matt Riley: Factors that could cause actual results to differ are described in the disclaimer and in our file to the Securities and Exchange Commission. For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part 1, Item 1A, entitled Risk Factors in Lucid's most recent annual report on Forms 10-K filed with the SEC, and any subsequent updates filed in the quarterly reports on Forms 10-Q and subsequent Forms 8-K. That is required by law lucid disclaims any intentions or obligations to publicly update or revise any forthcoming 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, I would now like to turn the call over to Dr. Lishan Aklog, Chairman and CEO of Lucid Diagnostics. Take it away, Lishan.

Matt Wiley: For a list and a description of these and other important risks and uncertainties that may affect future operations see part one item one a entitled risk factors and boost its most recent annual report on forms 10-K filed with the SEC and any subsequent updates filed in our quarterly reports on forms 10-Q and subsequent forms 8-K.

Matt Wiley: Except as required by law, we said disclaims any intention or obligation to publicly update or revise any forward looking statements to reflect changes in expectations or in events conditions or circumstances on which the expectations may be based or.

Matt Wiley: Or that may affect the likelihood that actual results will differ from those contained in the forward looking statements.

Dr. Sean: I would now like to turn the call over to Dr. <unk>, <unk>, chairman and CEO of lucid diagnostics take it away Sean.

Lishan Aklog: Thank you, Matt, and good morning, everyone. Thank you for joining our quarterly update call today. As always, I'd like to thank our long-term shareholders for your ongoing support and commitment. Our team remains singularly focused on driving this Lucid enterprise towards its substantial commercial potential and to enhance our long-term shareholder value.

Lishan Aklog: Thank you, Matt. And good morning, everyone.

Dr. Sean: Thank you, Matt and good morning, everyone. Thank you for joining our quarterly update call today as always I'd like to thank our long term shareholders for your ongoing support and commitment our team remains singularly focused on driving this lucid enterprise towards a substantial commercial potential and to enhance our long term shareholder value.

Lishan Aklog: Very pleased with the solid progress the team has made on multiple fronts during the past second quarter and in reach. We are now fully armed with a complete body of outstanding clinical data and are poised to make our final push towards broad coverage and reimbursement to drive e-cigarette revenue and revenue growth. Let's start with some highlights, first on commercial execution. Our revenue for the second quarter of 2024 was $1 million, that's flat relative to the prior quarter and up approximately 500% on an annual basis. E-cigarette test volume, as we previously reported, was 3,147 tests, which is a 31% increase on a quarterly basis and 44% annually.

Lishan Aklog: Thank you for joining our quarterly update call today. As always, I'd like to thank our long-term shareholders for your ongoing support and commitment. Our team remains singularly focused on driving this lucid enterprise towards substantial commercial potential and to enhance our long-term shareholder value. I'm very pleased with the solid progress the team has made on multiple fronts during the past second quarter and in recent years.

Dr. Sean: We're very pleased with the solid progress the team has made over multiple fronts during the past the second quarter and in recent weeks.

Lishan Aklog: We are now fully armed with a complete body of outstanding clinical data and are poised to make our final push towards broad coverage and reimbursement to drive e-cigarette revenue and revenues. Let's start with some highlights, first on commercial execution. Our revenue for the second quarter of 2024 was $1 million. That's flat relative to the prior quarter and up approximately 500% on an annual basis. E-cigarette test volume, as we previously reported, was 3,147 tests, which is a 31% increase on a quarterly basis at 44% annually, and that represents a record e-cigarette quarterly test volume.

Dr. Sean: We are now fully armed with a complete body of outstanding clinical data and are poised to make a final push towards broad coverage and reimbursement to drive E cigarette revenue revenue growth.

Lishan Aklog: And that represents a record e-cigarette quarterly test volume. Our CYFT events continue to thrive. We held over 50 high-volume health fair events during the quarter, that's a 60% increase relative to the prior quarter. In partnership with the Fort Worth Fire Department, we held our first large CYFT event with upfront contracted payment.

Dr. Sean: Let's start with some highlights first on commercial execution.

Dr. Sean: Our revenue for the second quarter of 2024 was $1 million of that was.

Speaker Change: That's flat relative to the prior quarter and up approximately 500% on an annual basis. He says I test volume as we've previously reported was 30 147 tests, which was up 31% increase on a quarterly basis at 44% annually and that represents.

Speaker Change: Record quarterly test volumes.

Lishan Aklog: Our CYFT events continue to thrive; we held over 50 high-volume health fair events during the quarter, that's a 60% increase relative to the prior quarter. In partnership with the Fort Worth Fire Department, we held our first large CYFT event with upfront contracted payment.

Speaker Change: C Y if T events continue to thrive we hold over 50 high volume how fair.

Speaker Change: Yes.

Speaker Change: During the quarter, that's a 60% increase relative to the prior quarter.

Speaker Change: In partnership with the Fort worth fire departments, we held our first large cys T event with upfront contracted payments.

Lishan Aklog: We've made solid progress in our direct contracting initiative, targeting benefit brokers, third-party administrators, and self-insured entities to offer e-cigarettes as a covered benefit. We also continue to make progress with our revenue cycle management processes, including prior authorization expansion, physician and professional society advocacy, and our pricing, as Dennis will describe in more detail, is holding with median out-of-network allowed amounts remaining near the Medicare, Some key strategic accomplishments Again, as I stated earlier, we are now fully armed with a complete body of outstanding clinical data, and much of this has come in recently. We reported on the NVET-BE clinical utility study, which showed positive data with a 2.4-fold increase in the yield of endoscopy.

Speaker Change: We've made solid progress in direct contracting and a direct contracting initiatives targeting benefit brokers third party administrators and self insured entities, but also used to guide as a covered benefit.

Speaker Change: We also have made and continue to make progress with our revenue cycle management processes, including prior authorization expansion physician professional society advocacy and our pricing as Denis will describe in more detail is holding with median outer network allowed amounts remaining the Medicare rate.

Dênis: Some key strategic accomplishments again as I stated earlier, we are now fully armed with a complete body of outstanding clinical data.

Lishan Aklog: We reported on the NVET-BE Clinical Utility Study, which showed positive data with a 2.4-fold increase in the yield of endoscopy. And the BE-1 Clinical Validation Data, which was also recently released, showing e-cigarette sensitivity of 88% and a negative predictive value of 99%. We'll discuss both of these studies in greater detail later.

Dênis: Is this just come in recently, we reported the oddity and B E quite a bit it's always studying with show positive data with <unk> 2.4 fold increase in the endoscopy yield of adaptability.

Lishan Aklog: And the BE-1 clinical validation data, which was also recently released, showing e-cigarette sensitivity of 88% and a negative predictive value of 99%. We'll discuss both of these studies in greater detail later. The previously released data from the Cleveland VA Clinical Validation Study was published in a peer-reviewed journal, the American Journal of Gastroenterology, and showed similar e-cigarette sensitivity of 88% and negative predictive value of 99%. Last month, we held a productive meeting with CMS, the Moldy X program focused on Eastern Guard clinical data, and we look forward to submitting our data and working with the Moldy X team to ultimately secure Medicare The American Foregut Society, a leading professional society focused on esophageal disease, published a formal statement that strongly advocated for commercial payer coverage of e-cigarettes to align with guidelines of biomarker legislation.

Dênis: And is it the beat you on clinical validation data, which was also just recently released showing Easter got a sensitivity of 88% and a negative predictive value of 99% I will discuss both of these studies in greater detail later.

Lishan Aklog: The previously released data from the Cleveland VA Clinical Validation Study was published in a peer-reviewed journal, the American Journal of Gastroenterology, and showed similar e-cigarette sensitivity of 88% and negative predictive value of 99%. Last month, we held a productive meeting with CMS. The Moldy X program focused on Easter Guard clinical data, and we look forward to submitting our data and working with the Moldy X team to ultimately secure Medicare coverage. The American Foregut Society, a leading professional society focused on esophageal disease, published a formal statement that strongly advocated for commercial payer coverage of e-cigarettes to align with guidelines of biomarker legislation.

Dênis: <unk> previously released data from the clinical for the Cleveland VA clinical validation study was published in a peer reviewed journal of the American Journal of Gastroenterology and show a similar sensitivity of 88% and negative predictive value of 99%.

Dênis: Last month, we held a productive meeting with CMS.

Dênis: CMS multi.

<unk> program focused on Easter got clinical data and we look forward to submitting our data and working with the <unk> team to ultimately secure Medicare coverage.

Speaker Change: The American forgets the Friday, a leading professional society focused on esophageal esophageal disease published a formal statement that strongly advocated for commercial payer coverage of E cigarettes alive. Our guidelines for biomarker legislation. This is a formal request will strongly worded and we believe it will have an impact on our seeking coverage from commercial payers.

Lishan Aklog: This is a formal request, it was strongly worded, and we believe it will have an impact on seeking coverage from commercial payers. So, for those of you who are new to the Lucid story, this is a few slides to provide you some background on our company. Lucid is a commercial-stage cancer prevention medical diagnostic company.

Lishan Aklog: This is a formal request, it was strongly worded, and we believe it will have an impact on seeking coverage from commercial payers. So for those of you who are new to the Lucid story, let's have a few slides to provide you some background on our company.

Speaker Change: So for those of you who are new to the story. It was a few slides to provide you some background on our company.

Lishan Aklog: Lucid is a commercial-stage cancer prevention medical diagnostic company. We're focused on early pre-cancer detection, and the mission is to prevent esophageal cancer deaths in a well-defined at-risk population. We have two technologies; ESAGuard, an esophageal DNA test, and the ESA Check Cell Collection device. The E-Cigar test is the first and only commercially available test that's capable of serving as a widespread screening tool to prevent esophageal cancer deaths through the early detection of esophageal pre-cancer. The e-cigarette performance is really unprecedented for a molecular diagnostic test.

Speaker Change: Lucid is a commercial stage cancer prevention and medical diagnostic coupling we're focused on early pre cancer detection and mission is to prevent the Salford you'll cancer deaths and a well defined at risk population. We have two technologies Easter Guard esophageal DNA test early Easter check cell collection device.

Lishan Aklog: We're focused on early pre-cancer detection, and the mission is to prevent esophageal cancer deaths in a well-defined at-risk population. We have two technologies: ESAGuard, an esophageal DNA test, and the ESA Check Cell Collection device. The ECG test is the first and only commercially available test that's capable of serving as a widespread swing tool to prevent softjoke cancer death through the early detection of a softjoke pre-camp. E-cigar performance is really unprecedented for a molecular diagnostic test.

Lishan Aklog: Here we show, compare the e-cigar performance in various categories compared to some comparable, some other early detection tests, including the Coligard, the colorectal stool test, and the Guidance-Shield colorectal blood test, which was recently approved. And I say it's unprecedented really in its ability to detect pre-cancer and early pre-cancer. So you can see this is pooled data from multiple recent clinical validation studies that show 100% sensitivity for cancer, which compares very favorably to these other tests.

Lishan Aklog: Pre-cancer sensitivity, however, is 83%, substantially greater than the other tests and really any other test in this category. And then, most notably, early pre-cancer sensitivity remains high at 86%, while other tests have no capability to detect early pre-cancer.

Speaker Change: But he says I test is the first and only commercially available test that's capable of serving as a widespread screening tool to prevent esophageal cancer test through the early detection of esophageal cancer.

Speaker Change: <unk> performance is really unprecedented for molecular diagnostic tests here, we show compare the Easter got performance in various categories compared to some comparable.

Lishan Aklog: Here we show, compare the e-cigar performance in various categories compared to some comparable early detection tests, including the Coligard, the colorectal stool test, and the Guidance Shield colorectal blood test, which was recently approved. And I say it's unprecedented really in its ability to detect pre-cancer and early pre-cancer. So you can see this is pooled data from multiple recent clinical validation studies that show 100% sensitivity for cancer, which compares very favorably to these other tests.

Speaker Change: Some other early detection tests included Cologuard at Colorado still test and the guidance Shield, Colorado Blood test, which was recently approved.

Speaker Change: It's unprecedented really around its ability to detect precancer in early pre cancer. So you can see this is pull data from multiple recent clinical validation studies that show, 100% sensitivity for capstone.

Speaker Change: Compares very favorably to these other tests.

Lishan Aklog: Pre-cancer sensitivity, however, is 83%, substantially greater than the other tests and really any other test in this category, and then, most notably, early pre-cancer. Sensitivity remains high at 86%, while other tests have no ability to detect early pre-cancer.

Speaker Change: Pre cancer sensitivity, however is 83% substantially greater than the other tests that really any other tests in that category and then most notably early pre cancer.

Speaker Change: Sensitivity remains high at 86%, while other tests have no okay, no ability to detect early pre cancer.

Lishan Aklog: The E-cigarette even has a high sensitivity of 91% in the very shortest segments of disease, 99% negative predictive values, so a very low false negative rate, and a positive predictive value of approximately 30%, which is comparable to other such tests. The commercial opportunity here is very large. They're a very well-defined population of 30 million, approximately 30 million people in the United States who are at risk for chronic heartburn and are already recommended for pre-cancer testing.

Lishan Aklog: Issigard even has a high sensitivity of 91% in the very shortest segments of disease, 99% negative predictive values, so a very low false negative rate, and a positive predictive value of approximately 30%, which is comparable to other such drugs. The commercial opportunity here is very large. There is a very well-defined population of 30 million, approximately 30 million people in the United States who are at risk for chronic heartburn and are already recommended for pre-cancer testing.

Speaker Change: But he said RT PCR, even it has a high sensitivity of 91% and the very shortest segment.

Speaker Change: So it's sort of segments of disease, 99% negative predictive value, so very false or very low false negative rate and a positive predictive value of approximately 30%, which is comparable to other such tests.

Speaker Change: The commercial opportunity here is very large they're very well defined population of $30 million approximately 30 million people in United States or at risk with chronic heartburn at already recommended for pre cancer testing Medicare has established a rate of 90 to $138 and our out of network payments with commercial payers.

Lishan Aklog: Medicare has established a rate of $1,938, and our out-of-network payments with commercial payers have held up; pricing has held up in that range. So, a very large addressable market, a lot of opportunity for us to generate revenue, substantial revenue even with low levels of penetration. Our gross margin for the next test in the door at our current volumes is approximately 90%, which we believe will give us an opportunity to drive our business moving forward. We have a multi-pronged commercial strategy with multiple venues and multiple locations where patients can get access to our test. We have physical test centers located in 23 cities now.

Speaker Change: How is that pricing has held up in that range. So very large addressable market a lot of opportunity for us to generate revenue substantial revenue, even with low levels of penetration our gross margin for the next test in the door as our current volumes is approximately 90%, which we believe will give us an opportunity to drive our business moving forward.

Speaker Change: Yeah.

We have a multi pronged commercial strategy with multiple venues at multiple locations where patients can get access to our test we have physical test sensors now located located in 23 cities.

Lishan Aklog: Our dominant approach right now is what we call our Satellite Lucid Test Center model where our team partners with typically primary care physicians and performs cell collection at the physician's office. And we also have physician practices who are building programs around, typically specialists who are building programs around the e-cigarette test where they perform the test itself. We have a mobile test unit in Florida, which provides us with a good opportunity for visibility and marketing.

Speaker Change: Our dominant approach right now is what is the what we call our satellite lucid pass that test center model, where our.

Speaker Change: <unk> partners with typically primary care physicians and perform cell collection.

At the physician office and we also have physician practices, who are building programs around typically specialists. We're building programs around the Easter Guard test, where they perform the test itself, we have a mobile testing it in Florida, which provides us with a good opportunity for visibility and marketing and as I hinted at earlier, we have these large check your food to health.

Lishan Aklog: And as I hinted at earlier, we have these large check your food tube health fair-type events. We've initially focused on firefighters, but we're expanding to other targets. We've made, and we're starting to get some increased traction with larger health systems. These are longer lead times, but they really are high value once we have programs in place. And we're looking forward to expanding our efforts in that area. As previously noted, we had record quarterly test volume. This Path Quarter, just over 3100 tests.

Lishan Aklog: And as I hinted at earlier, we have these large check your food to health fair-type events. We've initially focused on firefighters, but we're expanding to other targets. We're starting to get some increased traction with larger health systems. These have longer lead times, but they really are high value once we have programs in place.

Speaker Change: Fair type events, we are initially focused on firefighters, but we're expanding to other targets.

Speaker Change: Made we're starting to get some increased traction with larger health system hospitals. These are longer lead times, but really our high value. Once we have programs in place that we're looking forward to expanding our efforts in that area.

Lishan Aklog: And we're looking forward to expanding our efforts in that area. As previously noted, we had record quarterly test volume. This past quarter, at just over 3,100 tests, revenue has been flat compared to the last quarter.

Speaker Change: So as previously noted we had record quarterly test volume.

Lishan Aklog: Revenue has been flat for about a year compared to the last quarter, and this commercial activity has been with a flat head count for sellers over the past couple of quarters and really a 30 percent decrease in the head count compared to our peak in the fourth quarter of 2022. So really, this represents an increase in the productivity of ourselves. On the commercial execution side, let me first talk about these, our high-volume Check Your Food Tube pre-cancer protection events.

Speaker Change: This past quarter.

Speaker Change: At.

Speaker Change: Just over 3100 tests, our revenue has been flat for a lot compared to the last quarter and this commercial activity has been with a.

Lishan Aklog: And this commercial activity has been with a flat headcount for sellers over the past couple of quarters and really a 30% decrease in the headcount compared to our peak in approximately the fourth quarter of 2022. So really, this represents an increase in the productivity of our sales. On the commercial execution side, let me first talk about our high volume Check Your Food Tube pre-cancer protection events. As I mentioned earlier, we had over 50 such events during this past quarter. That represents a 60% increase relative to the first quarter of 2024.

Speaker Change: A flat head count for sellers over the past couple of quarters, and really a 30% decrease in the head count compared to our peak in approximately the fourth quarter of 2022.

Speaker Change: So really this represents an increase in the productivity of our Salesforce.

Speaker Change: Our commercial execution side, let me first talk about these are high volume check your food to Precancer detection events as I mentioned earlier are we had over 50 such events. During this past quarter that represents a 60% increase relative to the first quarter of 2024.

Lishan Aklog: As I mentioned earlier, we had over 50 such events during this past quarter. That represents a 60% increase relative to the first quarter of 2024. We're happy to note an important milestone where we tested our 4,000th firefighter recently, and we continue to have a very robust pipeline of events scheduled full through October. Direct contracting remains an important part of our near future.

Lishan Aklog: We're happy to note an important milestone where we tested our 4,000th firefighter recently, and we continue to have a very robust pipeline of events scheduled full through October. Direct contracting remains an important part of our near term. Strategy, which we believe will meaningfully contribute to long-term revenue growth. We're deploying additional resources to this initiative, and we held, as I mentioned, our first large CYFT event where we received upfront contracted payment with the Fort Worth Fire Department. This is a really important milestone. We'll increasingly seek to have guaranteed revenue from CYFT events outside of the usual insurance claims process whenever possible.

Happy to note an important milestone where we tested our 4000th firefighter recently and we have continue to have a very robust pipeline of events Scott scheduled fall through October.

Speaker Change: Direct contracting remains an important part of our near term.

Lishan Aklog: Strategy, which we believe will meaningfully contribute to long-term revenue growth. We're deploying additional resources to this initiative, and we held, as I mentioned, our first large CYFT event where we received an up-front contracted payment with the Fort Worth Fire Department. This is a really important milestone.

Our strategy.

Speaker Change: We believe will meaningfully contribute to long term revenue growth.

Lishan Aklog: We'll increasingly speak to have guaranteed revenue from the CYFT events outside of the usual insurance claims process whenever possible. [inaudible] We are making solid progress targeting benefit brokers, third-party administrators, and other self-insured entities in our effort to offer e-cigarettes as a covered benefit and, in the near term, drive contractually guaranteed revenue. We continue to make solid progress with our revenue cycle management processes related to out-of-network payments. This remains a critical aspect of converting our test funding growth into revenue. The median allowed payment amount remains stable near the Medicare rate.

Speaker Change: We are deploying additional resources to this initiative and we held as I mentioned, our first large C Y F. TFS wherever you received it we received upfront contracted payment with the Fort Worth Fire Department. This is a really important milestone will increasingly seek to have guaranteed revenue from D. C Y P events outside of it.

Speaker Change: Usual insurance claims process whenever possible.

Lishan Aklog: We are making solid progress targeting benefit brokers, third party administrators, and other self-insured entities in our effort to offer e-cigarettes as a covered benefit to, and the near term drive is contractually guaranteed. We continue to make solid progress with our revenue cycle management processes related to out-of-network payments. This remains a critical aspect of converting our test volume growth into revenue. The median allowed payment amount remains stable near the Medicare rate.

Speaker Change: We are making solid progress targeting benefit brokers third party administrators and other self insured entities and our effort to offer Isa gone to a covered benefit too.

Speaker Change: In the near term drive contractually guaranteed revenues.

Speaker Change: We're still going to have make solid progress with our revenue cycle management processes.

Speaker Change: Related to out of network payments. This remains a critical aspect of converting our test volume growth into revenue.

Speaker Change: The median allow payment amount remains stable Medicare the Medicare rate, we're making good progress on streamlining of processes for prior authorizations to eliminate denials are appeals process is getting more sophisticated and targeted and we are seeing higher percentages of appeals.

Lishan Aklog: We're making good progress on streamlining the processes for prior authorizations to eliminate denials. Our appeals process is getting more sophisticated and targeted, and we are seeing higher percentages of appeals for claims that are being turned over on appeal. And we have better processes for those appeals, particularly in those patients where the appeal is related to the designation of being medically not necessary. Dennis will discuss some of these numbers in more detail later. We held a highly anticipated and productive meeting with The MoldeX leadership group had an in-person meeting last month, and it was very productive.

Lishan Aklog: We're making good progress on streamlining the processes for prior authorizations to eliminate denials. Our appeals process is getting more sophisticated and targeted, and we are seeing higher percentages of appeals, of claims that are being turned over on appeals, and we have better processes for those appeals, particularly in those patients where the appeal is related to the designation of being medically not necessary. Dennis will discuss some of these numbers in more detail later. We held a highly anticipated and productive meeting with The MoldeX leadership group had an in-person meeting last month, and it was very productive.

Speaker Change: Claims that are being turned over on materials that we have better processes for.

Speaker Change: For those appeals, particularly in those patients where the appeal is related to the.

Speaker Change: The designation of being medically necessary, you've got a whole discuss some of these numbers in more detail later.

Speaker Change: We held a highly anticipated a productive meeting with the.

Speaker Change: The multi X leadership group as an in person meeting.

Speaker Change: Last month and it was very productive.

Lishan Aklog: We really look forward to the focus on our data, and we look forward to submitting our data formally and working with the MoldeX team to ultimately secure Medicare coverage. We also continue to pursue an active market access strategy with commercial payers that's focused on securing medical policy coverage with regional plans and trying to leverage biomarker legislation, which now exists in multiple states, and trying to secure pilots with national plans. As I stated from the onset, we are really now fully armed with what is now a complete body of outstanding clinical data, and this positions us really well for this final push towards broad coverage and determination. This table shows the data. Here it is.

Lishan Aklog: We really look forward to the focus on our data, and we look forward to submitting our data formally and working with the MoldeX team to ultimately secure Medicare coverage. We also continue to pursue an active market access strategy with commercial payers that's focused on securing medical policy coverage with regional plans and trying to leverage biomarker legislation, which now exists in multiple states and trying to secure pilots with national plans. As I stated from the onset, we are now fully armed with what is now a complete body of outstanding clinical data, and this positions us really well for this final push towards broad coverage and determination. This table shows the data. Here it is.

Speaker Change: We really look forward to the focus was on our data and we look forward to submitting our data formally and working with them all the X team to ultimately secure Medicare coverage.

Speaker Change: We also continue to pursue an active market access strategy with commercial payers, it's focused on securing medical policy coverage with regional plans and trying to leverage our biomarker legislation, which don't exist in multiple states and trying to secure pilots with our national players.

Speaker Change: As I stated from the onset we are now fully armed with what is now a complete body of outstanding clinical data.

Speaker Change: This positions ourselves really well for a flood this final push towards broad public and determination.

Lishan Aklog: I won't go through each of these, but just to highlight a few, I'll talk briefly about the most recently released data for the ESAGuard BE-1 and the NVAD BE studies, which, as you can see, are working their way through peer review. We've had some recent publications and now have multiple published studies. Basically, four clinical validity studies, those are the top four, and four clinical utility studies that demonstrate the clinical utility of ESAGuard.

Lishan Aklog: I won't go through each of these, but just to highlight a few, I'll talk briefly about the most recently released data for the ESA-GRAD BE-1 and the NVAD BE studies, which as you can see, are working their way through peer review. We've had some recent publications and now have multiple published studies. Basically, four clinical validity studies, those are the top four, and four clinical utility studies that demonstrate the clinical utility of ESA-GRAD.

Speaker Change: Table shows the data here. It is I won't go through each of these but just to highlight a few I'll talk.

Pete: We've got the most the most recently released data for ease of Great. Pete you want to be.

Speaker Change: <unk> studies.

Pete: You can see those are working their way through peer review we've had some recent publications that now have multiple published studies.

Pete: Basically for clinical validity studies those are the top four and have for quite a few studies that are.

And that demonstrated the clinical utility of you so Greg.

Lishan Aklog: So the e-cigarette DE1 study, which was recently released on preprint, and it's awaiting peer review publication, was a study that included 93 patients in a screening population. So these were not pre-selected patients who had no disease. Pre-cancer sensitivity was 88%. There were no, not unexpectedly, no cancers detected in this population.

Lishan Aklog: So the e-cigarette DE1 study, which was the data was recently released on preprint, and it's awaiting peer review publication, was a study that included 93 patients in a screening population. So these were not pre-selected patients who had known diseases. Pre-cancer sensitivity was 88%, and not unexpectedly, there were no cancers detected in this population. And very similar statements, sorry, similar results with negative predictive values in the 99% range and a positive predictive value of 30%.

Pete: So the ECR D. One study, which was the data was recently released our preprint that it's awaiting peer review publication.

Pete: It was a study that included 93 patients screening.

Pete: Screening population. So these were not pre selected patients who had no disease.

Pete: <unk> pre cancer sensitivity was 88% as there were no.

Pete: Not unexpectedly there were no cancers detected a miss in this population at a very similar statements I've started similar results with a negative predictive value of 99% range and a positive predictive value of 30, 30%. That's the multicenter study led by Dr. Nick Shaheen Unc.

Lishan Aklog: This is a multi-center study led by Dr. Nick Shaheen of UNC. The NVET-BE study, which was recently released on preprint, and we announced that last week in a press release, as a waiting peer review, the study provided real world data to confirm the utility of Isagard as a non-invasive triage tool to significantly increase the positive yield of invasive upper endoscopy, that was noted. And by our world, it demonstrates that our Isagard test more than doubles a pre-cast. I reported on 199 patients where Isacard was used as a triage tool before invasive endoscopy.

Lishan Aklog: And very similar statements, sorry, similar results with negative predictive values in the 99% range and a positive predictive value of 30%. This was a multi-center study led by Dr. Nick Shaheen of UNC. The NVET-BE study, which was recently released in preprint, and we announced that last last week in a press release, as a waiting peer review, the study provided real-world data to confirm the utility of Isagard as a non-invasive triage tool to significantly increase the positive yield of invasive upper endoscopy. And it noted, and by our world, it demonstrates that our Isagard test more than doubles pre I reported on 199 patients where the Isacard was used as a triage tool before invasive endoscopy.

Speaker Change: The <unk> study, which was recently released a preprint that we announced that last last week in our press release. The way is awaiting peer review this study.

Speaker Change: Provided real world data to confirm that utility a visa card has a noninvasive triage tool to significantly increase the positive you all does invasive upper endoscopy and I was noted and buyer world It demonstrates that.

Speaker Change: Our Ethernet test more than doubles, our pre casualty protections.

Speaker Change: We reported about 199 patients where <unk> was used as a triage tool to invasive endoscopy. So positive patients got endoscopy negative patients did not have a yield of endoscopy with increased by Patrick.

Lishan Aklog: So positive patients got endoscopy, negative patients did not, and the yield of endoscopy was increased by 2.4 fold relative to what it would have been if endoscopy had been performed without triage using isacard. So really, really excellent clinical utility data to supplement our overall clinical evidence. Let me pass the baton on now to Dennis, who will cover our financials. Thanks, Lishan, and good morning, everyone. The summary financial results for the second quarter, which we put in our press release, were published earlier today.

Lishan Aklog: So positive patients got endoscopy, negative patients did not, and the yield of endoscopy was increased by 2.4 times relative to what it would have been if endoscopy had been performed without triage using Isacard. So really, really excellent clinical utility data to supplement our overall clinical evidence. Now I pass the baton on to Dennis, who will cover our financial aspects.

Speaker Change: Two four fold relative to what it would have data.

Speaker Change: Endoscopy was performed without triage using visa card, but really really excellent clinical utility data to supplement our overall clinical evidence.

Speaker Change: Before I pass the baton on now too.

Speaker Change: Dennis will cover our financials.

Dennis McGrath: Thanks, Lishan, and good morning, everyone. The summary financial results for the second quarter were reported in our press release published earlier today. On the next three slides, I'll emphasize a few key financial highlights from the quarter, but I encourage you to consider those remarks in the context of the full disclosures covered in our quarterly report on Form 10-Q. With regard to the balance sheet, cash at quarter end June 30th was $24.9 million. During the quarter, we closed Series B1 convertible preferred financing in the amount of $11.6 million.

Dennis: Thank you Felicia and good morning, everyone. The summary financial results for the second quarter were reported in our press release that was published earlier today.

Lishan Aklog: On the next three slides, I'll emphasize a few key financial highlights from the quarter, but I encourage you to consider those remarks in the context of the full disclosures covered in our quarterly report on Form 10-Q. With regard to the balance sheet, cash at quarter-end June 30th was $24.9 million. During the quarter, we closed the Series B1 convertible preferred financing in the amount of $11.6 million.

Dennis McGrath: The average quarterly burn rate for the trailing four quarters is 10.6 million. The burn in the second quarter included $7.4 million from ongoing operations, which is in line with the previous quarter. 2.5 from the quarterly MSA, or management services agreement, and 1.6 million reduction to the intercompany debt department. We disclosed in the 10-Q that our ability to fund operations beyond one year from today is largely dependent upon how revenues ramp over the next four quarters, which is dependent upon how the reimbursement landscape for both government and private health insurers continues to improve. Additionally, our direct contracting efforts with self-insured employers and or corporate finance activities, including refinancing any outstanding debt at the time, can also work to exceed that threshold.

Dennis: Well in the next three slides I'll emphasize a few key financial highlights for the quarter, but I encourage you to consider those remarks in the context of the full disclosures covered in our quarterly report on Form 10-Q.

Dennis McGrath: The increases in other assets of approximately $2 million reflect the gap accounting for the three-year lease renewal of our California lab. That also is reflected in the long term liabilities with the corresponding $2 million. Included in other current liabilities is the $11.2 million fair value of the senior convertible debt, which reflects a sequential quarterly decrease of $1.9 million. During the quarter, the company issued approximately 2.1 million shares in satisfaction of conversion notices from the debt holder.

Dennis: With regard to the balance sheet cash at quarter end June 30th was $24 9 million.

Dennis: During the quarter, we closed the series B, one convertible preferred financing in the amount of $11 6 million.

Dennis McGrath: The average quarterly burn rate for the trailing four quarters is 10.6 million. The burn in the second quarter included $7.4 million from ongoing operations, which is in line with the previous court. 2.5 from the quarterly MSA, or management service agreement, and 1.6 million reduction to the intercompany debt department. We disclosed in the 10-Q that our ability to fund operations beyond one year from today is largely dependent upon how revenues ramp over the next four quarters, which is dependent upon how the reimbursement landscape for both government and private health insurers continues to improve. Additionally, our direct contracting efforts with self-insured employers and or corporate finance activities, including refinancing any outstanding debt at the time, can also work to exceed that threshold.

Dennis: The average quarterly burn rate for the trailing four quarters is $10 6 million.

Dennis: The burn in the second quarter included $7 4 million from ongoing operations, which.

Dennis: Which is in line with the previous quarter.

Two five from the quarterly MSA, a management services agreement and $1 6 million reduction to the intercompany debt to cap.

Dennis: We disclosed in the 10-Q that our ability to fund operations beyond one year from today is largely dependent upon how revenues ramp over the next four quarters, which is dependent upon how the reimbursement landscape for both government and private health insurers continues to improve.

Dennis: Additionally.

Dennis: Direct contracting efforts with self insured employers and the word corporate finance activities, including refinancing any outstanding debt at the time can also work to exceed that threshold.

Dennis McGrath: The increases in other assets of approximately two million dollars reflect the gap accounting for the three-year lease renewal of our California lab. That also is reflected in the long-term liabilities with the corresponding $2 million increase. Included in the other current liabilities is the $11.2 million fair value of the senior convertible debt, which reflects a sequential quarterly decrease of $1.9 million. During the quarter, the company issued approximately 2.1 million shares in satisfaction of conversion notices from the dead hole.

Dennis: The increases in other assets of approximately $2 million reflects the GAAP accounting for the three year lease renewal of our California lab.

That also is reflected in long term liabilities with a corresponding $2 million increase.

Dennis: Included in other current liabilities is the $11 2 million fair value of the senior convertible debt, which reflects a sequential quarterly decrease of $1 9 million.

Dennis: During the quarter the company issued approximately $2 1 million shares and satisfaction of conversion notices from the debt holder.

Dennis McGrath: Chair's outstanding shares, including Unvested Restricted Stock Awards as of last week, are approximately 54 million shares, which includes approximately 750,000 shares issued subsequent to quarter end and connection with conversion notices from the convertible debt holders. The GAAP outstanding shares as of June 30th, of $49.3 million, are reflected on the slide as well as on the face of the balance sheet in the 10-Q. GAAP shares do not reflect unvested restricted stock award amounts

Dennis McGrath: Shares outstanding, including Unvested Restricted Stock Awards as of last week, are approximately 54 million shares, which includes approximately 750,000 shares issued subsequent to quarter end in connection with conversion notices from the convertible debt holders. The GAAP outstanding shares as of June 30th, of $49.3 million, are reflected on the slide as well as on the face of the balance sheet in the 10-Q. Gap shares do not reflect an unvested restricted stock award. At present, PatMed continues to be the single largest shareholder of Lucid Diagnostics with ownership of just under 60% of the common shares outstanding.

Dennis: Shares outstanding, including Unvested restricted stock awards as of last week are approximately 54 million shares which includes approximately 750000 shares issued subsequent to quarter end in connection with conversion notices from the convertible debt holder.

Dennis: The GAAP outstanding shares as of June 30th.

Dennis: $49 3 million.

Dennis: Are reflected on the slide as well as on the face of the balance sheet in the 10-Q.

Dennis: <unk> shares do not reflect unvested restricted stock award amounts.

Dennis McGrath: At present, PatMed continues to be the single largest shareholder of Lucid Diagnostics with ownership of just under 60% of the common shares outstanding. Furthermore, PavMed maintains the controlling financial and controlling voting interest in the company at greater than 50%. As you are aware, Lucid's recent financing included the issuance of a series of voting convertible preferred securities, whereby the preferred shareholders are significantly incentivized to delay the conversion of the preferred shares in the common shares until 2026, namely the second anniversary from close. All of the preferred shares outstanding have been converted to common shares as of today.

Speaker Change: At present patented continues to be the single largest shareholder of lucid diagnostics with ownership of just under 60% of the common shares outstanding.

Dennis McGrath: Furthermore, PavMed maintains the controlling financial and controlling voting interest in the company at greater than 50%. As you are aware, Lucid's recent financings included the issuance of a series of voting convertible preferred securities, whereby the preferred shareholders are significantly incentivized to delay conversion of the preferred shares in the common shares until 2026, namely the second anniversary from close. Eventually, all of the preferred shares outstanding were converted to common shares.

Speaker Change: Furthermore, <unk> maintains the controlling financial and controlling voting interest in the company at greater than 50%.

Speaker Change: As Youre aware lucid recent financings included the issuance of series a series of voting convertible preferred securities.

Speaker Change: Whereby the preferred shareholders are significantly incentivize the delayed conversion of the preferred shares into common shares until 2026, namely the second anniversary from closing.

Operator: Good morning and welcome to the Lucid Diagnostic's second quarter, 2024 Business Update Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session.

Dennis McGrath: As of today, there would be an additional 51.6 million shares out with regard to the P&L. This slide compares this year's second quarter to last year's second quarter on certain key items. Trustee will review the information and my comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-GAAP information. Revenue of approximately $1 million for the second quarter is about even with the previous two quarters and reflects more than a six-fold increase over the prior year's second quarter.

Speaker Change: All of the preferred shares outstanding were converted to common shares as of today, there would be an additional 51 6 million shares outstanding.

Dennis McGrath: There would be an additional 51.6 million shares outstanding with regard to the P&L. This slide compares this year's second quarter to last year's second quarter on certain key items. Trustee will review the information and my comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-GAAP information. Revenue of approximately $1 million for the second quarter is about even with the previous two quarters and reflects more than a six-fold increase over the prior year's second quarter.

Speaker Change: With regard to the P&L.

Operator: 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.

Speaker Change: This slide compares this year second quarter to last year's second quarter of certain key items.

Trustee, who will review the information in my comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-GAAP information.

Matt Riley: I would now like to turn the conference over to Matt Riley, Lucid Diagnostic's Director of Investur Relations. Please go ahead. Thank you operator and good morning everyone. Thank you for participating in today's Business Update Call.

Speaker Change: Revenue of approximately $1 million for the second quarter is about even with the previous two quarters and reflects more than a six fold increase over the prior year second quarter.

Matt Riley: Joining me today on the call are Dr. Lishan Aklog, Chairman and Chief Executive Officer of Lucid Diagnostics, along with Dennis McGrath, Chief Financial Officer of Lucid Diagnostics. The press release announcing our business update and financial results is available on Lucid's website. Please take a moment to read the disclaimers about four of the statements in the press release. The business update, press release and the conference call all include four of the statements and these four of the statements are subject to known and unknown rest of the uncertainties that may cause actual results to differ materially from statements made.

Dennis McGrath: The amount reflects actual cash collections for the quarter plus a small amount of invoiced e-cigarette tests delivered to the VA. Volume of 3,174 tests for the quarter represents almost $8 million in submitted claims at our $2,499 ASP. It's worth repeating what we've communicated in past quarters about revenue recognition. The key determinant in how revenue is recognized at this point in our reimbursement journey is the probability of collection. Therefore, due to the fact that we are in the early stages of the reimbursement process, revenue recognition for claims submitted to traditional government or private health insurers will be recognized when the claim is actually collected.

Speaker Change: The amount reflects actual cash collections for the quarter plus a small amount of Invoiced east cigar tests delivered to the VA.

Speaker Change: Test volume of 3174 tests for the quarter represent almost $8 million in submitted claims.

Speaker Change: At our 2000 and $499 ASP.

Speaker Change: It's worth repeating what we've communicated in past quarters about revenue recognition.

Dennis McGrath: The key determinant in how revenue is recognized at this point in our reimbursement journey is the probability of collection. Therefore, due to the fact that we are in the early stages of the reimbursement process, revenue recognition for claims submitted to traditional government or private health insurers will be recognized when the claim is actually collected. First, when the patient report is delivered in voice, and submit it for reimbursement. As you will see in our 10-Q, this is called Variable Consideration in the Jargon of GAPS ASC-606 Revenue Recognition Guidelines, and presently, there is insufficient predictive data to reflect revenue when the test report is delivered to the referring physician.

Speaker Change: A key determinant in how revenue is recognized at this point in our reimbursement journey is the probability of collection.

Matt Riley: Factors that could cause actual results to differ are described in the disclaimer and in our findings to the securities and exchange commission. For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part 1, Item 1A, entitled Risk Factors and Lucid's Ministry's and Annual Report on Forms 10K filed with the SEC, and any subsequent updates filed in the quarterly reports on Forms 10Q and subsequent Forms 8K.

Speaker Change: Therefore, due to the fact that we are in the early stages of the reimbursement process means revenue recognition for claims submitted to traditional government or private health insurers.

Speaker Change: I'll be recognized when the claim is actually collected.

Dennis McGrath: First, when the patient report is delivered in voice and submitted for reimbursement. As you will see in our 10-Q, this is called Variable Consideration in the Jargon of GAPS ASC-606 Revenue Recognition Guidelines, and presently, there is insufficient predictive data to reflect revenue when the test report is delivered to the referring physician. However, billable amounts contracted directly with employers and that are fixed and determinable will be recognized as revenue when our contracted service is delivered.

Speaker Change: First when the patient report is delivered Invoiced.

Speaker Change: And submitted for reimbursement.

Speaker Change: As you will see in our 10-Q. This is called variable consideration that jogging gaps ASC 606 revenue recognition guidelines and presently there is insufficient predictive data to reflect revenue when the test reports delivered to the referring physician.

Matt Riley: Except as required by law, Lucid disclaims any intentions or obligations to publicly update or revise any four of the 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 four of the statements.

Dennis McGrath: For billable amounts contracted directly with employers, and that are fixed and determinable, will be recognized as revenue when our contracted service is delivered. Generally, that means when the report is delivered to the referring physician. Our non-GAAP loss for the second quarter of $9.7 million is in line with each of the trailing six quarters with an average of $9.6. The non-GAAP net loss per share has been relatively flat for each of the last six quarters, plus or minus a penny between each of the six quarters with an average of 22 cents.

Speaker Change: For billable amounts contracted directly with employers and that are fixed and determinable.

Speaker Change: Be recognized as revenue when our contracted service is delivered generally that means when the report is delivered to the referring physician.

Lishan Aklog: I would now like to turn on the call over to Dr. Alicia Nakhog, Chairman and CEO of Lucid Diagnostics. Take it away, Alicia. Thank you, Madden. Good morning, everyone. Thank you for joining our quarterly update call today. As always, I'd like to thank our long-term shareholders for your ongoing supporting commitment. Our team remains singularly focused on driving this lucid enterprise towards its substantial commercial potential and to enhance our long-term shareholder value.

Dennis McGrath: Generally, that means when the report is delivered to the referring physician. Our non-GAAP loss for the second quarter of $9.7 million is in line with each of the trailing six quarters with an average of $9.6 million. The non-GAAP net loss per share has been relatively flat for each of the last six quarters at plus or minus a penny between each of the six quarters with an average of 22 cents per share.

Speaker Change: Our non-GAAP loss for the second quarter of $9 7 million is in line with each of the trailing six quarters with an average of $9 6 million.

Speaker Change: The non-GAAP net loss per share.

Speaker Change: Has been relatively flat for each of the last six quarters at plus or minus a penny between each of the six quarters with an average of 22 per share.

Lishan Aklog: I'm very pleased with the solid progress the team has made over multiple fronts during the past the second quarter and in recent weeks. We are now fully armed with a complete body of our state and clinical data and our poised to make our final push towards broad coverage and reimbursement to drive ESA Guard revenue and revenue growth.

Dennis McGrath: On a cap EPS basis, non-cash charges accounted for approximately $0.19 with regard to our operating expense. This slide is a graphic illustration of our operating expenses after eliminating non-cash expenses for the period to reflect. Total non-GAAP OPEX is $10.6 million for the second quarter, and is in line with the trailing six quarters with an average of 10.3 m. Cost of Revenant primarily consists of esotech devices, lab supplies, and fixed lab facility costs, and is in line with the last several.

Dennis McGrath: On a cap EPS basis, non-cash charges accounted for approximately $0.19 with regard to our operating expenses. This slide is a graphic illustration of our operating expenses after eliminating non-cash expenses for the period. Total non-GAAP OPEX was $10.6 million for the second quarter, and was in line with the trailing six quarters with an average of 10.3 meters. Cost of revenue primarily consists of ESO check devices, lab supplies, and fixed lab facility costs, and is in line with the last several.

Speaker Change: On a GAAP EPS basis noncash charges accounted for approximately <unk> 19 per share.

Speaker Change: With regard to our operating expenses.

This slide is a graphic illustration of our operating expenses after eliminating noncash expenses for the periods reflect it.

Speaker Change: Total non-GAAP Opex was $10 6 million for the second quarter.

Lishan Aklog: Let's start with some highlights. First on commercial execution. A revenue for the second quarter of 2024 was $1 million. That's flat, relatively for the prior quarter and approximately 500% on an annual basis. ESA Guard tests volume as we previously reported with 3,147 tests, which is a 31% increase. A quarterly basis at 44% annually and that represents record ESA Guard quarterly test volume. Our CYFT events continue to thrive. We held over 50 high volume health fair events during the quarter.

Speaker Change: And is in line with the trailing six quarters with an average of $10 3 million.

Cost of revenue primarily consists of Easter check devices lab supplies and fixed lab facility costs and is in line with the last several quarters.

Dennis McGrath: Non-GAAP G&A expense is sequentially up slightly by about $400,000, which is mostly reflective of some hiring in our market access reimbursement department and some patent, Let me close with a few reimbursement highlights for the first half of this. In the second quarter, we built, as I mentioned, 3,174 tests, reflecting just under $8 million in pro forma revenue. During the second quarter, we collected $976,000; of that amount, we collect.

Dennis McGrath: Non-Gap GMA expense is sequentially up slightly by about $400,000, which is mostly reflective of some hiring in our market access reimbursement department and some patents. Let me close with a few reimbursement highlights for the first half of this year. In the second quarter, we built, as I mentioned, 3,174 tests, reflecting just under $8 million in pro forma revenue. During the second quarter, we collected 976,000 [inaudible] of that amount we collected. About 35% of the $976,000 claims paid were from those submitted in the current quarter.

Speaker Change: non-GAAP G&A expenses sequentially up slightly by about $400000, which is mostly reflective of some hiring in our market access reimbursement department and some patent expenses.

Speaker Change: Let me close with a few reimbursement highlights for the first half of this year.

Speaker Change: In the second quarter, we build as I mentioned 3174 tests, reflecting just under $8 million in pro forma revenue.

Lishan Aklog: That's a 60% increase prior relative to the prior quarter, in partnership with the Fort Worth Fire Department. We held our first large CYFT event with upfront contracted payment. We've made solid progress in direct contracting and our direct contracting initiatives targeting benefit brokers, third-party administrators and self-insured entities to offer use in order to cover benefit. We also continue to make progress with our revenue cycle management transition processes, including prior authorization expansion, physician professional society advocacy and our pricing as Dennis will describe it in more detail is holding with median out-of-network amount of amounts remaining near the Medicare rate.

Dennis McGrath: About 35% of the $976,000 claims paid were from those submitted in the current quarter, about 45% from claims submitted in the first quarter, and the balance from claims submitted last year with the longest dated item nearly 12 months. Our Revenue Cycle Manager is reporting that the turnaround times have been increasing for the largest payers, and we've seen an increase in claims being designated medically not necessary. The RCM has a mitigation plan for both issues, including increasing the speed to follow up with the late payers and proactively soliciting medical records to use in appeals at an earlier stage in the process.

Speaker Change: During the second quarter, we collected 976000.

Speaker Change: Of that amount we collected.

Speaker Change: About 35% of the 976000 claims paid were from those submitted in the current quarter.

Dennis McGrath: About 45% from claims submitted in the first quarter, and the balance from claims submitted last year with the longest dated item, nearly 12 months. Our Revenue Cycle Manager is reporting that the turnaround times have been increasing for the largest payers, and we've seen an increase in claims being designated medically notness. We've seen an increase in claims being designated medically notness, and we've seen an increase in claims being designated medically notness. The RCM has a mitigation plan for both issues, including increasing the speed to follow up with the late payers and proactively soliciting medical records to use in appeals at an earlier stage in the process.

Speaker Change: About 45% from claims submitted in the first quarter.

Speaker Change: And the balance from claims submitted last year with the longest dated item nearly 12 months ago.

Speaker Change: Our revenue cycle managers reporting that to turnaround times have been increasing for the largest payers.

Speaker Change: And we've seen an increase in claims being designated medically not necessary.

Lishan Aklog: Some key strategic accomplishments. Again, as I stated earlier, we are now fully armed with the complete body of outstanding clinical data. Much of this has come in recently. We reported on the NVET-BE clinical utility study, which showed positive data with a 2.4-fold increase in the yield of endoscopy. And the B-E1 clinical validation data, which was also just recently released showing easter-guard sensitivity of 88% and a negative predictive value of 99%. We'll discuss both of these studies a greater detail later.

The RCM as a mitigation plan for both issues, including increasing the speed to follow up with the late payers and proactively soliciting medical records to use and appeals in an earlier stage in the process.

Dennis McGrath: We submit reimbursement claims for nearly 5,600 claims during the first half of the year, representing just under $14 million in pro-form or rather. About 77% have been adjudicated, 23% are penned, and out of the 77% that have been adjudicated, about 25% resulted in an allowable amount by the insurance company with a weighted average during that period of time of about $1,540 per test.

Dennis McGrath: We submitted reimbursement claims for nearly 5,600 claims during the first half of the year, representing just under $14 million in pro forma revenue. About 77% have been adjudicated, and 23% are pending. Out of the 77% that have been adjudicated, about 25% resulted in an allowable amount by the insurance company with a weighted average during that period of time of about $1,540 per test. Of those denied, about 43% were deemed not medically necessary or required prior authorization. Additionally, about 26% were deemed benign. With that, Operator, let's open it up for questions.

Speaker Change: We submitted reimbursement claims for nearly 5600 claims during the first half of the year, representing just under $14 million in pro forma revenue.

Speaker Change: About 77% have been adjudicated, 23% are pending.

Speaker Change: Out of the 77% that had been adjudicated.

Speaker Change: About 25% resulted in an allowable amount by the insurance company with a weighted average during that period of time.

Lishan Aklog: The previously released data from the clinical, from the Cleveland VA clinical validation study was published at a peer review journal, the American Journal of Guest Renorology, and showed similar easter-guard sensitivity of 88% and a negative predictive value of 99%. Last month, we held a productive meeting with the CMS VLDX program focused on easter-guard clinical data. And we look forward to submitting our data and working with the VLDX team to ultimately secure Medicare coverage.

Speaker Change: <unk> <unk> 40 per test $1540 per test.

Operator: Of those denied, about 43% were deemed not medically necessary or required prior authorization; additionally, about 26% were deemed V-9 covered. With that, Operator, let's open it up for questions. Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number on your touchstone phone. 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 2.

Speaker Change: Although as benign about 43% are deemed not medically necessary or require prior authorization. Additionally, about 26% were deemed to be non covered.

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

Operator: If you're using a speakerphone, please lift the handset before pressing any key again. Again, let's start one to ask a question. [inaudible] One moment, please, for your first question. Our first question comes from the line of Mike Matson from Needham. Morning Mike. Hi Dennis. Hi Lishan.

Operator: Thank you, sir. 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 1 on your touchstone phone. 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 2. If you are using a speakerphone, please lift the handset before pressing any key.

Speaker Change: Thank you Sir ladies and.

Speaker Change: Gentlemen, you will now begin the question and answer session.

Lishan Aklog: The American forget society, a leading professional society, focused on a self-agil disease, published a formal statement that strongly advocated for commercial payer coverage of easter-guard to align with guidelines to biomarker legislation. This is a formal request that was strongly worded, and we believe it will have an impact on seeking coverage from commercial payers.

Johan: So do you have a question. Please press star followed by the one on your Touchtone phone line, you'll hear a pond that Johan has been way should.

Should you wish to decline from the polling process. Please press the star followed by the number of cube.

Johan: If youre using a speaker phone please lift the handset before pressing any key.

Operator: Again, that's star number one to ask a question. One moment, please, for your first. Our first question comes from the line of Mike Matson from Needham.

Lishan Aklog: So for those of you who are new to the elusive story, it was a few slides to provide you some background on our company. Lucid is a commercial stage cancer prevention medical diagnostic company, we're focused on early pre-cancer detection and mission is to prevent a soft-agil cancer deaths in a well-defined adverse population. We have two technologies, easter-guard, a soft-agil DNA test, and the easter-check cell collection device. The easter-guard test is the first and only commercially available test that's capable of serving as a widespread screening tool to prevent a soft-agil cancer death through the early detection of a soft-agil pre-cancer, easter-guard performance is really unprecedented for a molecular diagnostic test.

Johan: Again, Thats star one to ask a question one on me. Please. Please next question.

Johan: Our first question comes from the line of Mike Matson from Needham go ahead. Please.

Joseph Conway: Morning Mike. Hi Dennis. Hi Lishan. This is Joseph on for Mike today. Hi Joe. Hey, how are you doing?

Joseph Conway: This is Joseph on for Mike today. Hi Joe. Hey, how are you doing?

Johan: Good morning, Hi, Dan, it's hard and highly Schon. This is Joseph on for Mike today.

Joseph Conway: Um, great. Just in terms of, I guess, the moldy x meeting, did you have the recent data, especially the clinical utility data, to be presented at that pre-submission meeting? And then, you know, I guess.

Speaker Change: Hey, How're you doing.

Joseph Conway: Just in terms of, I guess, the multi-X meeting. Did you have the recent data, especially the clinical utility data to be presented at that pre-submission meeting, and then, you know, I guess. [inaudible] When would be the next one where you would have, I guess, another batch of data to show them? And is there a timeline in terms of final dossier submission in 2024? Or do you think that may be pushed out to 2025?

Great just in terms of I guess, the Mol Dx meeting.

Joseph: Did you have the recent data, especially the clinical utility data to be presented in that pre submission meeting.

Speaker Change: And then I guess when would be the next one where you would have I guess another batch of data to show them and is there a timeline in terms of final dossier submission in 2024 or do you think that may be pushed out to 2025.

Joseph Conway: When would be the next one where you would have, I guess, another batch of data to show them? And is there a timeline in terms of final dossier submission in 2024? Or do you think that may be pushed out to 2025?

Lishan Aklog: Here we show compare the easter-guard performance in various categories, compared to some comparable, some other early detection tests, including colorguard, colorectal stool test, and the guidance shield, colorectal blood test, which was recently approved. And I say it's unprecedented really around its ability to detect pre-cancer and early pre-cancer. So you can see this is pool data from multiple recent clinical validation studies that show 100% sensitivity for cancer, which is, which is, compare it's very fair, we'll be to these other tests.

Lishan Aklog: Okay, a couple of questions there. So the data that we reviewed during the pre-submission meeting included the 3 Clinical Validity Studies and the 3 Clinical Utility Studies. We did not spend much time on the original paper from the STM because one of those was in preprint and has not yet been published. In terms of the CV data, we did not have the data, the fourth CU data, and the NVID-BE study prepared at the time, but we did discuss what we were expecting, and the additional data we expected in the pipeline. We do not expect to have another formal pre-submission meeting. This meeting was really our first formal reintroduction since the early days when we first submitted them, well, prior to the LCD.

Lishan Aklog: Okay, a couple of questions there. So the data that we reviewed during the pre-submission meeting included the 3 Clinical Quality Studies and the three clinical utility studies. We did not review or spend much time on the original paper from the STM.

Speaker Change: Couple of questions. There. So we the data that we reviewed during the pre submission meeting included.

<unk>.

Speaker Change: Three clinical what do these studies.

Speaker Change: The.

Speaker Change: Three clinical utility studies.

Speaker Change: We didn't we did not review the spend much time on the original paper from the STM from STM one.

Lishan Aklog: Pre-cancer sensitivity, however, is 83%, substantially greater than the other test and really any other test of this category. And then most notably, early pre-cancer. Sensitivity remains high at 86% while other tests have no ability to detect or only pre-cancer. And ESAGAR even has a high sensitivity of 91% in the very short of segments of disease, 99% negative predictive values are very low-false, negative rate, and a positive predictive value of approximately 30% which is comparable to other such tests.

Of those was not in preprint has not yet been published.

Lishan Aklog: One of those was not, was in preprint and had not yet been published, in terms of the CV data. We did not have the data, the fourth CU data, the NVID-BE study prepared at the time, but we did discuss that we were, what we expected, the additional data we expected in the pipeline. We do not expect to have another formal pre-submission meeting.

Speaker Change: In terms of the CV data.

Speaker Change: We did not have the data the fourth senior data the <unk> study prepared at the time, but we did discuss that we were.

What we expect the additional data we expected.

Speaker Change: In the pipeline.

Speaker Change: We do not expect to have another formal pre submission meeting. This meeting was really our first formal reintroduction since the early days when we first submitted.

Lishan Aklog: This meeting was really our first formal reintroduction since the early days when we first submitted it, well prior to the LCD, and our next step is to collect the data, put it together in a dossier, as you mentioned, and submit it for consideration. One of the gating items for that is the publication of the ESAGuard BE-1 data, which is on preprint now and has been submitted to a journal and is currently under peer review.

Speaker Change: Well prior to the LCD and our next step is to.

Lishan Aklog: And our next step is to collect the data, put it together in a dossier, as you mentioned, and submit it for consideration. One of the gating items for that is the publication of the ESAGuard BE-1 data, which is on preprint now and has been submitted to a journal and is currently under peer review. So, that will be the gating item for us to put a final package together and submit it.

Speaker Change: They collect the data and put it together and the dossiers as you mentioned and submitted for consideration.

Lishan Aklog: The commercial opportunity here is very large or a very well-defined population of 30 million, approximately 30 million people in the United States who are at risk with chronic heartburn and are already recommended for pre-cancer testing. Medicare has established a rate of 1938 dollars and our out-of-network payments with commercial payers have held up, pricing has held up in that range. So very large addressable market, a lot of opportunity for us to generate revenue, substantial revenue, even with low levels of penetration.

Speaker Change: One of the gating items for that is the publication of the Eastern Grant <unk> Monday that which is pre print now than it has been submitted to a journal and is currently under peer review so that'll be the gating item for us to put a final package together and submitted so really in terms of a timeline as to.

Lishan Aklog: So that will be the gating item for us to put a final package together and to submit it. So really, in terms of a timeline as to when that will happen and when, you know, what the subsequent steps are, it's a little bit hard to say right now, but certainly I would expect that the BE-1 data will get published soon enough for us to be able to do so this year. Okay, yeah, all that color is very hopeful.

Lishan Aklog: So, really, in terms of a timeline as to when that will happen and when, you know, what the subsequent steps are, it's a little bit hard to say right now, but certainly I would expect that the BE-1 data will get published soon enough for us to be able to do so this year.

Speaker Change: When that will happen and when.

Speaker Change: With the subsequent steps starts a little bit hard to say right now, but certainly I would expect that the.

Lishan Aklog: Our gross margin for the next test in the door is after our current volumes is approximately 90%, which we believe will give us an opportunity to drive our business moving forward. We have a multi-pronged commercial strategy with multiple venues and multiple locations where patients can get access to our test. We have physical test sensors now located in 23 cities. Our dominant approach right now is what we call our satellite losing test center model where our team partners with typically primary care physicians and perform cell collection at the physician's office.

Speaker Change: That's b when data will get published.

Speaker Change: Soon enough for us to be able to do something this.

Speaker Change: This year.

Speaker Change: Okay.

Joseph Conway: And then I guess just looking at payment rate in the quarter, obviously, use of guard volume was up a fair amount sequentially, I think it was 30%, which is great, but payment rate was down. Obviously, I understand some of the details that Dennis gave in terms of the increases in what was deemed medically not necessary, but just comparing that or, or, Stephens, participates in the Twitter Meet Unknown Presenter, Unknown Terrible Broadcaster, Unknown, Yes, so the contract amount was paid in advance, and we deferred that revenue.

Joseph Conway: Okay, yeah, all that color is very helpful. Thank you.

Speaker Change: Okay. Yeah all of that color is very helpful. Thank you.

Speaker Change: Okay, and then I guess, just looking at payment rates for in.

Joseph Conway: And then I guess just just looking at payment rate for the quarter, obviously, use of guard volume was up a fair amount sequentially, I think it was 30%, you know, which is great. But payment rate was down, obviously, I understand some of the details that Dennis gave, you know, in terms of the increases and you know, it was deemed medically not necessary. But just just comparing that or, you know, framing that up with the large CYFT event where you guys did have a contracted payment, I'm just kind of wondering how those two forces came in contact with each other.

Speaker Change: In the quarter, obviously Isa guard.

Speaker Change: <unk> was up a fair amount sequentially I think it was 30%.

Speaker Change: Which is great, but payment rate was down obviously I understand some.

Dennis: Some of the details that Dennis gave.

Dennis: In terms of the increases and what it was.

Dennis: Medically not necessary, but.

Dennis: Just comparing that or or or.

Lishan Aklog: We also have physician practices who are building programs around it that we specialize for building programs around the e-cigarette test, where they perform the test itself. We have a mobile test unit in Florida, which provides us with a good opportunity for visibility and marketing. And as I hinted at earlier, we have these large check your food to health fair type events. We initially focused on firefighters, but we're expanding to other targets.

Speaker Change: Framing that up with the large cys key event, where you guys did have a contracted payment I'm just kind of wondering how those two forces came in contact with each other well maybe what was that contracted payment rate. If you could talk about that but the way I assume that is.

Joseph Conway: Well, maybe what was that contracted payment rate, if you could talk about that. But the way I assume it is, you know, you had 100% payment rate for everybody in that event. Also, was that recognized in this quarter, then?

Speaker Change: You had a 100% payment rate for everybody in that event.

Speaker Change: <unk> also was that recognized in this quarter then.

Lishan Aklog: We're starting to get some increased traction with larger health systems. These are longer lead times, but really are high value once we have programs in place, and we're looking forward to expanding our efforts in that area of them. So as previously noted, we had record quarterly test volume this past quarter at just over 3100 tests. Revenue has been flat for about a compared to the last quarter. And this commercial activity has been with a flat head count for sellers over the past couple of quarters, and really a 30% decrease in the head count compared to our peak in the approximately the fourth quarter of 2022.

Speaker Change: Yes.

Unknown Speaker: Unknown Speaker: I may have some, I may have some. Yeah, go ahead. Unknown Speaker: Okay.

Speaker Change: And they happened yet so I might have thought yes go ahead, absolutely yes.

Dennis McGrath: Yes, so the contract amount was paid in advance, and we deferred that revenue because the event actually occurred in the third quarter and, therefore, will be recognized in the third quarter.

Speaker Change: Yes, so the the contracted amount was paid in advance and we deferred that revenue and we need to defer that revenue because the event actually occurred in the third quarter and therefore will be recognized in the third quarter.

Joseph Conway: And we needed to defer that revenue because the event actually occurred in the third quarter and, therefore, will be recognized in the third. Okay, that's very helpful then. And then I'll just maybe just ask one more, you know, would they- Current cash burn that you guys are laying out, as well as, you know, the recent financing, what is maybe your cash runway look like right now? At $25 million in cash burn, you know, just around $10 million.

Speaker Change: Okay.

Joseph Conway: Okay, that's very helpful, then. And then I'll just maybe just ask one more question: would the current cash burn that you guys are laying out, as well as, you know, the recent financing, what is your cash runway like right now?

Speaker Change: Okay. That's very helpful. Then and then I'll just maybe just ask one more.

Speaker Change: The current cash burn that you guys are.

Speaker Change: Laying out as well as the recent financing what is maybe a cash runway look like right now.

Joseph Conway: At $25 million in cash burn, you know, just around $10 million. You've got a little more than six months' worth of cash. Okay, okay. Beautiful.

Lishan Aklog: So really this represents an increase in the productivity of our sales force. A commercial execution sign, let me first talk about these are high volume checker food to precancer protection events, as I mentioned earlier. We had over 50 such events during this past quarter that represents a 60% increase throughout us to the first quarter of 2024. We're happy to note in a part of milestone where we tested our 4,000th firefighter recently, and we have continued to have a very robust pipeline of events scheduled full through October.

Speaker Change: Yes, $25 million in cash burn just around $10 million you've got.

Speaker Change: Little more than six months worth of cash.

Joseph Conway: Okay, okay, beautiful. Well, thank you guys very much and congrats on the record quarterly e-cigarette volume. Okay, thanks.

Joseph Conway: You've got a little more than six months' worth of it. Okay, okay, beautiful. Well, thank you guys very much, and if you can grasp the record quarterly, you can see the guard going... Thanks, Joseph. Our next question comes from the line of Kyle Mikson from Canaccord. Albin Conway, Hey, guys, thanks for the questions.

Speaker Change: Okay, Okay beautiful well. Thank you guys very much and congrats on the record quarterly you can say guard volume.

Speaker Change: Okay. Thanks, so thanks Joseph.

Kyle Mikson: Our next question comes from the line of Kyle Mikson from Canaccord.

Speaker Change: Our next question comes from the line of Carl Mixon from Canaccord go ahead. Please.

Carl Mixon: Good morning.

Kyle Mikson: Congratulations on the progress. Um, yeah, given all of the clinical evidence you're building now, it's very encouraging, and it seems like it's going to be pretty useful for reimbursement and stuff. I mean, how are you thinking about like partnering with a large distribution company? You know, I guess like partners, like, you know, whether it could be like a larger healthcare company, diagnostics company with a large network or health system or some sort of like conglomerate, you know, like a vendor, I guess, as well. I mean, just at this point, I feel like it's a pretty legitimate story.

Kyle Mikson: Hey guys, thanks for the questions. Congratulations on the progress.

Carl Mixon: Hey, guys. Thanks for the questions Congrats on a progress.

Just given all of the on the clinical evidence Youre building now because it does vary.

Lishan Aklog: Direct contracting remains an important part of our near term. Strategy, which we believe will meaningfully contribute to long-term revenue growth. We're deploying additional resources to this initiative, and we held, as I mentioned, our first large CUIFT event where we received an up-front contracted payment with the Fort Worth Fire Department. This is a really important milestone. We'll increasingly speak to have guaranteed revenue from the CUIFT events outside of the usual insurance claims process whenever possible.

Speaker Change: Encouraging and it seems like it's going to be pretty useful for free.

Kyle Mikson: Um, yeah, given all of the clinical evidence you're building now, it's very encouraging, and it seems like it's going to be pretty useful for reimbursement and stuff. I mean, how are you thinking about partnering with a large distribution company? You know, I guess like a partner, like, you know, whether it could be like a larger, you know, healthcare company, diagnosis company with a large network or health system or some sort of like conglomerate, you know, like a vendor, I guess, as well.

Lishan Aklog: And I just, you know, how are you thinking about that sort of partnership model? Yeah, that's I think we've talked about this on and off over the past few quarters. Look, we're not quite there yet, Kyle, I think we'll need to get you to a higher percentage of realized reimbursement. But certainly, with the data we have, the progress we've made, that's certainly a consideration. But I don't I don't expect that that's going to be a true near-term, near-term event because obviously those kinds of contractual arrangements require that you have sufficient sufficient payment to justify the expense. Dennis, did you want to add anything?

Speaker Change: Reimbursement and stuff I mean, how are you thinking about like partnering with a large distribution.

Speaker Change: I guess my partner, Mike, whether it can be like a larger.

Speaker Change: Health care company Diagnostics company with a large network or health system, or some sort of looking alarm rates.

Mike Matson: Vendor I guess as well I mean, just at this point I feel like it's like a pretty much of a story and I guess, how are you thinking about that sort of a partnership model.

Kyle Mikson: I mean, just at this point, I feel like it's a pretty legitimate story. And I just, you know, how are you thinking about that sort of partnership model? Yeah, that's, I think we've talked about this.

Lishan Aklog: Yeah, that's I think we've talked about this on and off over the previous quarters. Look, we're not quite there yet, Kyle, I think we'll need to get, you know, to a higher percentage of have realized reimbursement. But certainly, with the data we have, the progress we've made, that's certainly a consideration. But I don't I don't expect that that's going to be a true near-term, near-term event, because obviously, those kinds of contractual arrangements require that you have sufficient sufficient payment to justify the expense on both sides. Dennis, did you want to add anything?

Speaker Change: Yes, I think we've talked about this on and off over over over the previous quarters look we're quite there yet call I think we'll need to get.

Lishan Aklog: We are making solid progress targeting benefit brokers, third-party administrators, with other self-insured entities, and are effort to offer ease of going to the covered benefit to, in the near-term, drive contractually guaranteed revenues. We continue to have mixed solid progress with our revenue cycle management processes. Related to out-of-network payments, this remains a critical aspect of converting our test volume growth into our revenue. The median allowed payment amount remains stable, near Medicaid, near the Medicare rate.

Speaker Change: Two a higher percentage.

Speaker Change: I have realized reimbursement, but certainly with the data we have and the.

Speaker Change: The progress we've made that's certainly a consideration but.

Speaker Change: I don't expect that that's going to be.

Speaker Change: Near term near term effects, because obviously those kinds of contractual arrangements require that you have sufficient payment to justify the expense on both sides. Dennis did you want to add anything.

Lishan Aklog: All right, great. And then, yeah, Lishan, what's been the reaction in the medical community or among the payers to all the most recent studies, I guess, and just like the building portfolio of data, you know, that actually results in an increase in adoption, or is volume going to be kind of stable until coverage, you know, for Medicare Excel rates, here? Yeah.

Dennis McGrath: All right, great. And then, yeah, Lishan, what's been the reaction in the medical community or among the payers to all this? Unknown Person, Executive Director, GeneXus Medical Center. Lourdes Fabiola is mentioning the Hormone Treatment System, which is an outward-faced Yeah, I think, thanks Kyle. I think the way I would characterize it is that we have, our adoption is already quite good. Our volumes are really driven by the number of folks we have in the field.

Lishan Aklog: We're making good progress on streamlining the processes for prior operations to eliminate denials. Our appeals process is getting more sophisticated and targeted, and we are seeing higher percentages of appeals that are being turned over on appeals, and we have better processes for those appeals, particularly in those patients, where the appeal is related to the designation of being medically not necessary. Dennis will discuss some of these numbers and more detail later.

Speaker Change: Alright, great and then yes, it will be at least one what's been the reaction in the medical community are among the payers that nuanced.

Speaker Change: The most recent studies I guess and just like the building portfolio data.

Speaker Change: And that actually results in like an increase in adoption or is probably going to be kind of stable until coverage.

For Medicare accelerates.

Lishan Aklog: I think the way I would characterize it is that our adoption is already quite good. Our volumes are really driven by the number of folks we have in the field, as I mentioned. We actually have fewer reps in the field with greater productivity.

Speaker Change: Yes, I think thanks, Kyle I think.

Speaker Change: The way I would characterize it is that we have our adoption is already quite quite good our volumes are really driven by.

Lishan Aklog: We held a high anticipated and productive meeting with the multi-ex-leadership group of an in-person meeting last month, and it was very productive. We really look forward to the focus was on our data, and we look forward to submitting our data formally and working with the multi-ex-chain to ultimately secure Medicare coverage. We also continue to pursue an active market access strategy with commercial payers that focused on securing medical policy coverage, with regional plans and kind of leverage by market legislation, which now exists in multiple states and trying to secure pilots and went for a national plan.

By the number of folks we have in the field as I mentioned, we actually have fewer fewer reps in the field with greater productivity, but look the data is being well received especially the clinical validation data, which is something that the physicians focus on the fitness the clinical utility is generally more it's something that.

Dennis McGrath: As I mentioned, we actually have fewer reps in the field with greater productivity. But look, the data is being well received, especially the clinical validation data, which is something that physicians focus on. The clinical utility is generally greater, and John W. Gray. Thank you. Thank you.

Lishan Aklog: But look, the data is being well-received, especially the clinical validation data, which is something that physicians focus on. Clinical utility, however, is generally something that payers focus on more. But the clinical validity data with these kinds of sensitivities, really high negative predictive values, solid PPVs, we do numerous peer-to-peer events. There was one associated with, a large one associated with, the Fort Worth Fire Department event that I was able to attend.

Speaker Change: That's more at the payers have focus on more but the clinical validity data with these kinds of sensitivities really high negative predictive value solid Pete Ppvs, we do numerous.

Lishan Aklog: So I think, as I said, it's all about the data. But it's not just about the data. It's about the data. It's all about the data. It's about the data. And I think that's more what the payers should focus on, but the clinical validity data with these kinds of sensitivities, really high negative predictive values, solid PPVs, we do numerous peer-to-peer events. There was one associated, a large one associated with the Fort Worth Fire Department event that I was able to attend.

Speaker Change: Peer to peer events there was one associated a large one associated associated with the Fort worth fire Department event that I was able to attend.

Lishan Aklog: And, you know, as you said, it helps, it's really critical to have data. So even though people generally have been quite, you know, a little bit less sensitive, quite enthusiastic about the prospect of having a nonendiscopic biomarker test as an alternative to endoscopy with good early data as we've locked down the clinical glowy data in particular. That's just strengthened. Unknown Speaker, Unknown Attendee, Unknown Speaker, Unknown, All right, that was a great thanks for that.

Lishan Aklog: And as you said, it's really critical to have data. So even though people generally have been quite enthusiastic about the prospect of having a non-endoscopic biomarker test as an alternative to endoscopy with good early data, as we've locked down the clinical validity data in particular, that's just strengthened the enthusiasm within physicians.

Speaker Change: And as you said it helps it is really critical to have data so even though people generally had been quite.

Lishan Aklog: As I stated from the onset, we are fully now fully armed with what is now a complete body of outstanding clinical data, and this positions ourselves really well for our final push towards broad coverage and determination.

Speaker Change: Quite enthusiastic about the prospect of having a non endoscopic biomarker tests as an alternative to endoscopy with good early data as we've locked down.

Lishan Aklog: This table shows the data. Here it is. I won't go through each of these, but just to highlight a few, I'll talk briefly about the most recently released data for the ESA grad BE1 and BE. The end of that BE studies, as you can see, those are working their way through peer review. We've had some recent publications and now have multiple public studies. Basically, four clinical validity studies, those are the top four and four clinical utility studies that demonstrate the clinical utility of ESA grad.

Speaker Change: Clinical validity data in particular, that's just strengthened.

Speaker Change: <unk> enthusiasm within the physician community.

Kyle Mikson: And then Dennis, you mentioned that 43% of the, like, you know, over 5,000 claims submitted in the first half of the year were deemed not medically necessary. Maybe we found a dentist, could you just dive more into that and what that means? Like, why is that a reaction?

Lishan Aklog: All right, that was great. Thanks for that. And then Dennis, you mentioned that 43% of the like, you know, over 5000 claims submitted in the first half of the year were deemed not medically necessary. Maybe Lishan or Dennis, could you just dive more into that and what that means? Like, why is that a reaction? Or why are you seeing that reaction among these groups? That's interesting, but maybe not necessary.

Speaker Change: Alright, that's great thanks for that.

Speaker Change: And then Dennis you mentioned that 42% of like over.

Speaker Change: Over 5000 claims coming in the first half of the year were deemed not medically necessary, maybe Lisa could you just dive more into that and what that means like why is that a reaction or why are you seeing that reaction. Among these groups that's interesting.

Lishan Aklog: So the ESA grad BE1 study, which was the data was recently released on preprint, and it's awaiting peer review publications, was a study that included 93 patients in a screening population. So these were not pre-selected patients who had known disease, pre-cancer sensitivity was 88 percent. There were no, not unexpectedly, there were no cancers detected in this population, and very similar statements, sorry, similar results, with negative predictive values in the 99 percent range and positive predictive value of 30 percent.

Dennis McGrath: Why are you seeing that reaction among these groups? That's interesting. Yeah, medically, so the 43% included the combination of two things; medically not necessary was about 25%, and 18% were prior, not requiring a prior office visit. The medical not necessary designation tends to be the jargon when it may not be covered, may need additional information.

Speaker Change: And Dennis maybe phrase unnecessary yes.

Dennis McGrath: Yeah, medically. So the 43% included the combination of two things.

Dennis: Yes, medically so the 43% and included the combination of two things.

Dennis: Medically not necessary was about 25% and 18% were prior not required a prior authorization the medical not necessary designation.

Dennis McGrath: Medically not necessary was about 25%, and 18% were prior not required a prior authorization. The medical not necessary designation tends to be the jargon when it may not be covered, and may need additional information. And obviously, that's puzzling because all of these patients meet the guidelines, the criteria that have been well established for a long period of time. And that gives us the ability to appeal that claim, demonstrating that it was medically necessary based upon the patient's criteria.

Speaker Change: <unk> tends to be the jargon when it may not be covered may need additional information.

Dennis McGrath: And obviously, that's puzzling because all of these patients meet the guidelines, the criteria that have been well established for a long period of time. And that gives us the ability to appeal that claim, demonstrating that it was medically necessary based upon the patient's criteria. So each of those denials on that basis becomes a tool for us in the appeals process. And we're making progress on the appeals side. We're seeing an increase in those overturned in the appeal process.

Speaker Change: And obviously, that's puzzling because all of these patients meet the guidelines the criteria that they have been well established for a long period of time and that gives us the ability to appeal that claim demonstrating that it was medically necessary based upon the.

Lishan Aklog: This is the multi-center study led by Dr. Nick Shaheen of UNC. The NBBE study, which was recently released on preprint, and we announced that last week in a press release, as a waiting pre-review, to study, provided real-world data to confirm the utility of ESA Guard has a non-invasive triage tool to significantly increase the positive yield of invasive uppercut, I was noted. And by a world it demonstrates that our ESAGRA test more than doubles pre-catcher defections.

Lishan Aklog: It reported on 199 patients where ESAGRA was used as a triage tool to invasive endoscopy, so positive patients got endoscopy negative patients did not, and the yield of endoscopy was increased by 2.4 fold relative to what it would have been endoscopy was performed without triage using ESAGRA. It's a really, really excellent clinical utility data to supplement our overall clinical evidence.

Speaker Change: The patient criteria.

Dennis McGrath: So each of those denials on that basis becomes a tool for us in the appeals process. And we're making progress on the appeals side. We're seeing an increase in those overturned in the appeal process. One other comment that might be important in the overall scheme of things is that the total backlog of tests and submitted claims that we are still working through this entire process is about $12.5 million. So this becomes an opportunity for us. It becomes an opportunity for our market access team to engage with the payers, to submit additional information to demonstrate that it was medically necessary and may be overturned in the appeal process.

Speaker Change: No.

Speaker Change: Each of those denials on that basis becomes a tool for us on the on the appeals process.

Speaker Change: And we're making progress on the appeal side, we're seeing an increase of those overturned in the appeal process.

Lishan Aklog: One other comment that might be important in the overall scheme of things is that the total backlog of tests and submitted claims that we are still working through all of this process is about twelve and a half million dollars. So this becomes an opportunity for us; it becomes an opportunity for a market access team to engage with the payers, submit additional information to demonstrate it was medically necessary, and may be overturned in the end. Maybe I could just emphasize one thing Dennis said, Kyle, which is that, you know, this is actually, these are obviously out-of-network claims, so you expect to get denials on some reasonable number of them.

Speaker Change: One other comment that might be important in the overall scheme of things is that.

Speaker Change: The total.

Speaker Change: Backlog.

Speaker Change: Tests and submitted claims that we are still working through all of this process is.

Speaker Change: It was about $12 $5 million so.

Speaker Change: This becomes an opportunity for us it becomes an opportunity for our market access team to engage with payers to submit additional information to demonstrate it was medically necessary and.

Speaker Change: And may be overturned and the appeals.

Dennis McGrath: Maybe I could just emphasize one thing Dennis said, Kyle, which is that, you know, this is actually, these are obviously out-of-network claims, so you expect to get denials on some reasonable number of them. When we see medically unnecessary, we actually embrace that because that gives us an opportunity to make the case, not just for that individual claim but more generally with the higher-up medical director or other person that's reviewing that.

Lishan Aklog: When we see medically in this area, we actually embrace that because that gives us an opportunity to make the case, not just for that individual claim but more generally with the higher-up medical director or other person that's reviewing that.

Speaker Change: Maybe I could just add one emphasize one thing that <unk>, which is that this is actually.

Dennis McGrath: Let me pass the baton on now to Dennis who will cover our financials. Thanks, Lishan, and good morning everyone. The summary financial results for the second quarter where we put in our press release was published earlier today.

Speaker Change: These are obviously out of network claims so you expect to get denials at some reasonable number of them when we see a medically necessary we actually.

Speaker Change: Embrace that because that gives us an opportunity to make the case not just for that individual claims, but more generally with the.

Dennis McGrath: On the next three slides, I'll emphasize a few key financial highlights from the quarter, but I encourage you to consider those remarks in the context of the full disclosures covered in our quarterly report on form 10Q. With regards to the balance sheet, cash at quarter end June 30th was 24.9 million. During the quarter, we closed the Series B1 convertible preferred financing in the amount of 11.6 million. The average quarterly burn rate for the trailing four quarters is 10.6 million. The burn in the second quarter included 7.4 million from ongoing operations, which is in line with the previous quarter. 2.5 from the quarterly MSA management service agreement and 1.6 million reduction to the intercompany debt department.

Speaker Change: The higher RF medical director other other person Thats reviewing that and one of the things that Dennis mentioned I just want to emphasize is that we have we're armed with substantially more.

Lishan Aklog: And one of the things that Dennis mentioned, but I just want to emphasize, is that we have, we're armed with substantially more firepower entering into those, and we've had increases in our appeals. So now we have not just the data, not just the guidelines, but, as we mentioned, we now have physician advocacy letters both within the local communities as well as a society letter. So the AFS letter, which is worth reading if you haven't already, is quite powerful.

Kyle Mikson: And one of the things that Dennis mentioned is that we have, we're armed with substantially more firepower entering into those when we've had increases in our appeal, so now we have not just the data, not just the guidelines, but as you mentioned, we now have physician advocacy letters within the local communities as well as a society letter. So the AFS letter, which is worth reading if you haven't, is quite powerful and basically, you know, basically calls the insurance company and asks them to pay for our clinical minutes.

Speaker Change: More firepower entering into those and we've had increases in our appeal. So now we have not just the data not just the guidelines, but as we mentioned we now have a physician advocacy letters of both within the local communities as well as our society letters of EHS letter, which is worth reading. If you haven't is quite powerful and basically so basically calls caused the insurance.

Lishan Aklog: It basically, you know, basically calls the insurance companies out and says, you know, you need to pay for this. Important for our clinical management. And on the prior auth portion, as we've hinted at, without going into too much detail, because it can get a little bit wonky, we're really beefing up our prior authorization processes so that for payers and in locations where that, Thank you so much.

Speaker Change: Is that incentive you need to pay for you need to pay for this for this test it's important for for our clinical management of these patients.

Kyle Mikson: And on the prior auth portion, as we've hinted at without going into too much detail, because it can get a little bit wonky, we're really beefing up our prior authorization processes so that for payers and in locations where that's, A Plum Village. And then one more problem, the 37% of the claims that were, I guess, billed in the second quarter. Okay, I guess we're in the current quarter. Is that like a kind of a, is 35% like a pretty normal rate?

Speaker Change: And on the prior off portion.

Speaker Change: As we've hinted that without going into too much detail because it can get a little bit a little bit wonky ware.

Dennis McGrath: We disclosed in the 10Q that our ability to fund operations beyond one year from today is largely dependent upon how revenues ramp over the next four quarters, which is dependent upon how the reimbursement landscape for both government and private health insurers continues to improve. Additionally, our direct contracting efforts with self-insured employers and to work corporate finance activities, including refinancing any outstanding debt at the time can also work to exceed that threshold.

Speaker Change: We are really beefing up our prior authorization processes so that.

Speaker Change: For that for our payers and locations for that.

Speaker Change: Carmen, we can actually get prior authorizations submitted prior to the test actually being performed to facilitate that so.

Carmen: Those are both areas that we actually have something actionable that we can.

We believe is already leading to an increase in the success of our appeals.

Dennis McGrath: The increases in other assets of approximately $2 million reflects the gap accounting for the three-year lease renewal of our California lab that also is reflected in the long-term liabilities with the corresponding $2 million increase. Included in other current liabilities is the 11.2 million fair value of the senior convertible debt, which reflects a sequential quarterly decrease of 1.9 million. During the quarter, the company issued approximately 2.1 million shares in satisfaction of conversion notices from the debt holder.

Carmen: Hopefully continue to do so.

Kyle Mikson: Okay, and then one more problem, the 37% of the claims that were, I guess, built in the second quarter. I guess we're in the current quarter now. Is that 35% a pretty vulnerable rate, or do you want to see that increase going forward? In other words, do you want to see the book-to-bill ratio become more even over time? Just help us think about how that metric could change as you get coverage and so forth.

Carmen: Okay, and then one more crop.

Speaker Change: 37% of the claims that were I guess build India.

Speaker Change: In the second quarter.

Speaker Change: Yeah.

Speaker Change: I guess, we're in the burden for the current quarter is that a kind of a 35% are pretty volatile right or do you want to see that increase going forward and again like in other words, you're going to see more like the the book to Bill ratio I guess kind of like AECOM or even over time and just help us think about how that metric could I can't change.

Dennis McGrath: Or do you wanna see that increase going forward? Like in other words, do you wanna see more of the book to bill ratio, I guess, kind of like become more even over time? And just help us think about how that metric could change as you get coverage and so forth. Yeah, the expectation would be as we move to medical policies and more of the engagement with the insurers, you know, that should be a 30 to 45 day turnaround time from submission of a claim to payment.

Speaker Change: It covers and so forth.

Dennis McGrath: Yeah, the expectation would be as we move to medical policy and more of the engagement with insurers, you know, that should be a 30 to 45 day turnaround time from submission of a claim to payment. So obviously, it's stretched out while we're in this early part of the reimbursement journey, particularly since we're dealing with out of network providers and may require additional submitted data to get them paid. So it is being stretched out at this point in time.

Speaker Change: Yes, the expectation would be as we move to medical policy in more of the engagement with the insurers that should be a.

Dennis McGrath: Shares outstanding, including unvested restricted stock awards as of last week are approximately 54 million shares, which includes approximately 750,000 shares issued subsequent to quarter end and connection with conversion notices from the convertible debt holder. The gap outstanding shares as of June 30th, a 49.3 million, are reflected on the slide as well as on the face of the balance sheet and attend to you. Gap shares do not reflect unvested restricted stock award amounts.

30% to 45 day turnaround time from submission of claims payment. So obviously stretched out while we're in this early part of the reimbursement journey, particularly since we're dealing with out of network and may require additional soon.

Dennis McGrath: So obviously, it's stretched out while we're in this early part of the reimbursement journey, particularly since we're dealing with out of network providers and may require additional submitted data to get them paid. So it is being stretched out at this point in time. And it is also being reported by the Revenue Cycle Manager that during this out of network, the payments are getting stretched. With medical policy, it becomes much more streamlined. It's not without headaches, but the expectation is that we should collect more of what's billed in a quarter and, ultimately, recognize revenue once the report is delivered. And that would then be in the current quarter.

Speaker Change: Assuming that data to get them paid so it is being stretched out at this point in time and it is also being reported by the revenue cycle manager that during this.

Dennis McGrath: And it is also being reported by the Revenue Cycle Manager that during this out of network, the payments are getting stretched. With medical policy, it becomes much more streamlined. It's not without headaches, but the expectation is that we should collect more of what's billed in a quarter and, ultimately, recognize revenue once the report is delivered. And that would then be in the current quarter.

Speaker Change: Out of network.

Speaker Change: Payments are getting stretched with medical policy that becomes much more streamlined its not without headaches, but the expectation is that we should collect more of what's built in a quarter and ultimately recognize revenue once the report is delivered.

Dennis McGrath: At present, PadMed continues to be the single largest shareholder of Lucid Diagnostics with ownership of just under 60% of the common shares outstanding. Furthermore, PadMed maintains the controlling financial and controlling voting interest in the company at greater than 50%.

Speaker Change: And that would then be in the current quarter.

Kyle Mikson: Got it. Okay. Any size?

Dennis McGrath: As you are aware, Lucid's recent financings include at the issuance of series of voting convertible preferred securities whereby the preferred shareholders are significantly incentivized to delay conversion of the preferred shares in the common shares until 2026, namely the second anniversary from closing. Full of the preferred shares outstanding were converted to common shares as of today, there would be an additional 51.6 million shares outstanding.

Speaker Change: Got it okay. Thanks, guys.

Speaker Change: Okay.

Operator: Thank you. Our next question comes from the line of Ross Osborn from Canada.

Ross Osborn: Our next question comes from the line of Ross Osborn from Cantor Fitzgerald. Hey guys, thanks for taking our questions. Starting off, I was just hoping you guys could provide some more color.

Operator: All right. Go. Our next question comes from the line of Ross Osborn from Cantor Fitzgerald. Hey guys, thanks for taking our questions. Starting off, I was just hoping you guys could provide some more color on your direct contracting engagements, just in terms of what's planned for the balance of this year. Yeah, so I can tell you a bit about the activity and some of the expectations. So, we now have three full-time employees who are working on this. They're working on it on a couple of fronts. One is directly engaging with employers, literally calling employers and looking to have our test offered as a covered benefit within their plans.

Speaker Change: Our next question comes from the line of Ross Osborn from Cantor Fitzgerald go ahead. Please.

Ross Osborn: Good morning, guys. Thanks for taking the questions.

Ross Osborn: We've also had a lot of great success with engaging with brokers. They're a really key part of this infrastructure. They work with third-party administrators and with companies.

Ross Osborn: I'll start off.

Speaker Change: Her being is if you guys could provide some more color.

Ross Osborn: On your direct contracting engagement just in terms of you know what's the plan for the balance of this year.

Lishan Aklog: Yeah, so I can tell you a bit about the activity and some of the expectations with regard to how that will translate. So we now have three full-time employees who are working on this. They're working on it on a couple of fronts. One is just directly engaging with employers, literally calling employers and looking to have our test offered as a covered benefit within their plans.

Speaker Change: Yes, so I can tell you a bit about the activity and with some of the expectations with regard to how that will translate so we now have three.

Dennis McGrath: With regard to the P and L, this slide compares this year's second quarter to last year's second quarter of certain key items. Trust you will review the information in my comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-gap information. Revenue of approximately $1 million for the second quarter is about even with the previous two quarters and reflects more than a six-fold increase over the prior year's second quarter.

Speaker Change: <unk> three full time employees, who are working on this there is they are working on it on a couple of fronts. One is just directly engaging with employers literally calling calling employers.

Speaker Change: Sure.

Speaker Change: And looking to have our test offered as a covered benefit within their plan. We've also had a lot of great success with.

Lishan Aklog: We've also had a lot of great success with engaging with brokers. They're a really key part of this infrastructure. They work with third-party administrators and with companies.

Dennis McGrath: The amount reflects actual cash collections for the quarter plus a small amount of invoiced esogart test delivered to the VA. Test volume of 3,174 tests for the quarter represents almost $8 million in submitted claims at our $2,499 ASP. It's worth repeating what we've communicated in past quarters about revenue recognition. A key determinant in how revenue is recognized at this point in our reimbursement journey is the probability of collection. Therefore, due to the fact that we are in the early stages of the reimbursement process means revenue recognition for claims submitted to traditional government or private health insurers will be recognized when the claim is actually collected first when the patient report is delivered invoiced and submitted for reimbursement.

Speaker Change: Engaging with our brokers out there really key part of this infrastructure they work with third party administrators and with companies.

Lishan Aklog: And we're starting to get some traction with brokers who are now out there on our behalf pitching ESA Guard as a covered benefit within packages and actually the mechanics of doing so. So doing so by just adding riders to benefit plans to add ESA Guard as a rider. And so we're still in the early stages of this, but there's a lot of activity. Again, we have three full-time employees who are working diligently on this.

Lishan Aklog: And we're starting to get some traction with brokers who are now out there on our behalf pitching ESAGuard as a covered benefit within packages, and actually the mechanics of doing so. For example, doing so by just adding riders to benefit plans to add ESAGuard as a rider. And so, we're still in the early stages of this, but there's a lot of activity, a lot... Again, we have three full-time employees who are working diligently on this, and we are starting to see some traction. I think what you should expect over the coming quarters is some of our traditional CYFT events, such as the firefighter events, to result in pre-negotiated contracted payments. These should happen more quickly.

Speaker Change: And we're starting to get some traction with brokers, who are now out there on our behalf pitching Isa guard as a.

Speaker Change: As a covered benefit within packages and actually the mechanics of doing so so doing so by just adding riders to benefit plans to add <unk> as a writer and so we're still in the early stages of it but there's a lot of activity a lot of.

Speaker Change: We have again we have.

Speaker Change: Three full time employees were working diligently on this and we are starting to see some traction I think.

Lishan Aklog: And we are starting to see some traction. I think what you should expect over the coming quarters is some of our traditional CYFT events, such as the firefighter events, to result in pre-negotiated contracted payments. Those should happen more quickly.

Speaker Change: What you should expect over the coming quarters as some.

Speaker Change: Some of our traditional cys key events, such as the firefighter events too.

Speaker Change: The resulting.

Dennis McGrath: As you will see in our 10Q, this is called variable consideration of the jargon of gaps ASC 606 revenue recognition guidelines and presently there is insufficient predictive data to reflect revenue when the test report is delivered to the referring physician. For billable amounts contracted directly with employers and that are fixed and determinable will be recognized as revenue when our contracted service is delivered. Generally, that means when the report is delivered to the referring physician.

Speaker Change: Pre negotiated contracted payments.

Speaker Change: Those should happen.

Speaker Change: More quickly getting on these plans and integral altering their benefit programs has a longer lead time, but we think we have enough.

Lishan Aklog: Getting on these plans and sort of altering the benefit programs has a longer lead time, but we think we have enough folks on it right now, a lot of activity that should start generating some activity there. And again, when we do so, those will translate into... and be contractually guaranteed. Okay, great.

Ross Osborn: Getting on these plans and sort of altering the benefit programs has a longer lead time, but we think we have enough folks on it right now, and a lot of activity that should start generating some activity there. And again, when we do so, it will translate into contractually guaranteed revenue. Okay, great.

Speaker Change: Folks on it right now a lot of activity that should start generating some activity there and again when we do so those will translate into.

Speaker Change: Into guarantee contractually guaranteed revenue.

Speaker Change: Okay.

Lishan Aklog: And then I realized that your Salesforce is demonstrating productivity gains. But as we're entering into 2025, you know, do you plan on selectively adding to Salesforce? Or do you still think you're at sufficient numbers on that count? We're playing it, we're playing it really quarter by quarter at this point because we have a really good field training process; we know how to train folks and add them. But you know, we're paying a lot of attention to maintaining our OPEX flat.

Ross Osborn: And then I realize you mentioned that your sales force is demonstrating productivity gains, but as we're entering into 2025, you know, do you plan on selectively adding to your sales force or do you still think you're at submission accounts? We're playing at, we're playing at really a quarter by quarter basis. We have a really good sales training process. We know how to train folks and add them, but we're paying a lot of attention to maintaining our OPEX flat.

Speaker Change: Okay, Great and then I realize you mentioned that your sales forces demonstrating productivity gains, but as we're entering into 2025, Yeah. Do you plan on selectively adding to the sales force or do you still think you are at sufficient head count.

Dennis McGrath: Our non-gap loss for the second quarter of 9.7 million is in line with each of the trailing 6 quarters with an average of 9.6 million. The non-gap net loss per share has been relatively flat for each of the last 6 quarters plus or minus a penny between each of the 6 quarters with an average of 22 cents per share. On a cappy PS basis, non-cast charge is accounted for approximately 19 cents, for Share.

Lishan Aklog: We're obviously encouraged by the increased productivity that can that that could very well continue, particularly since the CYFT events tend to be more efficient, they don't require as much, sort of foot time of reps going from office to office. But our threshold, there is a threshold, but it's a threshold for us starting to steadily increase our sales team, very similar to what Kyle was asking, the threshold for considering entering into partnerships would be sort of a meaningful increase in the percentage of our test that we're generating revenue on, so for the foreseeable future, we'll assume it's flat, but obviously we look forward to there being an inflection point in the realization of revenue, which would allow us to justify increasing.

Speaker Change: We're playing we're playing it really quarter by quarter at this point because we have.

Speaker Change: They're really good sales training process, we know how to train folks and add them, but are you know, we're paying a lot of attention to maintaining our opex flat.

Ross Osborn: We're obviously encouraged by the increased productivity, and that could very well continue, particularly since the CYFT events tend to be more efficient. They don't require as much sort of foot time of reps going from office to office, but our threshold, there is a threshold, but it's a threshold for us to start to steadily increase our sales team, very similar to what Kyle was asking. The threshold for considering entering into partnerships would be sort of a meaningful increase in the percentage of our tests that we're doing and generating revenue on.

Dennis McGrath: With regard to our operating expenses, this slide is a graphic illustration of our operating expenses after eliminating non-cashy expenses for the peer to reflected. Total non-gap op-ex is 10.6 million for the second quarter and is in line with the trailing six quarters with an average of 10.3 million. Cost of Revenant primarily consists of esotech devices, lab supplies, and fixed lab facility costs and is in line with the last several quarters. Non-gap GMA expense is sequentially up slightly by about $400,000 which is mostly reflective of some hiring in our market access reimbursement department and some patent expenses.

We're obviously encouraged by the increased productivity that can that could very well continue particularly since the citywide events tend to be more efficient they don't require as much.

Speaker Change: Sort of what time of reps going from office to office.

Speaker Change: But our.

Speaker Change: Hold there is a threshold, but it's a threshold for us.

Speaker Change: So starting to steadily increase our sales team very similar to what kind of is that the threshold for.

Speaker Change: For considering entering into partnerships would be.

Speaker Change: Sort of a meaningful increase in the percentage of our <unk>.

Speaker Change: Tests that were.

Speaker Change: At generating revenue on so.

Dennis McGrath: Let me close with a few reimbursement highlights for the first half of this year. In the second quarter we build, as I mentioned, 3,174 tests reflecting just under $8 million in pro forma revenue. During the second quarter we collected 976,000. Of that amount we collected about 35% of the 976,000 claims paid were from those submitted in the current quarter. About 45% from claims submitted in the first quarter. In the balance from claims submitted last year, with the longest dated item nearly 12 months ago.

For the foreseeable future.

Speaker Change: So we'll assume it's flat, but obviously, we look forward to there being an inflection point.

Speaker Change: And the realization of revenue, which would allow us to adjust allowed us to justify increasing the sales team.

Speaker Change: Got it thanks for taking the questions.

Ralph: Thanks Ralph.

Lishan Aklog: So for the foreseeable future, we'll assume it's flat, but obviously, we look for it to there being an inflection point in the realization of revenue which allows us to just allow us to justify an increase. Got it. Thanks for taking our questions. Thanks, Ross. Our next question comes from the line of Anthony Vendetti from Metkin Group. Go ahead. Good morning, Anthony. Thanks. Good morning, Dennis. Good morning, Lishan.

Operator: Our next question comes from the line of Anthony Vendetti from Metkin Group.

Speaker Change #100: Our next question comes from the line of Anthony Vendetti from Maxim Group go ahead. Please.

Speaker Change #100: Good morning, Anthony.

Anthony Vendetti: Thanks. Good morning, Dennis. Good morning, Lishan.

Anthony Vendetti: Thanks, Good morning, Dennis Good morning, Sean.

Speaker Change #103: Just following up on the.

Anthony Vendetti: Just following up on the, Hi, just following up on the medically, you know, Tested or deemed not medically necessary. I know you've talked about it. But I think it's, I think it's really important to try to understand. And... Exactly the trajectory.

Anthony Vendetti: Just following up on the... Hi, just following up on the medically, Tested or deemed not medically necessary. I know you've talked about it. But I think it's, I think it's really important to try to understand exactly the trajectory. So when it's out of network claims, and I know you look at it as an opportunity because you can have these discussions, and you have three employees focused on this, and I know this is complicated with third-party administrators, brokers, and so forth.

Anthony Vendetti: Hi, just following up on the on the medically.

Dennis McGrath: A revenue cycle manager is reporting that the turnaround times have been increasing for the largest payers and we've seen an increase in claims being designated medically not necessary. The RCM has a mitigation plan for both issues including increasing the speed to follow with the late payers and proactively soliciting medical records to use and appeals at an earlier stage in the process. We submit it reimbursement claims for nearly 5,600 claims during the first half of the year representing just under $14 million in pro forma revenue.

Speaker Change #104: Test, they're deemed not medically necessary I know you've talked about it.

Speaker Change #105: But I think it's I think it's.

Speaker Change #105: Really important to try to understand.

Anthony Vendetti: Generally, these plans come up for renewal once a year, but in the meantime, it sounds like you're making progress with getting amendments to the plans, which is great, with all the data you have, and you put out a lot of data, which is also awesome in terms of reporting, you know, the fact that these tests are necessary, you know, prevents spirotroph esophagus and esophageal cancer Do you believe, because I know it's a long process, but do you believe this 25-26% that are still being deemed medically necessary, is that sort of where it's going to stay for a little while, or are you expecting it to improve quarterly? sequentially, just a little bit. And then maybe, you know, over the next year, we will see significant improvement in that. I'm just curious, as you see it unfolding, what's the...

Exactly.

Speaker Change #105: The trajectory so.

Anthony Vendetti: So, when it's out of network claims, and I know you look at it as an opportunity because you can have these discussions and you have three employees focused on it, and I know this is complicated with third-party administrators, brokers, and so forth. Generally, these plans come up for renewal once a year, but in the meantime, it sounds like you're making progress with getting amendments to the plans, which is great. With all the data you have, and you put out a lot of data, it's also awesome. Reporting, Unknown Speaker 0, 0, 0.

Speaker Change #106: When it's out of network claims and I know you look at it as an opportunity because you can have these discussions and you have three employees focused on it and I know this is complicated with third party administrators brokers and so forth generally these plants come up for renewal once a year, but in the meantime, it sounds like you're making progress with getting amendments to the plans.

Dennis McGrath: About 77% have been adjudicated 23% of pending. Out of the 77% that have been adjudicated, about 25% resulted in an allowable amount by the insurance company with a weighted average during that period of time, about 1540 protests, $1,540 protests. Of those denied, about 43% are deemed not medically necessary or require prior authorization. Additionally, about 26% were deemed being uncovered.

Speaker Change #106: Great.

Speaker Change #106:

With all the data you have you put out a lot of data, which is which is also awesome in terms of.

Speaker Change #106: Supporting.

Lishan Aklog: Unknown Speaker 0, 0, 0, the fact that these tests are necessary, you know, prevents spriot esophagus and esophageal cancer down the road. Do you believe, because I know it's a long process, but do you believe this 25-26% that are still being deemed medically necessary, is that sort of where it's going to stay for a little while? Or are you expecting it to improve quarterly? sequentially just a little bit, and then maybe over the next year see significant improvement in that? I'm just curious, as you see it unfold, who's the director?

Speaker Change #106: The fact that they did.

Speaker Change #106: These tests are necessary.

Speaker Change #107: Prevents <unk> esophageal cancer down the road.

Speaker Change #107: Do you believe because I know, it's a long process, but do you believe this 25, 26% that are still being deemed medically necessary is that.

Operator: With that operator, let's open it up for questions. Thank you, sir.

Is that sort of.

Speaker Change #108: Where it's going to stay for a little while or are you expecting it to improve quarterly.

Operator: Ladies and gentlemen, we will not begin the question and answer session. Should you have a question, please press star followed by the one on your touchstone phone. 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. If you're using a speaker phone, please lift the handset before pressing any key. Again, let's start one to ask a question. One moment, please, for your first question.

Speaker Change #107:

Speaker Change #107: Sequentially, just a little bit and then and then maybe.

Speaker Change #107: Over the next year see significant.

Speaker Change #107: Improvement in that I'm, just curious as you see it unfolding.

Lishan Aklog: Director. Yeah, great. Thanks, Anthony.

Speaker Change #107: Trajectory.

Lishan Aklog: Yeah, very much thanks Anthony, let me touch on that and see if we can provide some additional color, and I'm sure Dennis will have some. Um, so you just want to make sure that we're clear that the out-and-network process where we're submitting claims and seeking to get paid on claims is different than direct contracting. I think you were suggesting that, but I didn't want to acknowledge that, but I didn't want folks to get confused. So when we are working on the direct contracting side where we're getting ESA Guard added as a covered benefit, that does not need to go through the traditional claims process.

Speaker Change #109: Okay, great. Thanks, Anthony Let me, let me touch on that if we can provide some additional color and I'm sure Dennis will have some additional thoughts.

Lishan Aklog: Let me touch on that, see if we can provide some additional color, and I'm sure Dennis will have some additional thoughts. So I just want to make sure that we're clear that the out-of-network process where we're submitting claims and seeking to get paid on claims is different than the direct contracting initiative. I think you were suggesting that, but I didn't want to acknowledge that, but I didn't want folks to get confused. So when we are working on the direct contracting side, where we're getting e-cigarettes added as a covered benefit, that does not need to go through the traditional claims process that we're talking about here. So those are two separate initiatives.

Speaker Change #110: So just wanted to make sure that we're clear that the aten networks.

Joseph Conway: Our first question comes from the line of Mike Madsen from Needham. Go ahead, please. Good morning, my name is John.

Speaker Change #111: That's why we're submitting claims and seeking to get paid on claims is different than the direct contracting. Initially I think you were suggesting that he has done what we didn't want acknowledging that but I didn't want folks to get confused. So when we are working on the direct contracting side, where we're getting Isa guard added as a covered benefit that does not need to go through the traditional claims process that we're talking about.

Joseph Conway: This is Joseph on from Mike today, and so on. Just in terms of, I guess, the multi-X meeting. Did you have the recent data, especially the clinical utility data to be presented in that pre-submission meeting? And then, you know, I guess, one would be the next one where you would have, I guess, another batch of data to show them. And is there a timeline in terms of final dossier submission in 2024 or using that maybe pushed out to 2025?

Lishan Aklog: [inaudible] So those are two separate initiatives but you're your direct question about the medically necessary unnecessary until we have more until we have medical policy coverage you know it's it's reasonable to expect that the percentage that get denied immediately out of network claims they get denied initially let me sorry to say initially based on medically necessary may may may go down but not necessarily dramatically we do we do think we'll have some ability to drive that down as another there are a variety of initiatives we can cover them all here but another RCM initiative we have is really having making sure that claims are submitted with full medical histories and with with literally with the medical notes and we have the teams done a great job of coming up with the streamline brought, To do so, so that the claim gets submitted with the actual medical history, with the risk factors that demonstrate that are consistent with the guidelines. That doesn't mean that all of those will get, will get one of them, but that should winnow it down somewhat. But still, if medical policy is not available, then there is generally sort of an administrative nature that to say, well, this is medical and unnecessary because we have a policy.

Speaker Change #111: So those are two two separate initiatives, but to your direct question about the medically.

Lishan Aklog: But to your direct question about the medically unnecessary, you know, until we have more, until we have medical policy coverage, you know, it's reasonable to expect that the percentage that get denied immediately of out-of-network claims that get denied initially, let me, sorry to say, initially based on medically unnecessary may go down, but not necessarily dramatically. We do think we'll have some ability to drive that down as another, there are a variety of initiatives, we can't cover them all here, but another RCM initiative we have is really making sure that claims are submitted with full medical histories and with, literally, medical notes.

Speaker Change #111: <unk> unnecessary until we have more.

Speaker Change #111: Until we have medical policy.

Speaker Change #111: Coverage.

Speaker Change #112: It's reasonable to expect that the percentage that gets denied immediately out of network claims that get denied initially let me I'm sorry to say initially based on medically.

Joseph Conway: Okay, a couple of questions there. So, the data that we reviewed during the pre-submission meeting included the three clinical validity studies and the three clinical utility studies. We did not review the study much time on the original paper from the STM, one of those was not was in pre-print and not yet been published in terms of the CV data. We did not have the data, the fourth, the CU data, the end of the study prepared at the time, but we did discuss that we were what we expect, the additional data we expected in the pipeline.

Speaker Change #113: Sir you May may may go down, but not necessarily dramatically. We do think we will have some.

Speaker Change #113: <unk> ability to drive that down as another there are a variety of initiatives. We can cover them all here, but when other RCM initiative, we have.

Speaker Change #113: Really having making sure that claims are submitted with full medical histories, and with with literally with a medical notes and we have the team has done a great job of coming up with the streamline processes to do so so that the claim gets submitted with the actual medical history with the risk factors that demonstrate that better because estimates with the guy.

Lishan Aklog: And we have, the team did a great job of coming up with a streamlined process to do so, so that the claim gets submitted with the actual medical history, and the risk factors that demonstrate that they are consistent with the guidelines. That doesn't mean that all of those will get one of them, but that should winnow it down somewhat. But still, if medical policy is not available, then there is generally sort of an administrative knee-jerk thing to say, well, this is medically not necessary because we don't have a policy. And then we have the opportunity to engage on appeal and leverage the physician advocacy letters as well as the society advocacy letters to get those appeals turned around.

Lishan Aklog: And then we have the opportunity to engage on appeal and to give you a, a, a, a, leverage the physician advocacy letters as well as the society advocacy letters to get those appeals turned around. That might be different on the prior authorization side, so that our efforts to get more patients to have prior authorization should drive that portion of that 43%, whatever that number was. Dennis, did you have anything you'd like to add to that?

Speaker Change #114: <unk> that doesn't mean that all of those will get we will get one of them, but that should winnow it down somewhat but still if medical policy is not available. Then there is generally sort of an administrative nature to say well. This is medically and I understand because we don't have a policy and we and then we have the opportunity to.

Joseph Conway: We do not expect to have another formal pre-submission meeting. This meeting was really our first formal reintroduction since the early days when we first submitted well prior to the LCD. And our next step is to collect the data, put it together in a dossier, as you mentioned, and submit for consideration. One of the gating items for that is the publication of the ESA grant BE1 data, which is pre-print now and has been submitted to a journal and is currently under peer reviews.

Speaker Change #114: To engage on appeal and too.

Speaker Change #114: To leverage the physician advocacy letters as well as the society efficacy matters to get those appealed to appeal turnaround that might be different on the on the prior authorization side, so that our efforts to get more and more patients.

Joseph Conway: So, that will be the gating item for us to put a final package together and submit it. So, really in terms of a timeline as to when that will happen and when the subsequent steps are a little bit hard to say right now, but certainly would expect that the BE1 data will get published soon enough for us to be able to do so this year. Okay, yeah, all the colors are very helpful.

Lishan Aklog: That might be different on the prior authorization side, so that our efforts to get more patients to have prior authorization should drive that portion of that 43%, whatever that number was. Dennis, did you have anything you'd like to add to that?

Speaker Change #114: To have prior authorization should drive that portion of that 43% of them. What that number was Dennis did you have anything you'd like to add to that.

Dennis McGrath: No, I think you hit it on the head. It's reasonable to assume that medically not necessary will go down as policy changes and improvements in policy change. Prior to that, even though now we are addressing that by giving more of the clinical data up front with a submitted claim, you could even in the non-network, out-of-network environment see more of the just non-covered go up. What will change is that medical policy changes will change all of those categories. And that's what we're driving with clinical data to move that needle.

Dennis McGrath: Unknown Speaker No, I think you hit the nail on the head: it's reasonable to assume that medically not necessary will go down as policy changes and improvements in policy change. Prior to that, if even though now we are addressing that by giving more of the clinical data up front with a submitted claim. You could even in the non-, you know, out-of-network environment see more of the just non-covered go up. What will change is medical policy changes will change all of those categories.

Dennis: No I think you hit it on the head the it's reasonable to assume that the medically not necessary will go down as policy changes improvements in policy change.

Speaker Change #115: Prior to that if even though now we are addressing that by <unk>.

Giving more of the clinical data upfront with the submitted claims you could even in the non.

Joseph Conway: Thank you. Okay, and then I guess just looking at payment rate in the quarter, obviously ESA guard volume was up a fair amount sequentially, I think it was 30%, which is great, but payment rate was down. Obviously, I understand some of the details that Dennis gave in terms of the increases in what was deemed medically not necessary, but just comparing that or framing that up with the large CYFT event where you guys did have a contracted payment.

Speaker Change #115: Out of network environment see more of just non covered go up what will change is medical policy changes will change all of those categories and that's what we're driving with the clinical data.

Dennis McGrath: And that's what we're driving with clinical data to move that. Okay, no, that's helpful. And in terms of what I know, it's probably hard to make sure this happens. Most of the time, it's definitely possible to make it happen all the time.

Speaker Change #115: To move that needle.

Anthony Vendetti: Okay, no, that's helpful. And in terms of what I know, it's probably hard to make sure this happens. Most of the time, it's definitely probably impossible to make it happen all the time. But how do you make sure that when the claims are submitted, is that part of the revenue cycle management? Unknown Speaker, Unknown Transcript, Unknown Transcript, Unknown Transcript,

Speaker Change #116: Okay. No that's helpful and in terms of I know, it's probably hard to make sure. This happens.

Speaker Change #117: Most of the time, but definitely probably impossible to make it happen all the time, but how how do you make sure that when the claims are submitted is that is that part of the revenue cycle management.

Joseph Conway: I'm just kind of wondering how those two forces came in contact with each other. Well, maybe what was that contracted payment rate if you could talk about that, but the way I assume it is that you had 100% payment rate for everybody in that event. Also, was that recognized in this quarter then? No, I'm not going to have them yet. So I might have thought, yeah, go ahead. Yes. So the contract that amount was paid in advance, and we deferred that revenue, and we needed to defer that revenue because the event actually occurred in the third quarter, and therefore we'll be recognized in the third.

Speaker Change #116:

Anthony Vendetti: But how do you make sure that when the claims are submitted? Is that part of the revenue cycle management? I mean, uh... Daniel Holoutka, UNSC Global Childcareakovici Initiative, Tribeca Foundation, anlaties.org, Yeah, okay, that's a topic I'm going to jump in on.

Speaker Change #118: It's under their purview to make sure that the claims get submitted.

Speaker Change #119: With all the medically with the medical history, and so forth to prove that.

Speaker Change #119: This person meets that criteria or it.

Anthony Vendetti: Yeah, okay. That's a good idea. I'm going to jump in.

Lishan Aklog: I think that's a joint effort by both teams by our team that includes everybody on our team, the field team, that includes the sales team, communicating with the physician practice, the clinical team that's there at the time to sell collection, the laboratory team who's processing the samples as they come in, and Quadex, our revenue cycle management. So there are a bunch of procedures, standard operating procedures that we continue to hone and improve on to make sure to understand what, you know, with their expertise, with Quadex's expertise, we think will improve, like, for example, the specific effort to drive the prior authorization processes and advance the efforts to get the physician notes in with that.

Speaker Change #120: Yeah Okay.

Speaker Change #121: I'm going to jump in.

Speaker Change #121: That's a joint effort by both teams by our team that includes everybody on our team the field team.

Lishan Aklog: I think that's a joint effort by both teams. By our team, that includes everybody on our team, the field team, that includes the sales team communicating with the physician practice, the clinical team that's there at the time of the cell collection, the laboratory team who's processing the samples as they come in, and Quadex, our revenue cycle management. So there are a bunch of procedures, standard operating procedures that we continue to hone and improve on to make sure we understand what, you know, with their expertise, with Quadex's expertise, we think will improve, like, for example, the specific effort to drive the prior authorization processes and advance the efforts to get the physician notes in with that. So it's a joint effort on strategy, but the execution requires execution by multiple folks within our team in coordination with Quadex DRC.

Speaker Change #121: That includes the.

Speaker Change #121: The sales team communicating with the physician practice the clinical team Thats there at the time to sell collection. The laboratory team is processing of samples as they come in and quite X. Our revenue cycle management. So there are a bunch of.

Joseph Conway: Court. Okay, that's that's very helpful then. And then I'll just maybe just ask one more, you know, with a current cash burn that you guys are laying out as well as, you know, the recent financing, what is maybe your cash runway look like right now? You have $25,000 in cash with burn, you know, just around $10 million. You've got a little more than six months worth of cash. Okay, okay, beautiful. Well, thank you guys very much and you can grasp on the record quarterly, you can cigar volume. Okay, thanks Joseph.

Speaker Change #121: Procedure of standard operating procedures that we continue to hone and improve on to make sure to understand what with their expertise with product expertise what we think.

Speaker Change #121: Will improve by could for example, the specific effort to drive the prior authorization processes and advance the efforts to get the physician notes.

Speaker Change #122: And with that so it's a joint effort on strategy, but the execution requires.

Lishan Aklog: So it's a joint effort on strategy, but the execution requires execution by multiple folks within our team and coordination with Quadex. Okay, no, that's helpful. I know it's a process, but... The good news is, obviously, it's a testicle.

Speaker Change #122: On execution with multiple folks within our team in coordination with the with <unk>.

Speaker Change #122: Management.

Lishan Aklog: Okay, no, that's helpful. I know it's a process, but the good news is, obviously, the tests are going up. It's not like we outsource it to them and say, call us if it works. It's a back and forth, and we keep honing our operations in the field and in the lab to feed the data to maximize their ability to be successful.

Speaker Change #122: Okay No that's helpful.

Kyle Matson: Our next question comes from the line of Kyle Matson from Canacord.

Speaker Change #122: I know, it's a process but.

Lishan Aklog: It's not like we outsource it to them and they call us, call us if it works. It's a back and forth, and we keep honing our operations in this. Feed, the data.

Speaker Change #122: But the good news is obviously the testicle.

Kyle Matson: Go ahead, please. Okay. Hey guys, thanks for the questions. Congrats on the progress. You're just given all of the clinical evidence you're building now. It's very encouraging and it seems like it's going to be reasonable for reimbursement and stuff. I mean, how are you thinking about like partnering with a large distribution? You know, I guess I partner with you know, whether it's going to be like a larger, you know, healthcare company that has a company with a large network or a health system or. Customs are looking a lot more at, you know, like vendor, I guess as well.

Speaker Change #122: Maybe if the way you said it it's not it's not like we outsource it to them and say call us call. It if it works.

Speaker Change #122: It's a back and forth and we keep honing our power operations in the field and in the lab to feed.

Speaker Change #122: The data too.

Anthony Vendetti: Maximize their, Excellent. Okay. Thanks so much. I'll hop back into the queue.

Speaker Change #122: Maximize their ability to be successful on their site.

Anthony Vendetti: Excellent. Okay. Thanks so much. I'll hop back into the queue. Appreciate it.

Operator: I appreciate it. Great. Thanks.

Speaker Change #123: Excellent. Okay. Thanks, so much I'll hop back in the queue appreciate it.

Speaker Change #124: Great. Thanks.

Operator: Our next question comes from the line of Mark Massaro from BTIG.

Mark Massaro: Our next question comes from the line of Mark Massaro from BTIG. Hey guys, thanks for taking the questions. So congrats on the strong volume quarter record and up sequentially by 31%. You know, you did host over 50 events in Q2, that's up from I think 32 in Q1. So I'm just curious what your event numbers might look like in Q3 because I'm just trying to determine if it's reasonable if you think volumes can grow sequentially, or are you going up against a tough comp.

Speaker Change #124: Our next question comes from the line of Mark Massaro from <unk> go ahead. Please.

Lishan Aklog: And just at this point, I feel like it's like a pretty legitimate story and like just, you know, how are you thinking about that sort of a partnership model? Yeah, that's, I think we've talked about this on and off over over over the previous quarters. Look, we're quite there yet Kyle. I think we'll need to get you know. To a higher percentage of have realized reimbursement, but certainly with the data we have the progress we've made, that certainly consideration, but I don't, I don't expect that that's going to be a true near term, near term event because obviously those kinds of contraction arrangements require. That you have sufficient payment to justify the expense on both sides.

Mark Massaro: Hey, guys, thanks for taking the questions. So congrats on the strong volume quarter, you know, record and up sequentially by 31%. You know, you did host over 50 events in Q2, that was up from, I think, 32 in Q1. So I'm just curious what you think your event numbers might look like in Q3, because I'm just trying to determine if it's reasonable if you think volumes can go up. Can they grow sequentially?

Mark Massaro: Yeah, I think it's hard to say, Mark. I mean, we're not, we're certainly not pushing a story that, you know, we were sort of, we're going to see some dramatic quarter on quarter growth every quarter moving forward. I think our stance from the other, from a couple of quarters ago.

Mark Massaro: Hey, guys. Thanks for taking the hey, thanks for taking the questions.

Mark Massaro: So congrats on the strong volume quarter.

Speaker Change #126: Yeah, a record and up sequentially by 31%.

Speaker Change #127: You did host over 50 events in Q2 that was up from I think 32 in Q1. So I'm just curious what you think your event number might look like in Q3, because I'm just trying to determine if it's reasonable if you think volumes can grow sequentially or are you going up against the tough.

Lishan Aklog: Or are you going up against a tough competition?

Speaker Change #127: Comp.

Lishan Aklog: Yeah, I think it's hard to say, Mark. I mean, we're not, we're certainly not pushing a story that, you know, we were sort of expecting, we're going to see sort of dramatic quarter-on-quarter growth every quarter moving forward. I think our stance from the other, from a couple quarters ago, or I guess it was last quarter, to say that our expectations are generally given the sales, given the lean sales team, even with higher productivity, to see modest quarter-on-quarter growth.

Speaker Change #127: Yeah, I think it's hard to say Mark I mean, we're not we're certainly not pushing a story that that.

Dennis McGrath: Dennis, did you want anything to do? Right, great. And then yeah, it'll be least fun.

Speaker Change #128: We're sort of we're going to see dramatic quarter on quarter growth every quarter moving forward I think our stance from the other from a couple of quarters ago. I guess it was last quarter to say that our expectations are are generally.

Lishan Aklog: What's in the reaction in the medical community or among the pairs to all the most recent studies, I guess, and just like the building portfolio data. You know, that actually results in like an increase in adoption or as volume can be kind of stable until coverage from Medicare, so rates here. Yeah, I think that thanks, Kyle. I think the way I would characterize it is that we have our adoption is already quite, quite good.

Lishan Aklog: Introduced last quarter to say that our expectations are generally given the sales, given the lean sales team, even with higher productivity, to see modest quarter-on-quarter growth. We're obviously happy that that increased. But, as you sort of hinted, could be, could change depending on how RCYST volume goes.

Speaker Change #128: Given the sales given the lean sales team, even even with higher productivity to see modest quarter on quarter growth. We're obviously happy that that increased that as you've sort of hinted it could be could change depending on how our cys tea volume goes and so there is certainly the possibility of.

Lishan Aklog: We're obviously happy that that has increased. That, as you sort of hinted, could be, could, could change depending on how our CYST volume goes. And so there is certainly the possibility of another quarter up, up similar to what it was this quarter. But we're really, we're really Yeah, we would prefer to kind of assume that those that may be noisy and choppy with some overall growth, and given that both the CYFT events and the more traditional volume are still driven by a relatively lean sales team. Yep.

Lishan Aklog: And so there is certainly the possibility of another quarter similar to what it was this quarter. But we're really, we're really, would prefer to kind of assume that those that may be noisy and choppy, you know, with some overall growth and given that both the CYFT events and the more traditional volume are still driven by a relatively lean Yeah, that makes sense. And so it's nice to see you test over 4000 firefighters.

Lishan Aklog: Our volumes are really driven by the number of folks we have in the field as I mentioned. We actually have fewer fewer reps in the field with greater productivity. But look, the data is, is being well received, especially the clinical validation data, which is something that the physicians focus on the physician, the clinical utility is generally more is something that that's more at the payers focus on more, but the clinical ability data with these kinds of sensitivities really high negative predictive values solid p p p v's.

Speaker Change #128: Of having another another quarter.

Speaker Change #128: Similar to what it what it was this quarter, but we.

Speaker Change #128: We're really we're really.

Speaker Change #128: We would prefer to kind of assume that those that may be.

Speaker Change #128: Noisy and choppy with some overall growth and given that both the cys events and more traditional vol.

Speaker Change #128: Volume is still driven by a relatively lean sales team.

Mark Massaro: Yeah, that makes sense. And so it's nice to see you test over 4000 firefighters. You've made strong inroads into that group of folks. I think you talked about expanding to other targets, other types of end markets. I guess, are you willing to share some of those? And, you know, I would assume these folks are higher risk.

Lishan Aklog: You've made strong inroads into that group of folks. I think you talked about expanding to other targets, other types of, you know, and markets. I guess, are you willing to share some of those? And, you know, I would assume these folks are higher-rich.

Lishan Aklog: We do numerous peer to peer events. There was one associated a large one associated associated with the Fort Worth Fire Department events, and I was able to attend. And, you know, as you said, it helps. It's really critical to have data. So even though people generally have been quite live. Quite enthusiastic about the prospect of having a non-endoscopic biomarker test, as an alternative to endoscopy with good early data, as we've locked down the clinical bloody data in particular, that's just strengthened the enthusiasm within the physician's community.

Speaker Change #129: Yes that makes sense and so it's nice to see you test over 4000 firefighters you've made strong inroads in that group of folks I think you talked about expanding to other targets other types of.

Kyle Matson: All right, that was great. Thanks for that.

Speaker Change #128: <unk>.

Speaker Change #130: You know end markets I guess are you willing to share some of those in.

Speaker Change #130: Yeah.

Speaker Change #131: These folks are at higher risk.

Mark Massaro: Yeah, you know, sorry to interrupt. Yeah, sure. You know, it's interesting because the way we see this progressing is sort of the lines are going to start getting a bit blurred between what we're talking about, what we've been experiencing over the last year and a half with these firefighter-focused check your food of events and expanding into other similar groups. For example, police departments or other municipal groups, teachers, and so forth.

Lishan Aklog: Yeah, you know, sorry to interrupt, Mark, I know you're done. Yeah, sure, you know, it's interesting because the way we see this progressing is sort of the lines are gonna start getting a bit blurred between what we're talking about, what we've been experiencing over the last year and a half with these firefighter-focused Check Your Food Tube events and expanding into other similar groups, for example, police departments or other municipal groups, teachers, and so forth.

Speaker Change #131: Yes.

Speaker Change #132: Alright fair enough.

Speaker Change #133: Yeah sure it's interesting because what ends up.

Speaker Change #133: The way, we see this progressing as sort of the lines get are going to start getting a bit blurred between what we're talking about what we've been experiencing over the last year and a half with these firefighter focused check your fruits of events and expanding into other similar groups for example, police departments or other municipal municipal groups teachers and so forth.

Dennis McGrath: And then Dennis, you mentioned that 43% of people, like, you know, it was like over 5,000 claims submitted in the first half of the year, were deemed not medically necessary. Maybe we found it as, could you just like dive more into that and what that means, like, why is that a reaction, why are you seeing that reaction among these groups? That's interesting.

Lishan Aklog: But that starts to blend into unions, and that starts blending into employers. And that actually starts playing and blending into our direct initiatives as well. So there is close collaboration actually between our sales team, our field sales team, which is driving most of the current Check Your Food Tube event volume with firefighters and our employer markets, and we're a contracting team who are looking to call on more employers, and then kind of the unions fall sort of in between.

Lishan Aklog: But that starts to blend into unions, and that starts blending into employers, and that actually starts blending into our direct contract initiatives as well. So there is close collaboration actually between our sales team, our field sales team, which is driving most of the current Check Your Food Tube event volume with firefighters, and our employer markets and our contracting team, who are looking to call on more employers, and then kind of the unions fall sort of in between.

Speaker Change #133: But that starts to blend into unions and that starts blending into employers and that actually started blending blending into our direct contracting.

Dennis McGrath: Yeah, Dennis McGrath. Yeah, medically. So the 43% included the combination of two things. Medically, not necessary was about 25% and 18% were required, required a prior authorization. The medical, not necessary designation, tends to be the jargon when it may not be covered, may need additional information. And obviously, that's puzzling because all of these patients meet the guidelines, the criteria that have been well established for a long period of time. And that gives us the ability to appeal that claim, demonstrating that it was medically necessary based upon the, you know, the patient's criteria.

Speaker Change #133: Initiatives.

Speaker Change #133: So there is close collaboration actually between our.

Sales team our field sales team, which is driving most of the current check your food to event volume with firefighters and our employer market and our contracting team.

Speaker Change #133: We're looking to call on more and more employers and then kind of the unions fall sort of in between and so.

Lishan Aklog: And so, um, but yeah, the expansion starts with other groups that are similar to firefighters. I mentioned police and other municipal groups, but then we'll start to blur into just unions in general, but also employers.

Lishan Aklog: But yeah, the expansion starts with other groups that are similar to firefighters that mentioned, you know, police and other municipal groups, but then we'll start to learn about not just unions in general but also employers.

But yes it is.

Speaker Change #133: The expansion starts with other.

Speaker Change #133:

The groups that are similar to firefighters, who mentioned police and other municipal groups, but then we'll start to blur into just unions in general but also employers.

Mark Massaro: Okay, great. So I believe there have been at least 15 states that have moved to pass biomarker legislation. You guys did talk about it, but I'd be curious to know if you're having any conversations with commercial payers, specifically about the biomarker bills, and if you could maybe just share any, you know, any type of intelligence with respect to when, you know, I think a lot of other labs have talked about 2025, when we can start to see the movement.

Mark Massaro: Okay, great. So I believe there have been at least 15 states that have moved to pass biomarker legislation. You guys did talk about it.

Speaker Change #134: Okay great.

Dennis McGrath: So, you know, each of those niles on that basis becomes a tool for us on the, on the appeals process. And we're making progress on the appeals side. We're seeing an increase of those overturned in the appeal process.

Speaker Change #134: So I believe there's been at least 15 states that have moved to past biomarker Bill legislation you guys did talk about it but I'd be curious to know.

Lishan Aklog: But I'd be curious to know if you're having any conversations with commercial payers, specifically about the biomarker bills, and if you could maybe just share any, you know, any type of intelligence with respect to when, you know, I think a lot of other labs have talked about 2025, when we can start to see the movement. But just curious if you've had conversations with any regional plans, like perhaps Blue Cross's plans, about whether or not your test is eligible to qualify under the biomarker bill language or, you know, how we should think about this as we exit the year.

Speaker Change #135: You know if you're having any conversations with commercial payers, specifically about the biomarker bills.

Dennis McGrath: One of the comments that might be important in the overall scheme of things is that the total backlog of tests and submitted claims that we are still working through all of this process is about 12 and a half million dollars. So, this becomes an opportunity for us. It comes an opportunity for a market access team to engage with the payers, submit additional information that demonstrated was medically necessary, and they will be overturned in the appeals.

Speaker Change #136: And if you could maybe just share any.

Speaker Change #137: Any type of intelligence with respect to win.

Speaker Change #138: I think a lot of other labs talked about 2025, when we can start to see that start to move but just curious if you've had conversations with any regional plans like perhaps blues plans about whether or not your test is eligible to qualify under the biomarker Bill language.

Mark Massaro: But just curious if you've had conversations with any regional plans, like perhaps Blue's plans, about whether or not your test is eligible to qualify under the biomarker bill language or, you know, how we should think about this as we accept it.

Speaker Change #138: Or.

Speaker Change #138: How we should think about this as we exited the year.

Lishan Aklog: Maybe I could just add one, emphasize one thing that I said, which is that, you know, this is actually, you know, these are obviously out of network claims, so you expect to get denials on some reasonable number of them. When we see medically in this area, we actually embrace that because that gives us an opportunity to make the case not just for that individual claim, but more generally with the higher up medical director, other other person that's reviewing that.

Lishan Aklog: So the answer is yes, we do have conversations with multiple plans in multiple states, and we're very cognizant of this legislation, and as you sort of hinted at, regional blues are actually a key target in that area. And so we are having those conversations, and you know, there's a bureaucratic element to it that requires more work than it probably should, because we definitely qualify under it, because most of these biomarker tests are on states that mandate coverage. I mean, obviously, they have their own language, but just to kind of, as a general theme, that mandate coverage based on FDA approval or recommendation and guidelines, right?

Lishan Aklog: So the answer is yes, we do have conversations with multiple plans in multiple states, and our market access team is very cognizant of this legislation. And, as you sort of hinted at, regional blues are actually a key target in that area.

Speaker Change #139: So the answer is yes, we do have we have.

Speaker Change #139: Patients with multiple plants and multiple in multiple states and we're very cognizant of our market access team is very cognizant of.

Speaker Change #139: This legislation and as you sort of hinted at regional blues are actually.

Speaker Change #139:

A key key target in that area and we are having those conversations and.

Mark Massaro: And we are having those conversations. And, you know, there's a bureaucratic element to it that requires more work than it probably should, because we definitely qualify under it. Because most of these biomarker tests are on a state that...

Lishan Aklog: And one of the things that Dennis mentioned, what he's trying to emphasize is that we have, we're armed with substantially more firepower entering into those and we've had increases in our appeals. So, now we have not just the data, not just the guidelines, but as we mentioned, we now have the physician advocacy letters within the local communities as well as a society letter. So, the AFS letter, which is worth reading, if you haven't, is quite powerful.

Speaker Change #139: There is a bureaucratic element to that that requires more work than it probably should because we we definitely qualify under because most of these biomarker tests.

Speaker Change #139: State that.

Lishan Aklog: Mandatory coverage, I mean, every one of them has their own language, but just to kind of as a general thing that that mandate coverage is based on FDA approval or recommendation and guidelines, right? So we really feel absolutely that we qualify under the ladder. But yeah, there's a bureaucratic process. You know, as you might assume that the payers are not necessarily the government, I mean, Minister for Health and Human Security, Robert Hocagraphia, Victor Calderon, Michael Wagner, Schilling Foundation Participant, William & Maureen P. Clegger, and we'll start seeing coverage pathways that take advantage of this legislation. And later, to the end of this year and early next year, is probably a good reason. Okay, great. That's it for me.

Speaker Change #139: Mandate coverage I mean, they obviously have their every every one of them has their own language, but just to kind of as a general theme that mandate coverage based on FDA approval or.

Lishan Aklog: And basically, you know, basically calls the insurance companies out and says, you know, you need to pay for this test, it's important for our clinical management of these patients. And on the prior off portion, as we've hinted at what I'm going into too much detail because it can get a little bit wonky, where we're really beefing up our prior authorization process so that, for that, for payers and locations for that. That's a common.

Speaker Change #139: Recommendation guidelines right, so we really feel.

Lishan Aklog: So we really feel absolutely that we qualify under the latter. But you know, there is a bureaucratic process, as you might assume that the payers are not necessarily... sprinting to this process. But you know, we think it's inevitable. So I think we've had conversations, and we've made some progress in a couple of states. We're working, our team is working diligently there, and I don't think the general sense you're getting that that traction will start, and we'll start seeing coverage pathways that take advantage of this legislation later towards the end of this year or early next year is probably reasonable.

Speaker Change #139: Absolutely.

Speaker Change #139: We qualify.

Speaker Change #139: The ladder.

Speaker Change #139: But yeah, there is a bureaucratic process.

Speaker Change #139: As you might assume that the payers are not necessarily.

Speaker Change #140: Sprinting to through this process, but we think it's inevitable. So I think we've had conversations we've had some progress on a couple of states. We're working with our team is working diligently.

Speaker Change #140: Diligently there and I don't I think the general sense, you are getting that.

Lishan Aklog: We can actually get prior authorization submitted prior to the test actually being performed to facilitate that. So those are both areas that we actually have something actionable that we can, that we believe is already leading to an increase in the success of our appeals and will hopefully continue to do so.

Speaker Change #140: Traction will start picking up.

Speaker Change #140: And we will start seeing.

Speaker Change #140: Coverage pathways that are that take advantage of this legislation.

Speaker Change #140: Later towards the end of this year and early next year is probably a reasonable assessment.

Mark Massaro: Okay, great. That's it for me. Thank you. Good. Thanks, Mark. Our next question comes from the line of Ed Woo from Ascendian Capital.

Speaker Change #141: Okay, Great. That's it for me thank you.

Dennis McGrath: Okay, and then we'll, we'll have the 37% of the claims that were, I guess, those in the, in the second quarter. Okay, I guess we're in the current quarter. Is that kind of a, is that 35% like a pretty reasonable rate? Or do you want to see that increase going forward? Like, you know, the words you want to see more like the book to the lower issue, I guess, kind of like peak more even over time.

Mark Massaro: Thank you. Great, thanks Mark, please. Our next question comes from Ed Woo from Ascendian Capital. Yeah, congratulations on the progress and on the quarter. As you guys possibly move to having more of these, you know, check your food tube events with upfront contracted payments. Has there been any pressure to negotiate down the testing prices?

Speaker Change #141: Great. Thanks, Mark Thanks, Mark.

Lishan Aklog: You know, the way these events are structured, it's sort of a potpourri of what works for both sides. And so there are a variety of pricing models that we explore with these folks that, you know, some of them are risk-sharing in some respects. So they vary a lot. I wouldn't say there's pressure on pricing so much as there is what you might expect there to be in terms of sort of working out the details of a contractual arrangement, you know, how many, over what time, is it a maximum number, you know, just a variety, is it a per-day, per-DM structure. There are a variety; there's sort of a menu that we present and look at a contractual arrangement accordingly. Dennis, did you want to add anything? Yeah, no, it does depend.

Operator: Our next question comes from the line of Ed Woo from Ascendian Capital. Go ahead.

Speaker Change #142: Our next question comes from.

Adam: On the line of Adam.

Brian: Brian <unk> capital go ahead. Please.

Adam Brian: Yes, congratulations on the progress and on the quarter as you guys, possibly move to having more of these check your food tube events with upfront contracted payments has there been any pressure to negotiate down the testing prices.

Dennis McGrath: And just to help us think about how that metric could, like you know, change as you get covers and so forth. Yeah, the expectation would be as we move to medical policy and more of the engagement with the insurers, you know, that should be a 30 to 45 day turnaround time from submission of claimed payment. So obviously it's stretched out while we're in this early part of the reimbursement journey, particularly since we're dealing without a network and they require additional submitted data to get them paid.

Ed Woo: You know, the way these these events are structured, it's sort of a potpourri of what. So there are a variety of pricing models that we explore with these folks, some of them are risk sharing and some regard. So they vary a lot. I would say there's pressure on pricing so much as there is what you might expect there to be in terms of after working out the details of the contractual arrangement.

Adam Brian: The way these fees.

Speaker Change #146: Events are structured it sort of a potpourri of what works for both sides and so there are a variety of pricing models that that we explore with with these folks that.

Lishan Aklog: You know, how many over one time, is it a maximum number, you know, just a variety of per day, per DM structure? They're a variety. There's sort of a menu that we that we present, and we'll make a kind of contractual arrangement accordingly. Dennis, did you want any? You know, you know, you know, you know, you know, you know, you know, yeah, no, it does depend upon the event, so we could engage in a fixed amount for that particular day and have all comers up to a certain level, and it's unpredictable based upon firefighters' schedules, whether or not that's going to be 50 or 200. We look at it for that particular event. What's profitable for us for our team being there on that particular day, and it always calculates out to be a very profitable day for us.

Speaker Change #147: Some of them are risk sharing and similar in some regards so they vary a lot I don't I Wouldnt say there is pressure on pricing. So much as there is what you might expect there to be in terms of.

Dennis McGrath: So it is being stretched out at this point in time. And it is also being reported by the revenue cycle manager that during this out of network, the payments are getting stretched with medical policy. It becomes much more streamlined. It's not without headaches, but the expectation is that we should collect more of what's built in the quarter and ultimately recognize rather than once the report is delivered. And that would then be in the current quarter.

Speaker Change #147: And sort of working out.

Unknown Attendee: Got it. Okay. Thanks.

Speaker Change #147: The details on the contractual arrangement, how many over one time.

Speaker Change #147: Is it a maximum number just a verizon per day per diem structure. There are a variety of sort of a menu that we took that we that we present and look at it.

Speaker Change #147: Actual rates went accordingly, Dennis did you want anything to that.

Dennis McGrath: Yeah, no, it does depend upon the event. So we could engage in a fixed amount for that particular day and have all comers up to a certain level. And it's unpredictable based upon firefighters' schedules, whether or not that's gonna be 50 or 200. And we look at it for that particular event, what's profitable for us, for our team being there on that particular day. And it always calculates out to be a very profitable day for us. There's not much more to add other than what Lishan indicated; we have a lot of flexibility in that regard to fit the particular needs and circumstances of that department at that particular time of the event.

Dennis: Yes no.

Speaker Change #148: It does depend upon the event so.

Dennis: We could engage in a fixed amount for that particular day and have all comers up to a certain level.

And it's unpredictable based upon firefighters schedules, whether or not that's going to be 50 or 200.

Ross Osborne: Our next question comes from the line of Ross Osborne from Cantor Fitzgerald. Go ahead, please. Thank you. Thanks for your question. Sorry, Paul.

Dennis: And we look at it for that particular event whats profitable for us for our team being there in that particular day.

Ross Osborne: I'm just hoping you guys will write the more color on your direct contracting engagement in terms of, you know, what's the plan for the balance of this year? Yeah, so I can tell you a bit about the activity and with some of the expectations with regard to how vital it translates. So we now have three, three full time employees who are working on this. There's been working on it on a couple of fronts.

Dennis: It always calculates out to be a very profitable day for us.

Dennis McGrath: There's not much more to add other than what Lishan indicated. We have a lot of flexibility in that regard to fit the particular needs and circumstances of that department at that particular time of the event. Great, well thanks for the explanation, I wish you guys good luck, thank you. Thanks, that's very good at it. Thank you. Thank you. There are no further questions at this time. I'd like to turn the call back over to Mr. Lishan Aklog for the final closing comes.

Speaker Change #149: So there's not much more to add other than what <unk> indicated.

Speaker Change #150: We have a lot of flexibility in that regard to fit that particular need and circumstances of that department at that particular time of the event.

Speaker Change #151: Great well thanks for the explanation that I wish you guys. Good luck. Thank you.

Ross Osborne: One is just directly engaging with employers, literally calling employers and looking to have our test offered as a covered benefit within their plan. We've also had a lot of great success with engaging with brokers. They're really key part of this infrastructure. They work with their party administrators and with companies. And we're starting to get some traction with brokers who are now out there on our behalf pitching ESA Guard as a, as a covered benefit within packages and actually the mechanics of doing so.

Ed Woo: Thanks, Ed. Very good, Ed. Thank you.

Speaker Change #152: Thanks, Ed.

Speaker Change #152: Thank you.

Lishan Aklog: Thank you. There are no further questions at this time. I'd now like to turn the call back over to Mr. Lishan Aklog for his final closing comments.

Speaker Change #153: Thank you there are no further questions at this time I would now like to turn the call back over to Mr. Haisheng <unk> Guac for final closing comments.

Lishan Aklog: Well, that's great. Thank you all for your time and for your questions. I really appreciate that. I do want to mention that we have a fireside chat tomorrow at the

Lishan Aklog: Well, that's great. Thank you all for your time and for your free questions. I really appreciate that. I do want to mention that we have a fireside chat tomorrow at the 44th Annual Canaccord Genuity Growth Conference, so we're looking forward to that. And as always, we look forward to keeping you abreast of our progress via news releases and periodic calls, such as this one. And the best way to do so and to keep up with our news updates and events is to sign up for our email alerts on the Lucid Investor Relations website and to follow us on Twitter, LinkedIn, and on our website. So thank you, everybody. I really appreciate it, and have a great day.

Speaker Change #154: Well that's great. Thank you all for your time and for your questions.

Operator: Thank you, Sam. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line. Have a lovely day.

Speaker Change #155: Really appreciate that I do want to mention that we have a fireside chat tomorrow at the 44th annual Canaccord Genuity growth conference. So we're looking forward to that and as always we look forward to keeping you abreast of our progress and news releases and Purion periodic calls such as this one and the best way to do so and to keep up with our use of data and <unk>.

Ross Osborne: So doing so by just adding writers to, to benefit plans to add ESA Guard as a writer. And so we're still in the early stages of this, but there's a lot of activity, a lot of, we have, again, these, we have three full time employees who are working diligently on this. And we are starting to see some traction. I think that what you should expect over the coming quarters is some of our traditional CYFT events, such as the firefighter events, to result in prenegotiated contracted payments.

Speaker Change #156: Vince has to sign up for our E mail alerts on the lucid and Investor Relations web site and to follow us on Twitter Linkedin.

Speaker Change #156: Website. So thank you everybody I really appreciate it and have a great day.

Speaker Change #157: Thank you Sir.

Speaker Change #158: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask could you. Please disconnect your line.

Speaker Change #158: Okay.

Speaker Change #158: Right.

Ross Osborne: Those should happen more quickly. Getting on these plans and altering the benefit programs has a longer lead time, but we think we have enough folks on it right now, a lot of activity that should start generating some activity there. And again, when we do so, those will translate into guarantee, contractually guarantee. Good, great.

Speaker Change #158: Yes.

Speaker Change #158: Okay.

Speaker Change #158: [music].

Lishan Aklog: And then I realize you mentioned that your Salesforce is demonstrating productivity gains, but as we're entering into 2025, do you plan on selectively adding to Salesforce or do you still think you're at submission accounts? We're playing at really quarter by quarter at this point because we have a really good sales training process. We know on a train folks and add them, but are, you know, we're paying a lot of attention to maintaining our OPEX flat.

Speaker Change #158: Okay.

Speaker Change #158: Yes.

Speaker Change #158: [music].

Speaker Change #158: Yeah.

Speaker Change #158: Yes.

Lishan Aklog: And we're obviously encouraged by the increased productivity. That could very well continue, particularly since the DYFT events tend to be more efficient. They don't require as much sort of foot time of reps going from office to office. But our threshold, there is a threshold, but it's a threshold for us. Starting to steadily increase our sales team, very similar to what Goat Kyle was asking the threshold for considering entering into partnerships would be sort of a meaningful increase in the percentage of our test that we're generating revenue on.

Speaker Change #158: No.

Speaker Change #158: [music].

Speaker Change #158: Okay.

Speaker Change #158: [music].

Lishan Aklog: And so for the foreseeable future, let's we'll assume it's flat, but obviously we look forward to there being an inflection point in the realization of revenue, which allowed us to justify increase in the sales team. Got it.

Ross Osborne: Thanks for taking our questions.

Anthony Vendetti: Thanks, Rob. Our next question comes from the line of Anthony Vendetti from Mexican Group. Go ahead, please. Good morning, Anthony. Thanks. Good morning, Dennis. Good morning, Sean.

Speaker Change #158: Yes.

Anthony Vendetti: Just just following up on the high, just following up on the on the medically, you know, test their team, not medically necessary. I know you've talked about it, but I think it's, I think it's really important to try to understand exactly the trajectory. So when it's out of network claims, and I know you look at it as an opportunity because you can have these discussions and you have three employees focused on it.

Anthony Vendetti: And I know this is complicated with third party administrative brokers and so forth. Generally these plans come up for renewal once a year. But in the meantime, it sounds like you're you're making progress with getting amendments to the plans, which is great. With all the data you have, you put out a lot of data, which is, which is also awesome in terms of supporting. You know, the fact that these tests are necessary, you know, prevent fired suffocates and then a suffocate cancer down the road.

Anthony Vendetti: Do you believe, because I know it's a long process, but do you believe this 25, 26% that are still being deemed medically necessary. Is that is that sort of where it's going to stay for a little while or are you expecting it to improve quarterly, sequentially, just a little bit. And then, and then maybe, you know, over the next year, see significant improvement in that. I'm just curious as you see it unfolded. What's the director?

Lishan Aklog: Yeah, I'm very excited. Let me, let me touch on that to see if we can provide some additional color and I'm sure Dennis last. Laws and Material Funds. So you just want to make sure that we're clear that the out-of-network process where we're submitting claims and seeking to get paid on claims is different than the direct contracting mission. I think you were suggesting that, but it's not what we didn't want. If not, it's in that, but I didn't want folks to get confused.

Lishan Aklog: So when we are working on the direct contracting side where we're getting esoguard added as a covered benefit that does not need to go through the traditional claims process that we're talking about here. So those are two separate initiatives. But you're your direct question about the medically necessary, unnecessary. Until we have more, until we have medical policy coverage, it's reasonable to expect that the percentage that get denied immediately out of network claims that get denied initially, let me sorry to say, initially based on medically necessary, may go down, but not necessarily dramatically.

Lishan Aklog: We do think we'll have some ability to drive that down as another. There are a variety of initiatives we can cover them all here, but another RCM initiative we have is really having making sure that claims are submitted with full medical histories and with literally with the medical notes. And we have the team's done a great job of coming up with streamlined processes to do so so that the claim gets submitted with the actual medical history with the risk factors that demonstrate that that are consistent with the guidelines.

Lishan Aklog: That doesn't mean that all of those will get will get one of them, but that should winnow it down somewhat. But still, if medical policy is not available, then there is generally sort of an administrative knee-jerk beg to say, well, this is medically unnecessary because we don't have a policy. And then we have the opportunity to engage on appeal and to leverage the physician advocacy letters as well as the society advocacy letters to get those appeals turned around.

Lishan Aklog: That might be different on the on the prior authorization side so that our efforts to get more more patients to have prior authorization should drive that portion of that 40% of what that number was. Dennis, did you have anything like that? No, I think you hit it on the head. It's not necessary. We'll go down as policy changes, improvements in policy change. Prior to that, if even though now we are addressing that by giving more of the clinical data upfront with a submitted claim, you could even in the non, you know, out of network environment see more of just non-covered go up.

Lishan Aklog: What will change is medical policy changes, will change all of those categories. And that's what we're driving with clinical data to move that needle. Okay, no, that's that's helpful. And in terms of, and I know it's probably hard to make sure this happens. Most of the time, it's definitely probably possible to make it happen all the time. But how do you make sure that when the claims are submitted, is that is that part of the revenue cycle management, sort of it's under their purview to make sure that the claims get submitted with all the medically, with the medical history and so forth to prove that, okay, this person meets that criteria, or is it... Yeah, okay.

Lishan Aklog: That's a, I'm going to jump in. I think that's a joint effort by both teams, by our team. That includes everybody on our team, the field team, that includes the sales team communicating with the physician practice, the clinical team that's there at the time to select election, the laboratory team who's processing the samples as they come in, and quadx our revenue cycle management. So there are a bunch of procedures, standard operating procedures that we continue to hone and improve on to make sure, to understand what, you know, with their expertise with products and facilities, what we think will improve, like for example, the specific effort to drive the prior authorization processes in advance, the efforts to get the physician notes in with that.

Lishan Aklog: So there's a joint effort on strategy, but the execution requires execution with multiple folks within our team and coordination with the, with quadx, the RCM management. Okay, no, that's helpful. I know it's, I know it's a process, but the good news is obviously to test or go up. Yeah, it's not, it's not like we outsource it to them and say, call us, call us if it works. I mean, it's a back and forth and we keep honing our, our operations in the field and the lab to feed the data to maximize their ability to be successful on their site.

Dennis McGrath: Excellent. Okay. Thanks so much. I'll have to appreciate it. Great. Thanks.

Mark Massaro: Our next question comes from the line of Mark Massara from BTIG. Go ahead, please. Hey guys, thanks for taking the, hey, thanks for taking the questions. So congrats on the strong volume quarter, you know, record and up sequentially by 31%. You know, you did host over 50 events in Q2, that's up from I think 32 in Q1.

Mark Massaro: So I'm just curious what you think your event number might look like in Q3 because I'm just trying to determine if it's reasonable, if you think volumes can grow sequentially, or are you going up against a tough comp? Yeah, I think it's hard to say, Mark. I mean, we're not, we're certainly not pushing a story that, that, you know, we were sort of, we're going to see some dramatic quarter on quarter growth every quarter moving forward.

Mark Massaro: I think our stance from the other, from a couple quarters ago, I guess, was last quarter to say that our expectations are, are generally given the sales, given the, the lean sales team even, even with higher productivity to see modest. This quarter on quarter growth, we're obviously happy that that increased that as you sort of hinted could be, could, could change depending on on how our CYST volume goes. And so there is certainly the possibility of, you know, of having another quarter up, similar to what it, what it was this quarter, but we're really, we're really, you know, would, would prefer to kind of assume that those that may be noisy and choppy.

Mark Massaro: Yeah, with some overall growth and given that both the CYST event and that more traditional volume still driven by a relatively lean. King Fails Team. Yeah, that makes sense. And so it's nice to see you test over 4,000 firefighters. You've made strong inroads in that group of folks. I think you talked about expanding to other targets, other types of, you know, end markets. I guess are you willing to share some of those and, you know, I would assume these folks are higher risk.

Mark Massaro: Yeah, you know, sorry, sorry, I forgot to get that. Yeah, sure, you know, it's interesting because what ends up, what, what we, the way we see these progressing is sort of the lines get, are going to start getting a bit blurred between what we're talking about, what we've been experiencing over the last year and a half with these firefighter focused, check your food to events and expanding into other similar groups, for example, police departments or other municipal municipal groups, teachers and so forth.

Mark Massaro: But that starts to blend into unions and that starts blending into employers and that actually starts blending into our direct contracting initiatives as well. So there is close collaboration actually between our sales team, our field tail team, which is driving the most of the current check your food to event volume with firefighters and our employer markets and we're a contracting team who are looking to call on more employers and then kind of the unions fall sort of in between and so.

Mark Massaro: But yeah, it starts, the expansion starts with other groups that are similar to firefighters, the mentioned, you know, police and other municipal groups, but then we'll start to blur into just unions in general, but also employers. Okay, great.

Lishan Aklog: So I believe there's been at least 15 states that have moved to pass biomarker bill legislation. You guys did talk about it, but I'd be curious to know if you're having any conversations with commercial payers specifically about the biomarker bills and if you could maybe just share any, you know, any type of intelligence with respect to when, you know, I think a lot of other labs talked about 2025 when we can start to see the start to move, but just curious if you've had conversations with any regional plans, like perhaps blues plans about whether or not your test is eligible to qualify under the biomarker bill language or, you know, how we should think about this as we accept the year.

Lishan Aklog: So yeah, the answer is yes, we do have, we have conversations with multiple plans in multiple states and we're very cognizant, our market access team is very cognizant of this legislation and as you sort of hint to that regional blues are actually a key target in that area. And so we are having those conversations and, you know, there's a bureaucratic element to it, you know, that requires more work than it probably should because we definitely qualify under it because most of these biomarker tests are on state that mandate coverage and they obviously have every one of them has their own language, but just as a general thing that mandate coverage based on FDA approval or recommendation and guidelines, right?

Lishan Aklog: So we really feel absolutely that we qualify under the ladder, but yeah, there's a bureaucratic process. You know, as you might assume that the payers are not necessarily... You know sprinting to this process, but you know we think it's inevitable so I think we've had conversations we've had some progress in a couple of states. We're working with our team is working diligently there and I think the general sensor getting that that that the traction will start picking up and we'll start seeing coverage pathways that are that take advantage of this legislation. And later towards the end of the year and early next year is probably a reasonable assessment.

Mark Massaro: Okay great that's it for me thank you. Great thanks Mark. Thanks for it.

Edward Woo: Our next question comes from the line of AdWoo from Ascendient Capital. Go ahead please. Yeah congratulations on the progress and on the quarter as you guys possibly move to having more of these you know check your food to the events with upfront contract payments has there been any pressure to negotiate down the testing prices. You know the the way these these events are structured it's sort of a popery of what works for both sides and so there are a variety of pricing models that that we explore with these folks that some of them are risk sharing and some in some regard so they vary a lot.

Edward Woo: I would say there's pressure on pricing so much as there is what you might expect there to be in terms of after working out. The details of the contractual arrangement you know how many over what time is it a maximum number you know just a variety that a per day per day structure they're a variety there's sort of a menu that we that we that we present and look at contractual arrangement accordingly.

Edward Woo: Did you want anything? Yeah no it does depend upon the event so we could engage in a fixed amount for that particular day and have all cameras up to a certain level and it's unpredictable based upon firefighter schedules whether or not that's going to be 50 or 200 and we look at it for that particular event what's profitable for us for our team being there in that particular day. And it it all it always calculates out to be a very profitable day for us so there's not much more to add out than what leash on indicated we have a lot of flexibility in that regard to fit the particular need and circumstances of that department at that particular time of the of the event.

Edward Woo: Great well thanks for the explanation I wish you guys good luck thank you.

Unknown Executive: Thanks I'm very good at thank you.

Lishan Aklog: Thank you very no further questions at this time I'd like to turn the call back over to Mr. lesion aquaq for final closing common. Well that's great thank you all for your time and for your for your questions I really appreciate that I do want to mention that we have a fireside chat tomorrow at the 44th annual can accord genuity growth conference we're looking forward to that. And as always we look forward to keeping abreast of our progress via new releases and peer periodic calls such as this one and the best way to do so and to keep up with our use updates and events is to sign up for our email alerts on the lucid investor relations website and to follow us on Twitter link down on our on our website.

Operator: So thank you everybody I really appreciate it and have a. Great Day. Thank you, Stan.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line. Have a lovely day.

Q2 2024 Lucid Diagnostics Inc Earnings Call and Business Update

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