Q3 2024 Lucid Diagnostics Inc Earnings Call and Business Update

Good morning, and welcome to the lucid diagnostics third quarter 'twenty 'twenty for a 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. If at any time.

Operator: Good morning and welcome to the Lucid Diagnostics third quarter 2024 business update conference call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session.

Operator: If at any time during this call you require immediate assistance, please press star zero for the operator. Please note that this event is being recorded.

During this call very quiet immediate assistance. Please press star zero for the operator. Please note that this event is being recorded.

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

Speaker Change: I would now like to turn the conference over to Matt <unk>, who does she think those fish director of Investor Relations. Please go ahead.

Matt: 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 Alcon, Chairman and Chief Executive Officer of Lucid diagnostics, along with Dennis Mcgrath Chief Financial Officer of Lucid.

Matt Riley: Thank you, operator, and good morning, everyone. Thank you for participating in today's business update call. Joining me today on the call are Dr. Lishan Aklog, Chairman and Chief Executive Officer of Lucid Diagnostics, along with Dennis McGrath, Chief Financial Officer of The press release announcing our business update and financial results is available on Lucid's website.

Matt: The press release announcing our business update and financial results is available on <unk> website. Please take a moment to read the disclaimers about forward looking statements in the press release the business update press release and the conference call include forward looking statements and these forward looking statements are subject to known and unknown risks and uncertainties that may cause.

Matt Riley: Please take a moment to read the disclaimers about forward-looking statements in the press release. The business update, press release, and the conference call all include forward-looking statements and these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made. Factors that could cause actual results to differ are described in the disclaimer and in our filings with the Securities and Exchange Committee. 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, followed with the SEC and any subsequent updates filed in the quarterly reports on Forms 10-Q and subsequent Forms 8-K.

Matt: Actual results to differ materially from statements made.

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

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

Hey.

Matt Riley: Except as required by law, Lucid disclaims any intentions or obligations to publicly update or revise any forward-looking statements to reflect changes in expectations or events, conditions, or circumstances on which the expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements.

Matt: Except as required by law looser disclaims any intention or obligation to publicly update or revise any forward looking statements to reflect changes and expectations weren't events conditions or circumstances on which the expectations may be based or that may affect the likelihood that actual results will differ from those contained in the forward looking statements.

Matt Riley: I would now like to turn the call over to Dr. Lishan Aklog, Chairman and CEO of Lucid Diagnostics. Take it away, Lishan.

Speaker Change: I would now like to turn the call over to Dr. Alicia Cogs, Chairman and CEO of lucid diagnostics taken away at least.

Speaker Change: 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 has always remained singularly focused on driving this lucid enterprise towards that substantial commercial potential and to enhance our long term shareholder value.

Lishan Aklog: Thank you, Matt.

Lishan Aklog: 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 has always remained singularly focused on driving this Lucid enterprise towards its substantial commercial potential and to enhance our long-term shareholder value. This has really been a great quarter for Lucid, especially after key milestones that we announced last week. We're here. We've been working on this for four years, and we're now fully armed with a complete body of outstanding clinical data to go along with a renewed commercial focus.

It's really been a great quarter for lucid, especially after our key milestones that we announced last week. We're here we've been working on this for four years and we're now fully armed with a complete body of outstanding clinical data to go along with our renewed commercial focus and we're really poised now to make our final push towards broad.

Lishan Aklog: And we're really poised now to make our final push towards broad coverage and reimbursement to drive e-cigar revenue and revenue growth. So let's start with some key highlights related to our commercial execution. In the third quarter, revenue was $1.2 million, about 20% increase quarter-on-quarter, and that's a record quarterly revenue for us. The third quarter test volume was $2,787. While third quarter volume is in range with recent quarters following a record second quarter, the fourth quarter is off to a good start with a record test volume in October. Our commercial ramp remains at mid-throttle. We have a critical mass in terms of testing volume to drive our revenue cycle management and medical policy efforts.

Speaker Change: Coverage and reimbursement to drive Isa card revenue and revenue growth. So let's start with some key highlights related to our commercial execution.

Speaker Change: In the third quarter revenue was one point to $2 million about 20% increase quarter on quarter.

Speaker Change: And our and that's a record quarterly revenue for us at the third quarter test volume was 2787.

Speaker Change: Third quarter volume of in range with recent quarters. Following a record a record second quarter. The fourth quarter is off to a good start with our records have volume in October our commercial ramp remains at mid throttle. We have a critical mass in terms of testing volume to drive our revenue cycle management and medical policy efforts as he mentioned.

Lishan Aklog: As we mentioned, we've expanded our direct contracting initiative with multiple programs that are focused on driving near-term revenue, building on the first large Check Your Food Tube event with an upfront contracted payment that we announced earlier. We'll dive deeper into these exciting developments later in the presentation. We continue to be pushing hard with our efforts with firefighters at Check Your Food Tube events and have now tested over 7,000 firefighters with these.

Speaker Change: We've expanded our direct contracting initiative with multiple programs that are focused on driving near term revenue building on the first large check your food to the fast with an upfront contracted payments that we announced earlier I will dive deeper into this into these exciting developments later in the presentation.

Speaker Change: We continue to be pushing hard with our efforts with firefighters to check your foods with Edison have not tested over 7000 firefighters with Easter Guard.

Speaker Change: But to highlight a few of our key strategic accomplishments.

Lishan Aklog: Let's highlight a few of our key strategic... As we announced last week, the EtherGuard DE-1 Clinical Validation Study was accepted for peer review publication. And the publication, that publication completes our evidence package for submission to formally seek Medicare coverage. We also had peer-reviewed publication of the analytical validation study of eSIGARD, and we received a notice of allowance for a key patent underlying eSIGARD. Perhaps most importantly, we've held three productive in-person meetings with the CMS Medicare Administrative Contractor, MAC-MOLD-EX program, the Molecular Diagnostics Program, focused on our upcoming submission for e-cigar coverage by CMS. Just a few quick slides to provide an overview of Lucid and its technology.

Speaker Change: We announced last week that he took our D. E. One clinical validation study was accepted for a peer reviewed publication.

Speaker Change: On the publication that publication completes our evidence package for submission to formally seeking Medicare coverage.

Speaker Change: We also had peer reviewed publication of the analytical validation study of visa card and we received a notice of allowance for a low allowance excuse me for a key patent underlying Easter guard, perhaps most importantly, we have held three productive in person meetings with the CMS Medicare administrative contractor or Mac mall.

Speaker Change: Dx program for molecular diagnostics program focused on our upcoming submission for Isa guard coverage by CMS.

Speaker Change: So a few quick slides to provide an overview of lucid and <unk> technologies.

Lishan Aklog: Lucid is a commercial-stage cancer prevention solution company. We have two products, ESA Check and ESA Guard, that together provide a comprehensive pre-cancer screening solution. And our mission is to prevent esophageal cancer deaths in an established population of at-risk people. The key technology is the e-cigar esophageal DNA test, and it 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 precancer, and this type of non-endoscopic biomarker testing is now recommended in major professional society guidelines, including the two premier gastroenterology societies.

Speaker Change: It is a commercial stage cancer prevention solutions company. We have two products is a check a visa card that together provide a comprehensive pre cancer screening solution and our mission is to prevent esophageal cancer deaths established population of anchor spaces.

Speaker Change: The key technology as the east regardless of what Youll DNA test and it forms. It is the first and only commercially available test capable of serving as a widespread screening tool to prevent esophageal cancer deaths for the early detection of esophageal pre cancer and this type of non interest topic biomarker testing is now recommended a major professional.

Speaker Change: Society guidelines, including the two Premier Gastroenterology Society.

Lishan Aklog: ESAGuard's performance as a molecular diagnostic test, testing for pre-cancer and cancer, is really unprecedented in the history of molecular diagnostic testing for these conditions. You can see on this slide here our performance, the performance of ESAGuard relative to comparable early detection tests in the colorectal space. ESAGuard's sensitivity of detecting cancer is extremely high at 96 percent, really unprecedented sensitivity at 85 percent in pre-cancerous conditions, and a level of sensitivity that's never been accomplished in early pre-cancer at 88 percent. Even in those who have the shortest segment, small patches of abnormality at 89 percent. So overall, the two most important numbers is that we have a 99 percent negative predictive value, which means 1 percent false negative rate, and a 32 percent positive predictive value, which means that ESAGuard serves its purpose as a triage test for triaging patients to the invasive test endoscopy.

Speaker Change: With regards to performance at the molecular diagnostic test testing for a pre cancer and cancer is really unprecedented in the history of molecular diagnostic testing for these conditions you can see on this slide here our performance and the performance of visa guard relative to comparable early detection tests.

Speaker Change: Colorectal space I used the guards sensitivity of detecting cancer is extremely high at 96%.

Speaker Change: The unprecedented sensitivity at 85% and precancerous conditions.

Speaker Change: And our level of sensitivity, that's never been accomplished and early pre cancer at 88%, even and those who have the shortest segment.

Speaker Change: Small patches of abnormality at 89%. So overall the two most important numbers is that we have a 99% negative predictive value which means.

Speaker Change: 1% false negative rate and a 32% positive predictive value, which means that each of our served its purpose as a triage test for.

Speaker Change: Triaging patients to invasive.

So as test endoscopy.

Lishan Aklog: Eastgard Commercial Opportunity is really substantial. It's massive. We have a target population that's well-defined based on the existing society guidelines. There are about 30 million patients at risk who are recommended for screening. Medicare pricing has been established at $1,938, and this has set a precedent for private payer pricing, which is held up over So the total addressable market right now with no competition is approximately $60 billion. Our test, the gross margin per test is that as remains over 90% for each next test in the door. We've shown solid test volume and revenue growth over the past quarter, and this is with 30% fewer sellers in the field.

Speaker Change: He's got a commercial opportunity is really substantial and some assets we.

Speaker Change: We have.

Speaker Change: Target population that has a well defined based on the existing society guidelines for about 30 million patients at risk are recommended for screening Medicare pricing Thats been established that 90 to $138 and this has set a precedent for private payer pricing, which has held up over the years. So the total addressable market right now with no competition.

Speaker Change: Proximately $60 billion a test.

Speaker Change: The gross margin per test is that as it remains over 90% for each next test in the door.

Speaker Change: We've shown solid test volume and revenue growth over the past quarters and this is with 30% fewer sellers in the field that I mentioned previously we've maintained sort of a mid throttle approach to our commercial activities focusing our efforts on garnering garnering reimbursement and driving.

Lishan Aklog: As I mentioned previously, we've maintained sort of a mid-throttle approach to our commercial activities, focusing our efforts on garnering reimbursement and establishing revenue-driving programs through direct contact.

Speaker Change: Establishing revenue driving programs through direct contracted.

Lishan Aklog: Let's now dive into the business update. As we reported in two press releases last week, we've had a recent explosion in our clinical evidence base for eSAGuard. And following this, our team has carefully explored new opportunities to expand our commercial strategy, while we also seek to leverage this complete data set to secure both traditional, commercial, and Medicare coverage. With this data now in hand, we're now laser-focused on translating our test volume and test volume growth into contractually guaranteed. As I mentioned, we've had an explosion of our clinical evidence base. Here's a snapshot of that clinical evidence.

Speaker Change: Let's now dive into the business update.

Speaker Change: Reported in two press releases last week, we've had a recent explosion on our clinical evidence base for Isa Guard and following this our team is carefully explored new opportunities to expand our commercial strategy.

Speaker Change: While we also seek to leverage this complete dataset to secure both traditional.

Speaker Change: Commercial and Medicare coverage with this data now in hand, we are now laser focused on translating our test volume and test volume growth into contractually guaranteed revenue.

Demand since we've had an explosion of our clinical evidence base, here's a snapshot of that clinical evidence.

Lishan Aklog: I'm not going to go through each of these slides, but as you can see, it's very robust. We have now four clinical validity studies published in prestigious journals. The last one has been accepted for publication and will be published soon. Clinical utility is also important for coverage and discussions with payers. And this data, again, is very robust, as shown here, as well as the analytical validity. So overall, we really have a complete package now to drive our conversations, both with Medicare as well as with commercial payers for coverage. So this final publication, the publication of ESA Guard BE-1 was really the final piece of the puzzle in this effort to secure traditional commercial and Medicare coverage.

Speaker Change: I'm not going to go through each of the slides, but as you can see if it's very robust we have now four clinical validity studies published in prestigious journals. The last one it has been accepted for publication.

Speaker Change: Will be published soon a clinical utility is also important for for coverage.

Speaker Change: Discussions with payers and this data again is very robust as shown here as well as the analytical validity. So overall, we really are we really have a complete package now to drive our conversations both with Medicare as well as with commercial payers for coverage.

Speaker Change: So this is a final publication of the publication of Easter Guard <unk>. One was really the final piece of the puzzle in this effort to secure traditional commercial and Medicare coverage, which is now.

Lishan Aklog: With this now fourth clinical validation study accepted for peer review, we really now believe we're ready to go. We have a full package to submit our data to the MOLDI-X program and formally seek Medicare coverage. As I mentioned, we've had three very productive in-person meetings with the MOLDI-X group and its leadership over the past few months, and we are poised to submit our data and a request for conversion to a local coverage determination in the very, very near future.

Speaker Change: Now fourth clinical validation study accepted for a peer review, we really now believe we're ready to go we have a full package to submit our data to them, albeit multi X program and form of Medicare coverage as I mentioned, we've had three very productive in person meetings with the multi X group and its leadership over the past few months and we.

Speaker Change: We are poised to submit our data and our request for a conversion to a coverage local coverage determination.

Speaker Change: In the very very near future.

Lishan Aklog: As we also announced last week, beyond our journey to secure coverage, we're now laser-focused on translating this test volume growth into contractually guaranteed revenue, and we're commercially focused on three revenue-generating programs. They're shown here, fully contracted CYFT pre-cancer testing events, concierge medicine programs, and employer markets. So let me provide some details on each. on the fully contracted CYFT pre-cancer test. We will now focus our efforts on securing agreements with self-insured entities, including employers, the unions, particularly firefighter unions and municipal departments, to drive contractually guaranteed revenue. This initiative follows our first major successful directly contracted event, where approximately 200 Fort Worth Fire Department firefighters received e-cigar testing in partnership with their Medical Service Provider, Frontline Mobile Health.

Speaker Change: As we also announced last week beyond our journey to secure coverage. We're now laser focused on translating this test volume growth into contractually guaranteed revenue and we're commercially focused on three revenue generating programs. Other shown here are fully contracted.

Speaker Change: <unk> pre cancer testing events concierge medicine programs unemployment market. So let me provide some details on each on.

Speaker Change: On the fully contracted <unk> pre cancer testing events will now focus our efforts on securing agreements with self insured entities, including employers unions, particularly firefighter unions and municipal departments to drive impacts contractually guaranteed revenue. This initiative follows our first major successful direct.

Speaker Change: Contracted event were approximately 200 and Fort worth fire Department firefighters receive using our testing in partnership with their <unk>.

Speaker Change: Medical service provider frontline mobile house.

Speaker Change: We've designated.

Lishan Aklog: be designated an established senior member of our commercial team to focus exclusively on building this pipeline of fully contracted CYFT events. And we really look forward to some near term wins with that.

Speaker Change: Established senior member of our commercial team to focus exclusively on building. This pipeline of fully contracted cys TFS. So we really look forward to some near term wins with that.

Lishan Aklog: Next, let's talk a little bit about concierge medicine. This is a new area for us. The concierge medicine sector is rapidly growing nationwide and often offers patients enhanced access to physicians and personalized care for an annual fee. Patients in these concierge medicine practices, they routinely seek cutting-edge technologies such as e-cigar. We've hired a new senior director of strategic partnerships for concierge and executive medicine, a highly successful individual who comes to us from Grail, where the concierge medicine program has been very successful in offering new technologies such as e-cigar. She brings extensive relationships in the sector and has demonstrated success at driving revenue from this sector.

Next let's talk a little bit about concierge medicine. This is a new area for us or the concierge medicine sector.

Speaker Change: Rapid growing nationwide. It often offers patients enhanced access to physicians and personalized care for an annual fee.

Speaker Change: Patients in these concierge medicine practices, they routinely seek cutting edge technology, such as Easyjet, we've hired a new senior director of strategic partnerships for concierge and executive Medicine.

Speaker Change: Our highly successful individuals who comes to us from Grail, where the concierge Medicine program has been very successful and offering them new technologies such as E cigarette.

She brings extensive relationships in the sector and has demonstrated success at driving revenue through this from this sector.

Lishan Aklog: Next, let's talk about employer market. We have had some activity in this space, but we're pushing much harder on it moving forward. Over half of the patients in the United States are insured under self-funded plans, including through their employers, unions, and other entities. These plans are typically established through a network of health and wellness program brokers who seek to offer clients value-added services such as ESA Guard. And we've had good contact and good partnerships with these brokers over the past couple of quarters. We've now hired a new Senior Director of Employer Partnerships, also someone who had, who brings extensive experience from GRAIL, where she successfully introduced multi-cancer early detection tests to employers and brokers.

Speaker Change: Next let's talk about employer markets.

Speaker Change: We have had some activity in this space, but we're pushing much harder.

On it moving forward.

Speaker Change: Over half of the patients in the United States, our insured under.

Funded plans, including through their employers unions and other entities.

Speaker Change: These plans are typically established through a network of health and wellness program brokers, who seek to offer clients value added services, such as Easter Guard, who we've had good good contact and good partnerships with these brokers over the past couple of quarters. We've now hired a new senior director of employer partnerships also someone who had who brings extensive.

Speaker Change: The experience from Grail, where she successfully introduced multi cancer detection test to employers and brokers.

Lishan Aklog: To close the loop, again, the reason we're really excited and feel like we're at a moment in time for Lucid is that we're pushing hard to use the data that we've now completed to advance our CMS coverage efforts with MoldeX and these programs. that are designed to drive direct contracted revenue.

Speaker Change: To close the loop.

Speaker Change: The reason, we're really excited and feel like we're at a moment in time for lucid is that that we're pushing hard to use the data that we have now completed to advance our CMS coverage efforts with multi X and these programs.

Speaker Change: That are designed to drive direct kind of contracted revenue and so with that lets us pass the call onto Dennis.

Dennis McGrath: And so with that, let's pass the call on to Dennis.

Dennis McGrath: Thanks, Felicia and good morning, everyone.

Dennis McGrath: Thanks, Lishan, and good morning, everyone. The summary financial results for the third quarter were reported in our press release that has been distributed. 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 September 30th was $14.5 million. Last Friday, we gave notice to the convertible debt holder that the company is exercising its right to redeem the remainder of the outstanding note.

Dennis McGrath: The summary financial results for the third quarter were reported in our press release that has been distributed.

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.

Dennis McGrath: On Form 10-Q.

Dennis McGrath: With regard to the balance sheet cash at quarter end September 30 was $14 5 million.

Dennis McGrath: Last Friday, we gave notice to the convertible debt holder.

Dennis McGrath: But the company is exercising its right to redeem the remainder of the outstanding note.

Dennis McGrath: To finance this payoff, Lucid has entered into convertible note purchase agreements with certain accredited investors that exceed the redemption. The majority of the new investment is from existing preferred shareholders, which all have a long term view of the company. We expect to make the payment to the existing convertible debt holder no later than November 22nd. which is immediately after the expiration of the minimum 10 trading day notice. During this window, we expect to close on the purchase agreement. The net proceeds to the company less the payoff amount is subject to change depending in part on whether the existing debt holder converts any additional amounts of the debt between now and the payoff.

Dennis McGrath: <unk> Financial's payoffs lucid has entered into convertible note purchase agreements with certain accredited investors that exceed the redemption price.

Dennis McGrath: The majority of the new investment is from existing preferred shareholders, which all have a long term view of the company.

Dennis McGrath: We expect to make the payment to the existing convertible debt holder no later than November 22nd.

Dennis McGrath: Which is immediately after the exploration of the minimum 10 trading day notice period.

Dennis McGrath: During this window, we expect to close on the purchase agreements.

Dennis McGrath: Net proceeds to the company less that payoff amount is subject to change depending in part on whether the existing debt holder converts any additional amounts of the debt between now and the payoffs how's.

Dennis McGrath: However, with the current indication of interest minus the current payoff amount, we expect to increase our cash runway by more than an additional quarter, which puts us much closer to a Medicare approval. The terms of the replacement convertible debt are detailed in our related 8K on the topic, but generally reflect a five-year maturity. Interest only at an annual interest rate of 12%. A voluntary conversion price of a dollar with no conversions permissible for six months. The company can force conversion to common stock once the stock hits $10 per share for a minimum amount of time.

Dennis McGrath: However, with the current indications of interest minus the current payoff amount.

Dennis McGrath: We expect to increase our cash runway by more than an additional quarter, which puts us puts us much closer to our Medicare approval.

Dennis McGrath: The terms of the replacement convertible debt are detailed in our related 8-K on the topic, but generally reflect a five year maturity.

Dennis McGrath: The interest only at an annual interest rate of 12%.

The voluntary conversion price of one dollar with no conversions permissible for six months.

Dennis McGrath: The company can force conversion to common stock warrants and stock it's $10 per share for a minimum amount of time.

Dennis McGrath: The note is fully collateralized by the assets of the company, as well as a few other provisions, including dilution protection, board representation, participation rights. Change of control acceleration and other affirmative and negative covenants that are customary for security. The quarterly burn rate was 10.4 million, which is in line with the average burn rate for the four preceding quarters of 10.6 million. The burn in the third quarter included $7.3 million from ongoing operations, which is in line with the previous quarter. and $3.1 million from the quarterly MSG. We disclosed in the 10Q that our ability to fund operations beyond one year from today is largely dependent upon our revenues ramp over the next four quarters.

Dennis McGrath: The notice fully collateralized by the assets of the company.

Dennis McGrath: As well as a few other provisions, including dilution protection board representation participation rights.

Dennis McGrath: Change of control acceleration in other affirmative and negative covenants that are customary for security of this nature.

Dennis McGrath: The quarterly burn rate was $10 4 million, which is in line with the average burn rate for the four preceding quarters $10 6 million.

Dennis McGrath: The burn in the third quarter included $7 3 million from up from ongoing operations, which is in line with the previous quarter and.

And $3 1 million from the quarterly MSA.

Dennis McGrath: 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.

Dennis McGrath: which is dependent on how reimbursement landscape for both government and private health insurers continues to improve. Additionally, our direct contracting efforts with self-insured employers, the ramp of concierge medicine, which are cash pay accounts, and or corporate finance activities can work to exceed that threshold. Included in other current liabilities. is the $10.2 million fair value of the senior convertible debt, which reflects a sequential quarterly decrease of $1.1 million. During the quarter, the company issued approximately 2.1 million shares. Subsequent to the quarter end in the month of October, the company issued 3.8 million shares in satisfaction of conversion notices from the debt holder reflecting a principal reduction of approximately 2.5 million.

Dennis McGrath: Which is dependent on how reimbursement landscape for both government and private health insurers continues to improve Additionally, our direct contracting efforts with self insured employers the ramp of currency or medicine, which are cash pay accounts <unk> corporate finance activities can work to exceed that threshold.

Dennis McGrath: Included in other current liabilities.

The $10 2 million fair value of the senior convertible debt.

Dennis McGrath: Which reflects a sequential quarterly decrease of $1 1 million.

Dennis McGrath: During the quarter the company issued approximately two 1 million shares.

Dennis McGrath: Subsequent to the quarter ended in the month of October the company issued $3 8 million shares in satisfaction of conversion notices from the debt holder, reflecting a principal reduction of approximately $2 5 million.

Dennis McGrath: Shares outstanding, including Unvested restricted stock awards as of last week or approximately $59 3 million shares.

Dennis McGrath: Shares Outstanding, including Unvested Restricted Stock Awards, as of last week, are approximately 59.3 million shares. The GAAP outstanding shares as of September 30th of 51.6 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 unvested restricted stock award. At present, Pavet continues to be the single largest shareholder of Lucid Diagnostics with ownership of approximately 53% of the common shares. As of September 10th, 2024, PAVMED no longer has the controlling voting or controlling financial interest in Lucid, but PavMed is still significant at about a 40% voting rate.

Dennis McGrath: The GAAP outstanding shares as of September 30th of $51 6 million.

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

Dennis McGrath: GAAP shares do not reflect unvested restricted stock award amounts.

Dennis McGrath: At present.

Dennis McGrath: <unk> continues to be the single largest shareholder lucid diagnostics with ownership of approximately 53% of the common shares outstanding.

Dennis McGrath: As of September 10th 2024.

Dennis McGrath: <unk> no longer has the controlling voting we're controlling financial interest.

Dennis McGrath: In lucid, but <unk> is still significant at about a 40% voting interest.

Dennis McGrath: As you are aware, Lucid's financings earlier this year 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 and the common shares until 2026, namely the second anniversary from close. If all of the preferred shares outstanding were converted to common shares as of today, there would be an additional 51.6 million common shares outstanding. With regard to the P&L. This slide compares this year's third quarter to last year's third quarter on 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.

Dennis McGrath: As you are aware lucid financings early this year included the issuances issuance of a series of voting convertible preferred securities whereby the preferred shareholders are significantly incentivize to delay conversion of the preferred shares into common shares until 2026, mainly the second anniversary.

Dennis McGrath: From closing.

Dennis McGrath: All of the preferred shares outstanding were converted to common shares as of today.

There would be an additional $51 6 million common shares outstanding.

Dennis McGrath: With regard to the P&L.

Dennis McGrath: This slide compares this years third quarter to last year's third quarter on certain key items.

Dennis McGrath: I Trust you will review the information on my comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-GAAP information.

Dennis McGrath: Revenue of approximately $1 2 million for the third quarter. It was about 20% higher sequentially compared to the two previous quarters and reflects a 50% increase over the prior year third quarter.

Dennis McGrath: Revenue of approximately $1.2 million for the third quarter is about 20% higher sequentially compared to the two previous quarters and reflects a 50% increase over the prior year third quarter. The amount reflects actual cash collections for the quarter plus approximately $185,000 in direct contract billing. Test volume at 2,787 tests for the quarter represent almost $7 million in submitted claims at our $2,499 ASP. As Lishan mentioned, with the record number of tests in the month of October, the trailing three-month total of approximately 3,500 tests is the largest three-month total since the beginning of the pandemic. Given there is a number of new investors joining us for this call, it's worth repeating what we've communicated in the past quarters about revenue recognition.

Dennis McGrath: The amount reflects actual cash collections for the quarter plus approximately 185000 in direct contract billings.

Dennis McGrath: Test volume at 2787 tests for the quarter represent almost $7 million in submitted claims at our 2000 and $499 ASP.

As Alicia mentioned with a record number of tests in the month of October the.

Dennis McGrath: The trailing three month total of approximately 3500 test is the largest three month total since the beginning of the company.

Dennis McGrath: Given there is a number of new investors joining us for this call it's worth repeating.

Dennis McGrath: We've communicated in the past quarters about revenue recognition.

Dennis McGrath: Key determinant 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 our reimbursement process, which means Revenue Recognition for Claims Submitted for Traditional Government or Private Health Insurers. will be recognized when the claim is actually collected versus when the patient report is delivered. Invoiced and submitted for reimbursement. As you'll see in our 10-Q, this is called Variable Consideration in the Jargon of GAAF's 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.

Dennis McGrath: A key determinant of 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 our reimbursement process, which means.

Dennis McGrath: Revenue recognition for claims submitted for traditional government or private health insurers.

Will be recognized when the claim is actually collected versus when the patient report is delivered.

Dennis McGrath: Invoiced and submitted for reimbursement.

Dennis McGrath: As Youll see in our 10-Q. This is called variable consideration in the jargon of gaps ASC 606 revenue recognition guidelines.

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

Dennis McGrath: were 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 referee. Our non-net loss per share of 20 cents is flat sequentially and in line with each of the last four quarters, plus or minus a penny between each of the last four quarters with an average of 21 cents. or GAP EPS. Non-cash charges accounted for approximately $0.05. with regard to operating. This slide is a graphic illustration of our operating expenses after eliminating non-cash expenses for the periods reflected.

Dennis McGrath: Were billable amounts contracted directly with employers and that are fixed and determinable.

Dennis McGrath: Will be recognized as revenue when our contracted service is delivered generally that means when the report is delivered to the referring physician.

Dennis McGrath: Our non-GAAP net loss per share of <unk> 20 is flat sequentially.

Dennis McGrath: And in line with each of the last four quarters, plus or minus a penny between each of the last four quarters with an average of 21 per share.

Dennis McGrath: Our GAAP EPS.

Dennis McGrath: Noncash charges accounted for approximately <unk> <unk> per share.

Dennis McGrath: With regard to operating expenses.

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

Dennis McGrath: Total non-GAAP OPEX is $11.3 million for the third quarter, 2024. and reflects a $600,000 increase sequentially, including approximately $300,000 for increased clinical research expenses and $300,000 in G&A. Cost of revenue primarily consists of EISA-checked devices, lab supplies, and fixed lab facility costs, and is in line with the last several quarters. Let me close with a few reimbursement highlights for the third quarter. In the third quarter, we build about 2,800 tests reflecting just under $7 million in pro forma. During the third quarter, we collected $1 million from traditional reimbursement. of that amount collected, about 35% was from claims submitted in the current quarter.

Total non-GAAP Opex is $11 3 million for the third quarter 2024.

Dennis McGrath: And reflects a $600000 increase sequentially.

Dennis McGrath: <unk> approximately 300000 for increased clinical research expenses.

Dennis McGrath: And 300000 and G&A expenses.

Dennis McGrath: Cost of revenue primarily consists of Easter check devices lab supplies and fixed lab facility costs.

Dennis McGrath: It's in line with the last several quarters.

Dennis McGrath: Let me close with a few reimbursement highlights for the third quarter of this year.

In the third quarter we.

Dennis McGrath: We build about 2800 tests, reflecting just under $7 million in pro forma revenue.

Dennis McGrath: During the third quarter, we collected $1 million from traditional reimbursement claims.

Dennis McGrath: Of that amount collected about 35% was from claims submitted in the current quarter.

Dennis McGrath: About 45% from claims submitted in the previous quarter. and the balance from claims submitted more than six months ago with the longest dated item, nearly 16 months. During the third quarter, we submitted nearly 2,800 claims. represents just under $7 million in pro forma revenue. About 46% have been adjudicated, 54% are pending. Out of the 46% that have been adjudicated, about 31% resulted in an allowable amount by the insurance company with an average of about $1,621 per test. of those denied. About 34% are deemed not medically necessary or require a prior authorization. Additionally, about 23% were deemed to be non-COVID.

About 45% from claims submitted in the previous quarter.

Dennis McGrath: And the balance from claims submitted more than six months ago with the longest dated item nearly.

Dennis McGrath: Nearly 16 months ago.

Dennis McGrath: During the third quarter, we submitted nearly 2800 claims that.

That represents just under $7 million in pro forma revenue about.

Dennis McGrath: About 46% have been adjudicated.

Dennis McGrath: 4% are pending.

Dennis McGrath: Out of the 46% that had been adjudicated about 31% resulted in an allowable amount by the insurance company with an average of about $1621 per test.

Dennis McGrath: Of those denied.

Dennis McGrath: About 34% are deemed not medically necessary or require a prior authorization. Additionally.

Dennis McGrath: Additionally, about 23% were deemed to be noncore.

Dennis McGrath: One last thing I want to point out before opening it up to Q&A.

Dennis McGrath: One last thing I want to point out before opening it up to Q&A. The press release provides an update that was not ready in time to make the 10Q cutoff yesterday. Through the evening last night, we received the last subscription agreements that were expected, but delayed due in part to travel one of The auditor is required to disclose the amount of cash actually received at the point of the 10-2 cutoff. which is mid-afternoon for XBRL conference. However, there is more time flexibility with the press release that was published this morning. Press Release will also appear as an exhibit to an 8K that will be filed with the FCC as a formal record of the update.

Dennis McGrath: The press release provides an update that was not ready in time to make the 10-Q cutoff yesterday afternoon.

Dennis McGrath: Through the evening last night, we received the last subscription agreements that were expected, but delayed due in part to travel one other participants.

Dennis McGrath: The auditors required us to disclose the amount of cash actually received at the point of the 10-Q cutoff.

Dennis McGrath: Mid afternoon for <unk>.

<unk> population.

Dennis McGrath: However.

Dennis McGrath: There is more time flexibility with the press release that was published this morning.

Dennis McGrath: The press release will also appear as an exhibit to an 8-K that will be filed with the SEC as a formal record of the update.

Dennis McGrath: So in total, we have in hand $21.75 million of subscription agreements. The investors will be wiring funds over the next couple We expect to make the payoff of the existing note no later than the end of next week once the notice period has expired. We expect to increase our cash by about $13.2 million net of the payoff. which on a pro forma basis, including the September 30th cash. puts us about $28 million. At the current burn rate, that's nearly three quarters of run.

Dennis McGrath: In total we have in hand, 21 $75 million of subscription agreements the investors will be wiring funds over the next couple of days.

Dennis McGrath: We expect to make the pay off of the existing note no later than the end of next week once the notice period has expired.

Dennis McGrath: We expect to increase our cash by about $13 $2 million net of the pay off.

Dennis McGrath: Which on a pro forma basis, including the September 30 cash.

Dennis McGrath: Puts us about $28 million.

Dennis McGrath: At the current burn rate, that's nearly three quarters of runway.

Operator: With that, operator, let's open it up.

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

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session.

Operator: Thank you.

Operator: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. And if you're using a speakerphone, please lift the handset before pressing any.

I have a question. Please press star followed by one you will hear from Victor hand has been raised should you wish to decline the polling process. Please press star followed by chance and if you are using a speaker phone. Please lift the handset before pressing any key.

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

Kyle Mikson: Our first question comes from the line of Kyle Mikson from Canada Card. Your line is open.

Kyle Mikson: Hi, Kyle. Hey, guys, thanks for the questions. Good to see the increase in ASP this quarter. But on that note, though, like the sequential decline in test volume was was interesting.

Speaker Change: Hi, Carl.

Speaker Change: Hey, guys. Thanks for the questions good to see.

Speaker Change: Increase in ASP this quarter, but on that note I would like the sequential decline in test volume was was interesting.

Kyle Mikson: Maybe there was something that was inflating the results last quarter that caused, you know, it to look like a decline, but you want to just walk through, you know, what happened in the third quarter, like the summer on September that caused that kind of a decline, because it was pretty material 11%, quarter of quarter. So just wanted to start there. Thanks.

Speaker Change: Maybe there was something that was inflating the results last quarter that caused.

Speaker Change: It looked like the decline, but I wanted to walk through.

Speaker Change: What happened in the third quarter like the summer months September that caused that kind of a decline, but it was pretty material, 11% quarter to quarter. So just wanted to start there. Thanks.

Lishan Aklog: So interesting, Kyle, that July was about 700 tests and October was double that. So if you look at August and September and October, it's a record total. And so in July, you have fewer large events because of the summer period, but picked up pretty dramatically through August and September. And November is also a very good start as well.

Speaker Change: Interesting Kyle that July was about 700 tests in October was double that amount. So if you look at August and September and October it's a record total and so in July you have fewer large events because of that summer period, but picked up pretty dramatically.

Speaker Change: Through August and September and November is off to a very good start as well so.

Lishan Aklog: Yeah, so really nothing material, Kyle. This is, you know, we've we've I think, as we said before, we've we've kept our sales team at a headcount, flat to down. And, you know, this is sort of where we would expect our numbers to be. Last quarter was up. This was a bit down next quarter. You know, this month looks great. It's all sort of within the range that we expect as we now start. pushing hard on Okay, so I mean, that was great. If October had like, you know, 1400 claims or so, you know, that'd be roughly half of what you did in the second quarter of this year.

Speaker Change: So really nothing material Kyle this is.

Speaker Change: I think as we've said before we've.

Speaker Change: Kept our sales team.

Speaker Change: Head count flat to down.

Speaker Change: This is sort of where we would expect our numbers to be last quarter was that this was a bit down next quarter. This month looks great. It's all sort of within the range that we expect as we now start pushing pushing hard on the direct contract.

Speaker Change: Okay. So I mean.

Speaker Change: That was great if October had like.

Speaker Change: <unk> hundred claims are so.

Speaker Change: That would be roughly half of what you did in the second quarter of this year, so safe to say that the.

Lishan Aklog: So it's safe to say that, you know, the fourth quarter is going to be like a record volume quarter for Lucid I think you have to temper that by the fact that the tail end of the quarter starts to have some holiday periods. We saw last year. Some of the large events tailed off because of the holidays. So, you have a baseline of 2500 to 3000 tests on a quarter by quarter basis, and that can be additive by some of these large events, which give a little bit more choppiness to the predictability of it. But the bottom line is the adoption is continuing to be validated and expanded by some of the additional channels, sales channels that Lishan outlined.

Speaker Change: Fourth quarter is going to be like a record volume quarter for lucid.

Speaker Change: I think you have to temper that by the fact that the tail end of the quarter starts to have some holiday periods. We saw last year some of the large events tailed off because of the holidays. So you have a baseline of 2500 to 3000 tests on a quarter by quarter basis.

Speaker Change: Can be additive by some of these large events, which give a little bit more choppiness to the predictability of it but.

Speaker Change: The bottom line is the adoption is continuing to be validated and expanded by some of the additional channels sales channels that <unk> outlined and the pipeline is robust.

Lishan Aklog: Yeah, and the pipeline is robust, the CYFT pipeline. It's pretty robust.

Speaker Change: The C O a hefty pipeline is pretty robust and so yes, I think again, that's sort of just reiterate this is.

Lishan Aklog: And so, yeah, I think, again, I'd sort of just reiterate, this is, I would consider this sort of a stable to overall modest increases, which is exactly how we've been positioning ourselves to maintain our operating expense where it is as we move towards recognizing broader reimbursement and recognizing a greater percentage of this test volume being paid through direct contract. So bottom line is the first six, seven weeks of the fourth quarter are are very encouraging in terms of the All right, great.

Speaker Change: I would consider that sort of a stable to overall modest increases which is exactly how we've been positioning ourselves to maintain our operating expense where it is as we move towards.

Speaker Change: Recognizing broad reimbursement and recognizing a greater percentage of this test volume being paid through direct contracting.

Speaker Change: Bottom line is this first six seven weeks of the fourth quarter are very encouraging in terms of the results so far.

Speaker Change: Alright, great.

Kyle Mikson: This sounds promising.

Speaker Change: Promising and then separately on the recent kind of announcements.

Kyle Mikson: And then like separately on the recent kind of announcement to, you know, further push or penetrate into the concierge medicine market with some new folks from Grinnell and so forth. So that's super interesting, you know, kind of non-traditional, non-conventional way to do this type of like, you know, almost like wellness screening because they think, you know, typically it's like this BCP kind of effort, I guess, or kind of call point. But this is a good market, obviously, right? So could you just talk about the historical sort of penetration and success that you've had in the concierge medicine market?

Further push or penetrated into the concierge medicine market.

Speaker Change: Some new folks from grid and so forth so.

Speaker Change: That's super interesting kind of non traditional nonconventional way to do this type of like.

Speaker Change: Almost like wellness screening because they think.

Speaker Change: I typically take this PCB kind of.

Speaker Change: Effort, I guess I'll kind of call point, but this is a good market obviously it right. So could you just talk about the historical sort of penetration and success that you've had in the commentators Madison market and then maybe like why now there could be like an inflection in that market for you and why that might really like meshes well with your type of screening.

Lishan Aklog: And then maybe like, why now there could be like an inflection in that market for you? And why that why it really like meshes well with your type of screening?

Lishan Aklog: Yeah, so, it's a great question.

Speaker Change: Yes, so it's.

Speaker Change: It's a great question. So as I mentioned, the concierge medicine side of this is new we have done some we've had some activity on the employer market side with self funded entities as well as working and establish establishing our network of brokers that work to add Heath regard as a covered benefit within brokerage plan. So that's moving forward, we're actually getting we've been prior to this.

Lishan Aklog: So, as I mentioned, the concierge medicine side of this is new. We have done some, we've had some activity on the employer market side with self-funded entities, as well as working and establishing our network of brokers that work to add EtherGuard as a covered benefit within brokerage plans. So, that's moving forward. We're actually getting, we've been, prior to this initiative, we've been getting, we've established some success of getting amendments to health and wellness plans that include EtherGuard as a benefit.

Speaker Change: Initiatives that we've been getting.

Speaker Change: We've been we've established some success of getting.

Speaker Change: Amendments to health.

Speaker Change: Health and wellness plans that include Eastern guard as a benefit concert pathway is actually quite is new for us entirely new for us and it's really just a result of us.

Lishan Aklog: The concierge medicine pathway is actually quite new, is new for us, entirely new for us, and it's really just been a result of us You know, sort of seeing the success of other companies at putting forward new groundbreaking technologies where there's a real appetite for that in the concierge medicine sector. And that's a rapidly expanding sector.

Sort of seeing the success of other companies at.

Speaker Change: Put it put putting forward new.

Speaker Change: New groundbreaking technologies.

Speaker Change: There is a real appetite for that in the concierge medicine sector and Thats a rapidly expanding sector. The timing of all of this is related to the fact that it was really related to our data. So we've been pushing on important market side, but this sort of acceleration of these efforts and bringing in people.

Lishan Aklog: The timing of all of this is related to the fact that it's really related to our data. So we've been pushing on the employer market side, but this sort of acceleration of these efforts and bringing in people with direct experience and success from other companies who've done this is really linked to the fact that now we have a strong package of data. When you call on concierge medicine, you know, the initial engagement is fundamentally not that different than when we call on traditional primary care physicians. We have to make our case. We have to show our data and show the value of our test.

Direct experience and success from other companies who've done. This is really linked to the fact that now we have a strong package of data when you Collyn Concierge medicine.

Speaker Change: The initial engagement is fundamentally not that different than when we call on traditional primary care physicians, we have to make our case, we have to show our data and show and show the value of our test.

Speaker Change: The way the the way the sector works is that they the physician the concierge medicine physicians are.

Lishan Aklog: The way the sector works is that they, you know, the physician, the concierge medicine physicians are are looking for these kinds of technologies to offer to their higher-end client patients who pay out-of-pocket for these kinds of tests, and they've had a proven track record of getting patients to do so. So we really look forward to starting to see some traction.

Speaker Change: Our.

Speaker Change: Looking for these kinds of technologies to offer to their higher end find patients who pay out of pocket for these kinds of tests that we've got a proven.

Speaker Change: <unk> proven track record of.

Speaker Change: Getting patients to do so so we really look forward to two starting to see some traction in this space.

Kyle Mikson: Okay, one last one on that point.

Speaker Change: Okay. One last one on that point. So is it fair to say that your past work with employers health systems test centers all of that that actually helps you succeed I guess in the <unk> market.

Lishan Aklog: So is it fair to say that your past work with employers, health systems, the test centers, all that that actually helps you, you know, succeed, I guess, in the concierge market? Oh, absolutely. Yeah, the, you know, the, the, the, as I mentioned, the initial engagement is no different. So the folks that right now are focusing on concierge medicine are, you know, their training and the way we go about Talking to physicians, you know, physicians are physicians at the end of the day, it's identical and the groundwork we've laid for that is definitely going to help us.

Speaker Change: Oh, absolutely, yes, yes.

Speaker Change: As I mentioned the initial engagement is no different so the folks that right now we're focusing on concierge medicine.

Speaker Change: Their training and the way we go about.

Speaker Change: Talking to physicians physicians or physicians at the end of the day is identical and the groundwork we've laid for that is.

Speaker Change: As.

It's definitely going to help us there just some nuances about how you actually structure. The those engagements that are unique to the concierge medicine side. The other part which of course is critical in all of this is the infrastructure that we've established on the cell collection side of things. So we have a completely well oiled machine right now and getting patients.

Lishan Aklog: There are just some nuances about how you actually structure those engagements that are unique to the concierge medicine side. The other part, which of course is critical in all this, is the infrastructure that we've established on the cell collection side of things, right? So we have a completely, you know, well-oiled machine right now in getting patients tested, getting the cell collection performed, and doing so either through our physical test centers, but we've talked about it before, increasingly through having our clinicians actually come to the physician's offices on a regular basis and do the testing. So we were able to offer that to these concierge medicine practices, as well as to larger networks.

Getting the cell collection performed and doing so either through our physical test sensors, but we've talked about before increasingly through having our clinicians actually.

Speaker Change: Come to the physician's offices on a regular basis and do the testing. So we were able to offer that to these concierge medicine practices as well as to a larger networks. These concierge medicine practices are growing there've been roll ups that have large large numbers of hundreds of physicians within this within their infrastructure. So the infrastructure that we've put together a cell collection is going as.

Lishan Aklog: You know, these concierge medicine practices are growing. There have been roll-ups that have large, large numbers, hundreds of physicians within their infrastructure.

Kyle Mikson: The infrastructure that we've put together our cell collection is going is obviously critical for Okay, and then does the pricing in that market work more like, you know, the commercial market, like you have a negotiator rate? Or is there like a bundle? Is it volume based? How does payment and pricing work in that market?

Speaker Change: Obviously critical to before that.

Speaker Change: Okay, and then does the pricing in that market work more like.

Speaker Change: The commercial market like you have negotiated rate.

Speaker Change: Or is there like a bundle of it volume based payment and pricing work in that market.

Kyle Mikson: So you we establish a rate with the with the practice or the network practice and and that's the rate and that's the rate that the patient All right, great.

Speaker Change: Are you, where you establish a rate with the with the practice or the network practice and.

Speaker Change: And thats the rate and Thats the rate that the patients pay alright.

Speaker Change: Alright, great that sounds great guys. Thanks, a lot I appreciate it thanks guys.

Kyle Mikson: That sounds great, guys. Thanks a lot. Appreciate it.

Lishan Aklog: Yeah, thank you.

Mark Massaro: Our next question comes from the line of Mark Massaro from DTIG. Your line is open.

Speaker Change: Our next question comes from the line of Mark Massaro from DB. Your line is now open.

Mark Massaro: Hey, Mark. Hey, guys. Thank you for taking the questions. Great updates. Appreciate the color on October and November volumes. Things are obviously moving in the right direction.

Mark Massaro: Hey, Mark Hey, guys. Thank you for taking the questions.

Mark Massaro: Great updates appreciate that the color on October and November volumes things are obviously moving in the right direction.

Mark Massaro: I wanted to just clarify the, maybe, Lishan, your commentary about the ESAGARD-BE1 study accepted for peer reviewed publication in the American Journal of Gastroenterology. Is it fair to say that that publication is on track to hit, maybe, by the end of this calendar year? And I would assume that you would be submitting this to Moldex immediately after that. Can you just give us a sense for timing? Yeah, no, that so it's from this point, it's a formality. It's been accepted for publication. I believe the PDF of the sort of the unformatted will be available on their site soon.

Mark Massaro: I wanted to just clarify the <unk>.

Lease on your commentary about the Isa Guard <unk> one study accepted for peer reviewed publication in the American Journal of Gastroenterology is it is it fair to say that that publication.

Mark Massaro: <unk> is on track to hit maybe by the end of this calendar year.

Speaker Change: I would assume that you would be submitting this to mall decks.

Speaker Change: Immediately after that can you just give us a sense for timing.

Speaker Change: Yes. So it says from this point is a formality its been accepted for publication I believe the PDF of the sort of the on formatted will be available.

Speaker Change: Their site soon we're going through this stuff.

Lishan Aklog: We're going through the usual formalities of getting the formatting before it'll be posted. on their website as being published very, very soon. And so we are poised now, having met with MoldeX, having this particular paper now done and accepted to file our data and our request for reconsideration of the LCD in the coming Okay, great.

Actual formalities of getting the format before it'll be posted.

Speaker Change: On their website as being published very very soon and so we are.

Speaker Change: We are poised now having met with multi X having this particular paper now done and accepted to file are.

Speaker Change: Our data in a request for reconsideration of the LCD and the <unk>.

Speaker Change: Coming days.

Speaker Change: Okay great.

Mark Massaro: Can you give us a sense for what your funnel looks like in the CYFT pipeline? You characterize it as robust. However, I recognize that, you know, December gets pretty cold. And so I'm just thinking about weather and seasonality, and also fewer days due to holidays.

Speaker Change: Can you give us a sense for what your funnel looks like in the <unk> pipeline you characterized it as robust however, I recognize that December gets pretty cold and so I'm, just thinking about weather and seasonality and also fewer days due to holidays, just give us a sense for maybe how many events.

Lishan Aklog: Just give us a sense for maybe how many events you are planning to host in Q4 and what your runway might look like into 2025. I think, Mark, we're going to limit it to say that usually these Check Your Food Tube events are scheduled out three and four months. and except for the holidays in December, our teams have their hands full over that period. We'll update that as we go forward. Let's leave it at that. It's fairly robust.

Speaker Change: You are planning to host in Q4, and what your runway might look like into 2025.

Speaker Change: I think Mike we're going to limit it to say that usually these check your <unk> are scheduled out three and four months ahead and except for the.

The holidays in December our teams have their hands full over that period of time so.

We will update that as we go forward, but.

Speaker Change: Let's leave it at that it's fairly robust.

Lishan Aklog: And rather than giving that perspective information, you know, we'll update it next time we talk to the street.

Speaker Change: Rather than giving that prospective information.

Speaker Change: We will update at the next time, we talk to the.

Speaker Change: The St.

Mark Massaro: Okay, and that's helpful.

Speaker Change: Okay. That's helpful and then maybe last one for me.

Mark Massaro: And then maybe last one for me. Yeah, the concierge medicine is certainly interesting. Maybe just to clarify, because I know that you've done a nice job of holding your, your ASPs, you know, your $1,938 Medicare price, you've done a nice job of holding with commercial health plans. Do can we look at that Medicare price as a potential proxy when you're going to sell in the concierge? Or do you think because it's, you know, full self pay, there might be a discount? How we don't know yet, you know, we come in with our list price is 2500.

Speaker Change: Yes, the concierge medicine.

Speaker Change: It's certainly interesting maybe.

Maybe just to clarify.

Speaker Change: Because I know that you've done a nice job of holding your your asps.

Your $1938 Medicare price, you've done a nice job of holding with commercial health plans.

Can we look at that Medicare price as a potential <unk>.

Speaker Change: Proxy.

Speaker Change: Youre going to sell in the concierge or do you think because it's full self pay there might be a discount to that.

Speaker Change: We don't know yet we come in with our list prices 2500, So I hope that thats, our starting point and.

Lishan Aklog: So that's our starting point. And, you know, this will be charged to patients.

Speaker Change: This will be charged to patients. So I think it's a little bit too early to say, but we are we think the pricing is going to remain robust our margins are going to remain robust and obviously the opportunity to have guaranteed payment.

Lishan Aklog: So I think it's a little bit too early to say, but we are, you know, we think the pricing is going to remain robust, our margins are going to remain And obviously, you know, the opportunity to have guaranteed payment, you know, within the sector is very attractive to us. So just look, I think I'll just leave it at that. Our pricing is, we think the pricing is good also.

Speaker Change: No.

Speaker Change: Within this sector is very attractive to us so.

Speaker Change: I think I'll just leave it at that our pricing is we think the pricing has got all of them.

Mark Massaro: Okay, great.

Speaker Change: Okay, great. Thanks for the reminder, on the list price that's it for me thanks, guys.

Mark Massaro: Thanks for the reminder on the list price. That's it for me. Thanks, guys.

Mark Massaro: Thank you.

Speaker Change: Alright, Thanks Mark.

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

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

Anthony Vendetti: Thank you.

Anthony Vendetti: Okay. Thank you.

Anthony Vendetti: Hey, Dennis. Hey, Lishan. How are you? Great morning. Great.

Speaker Change: Hey, Dennis <unk>, John how are you.

Speaker Change: Great great.

Anthony Vendetti: Morning. So, I just want to dig in a little bit more on, it sounds like you're just about ready to submit the data package for Medicare coverage. What is that timeline for that?

Speaker Change: Good morning.

Speaker Change: Just wanted to dig into a little bit more on.

Speaker Change: It sounds like you're just about ready to submit the data package.

Speaker Change:

Speaker Change: For Medicare coverage, what is that that timeline for that then then once you submit it.

Lishan Aklog: Then once you submit it, What is your what is the expected timeline for a decision and and and then your plan to? to prepare for the eventual coverage decision, Salesforce, all that.

Speaker Change: What is your what is the expected timeline for.

Speaker Change: A decision and then.

Speaker Change: Plant two.

To prepare for the eventual coverage decision.

Speaker Change: For us all of that.

Lishan Aklog: Yeah, so obviously, you know, as with anything like this, whether it's FDA or CMS, you know, there's no assurances as to how, you know, we can't give sort of hard projections. But as I've said before, we've been deeply engaged with MoldeX. We have a high level of confidence in our data. We understand that this reconsideration of the LCD is fairly straightforward because the work that had been done in the original LCD is very comprehensive and we have no qualms with regard to how that's written. We're just looking for coverage for our own test. So I will just kind of leave it at, you know, we're very optimistic.

Speaker Change: Yeah. So obviously.

Speaker Change: As with any thing like this whether it's FDA or CMS, if theres no assurances as to how.

Speaker Change: We can't give sort of hard projections with regard to the time, but as I've said before we've been deeply engaged.

With with <unk>, we have a high level of confidence around data.

Speaker Change: We understand that this.

Speaker Change: A reconsideration of the LCD is fairly straightforward because.

The work that had been done in the original LCD is very comprehensive and we have no no qualms with regard to how that is written we're just looking for coverage for our own test.

Speaker Change: So I will just kind of leave it add.

Speaker Change: We're very optimistic we think its.

Lishan Aklog: You know, we think it's likely to be a first half event for next year and, you know, we'll know that we're just really happy to have reached this point to have the data to be able to get this thing filed and we're entering into this with a lot of optimism and confidence in both the data and in both our efforts to figure out how to precisely navigate this process.

Speaker Change: Likely to be a first half event for next year.

Speaker Change: And.

Speaker Change: We'll know then we're just really happy to have reached this point to have the data to be able to to get this thing filed and we're entering into this with a lot of optimism.

Speaker Change: Confidence in both the data and in both our efforts to figure out how to precisely navigate this process with <unk>.

Speaker Change: Okay and.

Anthony Vendetti: Okay. And the concierge option, I guess, or concurrent with this submission, has there been decisions on pricing that? Would that be different than in the current pricing for, you know, coverage decisions.

Speaker Change: The couple of years.

Speaker Change: Option I guess or.

Speaker Change: With this mission.

Speaker Change: Is there has there been decisions on pricing that.

Would that be different then.

Speaker Change: And the current pricing.

Speaker Change: Four.

Speaker Change: Coverage decisions.

Lishan Aklog: Can you delve into that a little bit, or is it... Yeah. It touched on this a little bit with Mark, but we're not... It doesn't really have anything to do with the coverage side of things, right?

Speaker Change: Can you delve into that a little bit or is it yes, yes.

Mark Massaro: You touched on this a little bit mark, but we're not it doesn't really haven't needed with the coverage side of things right. These are you walk in you engage with a practice.

Lishan Aklog: These are, you walk in, you engage with a practice, you first make the case with regard to their understanding of the value of the test and their excitement about offering this test to their cash-paying patients, and you negotiate a price. And as I said to Mark, our benchmark, our list price is $2,500, and it's a negotiation to determine at what price they feel their patients will pay. You know, this is a very select group, the concierge medicine practice is one where people are very used to not simply paying, you know, sometimes a substantial amount on a regular monthly or annual basis just to be part of the practice, but for added services, whether it be tests like this or the GRAIL test or, you know, other comprehensive cardiac evaluations and things like that.

Speaker Change: Sure.

Speaker Change: You first make the case with regard to.

Speaker Change: Their understanding of the value of the test and it will and their excitement about offering this test to their cash paying patients.

And in.

And you negotiate a price and as I said to Mark our benchmark our list price is $2500 and it's a negotiation to determine.

Speaker Change: At what price they feel their patients will will pay.

Speaker Change: This is a very.

Speaker Change: Hi group I mean, the concierge medicine practice.

Speaker Change: Is one where people are very used to not simply paying.

Speaker Change: Sometimes a substantial amount on a regular monthly or annual basis, just to be part of the practice, but for added services, whether it be tests like this or the grille test or other other comprehensive cardiac evaluations and things like that so that's how this this ecosystem works and we will start to 2500 and we will.

Anthony Vendetti: So that's how this ecosystem works, and we'll start at $2,500, and we'll make a, we'll end up with sort of contractually arranged pricing that the practices will pass on to their patients, and it doesn't, this doesn't require, remember, this is direct pay, so this doesn't require us to submit claims and to work through the revenue cycle management process or all of the other hoops you have to jump through through traditional. Great. Excellent. Thanks for that update. Appreciate it, Lishan.

Speaker Change: Make a.

Speaker Change: We'll end up with sort of a contractually ranged pricing.

Speaker Change: That the practices will pass on to their patients and it doesn't this doesn't require.

Speaker Change: Remember this is direct pay so this doesn't require us to submit claims and to work through the revenue cycle management process are all of the other hoops you have to jump through through traditional reimbursement. This is.

Speaker Change: Effectively cash paid by the patients.

Speaker Change: Great excellent thanks for that update appreciate it John.

Anthony Vendetti: Great. Thanks.

Ed: Alright, Thanks, Ed.

Speaker Change: Our next question comes from the line of Mike Lee Chen from Guggenheim. Your line is open.

Michael Matson: Our next question comes from the line of Mike Matson from Dean Hammier Lines.

Yes.

Michael Matson: Yeah, thanks. Hey, guys.

Speaker Change: Hey, guys. So I guess first.

Michael Matson: So I guess first, you know, when and if you get Medicare coverage, probably not an if at this point, but, you know, how would your marketing strategy, kind of go to market approach change? I mean, you know, I know you're deliberately targeting places that you're likely to get paid now, but in doing these CYFT events and stuff, but, you know, are you going to do something differently when you get Medicare coverage? Yeah, about 25% of our volume right now is Medicare population. And You know, you sort of hinted that we we have the ability with our CYFT events to target folks, but really not so much based on payer right now.

When.

Speaker Change: Yes, you get Medicare coverage, calling on behalf at this point.

Speaker Change: Marketing strategy kind of go to market approach change I mean I.

Speaker Change: I know you're deliberately targeting places that you're likely to get paid but indiana, CYP events and stuff but.

Are you going to do something differently.

Speaker Change: When you get Medicare coverage.

So about 25% of our volume right now is met.

Speaker Change: Medicare population and.

Speaker Change: You sort of hinted that we have the ability with our CYP events to target folks, but really not so much based on on payer right now the epidemiology would suggest that up to 40%.

Lishan Aklog: The epidemiology would suggest that up to 40% or more of the target population here are medical. So, you know, we certainly will have the ability upon Medicare approval to direct our resources towards that. But, you know, obviously, and, you know, drive, perhaps drive that percentage higher and certainly drive the proportion of our revenues that come from Medicare to be higher, you know, targeting retirement villages or population centers that have higher than average income. Right.

Speaker Change: Or more of the target population here, our Medicare population. So we certainly will have the ability.

Speaker Change: Upon Medicare approval too.

Speaker Change: To direct our resources towards that but to give you the obviously and drive.

Speaker Change: <unk> drive that percentage higher and certainly drive the proportion of our revenues that come from from Medicare can be hiring targeting retirement villages are population centers that have a higher to the higher than average average ages and so forth right. So.

Lishan Aklog: So, but, you know, it's a key reminder, this is not just about Medicare, right? Having Medicare coverage is, you know, the ticket or the entry or the gateway to finalizing ongoing conversations with commercial payers through their laboratory management groups like, you know, Evercore and others that do technical assessments on behalf of the larger plan. So, it's really a stepping stone towards getting broader a broader commercial coverage. And we certainly would expect that to accelerate immediately after those efforts to accelerate and for us to start getting some runs across the plate after we secure Medicare coverage.

Speaker Change: But.

Speaker Change: This is a key reminder, this is not just about Medicare having.

Speaker Change: Medicare coverage is.

Speaker Change: Ticket or the entry of the gateway to finalizing ongoing conversations with commercial payers.

Speaker Change: Through there.

Speaker Change: Laboratory management groups.

Speaker Change: Evercore and others that do technical assessments on behalf of the larger plan. So it's really a stepping stone towards getting broader.

Broader commercial coverage and we certainly wouldn't expect that to accelerate.

Speaker Change: Immediately after those efforts to accelerate and for us to start getting some of those across the plate. After we secure Medicare coverage. So it's a combination of the two.

Michael Matson: So, it's a combination.

Michael Matson: Okay, yeah, got it.

Speaker Change: Okay, Yeah got it and that kind of leads into my second question, which maybe already partially answered but.

Lishan Aklog: And that kind of kind of leads into my second question, which maybe you already partially answered, but, you know, just the dossier data package you're putting together for Moldex. Do you think that that's sufficient for private insurers? And then, you know, to what degree do you think those private insurers sort of factor Medicare coverage, assuming you get it into their their own coverage decision? Oh, yeah, we obviously have a lot of confidence in our data. We do believe for both. Medicare, as well as the commercial payers. And as I sort of already mentioned, that it's not like we're not having active engagements or discussions on policy and so forth with the commercial payers right now.

Just the.

Speaker Change: Dossier data package or putting together for multi Alex.

Speaker Change: Do you think that that's sufficient for private insurers and then to what degree do you think those private insurers sort of factor Medicare coverage is seeming to get it into their their own coverage decisions.

We obviously have a lot of confidence in our data we do believe it's sufficient.

Speaker Change: For both.

Speaker Change: Medicare as well as the commercial payers and as I sort of already mentioned that that it's not like we're not having active engagements with discussions on PON policy and so forth with with the commercial payers right now, but having Medicare.

Lishan Aklog: But having Medicare Coverage in your pocket, sir.

Sure.

Speaker Change: Coverage in your pocket certainly has a big impact on those conversations.

Speaker Change: Okay, great. Thanks.

Michael Matson: Okay, great. Thanks.

Michael Matson: Okay, thanks.

Speaker Change: Okay. Thanks, Mike.

Speaker Change: Our next question comes from the line.

Edward Woo: Our next question comes from the line of Edward from Ascendant Capital. Your line is open.

Speaker Change: We will go to Michel <unk> capital Your line is open.

Lishan Aklog: Yeah, thank you for taking my question. My question is on the geographic dispersion of the task. Have this been pretty uniform and is there certain areas of the country where you guys are more stronger? Yeah, there are there are certainly areas where just as with any commercial ramp, you should get areas where you develop traction as it relates to your personnel and so forth. And our team, you know, we've kept our team flat, but the team has been pretty dynamic in allocating resources in various locations. So, you know, we're strong in California, in Texas, in Florida, but also in other parts of the country.

Speaker Change: Hi, Thank you for taking my question. My question is on the geographic dispersion of the test how does then pretty uniform and it's there are certain areas of the country, where you guys are more stronger.

Speaker Change: Yes, there are there are certainly areas where.

Speaker Change: Just just as with any commercial ramp you should get get areas, where are you worried about traction as it relates to your personnel and so forth and our team you know we've kept our team flat, but the team has been pretty dynamic and allocating resources in various locations. So we're strong in California, and Texas and Florida, but also in other parts of the country we.

Lishan Aklog: We have, you know, we've talked about this before I didn't mention it today, that there are states that have biomarker legislation, that have state legislation that mandates coverage for biomarker tests. And we've certainly taken that into consideration as well as we've looked to our geographic...

Speaker Change: We've talked about this before I didn't mention that today that there are states.

Speaker Change: That have biomarker legislation that have.

Speaker Change: State legislation that mandates coverage for biomarker tests, and we've certainly taken that into consideration as well as we.

Speaker Change: Look toward geographic distribution.

Speaker Change: Great well, thank you for answering my questions and wish you guys. Good luck.

Edward Woo: Great, well thank you for answering my questions and I wish you guys good luck.

Operator: Yes, thank you, sir. There are no further questions at this time.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: There are no further question at this time I would now like to turn the call over to Dr. <unk>.

Lishan Aklog: I would now like to turn the call over to Dr. Lishan Aklog for closing remarks. Hey, so with that, you know, thank you all for your time and attention this morning. I think it should be clear that this is a moment in time for our company and we have a lot of exciting things to look forward to in the coming weeks. So make sure you keep abreast of our progress via news releases and periodic calls such as this. And the best way to do so is to sign up for our email alerts on the Lucid Investor Relations website and to follow us on Twitter, LinkedIn, and our website.

Speaker Change: <unk> remarks.

Speaker Change: Okay. So with that thank you all for your time and attention. This morning, I think it should be clear that this is a moment in time for our company and we have a lot of exciting things to look forward to in the coming weeks and months.

Speaker Change: So make sure you keep abreast of our progress via news releases and periodic calls such as this and the best way to do so as to sign up for our E Mail alerts on the lucid Investor Relations website and to follow us on Twitter Linkedin and on our website. So thank you everyone really appreciate it and have a great day.

Lishan Aklog: So thank you, everyone.

Operator: Really appreciate it and have a great day.

Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].