Greetings, and welcome to the PAVmed Inc. Business Update Conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference to your host Mike Havrilla, Director of Investor Relations for PAVmed. Please proceed.

Thanks operator. Good afternoon, everyone. This is Mike Havrilla, PAVmed's Director of Investor Relations. Thanks for participating in today's business update call. Joining me today on the call are Dr. Lishan Aklog, Chairman and Chief Executive Officer; and Dennis McGrath, President and Chief Financial Officer. Press release announcing our business updates and financial results is available on PAVmed's website. Please take a moment to read the disclaimer about forward-looking statements in the press release. The business update press release and this conference call, both include forward-looking statements. And these forward-looking statements are subject to known and unknown risks and uncertainties, may cause actual results to differ materially from the statements made. Factors that could cause actual results to differ are described in the disclaimer and in our filings with the Securities and Exchange Commission. For further list and description of these and other important risks and uncertainties may affect future operations, see Part 1, Item 1A entitled Risk Factors in PAVmed's most recent annual report on Form 10-K filed with the Securities and Exchange Commission and any subsequent updates filed in quarterly reports on Form 10-Q. Except as required by law, PAVmed disclaims any intention or obligation to publicly update or revise any forward-looking statements to reflect changes in expectations or in events, conditions or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. With that said, I would like to turn the call over to Lishan Aklog. Dr. Aklog?

Thank you, Mike. And good afternoon, everyone. Well, these are very active and exciting times for PAVmed and its subsidiaries. And I look forward to spending the next 45 minutes or so catching you up on important developments over the past quarter in recent weeks, and providing you with some useful insights on the evolution of our strategic thinking, namely, where we are seeking to take this company in the coming quarters and years. First, as always, let me take a moment to thank our long-term shareholders for your unwavering support and commitment to our company. I recently had the opportunity to review another lists of investors and it is really gratifying and frankly remarkable that over five years later, nearly all of our IPO investors remain PAVmed stockholders. Then so many of our long termers have been with us through, they have been up and down victories and challenges. It is satisfying to see how far we have come together and how well positioned we are for what I believe will be an exciting future for us all. I will start with some high level comments on the state of the company, cover some general corporate matters and discuss a few important topics upfront that I know are of keen interest to many of our investors. I'll then hand things over to Dennis who will provide our financial updates, after which I will proceed with usual more systematic comprehensive business update. About nine months ago in the fall of 2020, we decided that the time has come for us to pursue a bigger and bolder future plan for PAVmed and its subsidiaries, to fully realize their long-term potential for success. We decided to accelerate our plans to grow the company on multiple fronts. We decided to expand and expedite…

Thanks Lishan and good afternoon everyone. Let me brief our summary financial results for the second quarter ended June 30 2021, we reported in our press release. It was published earlier this afternoon in our quarterly report on Form 10-Q will be filed with the SEC in the coming days at that time will be available @sec.gov and on our website. So with regard to test performed the revenue recognition, as you already know from our previous quarterly update calls, but as a general rule EsoGuard tests performed so far will be recognized as GAAP revenue when cash is collected by the company. As previously mentioned, this will more and likely be true during this transition period of negotiating third-party private payer reimbursement contracts and related coverage policies. There was no recognized revenue in the quarter as Lishan mentioned. And as only recently the first payments were received by our Medicare and private payer billing agency, and if not been disbursed by them. For compliance purposes, again as Lishan outlined during this reimbursement transition period, we've negotiated a month to month fix payment arrangement with the laboratory, which is processing the EsoGuard assay and is also billing and collecting from the insurance companies. This fixed payment arrangement can be updated monthly to reflect estimated collections. Consequently, it is our expectation that we will begin to recognize GAAP revenue in the third quarter and will be adjusted based upon actual collections received for tests submitted for reimbursement by the laboratory. This obviously can result in timing of revenues recognized versus time they're submitted for third-party reimbursement. As promised in our last corporate update call, EsoGuard tests performed and submitted for payment are now provided in the press release. Obviously, we're in the very early innings here, we'll continue to evolve our…

Thanks, Dennis. So let's now proceed with a systematic update of our business. I'll start with Lucid, which, as usual will take up the bulk of my time, and then proceed with brief updates on CarpX commercialization, the various health launch, and close with the short rapid fire updates on other products in our portfolio. First, some background for those of you who are new or just catching up to the Lucid story. Lucid is a commercial stage medical diagnostics technology company, focused on the millions of patients with gastroesophageal reflux disease or GERD, also known as chronic heartburn, who were at risk of developing the esophageal pre-cancer and cancer, specifically highly lethal esophageal adenocarcinoma or EAC. We believe our lead products the EsoGuard esophageal DNA test performed on samples collected with the EsoCheck esophageal cell collection device constitute the first and only commercially available diagnostic test capable of serving as a widespread screening tool, to prevent these esophageal cancer deaths through early detection of esophageal pre-cancer can add risk to our patients. We formed Lucid in May 2018 as a subsidiary of PAVmed to license the technologies underlying EsoGuard and EsoCheck from Case Western Reserve University. Since Lucid's inception, PAVmed has managed Lucid pursuant to a management services agreement and finance its operations through working capital advances. This past June 1, Lucid issued a convertible promissory note to PAVmed and exchange for the cancellation of the $22.4 million in working capital advances and management services fees that have accumulated as of that date. And just over three years since Lucid's inception, we have advanced the technology underlying EsoGuard and EsoCheck from the academic research laboratory to commercial products within a scalable business model. EsoGuard as an NGS DNA methylation assay performed on samples collected with EsoCheck, EsoGuard has shown…

[Operator Instructions] Our first question is from Frank Takkinen with Lake Street Capital Markets.

Hey, Frank, how are you. Good evening.

Very good. Lots of exciting new things here. Thanks for taking my questions. Wanted to focus in on EsoGuard and my questions here. First, for that the cases where you have heard back from private payers, can you speak to any reimbursement levels you've seen there as well as just a broader success rate for those that you have heard back on?

Dennis, why don't you take that?

Yes. Sure thanks, Frank. So the payments that have been received by ResearchDx billing agency are largely from the private payer side and out-of-network designation because there's not coverage policies in place. And the payment rate on that has been about half of what the CMS rate is, which you would expect for out of network, which typically is 50% of the asked price, which we find that encouraging in that they're paying out-of-network rates at almost 50% of what the CMS rate is.

Got it. Okay. That's great. And then I wanted to ask on the Phoenix opportunity. I think this is really exciting here. Can you just talk a little bit about how you think the patient volumes may trend? Obviously, huge opportunity, but I just wanted to one talk about that. And then can you talk to how - what kind of direct-to-consumer advertising you're doing in the area to just educate primary care physicians adequately enough to start generating that referral volume to get to some of those target volume ranges over time?

Sure. So let me start with the first question. So it really is a bit too early for us to - this is a pilot program. It's a bit early for us to be able to come up with any kind of sort of meaningful sense as to how cases will ramp up. I did mention that with one rep, who just started this summer, calling on primary care in the area. We've seen a lot of very good engagement, well quick early referrals to the test centers. And as I said, a lot of engagements with dozens of lunch meetings. I think certainly by the next quarter, we should have a better sense as to how these - how we could expect our primary care physician sales and marketing efforts to translate into actual procedure volume and testing volume that is at the centers. So that's really - it would be really difficult for us to say anything more than that. This really, really early stage in the process. Can you repeat your second question? I apologize.

Just related to the marketing efforts, that you have in market your generating awareness.

Yes. So we've designed this as consciously as firmly as a 2-step process, so we have not yet initiated any direct-to-consumer marketing through traditional media. We have some activity on social media because we wanted to - we needed to wait until two things happened. One, the test centers were up and running, so that those patients could be seen at the test centers and two, that the platform, the telemedicine platform that we're building with Upscript is also up and running so that they can undergo a telemedicine visit in response to the direct-to-consumer marketing. So as I said, the marketing materials, and frankly, the ad buys and all of that are all already in place, but we are not going to trying to switch on that until the telemedicine platform is ready to go, and I expect that to be so technical.

Got it. Okay. And then I'll just end with one more quick one at the end. You guys were previously providing some metrics around sites trained and stocking EsoCheck. So, can you give us the latest thinking around those metrics?

Yes. We decided we're going to discuss is on procedures moving forward because accounts, you can have accounts where we just think it's a more useful metric for clinic for commercial activity along with - and the one that will track future revenue and recognize revenue more directly. So for example, you can have centers that come on board, do a stock equipment and even get trained and not perform procedures, and then you're going to have others that the more procedures a week. So at least for the foreseeable future, we're going to focus on reporting on procedure volume and less useful, we'll avoid the less useful information on accounts.

Got it, okay. That makes sense, thanks for taking my questions. And again congrats on excellent progress.

Thanks Frank.

Our next question is from Ed Woo with Ascendiant Capital. Please proceed with your question.

Ed, good afternoon.

Talking about your product ramp up. I had a question in terms of potential new opportunities. Obviously, you're very busy, you got a lot of things going on. Will you wait until the Lucid IPO before you add new products on? And then what are you seeing out there in terms of marketplace? Are there a lot of stuff out there at a reasonable valuation? Or is the market still kind of too high?

Really, really intriguing question. So we're pursuing both of those processes in parallel. So this has absolutely been our DNA at the parallel level and it continued on the Lucid level but we are constantly, very regularly viewing and reviewing opportunities for licensing, partnering and now more increasingly with acquisitions. So I don't have time to talk about some of the, say, some of the areas that we're looking at, but one area in particular is in-licensing technologies for additional biomarkers that can be used, not just - not for screening but for progression for identifying progression from non-dysplastic to dysplastic Barretts Esophagus, there's an exciting technology that we're pursuing out of Case Western and John Hopkins, for example. On that front, and that will have a really another opportunity to leverage the EsoCheck device for - as an alternative to endoscopy for monitoring patients who have non-dysplastic Barretts Esophagus. We also are reviewing - we actually - on the diagnostics side, we see a lot of opportunities ongoing. We've had conversations with the natural cancer institute on several technologies and others. So that's all full steam ahead, and we certainly are seeing these technologies coming across transom.

Great. So it wouldn't be that much of a surprise if you found a good opportunity that we will hear about it before the Lucid IPO is complete?

I can't really comment on that because that sort of implied a little sort of be able to extrapolate this to the timing of the Lucid IPO. I think unlikely, it's that's unlikely. It obviously depends on how things proceed with the IPO. But I would just - let me just say that I expect the things continue to go well at the IPO was a nearer-term event than another transaction.

Great. Well thanks for answering my questions and good luck.

Thanks a lot, thanks Ed. Good to talk to you.

Our next question is with Jeremy Pearlman from the Maxim Group. Please proceed with your question.

Hey, Jeremy, how are you?

How you're doing, I am good. I'm on the line for Anthony Vendetti. I just had one quick question about the CarpX. So I know you mentioned there are some delays due to COVID and then from the sales side. And you're in the middle of a full reboot. Could you maybe just talk more to that? What does that commercialization now look like? And then in, I guess, and when do you think we'll start to ramp up because procedures will really pick up?

Yes. Just to be clear, what I was describing the COVID related matters that was really more sort of historical in 2020 and in the early part of 2021. The really the way to look at it is, I think we lost about 6 or 7 months between the end of last year and the first half of this year and sort of getting this initial KOL, early adopter, initial launch established that we can set a good foundation for a full commercial launch. As I said, obviously, we'd love to be sort of - reported having done cases up until now, but we really have good momentum with Calvin significant engagement through a much greater traction and significant engagement with a broader range of enhanced surgeons, and we look forward to being able to report on cases in the coming quarters. The fundamentals behind transitioning from an initial commercialization to hit full commercialization remains unchanged, That was really about the fact that it's incredibly important in the early launch of a surgical type device that you get early adopter and KOL folks to really help with procedural efficiency and procedural safety before going out to the broader community. And so that's where we still are committed to doing the initial KOL launch and then proceeding to full commercialization. But as I said, we probably lost about 6 to 7 months from our initial process.

Okay. All right. So just from my perspective just 6-7 month delay, but everything else, the whole other plan, just like you said, first right, okay, conduct with KOLs and then to move on to comment. I got it. Thank you very much for taking my questions.

Thanks Jeremy.

Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back over to Dr. Aklog for closing remarks.

So thank you all for joining us today and for the great questions. As always, we look forward to keeping you abreast of our progress via, our news releases, the periodic press conferences. The best way to keep up with PAVmed news, updates and events to sign up for our e-mail alerts on our new - on our Investor Relations website, follow us on Twitter, LinkedIn and YouTube. I also encourage you to contact me directly with any questions jmh@pavmed.com. So thanks again, and have a great day.

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