Good morning, ladies and gentlemen, and welcome to the PAVmed First Quarter 2024 Business Update Conference Call. [Operator Instructions] This call is being recorded on Tuesday, May 14, 2024. I would now like to turn the conference over to Matt Riley, Director of Investor Relations. Please go ahead.

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 PAVmed; along with Dennis McGrath, Chief Financial Officer of PAVmed. The press release announcing our business update and financial results is available on PAVmed's 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 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 Commission. For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part I, Item IA entitled Risk Factors in PAVmed's 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 8-K. Except as required by law, PAVmed disclaims any intentions or obligations to publicly update or revise any forward-looking statements to reflect changes in expectations or in events, conditions or circumstances on which the expectations may be based or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. I would now like to turn the call over to Dr. Lishan Aklog, Chairman and CEO of PAVmed. Lishan, you can take it away.

Thank you, Matt, and good morning, everyone. Thank you for joining our PAVmed quarterly update call. Before proceeding, I'd like to thank our long-term shareholders for your ongoing support and commitment. We continue to leave no stone unturned to enhance long-term shareholder value. We continue to be pleased that Lucid, PAVmed's strongest and most advanced asset, is making such great commercial progress and it continues to successfully finance its operations through long-term fundamental investors. Lucid has a runway to advance through key upcoming reimbursement milestones on its pathway to profitability. As we discussed during our last call, we have updated PAVmed's overall strategy to drive shareholder value through independently financed subsidiaries, which, like Lucid, can leverage PAVmed's shared infrastructures. The initiatives we announced in furtherance of this strategy, specifically Veris' updated commercial strategy and the PMX Incubator are progressing well. Let's begin with some highlights starting with Lucid. As we noted in yesterday's lucid quarterly update call, first quarter EsoGuard revenue was flat quarterly. First quarter test volume grew 10% quarter-on-quarter. Lucid further strengthened the EsoGuard clinical data evidence base supporting ongoing engagement to secure commercial and Medicare payer coverage. Very importantly, a date for a MolDx pre-submission meeting was secured for July 17, 2024. On Veris Health, we're -- as I mentioned, we're executing on our new strategy, which is focusing on large academic cancer centers. I am very excited that we were able to complete a memorandum of understanding with the Ohio State James Cancer Hospital to implement a pilot program, enrolling their patients onto our Veris Cancer Care platform. We have based solid progress on pursuing financing of Veris, and we have a clear path to FDA clearance of our implantable monitoring pending independent financing. The PMX Incubator launched last quarter. And as we reported last time,…

Thanks, Lishan, and good morning, everyone. Our summary financial results for the first quarter were reported in our press release that was published last night. On the next 3 slides, I'll emphasize a few key 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 March 31st was $25.5 million. We added $11.6 million to that amount with the Lucid financing completed last week or pro forma cash of $37.1 million. The average quarterly burn rate for the trailing 4 quarters is $11.7 million per quarter. We disclosed in the 10-Q that our ability to fund operations beyond 1 year from today is largely dependent upon how revenues ramp over the next 4 quarters, which is dependent upon how the reimbursement landscape for both government and private health insurers continues to improve for EsoGuard. Additionally, our direct contracting efforts with self-insured employers and/or corporate finance activities, including refinancing any outstanding debt at the time can also work to exceed that threshold. Furthermore, as we advance the initiatives both with PMX Incubator and Veris Health, particularly in connection with the Ohio State University Cancer Care Center, any direct financing into either of these subsidiaries will further satisfy that threshold. The change in other assets is largely related to the normal amortization of certain intangibles, the prepaid insurance, the application of advanced vendor deposits to the current period incurred expenses. Convertible debt. The convertible note, the balance reflects $37.3 million in face value principal plus $8.2 million in fair value accounting convention, a noncash amount. The face value principal is split between PAVmed and Lucid at approximately $26.4 million and $10.9 million, respectively. During the…

[Operator Instructions] Your first question comes from the line of Anthony Vendetti from Maxim Group.

Just on the memorandum of understanding with Ohio State, what are the milestones or expectations for that to go to some type of definitive agreement? And then how many others like Ohio State do you have in the pipeline at this point?

Yes. Great question. So I mean just to backtrack a little bit chronologically. So we've had really fruitful discussions with the full team at Ohio State there. There's a real strong shared vision for the role of digital health tools in advancing cancer care that go, frankly, beyond the initial efforts within remote patient monitoring. Lots of discussions around long-term goals and opportunities to collaborate beyond us. We're going to still wait -- the memorandum of understanding focus is on a pilot study that we expect to launch in the coming weeks. And it will involve up to 100 patients in 2 units within the medical center. And the goals really for the pilot are to really demonstrate feasibility, to demonstrate the key elements of this platform, which is getting patients on the platform, getting them connected to the monitoring tools through Bluetooth, making sure that the data is making it to the physicians and the other caretakers and it's able to provide the information to impact cancer care. We look forward following that to -- upon completion of a RFP that's currently active to hopefully expand that beyond to the full engagement on the commercial side. So the answer is really that the pilot is intended to just demonstrate feasibility, but our goal is to advance the partnership to cover an increasing number of the patients within platform and then ultimately to work collaboratively on innovation in this space, which again is something that was really the centerpiece of our conversations with them and effort to engage. We have about a half a dozen other large centers that we have active conversations with, several of whom are advancing to more fulsome conversations. We -- I think as we described, we're working -- we're operating under a strategy where Veris is raising capital in order to expand its efforts beyond the initial sites. And so we expect to advance these individual sensors after demonstrating feasibility here and being able to raise capital in order to advance beyond that.

Your next question comes from the line of Frank Takkinen from Lake Street Capital Markets.

Just one more follow-up on the Ohio State MOU. Maybe walk us through what the total revenue opportunity looks like. I understand you're going into a pilot, but how large is their cancer center? And if you were to be successful in that pilot and roll it out across that entire network through Ohio State, what kind of revenue opportunity could that look like? And then as a second part to that question, how should we think about how many players are out there similar to Ohio State that you could partner with?

Yes. I'm going to answer that at a high level. Let me sort of start from the latter and maybe work more specifically. So a significant portion of cancer care, particularly the kinds of patients who we're targeting with the Veris Cancer Care platform, which are those that are diagnosed with and are entering what's called systemic therapy, which usually means infusion therapy. We do have the vision to go beyond that, but that's the initial target. So a reasonable portion of those patients across the country are cared for at large comprehensive cancer centers such as the Ohio State chains -- Hospital. They, as I mentioned, have 10,000 patients who are in infusion therapy. And so when this hopefully transitions from this pilot program into a full program, we'll have the opportunity to expand the engagement to include an increasing proportion of those patients. Stepping back, as we've talked before and not specific to Ohio State, but with regard to the platform as it's designed now, we have the remote patient monitoring billing opportunities for an individual center are such that our recurring revenue service model that we provide, provides an opportunity with approximately $1,000 to $1,200 per patient per year. And -- so I think I'll leave it at that high level for now, Frank. It's -- the revenue opportunity is substantial, these large centers. This is why we transitioned from smaller practices to large centers because frankly, it's more efficient engagement. It's got a bit of additional lead time and additional work to get there, but the strategic opportunities as well as the size of these centers in terms of the number of patients and the subsequent revenue opportunity are substantially greater. And we're really happy with that transition, and we look forward to completing this pilot and transitioning to a commercial relationship that can yield substantially more patients on the platform and ultimately increasing revenue opportunities.

Got it. And then the second half of that, how should we think about the opportunity of players like this? Or maybe more specifically, how should we think about your current funnel of opportunities like this?

Yes. So as I said, we have several dozen actually on our target list. We have approximately 5 that we have engagements with, of which Ohio State is one of the largest. It's the third largest in the country. And the pace of which -- we're not billing in a position yet to say what the pace will be in terms of signing these up, a lot of it will depend on the success of this pilot as well as our ability to raise sufficient capital to expand our commercial activity to multiple sites concurrently.

Perfect. And then just last one for me. I think you referenced it briefly in your prepared comments, a lot of these centers have venture arms. How could some sort of strategic investment from them be structured and look like?

Yes. We've had -- we had prior engagements beyond Veris with academic centers. And you're right to highlight the fact that many, many large academic centers, not just in the cancer sector, have venture arms and have interest in engaging in investment opportunities alongside the strategic collaborations, right, especially since this is one of the great parts of transitioning our strategy to larger academic centers is that there's a greater opportunity for these kinds of strategic collaboration which include opportunities to develop actually new products or new care platforms that have licensing opportunities and so forth. So that does provide an initiative to partner, not simply on the clinical side but also on the venture side. Each institution has different structures and strategies for their investment. But I think, generically, they're -- they share a common theme, which is to simply invest in the entity through these arms as sort of a measure of sort of a vote of confidence in the commercial potential of the partner as well as the partnership. And so they all vary, but at the end of the day, they're just simply investments -- sort of venture investments, typically, into the company, and we certainly are seeking those with the partners that we are targeting here.

[Operator Instructions] Your next question comes from the line of from Edward Woo from Ascendiant Capital.

Congratulations on all of the progress. My question is on PortIO and the PMX Incubator initiatives. Can you talk about the fundraising environment? How difficult is it or how easy it is to raise money? And also, is there a strategy to focus on PortIO versus EsoCure and CarpX at the same time or to do it kind of on a linear process?

Yes. So in terms of raise, it's always -- raising capital is never easy, but these are -- what's interesting in our engagement with Hatch is that they have a somewhat different universe based on their 30 years of experience of engaging with pockets of investors, particularly on the [ angel ] side that are anxious to invest in assets like this at the bright side of the investment size that we need to advance these products, which is not all that great. So we're very active and the process is off to a great start, and we really are actually quite optimistic that we'll be able to raise the capital individually into PortIO through the partnership with the folks at Hatch who have great experience in doing so. So that's promising, and we look forward to consummating that and getting started. As it relates to the other products that we've put into the incubator, EsoCure and CarpX and potentially others. What we're pursuing is raising capital on a -- one at a time, but certainly not a way to complete the project or advancing commercialization one at the time. So it'll be staggered but in parallel. So once we're able to raise sufficient funds to fund PortIO through commercialization, FDA submission and -- sorry, FDA submission and clearance and commercialization, once we raise those funds, we will move on to the next target, which would likely be EsoCure and then subsequently, CarpX. So ideally, as we continue to raise capital into each of these projects that in the not-too-distant future, they will all be moving along their path towards commercialization in parallel.

We do not have any further questions at this time. I would now like to turn the conference back to Lishan Aklog.

Great. So thank you all for joining today. And as always, thanks to our -- for all the great questions and great discussion. Hopefully, you have a sense that we're really excited that we're still in the early phases of executing on this updated PAVmed strategy that we hope in addition to the activities and successes we're having at Lucid, will translate into other subsidiaries, including Veris and PMX and potentially, hopefully, others that we consummate in the near future. So as always, we look forward to keeping you abreast of our progress via press releases and conference calls such as this one to keep up with PAVmed, Lucid, Veris updates. I would encourage you to sign up for our e-mail alerts at both the PAVmed and Lucid Investor Relations sites, to follow us on social media on Twitter, on LinkedIn and to contact Matt with any specific questions. So thank you very much, everybody, and have a great day.

This concludes today's conference call. Thank you for your participation. You may now disconnect. Happy Tuesday, everyone. Bye.