PAVmed Inc.

Good morning and welcome to PavMed's fourth quarter and full year 2023 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. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, March 27, 2024. I would now like to turn the conference over to Dennis McGrath, PAVMED President and Chief Financial Officer. Please go ahead, Dennis.

Thank you, Operator. Good morning, everyone, and thank you for participating in today's fourth quarter 2023 business update call. Press release announcing our business update for the company and financial results for the fourth quarter and the full year ended December 31, 2023 is available on the PAVMED website. Please take a moment to read the disclaimer about the forward-looking statements. 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 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 U.S. Securities and Exchange Commission. For a list and a Description of these and other important risk factors or risks and uncertainties that may affect future operations. See Part 1, Item 1A entitled Risk Factors in ABMED's most recent annual report on Form 10-K filed with the SEC and subsequent updates filed in quarterly reports on Form 10-Q and any subsequent Form 8-K filings. ABMED is required by law. ABMED disclaims any intention 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 now would like to turn it over to Dr. Lishan Akhlaq, PadMed Chairman and CEO. Lishan?

Thank you, Dennis, and good afternoon, everyone. Thank you for joining our quarterly update call. Before proceeding, a couple things. As yesterday, I'd like to apologize for my scratchy voice, a little bit under the weather. I'd also like to thank our long-term shareholders for your ongoing support and commitment. We've been together through some challenging times, and as we'll discuss in greater depth, we continue to leave no stone unturned to enhance long-term shareholder value. Lucid clearly remains PadMed's strongest and most promising asset, and we're very pleased by its commercial progress and Lucid's ability to finance its operations despite challenging market conditions. We're looking to replicate the model more broadly and have revised PadMed's overall strategy to drive shareholder value through independently financed subsidiaries, which, like Lucid, can leverage PadMed's shared infrastructure. Consistent with this approach, we've updated Veris' commercial strategy accordingly. We've launched our PMX incubator in partnership with Hatch Medical, and we've aggressively sought groundbreaking independently financeable technologies with large Market Opportunities Agnostic Center. So a couple of, let's just start with some recent highlights, starting with Lucid Diagnostics. A reminder that yesterday we had a full presentation regarding Lucid, so I would encourage everyone to view that webinar or the transcript of that webinar to get further details with Lucid. I'll just give some highlights. Quarterly revenue rose nicely at 33%. for the prior quarter, and these health fair high volume CYFT events continue to gain traction. Our auto network reimbursement is improving with stable pricing, and we've expanded our clinical validity and clinical utility data to support in-network coverage, including Medicare. As I mentioned, and I'll talk about it in further and more depth in a bit, for Varus Health, we've shifted our strategy to target large academic and regional cancer centers, and our first such engagement is expected in the very near term. We had a final and successful FDA pre-submission meeting for the implantable monitor, and we feel we have a clear path the FDA clears pending independent financing. As we announced last week, Pat had launched its wholly-owned incubator, PMX, in partnership with Hatch Medical to complete development and commercialization of its existing MedTech portfolio technology, starting with Port IOM.

So a bit more about our updated strategy or revised strategy.

As I mentioned, given the success of Lucid and Lucid's ability to independently finance itself, we decided to move it forward to focus on driving shareholder value through our holdings and independently finance subsidiaries managed through our PadMed shared services structure. following Lucy's successful path and will seek financing opportunities directly to Veris and our subsidiaries based on the PMX incubator technologies, as well as future subsidiaries. As I mentioned, Veris is shifting to large academic centers in order to enhance its financeability. The PMX launch has proceeded, and the initial effort will be to independently finance Port IO as a subsidiary. We're also actively seeking new, groundbreaking, independently financeable technologies that have several targets that we're working on. These have large market opportunities.

We've been agnostic to center, and we're looking to leverage PadMed's existing infrastructure. So a summary of the corporate structure as follows, with PadMed providing shared services.

We have lucid diagnostics. We have various health as a digital health platform. We have our MedTech platform. products within our privately held incubator, PMX, and we're looking, again, to add additional assets consistent with the structure, each of them independently financeable. Just a couple of brief slides on Lucid. Again, I would recommend reviewing the further details in our webinar. As I mentioned in the next slide, We've stabilized our test volume, expected to remain in the 23 to 2,500 range, pending improvements and reimbursement, as well as driving revenue through our early efforts at direct contracting. And you can see revenue has grown nicely since we took over and updated our revenue cycle management. This is all out-of-network reimbursement. Next slide. Again, just a couple of highlights on Lucid on the commercial execution side. As I mentioned, we're making great progress with our CYFT health fair testing events and are fully booked through July. We're increasing our activity in strategic accounts and now have over a dozen. These are large academic medical centers and other regional centers. And on the revenue cycle management side, we're getting about approximately 50% of our claims are now being allowed by commercial payers. And the payment amount has stabilized out of network at about $1,800, so just a bit shy of the Medicare price. Some of the key strategic accomplishments, Lucid strengthened its balance sheet by raising $18.1 million in preferred stock financing. I'll note, again, to put it in the broader context of Lucid's financeability, we've been but at least it has been able to raise its own capital, and this financing puts that number well over $100 million, including the IPO. The clinical data and clinical utility data now are well positioned to support a broad medical policy coverage for e-cigar. They are positioning us to engage with the multi-ex group that That works on local coverage determinations on behalf of Medicare. We're looking for that reengagement to happen quite soon upon publication, peer-reviewed publication of one of the CV studies. We've just started in the last month or so to hold meetings with major commercial payers using this data to formally request positive medical policy determinations and look forward to the outcomes of that. As I mentioned, we're really bullish on this direct contracting program with e-cigar offered as a covered benefit and have expanded our team pursuing these, and we have a robust pipeline of employers, self-insured entities, working with brokers, and third-party administrators to offer e-cigar in this fashion.

Next slide. So a bit of an overview on Veris. Next slide.

So Veris Health is a commercial-stage digital health company that's seeks to enhance personalized cancer care. It has two components, the Varus Cancer Care Platform, which has a smartphone app that the patient interacts with and enters patient-reported outcome information, along with a platform that the physicians and other caretakers use to track physiologic parameters that are collected currently using Bluetooth-connected external devices. The long-term plan is to market an implantable monitor that works with this platform that would be inserted at the time of the implantation of a vascular access port for chemotherapy and immunotherapy. And the goal is to utilize modern remote patient monitoring tools to improve care through early detection of complications, longitudinal trends, and risk management. Next slide. So a bit about our revised commercial strategy. The goal here is to advance Ferris to the point where it can raise its own independent capital. We've had strong interest in that regard, and we felt that the commercial strategy that targeted large, prestigious academic and regional cancer centers was the best path to get there. These tend to be centers that have large staff, large number of oncologists, and a large number of patients on infusion therapy, thousands and thousands. of such patients. These tend to be concentrated in metropolitan areas. They are typically NCI-designated comprehensive cancer centers. And actually, many of them have venture arms. And in our conversations with them, we've had interest in the centers investing directly into VAERS, and that's something we're pursuing. So among these centers, we have a robust pipeline. We have over a dozen targets with multiple active discussions. And as I mentioned at the beginning, we have one engagement that's in its very late stages, and we expect it to consummate in the near term. Our approach with these is very different than with the smaller, as we initially approached the smaller oncology practices, and these are more comprehensive engagements. So, they start with pilot programs, and they involve long-term commercial partnerships, as well as other strategic collaborations, so research and development activities, shared collaborations in this regard that include developing care pathways, digital biomarkers, and other innovations on our platform.

Next slide.

So, the VAERS Implantable Monitor is an important future part of this endeavor. We think ultimately will play a central role in advancing this technology. among other things, it assures 100% compliance with patient compliance to fulfill the requirements necessary for remote patient monitoring billing. Again, it's designed to be implanted at the time of a vascular access port and provides many of the necessary physiologic parameters, relevant physiologic parameters you can see listed there, continuously without the need for external devices. This This device has gone through multiple, we've had multiple engagements with the FDA. We held our final and ultimately successful FDA pre-submission meeting a few weeks ago, and now we believe we have a clear path to FDA clearance and commercial launch, and we will push forward on that once Vera secures independent financing, which we hope to accomplish soon.

Next. And the final area that we announced recently is our new incubator, PMX.

Next slide. So we launched PMX, as we announced last week, to complete development and commercialization of products with existing portfolio technologies, which many long-term PadMed shareholders will remember. The Port IEO implantable intraosseous vascular access device, E-Secure esophageal ablation device, which has been licensed to Lucid for commercialization once completed, the CARPEX minimally invasive device for carpal tunnel syndrome. Each of these technologies had advanced quite far. Excuse me. I had to advance quite far with a Carpex device having been cleared and was undergoing a second-generation product development. These had been put on the back burner at the time of a restructuring about a year ago, and we're very excited to have launched these again in the context of this incubator through a joint venture with Hatch Medical, a very experienced group of medtech veterans who have a long history of advancing medtech technologies as well as brokering partnerships and strategic acquisitions. So we're really looking forward to that. The structure is that we will seek to independently finance a separate subsidiary of the incubator to develop and commercialize each technology. And our first target, and we're just getting started on seeking financing for this, is Port IO. It's the first such device, the first implantable intraosseous vascular access device. It offers solutions for patients with poor veins or the need to preserve veins for dialysis. It eliminates the need for regular maintenance with flushes and is resistant to occlusion and infections compared to traditional access devices. The estimated market opportunity, not including the dialysis population, is about $500 million. We completed a first in human study in Columbia in 2022, and that study in nine patients demonstrated excellent device function, operated just as designed, and there were no complications in any of those patients. Using this data, we hope to add to extensive engagement we've had already with the FDA, and we believe we now have a clear path to a US IDE or investigational device exemption clinical study that will be necessary to get a de novo regulatory clearance. So looking forward to getting this financed and moving forward to fulfill its commercial potential, and then in series or in parallel, pursue similar pathways for eSecure and CARB-X. And with that, I'll pass things over to Dennis to talk about our financial update.

Thanks, Leshawn. Our financial results for the fourth quarter and year were reported in our press release that was published last night. On the next three slides, I'll emphasize a few key highlights from the quarter, but I encourage you to consider those remarks in the context of the full disclosures covered in our annual report on Form 10-K. It was filed with the SEC Monday afternoon and is available on the PatMed website. So balance sheet slide 16 here. Cash of $19.6 million reflects sequential burn of $11.8 million. Cut our quarterly burn rate by 31% since the beginning of the year of 2023. These improvements are related to the cost control initiatives we put in place at the beginning of the year with continued improvement with each successive quarter. Obviously, the cash balance does not reflect the $18.1 million in additional lucid funding just two weeks ago. We disclosed in the 10-K that our ability to fund operations beyond one year from today is largely dependent upon how revenues ramp over the next five quarters, which is highly dependent on how the reimbursement landscape for both government and private health insurers, as well as successful efforts for direct contracting with self-insured employers shake increases in payment realization of submitted claims and or our corporate finance activities. The change in other assets is largely related to the normal amortization of certain intangibles. Prepaid insurance is an example. The application of advanced vendor deposits to current period and current expenses. With regard to the convertible note, the balance reflects a $37.7 million in face value principal plus $6.5 million in fair value accounting convention, which is a non-cash amount that gets added to that principal amount for accounting purposes. The face value principal is split between Padman and Lucid at approximately $27 million and $11 million, respectively. During the fourth quarter, the face value principal was reduced by about $1 million, with the issuance of approximately 387,000 shares, post-split shares of common shares. Other long-term liabilities are from capitalized leases related to our lab and office basis. Shares outstanding, including unvested restricted stock awards of $8.8 million. The GAAP outstanding shares of $8.6 million are reflected on the slide as well as the face of the balance sheet on the 10-K.

Slide 17.

Slide 17 compares this year's fourth quarter to last year's fourth quarter and similarly for the yearly totals on certain key items. I trust you'll review the information, my comments, in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-GAAP information. Revenue for the fourth quarter largely reflects lucid actual cash collections for the quarter for insurance, reimbursable claims, plus Invoiced E-Cigar test to the VA and about $26,000 to Serum Auto Group under the direct contract. And this testing there just got underway late in the fourth quarter. Plus some invoiced amounts, about $9,000 for various cancer care platforms. As detailed in our Lucid quarterly call yesterday, recognized Lucid revenue of $1,040,000 represented a 33% increase over the third quarter. and was in line with what was previously previewed to the market. Test volume at 2,200 tests for the quarter represent just over $5 million in submitted claims for the fourth quarter at our standard ASP of $24.99. Lucid recognized revenue or its recognition policy. A key determinant is the probability of collection. And therefore, due to the fact that we are in the early stages of reimbursement process means Revenue recognition for claims submitted for traditional government or private health insurers will be recognized when the claim is actually collected. First, when the patient report is invoiced and submitted for reimbursement. As you'll see in our 10-K, this is called variable consideration, the jargon of GAPS ASC 606, the revenue recognition guidelines we need to live by. And presently, there is insufficient predictive data to reflect revenue when the test report is actually delivered. For billable amounts contracted directly with employers that are fixed and determinable, there's a difference in how we'll recognize revenue. We will recognize that revenue when the contracted service is delivered, and a contracted service generally means when the report is delivered to the referring physician. Our non-GAAP loss for the year was $42 million, with a quarterly average of $10.5 million and a quarterly high of $10.9 million. The fourth quarter non-GAAP loss was 10.6, very much in line with the average for the year.

Slide 18.

Slide 18 is a graphic illustration of our operating expenses presented in detail in our press release. As detailed yesterday in our lucid investor call, about 850,000 of the OPEX increases related to certain one-time fourth quarter events split about evenly between clinical research related to our published studies at that point, sales costs and patent expenses. The balance related to various health, particularly some animal studies, to advance our work on the implantable. As also worthy of repeating some reimbursement stats, as mentioned on the Lucid call yesterday, since the new revenue cycle manager, QuadEx, took over in mid-June, about 7,800 claims representing Almost $20 million in pro forma revenue has been submitted for reimbursement. About 82% of those 7,800 claims have been adjudicated already, which means 18% are still pending. Out of the 82% that have been adjudicated, about 46% resulted in an allowable amount by the insurance company with an average of $1,828 allowable per test. Of those denied, of which 54% were denied, about 51% of those that were denied fell into a couple different buckets. They either required additional information, that was about 7% of them, or deemed not medically necessary, that was 26%. That's probably the most puzzling piece because the guidelines are well established, the patients meet those guidelines, they're tested, and we bill. So medically not necessary is a denial. It's one that's ripe for appeal. Or last bucket, 18% of those denied require a prior authorization. About 29% were deemed not covered.

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

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star, followed by the one on your touchtone phone. 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 the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Frank Takinen with Lake Street Capital Markets. Please go ahead. Hi, Frank. Good morning, Frank.

Hey, morning. This is Nelson on for Frank. Hey, good morning. I was wondering if you could provide some additional commentary on the biomarker legislation mentioned in yesterday's call. What do the steps look like to obtain coverage with that? And how do you think about that opportunity impacting your business overall?

Yeah, thanks for the opportunity to elaborate on that a little bit. It's actually a really important and exciting area. As we mentioned, there are 15 states that have some type of biomarker legislation, but they vary from state to state. So each one has a different flavor. The language is different. Generally, they seek to mandate coverage within the state by commercial payers for biomarker tests. Some of them are specific to cancer, some not. And so the opportunity there is great, but it does require some work with regard to looking at each state one at a time and determining in consultation with the commercial payers there the language and making the case that we're covered under that language. And so we're still in the early stages. of those engagements, but we're starting to get some traction there, and we believe that we will, in many of them, if not ultimately all, as we would hope, end up with a determination that ESAGARD is, in fact, which we believe it is, a biomarker test for cancer prevention that would be subject to mandatory coverage by payers in that state. So there are steps along the way, although the foundational language in these

and the statutes are promising.

Got it. And then maybe switching over to Veris, how should we think about the potential revenue contribution from that in 24 and 25? I understand there's a lot of moving pieces still, but as you shift into those large academic and regional centers, how should we think about that?

Yeah, I'll let Dennis maybe chime in a bit, but sort of conceptually and strategically, we've... We're moving away. We still have some existing accounts that are oncology practices, but the cost of acquisition of these accounts was significantly higher. We needed a full sort of sales team to do that, while engaging with strategic accounts has longer lead times. There's more time because, as they're named, the reason they're called strategic accounts is because there's a strategic dimension to these engagements. So they do have longer lead times, But the commercial opportunity, the revenue opportunity in particular, is higher. So I would, I'll let Dennis maybe chime in a little bit on sort of how we're not really yet projecting, but the larger, these are larger accounts. One of the accounts that we're in the late stages of discussing has 10,000 patients with kidney infusion therapy. And so the revenue opportunity is substantial. It's equivalent to, you know, dozens of smaller cancer patients. oncology practices. The process for getting to, being in a position where we would have some meaningful portion of those patients on the platform is not necessarily short. Often, we would expect to start with a pilot program in one particular area within that cancer center to for example, a higher risk subgroup like bone marrow transplants and then work our way to a broader application. So why don't I leave it there and see if Dennis has any further insights. I don't think we'll have a lot of color yet on a revenue trajectory, but this is clearly, we believe, the path towards sustained value creation within VAERS and financeability.

Yeah, maybe just a few other data points. So as Lishan indicated, these large strategic accounts have a large patient population, 10,000 was the number that Lishan put there. And if you think about the top 10 cancer centers in the United States, they're all in that kind of framework of large patient pools. And you'll recall this is a recurring revenue model for us. Reimbursement is not an issue. It's already established. The general notion is that we would collect about $80 per patient per month for each patient that's on the platform. Lishan already mentioned our selling costs will be less because of just a single person getting a much larger opportunity. The transition will initially be pilot program, connected devices, ultimately higher penetration and adoption of the patient pool. on the platform, down the road, and plannable devices as part of it. These larger institutions tend to have a venture arm, whether or not they, whether they participate in one that they influence decision making, or they have one themselves, adds to the ability to finance this and become an anchor, a tenant, if you will, in a financing for this opportunity. All of the piece parts make sense. The smaller cancer centers that we have started with have demonstrated the effectiveness of the platform, the completeness of it, the ability to monitor patients. So all of the validation side of the technology has now been accomplished with the smaller institutions we've been involved with. It's now time to step up to these larger opportunities, which give us a greater opportunity for scaling and scaling with the recurring revenue. So I think that's what over the next two years you'll see more of this. And how fast that speed will be in terms of adoption remains to be seen here. But we are pretty optimistic about what could occur over the next several quarters for us.

Awesome. Thanks, guys, and congrats on the progress. Thanks, Frank.

Your next question comes from Ross Osborne with Cantor Fitzgerald. Please go ahead.

Hi, Ross. Hi. Good morning, everyone. So I understand the switch to larger centers, but would be curious to hear, is the biopharma opportunity still interesting, maybe the post-market study space?

Yeah, we didn't mention that because that's sort of the anchor of what we're pursuing here in the near term is what our expectation in terms of very near opportunities are with there. But yes, we are still actively involved. We have discussions with two major biopharma companies. Just to remind everybody, thanks for triggering the opportunity to talk about this, Russ. There's a separate, related, but separate opportunity to apply this platform technology in partnership with biopharma companies who are launching a large number of new cancer therapies, many of which are expensive and many of which are very intense in their therapy and can lead to complications and therefore can benefit from monitoring. And these conversations are focused around the phase four or the post-market surveillance aspect of this where a drug, a new cancer therapy is launched, but launched as it's cleared and launched, but only as a say third or fourth or even fifth line therapy for patients who failed other therapies because of the still to be proven balance between safety and effectiveness. And so there's a strong will and a strong interest with these companies to improve the the outcomes during those phase four post-market surveillance studies and the opportunity for a remote patient monitoring platform to monitor and to enhance the safety of these drugs by picking up changes in the patient before they result in complications. And so, yes, those are conversations that remain ongoing. There's a strong interest. There's clearly a synergy. They are also long lead time conversations. They're not going to happen overnight. but it does remain an important area of sort of strategic focus. But I would still emphasize the large academic centers as being sort of the linchpin of our near-term strategy.

Okay, great. And then sticking with Veris, would you provide an update on where you stand in development work on next-gen Port IO offerings?

For next-gen, you mean for Port IO? I just want to make sure I heard you correctly, Ross. Yeah, so Port IO is, we used the first generation device in the first in human study, and that demonstrated really excellent results with no complications. We have a second generation device that was in its late stages of development that enhanced some of the usability and structure, had sort of a built-in handle and a few other things. Fundamentally, the actual implantable portion was the same. a bit of additional work to get that through verification and validation testing and ready for use in a clinical study. So the We haven't decided yet as to whether we're going to proceed. I would say the most likely path, if we can secure financing for Port IO in the near term, would be to proceed with the IDE with the first-generation device and then transition into the second-generation midstream if that becomes ready. We're real anxious to start the IDE study. We've done a lot of time with FDA over the previous years. on fine-tuning a variety of preclinical work as well as various aspects of the study design. We think we're in a good position to get an approved IDE based on the first human results, which we were gearing to do when we paused the development work a year ago. So that's pretty much where we stand.

Hopefully that answers your question, Russ.

Yes. Thanks for taking my questions.

All right. Thanks, Russ.

Your next question comes from Ed Wu. with Ascendient Capital. Please go ahead.

Thank you for taking my question. My question is on the recently announced incubator that you guys are developing. What is your exact responsibility and any financial commitments for the incubator?

So the incubator is a wholly owned subsidiary of Fatbit. So it's 100% owned. Structurally, we're dropping those assets into the incubator. And we're seeking to, on a product-by-product basis, secure individual financing, just like you would with a freestanding incubator, seeking to secure financing for the development and regulatory clearance and commercialization of each individual product. And that would be in a separate subsidiary where there would be additional stakeholders involved. including anybody who finances that particular. So there's an opportunity to finance individual products. We have a partnership with Hatch Medical that incentivizes them to sort of help with that process on an individual product-by-product basis. But the incubator itself remains wholly owned by PadMed. Dennis, do you want to add any comments to that?

Yeah, so the game plan here is to have a joint venture with Hatch where they will provide capital. We will provide talent engineering knowledge and know-how about the market. And ultimately, once a decision is made about whether this is fully commercialized or you look to partner with a commercial entity, Hatch has the ability to broker that transaction as well. So the full service entity that can provide both financing, development work, the exit and brokerage, combined with the talent that we have internally to bring this to its full realization.

Just one point of clarification. So it'll be the entities, the PadMed entity or subsidiary of the incubator that will be raising We'll be raising the capital. Our partnership with Hatch is designed to help in all aspects, whether it's helping introduce to potential financial partners, angel networks, and also participate in the development and ultimately, as Dennis said, an area where they've had great success over the years in brokering commercial and strategic transactions.

Great. Well, thank you and wish you guys good luck. Thank you. Thanks, Ed. Thanks, Ed.

Your next question comes from Nick Sherwood with Maxim Group. Please go ahead.

Nick, thank you for taking my question. For the incubator, do you plan on being the majority owners of those products that are spun off of the incubator, or are you open to having minority stakes in Carpex or any of the other products?

I mean, our expectation is we have target financings for each of them. They're not huge. They're relatively modest in terms of the amount of capital required to get each of those products through regulatory clearance and commercial launch. And so we would not expect the financing into them to be dilutive so that Padmet ended up with a minority stake. So our expectation is that each of the products and subsidiaries would still be majority owned because we expect the valuations and the capital needs to kind of reflect that math. Um, they look over the longterm if they're once, once these are launched commercially and there's opportunities to partner with entities that are looking to deploy, um, resources to advance and accelerate a commercialization that, you know, we're open to whatever kinds of transactions, uh, are in the best interest of our shareholders. And that could include anything up to, um, uh, an acquisition of that, of that technology by a larger strategic. But I would say Dennis quickly, if you think otherwise in the, initial transaction, the initial financing to relaunch these products, the amount of capital that we're seeking to raise in each of these is modest enough that I would expect, really don't anticipate, PadMed losing its majority stake in any of these.

I agree. Awesome. Thank you for the detail.

And then my final question is, how far along in the progress for securing independent financing for the system to clear the path to FDA submission and the 510 clearance?

So we have interest. We've had discussions with various groups that have expressed interest in that. And what we've decided to do is to look to consummate our first to demonstrate that we can engage with a major large academic cancer center and sort of demonstrate and do a proof of concept that there's an opportunity to continue to do that. So our expectation is that once we do sign this first contract, then we will be able to engage with various folks that have expressed interest and consummated financing shortly thereafter.

Can you share with us the size of that target pool of the institutions? Yeah.

Yeah, I mean, there are obviously, you know, based on a, we've done this in a very systematic way and based on sort of the criteria that I'd outlined in that slide about NCI centers, magnet centers, a minimum of at least 20 oncologists, a minimum number of patients getting systemic infusion therapy and so forth. There are dozens of such centers across the country. We have a couple of dozen that are on our target list and about a dozen that we're making active inquiries with. I would say we have five or six where we've actually had active discussions. One of them, again, is very late stage, and a couple of others are – at least one other is pretty far along, and a couple others we're making progress with.

Hopefully that gives you some color. Yeah, that's perfect. Thank you for answering my questions, and I'll hop back into the queue. Great. Thanks, Nick. Thanks, Dave.

Ladies and gentlemen, as a reminder, should you have a question, please press star 1.

There are no further questions at this time. Please proceed. Lisa? Oops, sorry. I was on mute.

Thank you all for joining us today and for the great questions. And as always, we look forward to keeping abreast of our progress via press releases, conference calls such as this one. The best way to keep up with PadMed or Lucid News or updates or events is I would encourage you to sign up for our email alerts on both the PadMed and Lucid investor-related websites, and to follow us on Twitter and LinkedIn as well.

So thank you very much, everybody, and have a great day.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and as I say, please disconnect your lines.