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Good morning, and welcome to the PAVmed third quarter 2026 business update conference call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session following the prepared remarks. Should you require operator assistance, please press star zero. Please note, this event is being recorded. I would now like to turn the conference call over to Matt Riley, PAVmed's Vice President of Investor Relations. Please go ahead.

Thank you, operator, 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 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 SEC.

For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part One, Item 1-A, entitled Risk Factors in PAVmed's most recent annual report on Form 10-K filed with the SEC and any subsequent updates filed in the 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 the changes in expectations on 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.

Thank you, Matt Riley. Good morning, everyone. Thank you for joining our quarterly update call today. At our last business update call, we discussed the two-year process we undertook to permanently fix PAVmed's legacy capital structure and strengthen its balance sheet. The final step has been completed in the last couple of weeks, the cap table is now clean. Dennis will discuss this in more depth, our cap table now just consists of common stock and term debt. With that, we now truly believe that PAVmed is really well-positioned to execute on its founding mission for us to operate as a high-growth, diversified commercial life sciences company with multiple independently financed subsidiaries operating under our shared services model, and that we are well-positioned to new ops that come along.

I'll talk a little bit about how that has accelerated since the restructuring took place. As we described on our last call, part of one major initiative that followed this restructuring has been the relaunching of our medical device portfolio under Joe Virgilio. He's been on board now and has hit the ground running. He's actively focusing on advancing multiple medical device opportunities, including PortIO and the endoscopic imaging technology we licensed for Duke under the Octeris umbrella, as well as broader responsibilities across our entire medical device portfolio, utilizing his expertise on building and scaling growth stage businesses and raising capital for these individual medical device initiatives. As I mentioned, the pipeline has definitely opened up. We are evaluating business development assets that are being brought forth to us.

We're on our second major diligence exercise. We did pass on the first opportunity as attractive as it was, and we really do expect those to bear fruit and for us to bringing in commercial assets into our portfolio. Now let's move on to Lucid Diagnostics. Lucid is on the cusp of transformative milestones, including what we believe is impending Medicare coverage. As we discussed on our previous call, we're awaiting Medicare. We're a bit of frustration that this has dragged on, but our confidence has not wavered. I encourage you to listen to yesterday's Lucid business update call for greater details on this and other aspects of Lucid's business. As a reminder, PAVmed remains Lucid's largest shareholder. Lucid's progress and upcoming major inflection points will benefit PAVmed.

Just a couple of highlights from the call yesterday. In addition to Medicare, it's clear that we're not remaining idle on the Lucid front. As we discussed, the VA is off to a good start following us securing the Federal Supply Schedule and pricing. First orders are being placed. The path pipeline is being expanded, and we look forward to revenue along that segment. We also discussed our direct engagement with commercial payers that we have received positive coverage under 1 of the laboratory benefit managers, and that will be public soon. Of course, with all that, Lucid was also able to successfully raise a round of capital that extended our runway well into 2027. Now let's move on to Veris.

As we discussed in our last call, Veris is now well into the commercial phase of our strategic engagement with The Ohio State University. That process is well underway. The clinical rollout has been focused on the three clinical departments that had participated in the successful pilot study, and we're now on the cusp of adding additional departments according to our rollout schedule that OSU leadership developed in collaboration with us. As we announced last time, the EHR integration is now live. It's working well. And just overall, the feedback both on the clinical and the administrative side from our partners at OSU remains excellent, and we look forward to continuing to drive towards the targets that were established within as part of our strategic partnership with them.

Of course, a major focus right now is on the implantable physiological monitor. That development is progressing towards planned submission by the end of this year. As we discussed last time, we have a new, contract development and manufacturing partner firm. That partnership is going well. Velentium. The design and development efforts leading to design freeze and the transition to the final, pre-submission development work and testing is going well. A lot of the most recent efforts have been around the technical aspects of optimizing the battery life to get a full two year, two years of battery life. We've made excellent progress on that and look forward to continuing the work towards submitting that by the end of the year.

We're also continuing to work on this expanded strategic vision for the company that we spent a bit of time on discussing during our last call. That includes ultimately expanding our commercial efforts beyond our single strategic partner and a variety of initiatives that are focused on transforming Veris Health beyond simple remote patient monitoring into additional strategic areas. We're looking to leverage our commercial success at OSU to support this expansion into additional centers. The other aspects of the strategic transformation that we are working on, although within the limited confines of our capital resources today, are additional work on clinical support services and development efforts around AI-based projects beyond remote patient monitoring. With that, I'll hand the call over to Dennis for an update on the financials.

Thanks, Lishan. Good morning, everyone. Our summary for the first quarter were reported in our press release that has been distributed. On the next three slides, I'll emphasize a few key highlights from the first quarter, but I encourage you to consider those remarks in the context of full disclosures covered in our quarterly report on Form 10-Q as filed with the SEC. With regards to the balance sheet, you'll recall from our last investor update that in February we completed a $30 million Series D preferred stock offering. Concurrently, the company issued a $15 million senior secured note to an existing investor.

Company used the proceeds from these financings consisting of $22.3 million cash payment and a $15 million senior secured note with a February 2029 maturity date to redeem all of the outstanding shares of the Series C convertible preferred stock and fully retire its previously existing convertible debt. The $15 million replacement note nominally has a conversion price of $450 per share. It was done this way to protect the investors' tax status, but in every substantive sense, this is a long-term three-year note with interest-only quarterly payments and a balloon payment at maturity in February 2029. Upon shareholder approval obtained just a couple weeks back on March 27th, the newly issued Series D preferred were mandatorily converted to PAVmed common stock. As a result, the Series D preferred stock has been eliminated.

In connection with this financing, the company also issued $30 million in warrants, now convertible into common stock, which are callable by the company upon publication of a positive EsoGuard LCD. A couple things to point out on each of these balance sheets. Cash at March 31st is $6.5 million, which obviously is not inclusive of the expected $30 million to be received upon the warrants being exercised post-LCD publication, nor does it reflect the $2.5 million from the Veris warrants issued last year that are callable upon the Veris implantable physiological monitor being cleared by the FDA. The equity method investment balance of $36 million, that reflects the $31.3 million Lucid shares mark-to-market indicative of a $1.9 million increase in the quarter.

At present, as Lishan indicated, PAVmed continues to be the single largest shareholder of Lucid Diagnostics, with ownership of approximately 15% of the common shares outstanding. Although PAVmed no longer has voting control of Lucid, PAVmed, together with its board and management, still have a significant influence over Lucid with approximately a 25% voting interest. Shares outstanding today, including unvested RSAs, are approximately 7.3 million shares. The GAAP quarter-ending outstanding shares of 6.3 million are reflected on the slide as well as on the face of the balance sheet in the 10-Q. You'll recall GAAP shares do not reflect unvested RSA amounts. Next slide. Similar to past presentations, the P&L slide provides some GAAP and non-GAAP year-over-year quarterly comparisons.

On a pro forma basis and purely for illustrative purposes on this slide only, the Veris revenue and the Lucid management fee income are combined collectively more than $3 million per quarter simply to visually align PAVmed's income sources versus operating expenses. For SEC reporting purposes, the MSA income is a below-the-line item. Furthermore, for the first quarter, you see on the slide a GAAP net loss of $1.1 million before non-controlling interest and preferred dividends versus the prior year profit of $18.6 million. The driving force of this difference is the change in the fair value of the Lucid shares mark-to-market for each period.

There are a few other income and expense non-cash pluses and minuses that all relate to the accounting for the securities issued versus the securities redeemed, but are largely non-cash items together with out-of-pocket financing costs related to the Series D issuance and the conversion to common shares.

The GAAP net loss attributable to PAVmed, as reflected in the 10-Q and also shown in the press release, is $60,000 for the quarter and as disclosed prior to the effect of the preferred dividends of approximately $6.9 million. The result after the preferred dividends is a GAAP loss per share of $4.42 per share. Without the preferred dividends, the pro forma GAAP net loss per share would have been $0.04 per share. Next slide. With regard to the non-GAAP operating expenses, on this slide, you'll see a graphic illustration of our operating expenses over time as presented in more detail in our press release.

The first quarter non-GAAP OpEx of $5.9 million is above the average of the previous four quarters by about $1.1 million, which reflects about $300,000 in incremental Veris R&D expenditures and the balance in G&A costs that were incurred in connection with the recapitalization, financing, and other professional fees. OpEx increases moving forward are likely to be tied mostly to the R&D efforts to get the Veris implantable device submitted and cleared by the FDA, for which the 2025 Veris related financings are supporting. 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 touch-tone phone. Should you wish to cancel your request, you may press star two. Once again, that is star one should you wish to ask a question. Our first question is from Edward Woo from Ascendiant Capital Markets. Your line is now open.

Yeah, thank you for taking my question, and congratulations on all the progress. As you guys are evaluating possible new, you know, potential opportunities, have you considered looking at opportunities outside of North America or outside of the U.S.?

You know, we've always been open. We have historically gotten inquiries from, particularly in Europe on occasion. But I would say, and even Israel, the source of most of the technologies that are brought forth to us come from the U.S. Many of them come from academic medical centers. The founders of PAVmed, including myself, have a strong history in academic medicine and have maintained those ties so that that's been a catalyst for inquiries. I'll remind people that Lucid Diagnostics came from a partnership with academic medicine and the Octeris technology that we're launching is in conjunction with Duke and investigators at UNC. Also the ecosystem for physician-led innovation also is particularly robust here as well.

Those are the sources. You know, we're open to other sources, but the majority comes from within the U.S., including the ones that I've mentioned that we're actively pursuing. As I mentioned, we've did a deep dive on one asset, which we passed on and are in the process of doing another.

Thank you. My last question is, have you guys, you know, decided to focus, either on devices, diagnostics or therapeutics, or are you open to all three areas?

It's a great question, Ed. I think it's maybe a good opportunity to talk a little bit about the history of PAVmed and one of the things we're proud about, which is our willingness to be kind of bold and explore new areas. PAVmed was launched initially exclusively as a to operate in the medical device space. The initial assets were all focused on traditional medical devices. Because of the way we had set things up in the in its structure, and frankly, our mission was to look at, you know, to be open to viewing and looking at and evaluating opportunities across the life sciences.

When just a few years after PAVmed was founded, the opportunity technologies underlying Lucid were brought to us from relationships with an academic medical center. Even though this was in the diagnostic space, you know, Lucid obviously has a cell collection device, which is a medical device, but at the heart of it, Lucid is a diagnostic company. We chose to make that leap, and we're obviously happy we did. It continued on from there. When the Veris opportunity was brought to us, again, although Veris obviously has central to its future, is an implantable medical device, at the end of the day, the foundation for it is around digital health and software.

The Veris platform is rooted in that. Similarly, you know, we decided, okay, you know, there's a big future here in digital health and expanding the way physicians care for patients with a more aggressive monitoring. We chose to expand our horizons from there into digital health. Right now, digital health devices, diagnostics are on the table. I think I've said this on previous calls that we have been open to leverage our model, the shared services model and the resources that are concentrated within PAVmed that are available to its subsidiaries to therapeutics as well. One of our board members, [Sundeep] Agrawal, has deep experience on the therapeutic side.

We've relayed previously that we've looked at numerous assets in the therapeutic space. We just haven't pulled the trigger on them. We expect to continue to look in the therapeutic space. The challenges we had. The opportunity there is that we have the infrastructure with regard to clinical research, so the opportunity to acquire or license a therapeutic asset in a, you know, in a phase I or an early phase II situation. We have the resources to do that in terms of running the clinical trials necessary to create value there. The challenge previously, prior to this restructuring was that the availability of the capital needed to enter, you know, license fees and so forth to acquire assets.

Our capital structure just didn't allow it. Now that we're in a better position, we feel like, you know, we'll have an opportunity to look at therapeutic assets as well.

Great. Well, thanks for answering my questions, and I wish you guys good luck. Thank you.

Yeah, thanks, Ed. Great questions.

Thank you. Your next question is from Jeremy Pearlman from Maxim Group. Your line is now open.

Good morning, Dan. It's morning, Lishan. How you doing? Thank you for taking the question. While we're talking about this, the new relaunched device portfolio, how does that differ from the incubator you had set up? Is that or is it the same thing, just rebranded? Just curious.

Yeah, I guess fair enough to call it that. You know, The, it's a The slight difference is as follows, that, when we were, you know, as we were going through this, again, twoyear restructuring, ultimately recapitalization, you know, we were obviously motivated to start taking product lines that we had an IP and assets that we had that we had put on the, on the shelf during a [RIF], now three years ago. We're obviously motivated to do that, and what we sought to do initially was to put those assets, in that case, starting with PortIO in an incubator, and that gave us the opportunity to go out and spin assets off of the, out of the incubator and try to raise capital accordingly.

It was tough to do that, frankly. You know, we went through multiple angel processes and so forth to try to raise capital for PortIO. The structure just didn't work. You know, people who are, who are investing in super early-stage technologies really wanna know that there's someone dedicated, and articulating our shared services model in that, in that funding environment, did not yield the results that we were hoping for. Also we were not well-positioned because we hadn't completed the restructuring and the recapitalization.

Now that the latter is completed, we decided to tweak the relaunch of the medical device portfolio, learning the lessons that we acquired during the when we were trying to do this in the form of an incubator and the importance of having an experienced, highly skilled, per-person at the helm for the entire portfolio. That's why we went this route, and we were fortunate enough to be able to bring somebody with prior CEO experience and a, you know, deep experience in the medical device industry in the form of Joe to manage that relaunch.

He's working on PortIO, which as I mentioned, was the first technology that we were leading with when we were trying to do this in more of an incubator form. Now in the interim, we've licensed Duke Technology for imaging of dysplastic Barrett's esophagus and there'll be other opportunities in medical device, but very much integrated within the PAVmed infrastructure. Joe obviously has access to the full shared services model, but we have a dedicated person working on those technologies every day, and we expect that that will facilitate our ability to raise capital into subsidiaries that are advancing those individual medical device technologies.

Okay. Understood. Thank you for all that information. Maybe one more on this new device portfolio. What are some of the criteria you look for in a potential, you know, technology to license or to take under into this portfolio? Maybe just if you could share some, that would be helpful.

Yeah. Yeah. We've tried to be consistent with that, you know, from the very onset, from inception of this company. What's changed as we talked about with that is the expansion of our horizons into areas beyond our traditional medical devices. You know, it's a little bit cliché, right? It's technologies that address an unmet, you know, meaningful unmet clinical need. That's important. You know, this is a physician-founded company, and we feel like we have really good perspectives on identifying what that is and getting to the heart of that. We look for substantial market opportunities, which both Lucid and Veris have, and PortIO and Octeris have as well.

You know, our bias is towards a high margin, less commoditized product because our infrastructure we believe is better suited to that. Other than that, you know, we're pretty open and flexible, and I think that's one of our strengths is that we're willing to look at assets. Obviously, you know, more broadly beyond medical devices, you know, we have a substantial infrastructure through Lucid, the ability to partner with Lucid in the molecular diagnostics space. Many of the assets that we've looked at in recent recently have been, you know, really fascinating opportunities in the molecular diagnostic space. Those are the areas.

I think medical devices that fulfill the criteria that I mentioned, but also opportunities to synergize with the resources we have within Lucid on the diagnostic side. I guess I'll add one other thing, which is obvious with Octeris, that, you know, where we've evolved with Lucid and with Veris, our two clinical areas, gastroenterology. You know, Lucid is at the intersection between gastroenterology and cancer, oncology, and obviously Veris is focused on cancer. You know, those, you know, technologies that intersect with those spaces obviously would have an advantage and we'd have even more acute interest in those. I think the example of that is Octeris, which is, you know, an imaging technology that enhances the diagnosis of a soft tissue pre-cancer, right?

That obviously the synergies there with the work we're doing in Lucid should be obvious.

Understood. Okay, great. Just maybe moving to the Veris platform, how many patients have you signed up? I think in the past you mentioned you had a target enrollment by the end of this year of 1,000 patients. How's the ramp trending? Any headwinds you see or everything's, you know, smooth sailing?

Yeah. No, we're not gonna put forth specific numbers, but yeah, it's trending and on target. You know, the when we launched, once the pilot was completed and we launched, the commercial phase of our strategic e-engagement with OSU, they put forth a very detailed plan, rollout plan to get to their the target of 1,000 patients within the 1st year of the registry. Obviously, that trajectory is not linear, right? There were certain things at the beginning, particularly some of the delays with regard to getting EHR, you know, that took a bit more time than we had hoped for.

Overall, on target to hit that those goals. As I mentioned, just a bit more specifically, we're very soon going to expand to the next phase of departments within the Cancer Center. The first three departments that were launched in the commercial phase were the same departments that participated in the successful pilot. Now, the next phase are new departments that did not participate in the pilot. Again, all consistent with the, you know, well, laid out rollout plan.

Yeah, understood. I think you mentioned in your prepared remarks, the feedback has been really positive. Is there any feedback you were getting that you know, that's maybe not so positive that you're just using to incorporate to enhance the platform that you might in the next iteration?

Yeah, I mean-

That's a constant learning process?

Yeah, I would say the latter, right? You know, just if you think about it, what we're doing here to work within the capital constraints that Lucid has is to make sure that we're pushing in full steam ahead on the implantable because as we've said from the very beginning, the value proposition here is deeply rooted in both the software platform as well as the implantable. That's where the bulk of our capital resources is going right now.

We wanted to make sure during the period of time, that development work and the pathway to submission and clearance was underway, that we were engaging with a single large, you know, third largest cancer center to do exactly what you're saying, to show that we can create value, we can generate enthusiasm, locally, we can ramp up to very meaningful numbers for a center of this size, and to, you know, get the kinks out, you know, with regard to the EHR integration, for example. Other process issues about how does. This is not trivial, right?

You're taking patients who have, newly diagnosed cancer, entering into a system, complex therapies, complex clinical events that are going on, and how our platform communicates with the team. There's a lot to be learned in just sort of the real-world use of that. One particular example with OSU is that they have a dedicated call center. All alerts go through a call center. Just sort of how to manage that, how to staff that, how to get the flow of information correct in a way that optimizes care is, as you I would absolutely describe it like you said, as a continuous learning process.

We're focusing those lessons at one center so that when we are in a position, both from a development point of view, but also from a capital point of view to expand commercially, subsequent centers will benefit from the lessons that we've learned in this initial engagement, commercial engagement with OSU.

Okay, great. Then just maybe just the last question, just segueing right off what your last comment about, you know, further commercialization. What's, you know, maybe any sort of timeline you can give clarity on when you think that might be, when you could start? Are you still engaged with conversations with other large cancer centers or, are you sort of?

Yeah, we've been-

Potentially in that corner, as you're saying?

Yeah. Yeah, yeah. We have had conversations certainly with other academic medical centers. We've even had conversations with other entities that are engaged in the care of cancer patients, including, you know, sort of practice networks. There are a lot of PE-backed networks of oncologists out there. We've had plenty of discussions. We're unlikely to pull the trigger on, you know, on another major engagement until we're in a position to raise additional capital that we can allocate so we can do it right? The next phase with regard to commercialization will be aligned with our ability to raise additional capital to support an expanded commercial footprint.

That could happen prior to the submission and clearance of the implantable. We're not opposed to that. It really just depends on how, you know, how well we're positioned to fund commercial expansion.

Okay. Thank you so much for taking my questions, and I'll rejoin the queue.

Yeah. Great, Jeremy. Thanks a lot.

Thank you. There are no further questions at this time. I will now hand the call back to Dr. Lishan Aklog for the closing remarks.

Great. Thanks, operator, and thanks all of you for taking the time for your attention this morning. Obviously, really appreciate the questions and enjoy the opportunity to have substantive discussions with our covering analysts. Hopefully that you all found that enlightening as well. Just to kind of summarize, as we discussed, we believe we're really now in a strong position to advance PAVmed's strategic plan and original mission. Our two independently financed commercial subsidiaries, Lucid and Veris, are progressing well. They're both approaching key milestones. As importantly, as we've really discussed in some depth, the completion of our restructuring and recapitalization process has allowed us to start beginning to expand our horizons consistent with PAVmed's original mission.

Of course, this includes relaunching our medical device portfolio under Joe Virgilio and aggressively evaluating and pursuing additional assets and opportunities that align with our model and growth as just as we just discussed with Jeremy and Ed. With that, as always, we encourage you to continue to keep abreast of our progress. Please follow our news releases, these update calls, and continue to follow us on our website and through social media. As always, obviously, feel free to reach out with any specific questions. With that, I hope everybody has a great day, and thanks for your participation.

Thank you, ladies and gentlemen, the conference has now ended. Thank you all for joining. You may now disconnect your lines.