Good morning, and welcome to the PAVmed's Third Quarter 2024 Business Update Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Matt Riley, PAVmed 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 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 a list and a description of these and other important risks and uncertainties that may affect future operations, see Part 1, Item 1A entitled Risk Factors in PAVmed's most recent annual report on Forms 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 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. Take it away, Lishan.

Thank you, Matt, and good morning, everyone. Thank you for joining our quarterly update call. As always, I'd like to thank our long-term shareholders for your ongoing support and commitment. Before we delve into our recent operational highlights, I'd like to make a few high-level points. This has been a transformational quarter for PAVmed. Over the last couple of quarters, we've taken several critical steps related to PAVmed's corporate structure and balance sheet. This strategic transformation, which is now essentially complete, puts PAVmed in the strong position to fulfill its mission on behalf of its shareholders. As a result, PAVmed is now a sustainable vehicle that's capable of doing precisely what it was designed to do, deliver innovative medical technologies that address unmet clinical needs. The first step was the recent deconsolidation of Lucid Diagnostics, Dennis will provide greater context on this later on the call. But the most important thing this step accomplished was to preserve PAVmed's ownership in Lucid without having to absorb Lucid's operating losses on its balance sheet. The second step, which again, Dennis will provide further details on later, was the restructuring of our convertible debt, which will allow us to preserve our NASDAQ listing. So where are we now? PAVmed is now well positioned to operate as a diversified commercial life sciences company with multiple independently financed subsidiary operating under a shared services model. Our portfolio includes Lucid Diagnostics, our publicly traded diagnostics company, which, of course, remains PAVmed's strongest asset. Veris Health is our digital health company, which offers a Cancer Care Platform that enhances personalized cancer care. And our incubator PMX is advancing promising technologies in our portfolio, starting now with the PortIO, implantable intraosseous device. Our shared services model allows us the flexibility to bring in new assets and technologies in…

Thanks, Lishan, and good morning, everyone. The summary of financial results for the third quarter were reported in our press release that has been distributed. On the next four slides, I'll emphasize on 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 as filed with the SEC. With regard to the balance sheet, as you can see from the slide, things look very different comparing the third quarter to the previous quarter as a result of the deconsolidation of Lucid from PAVmed. That comment will also hold true for the P&L once I get there as well. Before I dive into the details explaining financial results for the third quarter, it's best to provide some insight as to the master plan and the intentional steps that management and the Board have taken and are continuing to take to both maintain the NASDAQ listing and also move PAVmed to be on a more stable financial footing as I'll demonstrate two slides after this one. On October 29, in a formal hearing, we presented the NASDAQ a two-step plan to satisfy the continued listing for the NASDAQ capital market and therefore, maintain our NASDAQ listing for at least the next 12 months. Structures in place that we believe may allow us to sustain compliance for much longer. The minimum requirement that we had to demonstrate to NASDAQ was that the company could achieve GAAP stockholders' equity greater than $2.5 million and be able to sustain that minimum for more than 12 months. Our starting point was a deficit of $18.6 million as of June 30. We were notified last Friday night that NASDAQ accepted that plan, which I'll describe in a…

[Operator Instructions] Your first question comes from the line of Ross Osborn with Cantor Fitzgerald. Please go ahead.

Good morning, Ross.

Hey, guys. Thanks for taking our questions. Good morning. Maybe starting off, could you share any learnings from your work with The Ohio State?

Sure. Yeah. So just to catch folks up, we've had a really strong engagement with them now coming on, I think, probably about a year since we initially engaged with them. And we launched a -- we entered into a memorandum of understanding with the -- this is The James Cancer Center within Ohio State University Medical Center. It's the third largest cancer center of the country and an NCI-designated comprehensive cancer center. We entered into a memorandum of understanding with them earlier this year that called for a first step of a pilot program with the institution that ran through the summer. It enrolled 100 patients on the Veris platform and has actually now been extended for another 30 patients because one of the clinical sites was -- that wasn't a participant in the initial pilot, was honestly clamoring to be a part of it. The pilot was highly structured. It had KPIs of metrics with regard to patient, physician satisfaction and other key parameters and that's been completed and was, frankly, widely successful with great feedback from all corners of the institution, from the administration to the leadership. So we're now in the process of having discussions with the leadership to follow up on other aspects of the -- that were articulated in the Memorandum of understanding, which would sort of fall under the broad umbrella of a strategic partnership with escalating commercial engagement. So those are active discussions right now. There's a lot of activity with -- between the two -- between us and the institution at telling the story of their experience with this pilot and how the various platform is able to enhance and personalize the care of those cancer patients. And this engagement, our goal is for this to serve as a template as we enter into similar discussions with a pipeline of some of our academic cancer centers around the country.

Okay. Great. And then I guess maybe regarding OpEx for PAVmed. How should we think about that in the coming quarters? I'm assuming maybe pretty steady ahead of any incremental financing?

Yeah. So as we presented in that pro forma slide, you can see the kind of the normalized OpEx moving forward. That's our baseline. As we generate the direct financing either in Veris or in PortIO, that will be the gating factor to now incur the additional operating expenses. In Veris' case, moving it towards the implantable. That's probably a couple of million dollar efforts over a six to eight month period of time. And likewise, in PortIO, with the financing, it's probably about a $4 million expenditure probably over a 12-month period of time. And it is those aspects of change in funding that will drive where the OpEx goes. But otherwise, the pro forma that's illustrated on that slide is the baseline and should continue going forward is a likely representation of the fourth quarter and with the funding, the changes that may occur in 2025.

Very helpful. Thanks for taking our questions.

Thanks, Ross.

Your next question comes from the line of Anthony Vendetti with Maxim Group. Please go ahead.

Anthony, good morning.

Good morning. Good morning, Dennis. Good morning, Lishan. Just a little more follow-up on the Veris program. So assuming you get the financing and so forth, is it still on track for submission with the FDA on a 510(k) basis before the first half of '25?

Yeah, I think it may -- we've -- because of the delay in closing the financing, which was necessary as a result of the restructuring and just sort of wrapping up the efforts to fix the listing requirement, it may leak into the early half of the second half, but hopefully not by much.

Okay. Great. And then in terms of the financing for the PMX incubator, you said you have lined up some financing already. How much total funding…

Let me clarify that. So we've engaged with an angel network that -- and we have a turf sheet in place, and Dennis explained the terms of that, which are attractive to raise $4 million, which covers the expenses of the second-generation PortIO as well as completing the IDE clinical trial to commercialization. That was at a $42 million pre-money valuation. So that term sheet has been finalized and negotiated. We are at the very end, they have a very rigorous diligence process, and we're at the very end of that process. And we expect the diligence report to be wrapped up soon. And then the network will go to its individual members and start circulating the opportunity and start raising the cash over the -- and collecting subscription agreements over the -- in the near term.

Got it. Okay, perfect. That's great. All right. I'll hop back into the queue. Thanks for that color. I appreciate it.

Thanks, Anthony.

Thanks, Anthony.

And your next question comes from the line of Ed Woo with Ascendiant Capital. Please go ahead.

Yeah. Congratulations on all your progress. My question is on The Ohio State pilot. What does the competitive slate looks like? Were you guys competing against other diagnostic, remote diagnostic devices? Or did they have nothing before that?

So the cancer center has not engaged with a digital health platform specific for cancer. I believe there are other products more that are being used broadly and they're actually in the process of trying to figure out what generalized remote patient monitoring platform they're going to use for the broader institution. But my understanding is this is the first foray of the cancer center, which is our direct partner in the digital health care platform arena. And certainly, our -- during the pilot, we were the only product that they were utilizing.

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

Thanks, Ed.

Thanks a lot, Ed.

And there are no further questions at this time. I would like to turn it back to Dr. Lishan Aklog for closing remarks.

So great. Thank you, operator, and thank you all for joining today. I hope you leave today with a strong sense that PAVmed has taken the decisive steps that it needed to, to solidify and stabilize our corporate structure and strengthen our balance sheet. We really do look forward to a bright future, positioning PAVmed as a sustainable, diversified commercial life sciences company with multiply independently financed subsidiaries. I do encourage you to stay connected with our progress through our news releases, periodic calls such as this and signing up for e-mail alerts on our IR website, and you can also follow us on Twitter and LinkedIn. So again, thank you for your continued support. And as they say, watch this space. Have a great day.

Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.