PAVmed Inc. (NASDAQ:PAVM) Q3 2022 Earnings Call Transcript

PAVmed Inc. (NASDAQ:PAVM) Q3 2022 Earnings Call Transcript November 15, 2022

PAVmed Inc. misses on earnings expectations. Reported EPS is $-0.29 EPS, expectations were $-0.26.

Operator: Ladies and gentlemen, greetings and welcome to the PAVmed Inc. Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Adrian Miller, Vice President of Investor Relations. Please go ahead.

Adrian Miller: Thank you, operator. Good afternoon, everyone. This is Adrian Miller, Vice President of Investor Relations at PAVmed. 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, President and Chief Financial Officer of PAVmed. The press release announcing our business updates and financial results is available on PAVmed’s Web site. Please take a moment to read the disclaimer about forward-looking statements in the press release. The business update press release and this conference call, both include forward-looking statements and these forward-looking statements are subject to known and unknown risks and uncertainties, 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 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 Form 10-Q filed with the SEC and subsequent updates filed in quarterly reports on Form 10-Q and in subsequent Form 8-K filing. 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 those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements.

With that, I’d like to turn the call over to Lishan Aklog. Dr. Aklog?

Lishan Aklog: Thanks, Adrian and thank you all. Good afternoon for joining us on this PAVmed’s quarterly update call. I would like to first start by thanking our long-term shareholders for their ongoing commitment and support. You’ll note that this quarter, we’re using a new format with a webcast in response to feedback, including one of our long-term investors in Boston. We’re really happy that we’ve done this. So far, the feedback from the recent webcast yesterday has been uniformly positive. I’ll remind you, speaking of Lucid that will present a tear down update on Lucid today, and encourage those of you who want to seek more details to review the webcast as yesterday’s dedicated listed Update Call and that will be available for a week on the Investor Relations page on Lucid’s Web site.

So during this past quarter and the recent weeks, our team has continued its relentless focus on executing on our long-term strategy and our vision to build a high growth diversified medical technology company. Lucid, Veris and technology teams are all delivering results which are steadily advancing us towards that goal, and are doing so I’m proud to say it’s on schedule and under budget, as we continue to keep a close eye on cash preservation to protect our long-term position. So let me start with a few quarterly updates, starting with Lucid. As we reported yesterday, EsoGuard testing volume increased 20% sequentially quarter-to-quarter, and 436% annually to 1,088 tests in the third quarter. We now have 13 Lucid Test Centers operating in 11 states and we plan to open three more during the fourth quarter.

The laboratory is operating independently and we demonstrated enhanced quality and efficiency metrics on yesterday’s call. And as we noted, we started to receive payments recognizing revenue on each of our claims started submitting in August. Very excited that the various cancer care platform has progressed well. And it is now proceeding towards initial launch later this year. All of the key pre-commercial development projects — products, including Mercury, CarpX ultrasound, and EsoCure are all progressing well, ultimately towards design freeze development, testing and regulatory submission. And as I mentioned, from our overall balance sheet point of view, we’ve been able to continue to be active and execute our growth strategy, while preserving cash and .

Just a couple of introductory slides on PAVmed. PAVmed is a diversified commercial stage medical technology company. We started in the medical device space, but we’ve diversified over the years to include both diagnostic sector and digital health sectors. Corporate structure currently consists of two, by majority owned subsidiaries which is diagnostics and publicly held company in the medical diagnostic space and various health or digital health company which remains privately held. PAVmed model has evolved into a shared services model where PAVmed provide comprehensive shared services to its subsidiaries and other internal business units that you can see on the slide, with everything from administration, HR, Finance, product development, I see regulatory manufacturing clinical research and others are provided at a PAVmed level on behalf of the subsidiaries and business units and that provides us with a variety of key benefits for the company and we believe for our long-term shareholders in terms of economies of scale, facilitates diversification that impact on our cost of capital and also our growth potential.

PAVmed’s current portfolio can be divided into the commercial products, pre-commercial products that are on a clear path towards commercialization, and then projects which remain in the R&D realm. On the commercial side, we have two Lucid products, EsoCheck. We continue to do commercial cases with the first generation complex device. On the pre-commercial side we have the CarpX ultrasound product. We have the two Veris products, both software platform, the cancer care platform as well as several iterations around Veris smart port and then EsoCare, which is our Esophageal Ablation Device which is complementary to with our EsoGuard and EsoCheck product. We also continue to work on R&D projects, our NextFlo and PortIO, and I’ll touch on this a little later.

Just a few summary slides to get on Lucid, which are — you can pair down from our update yesterday. As we mentioned, our growth of the testing volume for EsoGuard testing has been continued to steadily increase, 28% from the last quarter. This growth has been driven by combination things, increased personnel in the field which I’ll show you as well as improved sales training and data driven processes. And I’ve said repeatedly that we view this as a mid throttle strategy, we’re not full throttle yet. We want to generate sufficient test volume to demonstrate our ability to grow testing volume and to demonstrate physician adoption as well as to generate claims history, which is important for long-term contracting in our contracting with payers.

I described this in a bit more detail yesterday, but briefly, the volume has shifted to include about 22% of patients that have been tested were tested or performed at satellite Lucid Test Centers where our own nurse practitioners, co-located at a physician practice and we’re excited about the expansion opportunity that comes with that new model. I mentioned, we continue to steadily grow according to plan and expand our sales team can see here we were up to 37 professionals on the team. And as we’ve described over the last couple of quarters, our plan is to continue that growth and plateau at a level of approximately 58 sales professionals. That time period has been pushed into the first quarter at the end of this year and we expect to reach that number by mid first quarter.

The plan from that point on is to use that 16, but we believe we’ll be able to continue to drive test volume growth through an increased experience or medium rep right now has only been in the field for a month or two. And we believe it takes 4 months to be fully effective. Similar story with our Lucid Test Centers. Our goal is we have 11 states covered right now with 13 centers, we look to expand that with an additional three by the end of the year. And that won’t get us to 16. And again, we are planning this to plateau there, not planning on opening additional test centers and allow the current drivers of growth to support that work with our expanded sales infrastructure. Just a couple of comments about the laboratory. We’ve — those of you know we’ve taken over the operations in the laboratory starting in February.

And we’ve seen some dramatic improvements and many parameters, operational parameters and quality parameters, showed some more detail yesterday, perhaps the most relevant one from the point of view of patients and physicians is that we have the turnaround times now down to a record low of just under a week. And as I’ve also described in more detail yesterday, the process by which we are able to submit claims has improved and we started that process in August. We have about 2,000 plus claims that we’ve held since the laboratory transferred to us in February. And we’re in the process of submitting those claims, and we actually have started to receive even though that process started in August, claims paid in the past quarter. Just one comment about — couple of comments about Medicare.

If you look at the payer mix there you can see that our payer mix is heavily weighted towards private payers, about 11% are Medicare. With regard to the Lucid — with regard to the LCD, as you may recall, back in the spring, we had a fairly intense amount of activity with the publication of a draft, local coverage determination, LCD; and a flurry of activity around the public comment period. Now that public comment period is over, we simply wait until MolDx, entities and affiliated with the medical — Medicare Administrative Contractor to get around to reviewing the responses and responding to them. I just want to make one thing clear that there may have been some confusion on the call earlier as have been reports that MolDx was not engaging with us.

And that’s just not the case, we actually have had calls with MolDx, so we’re going to call to discuss our clinical utility plan. But with regard to the LCD process, and that is not a interactive process, you just simply wait until they complete their review and then we will have the opportunity to respond after they published an updated LCD. On the private payer side, we continue to have conversations with private payers, but ultimately for us to have meaningful conversations we need two things to happen. We need increased claims history which we are just getting started to — starting to do. And also clinical utility, which we’re starting to collect. But as I mentioned so far we have had out of network payments that are getting paid at the full 50% to 60% out of network benefit and respects, the target list price that we submit and those payments are coming in at about $1,200 to $1,400 which is gratifying.

And as I discussed yesterday on the manufacturing side, we’re really happy to transport our manufacturing of EsoCheck for high volume manufacture. And we’re extracting immediate benefits with regard to decreased manufacturing costs as well as capacity and scalable, long-term scalable capacity. Let’s move on to Veris Health. Veris Health is a digital health company that’s developing a cancer care platform that combines patient engagement with smartphone and connected devices, along with an enhanced cancer care platform that the clinical care team can use to collect to view data on patients who have cancer, who are under their care and respond accordingly. And to do so in a way that’s integrated with the electronic health record. The long-term plan is to incorporate smart device physiologic monitoring with an implantable form that has biosensors that allow for physiologic monitoring.

The plan that we’ve described in previous call as to first launch will we referred to Veris Solar, which is the cloud connected platform, software platform in conjunction with various boxes connected Bluetooth enabled devices. Veris Mercury is our first effort to deliver an implantable smart port. This is a modular device that has an implantable physiologic monitoring device with a traditional vascular access cord. And then the final stage will be to have a fully integrated smart implantable vascular access network with the geologic and physiologic monitoring. So as I mentioned, and I’ll talk a little bit more detail now. We are on the verge of launching the Veris platform by the end of this year on schedule, as we have previously described.

So you can see on the left there, this is what we’re launching our software platform, which has been completed and is completed testing and is now ready for launch. Along with Bluetooth connected health care measuring devices, you can see the activity monitors monitor, blood pressure cuff, I think digital thermometer. And those are all Bluetooth connected to a hub that the company provides and allows those — that data along with patients symptom reporting to be transmitted through the cloud to the physicians platform. On the commercialization side, we worked extensively with Deloitte Consulting to establish the market dynamics and to own our commercial strategy. We’re quite excited about this model. It’s a subscription based model with revenue — with recurring revenue.

The practice will pay Veris a fixed subscription fee per seat. And they’ll be able to build with remote patient monitoring, while RPM codes, which I’ve shown here which actually are established. They’re not under threat of any revision, not a COVID era process. These are codes that have existed. And so really, from a reimbursement point of view, that’s established. There’s nothing for us to wait for there. There’s also — our platform will also facilitate telemedicine billing, which the physicians will have the opportunity to build as well. Overall, this gives them an opportunity to have a significant net contribution margin, again, based on this existing reimbursement. An additional area that we’ve learned at our initial engagements now with potential clients is the new enhancing oncology model, which is a CMS program that I won’t go into a lot of detail on, but basically uses incentives with regard to certain aspects of quality of care that would be enhanced with this kind of remote monitoring to provide financial incentives for practices that can actually be significant — that can add significantly to the practice revenues.

We’re targeting the full range of oncology care, oncology practices, large cancer centers, integrated health networks, a bit of an early emphasis on rural practices, looking forward to — for obvious reasons that we believe that remote patient monitoring will be beneficial. And we have our commercial team that’s already been — have that already been utilizing demos to interface with such practices and with potential clients. The other aspect of this, as you might imagine, is getting started with customer integration. So when we launch a site, there’s a whole slew of things that have to be done to make sure that the practices, software, their EHR and so forth and complete fully integrated with our system. We hired a really talented and experienced person to lead this effort.

He led customer engagement and ethics, the large electronic health records company and they’re doing a great job so far with us with establishing that infrastructure for customer integration. Our initial interactions with the — with potential clients has been that there’s a very, very strong focus right now on tools that can enable remote patient monitoring and everything that we’ve — all the feedback we’ve received so far has been quite positive and we look forward to getting our first contracted customer by the end of this year and officially launching this product. Now with an overview of the other products within our portfolio. As I mentioned, we still continue to perform complex procedures utilizing the key opinion leaders at a low level to continue to provide us with procedural and product improvements.

But as I’ve described previously, all of our efforts for a longer term expanded commercial launch are focused on the CarpX ultrasound device, that product is making good progress through its design and product development phases. We’re starting to do cadaver work and getting and starting to get images that demonstrate that we’re able to using this device to actually see the anatomic structures in the carpal tunnel and position them in a way so that the cutting can be done under direct ultrasonic measurement. So that’s progressing well. The second area of focus on the pre-commercial products is that there are smart port, the middle of what we refer internally as Veris Mercury, which is the combination of the implantable cardiac monitor with an existing traditional payment board that’s also progressing well.

We’ve had multiple interactions with FDA to understand and make clear what our preclinical testing will need to be for an FDA submission. We’ve engaged several high caliber outside contract manufacturing partners for the various electronics and enclosures and so forth. And again, and also animal work. And so again, that’s moving forward on track and looking forward to getting quickly to design freeze and moving towards the work that’s required for regulatory submission. Very much a similar story with EsoCure, if you recall it. EsoCure is a device that was looking to compete with the Medtronic device for ambulating dysplastic Barrett’s Esophagus. So it obviously it has synergies with the EsoGuard, EsoCheck products. It uses direct thermal energy instead of radiofrequency.

And we are also making good progress with the — both the catheters, the console electronics, all the mechanical aspects of it had multiple animal studies which have shown really promising results and including indirect head to head comparisons with there. So again, on target, on schedule to advance through design freeze and ultimately towards . A few comments about our R&D projects, those of you who’ve been involved with PAVmed for a long time, now the next one, just a brief recollection of that history. We had hoped and planned to have NextFlo actually complete the pre-submission testing and go for regulatory submission. In the first half of this year, we were getting really good regulation of flow, which was the whole point of this technology.

But we encountered some technical challenges during the — on repeatability during the last eight stages of testing. And that required us to kind of go back to the drawing board and relegate NextFlo back to being an R&D project. We’re still very committed to the concept. We think it is a good market opportunity here. And there’s a lot of activity right now in the R&D side, but right now, we’re still unknown what the solution will be and when we’ll be able to bring this back on to a pre-commercial path . PortIO, it is our Implantable Intraosseous Vascular Access Device. Again, we — that remains an R&D project. We have first generation device that continues to undergo first in human testing in Colombia that’s going well. The device works, we’ve had no complications associated with IT and we’re continuing to expand the number of patients.

Our long-term plans with this depends a bit on a revised regulatory strategy, our new — had a regulatory new VP of regulatory quality has engaged with us on a process to develop a more streamlined plan than we had previously thought we relegated to, and depending on how that goes, we may move this up into the pre-commercial realm after we’ve completed the first . So with that, I’ll end and I’ll hand the reins over to Dennis to give us financial update.

Dennis McGrath: Thanks, Lishan, and good evening, everyone. You see in front of you the balance sheet, so our summary financial results for the third quarter reported press release that was published earlier today. On the next three slides, I want to emphasize a few key highlights from the quarter, but I encourage you to consider those remarks in the context of a full disclosures covered on our quarterly report on Form 10-Q that was filed with the SEC yesterday afternoon, and is available on our Web site. So as you can see here, cash, the sequential decrease was $8.4 million. Vendor payables had a $3 million sequential decrease when considering accounts payable and other recurring accrued expenses. Convertible note, a net increase of $6 million driven by $10.2 million net proceeds from the issuance of an additional convertible note.

It was offset by $5 million of principal converted to equity related to the April 2022 note. As mentioned yesterday, the committed equity facility from Lucid stock issuance proceeds for the quarter were $1.8 million, most of which we had already reported to you as part of our update in August. Shares outstanding for PAVmed including our invested restricted stock awards as of today is 93.2 million shares. And as also mentioned yesterday, Lucid is now S3 eligible and is previewed with everyone previously and similar to what we have previously done at PAVmed, the Lucid Board considers it good governance to have a shelf registration with an embedded ATM on file with the SEC and Lucid will plan to do so in due course. Slide 18 here compares this year’s third quarter to last year’s third quarter on certain key items.

Trust you’ll review the information and my comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly the non-GAAP information. Revenue for the quarter reflects 39 EsoGuard tests at an average payment rate of $1,945 per test. The rate is slightly higher than the 1938 Medicare rate and we received one payment closer to our ASP of $2,499. And the Medicare rate that skewed things slightly higher. The prior year reflects the fixed monthly fee received from the third-party lab that Lucid use before setting up our own lab earlier this year. Revenue recognition, a key determinant is the probability of collection. We’ve mentioned this multiple times in the past. For the vast majority of Lucid patient out of network claim submissions means revenue recognition occurs when the claim is actually collected versus when the patient report is invoiced and submitted for reimbursement.

As you’ll see in our 10-Q, this is called variable consideration in the jargon of gaps ASC 606 revenue recognition which we all have to live by those guidelines. And presently there is insufficient predictive data to recognize revenue when invoiced. Our GAAP loss is slightly higher about 2% higher and our non-GAAP loss is slightly lower — about 5% lower for the third quarter due to the effect of higher non-cash charges in the current quarter related to convertible debt. Most comparisons are sequential comparisons. Our non-GAAP loss per share is $0.15 for the third quarter compared to a loss of $0.17 per share in the previous quarter. So Slide 19 here is a graphic illustration of our operating expenses as presented in detail in our press release.

The total GAAP and non-GAAP OpEx was relatively flat sequentially. The cost of revenue primarily consists of EsoCheck devices, lab supplies and fixed lab monthly or facility costs. And it’s now being presented in our 10-Q as operating expense consistent with the practices of other diagnostic companies. Sales and marketing was slightly lower about 5% sequentially. G&A also decreased about 9% sequentially, and some of that reflects an allocation of about lab costs in the prior quarter as no revenue was recognized in that quarter, and therefore the typical cost of revenue type expenses are reclassified to G&A in that previous quarter. And then lastly, R&D decreased 8% sequentially. So with that, operator, let’s open it up for questions.

Q&A Session

Operator: Thank you. Our first question comes from the line of Frank Takkinen from Lake Street. Please go ahead.

Charlie Montang: Good evening. Hi, guys. This is Charlie Montang on for Frank. Just a couple of quick questions for me. First on the Lucid front. I heard your comments about the plateauing centers, I assume that does not mean indefinitely. Can you maybe just talk, what you’re looking to see before reaccelerating openings, and maybe any feel for timing around that.

Lishan Aklog: Sure. Let me just start by emphasizing one thing is to keep hammering this point. That the Lucid Test Centers support the growth, they’re not drivers of growth, right. They’re not — they don’t generate actual activity. They’re available for tests that are ordered by physicians through our sales and marketing process to actually perform tests. And also, just want to emphasize one thing real quick, Charlie, before answering a while, which is that we have now expanded our use of the satellite Lucid Test Centers where our nurse practitioners can be more mobile and work within those . So the plateauing of the Lucid Test Centers and the its part of the same strategy of plateauing our sales force altogether. And this is something we described in a bit more detail, believe it on the last quarterly call that as part of our efforts to be cautious with regard to cash preservation, we set a target for both of those that we thought would give us — would have given us critical mass with regard to the sales team, and then with sufficient support with Lucid Test Centers to support the sales team, where we could continue at a fixed level to drive growth through increased effectiveness of the sales force as they get more time in the field, and so forth.

All of that is really driven by this mid — mid throttle strategy, right. We want to have enough activity, so we can demonstrate ongoing sales growth to get the word out to continue our momentum with physicians and physician adoption. Well, we need to continue that growth as well to generate claims history, which is a critical step, one of its critical steps in engaging private payers, for in network contracts, but to do so cautiously at a mid throttle level, because we still have we still are not at the point where we have predictable reimbursement. So the answer I think, for the last part of your question is, is this a permanent thing? No, it isn’t. It’s really just a — where we’re pausing at a level that we think we can, that we feel confident that we will allow us to continue to drive testifying growth, but while keeping our costs in check, and that pivoting from that will be a function of what we see with regard to both the trajectory of other network payments and the percentage of the Lucid tests that are paid out of network.

Again, we’ve emphasized, we’ve been quite happy with the payments that we’re getting, we just don’t know — we just don’t have enough of the sample size yet to know what percentage of the test will generate that volume. And then of course, as we collect clinical utility data and engage with private payers, we’ll start seeing some in network payments as well. So until we — so it’s really a holding pattern that we believe will continue to still drive test volume growth. But the holding pattern until we get with regard to the infrastructure until we get more predictable reimbursement numbers, we just think that’s the appropriate sort of prudent thing to do from a cash preservation point.

Charlie Montang: Great, okay. Thank you. Thanks for clearing that up for us. My other question, just looking at the balance sheet that looks good. Last quarter, you call about modulating spend across your asset portfolio outside of Lucid with a focus on the most near-term and largest opportunities. Have your capital allocations changed at all since then? Or should we continue to think the order of CarpX.

Lishan Aklog: It’s exactly what we were described and we stuck to that plan. And you can see the — we are seeing some savings already on the R&D side. So it’s it is entirely at this point from the non-Lucid. Now let’s just split it into two for now. We have obviously have the commercial products with Lucid. Very soon we’ll have the commercial software product with various — the various solar software platform. So that that’ll be out in the commercial realm. When it comes to the investment of resources. capital allocation, as you say, into the product portfolio. The focus is heavily and remains the same on those three products. So the three products being the ultrasound version of CarpX, the first version of an implantable Veris device, that Veris Mercury product and the EsoCure esophageal ablation product.

So those that is where we are focusing our resources and capital allocation. But we’re not shutting, we continue to make some effort on the two research projects which I described. But those are relatively modest investments. It’s pure R&D work at this time. And then as we talked about last time, we have rationalized and put on the backs — on the backburner a number of lower priority, lower yield, we believe, higher risk projects that we’ve been working on and those remain on the .

Charlie Montang: Okay, great. Thank you very much. And if I can just one last quick question. You spoke to commercial agreement with increase in May. Can you give us an update around that contract and call out whether or not you’ve received reimbursement under that contract? And if so, kind of at what level?

Lishan Aklog: Just to remind you that even though we had — that was the first example. But since then we’ve reported on multiple, I believe we have seven, correct me if I’m wrong, seven or eight, similar secondary PPO contracts. We have not broken on that data and we’re not reporting on those individual on sort of individual plans at this point, that would be sort of too granular at this level with the sample size. I think, well just suffice it to say that, you saw we have 39 payments in this quarter, those are a mix of a variety of private payers. And the — Dennis gave you the data on the average payment, which was 19, just a bit over $1,900. And also that the other network payments that are coming in are $1,200 to $1,400.

So as we get higher more volume, and we have a sample size, that’s large enough, we will certainly be in a position to kind of break down where that — where those payments are coming to, whether they’re from secondary BPOs, from other network with traditional payers, eventually with Medicare and so forth. But I think it’s a bit premature to break. Dennis, would you like to add anything to that?

Dennis McGrath: No, I agree. It’s too early to kind of give any kind of directional information that’s reliable to be able to create some kind of forecast based upon the information we’ve gotten so far. It’s just too early in the submission process and the collection process.

Lishan Aklog: I mean, the bottom line, Charlie, is that the 39 payments test that we submitted in August and got paid before September were private pay. So and it was a mix of different payers and we will look forward to increasing that, and perhaps at some point breaking that down.

Charlie Montang: Okay, great. Thank you very much and thanks for answering my questions. I’ll hop back in the queue.

Lishan Aklog: Thanks Charlie.

Charlie Montang: Thank you.

Operator: Thank you. Our next question comes from the line of Ed Woo from Ascending Capital Markets LLC. Please go ahead.

Edward Woo: Hello. Yes, thanks for taking my question and congratulations on the progress. I know you are very focused with your capital allocation right now. But what are you seeing out there in terms of the M&A space and opportunities for adding new products into your portfolio? Have you seen valuations come down significantly to the point where you’re seeing interesting opportunities out there or valuation still all over the place?

Lishan Aklog: The answer is yes. And I probably appreciate you asking that call because I — there’s not a lot that I can talk about sort of directly, but there’s a lot of — there are a lot of opportunities out there. And as it’s historically been the case, we get to see a lot of opportunities within the space and we get to evaluate them. And you’re right, I mean, the markets are there are companies that are tight for cash, and for a variety of other reasons are looking to partner or to be acquired and so forth. So there’s a lot of activity there. Nothing to report yet. But we will obviously let you guys know when we — if and when we cross the threshold with any of the opportunities that we’re looking at.

Dennis McGrath: But let me just reiterate one other point I made last time, which is that our cash preservation stances is important. It’s important that we maintain our runway and protect our long-term interests. But I’ve also said repeatedly that we’re not going to sort of violate our core DNA of this company, which was to pounce on attractive opportunities, as we say, just like we did with Lucid and with Veris. The profile of what that would look like is going to be — it’s obviously a bit different now than it would have been 2, 3 years ago. And we are looking at opportunities with a very close eye on the opportunity for them to either be synergistic with our current portfolio in some way and to not be a capital drain and to be accretive in some capacity in the near future. So those are the criteria we look at. We have opportunities when we have looked at, we continue to look at the world. We’ll let you know when we .

Edward Woo: Great. Well, thank you and good luck.

Lishan Aklog: Thanks, Ed.

Operator: Thank you. Our next question comes from the line of Anthony Vendetti from Maxim Group LLC. Please go ahead.

Lishan Aklog: Anthony, good evening.

Anthony Vendetti: Good evening, Dennis. Hi, Lishan. How are you?

Lishan Aklog: Great.

Anthony Vendetti: Wanted to just dig a little deeper into the commercial launch for Veris by the end of the year. Can you talk a little bit about that particular business model? And what the pipeline of potential customers looks like at this point?

Lishan Aklog: Yes, well, let me start with the latter. So the pipeline of potential customers are really the full spectrum of oncology practices, we have — Q3, we were really fortunate that we have a good relationship with the Lloyds and we did an extensive market dynamic marketing and market analysis with them. So we have a really good understanding of where patients get their care for their cancer, and it can vary anywhere from relatively small, private practices to larger practices, even mega practices, as well as cancer programs that are affiliated with moderate sized community hospitals all the way up to the big academic medical center. So really all of them are our targets for us. As I mentioned, there is an obvious opportunity with rural practices, in terms of the advantage, their patients tend to be more dispersed.

And the advantages of remote patient monitoring are particularly are potentially greatest with that group. The business model is just sort of dive into a little bit deeper. And as we engage with the practice, we — when we engage with them, we have demos now that show how the software platform can feed — can be fed with patients symptom reporting, as well as data from these Bluetooth connected devices and provide them with data to not just enhance their care, but also to provide them with the opportunity to record activity that can be subjected to — that can be reimbursed as remote patient monitoring or RPM. RPM is sort of a hot topic right now. And setting up a system that allows physicians to bill for under RPM codes, again, these are established codes are not transient codes, like some of the telemedicine codes that came from COVID, requires really good software platform and our feedback so far has been quite positive.

We found that the practices are very focused on RPM codes and the opportunity to practice revenues through RPM, and that our platform does in fact do that. One of the things that you have to do in order to bill for RPM codes for on a monthly basis is they have to show that the patient has submitted data of some kind from a device than FDA authorized device at least 16 days of the year. So that requires a really good platform that’s engaged with the patient, that encourages them to do the — to measure their various just the forward thinking, once we have an implantable device, that’ll obviously be fixed, because that’s not going to depend on patient engagement and patient compliance. Then, as I mentioned, there’s the other part, the value added here comes from being able to integrate within their IP system.

So the process of integrating with their health care, with their electronic health record, and other aspects of IT infrastructure requires some talent and skill on our part. And we are really happy that we recruited someone who was able to help us with that type of engagement .

Anthony Vendetti: Okay.

Lishan Aklog: So that’s a little bit of attention to what I said, but perhaps there was more, more detail that you wanted to dive into that.

Anthony Vendetti: Yes, no, that’s great. That’s great to know. Just a quick follow-up for just a quick question on CarpX. So the — there’s debate about how much coverage CMS which expanded coverage of telemedicine during COVID will currently allow to continue. In terms of remote patient monitoring, are there particular CPT codes right now that this fall under and ?

Lishan Aklog: Yes, yes, it’s actually on Slide 15. There are codes for the one-time onboarding for the per monthly fee. So, I list them all on Slide 15. And those are not again, just to emphasize for the third time, those are not temporary codes that have been in place. Although the telemedicine codes were brought in under COVID and are subject to ongoing sort of statutory updates, but these RPM codes are not. So they are there and our codes are well established, the payment rates are well established. The criteria under which you can build are well established with regard to the 16th day of the month. So all of that infrastructure and reimbursement is kind of established.

Anthony Vendetti: Okay, great. That’s helpful. And then before switching to CarpX, 37 sales professionals go into 58, that — is that 100% for Lucid?

Lishan Aklog: Yes, that’s for Lucid, yes. We’re not — we haven’t reported on the commercial team for Veris yet. Veris is just — obviously just we’re just gearing up with that. We have a leadership in place, we’re starting to create individual sales reps, so right now the sales leadership, they’re the ones who are actually out and looking at high-end scattering for early adopters to the various technologies and we’ll report on the various sales team over time. And on CarpX we have — we do have three individuals, the same individuals that we’ve had throughout this limited procedural and product improvement focused on launch and then they remain the same.

Anthony Vendetti: Okay. Any feedback from KOLs on CarpX at this point?

Lishan Aklog: So the CarpX activity right now remain that procedural and product development and product improvement work. So we have our core group of KOLs. We would look to expand on here and there, but we — as I mentioned before, we’re not investing in a — in expanding the team or expanding that — the activity beyond the limited number of KOLs we have. We’re using this exclusively as a procedure in the product development exercise. And we’re going to wait CarpX ultrasound before gearing up for a full commercial launch.

Anthony Vendetti: Okay, great. I will hop in the queue. Thank you very much. Appreciate it.

Lishan Aklog: Just one follow-up. I know you’re . Can I just add one real quick — one quick follow-up to Anthony’s last question, which is that, as you might imagine, the surgeons in our KOL list, who we do training with, but you could ever work with and they do a limited number of cases, we’ve obviously also shown them the CarpX ultrasound device and the prototypes for that and where we’re heading with that. And the feedback on that on the ability these are folks who’ve done the procedure with the Gen 1 device and the feedback of the opportunity to have intraluminal ultrasound. So ultrasound imaging as you’re working within the carpal tunnel has been quite positive. And then when we were utilizing those folks with CarpX experience to help us with that development process. Thank you, operator. Sorry about the interruption.

Operator: Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. I would now like to turn the conference to Dr. Lishan Aklog, Chairman and CEO for closing comments.

Lishan Aklog: So I’d like to, again, thank you all for joining us today. And really great questions from all the folks who came on and really good discussion. Look forward to always to being fully transparent with our communications and keeping you abreast of our progress and keep an eye out for our press releases and obviously these quarterly calls. We appreciate any feedback. As I mentioned, the webcast version of this was a result of direct feedback from individual investors who asked us can give us advice on how to improve our communications. And we’re always open to that and look forward to more feedback positive or negative. Please keep up to date, sign up for our email alerts and keep up to date with our social media feeds. And as always, Adrian is available for direct contact at akm@pavmed.com. So again, thanks everyone and have a great day.

Operator: Thank you. The conference of PAVmed Inc has now concluded. Thank you for your participation. You may now disconnect your lines.