. . . . . . . . Good morning and welcome to the PAVMED Third Quarter 2026 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 Charge Zero for the operator. Please note this event is being recorded. I would now like to turn the conference over to Matt Riley, PAVMED Vice President, Investor Relations. Please go ahead, sir.

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 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 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 Quarter 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 of new statements, verify 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 of new statements. I would now like to turn the call over to Dr. Lishan Aklog, Chairman and CEO of PAVMED.

Thank you, Matt, and good morning, everyone. Thank you for joining our quarterly update call. We're very encouraged by developments across our PadMed portfolio. The most important development, of course, is that Lucid has secured Medicare reimbursement for E-Cigar, and this is a critical and transformational milestone. The other front, Ferris continues to grow enrollment at Ohio State while advancing its implantable monitor towards FDA submission, and we are now actively engaged with the FDA on our two other portfolio units, Port IO and Octeris. We believe this progress puts PadMed in a strong position to create real long-term shareholder value. So let me start with Lucid. The most significant development at Lucid is that Medicare is now reimbursing ESAGARD. Lucid began submitting claims through its Texas laboratory in late September and has been paid consistently since October at the full Medicare rate. The engagement with the contractor and a subsequent consistent pattern constitutes Medicare coverage through claim-by-claim adjudication and this applies for two Medicare patients nationwide. With Medicare reimbursement now secured, Lucid immediately and aggressively transitioned its commercial activity to focus on access to e-cigarette in the Medicare population. This transition is going extremely well and October was a record month for test volume. We expect to quickly scale Lucid's commercial activity to take advantage of its massive revenue opportunity and to grow its commercial infrastructure in an aggressive but responsible way. As Lucid's largest shareholder, PadMed stands to benefit directly from this near-term opportunity. Yesterday's Lucid call covers this and other developments in far greater detail, and I encourage you to listen to the recording. Now let's move on to VAERS. The commercial phase of our Ohio State strategic engagement continues to accelerate. Monthly enrollment grew throughout the quarter and nearly doubled from July to September, and the clinical rollout is now live across most of the departments at the James Cancer Center, with the remaining departments moving through the final implementation stage. Our focus remains reducing onboarding friction and workflow disruption, and we continue to have strong support from the OSU and the James leadership team. We've also continued to improve the software platform, including an upgraded EHR integration and various software updates. The implantable physiologic monitor remains on track for an FDA 5K submission in early 2027. We successfully achieved design freeze in August as planned. And in October, we initiated the 90-day GLP animal study, which is a key part of the verification and validation testing required for FDA 510K submission. We expect to complete the app design freeze and the skin validation study, both additional components of the FDA submission, by the year end. Now let's move on to our other products in our medical device portfolio, starting with Port IO. As a reminder, Port IO is an implantable intraosseous port that's designed to provide long-term vascular access through the bone marrow cavity, and particularly for patients with difficult or compromised venous access. We held an initial call with the FDA in late October, it was successful, and this will be followed by an in-person pre-submission meeting, a formal pre-submission meeting in January. The key topic will be the regulatory pathway. We believe that our published first in human results may support a 510 rather than a de novo regulatory pathway through the FDA. That would mean a shorter timeline and lower capital requirements to reach commercialization.

Now let's finish up with OCTARIS.

Again, as a reminder, OCTARIS is our multimodal endoscopic imaging platform that we licensed from Duke University, and it's designed to identify esophageal dysplasia or late stage precancer during upper endoscopy and to help guide more accurate biopsy and treatment. The next generation probe is now complete and ready for clinical testing. We expect to submit our initial FDA pre-submission package this month. The start of the clinical validation study at the University of North Carolina is in the IRB phase and going through contracting at the two universities. We expect enrollment to begin in January. With that, I'll hand the call over to Dennis for an update on our financials.

Thanks, Lishan, and good morning, everyone. Our preliminary financial results for the third quarter were reported in our press release that has been distributed. On the next three slides, I'll emphasize a few highlights from the third quarter, but I encourage you to consider those remarks in the context of the full disclosures that will be covered in our quarterly report on Form 10-Q, expected to be filed with the SEC on Monday. With regard to the balance sheet, A few key items to point out. Cash at September 30th was $8.9 million, including $5.3 million of restricted cash. Of the restricted cash, $5 million is held in a collateral account as additional security for the senior debt, which we funded in August under an amendment to the note. During the quarter, we received $2.8 million of proceeds from our ATM, which is time with the maximum allowable under the ATM. In September, we put in place a new at-the-market facility with AGP for up to $9.4 million, which is presently fully available to us. Our underlying burn for the third quarter was approximately $2.8 million compared with $2.7 million in the second quarter. Cash on the balance sheet also does not reflect the $30 million expected upon exercise of the Series D warrants, which are currently out of the money, but potentially callable in the future by the company Nor the approximately $2.5 million of virus warrants have become callable upon FDA clearance of the virus implantable device. The equity method investment balance of $23.5 million reflects the $31.3 million Lucid shares marked to market at Lucid's closing price of $0.75 on September 30th, down from $1.07 at June 30th. That $10 million decrease is a non-cash mark-to-market adjustment and is the single largest item in our third quarter P&L, which I'll come back to. At present, PavMed continues to be the single largest common shareholder of Lucid with approximately 15% of the common shares outstanding. Although PavMed no longer has voting control of Lucid, PavMed, together with its board and managers, still has significant influence over Lucid with approximately 25% of voting interest. Shares outstanding today, including unvested RSAs, are approximately 8 million. The GAAP quarter-end outstanding shares of 6.9 are reflected on the slide as well as it will be on the face of the balance sheet in the 10-Q. GAAP shares do not reflect unvested RSA amounts. A word on our $15 million senior secured note, which carries a 15% interest rate, is interest only with quarterly payments and matures in February of 29th. The note includes financial covenants, one of which is a minimum cash covenant, which we satisfied at September 30th. Another is a collateral coverage covenant tied to the market value of the Lucid shares we hold. With the decline in Lucid's share price during the quarter, we did not satisfy that collateral coverage covenant as of September 30th. The note holder has agreed to waive that covenant through the date of our SEC filing, and we continue to work constructively with the note holder just as we have consistently in the past on covenants going forward. The details will be in Note 9 of the financial statements in our 10Q. The note is required to be carried at fair value. At September 30th, the preliminary value reflects $14.2 million compared with $15.1 million at June 30th after the $600,000 quarterly interest payment. The resulting $300,000 gain in the P&L is a non-cash accounting item, and both of these do not change the $15 million principal we owe. These non-cash amounts are subject to change as we complete the final valuation analysis prior to the filing of the 10-Q. Obviously, like others, the Microsoft outage yesterday slowed down the completion of that effort. Similar to past presentations on this slide, the P&L provides some GAAP and non-GAAP year-over-year quarterly comparisons. On a pro forma basis and purely for illustrative purposes on this slide, the various revenue and the Lucid management fee income are combined, collectively more than $3 million per quarter. just to visually align PABNED's income sources versus its operating expenses. For SEC reporting purposes, the management service income is a below the line item. For the third quarter, you'll see on the slide a preliminary gap net loss of 13 million before non-controlling interest and preferred dividends versus the prior year loss of 6 million. The driving force of that difference is the change in fair value of the Lucid shares and the senior note, both non-cash amounts, reflecting a net charge of approximately $9.6 million in the current quarter compared with $4.5 million in the prior year quarter. Other than the fair value changes, the most significant change between the periods is higher R&D expense, largely for the various and planable device. The preliminary gap net loss attributable to Padman Common Stockholders is $11.8 million for the third quarter, and that's subject to the final debt valuation analysis. On a non-GAAP basis, the loss is $1.2 million, an improvement from $1.7 million in the second quarter. Next slide, please. 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 third quarter non-GAAP OpEx of $5.6 million is below the second quarter by about $480,000, in line with the $5.7 million average of the previous four quarters. The sequential decrease reflects about 330,000 lower G&A costs and about $160,000 of lower VRRS R&D spending due to timing. OPEX changes up or down moving forward are likely to be tied mostly to the R&D efforts to get VRRS Implantable Device submitted to and cleared by the FDA. With that, operator, let's open it up for questions.

Thank you, Mr. McGrath. Ladies and gentlemen, we now begin the question and answer session. If you'd like to ask a question, please press star, followed by the number one on your telephone keypad. If your question has been answered, you'd like to withdraw from the queue, please press star, followed by the number two. And if you're using a speakerphone, please lift the handset for pressing any keys. One moment, please, while we'll compile the roster. The first question comes from Jeremy Perlman with Maxine Group. Please go ahead. Hi, Jeremy.

Good morning, Jeremy. Okay, so first is maybe on the various platform, you know, commercialization, it seems like you said enrollment was doubling. Maybe if you could just say a little more why you think the commercialization is doubling. Is that just a natural as the platform is rolling out to more departments or is there something else that's driving that nice growth in enrollment?

Yeah, so maybe to step back a second and just explain a little bit about our engagement with OSU and frankly the broader picture as it relates to the implantable. Our goal from now has been and through the submission and clearance of the implantable is to leverage the strategic engagement with OSU to really optimize and learn how to drive adoption in these Thank you very much. We started this commercial phase with the departments that participated in the successful pilot program. And it's just been a steady rollout, bringing on each individual department, training the team, training the physicians, training the nurses on onboarding patients. And then, again, this is really the primary goal of this effort, in addition to just driving adoption, is to really learn how to optimize workflow to minimize friction with regard to getting patients on the platform and a whole variety of creative ways to insert our platform into the complex workflow of these cancer centers. So the acceleration is bringing on other centers, but also a high degree of adoption within each department. This is all part of a strategic engagement is the building of a registry of the first thousand patients within OSU. The target for that was to do so by the end of the first quarter of next year, and we're on pace to do that, particularly with the acceleration moving forward. Once we have the implantable cleared, then we'll be able to take the lessons learned, take the template in a sense of how we engaged with the James at OSU, which is the third largest cancer center in the country, and then rinse and repeat at other commercial centers, but this time with the implantable as a major value multiplier, force multiplier with regard to the power of the platform.

Okay, yeah, I understand. Great. And maybe, yeah, so you just touched on it at the very end. Just to segue to my next question, you know, are you seeing interest from other health cancer, large cancer centers? Are you being proactive, or you're just going to wait until you have enough data from this, from the OSU, to start maybe, you know, commercializing it into other institutions? And what do you think the timeline might be?

Yeah, we are getting interest. There have been some contacts. There have been some discussions with a handful. But we have not been aggressively pursuing it because, at the end of the day, this is platform is a combination, the various and the value opportunity, the clinical value comes from a combination of this cancer Thank you very much. Our strategic approach to this enterprise has been to focus our efforts on OSU, get the data, but it's not just data, it's just the institutional knowledge within Veris on how to best optimize engagement, how to best optimize adoption, and package that all up so that when we Thank you. Thank you.

potential regulatory pathways either at 510 or de novo. Maybe just if you could flesh out a little bit what each of those would look like in terms of timeline and maybe capital needs. Thanks.

Yeah. So look, we can get a little bit in the weeds on that for those who are students of 510 versus de novo. So just as a reminder, the 510 pathway is the lowest hurdle for a medical device to go through FDA approval, FDA clearance. and it just requires a substantial equivalence to an existing predicate device. The next stage is the de novo, which is, has a higher, is between 510 and the PMA and has somewhat higher requirements with regard to the clinical study design, the size and so forth. When Port IO was actively being pursued before we, Before we paused the project several years ago, our engagements with FDA had led to a determination at that point that this was likely, that this needed to go down the de novo pathway. And so that's how we were proceeding before we paused the project. What's happened since that engagement with the FDA are two things. One, we had our first in human study, the successful human study in Columbia, South America that demonstrated the safety of the device in humans. So that wasn't available at the time of the original engagement with the FDA. Also, on further analysis with our team as well as with external regulatory consultants, some of whom were actually aware of the previous application, it's become clear to us that the major consideration with regard to Moving this down to de novo pathway had to do with the predicate device was used for urgent and emergency situations and Port IO is not really intended for that. The purpose of Port IO is to be a long-term vascular access device comparable to existing ports and existing long-term catheters. And so we have a possibility and I think a reasonable possibility that this time around we can Thank you very much. We're confident based on the previous data and based on the previous conversations that we have a clear path to completing a study and getting this cleared, but obviously our strong preference would be to be able to do so through the 510k pathway, which would be shorter and less capital requirements and potentially might not even need additional human data, but that's still to be determined.

Okay, great. And then just lastly, moving to Octaris, Maybe, you know, help investors understand, you know, what is it, what type of, what problem is it trying to solve? Is it creating a better mousetrap? You know, what, is there any other standard of care, current competitors that would, that are tackling the same issue? And maybe that would be a really helpful thing.

Yeah, excellent. So, you know, obviously, most folks in PatMed understand, have some understanding of the problem. Thank you very much. You can consider this basically the Octoris to fit in in the post-Isogard step. So, Isogard identifies these patients with pre-cancer, they go for an endoscopy, and then at the time of endoscopy, what are the various things that can be done to enhance that? The direct answer to your question is that Octoris does compete with some existing technologies. Most of them are molecular tests that seek to risk stratify patients or to determine at the time of confirmatory endoscopy whether the patient needs more aggressive surveillance, whether there's a likelihood that they have the later stage pre-cancer and maybe should be directed more towards an urgent, more immediate Thank you very much. tomography, as well as an additional more proprietary optical method to assess the areas of abnormality at the time of endoscopy. And so it can look at those cells, and it's able to measure the size of the nucleus, which correlates very closely with the likelihood that they have late-stage precancer, which would need to be treated more directly. That's a bit in the weeds, but the bottom line is that but when Arteris is finalized and commercialized, it'll provide the opportunity to take a patient who has suspected pre-cancer, suspected Barrett's esophagus, hopefully from having gotten an Isagard test and during the endoscopy to determine whether that patient has a late stage pre-cancer and whether those areas should be biopsied more aggressively. And then if it does come back as dysplasia, the later stage pre-cancer, whether that patient should go straight to the definitive treatment. Over the long term, later versions of this device, the goal would be to have it be a one-time procedure. So you go in for your confirmatory endoscopy and the endoscopist assesses the area and using The supplemental imaging from Octaris, they can decide to ablate and destroy those abnormal cells on the spot, eliminating the need for multiple other interventional procedures. So that's the paradigm that we're operating within. And if it is successful, it really will shake up the way these patients are managed after they're identified as having pre-cancer.

Very well. That's great information. Thank you for all that color. I'll have that in the queue.

Thanks a lot, Jeremy. Thank you, Jeremy. Your next question comes from Ed Wu with Ascendian Capital. Please go ahead.

Hi, Ed. Yeah, congratulations on all the progress. Are you guys mainly focused on your four devices now, Lucid, Verus, Octerus, Port IO? Are you guys also actively looking for new portfolio products?

Yeah, you know, over the years, we've had a fairly steady flow of of new and interesting technology that have been brought forth to us. Arcturus is one of them, for example, at Duke University, the Technology Transfer Office and the Associated Scientists came to us seeking a partnership. And we do continue to evaluate those. I think our sense is really at this point that with the capital constraints that these four, we have our hands full right now with these four technologies, but we will continue to look because there could be another Arcturus, another Verus, out there waiting, and if there's a creative way to bring that technology in, particularly if it's independently financeable, we have the infrastructure to be able to accelerate development and commercialization of those. So our eyes are open, but right now we're primarily focused on the two medical device portfolio companies, the products, the digital health product with Veris at commercial phase, and obviously Lucid is operating independently of Padmet at this point.

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

Great. Thanks a lot, Ed.

Thank you, Ed. Then for the questions at this time, I will turn it back to Dr. Lishan Aklog for some closing remarks.

So, great. Hey, thanks, operator, and thank you all for taking the time and for your attention this morning. We obviously appreciate the questions. We enjoyed the opportunity to discuss the business and, in particular, the technology and be able to get a bit in the weeds thanks to great questions from our covering panelists. Hopefully you found that informative and that the additional color was helpful. I think as we look at PABMED, clearly the main focus with regard to near-term inflection points relates to Lucid and e-Cigar and the Medicare milestone for e-Cigar is obviously a turning point for Lucid, but as Lucid's largest shareholder, PABMED clearly stands to benefit from this near-term revenue opportunity at Lucid. But as we discussed, there's really great progress on multiple fronts with Veris, the progress with our strategic engagement with Ohio State, the progress on the Implantable Monitor. We're really looking forward to FDA submission in the first quarter of next year and then clearance thereafter. And obviously the progress with regard to Port IO and Octoris, both on the development side with Octoris and with both of them as we head towards getting definitive regulatory pathways from the FDA on both of those. So as always, you know, PadMed has been Designed from scratch to give our shareholders the opportunity to have multiple shots on goal, extending here from a commercial company that's at an inflection point to a second commercial company in the digital health space that's poised for broader commercialization in the second half of next year, and then to earlier stage but promising technologies. So with that, as always, we encourage you to continue to keep abreast of our progress. Please follow us through our news releases, these update calls, and our website and through social media. And of course, feel free to reach out with any specific questions. So with that, I hope you all have a great day and thank you so much for your participation.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.