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Good morning, and welcome to the Lucid Diagnostics Inc. Fourth Quarter 2025 Business Update Conference Call. At this time, lines are in listen-only mode. If at any time during this call you require immediate assistance, please press 0 for the operator. Please note this event is being recorded. I will now turn the conference over to Matthew Riley, Lucid Diagnostics Inc.’s Vice President 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 CEO of Lucid Diagnostics Inc., along with Dennis M. McGrath, Chief Financial Officer. The press release announcing our business update and financial results is available on Lucid Diagnostics Inc.’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 Securities and Exchange Commission. For a listing and description of these and other important risk factors and uncertainties that may affect future operations, see Part I, Item 1A, entitled “Risk Factors,” in Lucid Diagnostics Inc.’s most recent Annual Report on Form 10-K filed with the SEC and any subsequent updates filed in Quarterly Reports on Form 10-Q and subsequent Forms 8-K. Except as required by law, Lucid Diagnostics Inc. disclaims any intention or obligation to publicly update or revise any forward-looking statements to reflect changes in expectations, or events, conditions, or circumstances on which the expectations may be based, or that may affect the likelihood that actual results would differ from those contained in the forward-looking statements. I will now turn the call over to Dr. Lishan Aklog, Chairman and CEO of Lucid Diagnostics Inc. Lishan?

Thank you, Matthew, and good morning, everyone. Thank you for joining us today and for your continued engagement and support. Let us begin with some key highlights for the fourth quarter and in recent weeks. We will start with some key highlights from the commercial side. Our EsoGuard test volume in the fourth quarter was 3,664. That exceeds our target range that we have articulated regularly of approximately 2,500 to 3,000 tests per quarter, and that represents a 29% increase from 2025. Revenue came in at $1,500,000 for the fourth quarter, about a 24% increase from 2025. We continue on the commercial side to engage our team in transitioning to target both Medicare, which we have talked about before, but now also the VA, which we will discuss in more depth. We are continuing our event-based testing to maintain the volume as prescribed. We are entering 2026 with significant momentum as we await Medicare coverage. Let us talk about the VA. It was a really important milestone for us that we were awarded a U.S. Department of Veterans Affairs, the VA, contract for EsoGuard. This was issued under the VA Federal Supply Schedule, or FSS, which centralizes ordering and includes pricing aligned with our established Medicare rate of $938. That was a great accomplishment. The VA, as most of you know, operates 170 medical centers across the country and serves approximately 9,000,000 enrolled veterans annually. This is a very clinically relevant population. Veterans have a higher risk of GERD and esophageal disease and a higher risk of having the risk factors recommended for esophageal precancer testing. We believe a significant portion of those 9,000,000 patients will be recommended for testing. We believe that our ability to secure this and to secure it at the Medicare rate is a testament to the strength of our clinical evidence. The VA is, in many ways, similar to Medicare in terms of how they view the clinical evidence and in approving this. We will discuss the business implications of this and the rollout from a commercial point of view in a bit more detail in the models. We are also very excited that we announced positive data from the largest reported real-world experience of esophageal precancer testing. This manuscript, which is now in the process of being peer-reviewed for publication, evaluated EsoGuard and EsoCheck in nearly 12,000 HET BRICK patients, and the results were outstanding. The study confirmed excellent technical test performance, rapid cell collection times, and appropriate physician use across the board. More specifically, the technical success rate for EsoCheck cell collection was 95%, and 95% of procedures were completed in under two minutes. It is important that we compare that to the historical alternative to EsoCheck and to explain this in contrast. The sponge-based tassel devices, which are 30 years old and somewhat antiquated, take at least 10 minutes or greater to do so. Being able to do this in a minute or two really provides an opportunity for us to roll this out in a variety of clinical settings. It was also 100% safe, in contrast to previous sponge-based devices, which have been plagued by Class I recalls as a result of unattached sponges. This data across a large number of patients—12,000 in a real-world setting—really confirmed the scalability and the viability of EsoGuard on samples collected with EsoCheck. It sets a very high standard that any clinically viable, widespread precancer screening tool must meet. We are quite skeptical that other technologies in this space will be able to reach that high standard. So, EsoGuard and EsoCheck clearly work in real life, in real patients, and at real-world scale, and the study demonstrates our preparedness for broad access. It has been extremely useful for us even in the preprint form in our engagements and discussions with commercial payers and even in our side conversations with Medicare. Before turning it over to Dennis, I wanted to provide more in-depth updates on two key aspects related to reimbursement and provide some additional context on the VA. Let us start with reimbursement. We are all anxiously awaiting the publication of a draft LCD for Medicare, and we remain highly confident that this is close. We have had ongoing engagements, in person and otherwise, with the leadership of MolDx. We continue to feel strongly and to understand and believe that the MolDx group and others view the CAC meeting, the Contractor Advisory Committee meeting, that occurred in September, as being a home run—with 11 clinicians unequivocally, in somewhat unprecedented fashion, all aligning with the clinical validity and clinical utility evidence that we demonstrated. We believe the fact that we are still waiting for this is related to logistical delays. There have been other LCDs that have been held up. We have some positive signs in that several LCDs that were in the CAC meeting process in the late summer of last year have started to come across the finish line, and we believe that we are next. The next steps, to remind everybody, once we get the publication of this draft LCD that proposes coverage for EsoGuard, there will be a mandatory 45-day comment period. After that public comment period, which includes the public meeting, there will be a publication of a final LCD and an official notice and register of EsoGuard coverage. Once that final LCD and that official notice are complete, then Lucid Diagnostics Inc. will be eligible for payments going back on Medicare claims dating back one year. While we are awaiting Medicare coverage—as everybody else is—I want to make it clear that we are continuing to push forward on two other very important fronts on the reimbursement, on the commercial side. As we hinted at last time, and now it has become clearer, we have some very positive engagements with several of the large payers. The most notable one is with UnitedHealthcare. As we noted at our last meeting, UnitedHealthcare included in their coverage policy for endoscopy for EGD in this condition the fact that a positive EsoGuard test was an appropriate indicator for coverage of the EGD, and we viewed that—and our consultants and others viewed that—as a sign of de facto coverage. We are viewing it as that and proceeding accordingly. We have entered into the credentialing process with UnitedHealthcare, and that positions us to enter into contracting discussions once that is secured. There are some other examples where that is also the case, though a little bit more complicated, including Cigna and potentially Anthem. We believe that we have the opportunity to leverage policies related to endoscopy to secure in-network coverage of EsoGuard, and we are pursuing those aggressively. What that allows us to do is to have an alternative pathway that is not typically available for molecular diagnostics tests. Molecular diagnostic tests typically have to work through the laboratory benefit management groups, the LBMs, and secure coverage through those groups that work on behalf of other payers and issue coverage policies accordingly. That is not to say that we do not remain deeply engaged with the LBMs—we do. In the situations where we have a pathway to securing in-network payment and contracting through the EGD policies, we will continue to do that, but we will also continue to engage with the laboratory benefit managers. Those engagements have been very positive. There has been very positive feedback on our clinical evidence, on our clinical validity, on our clinical utility data, and all of that. The one additional challenge with the commercial payers in general is that, unlike Medicare, they do look at cost-effectiveness data. We believe we have solid data already existing on that, but we are continuing to supplement that with more sophisticated modeling on cost-effectiveness that will be available for us to supplement these discussions in the coming quarters. We believe we have secured our first LBM positive policy coverage. We cannot disclose that yet. That will be coming up in the next couple of months. We had a very good conversation with the largest LBM recently and feel like we have a pathway forward for coverage on that front. We also continue to have extensive engagement with the Blue Cross Blue Shield Association, which is the umbrella organization of multiple Blue Cross Blue Shield plans. Those conversations continue to be in-depth and engaged, and we think they will result in future positive coverage policies from regional Blue Cross plans. In addition to that, we also remain engaged with IDNs, with integrated delivery networks. There are several large networks across the country, and one of them—a large one on the West Coast—we have had very good engagements with. We have good clinical champions within those. Engagements tend to be somewhat different than the engagements with the traditional commercial payers because they involve a more integrated, multifaceted engagement with both clinicians as well as the administrators. Those look good, and we feel like we will have some positive news on that front in the near future. Again, to reiterate, as we are waiting for Medicare, we are continuing to work hard on the commercial side. We believe that there are some near-term wins there and that the pipeline with our upgraded team is now very robust, and we will continue to start seeing some wins over the coming quarters. Let us talk about the VA system. We could not be more excited about this. This was an important win for our team. Getting on the FSS was important. Getting on the FSS without discounting relative to Medicare, acknowledging and validating the Medicare price and our clinical evidence, was a big win. What that now allows us to do is allows our team to engage with individual VA medical centers. We have a very robust pipeline of such engagements with individual centers across the country. Those engagements have been positive. We have been able to leverage the fact that we have solid data in a VA population. That is the Dr. Greer study from the Louis Stokes VA Center in Cleveland that is published, part of our clinical evidence package. Being in the VA population is very powerful as we engage. We know that the dynamics within the VA are different than they are at other centers—that the VA can often be resource-limited with regard to procedures. EGD resources in particular are limited. The wait times and timelines to get an EGD, particularly a screening EGD, can be high. EsoGuard really fits in nicely within this clinical ecosystem as a test that will allow for broader screening and triaging only those who are positive on EsoGuard—only those who have the highest yield—to EGD. The process is fairly straightforward. Since we are on the FSS now, we can engage, find clinical champions at that center, engage contracting, and have a PO issued. We do need to coordinate cell collection at these sites, and we have a variety of pathways to do that. We have also figured out how to allocate our commercial resources accordingly. As we have talked about before, prior to the VA, when it became clear that Medicare coverage was imminent, we made some changes to our commercial team to shift them and their incentives towards enhancing our Medicare volume so that once we get Medicare, we can put our foot on the gas and drive that Medicare business. We are reallocating our existing resources in the same way. We are not increasing our resources—we are very cognizant of our cash burn and our OpEx right now—but we are reallocating resources to make sure we are taking advantage of the opportunity with the VA. We have appointed one of our senior leaders on the commercial team to be a National Director for the VA, and he is working in close collaboration with our VP of Market Access to drive these engagements with the VA, turn them into contracts, turn them into POs, test volume, and ultimately revenue. That happens both at the senior leadership level and in the field. Everybody in the field within their region is incentivized to not just engage with primary care physicians or gastroenterologists or their call points or even with fire departments, but they are also incentivized within their region—and every region has a VA—to develop relationships with physicians and identify clinician champions that they can hand over to the senior leadership team on the more strategic side. All of this activity on the commercial team, all of the adjustments we have made for the Medicare side and now are making on the VA side, we are looking forward to those bearing fruit in the coming weeks and quarters. To summarize from a commercial point of view, throughout 2025 we demonstrated there is a market for EsoGuard, that we can maintain a steady volume that allows us to remain engaged with commercial payers, and that engaging with the commercial payers is starting to pay off into progress towards securing in-network coverage. We have demonstrated that we know how to generate demand. We know how to get physician adoption. We are increasingly improving our ability to engage with health systems, and our ability to engage with health systems will be accelerated dramatically once we get Medicare, because the lack of Medicare is an obstacle to engaging with health systems. All of that groundwork has been laid nicely, culminating in the data that will be published soon and has been publicly released on the real-world experience. That foundation—2025 was a really important year for us in laying that foundation. As we move into 2026, our focus is on converting the lessons that we have learned, converting our ability to generate that demand, into revenue, and the focus is on the VA right now and then on Medicare once we secure that coverage. Progress with the VA, with our commercial payers, and with Medicare puts us in a great position to turn the corner with regard to our commercial experience and track record and to ultimately put our foot on the gas and drive test volume and revenue accordingly. Everything we have done to date, all the real-world experience that we have been able to document, and our full body of clinical evidence puts us in a great position to do so. One aspect that comes up regularly, and the timing for this is perfect because we believe we are at an inflection point, has to do with EHR integration. In order, in 2026, for a molecular diagnostic test to be implemented clinically, it is not sufficient just to get physician adoption. Having EHR integration—which facilitates not only the ordering of the test but delivery of the test results, and in our case, facilitating the identification of patients through identification of risk factors—is a major boost to commercial activity. In addition to the work on the commercial side, the VA side, and on Medicare, we have started to push some resources to work on EHR integration. At this stage, we are doing so using systems that are more cost-effective to us, but that still allow us, when we engage with a health system, to engage in such a way so that the EHR—the Epic instance or whatever other system that that health system happens to be using—we can actually offer ordering physicians the ability to order the test and the ability to receive the results. Once we are in a position where we have accelerated volume and we are further along, we are prepared to invest in the most aggressive way to pursue EHR integration, which is to actually engage with Epic directly on Epicor, and we are well positioned to do that at the appropriate time. Again, we are all waiting for Medicare. Hopefully, that is any day now, but hopefully you get a sense of the extensive work this team has put in over the last quarter to set us up for a lot of success this year—what we are doing now and once we get it. I will now turn the call over to Dennis for the financial results.

Thanks, Lishan, and good morning, everyone. The summary financial results for the fourth quarter and the year were reported in our press release that has been distributed. On the next three slides, I want to emphasize a few key financial highlights from the fourth quarter, but I encourage you to consider these remarks in the context of the full disclosures covered in our Annual Report on Form 10-Ks. With regard to the balance sheet—cash at year-end December 31 was $34,700,000. The average burn rate, including cash interest on the debt for 2025, was $11,100,000 per quarter, with the fourth quarter a bit higher as we made investments in our sales team and market access staffing—about $500,000 in the fourth quarter—and we settled some annual compensation obligations during the period. You will recall that in 2024, we refinanced our convertible debt into a $22,000,000 five-year note, interest only, at 12%, with a $1 conversion price, which is held by long-term shareholders. The fair value of the convertible notes in the amount of $24,000,000 at year-end is the only other substantive change from the previously reported balances at the end of the third quarter. The fair value increase of $1,700,000 reflects a mark-to-market quarterly adjustment in parallel with the common stock price changes between the periods. The fair value increase is also a substantial part of the fourth quarter expense charge of $2,400,000 reflecting other income in the P&L. For the year, the year-over-year change of $5,400,000 reflects a 33% increase in the stock price over the year and also drives a similar noncash expense charge to the annual P&L in the amount of $7,700,000. Shares outstanding, including unvested RSAs and conversion of the Series B preferred as of last week, are approximately 177,000,000. After the conversion of the Series B on March 13, there were approximately 13,000,000 common shares held in abeyance due to the 4.99% ownership blockers in the Series B Certificate of Designation. If these abated shares had been issued, common shares outstanding would be about 190,000,000. The GAAP outstanding shares as of December 31 of 131,000,000 are reflected on the slide as well as on the face of the balance sheet in the 10-Ks. GAAP shares do not reflect unvested RSA amounts. At present, PAVmed continues to be the single largest common shareholder of Lucid Diagnostics Inc. with ownership of approximately 18% of the common shares outstanding.

Although PAVmed no longer has voting control of Lucid Diagnostics Inc., PAVmed together with the Board and management still have a significant influence over Lucid Diagnostics Inc. with approximately a 25% voting interest. Lucid Diagnostics Inc.’s Series B-1 preferred securities convert to common shares in a couple of weeks on May 6. Including the dividends owed on the Series B-1, an additional 16,800,000 common shares will be issued, subject to the 4.99% beneficial ownership blocker in the Certificate of Designation.

With regard to the P&L, this slide compares this year's fourth quarter to last year's fourth quarter and year-over-year on certain key items. I trust you will review the information and my comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly on non-GAAP information. Our sales team sold over 3,600 tests for the fourth quarter, with a billable value over $9,000,000, resulting in recognized revenue of $1,500,000, reflecting a sequential 29% increase in test volume and 24% sequential recognized revenue for the period. With new investors once again joining our call, it is worth repeating what we have communicated in past quarters about revenue recognition. The key determinant in how revenue is recognized at this point in our reimbursement journey is the probability of collection, and therefore, the fact that we are in the transitional stages of our reimbursement process means revenue recognition for the majority of our claims submitted to traditional government or private health insurers will be recognized when the claim is actually collected versus when the patient report is delivered, invoiced, and submitted for reimbursement. As you will see in our 10-Ks, this is called variable consideration under GAAP’s ASC 606 revenue recognition guidelines, and presently, there is insufficient predictive data to reflect revenue from all of our quarterly test volume at the point where the test report is delivered to the referring physician. For billable amounts contracted directly with employers and that are fixed and determinable, revenue will be recognized when our contracted service is delivered—generally, that means when the report is delivered to the referring physician—which will be the case with the VA. It is important to note that a pending Medicare approval decision impacts 40% to 50% of our addressable patient population and therefore will have a significant impact on our future revenue recognition analysis. Furthermore, for tests performed on Medicare patients with dates of service within 12 months of a final positive Medicare policy, we will also get paid within a reasonable time frame after the final policy is issued. With regard to the remainder of the P&L, the variation analysis for the fourth quarter substantively aligns with the year-over-year analysis, so I will focus my comments on the annual changes and happily answer any specific questions on the last quarter in the Q&A. On a non-GAAP basis, total operating expenses increased from $44,300,000 in 2024 to $48,700,000 in 2025, an increase of $4,400,000, comprised of the sum of commercial expenses—largely increases in sales personnel and market access staff—in the amount of $1,600,000, with the remainder in G&A, which includes approximately $1,600,000 in financing costs together with $1,800,000 in annual compensation expenditures. Our non-GAAP loss for the year of $44,000,000 versus $40,000,000 in the prior year is largely related to the same items I just mentioned. The non-GAAP net loss per share of $0.10 in the fourth quarter and $0.43 for the year is better by almost half versus the same periods in 2024. With regard to the operating expenses, this slide is a graphic illustration of our operating expenses after eliminating noncash expenses for the period you collected. Non-GAAP operating expenses of $14,100,000 are higher than the average $11,600,000 for the last four quarters, largely related to the compensation expenses related to increased personnel in sales and market access and annual compensation-related plans. Let me close with a few reimbursement highlights for the fourth quarter as we have done in past quarters. In the fourth quarter, we sold over 3,600 tests, reflecting about $9,000,000 pro forma revenue. During the fourth quarter, we recognized revenue of about 17% of that amount, or $1,500,000. Of that amount, about 49% was from claims submitted in prior quarters, with the longest-dated item from over two years ago. Of the claims submitted in the fourth quarter, about 76% were adjudicated and 24% are pending. Out of the 76% that have been adjudicated, about 50% resulted in an allowable amount by the insurance company with an average of $16.23 per test, which bumps up against the Medicare rate. Of those denied, most fit into one of three buckets: medically not necessary or deemed to be not medically necessary, require a prior authorization, or, lastly, additional medical records. The balance are considered to be non-covered. With that, operator, let us open it up for questions.

Thank you. Ladies and gentlemen, we will now open for questions. If you have a question, please press star followed by one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Mark Anthony Massaro with BTIG. Your line is now open.

Good morning, and thanks for taking the questions. I wanted to start with the nice increase in volumes sequentially. It is about 800 up sequentially. I am wondering how much of that might have come from the VA versus any other targeting efforts that might have been new in the quarter. Do you think that this could be a new run rate, or should we continue to think of volume trajectory in that 2,500 to 3,000 range?

Thanks for the question. I think we might see that as a new run rate, but it is not because that represents the VA. We are in the early stages of engaging with individual VAs, but we do believe that we will start seeing some meaningful volume come from the VA on top of the volume we have already established. As we said in previous quarters, the quarter-to-quarter volume in our prior paradigm, which was heavily focused on event-based testing, tended to be variable based on the size of testing events. I would not discount two things: first, the productivity of our team as we become more established continues to improve over time; second, as we transition with our current commercial resources toward the Medicare population and now increasingly the VA, we will see the fruit of those efforts. That 800 increase is not directly attributable to VAs; it was too soon for that.

Understood. You made an interesting comment about health plan coverage, including with UnitedHealthcare. You indicated that you view this as coverage given the coverage policy that they updated. Is there any change to how you have been submitting claims to them previously, and can you give us any sense for discussions or dialogue you are having with them about perhaps formally signing a contract?

This is a little tricky, so let me work through it. It has not changed how we have submitted claims; we have continued to do so. The reason why this is on the radar now is because of our prior strategy of making sure we had sufficient volume, and United has been one of the payers where we have submitted a significant number of claims. It is not a positive coverage policy specifically for the EsoGuard test. What we have learned since discovering that United—and, as I said, other plans have followed in almost verbatim identical fashion—have included EsoGuard as an appropriate indication for an EGD within their endoscopy guidelines for Barrett’s. On deep analysis of that, internally and externally, and in consultation with different medical directors, we concluded that we can use the term de facto coverage. Much of being in-network through credentialing and contracting happens outside of explicit written positive coverage policies. United operates a lot within guidelines. This is within the guidelines for how they assess claims related to endoscopy. It is our conclusion that we can go directly to credentialing and subsequently to contracting based on EsoGuard being included in the EGD guidelines as an appropriate indication because, by definition, if you say that it is an appropriate indication for an EGD, then it is not experimental. There is sufficient support to justify a positive test as being a triage tool for EGD. Practically, our team has initiated the credentialing process—the process by which you become an in-network provider. Once we achieve that threshold, which we think will be shortly, we are prepared to enter into, and have solicited the opportunity to enter into, contracting discussions directly with United.

Understood. You have talked about reallocating resources to Medicare lives. Can you give an example or two? As we think about 2026 progressing, is there a time this year where you think we can start measuring productivity of these reps?

From a strategic point of view, we have taken the position that we want to maintain test volume. We want to make sure we continue to have engagements with the individual commercial plans so that we can have meaningful conversations with them, like we have seen with United and with many other plans. That volume previously has been heavily dominated by event-based testing—fire departments and so forth—because that was a highly efficient way for us to execute on that strategy while maintaining our operating expenses and our cash burn at a level consistent while we await broader coverage for Medicare and others. Since the fall, we have been taking our commercial team—which has been incentivized to drive volume and event-based testing, increasingly event-based that is subject to contracting—and steadily moving them toward engaging with physicians, physician practices, and health systems to drive our Medicare volume up. The examples are different at every site. A couple of examples on the Northeast and on the Atlantic Coast: high-productivity teams in the field that were doing well with fire department volume and increasingly getting those events fee-contracted are shifting toward engaging with physicians. We are seeing that manifest as our Satellite Lucid Test Center activity at individual practices and health systems. We will suddenly see a practice that one of our field members has engaged with schedule testing events. The SLTC model is where we bring our nurses to the physician practice, co-locate them on scheduled days to test patients. We had one recently where our clinician tested 30 patients in a day, and the vast majority were Medicare patients. That process of turning the ship while maintaining our volume and revenue is working because of a carefully designed incentive plan and training program. I am not sure by the end of this year that we will be ready to start reporting productivity on a rep-by-rep basis, but that is something that will be coming next year. Dennis, do you want to comment on timing?

I think more fulsome reimbursement across the states will contribute to the timing in terms of when we start reporting that, so that an individual account can go in and really test their entire base rather than just solicit Medicare patients or VA. As we publish additional coverage policies, that is probably a metric that ultimately we will start publishing. The end of the year is as good a guess as any.

Great. Thanks so much for the time.

Thanks, Mark.

Your next question comes from Kyle Mikson with Canaccord. Your line is now open.

Good morning, and thanks for the questions. Could you talk about the Medicare mix over the last two to three quarters? In the recent past, it was maybe 10% to 15% of claims. As we think about the ability to turn on Medicare and then receive payment from claims going a year back, it would be helpful to know how much of this volume has been Medicare. Related to this, Dennis, on the $9,000,000 that you called out as being billable in the quarter, could you reconcile—is that literally the 3,600 or so claims times the payment rate? Because that would be $7,000,000. I did not understand the math there.

The Medicare rate—our standard billable amount—is $2,499, and we have actually increased that ASP by another couple of hundred dollars. That is what we bill and we collect. Obviously, we have not billed anything to Medicare yet. As far as the Medicare component, that has grown sequentially in the fourth quarter versus the third quarter by about 28%, as we started to direct the focus towards this effort. The percentage of test volume is around 16%. That is up from 10% to 12% from the prior quarters. If you go back into early 2024, we were probably as high as 25%. It reflects, post-CAC meeting in September, that in the fourth quarter we started directing that effort. We expect as we move through 2025, as a percentage of our test volume, beneficiaries under Medicare will be higher as well.

A couple of reminders on that, Kyle, for the listeners. Based on the epidemiology of the risk factors of patients recommended for testing, about 40%, probably closer to 50%, of patients would be in the Medicare population, but our goal is to drive that in the early phases above that. The numbers Dennis offered reflect less than one quarter of activity after the CAC meeting and after transitioning the team and adjusting incentives, so it reflects the early stages. Qualitatively, the process of shifting toward a greater Medicare portion of our mix is going very well.

Just to clarify, Dennis, the 28% was a quarter-over-quarter increase—Medicare claims?

Yes, the sequential increase in the fourth quarter from the third quarter was around 28%—Medicare claims.

Understood. You also talked about the LBM—the first positive coverage there, which you will be press releasing soon. As that turns on, what does that afford you in terms of additional volume and maybe ASP uplifts and gross margin as well from that deal? I feel like the LBM could unlock a lot of value.

Even though we feel like there is a really interesting path that United has brought forth—and a couple of others may be in the mix—with regard to using the EGD guidelines essentially separate from the LBM process, it is important to emphasize that the LBM process remains the main path towards positive coverage policy. Many or most of the plans outsource the technical assessments and the drafting of policies. Ultimately, the plan decides the policy, but the technical assessment is typically outsourced to the LBM. The LBMs range in size from smaller to the largest, and the number of covered lives they reach varies. As I said, we have had positive discussions with the largest LBM that covers the most and the largest plans, and then all up and down the chain. The one we will announce—we obviously cannot announce it until it is posted publicly—aligns closely with the existing guidelines. As you may recall, the proposed LCD also aligns with existing guidelines. There is a nice consistency across the board. The LBM has engagements with its clients, which are a set number of plans and covered lives. We will be able to use that information, know where those are geographically, and target those. It is not going to happen immediately in terms of translating a coverage policy toward volume and revenue in that target coverage area, but it is the first step. After coverage policy, you still need to engage in contracting discussions and agree on pricing. Being in-network following a coverage policy is an important step.

A housekeeping question on your broader commercial strategy. Sales and marketing expense increased $1,000,000 quarter-over-quarter—a 25% increase. You were at a pretty consistent run rate previously. Should we expect $5,000,000 or so a quarter going forward, or could this increase quite a bit in 2026?

I think that is a reasonable level going forward. The fourth quarter is also burdened by some annual compensation expenses—truing up sales teams and non-sales personnel in the support side of sales and marketing as well—so the fourth quarter is a little higher than the previous run rate. It is a reasonable number to look at moving forward over the next couple of quarters.

Perfect. Thanks.

Thanks, Kyle.

Your next question comes from Michael Stephen Matson with Needham. Your line is now open.

With regards to the VA, how does your sales rep geographic coverage align with their facilities?

It is really a two-level process, as hinted at in my prepared remarks. At a national level, we have a National Account Director and a National VP of Market Access who work hand in hand in bringing individual health systems across the finish line through contracting, PO submission, and then the team implements the launch within that center. We view our entire sales team as the tip of the spear for early engagement. With any of these individual centers, you still need to have a physician champion and a commitment from the physicians—typically the gastroenterologists in partnership with primary care/internal medicine—to launch within that center. Initial engagements will often be from the local team in that region, and once a champion is identified, that gets handed over to the national team who can quickly move toward executing and establishing cell collection and so forth. We also have positive engagement with the national clinician leaders, particularly over GI. After we have had a number of these sites in place—and given that we have published research and ongoing clinical trial data within the VA—the VA being research-centric bodes well for potentially launching a national program in the future. As a reminder, VAs tend to be linked with academic medical centers. The physicians that staff the VAs often hold faculty and clinical positions at affiliated academic medical centers. That is helpful to us in both directions. Where we have already engaged with a large academic health system, identifying the physician within that group who works at the VA gives us an immediate clinical champion. Vice versa, any success at a VA center gives us an entry point to the associated academic center.

A question for Dennis on OpEx. It stepped up a little in the fourth quarter; it sounds like that is related to sales and market access investments. Is it reasonable to assume that level continues in 2026?

There is some annual compensation triggered in there, but the market access team, clinical service team, and the commercial team are a baseline that we should plan for as we move forward. Particularly as the volume increases and revenue increases, the variable compensation plans will kick in as well.

Got it. Thanks.

Your next question comes from Jeremy Perlman with Maxim Group. Your line is now open.

Good morning, and thank you for taking my question. I want to circle back on the testing volume. It was a really strong quarter. You said it was not due to any significant increase in VA testing. Is it higher utilization in existing accounts, new accounts signing up, event-driven, or team productivity improving over time? Is this why you said this could be a better run rate for testing volume going forward?

I think it is a mix of all of the above. I want to give kudos to the team that we grew volume during a quarter where we were asking them to make a significant transition away from the more efficient event-based testing—not away from those entirely, but toward more traditional engagements to drive Medicare and VA volume. It is a combination of those factors, but still driven by productivity because that increase in volume, despite the structural changes, was driven by the same number of people. We have not increased the meaningful numbers in the field. The potential to continue to sustain somewhat higher volume than our target could be driven by the opportunity to start seeing volume in the VA, and, once we get Medicare, pushing volume more aggressively there.

On the VA, you mentioned it serves 9,000,000 lives, and the patient population has a higher risk of GERD, making it a strong target population. How are you viewing the total addressable market there, and what are you hoping to see in 2026 in terms of testing volume run rate exiting the year?

If you start with 9,000,000 patients, the proportion recommended for testing by existing guidelines is at least a couple of million patients—call it 20% to 25% of that population based on the most conservative subset of risk factors for testing, for example, over 50 with three risk factors based on the ACG. A couple of million times the Medicare rate gives you the addressable market within the VAs.

Understood. You have mentioned numerous times the one-year look-back period for Medicare billing. We were hoping to get the draft letter by the end of 2025. Now it is the end of the first quarter, so hopefully it is imminent. What is holding you back from signing on more sales reps and pushing Medicare since you still have the look-back?

I do not think we are nervous. I think it is prudent to be cautious. It is not due to any concern about the likelihood of us getting Medicare or the likelihood of us getting paid for that amount. It is general prudence regarding being super careful about our OpEx in the current capital markets environment. Dennis?

Eighty percent of our billable amounts are not being collected. We have been judicious about our spend, and you see that we have started to spend more. We are not going to turn the faucet on completely until we have the ability to collect a good chunk of the test volume that we bill for. That will be the gating factor. Could we put more salespeople on, particularly to go after Medicare patients? Yes, but anytime they walk in the door, there will be commercial patients as well that they are attracted to. Having a Medicare draft policy in place and knowing the timing would give us clarity as to when to step on the gas even further. We have started to and are being judicious about it, and we will accelerate once we know the timing.

Do you have an estimate of how many of these Medicare tests over the past year you would be able to bill?

It is rolling—couple million dollars. Obviously, it changes every day that we are delayed in getting this towards a final policy, but as a rule of thumb, it is a couple million dollars of collections that we will be able to get soon after we get the final policy.

Great. Thank you for taking my questions. Have a nice day.

Thanks, Jeremy.

There are no further questions at this time. I will now turn the call over to Dr. Lishan Aklog for closing remarks.

Thanks, operator, and thank you all for taking the time and for your attention this morning. We appreciate, in particular, the thoughtful and informed questions from our analysts and hope all the listeners find that back and forth enlightening. We believe this is going to be a big year for Lucid Diagnostics Inc. Last year established a solid commercial foundation and a really solid evidence base with the addition of our large real-world study. Medicare is coming. It is a matter of when, not if. Our activity today, while we are waiting for Medicare—with the VA, with Medicare patients, and our continued progress on the commercial side with payers and laboratory benefit managers—continues to lay a strong foundation for future growth. We are also excited on the commercial side to be moving into in-network and contracting for the first time with a large payer. We hope that will be a transformational event in the coming weeks and quarters. As always, we encourage you to keep abreast of our progress. Please follow our news releases, our quarterly update calls, as well as our website and social media, and feel free to reach out to us if you have any questions. Thanks again, everybody. Have a great day.