Lucid Diagnostics Inc. Q2 FY2026 earnings call

• Commercial Coverage Milestone • Secured the first positive laboratory benefit manager (LBM) commercial coverage policy from Concert for ESA Guard, which was already adopted by three client health plans with more expected in coming months • Concert confirmed ESA Guard is medically necessary for patients meeting screening criteria and validated the test's clinical evidence, noting competing esophageal precancer tests were deemed investigational due to insufficient evidence • Total covered lives across all Concert client health plans is just under 10 million, concentrated primarily in the Midwest U.S., allowing targeted geographic resource allocation • Management expects the Concert policy to set a precedent for positive coverage decisions from other LBMs, and ongoing engagement with additional LBMs is progressing positively

• Market Access Updates • Continues to await publication of the Medicare draft Local Coverage Determination (LCD), with a known broad backlog of LCD reviews at CMS that has recently shown signs of loosening as multiple long-delayed LCDs have been published • Management remains confident in a positive final Medicare LCD policy; Medicare coverage impacts 40-50% of the company's target patient population and will materially change future revenue recognition • VA opportunity development is progressing well, with a robust pipeline of VA centers and positive clinician engagement with almost no pushback; the team is targeting contracts for the new federal fiscal year starting October 1, 2026, with volume contribution expected after that date • Health system engagement, including EHR integration for automated patient identification and workflow integration, is advancing, with initial implementation work now underway after years of relationship building

• Healthcare Economic Research • Partnered with the lead author of the American College of Gastroenterology Guidelines and HEOR experts to build a sophisticated long-term cost-effectiveness model comparing ESA Guard screening to current standard of care • The model assesses clinical outcomes including cancer detection, stage shifting, cancer avoidance, and mortality reduction, which is required to demonstrate value to commercial payers (unlike Medicare, commercial payers require cost-effectiveness evidence) • Preliminary results are encouraging, showing ESA Guard is cost-effective versus current care; the model is expected to be completed in summer 2026 and will undergo peer review and publication

• Financial Position • Cash balance as of June 30, 2026 was $33.4 million, flat with year-end 2025, after a common stock offering in the quarter generated $16.8 million in net proceeds • Average quarterly cash burn over the prior four quarters was $11.6 million, with Q2 2026 burn lower at $11.3 million • The $22 million secured convertible debt is held by long-term shareholders; a $1.7 million mark-to-market fair value decrease on the notes drove $1 million in other income in Q2 2026 • Fully diluted common shares outstanding are approximately 225 million, with PadMed remaining the largest shareholder at ~15% ownership and ~25% combined voting interest with management and the board

Lucid Diagnostics operates as a single-segment molecular diagnostic company focused on its ESA Guard esophageal precancer screening test. In Q2 2026, the company performed 2,770 ESA Guard tests, generating recognized revenue of $1.5 million, which represents a 17% sequential increase from Q1 2026. Billable list-price value of the quarter's tests was $7.5 million, with recognized revenue equal to 19% of total billable value. Approximately 35% of the recognized Q2 revenue came from claims adjudicated from prior quarters, with some claims dating back over two years. 65% of Q2-submitted claims have been adjudicated, of which 28% received an allowable payment with an average of $1,424 per test. Currently, ~40% of Q2 test volume falls into the contracted/collectible category (Medicare, VA, self-insured employers), up substantially from the prior quarter. Total GAAP operating expenses increased 5% sequentially to ~$12.3 million non-GAAP, in line with the 5-quarter average of $12.2 million. Non-GAAP net loss per share was $0.06, a 1 cent improvement sequentially.

• Test volume target maintained at 2,500 to 3,000 tests per quarter for the pre-Medicare coverage period, with volume growth acceleration triggered by a positive Medicare draft LCD and growing traction at the VA and commercial payers
• Management expects OPEX and SG&A to increase in coming quarters to support expanded commercial activities, headcount, and program expansion in preparation for revenue growth post-Medicare and new commercial/VA contracts
• The 90% incremental margin on the $2,749 list-price test means OPEX increases will not result in proportional increases in cash burn, as incremental revenue will offset much of the added operating cost
• Management expects VA test volume contribution to begin in the new federal fiscal year starting October 1, 2026, after contracts are finalized for the new budget cycle
• No changes to long-term margin targets; at current volumes, COGS is approximately $125 per test plus $60 per test device, with potential for ~$50 total per-test cost reduction as volume increases via automation and scale efficiencies

• The LCD backlog at CMS continues to delay the Medicare coverage decision, which is the most important near-term milestone for the company and will have a significant impact on future revenue growth and revenue recognition
• The majority of adjudicated claims are still denied, with denials falling into three main categories: 18% denied as experimental/investigational, 22% denied for lack of prior authorization, and 5% denied for missing medical records; fundamental reduction in denial rates will only come after broad coverage policies are secured
• Out-of-network status and high patient responsibility portions even for allowed claims limit revenue collection until broad in-network coverage is secured
• Revenue recognition is currently constrained by lack of sufficient predictive collection data under ASC 606, meaning most revenue from new tests is only recognized upon actual collection, leading to lags between test volume and reported revenue

Q: What contribution did the VA make to Q2 test volume, what are plans for SG&A increases ahead of potential Medicare LCD publication, and will additional LBMs be secured before Medicare coverage?

A: The VA had no meaningful contribution to Q2 volume, as the company is still in contracting and pipeline building ahead of the October 1 new fiscal year; volume contribution will come later. While SG&A and headcount will increase to capitalize on improved reimbursement, the 90% incremental margin on tests means incremental burn will be much lower than for lower-margin products. The first Concert LBM coverage already has three client plans on board, and having the first positive LBM policy sets a precedent that is already positively impacting ongoing discussions with other LBMs.

Q: Could personnel changes at Palmetto GBA impact the timing of the Medicare LCD, and how much covered lives are associated with Concert?

A: Management does not expect personnel changes to impact the LCD decision, as all required work through the CAC review stage is already completed; delays are driven by a broad backlog that is now starting to loosen, which the company expects will accelerate its LCD processing. Total covered lives across all Concert client plans is just under 10 million, and management expects most or all client plans to ultimately adopt the positive Concert coverage policy.

Q: What is the status of the cost-effectiveness model, and how is the source of test volume changing?

A: The model is still being finalized, so no public metrics are available yet; it is a full sophisticated HEOR model that includes quality-adjusted life year metrics and is designed to meet commercial payer requirements for cost-effectiveness evidence, with expected completion and peer review publication coming. The company is actively shifting volume away from firefighter health fairs toward primary care, gastroenterologists, and health systems; now ~40% of volume is in contracted collectible categories (Medicare, VA, self-insured employers), up substantially from prior quarters, which drove higher revenue even with flat test volume.

Q: What is the current denial rate breakdown, and are denials starting to trend down?

A: Of 65% of Q2 claims adjudicated so far, 28% received an allowed payment; of denials, 18% were for being experimental/investigational, 22% required prior authorization, and 5% needed additional medical records. No clear downward trend in denials yet, as most denials are placeholders prior to formal coverage policies; fundamental improvement will only come as more coverage policies are secured, with the Concert policy being an important first step. The company is aggressive about appealing denials and providing required clinical evidence in advance, but this only impacts denials at the margin.