Prepared remarks
Good morning, ladies and gentlemen, and welcome to the Lucid Diagnostics Second Quarter 2026 Business Update Conference Call. This call is being recorded on Thursday, August 13, 2026. I would now like to turn the conference over to Matt Riley, Lucid Diagnostics 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 Chief Executive Officer of Lucid Diagnostics; along with Dennis McGrath, Chief Financial Officer. The press release announcing our business update and financial results is available on Lucid'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 to the SEC. For a list and the description of these and other important risks and uncertainties that may affect future operations, see Part 1, Item 1A entitled Risk Factors in Lucid's most recent annual report on Form 10-K filed with the SEC and any subsequent updates filed in quarterly reports on Forms 10-Q and subsequent Forms 8-K. Except as required by law, Lucid 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 expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. I would now like to turn the call over to Dr. Lishan Aklog.
Thank you, Matt, and good morning, everyone. Thank you for joining us today and for your continued engagement and support. We continue to make strong progress across key commercialization initiatives as we await Medicare draft LCD publication, and we're eager to discuss these today. Let's begin with some key highlights from the second quarter and recently. This quarter, our laboratory performed 2,770 EsoGuard tests, and we recognized $1.5 million in revenue. Revenue is up about 17% from the prior quarter, and our volume remains within our target range of approximately 2,500 to 3,000 tests. This reflects increased commercial focus on testing opportunities that are likely to drive revenue. In addition, we secured our first laboratory benefit manager commercial coverage policy from Concert. The Concert policy has already been adopted by multiple client health plans. This is a major commercial coverage milestone and represents third-party review of EsoGuard's clinical evidence. Concert concluded that EsoGuard is medically necessary for patients meeting established screening criteria and that the evidence definitively demonstrates improved health outcomes. We'll talk more about Concert and the significance of this policy shortly. Now let's turn to key updates related to market access and commercialization. With regards to Medicare, we continue to wait for publication of our draft LCD, but we remain confident that we will secure a positive draft policy. We do note that there's been a broad backlog at CMS with regard to LCD output. However, there does seem to be a sign that backlog may be loosening. Several long-awaited LCDs have been posted in recent weeks. With regard to the VA, this remains a very large opportunity for us, and the process is progressing very well. Our team has built a robust, high-quality pipeline of VA centers across the U.S., and most notably, our clinical engagement has been extremely positive. We're essentially getting no pushback from the clinicians. The team is making progress in translating those clinical engagements into contracts. A key focus is securing contracts for the new federal fiscal year, which begins on October 1. Next, let's try to provide some additional context on Concert and our commercial coverage updates. So as anticipated last week, Concert issued positive coverage policy for EsoGuard, representing our first laboratory benefit manager LBM coverage policy. They specifically covered our test but noted that other esophageal precancer tests that were evaluated were considered investigational due to insufficient evidence. Let's talk a little bit about how laboratory benefit managers work. Laboratory benefit managers concentrate the technical assessment of molecular diagnostic tests into single entities, and client health plans contract with them in order to ensure coverage policy. Three of Concert's client plans have adopted our policy with several more expected to do so in the coming months. Not all plans permit public announcements, so we won't necessarily be presenting that publicly. The plans that have adopted the policy are somewhat concentrated. Securing these regional commercial plans enhances our ability to allocate resources accordingly. We continue to be actively engaged with all the other laboratory benefit managers, and we do feel confident that the Concert policy will set a precedent for others. Moving on to healthcare economic research. Unlike with Medicare, an important tool for commercial coverage is demonstrating cost-effectiveness. We have partnered with the lead author of the American College of Gastroenterology guidelines and have developed a sophisticated cost-effectiveness model, working alongside HEOR experts and international key opinion leaders in Barrett's esophagus and esophageal cancer. This model compares the long-term clinical and economic impact of EsoGuard screening versus current care across the at-risk population. It's very important to take a long-term view of these cost-effectiveness models, particularly in screening, where the benefits of early detection can take years to emerge. The model assessed the impact on BE detection, on esophageal cancer stage shifting, esophageal cancer avoidance, and esophageal cancer-related mortality. This information helps payers assess whether the clinical benefits of EsoGuard DNA justify the cost. The model is expected to be completed this summer, but the preliminary results are actually very encouraging and show positive clinical impact, with EsoGuard appearing as cost-effective compared to current care. The other key area of focus is our engagement with health systems. There's extensive health system work underway and it's a major part of our commercialization strategy. We're translating those initial conversations into active implementation work. This process can take a bit of time, but we're starting to see results. Part of the work involves tailoring the clinical workflow, supporting patient identification, ordering, and results. The EHR plays a particularly important role in health systems with regard to automated patient identification, streamlining patients within the health systems toward EsoGuard testing as appropriate. So, in summary, we really are getting meaningful traction across market access and our commercialization efforts, and we haven't been idle as we await Medicare coverage. Obviously, Medicare coverage remains our most important near-term milestone, and we remain confident we will secure a positive draft policy. Our VA work, as I noted, is progressing well, and we expect that success to build in the new budget cycle and contribute to future revenue growth. Commercial coverage, economic evidence, and health system infrastructure are all advancing extremely well. Collectively, this progress is increasing Lucid's visibility and creating interesting opportunities for broader strategic engagement. So with that, I'll turn it over to Dennis for the financial update.
Thanks, Lishan, and good morning, everyone. The summary financial results for the second quarter were reported in our press release that has been distributed. On the next three slides, I'll emphasize a few key financial highlights from the second quarter, but I encourage you to consider these remarks in the context of the full disclosures covered in our quarterly report on Form 10-Q. With regard to the balance sheet, cash at quarter end, June 30, was $33.4 million, which is essentially flat with the year-end balance. We completed a common stock offering during the quarter with net proceeds of about $16.8 million. The average burn rate for the last four quarters, including cash interest on the debt, was $11.6 million per quarter, with the second quarter a little bit lower at $11.3 million. Our $22 million secured convertible debt is a five-year note, interest only at 12% with $1 conversion price, which is held by long-term shareholders. The fair value of the convertible notes in the amount of $23.5 million at quarter end is really the only other substantive change from the previously reported balances at the end of the year and also at the end of the first quarter. The fair value decrease of $1.7 million in the quarter reflects a mark-to-market quarterly adjustment in parallel with the common stock price changes between the periods. The fair value decrease also is a substantial part of the second quarter income pickup of $1 million reflected in other income in the P&L. Shares outstanding, including unvested restricted stock awards, and the earlier conversion of the remainder of the preferred shares, are approximately 203 million. After the conversion of the Series B1 preferred shares on May 6, there were approximately 22 million common shares held in abeyance due to the 4.99% ownership blockers in the former Series B and B1 certificate of designation. If these abeyance shares had been issued, common shares outstanding would be around 225 million. The GAAP outstanding shares as of June 30 of 190.8 million are reflected on the slide as well as on the face of the balance sheet in the 10-Q. GAAP shares do not reflect unvested RSA amounts, and there are no longer any preferred shares outstanding. At present, PAVmed continues to be the single largest common shareholder of Lucid Diagnostics, with ownership of approximately 15% of the common shares outstanding. Although PAVmed no longer has voting control of Lucid, they, with the board and management, still have a considerable influence over Lucid with approximately 25% voting interest. With regard to the P&L, this slide compares this year's second quarter to last year's second quarter and year-over-year on certain key items. Trust you'll review the information in my comments in the light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-GAAP information. Our sales team sold 2,770 tests for the second quarter, with a billable value over $7.5 million, resulting in recognized revenue of $1.5 million. The test volume is within the range we have been targeting in this pre-Medicare time period. With new investors once again joining us for this call, it's worth repeating what we've communicated in past quarters about revenue recognition. The key determinant of how revenue is recognized at this point in our reimbursement journey is the probability of collection. Therefore, due to the fact that we are in the transitional stages of our reimbursement process, revenue recognition for the majority of our claims submitted to traditional government or private health insurance will be recognized when the claim is actually collected, versus when the patient's report is delivered, invoiced, and submitted for reimbursement. As you'll see in our 10-Q, this is called variable consideration in the jargon of 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 is delivered to the referring physician. For billable amounts contracted directly with employers, including the VA, and that are fixed and determinable, will be recognized as revenue when our contracted service is delivered. Generally, that means when the report is delivered to the referring physician. It's 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'll also get paid within a reasonable timeframe after the final policy is issued. With regard to the remainder of the P&L, the second quarter's total OpEx on both a GAAP and a non-GAAP basis is slightly higher than the first quarter by about 5%, reflecting expected increases in commercial activities, including headcount and sales personnel, clinical service staff, and market access. The non-GAAP net loss per share of $0.06 in the second quarter is better by about a penny sequentially and about $0.04 versus each of the previous three quarters prior to that. With regard to our operating expenses, this slide is a graphic illustration of our operating expenses after eliminating non-cash expenses for the period is reflected. Non-GAAP operating expenses of $12.3 million are basically in line with the average non-GAAP OpEx for the previous five quarters. That is $12.3 versus an average of $12.2 million for those five quarters. Let me close with a few reimbursement highlights for the second quarter. In the second quarter, as mentioned, we sold almost 2,800 tests, reflecting about $7.6 million in pro forma revenue at our list price of $2,749. During the second quarter, we recognized revenue of about 19% of that amount, or $1.5 million. Recognized revenue included about 35% from insurance claims submitted in the prior quarters, with the longest dated item over two years ago. Of the claims submitted in the second quarter, about 65% have been adjudicated and 35% are pending. Out of the 65% that have been adjudicated, about 28% resulted in an allowable amount by the insurance company, with an average of $1,424 per test. Of those denied, most fit into one of three buckets: A, deemed to be medically not necessary or investigational; B, require prior authorization; or C, require additional medical records. The balance are deemed to be non-covered. With that, operator, let's open it up for questions.
Questions and answers
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Your first question comes from Kyle.
Hi, this is Alex Vukasin and I'm on for Kyle Mikson. The test volume remains essentially within the bounds of the guidance you've given us previously. So that comes to no surprise, really. How did the VA factor into the test volume during the quarter?
The VA has not yet contributed meaningfully to the test volume. We're still in the process of engaging with the centers and working through budgets and contracting, and we're really in that phase. So that's going well. We're starting to secure contracts, and we'll start to see the VA contribute to our volume moving forward.
And so, looking at operating expenses, you noted there was an uptick during the quarter reflecting increasing commercial activities. Given the potential timing of the draft and final LCDs, can you just discuss plans to potentially accelerate SG&A in the next few quarters?
Yes, let me just start. As we've discussed before, as we're awaiting Medicare, we have been, over the past couple of quarters, making some updates to our commercial infrastructure in order to be ready to accelerate our commercial activities upon securing broader reimbursement. So that involves shifting some of our commercial personnel to more senior roles so that we'll be able to scale more readily and adding a modest amount, as Dennis mentioned, to the overall commercial headcount. Dennis, did you want to add anything?
Yes, sure thing. So implicit in your question is also the implication in terms of burn and capital requirements. It's important to note when you think about that, yes, we are going to increase headcount. We are going to increase programs and take advantage of the reimbursement landscape as it improves. But because we have a roughly $2,000 test and a 90% margin for the next patient in the door, you're not going to have the incremental burn that you otherwise would have if this was a 50% margin test at a lower price point. So one of the favorable things, or tailwinds, if you would, is just that—the test price and the margin. And yes, we are going to increase our OpEx, but it won't have the direct correlation to the burn that otherwise it might have.
If I could also add one other thing, Alex, which is that, as you'd sort of said in your first question, we do expect to start seeing the impact of our efforts at the VA as well as our efforts on the commercial payer side as we start to secure coverage policies and ultimately translate those into contracts and allocate resources accordingly. So, it's also in preparation for increased commercial activity related to the VA and the commercial side as well.
One last one from me. So you recently contracted with your first LBM, efforts of which you alluded to during your discussions earlier this year. Can you just elaborate a bit more on this news, as well as the potential you could bring on additional LBMs into the fold in the near term prior to Medicare coverage?
Thanks, Alex. I think the first part was just elaborating on the LBM itself and what that means, and then how this may serve as a launchpad for future LBMs. Yes, we're quite excited about this. Maybe just a bit of an additional primer on how the system works. The diagnostic industry has—on the commercial coverage side—laboratory benefit managers where they concentrate the technical expertise in assessing complex molecular diagnostic tests like ours. Client health plans, regional as well as national plans, contract with these laboratory benefit managers to write coverage policies on their behalf. So this is a very big first step for us. This is our first laboratory benefit manager, Concert. And we're quite excited that the coverage policy that they wrote makes it clear that EsoGuard is medically necessary and really validates the bulk of our clinical evidence in support of that. And it did so looking at the entire landscape of potentially other products and found that only ours had sufficient evidence to justify that. So that was a big step and further validation of its importance is that three of its client plans almost essentially immediately published their own coverage policies in sync with that, and we expect several more to come. This gives us an opportunity, as I mentioned in my prepared remarks, since often these plans tend to be regionally concentrated. It gives us the opportunity to allocate resources in a geographic fashion consistent with that. The second part of your question is also extremely important. It's always important to get the first one under our belt in conversations with other plans and with other LBMs. Obviously, a very common question is who else is on board. So having Concert on board will certainly help us, and it's had a positive impact on our ongoing discussions with other LBMs.
Your next question comes from Mark with BTIG.
I guess the first one, just maybe asking about CMS. I completely understand there's been a long queue for several years. I just wanted to maybe ask, I know there was at least one person who changed or is about to change his role at Palmetto GBA. I'm just curious if you think any of the personnel change might have any impact to your weight in front of Medicare?
We don't think so. As we've said before, we've been in close communication with the leadership at MolDX, and we obviously do our best to try to understand to the best of our ability what may be going on behind the scenes. We feel quite confident that things are in the late stages and that the work that went into getting us this far all the way through the tech meeting and beyond is already built in. So it's our understanding, to the best of our ability to ascertain, that there has been a bit of a prolonged backlog with the processing and delays in processing LCDs coming out of the MACs, including MolDX and at CMS. There's a sort of a broad sense within the community that this may be loosening up as a couple of long-awaited LCDs that apparently were using up a significant amount of the bureaucratic bandwidth have come to fruition over the last couple of weeks. So we're hopeful that loosening will accelerate the processing of our LCD.
Okay, great. And then congrats again on getting Concert over the goal line. I guess can you just remind us, it looks like three of the plans have followed their coverage. If you could remind us how many plans look to Concert and, if all of them converted, do you have a sense for how many covered lives that could mean?
Under Concert there are numerous plans, leading to just under 10 million covered lives. All I can really say publicly is that three are on board. We expect a couple more in the coming quarters. And ultimately, we have every reason to believe that all of the client plans will ultimately mimic the coverage policy of the LBM.
Okay, perfect. If I can sneak one last one in. I just want to make sure that you're still planning to move in line with your target of 2,500 to 3,000 tests per quarter. And then I wanted to get a sense for how some of the activity is going just generally with firefighters and also with some of the more typical initiatives in primary care type clinics?
So, yes, I think for now we're still targeting that range as we prepare behind the scenes and make the modifications I had mentioned earlier. I think the trigger for us to start trying to drive up that volume by increasing our resources will really depend on the big trigger—securing our draft coverage policy—but also the parallel efforts and traction at the VA and with our commercial plans will obviously influence that as well. As we've talked about previously, the mix of that volume, even though we've reported a fairly steady number quarter-to-quarter, we're trying to shift that. Earlier that was dominated by health fair events such as firefighter events, as those were the most efficient ways for us to generate the test volume that we needed to drive claim submissions and support our engagement with the commercial payers. So behind the scenes, as we've talked about previously, we have been making adjustments to our commercial strategy, our incentive plans, and so forth, to start shifting that volume back towards more traditional engagements with primary care physicians and gastroenterologists and, as we've described, health systems as well. And that is working. We've also been pushing the team to shift more of our health fair events towards contracted plans where we have confidence and assurance that we'll get paid for them. That progress is proceeding as well. So as you may note that our revenue this quarter was up even though our test volume was flat, it's a reflection of those behind-the-scenes efforts.
Yes, Mark, maybe just a little bit more granularity, just expanding on what Lishan said. Our comp plans are now more heavily weighted towards what the team's calling MVAC—Medicare, VA, and contracted revenue. The contracted revenue would include firefighters and self-insured employers. It's an emphasis on getting paid. And so when you look at the total of 2,800 tests in the quarter, just under 40% fit that category, and that's up substantially from the previous quarter. The government insurance category, which includes Medicare and Medicare Advantage, Medicaid, TRICARE, and the VA, is about half of that, and the direct contracting is the other half. And as Lishan said, the VA presently is not contributing to the test volume. The VA is more about obtaining purchase orders and pipeline building until the new budget year in October. Test volume from those POs is forthcoming and that'll contribute to the mix. So that gives you a little bit more color in terms of the split on the volume, but it is increasing in terms of the concentration on the MVAC commercial efforts.
Your next question comes from Mike with Needham.
So I guess first, just on this cost-effectiveness model, I was wondering if there were any kind of metrics you could share there. I don't know if you were looking at things in terms of cost per quality-adjusted life year or something like that.
We don't— we're not ready to disclose public numbers yet. We're still wrapping up the final touches to the model, but it is a very sophisticated HEOR model. We have worked with Dr. Nick Shaheen, who's one of our close advisors and the lead author of the American College of Gastroenterology guidelines. He also has a lot of expertise in this type of model building. These analyses incorporate numerous variables and model a variety of scenarios. Their view is toward the long-term value across multiple parameters, as I mentioned, all the way from the detection of the precancerous conditions through the patient journey for those who develop cancer. One of the metrics will be quality-adjusted life years, but there are a lot of other details that come out of it. It's really designed to be the type of model that commercial payers can sink their teeth into. If you recall, Medicare doesn't incorporate healthcare economics, but commercial payers do. Demonstrating long-term cost-effectiveness, not just budget impact, is important and will be important over the long term. So all I can say right now is that the initial results with regard to the cost-effectiveness of EsoGuard testing across that broad spectrum of parameters are looking quite good. And it's looking quite good across nearly all model scenarios that were modeled in this analysis. Those results will be released shortly and will be submitted for publication. These models need to go through peer review and publication for them to have their greatest impact in our conversations with commercial payers.
Okay, got it, got it. And then just, curious where you're seeing test samples being taken. Has there been any kind of changes there? I guess what I'm asking about is PCPs versus GIs versus your test centers.
Yes, I touched on this earlier with Mark's question and Dennis elaborated on our efforts over the last couple of quarters to shift our incentive plans so that our volume starts to shift away from being heavily dominated by health fair events such as firefighter events towards engagement with primary care physicians and with gastroenterologists in our more traditional model, which in our case includes what we've referred to as our satellite Lucid Test Center model, where our nursing team and our clinical services team perform testing days at practices—primary care practices and GI practices—when desired. So yes, that shift is going well. It will always include both primary care and gastroenterologists as targets for us, but the majority of patients are at the primary care physician. However, GIs play a very important role as a conduit toward their primary care referral patterns, and within their practices there are patients they are happy to have adopt our technology. In addition, we've been engaged in long-term efforts over the last couple of years to work with health systems and develop models for building programs within larger health systems that include incorporating the primary care physician groups, training them, incorporating the cell collection processes and all of the integration involved with EHR integration and system building. That's really starting to come to fruition and we're starting to lock down implementation and have these programs active at multiple health systems.
Your next question comes from Anthony with Maxim Group.
So in terms of the coverage policy from Concert, do we know the number of enrolled lives or covered lives under that, and what that potential is in terms of patients?
Covered lives is always a bit of a tricky number. We don't want to oversimplify because there are complexities with geographic distribution, age distribution, demographics, and so forth. The covered lives are at the individual client health plans beneath the LBM. The total number is a bit under 10 million covered lives within the client health plans under Concert. Those plans are concentrated—tend to be in the Midwest and upper Midwest and central Midwest. So in terms of potential, yes, it's significant. And because it's concentrated geographically, it gives us directionality in terms of where to target our resources further.
Okay, and then just as a follow-up, has the number of denials of coverage for your product started to trend down? Or is it just every quarter it sort of stays the same? Is there anything else that you're doing from your end to try to get those denials down? I know when there's a denial, you provide evidence of necessity and so forth, but is there anything you can do from your end to prevent the denial from happening initially?
It's choppy, Anthony, but we can give you a couple things. When a claim requires additional medical information, we're doing things to provide that in advance. But some of the puzzling denials are placeholders until the plan gets the policy into their network and into alignment. For example, denials citing medically not necessary—every one of our patients meet guideline criteria. Or a denial saying investigational—well, United and Cigna now have policies about endoscopy that point to EsoGuard as a gating factor to approve an endoscopy, which goes against it being experimental or investigational. It's just an indication that it's a placeholder. It's continuing work of engagement, having the tools, clinical evidence, the HEOR, and Medicare progress. Having an LBM like Concert demonstrate coverage based upon clinical evidence is certainly a good indicator. Some of these pillars are starting to fall based on claims data, appeals, and providing engagement with the significant clinical evidence. There'll be more of that. But as far as denials, there's really no clear trend yet that we can point to as a definitive improvement.
Just to emphasize what Dennis said, we leave no stone unturned within our revenue cycle management process. Dennis mentioned a few measures: being aggressive about supplying full medical records and clinical evidence in advance, being meticulous about how the test requisition forms are filled out, ensuring they have the appropriate coding and criteria, and exploring situations where prior authorization comes into place and working through appeals when necessary. We do all of that, but much of that is on the edges. At the end of the day, the only way to really flip this fundamentally is to start securing coverage policies, and that's what we're doing.
Right, right. As your network grows, it lowers the denial rate.
Yes. In-network status ultimately has the biggest impact on converting an allowed claim into revenue.
Your next question comes from Ed with Ascendant Capital.
Yes, congrats on all the progress. My question is on the $2,000 test reimbursement. Is there any opportunity to increase that going forward for factoring inflation?
At this point, we're not really pushing for a higher price. We're quite satisfied that the current price is fair. Our marginal incremental cost of goods is relatively modest, and our focus is on adoption and securing coverage policy.
Your next question comes from Kyle with Canaccord. Please go ahead.
So I just wanted to ask if there's any update on concierge medicine and kind of unique ways of getting payment and maybe going forward, ways to supplement non-coverage and the traditional ways of having coverage reimbursement.
Last year we did explore the concierge medicine side and had some success, but we found the hurdles were quite high in terms of the resources required to convert a concierge practice into meaningful test volume and payment. So our emphasis outside of traditional pathways includes contracted events, whether contracted through fire departments and other entities, as well as employer contracting. We've shifted focus to MVAC. Ultimately, concierge is not a major emphasis for us; we didn't see the payoff relative to the resources required.
Got it. And when you think about hiring new reps, what industries would make sense for them to come from? I mean, how do you think about hiring from pharma or MedTech? I just feel like that's going to be a...
We've had a lot of experience with that over the last five or six years, and we've honed our internal expertise in recruiting and training. We've had success with a mix of backgrounds. Younger, early-career folks can be effective with strong training, and for sales leadership roles, people with GI diagnostics experience are often valuable. But the key is training. Our sales training has become quite sophisticated. Recent updates include AI-based role playing and objection-handling training so reps can effectively engage physicians and tell our story. Backgrounds matter, but training translates into field effectiveness.
Okay. And have you already unlocked most of the COGS savings over the years, or is there further automation or next-gen versions that could reduce COGS? What could COGS look like over the long term?
At our current volumes, we've spent a lot of time honing our SOPs and processes for the assay, and it is quite efficient. We continue to improve and have new AI-based tools for requisitions as samples come in. There are still improvements we can extract, but we're already quite efficient. As volume grows, there are multiple opportunities to incorporate further technological advances, particularly automation, which will improve efficiencies.
Presently, the EsoCheck device costs around $60, and to process a test through the lab is about $125 or so. We see the cost of the lab coming down marginally, and as you produce at higher volume, the EsoCheck device cost will come down as well. You might find another incremental amount of savings, but given the high margin—roughly 90%—adoption and price preservation are probably more important to overall profitability than squeezing marginal COGS savings, although we will pursue automation where it makes sense.
All right. And are there any other levers to reduce cash burn in the near term? Obviously revenue would offset that, but anything else as you model burn going forward and cash needs?
When you look backwards, the burn is pretty flat at about $11.3 million per quarter. A good chunk of that is commercial and clinical services and clinical evidence. We need to stay in that 2,500 to 3,000 test band at a minimum to remain relevant with chief medical officers—you have to file claims and appeals. Cutting the cash burn further would require cutting commercial activities, which doesn't make sense while we're in this Medicare preparation zone. One favorable dynamic is the test price and margin. Because it's a high-margin test, increasing commercial activities can be done without the normal significant incremental burn that many early-stage companies face during growth. That's a meaningful tailwind for us.
I would emphasize that our best opportunity to lower cash burn is to drive revenue. Our revenue was up this quarter even though volume was flat, and that's where the near-term opportunity lies: realizing revenue through the VA, increasing contracted events, and securing commercial plans while we await Medicare.
Ladies and gentlemen, that concludes today's Q&A session. I will turn the call back over to Dr. Lishan Aklog.
Great. Thanks, operator, and thank you all for taking the time and for your attention this morning. As always, great questions from our analysts. I hope you found the discussions informative. Just really to summarize, we do remain confident that a positive Medicare draft LCD is forthcoming, and we're encouraged by some of the signs that the LCD backlog may be loosening. Meanwhile, we're happy with the progress we're making on multiple fronts. First, the Concert coverage policy is really important. Second, we have solid progress on the VA; the new fiscal year will be important for securing longer-term contracts. Third, our engagement with health systems and the ability to use EHR integration within health systems to drive success in those programs is strong. And fourth, our healthcare economic work is an important milestone coming up and will have a significant long-term impact. All of this activity is increasing our visibility and creating opportunities for broader strategic engagement, which is exciting. Thanks again. As always, we encourage you to keep abreast of our progress via our news releases, these update calls, our website, and social media. And as always, feel free to reach out to us if you have any questions. Thanks, everybody, and have a great day.
Ladies and gentlemen, this has concluded today's conference call. Thank you for participating. You may now disconnect.