What changed in this filing

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Item 1. Business

2026-03-25 compared with 2025-03-24 · 375 added, 1008 removed, 59 unchanged (96% of the section changed)

the context otherwise requires, “we”, “us”, and “our”, the “Company”, “Lucid”

and “Lucid Diagnostics” refer to Lucid Diagnostics Inc.

Unless the context otherwise requires, “ we ” , “ us ” , and “ our ” , the “ Company ” , “ Lucid ” and “ Lucid Diagnostics ” refer to Lucid Diagnostics Inc.

and its subsidiaries LucidDx Labs Inc.

(“LucidDx Labs”)

and CapNostics, LLC (“CapNostics”).

( “ LucidDx Labs ” ) and CapNostics, LLC ( “ CapNostics ” ).

Background and Overview

Lucid Diagnostics is a commercial-stage medical diagnostics technology company focused on the millions of patients with gastroesophageal reflux disease

(“GERD”), also known as chronic heartburn, acid reflux or simply reflux, who are at risk of developing esophageal precancer

and cancer, specifically highly lethal esophageal adenocarcinoma (“EAC”).

We believe that our flagship

product, the EsoGuard Esophageal DNA Test, performed on samples collected with the EsoCheck Esophageal Cell Collection Device, constitutes

the first and only commercially available diagnostic test capable of serving as a widespread testing tool with the goal of preventing

EAC deaths, through early detection of esophageal precancer in at-risk GERD patients.

EsoGuard is a bisulfite-converted

targeted next-generation sequencing (NGS) DNA assay performed on surface esophageal cells collected with EsoCheck.

It quantifies methylation

at 31 sites on two genes, Vimentin (VIM) and Cyclin A1 (CCNA1).

Analytical validation tests of EsoGuard demonstrated approximately 97%

analytical sensitivity, 95% analytical specificity, approximately 98% analytical accuracy, and 100% inter-assay and intra-assay precision.

Two independent clinical validation case control studies funded by the National Institute of Health utilized were performed using upper

endoscopy with biopsies as the diagnostic comparator and confirmed EsoGuard accurately identifies BE.

A pooled analysis of both studies

demonstrated 84% sensitivity (95% confidence interval (“CI”) 76-90%), for detection of BE, and 86% specificity (95% CI 81-91%).

predictive value (PPV) and negative predictive value (NPV) were calculated using a BE prevalence of 10.6% published in a meta-analysis

of U.S patients with GERD.

This resulted in a PPV of approximately 42% and NPV of around 98% .

EsoCheck is an FDA 510(k) and

CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells in a less than five-minute

office procedure.

It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone catheter from which a soft silicone

balloon with textured ridges emerges to gently swab surface esophageal cells.

When vacuum suction is applied, the balloon and sampled

cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted region during device

We believe this proprietary Collect+Protect™ technology makes EsoCheck the only noninvasive esophageal cell collection

device capable of such anatomically targeted and protected sampling.

EsoGuard and EsoCheck are based

on patented technology licensed by Lucid from Case Western Reserve University (“CWRU”).

EsoGuard and EsoCheck have been developed

to provide accurate, non-invasive, patient-friendly testing for the early detection of EAC and Barrett’s Esophagus (“BE”),

including dysplastic BE and related pre-cursors to EAC in patients with chronic GERD.

Lucid Diagnostics is a commercial-stage cancer prevention medical diagnostics technology company.

Lucid is focused on the millions of patients with gastroesophageal reflux disease (“GERD”), also known as chronic heartburn, who are at risk of developing esophageal precancer and cancer, specifically highly lethal esophageal adenocarcinoma (“EAC”).

We believe that our flagship product, the EsoGuard Esophageal DNA Test, performed on samples collected with the EsoCheck Esophageal Cell Collection Device, constitutes the first and only commercially available diagnostic test capable of serving as a widespread testing tool with the goal of preventing EAC deaths, through early detection of esophageal precancer in at-risk GERD patients.

EsoGuard is a bisulfite-converted targeted next-generation sequencing ("NGS") DNA assay performed on surface esophageal cells collected with the FDA 510(k)-cleared EsoCheck device.

It quantifies methylation at 31 sites on two genes, Vimentin ("VIM") and Cyclin A1 ("CCNA1").

Analytical validation tests of EsoGuard demonstrated approximately 97% analytical sensitivity, 95% analytical specificity, 98% analytical accuracy, and 100% inter-assay and intra-assay precision.

Performance characteristics of the EsoGuard test have been evaluated in two case-control studies and two prospective, single-arm cohort studies.

Both cohort studies were designed as “screening” studies, enrolling patients from the intended-use population.

In these screening settings, EsoGuard demonstrated a positive predictive value ("PPV") of 30–33% and a negative predictive value ("NPV") of 99% for the detection of Barrett’s esophagus (“BE”) and EAC.

EsoCheck is an FDA 510(k) cleared and CE Mark certified noninvasive swallowable balloon capsule catheter device designed for in-office targeted sampling of surface esophageal cells in a less than two minute long office procedure.

It consists of a vitamin sized semi-rigid plastic capsule tethered to a thin silicone catheter from which a soft inflatable silicone balloon with textured ridges emerges to gently swab surface esophageal cells.

When suction is applied, the balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted region during device withdrawal.

We believe this proprietary Collect+Protect™ technology makes EsoCheck the only noninvasive esophageal cell collection device capable of such anatomically targeted and protected sampling.

EsoGuard and EsoCheck are based on patented technology licensed by Lucid from Case Western Reserve University (“CWRU”).

EsoGuard and EsoCheck have been developed to provide accurate, non-invasive, patient-friendly testing for the early detection of EAC and BE, including dysplastic BE and related pre-cursors to EAC in patients with chronic GERD.

Market Opportunity

In 2024, approximately 22,000

GERD patients were diagnosed with EAC and approximately 16,000 will die from it.

Over 80% of EAC patients will die within five years

of diagnosis, making it the second most lethal cancer in the U.S.

incidence of EAC has increased 500% over the past four decades,

while the incidences of other common cancers have declined or remained flat.

In nearly all cases, EAC silently progresses until it manifests

itself with new symptoms of advanced disease.

EAC is nearly always invasive at diagnosis, and, unlike other common cancers, mortality

rates are high even in its earlier stages.

As discussed below under the

heading “Clinical Guidelines for At-Risk Population”, in July 2022, the American Gastroenterology Association (“AGA”)

significantly expanded the target population for esophageal precancer screening, recommending screening in at-risk patients without symptoms

Based on this revision, we believe the cohort recommended for screening consists of an estimated 30 million U.S.

with at least 3 established risk factors for BE.

In 2025, approximately 22,000 U.S.

GERD patients were diagnosed with EAC and approximately 16,250 will have died from the disease.

Over 80% of EAC patients will die within five years of diagnosis, making it the second most lethal cancer in the U.S.

incidence of EAC has increased 500% over the past four decades, while the incidences of other common cancers have declined or remained flat.

In nearly all cases, EAC silently progresses until it manifests itself with new symptoms of advanced disease.

EAC is nearly always invasive at diagnosis, and, unlike other common cancers, mortality rates are high even in its earlier stages.

Based on current guidelines published by the American Gastroenterology Association (“AGA”), we believe the cohort recommended for screening consists of an estimated 30 million U.S.

individuals with at least 3 established risk factors for BE.

Accordingly, we believe EsoGuard’s total addressable U.S.

market opportunity approximates

$60 billion based on an effective Medicare payment of $1,938 and the estimated 30 million U.S.

patients recommended for screening by

clinical practice guidelines.

(In December 2019, we secured “gapfill” determination for EsoGuard’s PLA code 0114U through

the CMS CLFS process.

This allowed us to engage directly with Medicare contractor Palmetto GBA and its MolDx Program on CMS payment and

As discussed below under the heading “Reimbursement and Market Access”, in October 2020, CMS granted EsoGuard final

Medicare payment determination of $1,938.01, effective January 1, 2021.)

Unfortunately, for a variety

of reasons, less than 10% of at-risk patients who are recommended for screening undergo traditional invasive upper gastrointestinal endoscopy

We believe that the profound tragedy of an EAC diagnosis is that likely death could have been prevented if the at-risk patient

had been screened and then undergone surveillance and curative endoscopic esophageal ablation of dysplastic BE.

Since mortality rates are high

even in early stage EAC, preventing EAC deaths requires detection and intervention at the precancer stage.

Most of the necessary elements

for such an early detection program are already well established—an at-risk population (at-risk GERD patients), a precancer (BE),

and an intervention which can halt progression to EAC (endoscopic esophageal ablation).

Until recently, the only missing element for

such an early detection program is a widespread screening tool that can detect BE prior to EAC.

We believe EsoGuard, used with

EsoCheck, constitutes that missing element—the first and only commercially available diagnostic test capable of serving as a widespread

testing tool with the goal of preventing EAC deaths through early detection of esophageal precancer and cancer in patients with 3 or

more risk factors.

market opportunity approximates $60 billion based on an effective Medicare payment of $1,938 and the estimated 30 million U.S.

patients recommended for screening by clinical practice guidelines.

Unfortunately, for a variety of reasons, less than 5% of at-risk patients who are recommended for screening undergo traditional invasive upper gastrointestinal endoscopy ("EGD").

We believe that the profound tragedy of an EAC diagnosis is that likely death could have been prevented if the at-risk patient had been screened and then undergone surveillance and curative endoscopic esophageal ablation of dysplastic BE.

Since mortality rates are high even in early stage EAC, preventing EAC deaths requires detection and intervention at the precancer stage.

Most of the necessary elements for such an early detection program are already well established—an at-risk population (at-risk GERD patients), a precancer (BE), and an intervention which can halt progression to EAC (endoscopic esophageal ablation).

Until recently, the only missing element for such an early detection program is a widespread screening tool that can detect BE prior to EAC.

We believe EsoGuard, used with EsoCheck, constitutes that missing element—the first and only commercially available diagnostic test capable of serving as a widespread testing tool with the goal of preventing EAC deaths through early detection of esophageal precancer and cancer in patients with 3 or more risk factors.

Clinical Guidelines for At-Risk Population

The subgroup of long-standing

or severe GERD patients at-risk for BE and progression to EAC is well defined in clinical practice guidelines, including the American

College of Gastroenterology (“ACG”) BE Guidelines.

In its Recommendation 5, the ACG suggests a single screening endoscopy

in patients with chronic GERD symptoms and 3 or more additional risk factors for BE, including male sex, age greater than 50 years, White

race, tobacco smoking, obesity, and family history of BE or EAC in a first-degree relative.

An ACG clinical guideline entitled

“ Diagnosis and Management of Barrett’s Esophagus:

An Updated ACG Guideline ,” the first such update since 2016,

was published online in April 2022 in the American Journal of Gastroenterology.

The clinical guideline reiterates the ACG’s long-standing

recommendation for esophageal precancer screening in at-risk patients with GERD.

For the first time, however, the clinical guideline

also endorses non-endoscopic biomarker screening as an acceptable alternative to costly and invasive endoscopy stating that “a

swallowable non-endoscopic capsule device combined with a biomarker is an acceptable alternative to endoscopy for BE.” The clinical

guideline specifically mentions EsoCheck as such a swallowable, non-endoscopic esophageal cell collection device, as well as methylated

DNA biomarkers such as EsoGuard.

The summary of evidence for this recommendation includes a reference to the seminal NIH-funded, multicenter,

case-control study published in 2018 in Science Translational Medicine , which demonstrated that EsoGuard is highly accurate at

detecting esophageal precancer and cancer, including on samples collected with EsoCheck.

In July 2022, the American Gastroenterology

Association (“AGA”) published in their “Clinical Practice Update on New Technology and Innovation for Surveillance

and Screening in Barrett’s Esophagus” updated clinical guidance that mirrors the same furnished by the ACG as described above,

endorsing the use of non-endoscopic cell collection tools to screen for BE like our EsoCheck Cell Collection Device, which is cited in

the update, as an acceptable alternative to endoscopy to directly address the need for noninvasive screening tools that are easy to administer,

patient friendly, and cost-effective for the detection of BE.

The clinical practice update by the AGA also significantly expands the

target population for esophageal precancer screening, including for EsoGuard and EsoCheck, by recommending, for the first time, screening

in at-risk patients without symptoms of GERD.

The AGA does so by adding a history of chronic GERD as merely an additional, seventh risk

factor to the six risk factors for BE and EAC that have traditionally identified at-risk symptomatic patients recommended for screening.

March 2025, we announced that a recent update to the National Comprehensive Cancer Network® (NCCN) Clinical Practice Guidelines in

Oncology (NCCN Guidelines®) focused on Esophageal and Esophagogastric Junction Cancers (Version 1.2025) has added a new section on

BE screening.

The NCCN Guidelines® now reference professional society guidelines on BE screening, including the most recent ACG clinical

guideline discussed above, which recommends non-endoscopic biomarker testing, such as EsoGuard performed on samples collected with EsoCheck,

as an acceptable alternative to invasive upper endoscopy to detect esophageal precancer.

The subgroup of long-standing or severe GERD patients at-risk for BE and progression to EAC is well defined in clinical practice guidelines, including the American College of Gastroenterology (“ACG”) BE Guidelines.

In its Recommendation 5, the ACG suggests a single screening endoscopy in patients with chronic GERD symptoms and 3 or more additional risk factors for BE, including male sex, age greater than 50 years, White race, tobacco smoking, obesity, and family history of BE or EAC in a first-degree relative.

An ACG clinical guideline entitled “ Diagnosis and Management of Barrett ’ s Esophagus:

An Updated ACG Guideline ,” the first such update since 2016, was published online in April 2022 in the American Journal of Gastroenterology.

The clinical guideline reiterates the ACG’s long-standing recommendation for esophageal precancer screening in at-risk patients with GERD.

For the first time, however, the clinical guideline also endorses non-endoscopic biomarker screening as an acceptable alternative to costly and invasive endoscopy stating that “a swallowable non-endoscopic capsule device combined with a biomarker is an acceptable alternative to endoscopy for BE.” The clinical guideline specifically mentions EsoCheck as such a swallowable, non-endoscopic esophageal cell collection device, as well as methylated DNA biomarkers such as EsoGuard.

The summary of evidence for this recommendation includes a reference to the seminal NIH-funded, multicenter, case-control study published in 2018 in Science Translational Medicine , which demonstrated that EsoGuard is highly accurate at detecting esophageal precancer and cancer, including on samples collected with EsoCheck.

In July 2022, the AGA published in their “Clinical Practice Update on New Technology and Innovation for Surveillance and Screening in Barrett’s Esophagus” updated clinical guidance that mirrors the same furnished by the ACG as described above, endorsing the use of non-endoscopic cell collection tools to screen for BE like our EsoCheck Cell Collection Device, which is cited in the update, as an acceptable alternative to endoscopy to directly address the need for noninvasive screening tools that are easy to administer, patient friendly, and cost-effective for the detection of BE.

The clinical practice update by the AGA also significantly expands the target population for esophageal precancer screening, including for EsoGuard and EsoCheck, by recommending, for the first time, screening in at-risk patients without symptoms of GERD.

The AGA does so by adding a history of chronic GERD as merely an additional, seventh risk factor to the six risk factors for BE and EAC that have traditionally identified at-risk symptomatic patients recommended for screening.

In March 2025, we announced that a recent update to the National Comprehensive Cancer Network® ("NCCN") Clinical Practice Guidelines in Oncology ("NCCN Guidelines®") focused on Esophageal and Esophagogastric Junction Cancers (Version 1.2025) has added a new section on BE screening.

The NCCN Guidelines® now reference professional society guidelines on BE screening, including the most recent ACG clinical guideline discussed above, which recommends non-endoscopic biomarker testing, such as EsoGuard performed on samples collected with EsoCheck, as an acceptable alternative to invasive upper endoscopy to detect esophageal precancer.

Commercialization

Our EsoGuard commercialization

efforts span multiple channels including targeting primary care and GI physicians, who have generally embraced our message that EsoGuard

has the potential to expand the funnel of BE-EAC patients who will need long term EGD surveillance and, potentially, treatment with endoscopic

esophageal ablation.

To assure sufficient testing

capacity and geographic coverage, we have undertaken multiple ways for patients have access to our test.

Initially, we built a limited

network of our own physical Lucid Test Centers, staffed by Lucid-employed clinical personnel, where patients can undergo the EsoCheck

procedure and have the sample sent for EsoGuard testing at our CLIA-certified laboratory.

Our current test center network currently includes

locations in metropolitan areas in Arizona, California, Colorado, Florida, Georgia, Idaho, Michigan, Nevada, Texas and Utah.

In addition to our own test center

locations, we have broadened patient access to our test by establishing a satellite test center program, whereby we are making our personnel

available to perform cell collection services inside physician offices or in certain geographies, closely nearby physician offices by

way of our Lucid Mobile Testing Unit.

Also, in January 2023, we completed

our first #CheckYourFoodTube Precancer Testing Event, with the San Antonio Fire Department (the “SAFD”) during Firefighter

Cancer Awareness Month as designated by the International Association of Fire Fighters (IAFF).

A total of 391 members who were deemed

to be at-risk for esophageal precancer, underwent a brief, on-site, noninvasive cell collection procedure, performed by our clinical

personnel using EsoCheck.

Since then, additional testing events have been hosted with the SAFD, and similar events have been held with

fire departments throughout the country.

These events are ongoing and are an extension of Lucid’s satellite test center program,

which brings our precancer testing directly to patients—at their physician’s office and now at testing day events.

In March 2023, we launched a

direct contracting strategic initiative to engage directly with large Administrative Services Only (“ASO”) self-insured employers,

unions and other entities, seeking to replicate the successes of other cancer screening diagnostic companies that have deployed similar

In January 2025, we expanded

on our direct contracting initiative by launching a cash-pay program targeting concierge medicine, as an important component of our

strategic efforts to expand our contractually-guaranteed revenue.

We have already contracted with concierge medicine

practices across the country under this initiative.

We have also established an EsoGuard

Telemedicine Program, in partnership with UpScript, LLC, an independent third-party telemedicine provider, that accommodates EsoGuard

self-referrals from direct-to-consumer marketing.

Our EsoGuard commercialization efforts span multiple channels including targeting primary care and GI physicians, who have generally embraced our message that EsoGuard has the potential to expand the funnel of BE-EAC patients who will need long term EGD surveillance and, potentially, treatment with endoscopic esophageal ablation.

To assure sufficient testing capacity and geographic coverage, we have undertaken multiple ways for patients have access to our test.

Initially, we built a limited network of our own physical Lucid Test Centers in key metropolitan areas, staffed by Lucid-employed clinical personnel, where patients can undergo the EsoCheck procedure and have the sample sent for EsoGuard testing at our CLIA-certified laboratory.

In addition to our own test center locations, we have broadened patient access to our test by establishing a satellite test center program, whereby we are making our personnel available to perform cell collection services inside physician offices or in certain geographies, closely nearby physician offices by way of our Lucid Mobile Testing Unit.

We also regularly conduct testing events in addition to our satellite test center programs and Lucid Test Centers.

We conduct #CheckYourFoodTube Precancer Testing Events with fire departments throughout the country.

These events are ongoing and are an extension of Lucid’s satellite test center program, which brings our precancer testing directly to patients.

We also have a direct contracting strategic initiative to engage directly with large Administrative Services Only (“ASO”) self-insured employers, unions and other entities, seeking to replicate the successes of other cancer screening diagnostic companies that have deployed similar strategies.

Other commercial channels include our cash-pay program targeting concierge medicine, arrangements with health systems for comprehensive, integrated esophageal precancer testing programs, and an EsoGuard Telemedicine Program, in partnership with UpScript, LLC, an independent third-party telemedicine provider, that accommodates EsoGuard self-referrals from direct-to-consumer marketing.

Reimbursement and Market Access

As noted above, in December 2019,

we secured “gapfill” determination for EsoGuard’s PLA code 0114U through the CMS CLFS process.

This allowed us to engage

directly with Medicare contractor Palmetto GBA and its MolDx Program on CMS payment and coverage.

In October 2020, CMS granted EsoGuard

final Medicare payment determination of $1,938.01, effective January 1, 2021.

A final Local Coverage Determination

(“LCD”) L39256, entitled “ Molecular Testing for Detection of Upper Gastrointestinal Metaplasia, Dysplasia, and Neoplasia ”

became effective in May 2023 on the Center for Medicare and Medicaid Services (“CMS”) website by MAC Palmetto GBA.

(A substantially

identical LCD was published by Noridian Healthcare Solutions, the MAC whose geographic jurisdiction covers our CLIA laboratory in Lake

Forest, CA.) The LCD outlines criteria for future coverage that MolDX expects upper gastrointestinal precancer and cancer molecular diagnostic

tests to meet.

These criteria include active GERD with at least three risk factors, as well as evidence of analytic validity, clinical

validity, and clinical utility.

Although the LCD indicated that it found that no currently existing test has fulfilled all these criteria,

it indicated that it will “monitor the evidence and may revise this determination based on the pertinent literature and society

recommendations.” In November 2024, we submitted to MolDx our complete clinical evidence package in support of a request for reconsideration

of the non-coverage language in the LCD to secure Medicare coverage for EsoGuard.

In parallel with our request

for reconsideration of the LCD, we are aggressively pursuing EsoGuard commercial insurer coverage and payment.

Although the claim adjudication

cycle can be prolonged during the early commercialization of a new test, we have received and are continuing to receive out-of-network

commercial insurance payments for the EsoGuard test, which accounts for the vast majority of our revenue to date.

Additionally, the legislatures

in a number of states have passed laws mandating coverage of comprehensive biomarker testing over the past several years.

We are reviewing

how to leverage legislation in those states to expand access to and reimbursement of EsoGuard.

In December 2019, we secured “gapfill” determination for EsoGuard’s PLA code 0114U through the CMS CLFS process.

This allowed us to engage directly with Medicare contractor Palmetto GBA and its MolDx Program on CMS payment and coverage.

In October 2020, CMS granted EsoGuard final Medicare payment determination of $1,938.01, effective January 1, 2021.

A final Local Coverage Determination (“LCD”) L39256, entitled “ Molecular Testing for Detection of Upper Gastrointestinal Metaplasia, Dysplasia, and Neoplasia ” became effective in May 2023 on the Center for Medicare and Medicaid Services (“CMS”) website by MAC Palmetto GBA.

(A substantially identical LCD was published by Noridian Healthcare Solutions, the MAC whose geographic jurisdiction covers our CLIA laboratory in Lake Forest, CA.) The LCD outlines criteria for future coverage that MolDX expects upper gastrointestinal precancer and cancer molecular diagnostic tests to meet.

These criteria include active GERD with at least three risk factors, as well as evidence of analytic validity, clinical validity, and clinical utility.

Although the LCD indicated that it found that no currently existing test has fulfilled all these criteria, it indicated that it will “monitor the evidence and may revise this determination based on the pertinent literature and society recommendations.” In November 2024, we submitted to MolDx our complete clinical evidence package in support of a request for reconsideration of the non-coverage language in the LCD to secure Medicare coverage for EsoGuard.

The package was submitted as part of a request for reconsideration of the non-coverage language in the LCD to secure Medicare coverage for EsoGuard.

As part of the LCD reconsideration process, MolDx-participating Medicare Administrative Contractors convened a Contractor Advisory Committee ("CAC") Meeting regarding the LCD on September 4, 2025.

At the meeting, eleven experts, including physicians across multiple specialties (GI, primary care, pathology), major society guideline co-authors (ACG, AGA) and industry leaders (American Foregut Society, American Society for Gastrointestinal Endoscopy), participated in this extensive discussion of the unmet clinical need with respect to early detection of esophageal precancer and the strength of the EsoGuard clinical validity and clinical utility data.

In parallel with our request for reconsideration of the LCD, we are aggressively pursuing EsoGuard commercial insurer coverage and payment.

Although the claim adjudication cycle can be prolonged during the early commercialization of a new test, we have received and are continuing to receive out-of-network commercial insurance payments for the EsoGuard test, which accounts for the vast majority of our revenue to date.

Additionally, the legislatures in a number of states have passed laws mandating coverage of comprehensive biomarker testing over the past several years.

We are reviewing how to leverage legislation in those states to expand access to and reimbursement of EsoGuard.

Clinical Utility and Clinical Trials

Demonstrating EsoGuard’s

clinical utility, which requires providing evidence that the test has a meaningful impact on clinical practice, is very important for

a variety of purposes, including, importantly, for Medicare and private payor payment and coverage.

It has been established that one

of the most important factors to private payors in deciding whether to grant payment and coverage will be demonstration that the EsoGuard

test, when ordered by physicians, provides information that can be used to identify or exclude patients who would benefit from additional

management and/or treatment.

Clinical utility studies are also important for general EsoGuard commercialization by facilitating physician

understanding of test indications and potential benefit to the patients.

We continue to expand the EsoGuard

and EsoCheck evidence portfolio with additional clinical utility and clinical validity data from a range of ongoing studies and those

that will be completed in the upcoming year.

These efforts include completion of the ESOGUARD-BE2 study, a large multi-center case control

study recruiting patients from large academic institutions in the Netherlands and across the U.S., in the first half of the year and

submission for peer review of a publication of the results in the second half of 2025.

This data will further supplement what has previously

been published from the four earlier clinical validation studies from Moinova et.

(2018), Moinova et.

(2024), Greer et.

(2024), and Shaheen et.

A large, nearly 12,000 patient real-world experience of EsoCheck and EsoGuard from 18 months of commercial

data is expected to be submitted for peer review publication in the first half of the year.

Finally, data accrual from the PREVENT and

PREVENT-FF registries remains ongoing.

Both registries capture information on the diagnostic and/or therapeutic journey of subjects following

EsoGuard testing, and in addition to provider decision impact, will contribute differing levels of clinical outcomes data to the Lucid

evidence portfolio.

Demonstrating EsoGuard’s clinical utility, which requires providing evidence that the test has a meaningful impact on clinical practice, is very important for a variety of purposes, including, importantly, for Medicare and private payor payment and coverage.

It has been established that one of the most important factors to private payors in deciding whether to grant payment and coverage will be demonstration that the EsoGuard test, when ordered by physicians, provides information that can be used to identify or exclude patients who would benefit from additional management and/or treatment.

Clinical utility studies are also important for general EsoGuard commercialization by facilitating physician understanding of test indications and potential benefit to the patients.

We continue to expand the EsoGuard and EsoCheck evidence portfolio with ongoing emphasis on demonstration of clinical utility to support medical policy and payer coverage.

These efforts include a large, nearly 12,000 patient real-world experience of EsoCheck and EsoGuard from 18 months of commercial data that is under journal review and expected to be published within the first half of the year.

Additionally, data accrual from the PREVENT and PREVENT-FF registries remains ongoing and has been expanded to collect additional longitudinal follow-up data.

Both registries capture information on the diagnostic and/or therapeutic journey of subjects following EsoGuard testing, including provider decision impact, patient compliance, and clinical outcomes data for the Lucid evidence portfolio.

Data suggests that up to 40% of patients who develop EAC have no history of chronic reflux and would otherwise have failed to meet the BE screening criteria outlined by the ACG.

A pilot study published in August of 2025 by investigators from University Hospitals at Case Western Reserve University evaluated EsoGuard for BE screening in patients with three or more traditional BE/EAC risk factors who lacked a history of GERD or acid-suppressive medication use.

Findings suggested a BE prevalence of over 8% in this asymptomatic at-risk population;

EsoGuard demonstrated a PPV of 33% and NPV of 100%.

Two investigator-initiated studies are currently enrolling to expand upon these findings.

The first is a multi-center trial funded by a National Institutes of Health ("NIH") R01 grant with a target enrollment of 800 participants.

The second is a single-center Veterans Affairs ("VA") study funded by the United States Department of Defense (DOD), targeting enrollment of 400 participants.

Both studies are designed to further characterize the clinical performance and utility of EsoGuard in this broader at-risk screening population.

Positive results from these trials would provide meaningful evidence to support potential expansion of the test’s intended-use population among both healthcare providers and payers.

Manufacturing

EsoCheck is currently manufactured

for us by our partners Coastline International (“Coastline”), a high-volume device manufacturer, and Sage Product Development.

EsoCheck is currently manufactured for us by our partners Coastline International (“Coastline”), a high-volume device manufacturer, and Sage Product Development.

Our current line at Coastline can produce up to 25,000 units per year.

With Coastline’s improvement and expansion, there is capacity

to scale exponentially.

Our EsoGuard Specimen Kits are currently manufactured for us by our partner Path-Tec.

Path-Tec also manages warehousing,

logistics, fulfillment and customer support of our products.

With Coastline’s improvement and expansion, there is capacity to scale exponentially.

Diagnostics Support Services manages warehousing, logistics, fulfillment and customer support of our products.

License Agreement

Under the terms of our license

agreement with CWRU (as amended to date, the “Amended CWRU License Agreement”), we acquired an exclusive worldwide right

to use the intellectual property rights to the EsoGuard and EsoCheck technology for the detection of changes in the esophagus and on

sample preservation.

Under the terms of our license agreement with CWRU (as amended to date, the “Amended CWRU License Agreement”), we acquired an exclusive worldwide right to use the intellectual property rights to the EsoGuard and EsoCheck technology for the detection of changes in the esophagus and on sample preservation.

We are required to pay CWRU royalties on net sales of licensed products as follows:

5% of net sales of less than

$100 million per year;

5% of net sales of less than $100 million per year;

and 8% of net sales greater than $100 million per year.

We are also required to pay CWRU minimum annual royalty

payments as follows:

We are also required to pay CWRU minimum annual royalty payments as follows:

$50,000 per year, beginning January 1 following the first anniversary of a commercial sale of a licensed product;

$150,000 per year, if net sales of a licensed product exceed $25 million in a year;

$300,000 per year, if net sales of a licensed product

exceed $50 million in a year;

$300,000 per year, if net sales of a licensed product exceed $50 million in a year;

and $600,000 per year, if net sales of a licensed product exceed $100 million in a year.

Minimum yearly

royalty amounts are subject to increase based on the percentage change in the CPI-W Consumer Price Index and are credited against the

royalties otherwise due.

The license agreement was subject to four regulatory and commercialization milestones, of which one remains

unachieved and unpaid.

The remaining milestone is the FDA PMA submission of a licensed product, upon the achievement of which we will

pay CWRU a milestone payment of $200,000.

The license agreement terminates upon the expiration of the last-to-expire licensed patent,

or on May 12, 2038, in countries where no such patents exist, or upon expiration of any exclusive marketing rights for a licensed product

that have been granted by FDA or other U.S.

Minimum yearly royalty amounts are subject to increase based on the percentage change in the CPI-W Consumer Price Index and are credited against the royalties otherwise due.

The license agreement was subject to four regulatory and commercialization milestones, of which one remains unachieved and unpaid.

The remaining milestone is the FDA PMA submission of a licensed product, upon the achievement of which we will pay CWRU a milestone payment of $200,000.

The license agreement terminates upon the expiration of the last-to-expire licensed patent, or on May 12, 2038, in countries where no such patents exist, or upon expiration of any exclusive marketing rights for a licensed product that have been granted by FDA or other U.S.

government agency, whichever comes later.

In June 2019, we received FDA

510(k) clearance to market EsoCheck in the U.S.

as a device indicated for use in the collection and retrieval of surface cells of the

esophagus in adults followed by FDA 510(k) clearance in 2022, expanding the use of EsoCheck in adults and pediatric populations in the

In December 2019, our CLIA-certified then-laboratory partner, completed documentation of EsoGuard analytical validity allowing us

to commercialize it as a LDT.

In February 2020, we received

FDA “Breakthrough Device Designation” for EsoGuard as an in-vitro diagnostic (“IVD”) medical device.

Breakthrough Device Program was created to offer patients more timely access to breakthrough technologies which provide for more effective

treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions by expediting their development,

assessment and review through enhanced communications and more efficient and flexible clinical study design, including more favorable

pre/post market data collection balance.

In May 2021, we received CE Mark

certification for EsoCheck (under the Medical Devices Directive 93/42/EEC), and in June 2021, we completed CE Mark self-certification

for EsoGuard (under the European In-Vitro Diagnostic Devices Directive (IVDD 98/79/EC)), indicating both may be marketed in CE Mark European

In October 2023, FDA proposed

a policy under which FDA intends to phase out its general enforcement discretion approach for LDTs so that IVDs manufactured by a laboratory

would generally fall under the same enforcement approach as other IVDs.

On May 6, 2024, the FDA issued a final rule aimed at helping

to ensure the safety and effectiveness of LDTs.

The rule amends the FDA’s regulations to make explicit that IVDs are devices under the

Federal Food, Drug, and Cosmetic Act (FD&C Act) including when the manufacturer of the IVD is a laboratory.

Along with this amendment,

the FDA is finalizing a policy under which the FDA will provide greater oversight of IVDs offered as LDTs through a phaseout of its general

enforcement discretion approach for LDTs over the course of four years, as well as targeted enforcement discretion policies for certain

categories of IVDs manufactured by laboratories.

The phaseout policy contains

the following five stages:

Beginning on May 6, 2025,

which is one year after the publication date of the final LDT rule, FDA will expect compliance

with medical device reporting (MDR) requirements, correction and removal reporting requirements,

and quality system (QS) requirements regarding complaint files.

Beginning on May 6, 2026,

which is 2 years after the publication date of the final LDT rule, FDA will expect compliance

with requirements not covered during other stages of the phaseout policy, including registration

and listing requirements, labeling requirements, and investigational use requirements.

Beginning on May 6, 2027,

which is 3 years after the publication date of the final LDT rule, FDA will expect compliance

with QS requirements (other than requirements regarding complaint files which are already

addressed in stage 1).

Beginning on November 6,

2027, which is 3½ years after the publication date of the final LDT rule, FDA will

expect compliance with premarket review requirements for high-risk IVDs offered as LDTs (IVDs

that may be classified into class III or that are subject to licensure under section 351

of the Public Health Service Act), unless a premarket submission has been received by the

beginning of this stage in which case FDA intends to continue to exercise enforcement discretion

for the pendency of its review.

Beginning on May 6, 2028,

which is 4 years after the publication date of the final LDT rule, FDA will expect compliance

with premarket review requirements for moderate-risk and low-risk IVDs offered as LDTs (that

require premarket submissions), unless a premarket submission has been received by the beginning

of this stage in which case FDA intends to continue to exercise enforcement discretion for

the pendency of its review.

The FDA also intends to exercise enforcement discretion

and generally not enforce some or all applicable requirements for certain categories of IVDs manufactured by a laboratory.

The categories

of enforcement discretion that are applicable to EsoGuard are summarized in the table below.

4 & 5 (Premarket Review)

Currently marketed IVDs offered as LDTs first marketed prior to rule publication date and not

modified beyond scope described in preamble Section V.B.3 of preamble

Compliance generally expected beginning May 6, 2025

Compliance generally expected beginning May 6, 2026

Compliance with 21 CFR 820.180-820.186 generally expected beginning

Compliance generally not expected with other QS requirements (except

for complaint files)

Compliance generally not expected

LDTs approved by NYS CLEP Section V.B.2 of preamble

Compliance generally expected beginning May 6, 2025

Compliance generally expected beginning May 6, 2026

Compliance generally expected beginning May 6, 2027

Compliance generally not expected

As EsoGuard was marketed

prior to rule publication and is also NYS CLEP approved, hence, enforcement discretion is applicable for compliance with Stages 4

We will be implementing compliance with MDR requirements, correction and removal reporting requirements, and quality system

(QS) requirements regarding complaint files by March 31, 2025, well before the deadline of May 6, 2025.

Gap analysis has been

completed and we are expecting our compliance activities to be completed for Stages 2 and 3 before the FDA’s expected timeframes in 2026 and 2027, respectively.

We are confident that the proposed

final rule will not have a commercial impact as the Company already has a robust QS management platform for medical devices and

EsoGuard will be able to easily transition to the platform to fulfill the QS requirements, as required by the FDA.

Our longer-term strategy is to

secure a specific indication, based on published guidelines, for BE testing in certain at-risk populations using EsoGuard on samples

collected with EsoCheck.

This use of EsoGuard together with EsoCheck as a testing system must be cleared or approved by the FDA as an

In June 2019, we received FDA 510(k) clearance to market EsoCheck in the U.S.

as a device indicated for use in the collection and retrieval of surface cells of the esophagus in adults followed by FDA 510(k) clearance in 2022, expanding the use of EsoCheck in adults and pediatric populations in the U.S.

In December 2019, our CLIA-certified then-laboratory partner, completed documentation of EsoGuard analytical validity allowing us to commercialize it as a LDT.

In February 2020, we received FDA “Breakthrough Device Designation” for EsoGuard as an in-vitro diagnostic (“IVD”) medical device.

The FDA Breakthrough Device Program was created to offer patients more timely access to breakthrough technologies which provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions by expediting their development, assessment and review through enhanced communications and more efficient and flexible clinical study design, including more favorable pre/post market data collection balance.

In May 2021, we received CE Mark certification for EsoCheck (under the Medical Devices Directive 93/42/EEC), and in June 2021, we completed CE Mark self-certification for EsoGuard (under the European In-Vitro Diagnostic Devices Directive (IVDD 98/79/EC)), indicating both may be marketed in CE Mark European countries.

In October 2023, FDA proposed a rule to phase out its general enforcement discretion approach for LDTs so that IVDs manufactured by a laboratory would generally fall under the same enforcement approach as other IVDs.

On May 6, 2024, the FDA issued a final rule amending the FDA’s regulations to make explicit that IVDs are devices under the Federal Food, Drug, and Cosmetic Act ("FD&C Act") including when the manufacturer of the IVD is a laboratory.

Along with this amendment, the FDA finalized a policy under which the FDA will provide greater oversight of IVDs offered as LDTs through a phaseout of its general enforcement discretion approach for LDTs over the course of four years, as well as targeted enforcement discretion policies for certain categories of IVDs manufactured by laboratories.

However, On March 31, 2025, the U.S.

District Court for the Eastern District of Texas vacated the FDA’s May 6, 2024, LDT final rule holding that the agency exceeded its statutory authority in trying to regulate LDTs as medical devices and remanding the matter to HHS for further consideration.

Subsequently, on September 19, 2025, the FDA issued a final rule officially rescinding the 2024 LDT regulation and reverted the definition of in vitro diagnostic products to its pre-2024 language after declining to appeal the court’s decision.

EsoGuard continues to be marketed in the U.S.

as a LDT performed in CLIA-certified, CAP-accredited laboratories, approved under State of New York’s clinical laboratory regulations .

Our longer-term strategy is to secure a specific indication, based on published guidelines, for BE testing in certain at-risk populations using EsoGuard on samples collected with EsoCheck.

This use of EsoGuard together with EsoCheck as a testing system must be cleared or approved by the FDA as an IVD device.

Laboratory Operations

On February 25, 2022, our new,

wholly owned subsidiary, LucidDx Labs Inc.

(“LucidDx Labs”), acquired from ResearchDX Inc.

(“RDx”), certain licenses

and other related assets necessary for LucidDx Labs to operate its own new CLIA-certified, CAP-accredited clinical laboratory located

in Lake Forest, CA.

Since March 2022, we have conducted EsoGuard testing at our own laboratory with, until February 10, 2023, the assistance

of RDx, which had continued to provide certain testing and related services for the laboratory in accordance with the terms of a management

services agreement (“MSA RDx”).

Our subsidiary LucidDx Labs and RDx agreed to terminate the MSA RDx effective as of February

10, 2023, such that LucidDx Labs from and after such date has operated the laboratory itself, which the Company believes has improved

the efficiency of the performance of the EsoGuard assay.

In November 2023, LucidDx Labs

launched EsoGuard 2.0, which uses multiplexing thereby allowing both genes to be interrogated on a single DNA sample.

The next-generation

assay underwent rigorous analytical and clinical validation studies, including head-to-head comparisons of multiplexed triplicate consensus

versus singleplex techniques, consistent with CLIA standards.

Clinical validation analysis demonstrated improved sensitivity and specificity

for the detection of esophageal precancer, having demonstrated enhanced assay performance and lower costs in extensive validation studies.

market for esophageal

cancer (i.e., EAC) and pre-cancer (i.e., BE, with or without dysplasia) testing is large, consisting of more than 30 million at-risk

individuals over the age of 50.

Given the large market for pre-cancer testing, we likely will face numerous competitors, some of which

possess significantly greater financial and other resources and development capabilities than us.

Our EsoGuard test faces competition

from procedure-based detection technologies such as upper endoscopy, and other testing technologies such as multi-cancer early detection

Our EsoCheck device faces competition from other manufacturers with devices designed to collect cell samples from targeted

regions of the esophagus.

For example, EndoSign, commercialized by Cyted, and much like Cytosponge, is a small mesh sponge within a soluble

gelatin capsule that needs to reside in the stomach for some time until it fully dissolves and then is pulled thru the targeted region

brushing the lining of the esophagus and then later retrieved, although, unlike EsoCheck, it is unprotected from sample contamination

as the brush later passes regions of the upper esophagus and mouth.

Our competitors may also be developing additional methods of detecting

esophageal cancer and pre-cancer that have not yet been announced.

We will also compete in the marketplace

to recruit and retain qualified scientific, management and sales personnel, as well as in acquiring technologies and licenses complementary

to our products or advantageous to our business.

We are aware of several companies that compete or are developing technologies in our

current and future products areas.

In order to compete effectively, our products will have to achieve market acceptance, receive adequate

insurance coverage and reimbursement, be cost effective and be simultaneously safe and effective.

The EsoCure Esophageal Ablation

Device is a novel technology that allows a clinician to treat dysplastic BE before it can progress to EAC, a highly lethal esophageal

cancer, and to do so without the need for complex and expensive capital equipment.

In connection with our efforts

to expand our presence in the EAC diagnostic market, in March 2022, PAVmed and Lucid entered into an intercompany license agreement whereby

Lucid was granted the rights to commercialize EsoCure for the treating dysplastic BE.

Under the intercompany license, Lucid will pay

PAVmed a 5% royalty on all EsoCure sales up to $100 million per calendar year, and 8% above that threshold.

PAVmed has successfully completed

a pre-clinical feasibility animal study of EsoCure demonstrating excellent, controlled circumferential ablation of the esophageal mucosal

An acute and survival animal study of EsoCure Esophageal Ablation Device has also been completed, demonstrating successful direct

thermal balloon catheter ablation of esophageal lining through the working channel of a standard endoscope.

When resources permit, PAVmed

may conduct additional development work and animal testing of EsoCure to support a future FDA 510(k) submission.

LucidDx Labs operates its own CLIA-certified, CAP-accredited clinical laboratory located in Lake Forest, CA.

In November 2023, LucidDx Labs launched EsoGuard 2.0, which uses multiplexing thereby allowing both genes to be interrogated on a single DNA sample.

The next-generation assay underwent rigorous analytical and clinical validation studies, including head-to-head comparisons of multiplexed triplicate consensus versus singleplex techniques, consistent with CLIA standards.

Clinical validation analysis demonstrated improved sensitivity and specificity for the detection of esophageal precancer, having demonstrated enhanced assay performance and lower costs in extensive validation studies.

market for EAC and pre-cancer (i.e., BE, with or without dysplasia) testing is large, consisting of more than 30 million at-risk individuals over the age of 50.

Given the large market for pre-cancer testing, we likely will face numerous competitors, some of which possess significantly greater financial and other resources and development capabilities than us.

Our EsoGuard test faces competition from procedure-based detection technologies such as upper endoscopy, and other testing technologies such as assays that incorporate biomarket multi-cancer early detection products.

Our EsoCheck device faces competition from other manufacturers with devices designed to collect cell samples from targeted regions of the esophagus.

For example, EndoSign, commercialized by Cyted, and much like Cytosponge, is a small mesh sponge within a soluble gelatin capsule that needs to reside in the stomach for some time until it fully dissolves and then is pulled thru the targeted region brushing the lining of the esophagus and then later retrieved, although, unlike EsoCheck, it is unprotected from sample contamination as the brush later passes regions of the upper esophagus and mouth.

Our competitors may also be developing additional methods of detecting esophageal cancer and pre-cancer that have not yet been announced.

We will also compete in the marketplace to recruit and retain qualified scientific, management and sales personnel, as well as in acquiring technologies and licenses complementary to our products or advantageous to our business.

We are aware of several companies that compete or are developing technologies in our current and future products areas.

In order to compete effectively, our products will have to achieve market acceptance, receive adequate insurance coverage and reimbursement, be cost effective and be simultaneously safe and effective.

Our Relationship with PAVmed

We are currently a subsidiary of PAVmed.

On September 10, 2024, following preferred equity transactions completed by the Company earlier

in 2024 and the termination of voting proxies entered into between PAVmed and certain shareholders of the Company, PAVmed’s

voting interest in the Company was reduced to less than 50.0%, resulting in the loss of a controlling financial interest.

the completion of such transactions on such date, we were a majority-owned subsidiary of PAVmed.) However, PAVmed remains our

largest shareholder based on voting power, and therefore retains the ability to exercise significant influence over Lucid.

we continue to depend on PAVmed to provide us various management, technical, research and development, legal, accounting, and

administrative services.

PAVmed owns approximately 46%

as of December 31, 2024 and 34% as of March 20, 2025 of the combined voting power of our outstanding common stock (with

such percentage inclusive of shares of our common stock underlying granted but unvested restricted stock awards), but excluding the voting

power of any convertible securities.

Presently, PAVmed controls less than 50% of the combined voting power of our common stock and our

convertible securities.

In addition, PAVmed’s percentage of the combined voting power may decrease when dividends are paid on our

convertible securities and to the extent our convertible securities are converted into shares of our common stock.

PAVmed’s ownership interests may also decrease if the holder of its convertible debt exercises its right to

exchange some or all of such debt for shares of our common stock held by PAVmed.

Even though PAVmed’s

ownership has fallen below 50%, it remains our largest shareholder based on voting power, and accordingly PAVmed retains substantial

influence on the election of all the members of our board of directors and any other matters submitted to a vote of our stockholders.

PAVmed beneficially owns approximately 27.5% as of December 31, 2025 and 27.1% as of March 23, 2026 of our outstanding common stock (with such percentage inclusive of shares of our common stock underlying granted but unvested restricted stock awards and shares over which PAVmed otherwise has been granted voting control by the holder thereof).

Moreover, we continue to depend on PAVmed to provide us various management, technical, research and development, legal, accounting, and administrative services.

PAVmed’s percentage of the voting power may decrease when dividends are paid on our convertible securities and to the extent our convertible securities are converted into shares of our common stock.

Even though PAVmed’s ownership has fallen below 50%, it remains our largest shareholder based on voting power, and accordingly PAVmed retains substantial influence on the election of all the members of our board of directors and any other matters submitted to a vote of our stockholders.

PAVmed’s substantial voting interest may discourage a change of control that other holders of our common stock may favor.

We are party to a management

services agreement with PAVmed (the “MSA”), as well as a payroll benefits and expense reimbursement agreement (the “PBERA”).

Under the MSA, PAVmed provides management, technical and administrative services to us, including without limitation services related

to research and development, regulatory clearance, manufacture, and commercialization of our products, as well as services related to

corporate financial, accounting and legal matters.

The terms of this agreement are intended to be consistent with the terms that we could

have negotiated with unaffiliated third parties;

We are party to a management services agreement with PAVmed (the “MSA”), as well as a payroll benefits and expense reimbursement agreement (the “PBERA”).

Under the MSA, PAVmed provides management, technical and administrative services to us, including without limitation services related to research and development, regulatory clearance, manufacture, and commercialization of our products, as well as services related to corporate financial, accounting and legal matters.

The terms of this agreement are intended to be consistent with the terms that we could have negotiated with unaffiliated third parties;

however, they may actually be more or less favorable.

Under the PBERA, PAVmed has agreed

to pay certain payroll and benefit-related expenses in respect of our personnel on our behalf, and we reimburse PAVmed for the same.

PAVmed may elect that our obligations under each of the MSA and the PBERA are settled by the issuance of our stock (instead of cash),

subject to applicable restrictions under securities laws (and, in the case of the PBERA, subject also to approval by our board), although

under the terms of PAVmed’s convertible debt, PAVmed is required to elect that these payments be made in cash.

The MSA does not

have a termination date, but may be terminated by our board of directors at any time.

The PBERA likewise does not have a termination

date, but may be terminated by PAVmed or Lucid at any time.

Under the PBERA, PAVmed has agreed to pay certain payroll and benefit-related expenses in respect of our personnel on our behalf, and we reimburse PAVmed for the same.

PAVmed may elect that our obligations under each of the MSA and the PBERA are settled by the issuance of our stock (instead of cash), subject to applicable restrictions under securities laws (and, in the case of the PBERA, subject also to approval by our board).

The MSA does not have a termination date, but may be terminated by our board of directors at any time.

The PBERA likewise does not have a termination date, but may be terminated by PAVmed or Lucid at any time.

Recent Events

Medicare Coverage

In November 2024, we submitted

to MolDx our complete clinical evidence package in support of a request for reconsideration of the non-coverage language in the LCD to

secure Medicare coverage for EsoGuard.

In November 2024, we submitted to MolDx our complete clinical evidence package in support of a request for reconsideration of the non-coverage language in the LCD to secure Medicare coverage for EsoGuard.

The EsoGuard clinical evidence package included six new peer-reviewed publications:

three clinical

validation studies (two in the intended use population, one case control), two clinical utility studies, and one analytical validation

The current LCD provides clear coverage criteria consistent with the ACG guidelines for

esophageal precancer testing.

The package was submitted as part of a request for reconsideration of the non-coverage language in the

LCD to secure Medicare coverage for EsoGuard.

NCCN Clinical Practice Guidelines Update

March 2025, we announced that a recent update to the National Comprehensive Cancer Network® (NCCN) Clinical Practice Guidelines in

Oncology (NCCN Guidelines®) focused on Esophageal and Esophagogastric Junction Cancers (Version 1.2025) has added a new section on

BE screening.

The NCCN Guidelines® now reference professional society guidelines on BE screening, including the most recent ACG clinical

guideline discussed above, which recommends non-endoscopic biomarker testing, such as EsoGuard performed on samples collected with EsoCheck,

as an acceptable alternative to invasive upper endoscopy to detect esophageal precancer.

three clinical validation studies (two in the intended use population, one case control), two clinical utility studies, and one analytical validation study.

The current LCD provides clear coverage criteria consistent with the ACG guidelines for esophageal precancer testing.

The package was submitted as part of a request for reconsideration of the non-coverage language in the LCD to secure Medicare coverage for EsoGuard.

As part of the LCD reconsideration process, MolDx-participating Medicare Administrative Contractors convened a CAC Meeting regarding the LCD on September 4, 2025.

Department of Veteran Affairs

In January 2026, the Company announced that it has been awarded a contract by the U.S.

Department of Veterans Affairs for EsoGuard, expanding access to esophageal precancer testing across the nation's largest integrated healthcare system, which serves more than nine million enrolled veterans annually.

The contract is issued under the VA Federal Supply Schedule and includes pre-negotiated pricing for EsoGuard that matches the established Medicare payment rate determined by the Centers for Medicare & Medicaid Services (CMS), enabling VA hospitals and healthcare facilities nationwide to access EsoGuard through a single, national VA procurement framework.

Real-World Experience Data

In December 2025, the Company announced results from an 18-month real-world experience evaluating the EsoGuard and EsoCheck in approximately 12,000 patients.

The analysis demonstrated high technical success rates, rapid procedure times, and appropriate physician utilization in routine clinical practice, consistent with previously reported clinical studies.

The data are currently under peer review for publication.

Board Appointment

Effective September 22, 2025, the board of directors of the Company appointed John R.

Palumbo as a Class B director of the Company.

Palumbo was designated for appointment by certain of the holders of 2024 Convertible Notes.

Clinical Study Publications

March 18, 2025, the Company announced that its ENVET-BE clinical utility study has been accepted for publication in Gastroenterology

& Hepatology—the fifth peer-reviewed publication of clinical utility data for Lucid’s EsoGuard® Esophageal DNA Test, and

the second to present findings from a real-world screening population.

The manuscript, entitled “Enhancing the Diagnostic Yield

of EGD for Diagnosis of Barrett’s Esophagus Through Methylated DNA Biomarker Triage,” demonstrates that confirmatory upper endoscopy

(EGD) performed in EsoGuard-positive patients had a substantially higher diagnostic yield for detecting esophageal precancer (Barrett’s

Esophagus or BE) than the expected yield of screening EGD alone in at-risk patients.

The ENVET-BE study reviewed real-world data from

a cohort of 199 EsoGuard-positive patients who completed confirmatory EGD.

The overall positive diagnostic yield for BE was 2.4-fold

higher than the expected yield of screening EGD alone, based on disease prevalence within an at-risk population.

The yield was nearly

three-fold higher in patients meeting ACG screening criteria.

November 7, 2024, the Company announced that its manuscript for its multi-center ESOGUARD BE-1 study has been accepted for publication

in The American Journal of Gastroenterology, the official journal of the ACG.

This is the fourth publication presenting clinical validation

data for the Company’s EsoGuard® Esophageal DNA Test, and the second to demonstrate its performance in an intended-use screening

Consistent with previous studies, EsoGuard showed high sensitivity and negative predictive value in detecting esophageal

precancer (Barrett’s Esophagus or BE).

The prospective, multi-center study presented data from a cohort of patients who met ACG guideline

criteria for esophageal precancer screening and underwent non-endoscopic EsoGuard testing followed by traditional upper endoscopy.

sensitivity and negative predictive value for detecting BE were approximately 88% and 99%, respectively.

Specificity and positive predictive

value were approximately 81% and 30%, respectively.

No serious adverse events were reported.

In September 2025, a case series published in Gastroenterology & Hepatology highlighted four real-world cases in which EsoGuard facilitated the timely detection of either high-grade dysplasia (HGD) or intramucosal carcinoma (IMC;

T1a esophageal adenocarcinoma).

In all four cases, the patients had no prior history of EGD, including one individual who had previously declined multiple EGD referrals.

Following positive in-office EsoGuard results, each patient proceeded with endoscopic evaluation, which led to successful identification and eradication of disease in all cases.

This case series underscores both the clinical utility of EsoGuard in detecting early-stage neoplasia and the ease with which the test can be integrated into standard office workflows to enhance screening uptake and early disease detection.

Russell 2000® and 3000® Indexes

On June 27, 2025, the Company was added to the Russell 2000® Index and the Russell 3000® Index, following the 2025 annual reconstitution by FTSE Russell.

Hoag Comprehensive Esophageal Precancer Testing Program Using EsoGuard

On June 18, 2025, the Company announced that Hoag, a nationally recognized regional healthcare delivery network, launched a comprehensive, integrated esophageal precancer testing program using the Company’s EsoGuard® Esophageal DNA Test.

The Company will partner with Hoag to offer EsoGuard testing across its digestive health, primary care, and concierge medicine programs.

NCCN Clinical Practice Guidelines Update

In March 2025, we announced that a recent update to the NCCN Guidelines® focused on Esophageal and Esophagogastric Junction Cancers (Version 1.2025) has added a new section on BE screening.

Highmark Reimbursement Approval

On March 13, 2025, the Company announced that Highmark Blue Cross Blue Shield, an independent licensee of the Blue

Cross and Blue Shield Association, has issued a positive coverage policy for non-invasive screening of esophageal precancer and cancer

in New York state.

The new policy will cover EsoGuard in patients who meet established criteria for esophageal precancer testing consistent

with professional society guidelines.

CWRU NIH Grant Related to EsoGuard and EsoCheck

On February 27, 2025, the

Company announced that principal investigators from CWRU and University Hospitals (“UH”), were awarded an $8 million

National Institutes of Health (NIH) R01 grant to conduct a five-year clinical study designed to evaluate esophageal precancer

detection using EsoCheck and EsoGuard among at-risk individuals without symptoms of chronic gastroesophageal reflux disease (GERD).

The study, “A Clinical Trial of Cancer Prevention by Biomarker Based Detections of Barrett’s Esophagus and Its

Progression,” aims to evaluate the effectiveness of EsoCheck and EsoGuard in detecting esophageal precancer (Barrett’s

Esophagus or BE) to prevent esophageal cancer (EAC) within a non-GERD at-risk population.

To accomplish this aim, 800 patients

without GERD symptoms who meet the AGA’s risk criteria for screening will be

recruited across five participating research centers:

University Hospitals, University of Colorado, Johns Hopkins University,

University of North Carolina, and Cleveland Clinic.

On October 15, 2024, the Company

announced that it received a Notice of Allowance from the United States Patent and Trademark Office (USPTO) for a patent application covering

its proprietary method of using methylation of the cyclin-A1 (CCNA1) gene to help detect esophageal precancer and cancer, a key component

of its EsoGuard® Esophageal DNA Test.

EsoGuard utilizes next-generation

sequencing (NGS) to assess DNA methylation at 31 sites on two genes, vimentin (VIM) and cyclin-A1 (CCNA1).

Such methylation has been shown

to be strongly associated with conditions along the spectrum from early esophageal precancer (non-dysplastic Barrett’s Esophagus or BE),

to late precancer (dysplastic BE), to cancer (esophageal adenocarcinoma).

Although VIM methylation had been previously associated with

gastrointestinal neoplasias, the association of CCNA1 methylation with esophageal neoplasia is novel and appears to be more specific.

Intercompany Agreements with PAVmed

On August 6, 2024, PAVmed and

the Company entered into a ninth amendment to the management services agreement between PAVmed and Lucid (“MSA”) to increase

the monthly fee thereunder from $0.83 million per month to $1.05 million per month, effective as of July 1, 2024.

In addition, under

the terms of PAVmed’s convertible debt, PAVmed is required to elect that these payments be made in cash.

of Dennis Matheis to Board of Directors

May 6, 2024, the board of directors of the Company appointed Dennis Matheis as a Class C director of the Company (and he was subsequently

re-elected to the board, together with the incumbent Class C directors of the Company, at the Company’s annual shareholders meeting

held on July 23, 2024).

Registered Direct Offering

On March 5, 2025, the Company closed

on the sale of 13,939,331 shares of its common stock at a price of $1.10 per share (the “Offering”).

net proceeds of the Offering, after deducting the estimated placement agent’s fees and other expenses of the Offering, was approximately

$14.5 million.

The Company intends to use the net proceeds from the Offering for working capital and other general corporate purposes.

Termination of ATM Prospectus Supplement

In November 2022, the Company

entered into a Controlled Equity Offering℠ Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co.

Pursuant to the Sales Agreement, from time to time, the Company may offer and sell shares of its common stock

to or through Cantor, acting as sales agent or principal.

Sales of the Company’s common stock by Cantor, if any, under the Sales

Agreement may be made by any method permitted by law and deemed to be an “at the market offering” as defined in Rule 415(a)(4)

promulgated under the Securities Act (the “ATM Offering”).

The Company filed a prospectus supplement dated December 6, 2022

(the “ATM Prospectus Supplement”), for the offer and sale of shares of its common stock having an aggregate offering price

of up to $6,500,000 in the ATM Offering.

Effective as of March 4, 2025, the Company terminated

the ATM Prospectus Supplement.

The Company will not make any sales of common stock in the ATM Offering unless and until a new prospectus

or prospectus supplement is filed.

Other than the termination of the Prospectus Supplement,

the Sales Agreement remains in full force and effect.

Debt Refinancing

On November 22, 2024, the Company

closed on the sale of $21.975 million in principal amount of 12.0% Senior Secured Convertible Notes due 2029 (collectively, the “2024

Convertible Notes”), in a private placement, to certain accredited investors (the “2024 Note Investors”).

of the 2024 Convertible Notes were completed pursuant to the terms of that certain Securities Purchase Agreement, dated as of November

12, 2024 (the “2024 SPA”), between the Company and the 2024 Note Investors.

The Company realized gross proceeds of $21.975

million and, after giving effect to the repayment in full of the March 2023 Senior Convertible Note, net proceeds of $18.3 million from

the sale of the 2024 Convertible Notes.

The Company used a portion of

the proceeds from the sale of the 2024 Convertible Notes to redeem the March 2023 Senior Convertible Note, by paying the contractual

redemption price of approximately $3.6 million.

NASDAQ Compliance

On February 24, 2025, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock

Market (“Nasdaq”) stating that the closing bid price of the Company’s common stock had been above the minimum of $1 per share

f or continued listing on the Nasdaq Capital Market under Nasdaq

Listing Rule 5550(a)(2) for ten consecutive trading days (through February 21, 2025) and accordingly, the Company had regained compliance

with this listing requirement.

June 21, 2024, the Company received a notice from the Listing Qualifications Department of Nasdaq stating that, for the prior 30 consecutive

business days (through June 20, 2024), the closing bid price of the Company’s common stock had been below the minimum of $1 per

share required for continued listing.

The notification letter stated that the Company would be afforded 180 calendar days (until December

18, 2024) to regain compliance, which grace period was extended by an additional 180 calendar days (until June 16, 2025) .

On March 13, 2025, the Company announced that Highmark Blue Cross Blue Shield, an independent licensee of the Blue Cross and Blue Shield Association, has issued a positive coverage policy for non-invasive screening of esophageal precancer and cancer in New York state.

The new policy, which became effective as of May 26, 2025, covers EsoGuard in patients who meet established criteria for esophageal precancer testing consistent with professional society guidelines.

September 2025 Confidentially Marketed Public Offering

On September 11, 2025, the Company closed on the sale of 28,750,000 shares of its common stock at a price of $1.00 per share (the “September 2025 Offering”).

The net proceeds of the September 2025 Offering, after deducting the estimated placement agent’s fees and other expenses of $1.8 million, was approximately $27.0 million.

The Company intends to use the net proceeds from the September 2025 Offering for working capital and other general corporate purposes.

On May 30, 2025, the Company entered into an “at-the-market offering” (“ATM”) for up to $25.0 million of its common stock that may be offered and sold under a Controlled Equity Offering Agreement between the Company and Maxim Group LLC.

Subsequent to December 31, 2025, as of March 23, 2026, the Company sold 4,161,747 shares through its at-the-market equity facility for net proceeds of approximately $5.3 million, after payment of 3% commissions.

Intellectual Property

Our business will depend on proprietary

medical device and diagnostic technologies, including the EsoCheck and EsoGuard technology licensed by us.

We intend to vigorously protect

our proprietary technologies’ intellectual property rights in patents, trademarks and copyrights, as available through registration

in the United States and internationally.

Our business will depend on proprietary medical device and diagnostic technologies, including the EsoCheck and EsoGuard technology licensed by us.

We intend to vigorously protect our proprietary technologies’ intellectual property rights in patents, trademarks and copyrights, as available through registration in the United States and internationally.

Patent protection and other proprietary rights are thus essential to our business.

have applied for, license or own 20 domestic and foreign patents covering the EsoGuard and EsoCheck products and related technology.

Each of the technologies noted below is protected by multiple families.

The date the patents protecting certain of our owned and licensed

technology will first begin to expire is as set forth in the table below (although currently pending patent applications, both foreign

and domestic, provide protection beyond such date in each instance).

For EsoGuard, additional patents have been issued that offer protection

until at least 2037.

The EsoCheck and EsoGuard technology

is protected by patents in the United States and internationally, and our policy is to continue to aggressively file patent applications,

both independently and in collaboration with CWRU, as appropriate, to protect this technology and other of our proprietary technologies

relating to our business, including inventions and improvements to inventions.

Under the CWRU License Agreement, CWRU has agreed to apply

for patent coverage, at our expense, in any country requested by us, to the extent such protection is reasonably attainable.

patent protection, as appropriate, on:

● the product itself

including all embodiments with future commercial potential;

● the methods of

using the product;

● the methods of

manufacturing the product.

In addition to filing and prosecuting

patent applications in the United States, we intend to file counterpart patent applications in other countries where there is a value

Foreign filings can be cumbersome and expensive, and we will pursue such filings when we believe they are warranted as we

try to balance our international commercialization plans with our desire to protect the global value of the technology.

The term of individual patents

depends upon the legal term of the patents in the countries in which they are obtained.

In most countries in which we file, the patent

term is 20 years from the earliest date of filing a non-provisional patent application.

In the United States, a patent’s term may

be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution by the patentee,

and a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the

Patent and Trademark Office (“USPTO”) in granting a patent, or patent term extension, which restores time lost due to

regulatory delays.

We intend to continuously reassess

and fine-tune our intellectual property strategy in order to fortify the position of our business in the United States and internationally.

Prior to acquiring or licensing a technology from a third party, we will evaluate the existing proprietary rights, our ability to adequately

obtain and protect these rights and the likelihood or possibility of infringement upon competing rights of others.

We also rely upon trade

secrets, know-how, and continuing technological innovation, and may rely upon licensing opportunities, to develop and maintain our

competitive position.

We protect our proprietary rights through a variety of methods, including confidentiality agreements and/or

proprietary information agreements with suppliers, employees, consultants, independent contractors and other entities who may have

access to proprietary information.

We will generally require employees to assign patents and other intellectual property to us as a

condition of employment with us.

All of our consulting agreements assign to us all new and improved intellectual property that arise

during the term of the agreement.

Lucid also has proprietary rights

to a range of trademarks, including, among others, Lucid Diagnostics™, LUCID™, EsoCheck®, EsoGuard®, Collect + Protect®,

and EsoCheck Cell Collection Device®.

(Solely as a matter of convenience, trademarks and trade names referred to herein may or may

not be accompanied with the requisite marks of “™” or “®”.

However, the absence of such marks is not

intended to indicate, in any way, Lucid or its subsidiaries will not assert, to the fullest extent possible under applicable law, their

respective rights to such trademarks and trade names.)

Each of our technologies is protected by multiple patent families.

For select technologies shown below, patents have been granted with protection extending to at least the date shown below (although currently pending patent applications, both foreign and domestic, provide protection beyond such date in each instance).

The EsoCheck and EsoGuard technology is protected by patents in the United States and internationally, and our policy is to continue to aggressively file patent applications, both independently and in collaboration with CWRU, as appropriate, to protect this technology and other of our proprietary technologies relating to our business, including inventions and improvements to inventions.

Under the CWRU License Agreement, CWRU has agreed to apply for patent coverage, at our expense, in any country requested by us, to the extent such protection is reasonably attainable.

We seek patent protection, as appropriate, on:

the product itself including all embodiments with future commercial potential;

the methods of using the product;

the methods of manufacturing the product.

In addition to filing and prosecuting patent applications in the United States, we intend to file counterpart patent applications in other countries where there is a value in doing so.

Foreign filings can be cumbersome and expensive, and we will pursue such filings when we believe they are warranted as we try to balance our international commercialization plans with our desire to protect the global value of the technology.

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.

In most countries in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application.

In the United States, a patent’s term may be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution by the patentee, and a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S.

Patent and Trademark Office (“USPTO”) in granting a patent, or patent term extension, which restores time lost due to regulatory delays.

We intend to continuously reassess and fine-tune our intellectual property strategy in order to fortify the position of our business in the United States and internationally.

Prior to acquiring or licensing a technology from a third party, we will evaluate the existing proprietary rights, our ability to adequately obtain and protect these rights and the likelihood or possibility of infringement upon competing rights of others.

We also rely upon trade secrets, know-how, and continuing technological innovation, and may rely upon licensing opportunities, to develop and maintain our competitive position.

We protect our proprietary rights through a variety of methods, including confidentiality agreements and/or proprietary information agreements with suppliers, employees, consultants, independent contractors and other entities who may have access to proprietary information.

We will generally require employees to assign patents and other intellectual property to us as a condition of employment with us.

All of our consulting agreements assign to us all new and improved intellectual property that arise during the term of the agreement.

Lucid also has proprietary rights to a range of trademarks, including, among others, Lucid Diagnostics™, LUCID™, EsoCheck®, EsoGuard®, Collect + Protect®, and EsoCheck Cell Collection Device®.

(Solely as a matter of convenience, trademarks and trade names referred to herein may or may not be accompanied with the requisite marks of “™” or “®”.

However, the absence of such marks is not intended to indicate, in any way, Lucid or its subsidiaries will not assert, to the fullest extent possible under applicable law, their respective rights to such trademarks and trade names.)

Health Insurance Coverage and Reimbursement

Our ability to successfully commercialize

our products will depend in part on the extent to which governmental authorities, private health insurers and other third-party payors

provide coverage for and establish adequate reimbursement levels for the procedures during which our products are used.

In the United States, third-party

payors continue to implement initiatives that restrict the use of certain technologies to those that meet certain clinical evidentiary

requirements.

Our ability to successfully commercialize our products will depend in part on the extent to which governmental authorities, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for the procedures during which our products are used.

In the United States, third-party payors continue to implement initiatives that restrict the use of certain technologies to those that meet certain clinical evidentiary requirements.

In addition to uncertainties surrounding coverage policies, there are periodic changes to reimbursement.

Third-party payors

regularly update reimbursement amounts and also from time to time revise the methodologies used to determine reimbursement amounts.

includes annual updates to payments to physicians, hospitals and ambulatory surgery centers for procedures during which our products

An example of payment updates is the Medicare program’s updates to hospital and physician payments, which are done on

an annual basis using a prescribed statutory formula.

In the past, when the application of the formula resulted in lower payment, Congress

has passed interim legislation to prevent the reductions.

See “ Reimbursement and

Market Access ” above for a fuller discussion of the reimbursement status for EsoCheck and EsoGuard.

Third-party payors regularly update reimbursement amounts and also from time to time revise the methodologies used to determine reimbursement amounts.

This includes annual updates to payments to physicians, hospitals and ambulatory surgery centers for procedures during which our products are used.

An example of payment updates is the Medicare program’s updates to hospital and physician payments, which are done on an annual basis using a prescribed statutory formula.

In the past, when the application of the formula resulted in lower payment, Congress has passed interim legislation to prevent the reductions.

See “ Reimbursement and Market Access ” above for a fuller discussion of the reimbursement status for EsoCheck and EsoGuard.

Government Regulation

FDA Regulation

For the purposes of FDA regulation

a “medical device” is broadly defined in section 201(h) of the Food, Drug, and Cosmetic Act (“FDCA”) as “an instrument, apparatus, implement, machine,

contrivance, implant, in-vitro reagent, or other similar or related article, which is intended for use in humans for the diagnosis of

disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, or intended to affect the structure or

any function of the body, and which does not achieve its primary intended purposes through chemical action and which is not dependent

upon being metabolized for the achievement of its primary intended purposes.” Medical devices subject to FDA regulation include

“in-vitro diagnostic medical devices” or IVD devices, defined in the same FDCA section as “reagents, instruments, and

systems intended for use in the diagnosis of disease or other conditions, including a determination of the state of health, in order

to cure, mitigate, treat, or prevent disease or its sequelae, which are intended for use in the collection, preparation, and examination

of specimens taken from the human body”.

Our marketing of any medical

device product we may develop, license, or acquire, including traditional medical devices such as EsoCheck, and IVD products such as

EsoGuard, is subject to FDA regulation.

● In June 2019, we received FDA 510(k)

clearance for EsoCheck, permitting us to market it in the U.S.

as a cell collection device

indicated for use in the collection and retrieval of surface cells of the esophagus in the

general population of adults, 22 years of age and older.

In 2022, we received FDA clearance

to expand EsoCheck’s indications for use to include adults and adolescents, 12 years

of age and older.

In 2023, we further received FDA clearance to permit us to market EsoCheck

as non-sterile.

● In December 2019, RDx, our then-CLIA-certified

laboratory partner completed documentation of EsoGuard analytical validity allowing us to

commercialize it as an LDT.

In March 2022, we transferred EsoGuard testing to our own CLIA-certified

laboratory, upon our acquisition of certain assets from RDx as described elsewhere in this

FDA defines an LDT as “an

IVD product that is intended for clinical use and designed, manufactured and used within a single laboratory.” FDA has long maintained

that it has clear regulatory authority over LDTs and has chosen to fully exercise its authority for certain classes of “single

laboratory” IVD products which would satisfy its definition of an LDT, such as direct-to-consumer tests that do not involve a health

care provider.

FDA, however, has generally not enforced these regulatory requirements for most LDTs not in one of these classes and has

generally not required these LDTs to undergo FDA premarket review of analytical validity and clinical validity, as all other IVD products

Since only EsoCheck is FDA cleared,

we are not permitted to jointly market it with EsoGuard.

This currently is not a significant obstacle to our commercialization efforts,

which are almost entirely devoted to marketing EsoGuard.

EsoCheck is merely offered, free of charge, as a generic esophageal cell collection

device, which is FDA 510(k) cleared to be used to collect samples for any diagnostic test.

We believe, however, over the long-term, once

our commercialization efforts have gained significant traction, it would be useful to jointly market EsoGuard, used with EsoCheck.

therefore may, when resources permit, pursue FDA PMA approval for EsoGuard, when used on samples collected with EsoCheck, which will

allow us to jointly market them.

FDA “Breakthrough Device”

is highly-coveted special designation under FDA’s Breakthrough Devices Program, established pursuant to the 21st Century Cures

Act and the FDA Reauthorization Act of 2017, which seeks to offer patients and healthcare providers timely access to medical devices

which “provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions”

by speeding up their development, assessment and review through (i) enhanced communications, (ii) more efficient and flexible clinical

study design, including more favorable pre/post market data collection balance and (iii) priority review of regulatory submissions.

effective, MCIT would provide each Breakthrough Device with four years of national Medicare coverage starting on the date of FDA market

authorization.

For the purposes of FDA regulation a “medical device” is broadly defined in section 201(h) of the FD&C Act as “an instrument, apparatus, implement, machine, contrivance, implant, in-vitro reagent, or other similar or related article, which is intended for use in humans for the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, or intended to affect the structure or any function of the body, and which does not achieve its primary intended purposes through chemical action and which is not dependent upon being metabolized for the achievement of its primary intended purposes.” Medical devices subject to FDA regulation include “in-vitro diagnostic medical devices” or IVD devices, defined in the same FD&C Act section as “reagents, instruments, and systems intended for use in the diagnosis of disease or other conditions, including a determination of the state of health, in order to cure, mitigate, treat, or prevent disease or its sequelae, which are intended for use in the collection, preparation, and examination of specimens taken from the human body”.

Our marketing of any medical device product we may develop, license, or acquire, including traditional medical devices such as EsoCheck, and IVD products such as EsoGuard, is subject to FDA regulation.

In June 2019, we received FDA 510(k) clearance for EsoCheck, permitting us to market it in the U.S.

as a cell collection device indicated for use in the collection and retrieval of surface cells of the esophagus in the general population of adults, 22 years of age and older.

In 2022, we received FDA clearance to expand EsoCheck’s indications for use to include adults and adolescents, 12 years of age and older.

In 2023, we further received FDA clearance to permit us to market EsoCheck as non-sterile.

In December 2019, RDx, our then-CLIA-certified laboratory partner completed documentation of EsoGuard analytical validity allowing us to commercialize it as an LDT.

In March 2022, we transferred EsoGuard testing to our own CLIA-certified laboratory, upon our acquisition of certain assets from RDx as described elsewhere in this report.

FDA defines an LDT as “an IVD product that is intended for clinical use and designed, manufactured and used within a single laboratory.” FDA has long maintained that it has clear regulatory authority over LDTs and has chosen to fully exercise its authority for certain classes of “single laboratory” IVD products which would satisfy its definition of an LDT, such as direct-to-consumer tests that do not involve a health care provider.

FDA, however, has generally not enforced these regulatory requirements for most LDTs not in one of these classes and has generally not required these LDTs to undergo FDA premarket review of analytical validity and clinical validity, as all other IVD products must.

Since only EsoCheck is FDA cleared, we are not permitted to jointly market it with EsoGuard.

This currently is not a significant obstacle to our commercialization efforts, which are almost entirely devoted to marketing EsoGuard.

EsoCheck is merely offered, free of charge, as a generic esophageal cell collection device, which is FDA 510(k) cleared to be used to collect samples for any diagnostic test.

We believe, however, over the long-term, once our commercialization efforts have gained significant traction, it would be useful to jointly market EsoGuard, used with EsoCheck.

We therefore may, when resources permit, pursue FDA PMA approval for EsoGuard, when used on samples collected with EsoCheck, which will allow us to jointly market them.

FDA “Breakthrough Device” is highly-coveted special designation under FDA’s Breakthrough Devices Program, established pursuant to the 21st Century Cures Act and the FDA Reauthorization Act of 2017, which seeks to offer patients and healthcare providers timely access to medical devices which “provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions” by speeding up their development, assessment and review through (i) enhanced communications, (ii) mor e efficient and flexible clinical study design, including more favorable pre/post market data collection balance and (iii) priority review of regulatory submissions.

The Company can pursue additional reimbursement and coverage options through Transitional Coverage for Emerging Technologies ("TCET") program, once effective.

In February 2020 we were granted Breakthrough Device designation for EsoGuard on esophageal samples collected using EsoCheck.

Pursuant to this designation, we will be working with FDA to submit the premarket submission for EsoGuard.

Before and after approval or

clearance in the United States, our products are subject to extensive regulation by the FDA under the Federal Food, Drug, and Cosmetic

Act and/or the Public Health Service Act, as well as by other regulatory bodies.

FDA regulations govern, among other things, the development,

testing, manufacturing, labeling, safety, storage, recordkeeping, market clearance or approval, advertising and promotion, import and

export, marketing and sales, and distribution of medical devices and products.

In the United States, medical

devices are subject to varying degrees of regulatory control and are classified in one of three classes depending on the extent of controls

the FDA determines are necessary to reasonably ensure their safety and efficacy:

general controls, such

as labeling and adherence to quality system regulations;

special controls,

pre-market notification (often referred to as a 510(k) application), specific controls such as performance standards, patient registries,

post-market surveillance, additional controls such as labeling and adherence to quality system regulations;

special controls and

approval of a de novo request or PMA application, likely with clinical data requirements.

In general, the higher the classification,

the greater the time and cost to obtain approval to market.

There are no “standardized” requirements for approval, even within

Pursuant to this designa tion, we will be working with FDA to submit the premarket submission for EsoGuard.

Before and after approval or clearance in the United States, our products are subject to extensive regulation by the FDA under the Federal Food, Drug, and Cosmetic Act and/or the Public Health Service Act, as well as by other regulatory bodies.

FDA regulations govern, among other things, the development, testing, manufacturing, labeling, safety, storage, recordkeeping, market clearance or approval, advertising and promotion, import and export, marketing and sales, and distribution of medical devices and products.

In the United States, medical devices are subject to varying degrees of regulatory control and are classified in one of three classes depending on the extent of controls the FDA determines are necessary to reasonably ensure their safety and efficacy:

general controls, such as labeling and adherence to quality system regulations;

special controls, pre-market notification (often referred to as a 510(k) application), specific controls such as performance standards, patient registries, post-market surveillance, additional controls such as labeling and adherence to quality system regulations;

special controls and approval of a de novo request or PMA application, likely with clinical data requirements.

In general, the higher the classification, the greater the time and cost to obtain approval to market.

There are no “standardized” requirements for approval, even within each class.

For example, FDA could grant 510(k) status, but require a human clinical trial, a typical requirement of a PMA.

also initially assign a device Class III status but end up clearing a device as a 510(k) device or under a de novo classification pathway

if certain requirements are met.

They could also initially assign a device Class III status but end up clearing a device as a 510(k) device or under a de novo classification pathway if certain requirements are met.

The range of the number and expense of the various requirements is significant.

The quickest and least

expensive pathway would be 510(k) clearance with a review of existing bench and animal data.

A de novo classification pathway would have

a similar cost to seeking 510(k) clearance, but with a slightly longer review timeline.

The longest and most expensive path would be

a PMA with extensive randomized human clinical trials.

We cannot predict fully how FDA will classify our products, nor predict what requirements

will be placed upon us to obtain market clearance or approval, or even if they will clear or approve our products at all.

It is our understanding

that the data we are collecting for EsoGuard will be sufficient to support the analytical and clinical validity requirements for a premarket

submission to the FDA.

Clinical Trials of Medical Devices and Diagnostic

One or more clinical trials may

be necessary to support an FDA submission.

Clinical studies of unapproved or uncleared medical devices or diagnostic tests being studied

for uses for which they are not approved or cleared (investigational devices) must be conducted in compliance with FDA requirements.

If an investigational device could pose a significant risk to patients, the sponsor company must submit an Investigational Device Exemption,

or IDE application to FDA prior to initiation of the clinical study.

An IDE application must be supported by appropriate data, such as

animal and laboratory test results, showing that it is safe to test the device on humans and that the testing protocol is scientifically

The IDE is reviewed by FDA within 30 calendar days after receipt by FDA and FDA can issue a disapproval, conditional approval

or full approval for the study to begin depending on the remaining FDA questions following review.

Clinical studies of investigational

devices may not begin until an IRB has approved the study.

During any study, the sponsor

must comply with FDA’s IDE requirements.

These requirements include investigator selection, trial monitoring, adverse event reporting,

and record keeping.

The investigators must obtain patient informed consent, rigorously follow the investigational plan and study protocol,

control the disposition of investigational devices, and comply with reporting and record keeping requirements.

We, FDA, or the IRB at

each institution at which a clinical trial is being conducted may suspend a clinical trial at any time for various reasons, including

a belief that the subjects are being exposed to an unacceptable risk.

During the approval or clearance process, FDA typically inspects

the records relating to the conduct of one or more investigational sites participating in the study supporting the application.

Post-Approval Regulation of Medical Devices and

Diagnostic Tests

After a device is cleared or

approved for marketing, numerous regulatory requirements continue to apply.

The quickest and least expensive pathway would be 510(k) clearance with a review of existing bench and animal data.

A de novo classification pathway would have a similar cost to seeking 510(k) clearance, but with a slightly longer review timeline.

The longest and most expensive path would be a PMA with extensive randomized human clinical trials.

We cannot predict fully how FDA will classify our products, nor predict what requirements will be placed upon us to obtain market clearance or approval, or even if they will clear or approve our products at all.

Clinical Trials of Medical Devices and Diagnostic Tests

One or more clinical trials may be necessary to support an FDA submission.

Clinical studies of unapproved or uncleared medical devices or diagnostic tests being studied for uses for which they are not approved or cleared (investigational devices) must be conducted in compliance with FDA requirements.

If an investigational device could pose a significant risk to patients, the sponsor company must submit an Investigational Device Exemption, or IDE application to FDA prior to initiation of the clinical study.

An IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that it is safe to test the device on humans and that the testing protocol is scientifically sound.

The IDE is reviewed by FDA within 30 calendar days after receipt by FDA and FDA can issue a disapproval, conditional approval or full approval for the study to begin depending on the remaining FDA questions following review.

Clinical studies of investigational devices may not begin until an IRB has approved the study.

During any study, the sponsor must comply with FDA’s IDE requirements.

These requirements include investigator selection, trial monitoring, adverse event reporting, and record keeping.

The investigators must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition of investigational devices, and comply with reporting and record keeping requirements.

We, FDA, or the IRB at each institution at which a clinical trial is being conducted may suspend a clinical trial at any time for various reasons, including a belief that the subjects are being exposed to an unacceptable risk.

During the approval or clearance process, FDA typically inspects the records relating to the conduct of one or more investigational sites participating in the study supporting the application.

Post-Approval Regulation of Medical Devices and Diagnostic Tests

After a device is cleared or approved for marketing, numerous regulatory requirements continue to apply.

These include:

● FDA Quality Systems Regulation (QSR),

which governs, among other things, how manufacturers design, test manufacture, exercise quality

control over, and document manufacturing of their products;

● labeling and claims regulations,

which prohibit the promotion of products for unapproved or “off-label” uses and

impose other restrictions on labeling;

● the Medical Device Reporting regulation,

which requires reporting to FDA of certain adverse experience associated with use of the

We will continue to be subject

to inspection by FDA to determine our compliance with regulatory requirements.

FDA Quality Systems Regulation (QSR), which governs, among other things, how manufacturers design, test manufacture, exercise quality control over, and document manufacturing of their products;

labeling and claims regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling;

the Medical Device Reporting regulation, which requires reporting to FDA of certain adverse experience associated with use of the product.

We will continue to be subject to inspection by FDA to determine our compliance with regulatory requirements.

Manufacturing cGMP Requirements

Manufacturers of medical devices

are required to comply with FDA manufacturing requirements contained in FDA’s current Good Manufacturing Practices (“cGMP”) set forth

in the quality system regulations promulgated under section 520 of the Food, Drug and Cosmetic Act.

cGMP regulations require, among other

things, quality control and quality assurance as well as the corresponding maintenance of records and documentation.

Failure to comply

with statutory and regulatory requirements subjects a manufacturer to possible legal or regulatory action, including the seizure or recall

of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations, and civil and criminal

Adverse experiences with the device must be reported to FDA and could result in the imposition of marketing restrictions through

labeling changes or in device withdrawal.

Device clearances or approvals may be withdrawn if compliance with regulatory requirements

is not maintained or if problems concerning safety or efficacy of the product occur following the approval.

We expect to use contract

manufacturers to manufacture our products for the foreseeable future we will therefore be dependent on their compliance with these requirements

to market our products.

We work closely with our contract manufacturers to assure that our products are in strict compliance with these

Manufacturers of medical devices are required to comply with FDA manufacturing requirements contained in FDA’s current Good Manufacturing Practices (“cGMP”) set forth in the quality system regulations promulgated under section 520 of the Food, Drug and Cosmetic Act.

cGMP regulations require, among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation.

Failure to comply with statutory and regulatory requirements subjects a manufacturer to possible legal or regulatory action, including the seizure or recall of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations, and civil and criminal penalties.

Adverse experiences with the device must be reported to FDA and could result in the imposition of marketing restrictions through labeling changes or in device withdrawal.

Device clearances or approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following the approval.

We expect to use contract manufacturers to manufacture our products for the foreseeable future we will therefore be dependent on their compliance with these requirements to market our products.

We work closely with our contract manufacturers to assure that our products are in strict compliance with these regulations.

Laboratory Certification, Accreditation and Licensing

Our CLIA-certified laboratory

is subject to U.S.

and state laws and regulations regarding the operation of clinical laboratories.

CLIA requirements and laws of certain

states, including those of California, New York, Maryland, Pennsylvania, Rhode Island and Florida, impose certification requirements

for clinical laboratories, and establish standards for quality assurance and quality control, among other things.

CLIA provides that

a state may adopt different or more stringent regulations than federal law and permits states to apply for exemption from CLIA if the

state’s laboratory laws are equivalent to, or more stringent than, CLIA.

For example, the State of New York’s clinical laboratory

regulations, which have received an exemption from CLIA, contain provisions that are in certain respects more stringent than federal

Therefore, as long as New York maintains a licensure program that is CLIA-exempt, we will need to comply with New York’s clinical

laboratory regulations in order to offer our clinical laboratory products and services in New York.

We have current certificates

to perform clinical laboratory testing.

Clinical laboratories are subject to inspection by regulators and to sanctions for failing to

comply with applicable requirements.

Sanctions available under CLIA and certain state laws include prohibiting a laboratory from running

tests, requiring a laboratory to implement a corrective plan, and imposing civil monetary penalties.

If our CLIA-certified laboratory

fails to meet any applicable requirements of CLIA or state law, that failure could adversely affect any future CMS consideration of our

technologies, prevent their approval entirely, and/or interrupt the commercial sale of any products and services and otherwise cause

us to incur significant expense.

Our CLIA-certified laboratory is subject to U.S.

federal and state laws and regulations governing the operation of clinical laboratories.

CLIA requirements establish certification requirements and standards relating to quality systems, quality control, personnel qualifications, and operational requirements.

We are accredited by the College of American Pathologists ("CAP"), a CMS approved accrediting organization under CLIA’s authority.

As a CAP accredited laboratory, we are subject to periodic inspections conducted by CAP and, in certain circumstances, by CMS.

CAP accreditation is designed to meet or exceed CLIA requirements;

however, failure to maintain CAP accreditation could result in loss of our ability to operate under CLIA.

In addition to CLIA, certain states, including California, New York, Maryland, Pennsylvania, New Jersey, Rhode Island and Florida, impose separate certification and/or licensure requirements for clinical laboratories operating within or offering testing services to patients in those states.

CLIA allows states to adopt laboratory regulations that are equal to or more stringent than federal requirements, and allows states to apply for exemption from CLIA oversight if CMS determines that the state’s requirements are at least as stringent as or more stringent than, CLIA.

For example, the State of New York’s clinical laboratory regulations, received such an exemption, and in certain respects, impose requirements more stringent than those under federal CLIA standards.

Accordingly, to the extent we offer testing services in New York or for New York patients, we must comply with these applicable New York State Department of Health requirements.

We currently hold the certificates, licenses, and accreditations required to perform our clinical laboratory testing.

Clinical laboratories are subject to periodic inspection by federal and state regulators and accrediting bodies, and may be subject to sanctions for noncompliance.

Sanctions available under CLIA and applicable state laws include suspending, limiting, or revoking certificates or licenses;

prohibiting a laboratory from running tests;

requiring a laboratory to implement a corrective action plan;

imposing civil monetary penalties;

and, in certain cases, exclusion from participation in federal healthcare programs.

Failure to comply with applicable CLIA or state laboratory requirements could result in enforcement action, interruption of our laboratory operations, and increased cost.

It could also adversely affect the commercialization of our products and service or future regulatory determinations by CMS or other governmental authorities.

Healthcare Regulation

In addition to FDA restrictions

on marketing and promotion of drugs and devices, other federal and state laws restrict our business practices.

These laws include, without

limitation, anti-kickback and false claims laws, data privacy and security laws, as well as transparency laws regarding payments or other

items of value provided to healthcare providers.

Because of the breadth of these

laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is possible that some of our business

activities, including certain sales and marketing practices and the provision of certain items and services to our customers, could be

subject to challenge under one or more of such laws.

If our operations are found to be in violation of any of the health regulatory laws

described above or any other laws that apply to us, we may be subject to penalties, including potentially significant criminal and civil

and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare programs,

contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring

of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

To the extent

that any of our products are sold in a foreign country, we may be subject to similar foreign laws, which may include, for instance, applicable

post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs

and reporting of payments or transfers of value to healthcare professionals.

In any event, we have established

a substantial regulatory and compliance infrastructure for the Lucid Test Centers and other EsoGuard programs and related activities

that is designed to ensure compliance with these regulations.

In addition to FDA restrictions on marketing and promotion of drugs and devices, other federal and state laws restrict our business practices.

These laws include, without limitation, anti-kickback and false claims laws, data privacy and security laws, as well as transparency laws regarding payments or other items of value provided to healthcare providers.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is possible that some of our business activities, including certain sales and marketing practices and the provision of certain items and services to our customers, could be subject to challenge under one or more of such laws.

If our operations are found to be in violation of any of the health regulatory laws described above or any other laws that apply to us, we may be subject to penalties, including potentially significant criminal and civil and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare programs, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.

In any event, we have established a substantial regulatory and compliance infrastructure for the Lucid Test Centers and other EsoGuard programs and related activities that is designed to ensure compliance with these regulations.

Physician Payment Sunshine Act

On February 8, 2013, the Centers

for Medicare & Medicaid Services, or CMS, released its final rule implementing section 6002 of the Affordable Care Act known as the

Physician Payment Sunshine Act that imposes annual reporting requirements on device manufacturers for payments and other transfers of

value provided by them, directly or indirectly, to physicians and teaching hospitals, as well as ownership and investment interests held

by physicians and their family members.

A manufacturer’s failure to submit timely, accurately and completely the required information

for all payments, transfers of value or ownership or investment interests may result in civil monetary penalties of up to an aggregate

of $150,000 per year, and up to an aggregate of $1 million per year for “knowing failures.” Manufacturers that

produce at least one product reimbursed by Medicare, Medicaid, or Children’s Health Insurance Program and (i) if the product is

a drug or biological, and it requires a prescription (or physician’s authorization) to administer;

or (ii) if the product is a

device or medical supply, and it requires premarket approval or premarket notification by the FDA are required to comply with the Open

Payments (commonly referred to as the Sunshine Act) filing requirements under CMS.

We currently do not have any products covered by Medicare,

Medicaid, or Children’s Health Insurance Program as none of our products have premarket approval or clearance notification.

expect once our products receive regulatory clearance, we will be required to comply with the Sunshine Act provisions.

Certain states also mandate implementation

of commercial compliance programs, and other states impose restrictions on device manufacturer marketing practices and require tracking

and reporting of gifts, compensation and other remuneration to healthcare professionals and entities.

The shifting commercial compliance

environment and the need to build and maintain robust and expandable systems to comply with different compliance or reporting requirements

in multiple jurisdictions increase the possibility a healthcare company may fail to comply fully with one or more of these requirements.

On February 8, 2013, the Centers for Medicare & Medicaid Services, or CMS, released its final rule implementing section 6002 of the Affordable Care Act known as the Physician Payment Sunshine Act that imposes annual reporting requirements on device manufacturers for payments and other transfers of value provided by them, directly or indirectly, to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their family members.

A manufacturer’s failure to submit timely, accurately and completely the required information for all payments, transfers of value or ownership or investment interests may result in civil monetary penalties of up to an aggregate of $150,000 per year, and up to an aggregate of $1 million per year for “knowing failures.” Manufacturers that produce at least one product reimbursed by Medicare, Medicaid, or Children’s Health Insurance Program and (i) if the product is a drug or biological, and it requires a prescription (or physician’s authorization) to administer;

or (ii) if the product is a device or medical supply, and it requires premarket approval or premarket notification by the FDA are required to comply with the Open Payments (commonly referred to as the Sunshine Act) filing requirements under CMS.

We currently do not have any products covered by Medicare, Medicaid, or Children’s Health Insurance Program as none of our products have premarket approval or clearance notification.

We expect once our products receive regulatory clearance, we will be required to comply with the Sunshine Act provisions.

Certain states also mandate implementation of commercial compliance programs, and other states impose restrictions on device manufacturer marketing practices and require tracking and reporting of gifts, compensation and other remuneration to healthcare professionals and entities.

The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply with different compliance or reporting requirements in multiple jurisdictions increase the possibility a healthcare company may fail to comply fully with one or more of these requirements.

Federal Anti-Kickback Statute

The Federal Anti-Kickback Statute

prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration (including any kickback,

bribe or rebate), directly or indirectly, overtly or covertly, to induce or in return for purchasing, leasing, ordering or arranging

for or recommending the purchase, lease or order of any good, facility, item or service reimbursable, in whole or in part, under Medicare,

Medicaid or other federal healthcare programs.

The term “remuneration” has been broadly interpreted to include anything of

Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution,

the exceptions and safe harbors are drawn narrowly.

Practices that involve remuneration that may be alleged to be intended to induce

prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor.

to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per

se illegal under the Anti-Kickback Statute.

Instead, the legality of the arrangement will be evaluated on a case-by-case basis based

on a cumulative review of all its facts and circumstances.

Several courts have interpreted the statute’s intent requirement to

mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business,

the Anti-Kickback Statute has been violated.

Additionally, the intent standard

under the Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care

and Education Reconciliation Act of 2010, collectively the Affordable Care Act, to a stricter standard such that a person or entity no

longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

the Affordable Care Act codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback

Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.

Federal False Claims Act

The False Claims Act prohibits,

among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment

or approval to the federal government or knowingly making, using or causing to be made or used a false record or statement material to

a false or fraudulent claim to the federal government.

A claim includes “any request or demand” for money or property presented

The False Claims Act also applies to false submissions that cause the government to be paid less than the amount

to which it is entitled, such as a rebate.

The Federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any good, facility, item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs.

The term “remuneration” has been broadly interpreted to include anything of value.

Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly.

Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor.

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute.

Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all its facts and circumstances.

Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the Anti-Kickback Statute has been violated.

Additionally, the intent standard under the Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, collectively the Affordable Care Act, to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

In addition, the Affordable Care Act codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.

We are subject to comparable state laws, including those pertaining to fee splitting, some of which apply to all payors regardless of source of payment, and do not contain identical safe harbors.

False Claims Act

The False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval to the federal government or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.

A claim includes “any request or demand” for money or property presented to the U.S.

The False Claims Act also applies to false submissions that cause the government to be paid less than the amount to which it is entitled, such as a rebate.

Intent to deceive is not required to establish liability under the False Claims Act.

pharmaceutical, device and other healthcare companies have been prosecuted under these laws for, among other things, allegedly providing

free product to customers with the expectation that the customers would bill federal programs for the product.

Other companies have been

prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus noncovered,

The government may further prosecute,

as a crime, conduct constituting a false claim under the False Claims Act.

The False Claims Act prohibits the making or presenting of

a claim to the government knowing such claim to be false, fictitious, or fraudulent and, unlike civil claims under the False Claims Act,

requires proof of intent to submit a false claim.

Several pharmaceutical, device and other healthcare companies have been prosecuted under these laws for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product.

Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus noncovered, uses.

The government may further prosecute, as a crime, conduct constituting a false claim under the False Claims Act.

The False Claims Act prohibits the making or presenting of a claim to the government knowing such claim to be false, fictitious, or fraudulent and, unlike civil claims under the False Claims Act, requires proof of intent to submit a false claim.

The Foreign Corrupt Practices Act

The Foreign Corrupt Practices

Act, or the “FCPA,” prohibits any U.S.

individual or business from paying, offering, or authorizing payment or offering of

anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act

or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.

The FCPA also obligates

companies whose securities are listed in the United States to comply with accounting provisions requiring the company to maintain books

and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise

and maintain an adequate system of internal accounting controls for international operations.

Activities that violate the FCPA, even

if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment, disgorgement, oversight, and debarment

from government contracts.

The Foreign Corrupt Practices Act, or the “FCPA,” prohibits any U.S.

individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.

The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.

Activities that violate the FCPA, even if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment, disgorgement, oversight, and debarment from government contracts.

Healthcare Reform

Current and future legislative

proposals to further reform healthcare or reduce healthcare costs may result in lower reimbursement for our products, or for the procedures

associated with the use of our products, or limit coverage of our products.

The cost containment measures that payors and providers are

instituting and the effect of any healthcare reform initiative implemented in the future could significantly reduce our revenues from

the sale of our products.

Alternatively, the shift away from fee-for-service agreements to capitated payment models may support the value

of our products which can be shown to decrease resource utilization and lead to cost savings for both payors and providers.

Current and future legislative proposals to further reform healthcare or reduce healthcare costs may result in lower reimbursement for our products, or for the procedures associated with the use of our products, or limit coverage of our products.

The cost containment measures that payors and providers are instituting and the effect of any healthcare reform initiative implemented in the future could significantly reduce our revenues from the sale of our products.

Alternatively, the shift away from fee-for-service agreements to capitated payment models may support the value of our products which can be shown to decrease resource utilization and lead to cost savings for both payors and providers.

HIPAA and Other Privacy Laws

The Health Insurance Portability

and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (“HIPAA”)

established comprehensive protection for the privacy and security of health information.

The HIPAA standards apply to three types of

organizations, or “Covered Entities”:

health plans, healthcare clearinghouses, and healthcare providers that conduct certain

healthcare transactions electronically.

Covered Entities and their business associates must have in place administrative, physical, and

technical standards to guard against the misuse of individually identifiable health information.

Some of our activities, including at

our Lucid Test Centers and within our clinical trials, involve interactions with patients and their health information which implicate

Our activities also involve us entering into specific kinds of relationships with Covered Entities and business associates of

Covered Entities, which also implicate HIPAA.

The Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (“HIPAA”) established comprehensive protection for the privacy and security of health information.

The HIPAA standards apply to three types of organizations, or “Covered Entities”:

health plans, healthcare clearinghouses, and healthcare providers that conduct certain healthcare transactions electronically.

Covered Entities and their business associates must have in place administrative, physical, and technical standards to guard against the misuse of individually identifiable health information.

Some of our activities, including at our Lucid Test Centers and within our clinical trials, involve interactions with patients and their health information which implicate HIPAA.

Our activities also involve us entering into specific kinds of relationships with Covered Entities and business associates of Covered Entities, which also implicate HIPAA.

Penalties for violations of HIPAA include civil money and criminal penalties.

Our activities must also comply

with other applicable privacy laws, which impose restrictions on the access, use and disclosure of personal information.

More state and

international privacy laws are being adopted.

Many state laws are not preempted by HIPAA because they are more stringent or are broader

in scope than HIPAA.

Since 2020 we have also had to comply with the California Consumer Privacy Act of 2018, which protects personal

information other than health information covered by HIPAA.

In the E.U., the General Data Protection Regulation (“GDPR”)

took effect in May 2018 and imposes increasingly stringent data protection and privacy rules.

All of these laws may impact our business

and may change periodically, which could have an effect on our business operations if compliance becomes substantially costlier than

under current requirements.

Our failure to comply with these privacy laws or significant changes in the laws restricting our ability

to obtain patient samples and associated patient information could significantly impact our business and our future business plans.

Our activities must also comply with other applicable privacy laws, which impose restrictions on the access, use and disclosure of personal information.

More state and international privacy laws are being adopted.

Many state laws are not preempted by HIPAA because they are more stringent or are broader in scope than HIPAA.

Since 2020 we have also had to comply with the California Consumer Privacy Act of 2018, which protects personal information other than health information covered by HIPAA.

In the E.U., the General Data Protection Regulation (“GDPR”) took effect in May 2018 and imposes increasingly stringent data protection and privacy rules.

All of these laws may impact our business and may change periodically, which could have an effect on our business operations if compliance becomes substantially costlier than under current requirements.

Our failure to comply with these privacy laws or significant changes in the laws restricting our ability to obtain patient samples and associated patient information could significantly impact our business and our future business plans.

Self-Referral Law

The federal “self-referral”

law, commonly referred to as the “Stark” law, provides that physicians who, personally or through a family member, have ownership

interests in or compensation arrangements with a laboratory are prohibited from making a referral to that laboratory for laboratory tests

reimbursable by Medicare, and also prohibits laboratories from submitting a claim for Medicare payments for laboratory tests referred

by physicians who, personally or through a family member, have ownership interests in or compensation arrangements with the testing laboratory.

The Stark law contains a number of specific exceptions which, if met, permit physicians who have ownership or compensation arrangements

with a testing laboratory to make referrals to that laboratory and permit the laboratory to submit claims for Medicare payments for laboratory

tests performed pursuant to such referrals.

We are subject to comparable state laws, some of which apply to all payors regardless of

source of payment, and do not contain identical exceptions to the Stark law.

The federal “self-referral” law, commonly referred to as the “Stark” law, provides that physicians who, personally or through a family member, have ownership interests in or compensation arrangements with a laboratory are prohibited from making a referral to that laboratory for laboratory tests reimbursable by Medicare, and also prohibits laboratories from submitting a claim for Medicare payments for laboratory tests referred by physicians who, personally or through a family member, have ownership interests in or compensation arrangements with the testing laboratory.

The Stark law contains a number of specific exceptions which, if met, permit physicians who have ownership or compensation arrangements with a testing laboratory to make referrals to that laboratory and permit the laboratory to submit claims for Medicare payments for laboratory tests performed pursuant to such referrals.

We are subject to comparable state laws, some of which apply to all payors regardless of source of payment, and do not contain identical exceptions to the Stark law.

International Regulation

In order to market any of our

products outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries and

jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial

sales and distribution of our products.

We may be subject to regulations and product registration requirements in the areas of product

standards, packaging requirements, labeling requirements, import and export restrictions and tariff regulations, duties and tax requirements.

Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable foreign regulatory

authorities before we can commence clinical trials or marketing of the product in foreign countries and jurisdictions.

The time required

to obtain clearance required by foreign countries may be longer or shorter than that required for FDA clearance, and requirements for

licensing a product in a foreign country may differ significantly from FDA requirements.

In order to market any of our products outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products.

We may be subject to regulations and product registration requirements in the areas of product standards, packaging requirements, labeling requirements, import and export restrictions and tariff regulations, duties and tax requirements.

Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable foreign regulatory authorities before we can commence clinical trials or marketing of the product in foreign countries and jurisdictions.

The time required to obtain clearance required by foreign countries may be longer or shorter than that required for FDA clearance, and requirements for licensing a product in a foreign country may differ significantly from FDA requirements.

European Union

We received CE Mark certification

for EsoCheck under MDD and completed CE Mark self-certification for EsoGuard, which qualifies as a General IVD, under IVDD, indicating

that both may be marketed in CE Mark European countries, namely the European Economic Area (the European Union, Norway, Iceland, and

Lichtenstein), Switzerland, and, until July 1, 2023, the United Kingdom.

MDD refers to Medical Device

Directive 93/42/EEC, which for nearly three decades provided the essential requirements and conformity assessment procedure that medical

devices must undergo to be affixed with a CE Mark and sold in CE Mark European countries.

MDD is now obsolete and has been replaced by

MDR refers to Regulation (EU) 2017/745 and incorporates several new concepts and registrations, stricter oversight of manufacturers

by notified bodies, universal device identification (UDI) marking, and increased post-market surveillance requirements.

Similarly, IVDD refers to In-Vitro

Diagnostic Medical Devices Directive (98/79/EC), which for over twenty years has provided the essential requirements and conformity assessment

procedure that in-vitro diagnostic medical devices must undergo to be affixed with a CE Mark and sold in CE Mark European countries.

On May 26, 2022, IVDD will be replaced by IVDR, which refers to Regulation (EU) 2017/746, and has an expanded scope, risk-based classification,

more rigorous clinical evidence and surveillance requirements, and more stringent documentation.

Both MDR and IVDR have sunset

provisions for medical device and IVD certifications under MDD and IVD, respectively.

Both EsoGuard and EsoCheck will require recertification

under their stricter regulations in the coming years.

Failure to secure these recertifications under MDR and IVDR will halt our ability

to commercialize our products in the CE Mark European countries.

As these are entirely new regulations, the cost, time and risk associated

with these recertifications is difficult to predict.

In addition, the United Kingdom,

which is a major target market for us, has left the European Union (“Brexit”) and will transition from CE Mark certification

to its own UKCA mark certification.

We will need to secure UKCA mark certification for EsoGuard and EsoCheck before their CE Mark certifications

expire in the UK.

Since this is an entirely new process, it is difficult to predict the cost, time and risk associated with transitioning

to UKCA certification.

In the European Union, the manufacture

of medical devices is subject to good manufacturing practice (GMP), as set forth in the relevant laws and guidelines of the European

Union and its member states.

We received CE Mark certification for EsoCheck under MDD and completed CE Mark self-certification for EsoGuard, which qualifies as a General IVD, under IVDD, indicating that both may be marketed in CE Mark European countries, namely the European Economic Area (the European Union, Norway, Iceland, and Lichtenstein), Switzerland, and, until July 1, 2023, the United Kingdom.

MDD refers to Medical Device Directive 93/42/EEC, which for nearly three decades provided the essential requirements and conformity assessment procedure that medical devices must undergo to be affixed with a CE Mark and sold in CE Mark European countries.

MDD is now obsolete and has been replaced by MDR.

MDR refers to Regulation (EU) 2017/745 and incorporates several new concepts and registrations, stricter oversight of manufacturers by notified bodies, universal device identification (UDI) marking, and increased post-market surveillance requirements.

Similarly, IVDD refers to In-Vitro Diagnostic Medical Devices Directive (98/79/EC), which for over twenty years has provided the essential requirements and conformity assessment procedure that in-vitro diagnostic medical devices must undergo to be affixed with a CE Mark and sold in CE Mark European countries.

On May 26, 2022, IVDD replaced IVDR, which refers to Regulation (EU) 2017/746, and has an expanded scope, risk-based classification, more rigorous clinical evidence and surveillance requirements, and more stringent documentation.

Both MDR and IVDR have sunset provisions for medical device and IVD certifications under MDD and IVD, respectively.

Both EsoGuard and EsoCheck will require recertification under their stricter regulations in the coming years.

Failure to secure these recertifications under MDR and IVDR will halt our ability to commercialize our products in the CE Mark European countries.

As these are entirely new regulations, the cost, time and risk associated with these recertifications is difficult to predict.

In addition, the United Kingdom, which is a potential target market for us, has left the European Union (“Brexit”) and will transition from CE Mark certification to its own UKCA mark certification.

We will need to secure UKCA mark certification for EsoGuard and EsoCheck to market these products in Great Britain.

Since this is an entirely new process, it is difficult to predict the cost, time and risk associated with transitioning to UKCA certification.

In the European Union, the manufacture of medical devices is subject to good manufacturing practice ("GMP"), as set forth in the relevant laws and guidelines of the European Union and its member states.

Compliance with GMP is generally assessed by the competent regulatory authorities.

Typically, quality system

evaluation is performed by a Notified Body, which also recommends to the relevant competent authority for the European Community CE Marking

The Competent Authority may conduct inspections of relevant facilities, and review manufacturing procedures, operating systems

and personnel qualifications.

Typically, quality system evaluation is performed by a notified body (as such term is used in the applicable regulations), which also recommends to the relevant competent authority for the European Community CE Marking of a device.

The relevant competent authority may conduct inspections of relevant facilities, and review manufacturing procedures, operating systems and personnel qualifications.

Each device manufacturing facility must be audited on a periodic basis by the notified body.

Further inspections

may occur over the life of the product.

Any action against us for violation

of these or similar foreign laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert

our management’s attention from the operation of our business.

Further inspections may occur over the life of the product.

Any action against us for violation of these or similar foreign laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

Occupational Safety and Health

In addition to its comprehensive

regulation of health and safety in the workplace in general, the Occupational Safety and Health Administration has established extensive

requirements aimed specifically at laboratories and other healthcare-related facilities.

In addition, because our operations may require

employees to use certain hazardous chemicals, we also must comply with regulations on hazard communication and hazardous chemicals in

laboratories.

These regulations require us, among other things, to develop written programs and plans, which must address methods for

preventing and mitigating employee exposure, the use of personal protective equipment, and training.

In addition to its comprehensive regulation of health and safety in the workplace in general, the Occupational Safety and Health Administration has established extensive requirements aimed specifically at laboratories and other healthcare-related facilities.

In addition, because our operations may require employees to use certain hazardous chemicals, we also must comply with regulations on hazard communication and hazardous chemicals in laboratories.

These regulations require us, among other things, to develop written programs and plans, which must address methods for preventing and mitigating employee exposure, the use of personal protective equipment, and training.

Specimen Transportation

Our commercialization activities

for EsoGuard subject us to regulations of the Department of Transportation, the United States Postal Service, and the Centers for Disease

Control and Prevention that apply to the surface and air transportation of clinical laboratory specimens.

Our commercialization activities for EsoGuard subject us to regulations of the Department of Transportation, the United States Postal Service, and the Centers for Disease Control and Prevention that apply to the surface and air transportation of clinical laboratory specimens.

Environmental

The cost of compliance with federal,

state and local provisions related to the protection of the environment has had no material effect on our Diagnostics business.

were no material capital expenditures for environmental control facilities in the years ended December 31, 2024 and 2023.

As of March 20,

2025 we have 72 employees (all of whom are full-time employees), inclusive of our executive officers – our Chairman of the

Board of Directors and Chief Executive Officer (“CEO”), our President and Chief Operating Officer, (“President”

or “COO”), our Chief Financial Officer (“CFO”), and our General Counsel and Secretary (“General Counsel”).

In addition, we are obligated to reimburse PAVmed for certain payroll benefit and expenses related to our employees pursuant to the PBERA,

which may be settled in shares of our common stock, at PAVmed’s election.

The cost of compliance with federal, state and local provisions related to the protection of the environment has had no material effect on our Diagnostics business.

There were no material capital expenditures for environmental control facilities in the years ended December 31, 2025 and 2024.

As of March 23, 2026 we have 82 employees (all of whom are full-time employees), inclusive of our executive officers – our Chairman of the Board of Directors and Chief Executive Officer (“CEO”), our President and Chief Operating Officer (“President” or “COO”), our Chief Financial Officer (“CFO”), our General Counsel and Secretary (“General Counsel”) and our Chief Medical Officer ("CMO").

In addition, we are obligated to reimburse PAVmed for certain payroll benefit and expenses related to our employees pursuant to the PBERA, which may be settled in shares of our common stock, at PAVmed’s election.

No employees are covered by a collective bargaining agreement.

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Corporate Information

We were incorporated in Delaware

on May 8, 2018.

Our corporate offices are located at 360 Madison Avenue, 25th Floor, New York, NY 10017, and our main telephone number

is (917) 813-1828.

We were incorporated in Delaware on May 8, 2018.

Our corporate offices are located at 360 Madison Avenue, 25th Floor, New York, NY 10017, and our main telephone number is (917) 813-1828.

Available Information

We make available free of charge

through our website (www.luciddx.com) our periodic reports and registration statements filed with the United States Securities and Exchange

Commission (“SEC”), including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,

and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended

(the “Exchange Act”).

We make these reports available through our website as soon as reasonably practicable after we electronically

file such reports with, or furnish such reports to the SEC.

We also make available, free

of charge on our website, the reports filed with the SEC by our named executive officers, directors, and 10% stockholders pursuant to

Section 16 under the Exchange Act as soon as reasonably practicable after those filings are provided to us by those persons.

also may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE., Washington,

DC 20549, on official business days during the hours of 10 a.m.

The public may obtain information on the operation of the Public

Reference Room by calling the Commission at 1-800-SEC-0330.

The SEC also maintains an Internet site (http://www.sec.gov) that contains

reports, proxy and information statements, and other information regarding us that we file electronically with the SEC.

We file or furnish our current and periodic reports, proxy statements, registration statements and other information filed with the United States Securities and Exchange Commission (“SEC”) pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports.

We make these reports available through our website (www.luciddx.com) as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the SEC.

We also make available, free of charge on our website, the reports filed with the SEC by our named executive officers, directors, and 10% stockholders pursuant to Section 16 under the Exchange Act as soon as reasonably practicable after those filings are provided to us by those persons.

The public also may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m.

The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.

The SEC also maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding us that we file electronically with the SEC.

Our website address is www.luciddx.com.

The content of our website is not incorporated by reference into this Annual Report on Form 10-K, nor in any other report or document

we file or furnish with and /or submit to the SEC, and any reference to our website are intended to be inactive textual references only.

The content of our website is not incorporated by reference into this Annual Report on Form 10-K, nor in any other report or document we file or furnish with and /or submit to the SEC, and any reference to our website are intended to be inactive textual references only.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business