What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-16 · 446 added, 452 removed, 304 unchanged (75% of the section changed)

4 unchanged sentences

thousands except number of shares and per share data - unaudited)

March 31, 2022

June 30, 2022

December 31, 2021

11 unchanged sentences

Operating lease liabilities - current portion

Contingent purchase consideration payable

Purchase consideration payable

- MSA Fee and operating expenses

7 unchanged sentences

Preferred stock, $ 0.001 par value, 20,000,000 shares authorized;

no shares issued and outstanding as of March 31, 2022 and December 31, 2021

no shares issued and outstanding as of June 30, 2022 and December 31, 2021

Common stock, $ 0.001 par value, 100,000,000 shares authorized;

35,171,796 and 34,917,907 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

35,994,667 and 34,917,907 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

7 unchanged sentences

thousands except number of shares and per share data - unaudited)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

7 unchanged sentences

Other income (expense):

Change in fair value - contingent consideration payable

Interest expense - Senior Unsecured Promissory Note

Other income (expense), net

7 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

the THREE MONTHS ENDED March 31, 2022 and 2021

the THREE AND SIX MONTHS ENDED June 30, 2022

thousands except number of shares and per share data - unaudited)

Additional Paid-In

Balance as of December 31, 2021

Additional Paid-In Capital

Accumulated Deficit

Additional Paid-In Capital

Accumulated Deficit

Balance as of March 31, 2022

Exercise - stock options - Lucid Diagnostics Inc.

1 unchanged sentence

Stock-based compensation - Lucid Diagnostics Inc.

2018 Equity Plan

Stock-based compensation - PAVmed Inc.

CapNostics, LLC transfer

APA-RDx - Installment Payment

Balance as of June 30, 2022

Additional Paid-In Capital

Accumulated Deficit

Balance as of December 31, 2021

Exercise - stock options - Lucid Diagnostics Inc.

2018 Equity Plan

Stock-based compensation - Lucid Diagnostics Inc.

Stock-based compensation - PAVmed Inc.

CapNostics, LLC transfer

APA-RDx - Installment Payment

Balance as of June 30, 2022

accompanying notes to the unaudited condensed consolidated financial statements.

DIAGNOSTICS INC.

majority-owned subsidiary of PAVmed Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

the THREE AND SIX MONTHS ENDED June 30, 2021

thousands except number of shares and per share data - unaudited)

Additional Paid-In Capital

Accumulated Deficit

Balance as of March 31, 2021

Additional Paid-In

Stock-based compensation - Lucid Diagnostics Inc.

Stock-based compensation - PAVmed Inc.

Balance as of June 30, 2021

Additional Paid-In Capital

Accumulated Deficit

Balance as of December 31, 2020

Stock-based compensation - Lucid Diagnostics Inc.

2018 Equity Plan

Stock-based compensation - PAVmed Inc.

2014 Equity Plan

Balance as of March 31, 2021

Balance as of June 30, 2021

accompanying notes to the unaudited condensed consolidated financial statements.

3 unchanged sentences

thousands except number of shares and per share data - unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation expense

Depreciation and amortization expense

Stock-based compensation - Lucid Diagnostics Inc.

2018 Equity Plan

Stock-based compensation - PAVmed Inc.

2014 Equity Plan

Fair value adjustment to contingent consideration payable

Issue common stock - settle installment payment

Changes in operating assets and liabilities:

3 unchanged sentences

Accrued expenses and other current liabilities

- operating expenses paid on-behalf-of Lucid Diagnostics Inc.

- Management Services Agreement Fee

- Employee Related Costs

- operating expenses, employee related costs, MSA Fee

- Interest Expense - Senior Unsecured Promissory Note

Net cash flows used in operating activities

1 unchanged sentence

Purchase of equipment

Payments - Acquisition

Net cash flows used in investing activities

13 unchanged sentences

1 — Summary Description of the Company

accompanying unaudited condensed consolidated financial statements are those of Lucid Diagnostics Inc.

(“Lucid Diagnostics”

or “the Company”), which was incorporated in the State of Delaware on May 8, 2018.

Diagnostics Inc.

and Subsidiaries, referred to herein as “Lucid Diagnostics” or the “Company” is comprised of

Lucid Diagnostics Inc.

is a majority-owned

subsidiary of PAVmed Inc., as discussed below.

and its wholly-owned subsidiaries, inclusive of LucidDx Labs, Inc.

and CapNostics LLC.

Lucid Diagnostics Inc.

is a majority-owned subsidiary of PAVmed Inc., as discussed below.

Company operates in one segment as a commercial-stage medical diagnostics technology company focused on the millions of patients with

gastroesophageal reflux disease - “GERD” - which is also known as chronic heartburn, acid reflux or simply reflux, who are

at risk for developing esophageal precancer and cancer, specifically highly lethal esophageal adenocarcinoma (EAC).

gastroesophageal reflux disease - “GERD” - which is also known variously as chronic heartburn, acid reflux or simply reflux

- who are at risk for developing esophageal precancer and cancer, specifically highly lethal esophageal adenocarcinoma (“EAC”).

Diagnostics Inc.

13 unchanged sentences

and together are collectively referred to as the “EsoGuard Technology”.

3, Patent License Agreement – Case Western Reserve University, for a discussion of the Amended CWRU License Agreement.

Company’s consolidated financial statements for the year ended December 31, 2021, Note 3, Patent License Agreement - Case Western

Reserve University , as included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with

the SEC on April 6, 2022, for a further discussion of the Amended CWRU License Agreement.

February 25, 2022, LucidDx Labs, Inc.

entered into an asset purchase agreement (“APA”) with ResearchDx, Inc.

an unrelated third-party - “APA-RDx”.

Under the APA-RDx, LucidDx Labs Inc.

acquired certain assets from RDx to be combined

with LucidDx Labs Inc.

purchased and leased property and equipment to establish a Company-owned Commercial Lab Improvements Act (“CLIA”)

certified, College of American Pathologists (“CAP”) accredited commercial clinical laboratory capable of performing the EsoGuard®

Esophageal DNA assay, inclusive of DNA extraction, next generation sequencing (“NGS”) and specimen storage.

See Note 6, Asset

Purchase Agreement and Management Services Agreement, for a further discussion of the APA-RDx.

its inception, the Company has advanced the proprietary technologies underlying EsoGuard and EsoCheck from the academic research laboratory

3 unchanged sentences

the communication and education of medical practitioners and clinicians of the EsoGuard LDT;

and establishing “Lucid Diagnostics Test Centers” for the collection of cell samples using EsoCheck Up and until February

25, 2022, delivery of the collected cell samples were sent to ResearchDX Inc.

(“RDx”), a CLIA certified commercial

laboratory service provider, for the performance of the EsoGuard LDT.

See LucidDx Labs, Inc.

and Asset Purchase Agreement-February

Additionally, the Company is conducting two concurrent clinical trials, including each of:

the “EsoGuard screening

study” (“ESOGUARD-BE-1”);

and the “EsoGuard case control study” (“ESOGUARD-BE-2”), to support

a United States Food and Drug Administration (“FDA”) pre-market approval (“PMA”) of the use of EsoGuard and EsoCheck

as an in-vitro diagnostic medical device (“IVD”).

Further, the Company is developing expanded clinical evidence to support

recommendation of our products in professional society guidelines.

Note 1 — Summary Description of the Company - continued

its inception and through the date of the Company’s IPO on October 14, 2021, the operations of Lucid Diagnostics Inc.

funded by PAVmed Inc.

providing working capital cash advances and the payment by PAVmed Inc.

of certain operating expenses on-behalf-of

Lucid Diagnostics Inc.

Additionally, the daily operations of Lucid Diagnostics Inc.

continue to be managed by personnel employed by PAVmed

Inc., for which Lucid Diagnostics Inc.

incurs expense according to the provisions of a Management Services Agreement between Lucid Diagnostics

and establishing “Lucid Diagnostics Test Centers” for the collection of cell samples using EsoCheck.

Additionally, the Company

is developing expanded clinical evidence to support recommendation of our products in professional society guidelines and insurance reimbursement

adoption by government and private insurers.

Further, the Company is also pursuing development of other products and services, including

EsoCure™, an esophageal ablation device.

The ability of the Company to generate revenue depends upon the Company’s ability

to successfully advance the commercialization of EsoGuard, while also completing the clinical studies, its product and service development,

and the necessary regulatory approval thereof.

There are no assurances, however, the Company will be able to obtain an adequate level

of financial resources required for the long-term commercialization and development of its products and services.

1 — Summary Description of the Company - continued

to its initial public offering (“IPO”) of its common stock, the operations of the Company were funded by PAVmed Inc.,

inclusive of providing working capital cash advances and the payment of certain operating expenses on-behalf-of the Company.

Additionally,

certain operations of Lucid Diagnostics Inc.

continue to be managed by personnel of PAVmed Inc., for which Lucid Diagnostics Inc.

expense according to the provisions of a Management Services Agreement between Lucid Diagnostics Inc.

and PAVmed Inc.

See Note 5, Related Party Transactions , for information with respect to the Management Services Agreement;

See Note 4, Related

Party Transactions , for information with respect to the Management Services Agreement;

and Note 5, Due To PAVmed Inc.

, for further information with respect to amounts owed to PAVmed Inc.

further information with respect to amounts owed to PAVmed Inc.

by Lucid Diagnostics Inc.

Company is subject to all of the risks and uncertainties typically faced by medical device and diagnostic and medical device companies

Company is subject to all of the risks and uncertainties typically faced by medical device and diagnostic companies

that devote substantially all of their efforts to the commercialization of their initial product and services and ongoing research and

3 unchanged sentences

Notwithstanding, however, with the cash on-hand

as of the date hereof and other debt and equity committed sources of capital with Lucid and its parent company, PAVmed, the Company expects

to be able to fund its future operations for one year from the date of the issue of the Company’s unaudited condensed consolidated

financial statements, as included herein in this Quarterly Report on Form 10-Q for the period ended March 31, 2022.

Diagnostics Inc.

Initial Public Offering - October 14, 2021

October 14, 2021, Lucid Diagnostics Inc.

completed an initial public offering (“IPO”) of its common stock under an effective

registration statement on Form S-1 (SEC File No.

333-259721), wherein a total of 5.0 million IPO shares of common stock were issued,

with such total IPO shares inclusive of 571,428 IPO shares issued to PAVmed Inc., at an IPO price of $ 14.00 per share, resulting gross

proceeds of $ 70.0 million, before underwriting fees of $ 4.9 million, and approximately $ 0.7 million of offering costs incurred by the

LucidDx Labs Inc.

December 2021, Lucid Diagnostics, Inc.

formed a new wholly owned subsidiary, LucidDx Labs Inc., principally to construct and operate

a Company-owned Commercial Lab Improvements Act (“CLIA”) certified, College of American Pathologists (“CAP”)

accredited commercial clinical laboratory.

On February 25, 2022, LucidDx

Labs, Inc., entered into an asset purchase agreement (“APA”) with ResearchDx, Inc.

(“RDx”), an unrelated third-party

Under the RDx APA, LucidDx Labs Inc.

acquired certain assets from RDx to be combined with LucidDx Labs Inc.

purchased and leased property and equipment to establish a Company-owned CLIA certified, CAP accredited commercial clinical laboratory

capable of performing the EsoGuard® Esophageal DNA assay, inclusive of DNA extraction, next generation sequencing (“NGS”)

and specimen storage.

See Note 7, Acquisitions - Asset Purchase Agreement - Research Dx Inc.

, for a further discussion of the

2 — Summary of Significant Accounting Policies and Recent Accounting Standards Updates

as of the date hereof and committed equity sources of financing, the Company expects to be able to fund its operations and meet its financial

obligations as they become due for the one year period from the date of the issue of the Company’s unaudited condensed consolidated

financial statements, as included herein in this Quarterly Report on Form 10-Q for the period ended June 30, 2022.

2 — Summary of Significant Accounting Policies

Accounting Policies

2 unchanged sentences

of Presentation

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally

accepted in the United States of America (“U.S.

GAAP”), and applicable rules and regulations of the United States Securities

and Exchange Commission (“SEC”), and include the accounts of the Company and its wholly-owned subsidiary, LucidDx Labs Inc.

accompanying unaudited condensed consolidated financial statements of Lucid Diagnostics Inc.

and Subsidiaries have been prepared in accordance

with accounting principles generally accepted in the United States of America (“U.S.

GAAP”), and applicable rules and regulations

of the United States Securities and Exchange Commission (“SEC”), and include the accounts of the Company and its wholly-owned

subsidiaries.

All intercompany transactions and balances have been eliminated in consolidation.

Lucid Diagnostics Inc.

(“the Company”)

is a majority-owned consolidated subsidiary of PAVmed Inc., which has a majority equity ownership interest and has financial control

of Lucid Diagnostics Inc.

The Company manages its operations as a single operating segment for the purposes of assessing performance

and making operating decisions.

amounts in the accompanying consolidated financial statements and these notes thereto are presented in thousands of dollars, if not otherwise

noted as being presented in millions of dollars, except for shares and per share amounts.

is a majority-owned

consolidated subsidiary of PAVmed Inc., which has a majority equity ownership interest and has financial control of Lucid Diagnostics

The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating

amounts in the accompanying unaudited condensed consolidated financial statements and these notes thereto are presented in thousands

of dollars, if not otherwise noted as being presented in millions of dollars, except for shares and per share amounts.

preparing the unaudited condensed consolidated financial statements in conformity with U.S.

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the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period.

estimates in these consolidated financial statements include those related to the estimated fair value of stock-based equity awards and

contingent consideration.

Other significant estimates include the provision or benefit for income taxes and the corresponding

valuation allowance on deferred tax assets.

Additionally, management’s assessment of the Company’s ability to continue as

a going concern involves the estimation of the amount and timing of future cash inflows and outflows.

On an ongoing basis, the Company

evaluates its estimates and assumptions.

The Company bases its estimates on historical experience and on various other assumptions believed

to be reasonable.

Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected

by changes in these estimates.

Consideration

Consideration relates to the potential payment for an acquisition that is contingent upon the achievement of the acquired business meeting

certain milestones.

The Company records contingent consideration at fair value at the date of acquisition based on the consideration

expected to be transferred.

For potential payments related to milestone achievements, the Company estimated the

fair value based on the probability of achievement of such milestones.

The assumptions utilized in the calculation of the acquisition

date fair value include probability of success and the discount rates.

Contingent consideration involves certain assumptions requiring

significant judgment and actual results may differ from assumed and estimated amounts.

Contingent consideration is remeasured each reporting

period, and subsequent changes in fair value, including accretion for the passage of time, are recognized within other income (expense),

net in the Company’s unaudited condensed consolidated statements of operations.

2 — Summary of Significant Accounting Policies and Recent Accounting Standards Updates - continued

Accounting Standards Updates Adopted

December 31, 2021, the Company adopted FASB ASC Topic 842, Leases, (“ASC 842”).

ASC 842 established a right-of-use (“ROU”)

model requiring a lessee to recognize a ROU asset and a lease liability for all leases with terms greater-than 12 months.

classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

The Company’s adoption of ASC 842 did not have an effect on the Company’s consolidated financial statements.

3 — Patent License Agreement - Case Western Reserve University

The Company has a patent license

agreement with CWRU which provides for each of patent fees reimbursement payments, milestone payments and royalty payments - each as

discussed below.

For further details of this agreement, see Note 3 of the Company’s Consolidated Financial Statements in the Company’s

Form 10-K for the year ended December 31, 2021.

Diagnostics Inc.

is responsible for reimbursement of certain CWRU billed patent fees.

See Note 5, Related Party Transactions ,

for patent fee reimbursement payments paid to CWRU in the periods ended March 31, 2022 and 2021.

CWRU License Agreement contained milestones for

research and development expense was recognized

and paid with respect to the achievement of the regulatory milestone related to FDA clearance of EsoCheck.

The CWRU License Agreement

was amended effective February 12, 2021 such that a regulatory milestone related to FDA PMA submission of a licensed product

(“PMA Milestone”) is included in the Amended CWRU License Agreement, and is the sole remaining unachieved milestone, for

which a $ 200 milestone

payment would be payable to CWRU upon its achievement.

3 — Patent License Agreement - Case Western Reserve University - continued

the Amended CWRU License Agreement, the Company is required to pay a royalty fee to CWRU with respect to the “Licensed Products”

(as defined in the CWRU License Agreement) of a percentage of “Net Sales”, as defined in the Amended CWRU License Agreement,

5.0% of Net Sales up to $100.0 million per year;

and 8.0% of Net Sales of $100.0 million or greater per year, with such amounts

subject-to a minimum annual royalty fee.

The Company recorded a royalty expense of $ 10 for the three months ended March 31, 2022

estimates in these (unaudited) condensed consolidated financial statements include those related to the estimated fair value of stock-based

equity awards and intangible assets.

Other significant estimates include the estimated incremental borrowing rate, the provision

or benefit for income taxes and the corresponding valuation allowance on deferred tax assets.

Additionally, management’s assessment

of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows

and outflows.

On an ongoing basis, the Company evaluates its estimates and assumptions.

The Company bases its estimates on historical

experience and on various other assumptions believed to be reasonable.

Due to inherent uncertainty involved in making estimates, actual

results reported in future periods may be affected by changes in these estimates.

2 — Summary of Significant Accounting Policies - continued

Accounting Policies - Continued

Company adopted FASB ASC Topic 842, Leases , (“ASC 842”) effective December 31, 2021, with such adoption not having

an effect on the Company’s consolidated financial statements.

significant lease agreements and contractual agreements with embedded lease agreements are accounted for under the provisions of ASC

842, wherein, if the contractual arrangement:

involves the use of a distinct identified asset;

provides for the right to substantially

all the economic benefits from the use of the asset throughout the contractual period;

and, provides for the right to direct the use

of the asset.

A lease agreement is accounted for as either a finance lease (generally with respect real estate) or an operating lease

(generally with respect to equipment).

Under both a finance lease and an operating lease, the Company recognizes as of the lease commencement

date a lease right-of-use (“ROU”) asset and a corresponding lease payment liability.

lease ROU asset represents the Company’s right to use an underlying asset for the lease term, and the lease liability represents

its contractual obligation to make lease payments.

The lease ROU asset is measured at the lease commencement date as the present value

of the future lease payments plus initial direct costs incurred.

The Company recognizes lease expense of the amortization of the lease

ROU asset for an operating lease on a straight-line basis over the lease term;

and for financing leases on a straight-line basis unless

another basis is more representative of the pattern of economic benefit.

The operating ROU asset also includes any lease incentives received

for improvements to leased property, when the improvements are lessee owned.

For improvements to leased property that are lessor owned,

the Company includes amounts the Company incurred for the improvements as ROU assets which are amortized on a straight-line basis over

the life of the lease.

lease liability is measured at the lease commencement date with the discount rate generally based on the Company’s incremental

borrowing rate (to the extent the lease implicit rate is not known nor determinable), with interest expense recognized using the interest

method for financing leases.

leases may include options to extend or terminate the agreement.

The Company does not assume renewals in determination of the lease term

unless the renewals are deemed to be reasonably certain at lease commencement.

As well, an option to terminate is considered unless it

is reasonably certain the Company will not exercise the option.

The Company elected the practical expedient to not recognize a lease

ROU asset and lease payment liability for leases with a term of twelve months or less (“short-term leases”), resulting in

the aggregate lease payments being recognized on a straight line basis over the lease term.

The Company’s leases with a commencement

date prior to January 1, 2022 were short-term leases and therefore did not require recording a ROU asset or lease liability at December

Additionally, the Company elected the practical expedient to not separate lease and non-lease components.

3 — Revenue from Contracts with Customers

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of service is rendered, and is measured as the amount of estimated consideration expected to be realized.

In the period ended March 31,

In the period ended June 30,

2022, the Company recognized revenue under the EsoGuard Commercialization Agreement, dated August 1, 2021, as discussed below.

Commercialization Agreement

Company entered into the EsoGuard Commercialization Agreement, dated August 1, 2021, with its CLIA certified commercial laboratory

service provider, ResearchDX Inc.

Company entered into the EsoGuard Commercialization Agreement, dated August 1, 2021, with its CLIA certified commercial laboratory service

provider, ResearchDx Inc.

(“RDx”), an unrelated third-party.

The EsoGuard Commercialization Agreement initial term

was on a month-to-month basis and was terminated on February 25, 2022 upon the execution of the RDx APA.

See Note 7, Acquisitions

- Asset Purchase Agreement - Research Dx Inc.

, for a further discussion of the RDx APA.

the three months ended March 31, 2022, the Company recognized total revenue of $ 189

under the EsoGuard Commercialization Agreement ,

which represents the minimum fixed monthly fee of

for the period January 1, 2022 to the February

25, 2022 termination date as discussed above.

The monthly fee was deemed to be collectible for such period as RDx has timely

paid the applicable respective monthly fee.

The EsoGuard Commercialization Agreement was on a month-to-month

basis and was terminated on February 25, 2022 upon the execution of an asset purchase agreement (“APA”) dated February 25,

2022, between LucidDx Labs Inc., a wholly-owned subsidiary of Lucid Diagnostics Inc., and RDx, with such agreement further discussed

in Note 6, Asset Purchase Agreement and Management Services Agreement .

the six months ended June 30, 2022, the Company recognized total revenue of $ 189 , under the EsoGuard Commercialization Agreement, which

represents the minimum fixed monthly fee of $ 100 for the period January 1, 2022 to the February 25, 2022 termination date as discussed

above, The monthly fee was deemed to be collectible for such period as RDx has timely paid the applicable respective monthly fee.

cost of revenue recognized with respect to the revenue recognized under the EsoGuard Commercialization Agreement for the period January

1, 2022 to February 25, 2022 totaled $ 369 ,

inclusive of employee related costs of employees engaged in the delivery of the administration to patients of the EsoCheck cell sample

collection procedure, EsoCheck devices and EsoGuard mailers (cell sample shipping costs) distributed to medical practitioners’

locations and the Lucid Test Centers;

Lucid Test Centers operating expenses, including rent expense and supplies;

and royalty fees incurred

under the Amended CWRU License Agreement.

1, 2022 to February 25, 2022 totaled $ 369 , inclusive of employee related costs of personnel engaged in the delivery of the administration

to patients of the EsoCheck cell sample collection procedure, EsoCheck devices and EsoGuard mailers (cell sample shipping costs) distributed

to medical practitioners’ locations and the Lucid Test Centers;

Lucid Test Centers operating expenses, including rent expense and

and royalty fees incurred under the Amended CWRU License Agreement.

4 — Related Party Transactions

Western Reserve University and Physician Inventors - CWRU License Agreement

Western Reserve University (“CWRU”) and each of the three physician inventors of the intellectual property licensed under

the CWRU License Agreement (“Physician Inventors”) each hold equity ownership minority interests in Lucid Diagnostics Inc.

The expenses incurred with respect to the CWRU License Agreement and the three Physician Inventors, as classified in the accompanying

consolidated statement of operations for the periods indicated are summarized as follows:

Schedule of Incurred Expenses of Minority Shareholders

Three Months Ended March 31,

Western Reserve University (“CWRU”) and each of the three physician inventors of the intellectual property licensed

under the Amended CWRU License Agreement (“Physician Inventors”) each hold a minority equity ownership interest in Lucid

Diagnostics Inc.

The expenses incurred with respect to the Amended CWRU License Agreement and the three Physician Inventors, as

classified in the accompanying consolidated statement of operations for the periods indicated are summarized as follows:

of Incurred Expenses of Minority Shareholders

Three Months Ended

Six Months Ended

Cost of Revenue

11 unchanged sentences

Total Related Party Expenses

Diagnostics Inc.

entered into consulting agreements with each of the three Physician Inventors, with each such consulting agreement providing

for compensation on a contractual rate per hour for consulting services provided, and an expiration date of May 12, 2024, upon the agreements’

renewal effective May 12, 2021.

Additionally, as discussed below, each of the Physician Inventors have been granted stock options under

the PAVmed Inc.

2014 Long-Term Incentive Equity Plan, and stock options and restricted stock awards under the Lucid Diagnostics Inc.

2018 Long-Term Incentive Equity Plan.

each of their respective (initial) consulting agreements with Lucid Diagnostics Inc., the three Physician Inventors were each granted

25,000 stock options under the PAVmed Inc.

2014 Equity Plan, with a grant date of May 12, 2018, an exercise price of $ 1.59 per share

of common stock of PAVmed Inc., vesting ratably on a quarterly basis commencing June 30, 2018 and ending March 31, 2021, and a contractual

period of ten years from the date of grant.

As of March 31, 2021, such stock options were fully vested and exercisable.

Subsequent to

March 31, 2021, each of the Physician Inventors were granted 50,000 stock options under the PAVmed Inc.

2014 Equity Plan, with a grant

date of June 21, 2021, an exercise price of $ 6.41 per share of common stock of PAVmed Inc., vesting ratably on a quarterly basis commencing

June 30, 2021 and ending March 31, 2024, and a contractual period of ten years from the date of grant.

March 1, 2021, restricted stock awards were granted under the Lucid Diagnostics Inc.

2018 Equity Plan to each of the three Physician

Inventors, with such restricted stock awards having a single vesting date of March 1, 2023, with the fair value of such restricted stock

awards recognized as stock-based compensation expense ratably on a straight-line basis over the vesting period, which is commensurate

with the service period.

The restricted stock awards are subject to forfeiture if the requisite service period is not completed.

5 — Related Party Transactions - continued

Note 4 — Related Party Transactions - continued

- Management Services Agreement

daily operations of Lucid Diagnostics Inc.

are managed by personnel employed by PAVmed Inc., for which Lucid Diagnostics Inc.

a service fee, referred to as the “MSA Fee”, according to the provisions of a Management Services Agreement (“MSA”)

with PAVmed Inc.

Company’s daily operations of are managed by personnel employed by PAVmed Inc., for which Lucid Diagnostics Inc.

service fee, referred to as the “MSA Fee”, according to the provisions of a Management Services Agreement

(“MSA”) with PAVmed Inc.

The MSA does not have a termination date, but may be terminated by the Lucid Diagnostics Inc.

board of directors.

MSA Fee is charged on a quarterly basis and is subject-to periodic adjustment corresponding with changes in the number of PAVmed Inc.

employees providing services to Lucid Diagnostics Inc., with the change in the MSA Fee approved by each of the Lucid Diagnostics Inc.

The MSA Fee is charged on a monthly basis and is subject-to periodic adjustment corresponding with changes in

the services provided by PAVmed Inc.

personnel to the Company, with any such change in the MSA Fee being subject to approval of the

boards of directors of each of Lucid Diagnostics Inc.

and PAVmed Inc..

board of directors.

Diagnostics Inc.

recognized MSA Fee expense of $ 1,170 and $ 770

in the periods ended March 31, 2022 and 2021,

respectively.

The MSA Fee expense classification in the unaudited condensed consolidated statement of operations for the periods noted

is as follows:

Schedule of MSA Fee Expense Classification in Unaudited Condensed Statement of Operations

Three Months Ended March 31,

In this regard, subsequent to June 30, 2022, on August 11,

2022, the respective Company’s boards of directors approved a sixth amendment to the MSA to increase the MSA Fee to $ 550 per

month from $ 390 per

month, with such increase effective on a prospective basis commencing July 1, 2022.

Pursuant to the sixth amendment, the parties

agreed PAVmed Inc.

may elect to receive payment of the monthly MSA Fee in cash or in shares of common stock of the Company, with

such shares valued at the volume weighted average price (“VWAP”) during the final ten trading days of the applicable

month (subject to a floor price of $ 0.70

However, in no event will PAVmed Inc.

be entitled to receive under the MSA, as amended, more than 7,709,836 shares of

common stock the Company (representing 19.99% of our outstanding shares of common stock as of immediately prior to the execution of

the sixth amendment).

The shares that may be issued under the MSA, as amended, are being offered and sold in transactions exempt

from registration under the Securities Act of 1933, as amended, in reliance on the exemption afforded under Section 4(a)(2) thereof.

The MSA Fee expense classification in the unaudited condensed consolidated statement of operations for the periods noted is as

of MSA Fee Expense Classification in Unaudited Condensed Statement of Operations

Three Months Ended

Six Months Ended

Cost of Revenues

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recognized general and administrative expense

the period ended March 31, 2021 in connection with the consulting agreement.

of $ 8 and $ 14 in the three and six months ended June 30, 2021 in connection with the consulting agreement.

5 — Due To PAVmed Inc.

aggregate Due To:

PAVmed Inc., inclusive of the Senior Unsecured Promissory Note, for the periods indicated is summarized as follows:

Schedule of Senior Unsecured Promissory Note

Working Capital Cash Advances

Employee-Related

for the periods indicated is summarized as follows:

of Senior Unsecured Promissory Note

CapNostics, LLC Transfer

Related Costs

Balance - December 31, 2021

1 unchanged sentence

ERC - Payroll & Benefits

CapNostics, LLC transfer

Cash payments to PAVmed Inc.

Balance - March 31, 2022

to the Company’s initial public offering (IPO), it

principally financed its operations through working capital cash advances from PAVmed Inc.

and the periodic payment of certain operating

expenses by PAVmed Inc.

on-behalf-of Lucid Diagnostics Inc.

(the “PAVmed Inc.

OBO Payments”).

Additionally, the daily operations

of Lucid Diagnostics Inc.

are managed by personnel employed by PAVmed Inc., for which the Company incurs expense according to the provisions

of a Management Services Agreement (the “MSA”) between the Company and PAVmed Inc (the “MSA Fee”).

Note 5 , Related Party Transactions , for further information regarding the MSA.

7 — Acquisitions

Balance - June 30, 2022

October 5, 2021, PAVmed Subsidiary Corp, a wholly-owned subsidiary of PAVmed Inc., acquired 100 % of

the outstanding membership interest of CapNostics, LLC (“CapNostics”), an unrelated third-party, for total (gross)

purchase consideration of approximately $ 2.1 million

in cash, paid at the closing of the transaction.

Subsequently, effective April 1, 2022, PAVmed Subsidiary Corp and the Company

entered into an agreement pursuant to which PAVmed Subsidiary Corp assigned to Lucid Diagnostics Inc.

the membership interest in CapNostics, LLC, resulting in the recognition by the Company principally of an acquired defensive

technology intangible asset, and a $ 2.1 million

payment obligation Due To:

Additionally,

Lucid Diagnostics Inc.

was also assigned on a prospective basis effective April 1, 2022, the consulting agreement with the previous

principal owner of CapNostics, LLC.

The transfer was accounted for as entities under common control.

See Note 9 - Intangibles

Assets, with respect to the transferred intangible asset.

EsoCure License Agreement with PAVmed Inc.

has been in development as an esophageal ablation device by PAVmed Inc., with the intent to allow 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

In April 2022, following the approval from both the Company’s and PAVmed Inc.’s boards of directors, the

companies entered into an intercompany license agreement (“EsoCure License Agreement”), pursuant to which the Company

was granted the rights to commercialize EsoCure, a technology under development intended for the treatment of dysplastic

Barrett’s Esophagus.

The EsoCure License Agreement, includes a royalty arrangement whereby the Company will pay PAVmed Inc.

royalty on all EsoCure sales up to $ 100 million

per calendar year, and an 8.0 %

royalty on annual sales in excess of $ 100

million per calendar year.

The Company is obligated to reimburse PAVmed Inc.

for any ongoing development costs and cumulative patent

expenses associated with the licensed technology.

6 — Asset Purchase Agreement and Management Services Agreement

Purchase Agreement - ResearchDx Inc.

February 25, 2022, LucidDx Labs, Inc., entered into an asset purchase agreement (“APA”) with ResearchDx, Inc.

an unrelated third-party - “RDx APA”.

Under the RDx APA, LucidDx Labs Inc.

acquired certain assets from RDx to be combined

with LucidDx Labs Inc.

purchased and leased property and equipment to establish a Company-owned CLIA certified, CAP accredited commercial

clinical laboratory capable of performing the EsoGuard® Esophageal DNA assay, inclusive of DNA extraction, next generation sequencing

(“NGS”) and specimen storage.

Prior to consummation of

the RDx APA, RDx provided such laboratory services at its owned CLIA-certified, CAP-accredited laboratory.

As of March 31, 2022, the

Company’s preliminary analysis is the RDx APA transaction is a business combination, resulting in the recognition

and measurement of a preliminary purchase consideration in accordance with the valuation methodology described in Note

2, Summary of Significant Accounting Policies and Recent Accounting Standards Updates .

the terms of the RDx APA, LucidDx Labs Inc.

will pay RDx an aggregate purchase price of up to $ 6.2

million for the acquired assets.

million is comprised of non-contingent purchase

consideration of $ 1.0

million (included in “Accrued expenses

and other liabilities” in the accompanying unaudited condensed consolidated balance sheets, as of March 31, 2022), and contingent

purchase consideration of a total of $ 5.2

million face value, with such contingent purchase

consideration having a preliminary $ 4,714

initial estimated fair value

as of the transaction date.

The preliminary $ 5,714

purchase consideration (inclusive of both

the non-contingent and contingent purchase consideration discussed above) is unallocated as of March 31, 2022, and as such is included

in intangible assets in the accompanying unaudited consolidated balance sheet.

The preliminary estimated fair value of the contingent

purchase price consideration and the identification and estimated fair value of acquired assets are subject-to further revision.

Concurrent with the RDx

APA, LucidDx Labs Inc.

and RDx also entered into a management services agreement (“RDx MSA”), with a term of three

years , and a total of approximately $ 1.8

million payable in equal quarterly payments.

Pro Forma Information.

RDx APA transaction impact for purposes of pro forma financial statement disclosures would have primarily impacted the Company’s

EsoGuard Commercialization Agreement with RDx, summarized as follows:

of Business Acquisition Pro Forma Information

Three Months Ended March 31,

Basic and diluted net loss per share

its wholly-owned subsidiary, LucidDx Labs Inc., the Company entered into an asset purchase agreement (“APA”) dated

February 25, 2022, with ResearchDx, Inc.

(“RDx”), an unrelated third-party - “APA-RDx”.

Under the APA-RDx,

LucidDx Labs Inc.

acquired certain assets from RDx which were combined with LucidDx Labs Inc.

purchased and leased property and

equipment to establish a Company-owned CLIA certified, CAP accredited commercial clinical laboratory capable of performing the

EsoGuard® Esophageal DNA assay, inclusive of DNA extraction, next generation sequencing (“NGS”) and specimen

Prior to February 25, 2022, RDx provided such laboratory services at its owned CLIA-certified, CAP-accredited clinical

total purchase price consideration payable under the APA-RDx is a face value of $ 3,200 comprised

of three contractually specified periodic payments.

The APA-RDx is being accounted for as an asset acquisition, with the recognition

of an intangible asset of approximately $ 3,200 , which is included in “Intangible assets, net” on the accompanying

unaudited condensed consolidated balance sheet, as further discussed in Note 9, Intangible Assets, net .

In the three and six

months ended June 30, 2022, a total of $ 2,200

of cash was paid with respect to the periodic payments.

Subsequent to June 30, 2022, in July 2022, $ 1,000

of cash was paid with respect to the remaining unpai d

balance of the periodic payments.

Additionally,

the APA-RDx requires the Company to pay a total of $ 3,000 to be paid as twelve (12) equal installment payments commencing May 25, 2022

and then on each three month anniversary thereof, inclusive of a final installment payment on February 25, 2025, with such installment payments recognized as current period expense as incurred.

In the three and six

months ended June 30, 2022, as provided for in the APA-RDx, an installment payment was settled by the issue of 117,371 shares of common

stock of Lucid Diagnostics Inc., with such shares having a fair value of $ 239 (with the fair value measured as the quoted closing price

on the date the shares were issued), which was recognized as a current period expense included in general and administrative expenses

in the accompanying unaudited condensed consolidated statement of operations.

APA-RDx provides for each of an acceleration and a cancellation of the remaining unpaid installment payments, summarized as follows:

payment of the remaining unpaid installment payments will be accelerated as immediately due and payable as of the date the “MSA-RDx”

(as such agreement is discussed below) is either terminated by LucidDx Labs Inc.

or if it is terminated by mutual agreement between the Company

The payment of the remaining unpaid installment payments will be cancelled if the MSA-RDx is

terminated by LucidDx Labs Inc.

for cause, defined as the occurrence of any one of:

(i) a material breach by RDx which is not cured

within thirty days of LucidDx Labs Inc.

written notice;

(ii) RDx becomes insolvent and /or bankrupt;

RDx fails to comply with applicable statutes, is barred from participating in federal health care programs, or by

action of changes in law or regulation, or by action of judicial interpretation of law, or by judicial civil proceedings

Services Agreement - Research Dx Inc

and RDx entered into a separate management services agreement (“MSA-RDx”), dated and effective February 25, 2022,

with such agreement having a term of three

years commencing on the agreement’s effective

date, and an initial fee of $ 150

The MSA-RDx provides for the cancellation

of the remaining unpaid installment payments upon termination of the MSA-RDx for any reason or no reason by either party thereto.

7 — Prepaid Expenses, Deposits, and Other Current Assets

expenses and other current assets consisted of the following as of:

Schedule of Prepaid Expenses and Other Current Assets

March 31, 2022

of Prepaid Expenses and Other Current Assets

June 30, 2022

December 31, 2021

1 unchanged sentence

Prepaid insurance

Deferred financing charges

EsoCheck cell collection supplies

1 unchanged sentence

Total prepaid expenses, deposits and other current assets

the six months ended June 30, 2022, the Company entered into additional lease agreements that have commenced and are classified

as operating leases and short-term leases, including for each of:

a commercial clinical laboratory and additional Lucid Test Centers.

Company’s future lease payments as of June 30, 2022, which are presented as operating lease liabilities, current portion and

operating lease liabilities, less current portion on the Company’s unaudited condensed consolidated balance sheets are as follows:

Of Future Lease Payments Of Operating Lease Liabilities

2022 (remainder of year)

Total lease payments

imputed interest

Present value of lease liabilities

disclosure of cash flow information related to the Company’s cash and non-cash activities with its leases are as follows:

Of Cash Flow Supplemental Information

Three Months Ended March 31,

Six Months Ended June 30,

Cash paid for amounts included in the measurement of lease liabilities

4 unchanged sentences

Weighted-average discount rate - operating leases

of March 31, 2022, the Company’s right-of-use assets from operating leases are $ 2,224 ,

which are reporting in right-of-use assets - operating leases in the unaudited condensed consolidated balance sheets.

As of March 31,

2022, the Company has outstanding operating lease obligations of $ 2,224 ,

of which $ 769 is

reported in operating lease liabilities, current portion and $ 1,455

is reporting in operating lease liabilities less

current portion in the Company’s unaudited condensed consolidated balance sheets.

The Company did not have operating leases as

of December 31, 2021.

The Company calculates its incremental borrowing rates for specific lease terms, used to discount future lease

payments, as a function of the financing terms the Company would likely receive on the open market.

10 — Financial

Instruments Fair Value Measurements

Fair Value Measurements

fair value hierarchy table for the reporting dates noted is as follows:

of Fair value Measurement on Recurring Basis

Level-1 Inputs

Level-2 Inputs

Level-3 Inputs

Fair Value Measurement on a Recurring Basis at Reporting

Date Using (1)

Level-1 Inputs

Level-2 Inputs

Level-3 Inputs

March 31, 2022

Contingent consideration payable (1)

(1) As noted above,

as presented in the fair value hierarchy table, Level-1 represents quoted prices in active markets for identical items, Level-2 represents

significant other observable inputs, and Level-3 represents significant unobservable inputs.

There were no transfers between the respective

Levels during the period ended March 31, 2022.

value measurements of contingent consideration

Company recorded $ 4.9

million, which is the fair value, of contingent

consideration related to the RDx acquisition.

The Company is required to make contingent consideration payments of up to $ 5.2

million related to the RDx APA agreement.

contingent agreement is based on achieving milestones to obtain certain certifications and licensing rights.

The Company estimated

the fair value on a probability based model that assessed achievement of such milestones.

The model used present

value factors, that applied probability ranges of 94 - 99 % , a discount rate of 7.875 % and achievement times ranging from one

month to six months to achieve the respective milestones.

final settlement of contingent consideration liabilities for the acquisition could vary from current estimates based on

the actual results of the financial measures described above.

This liability is considered to be a Level 3 financial liability that is

re-measured each reporting period.

The change in fair value of contingent consideration for these acquisitions is included in other income

(expense), net.

following table presents a reconciliation of the liability measured at fair value on a recurring basis using significant unobservable

inputs (Level 3):

of Reconciliation of Liability Measured at Fair Value Recurring Basis Using Unobservable Inputs

March 31, 2022

Fair value of contingent consideration at the date of acquisition

Change in fair value of contingent consideration

Contingent consideration payable

of December 31, 2021 there were no fair value measurements.

of June 30, 2022, the Company’s right-of-use assets from operating leases are $ 2,080 , which are reporting in right-of-use assets

- operating leases in the unaudited condensed consolidated balance sheets.

As of June 30, 2022, the Company has outstanding operating

lease obligations of $ 2,080 , of which $ 798 is reported in operating lease liabilities, current portion and $ 1,282 is reporting in operating

lease liabilities less current portion in the Company’s unaudited condensed consolidated balance sheets.

The Company did not have

operating leases as of December 31, 2021.

The Company calculates its incremental borrowing rates for specific lease terms, used

to discount future lease payments, as a function of the financing terms the Company would likely receive on the open market.

9 — Intangibles Assets, net

assets, less accumulated amortization, consisted of the following as of:

of Intangible Assets Accumulated Amortization

Estimated Useful Life

June 30, 2022

Defensive technology

Laboratory licenses and certifications and laboratory information management

software (“LIMSDx”)

Total Intangible assets

Less Accumulated Amortization

Intangible Assets, net

defensive technology intangible asset of $ 2.1

million (and approximately $ 0.2

million of accumulated amortization) was recognized by the Company as of the April 1, 2022 effective date of the intercompany

transfer of CapNostics, LLC to the Company from PAVmed Subsidiary Corp (a wholly-owned subsidiary of PAVmed Inc.).

The transfer was

accounted for as entities under common control.

The defensive technology intangible asset was recognized by PAVmed Subsidiary Corp

upon its acquisition of CapNostics, LLC, an unrelated third-party, for total purchase consideration paid on the October 5, 2021

acquisition date of approximately $ 2.1

million in cash.

The CapNostics LLC transaction was accounted for as an asset acquisition, resulting in the recognition of the

defensive technology intangible asset.

The defensive technology intangible asset is being amortized on a straight-line basis over an

expected useful life 60

months commencing on the acquisition date.

See Note 5, Due To:

, with respect to the transfer of the

corresponding $ 2.1

million payment obligation Due To:

noted in Note 6, Asset Purchase Agreement and Management Services Agreement , the asset purchase agreement between the Company

and ResearchDx Inc.

(“APA-RDx”), is being accounted for as an asset acquisition.

The intangible assets recognized under the

APA-RDx are the laboratory licenses and certifications, (inclusive of a CLIA certification, CAP accreditation, and clinical laboratory

licenses for five (5) U.S.

States transfer to the Company from RDx), and a laboratory information management software (“LIMSDx”)

perpetual-use royalty-free license granted under the APA-RDx, with such intangible asset having a useful life of twenty-four months commencing

on the APA-RDx February 25, 2022 transaction date.

expense of the intangible assets discussed above was $ 639 and $ 0 for the three and six month periods ended June 30, 2022 and 2021,

respectively, and is included in general and administrative expenses in the accompanying unaudited condensed consolidated statements

of operations.

As of June 30, 2022, the estimated future

amortization expense associated with the Company’s finite-lived intangible assets for each of the five succeeding fiscal years

is as follows:

of Future Amortization Expense

2022 (remainder of year)

10 — Stock-Based Compensation

18 unchanged sentences

are reserved for issuance under the Lucid Diagnostics Inc.

Plan, with 733,541 shares available for grant as of March 31, 2022.

The share reservation is not diminished by a total of 473,300 Lucid

Plan, with 3,932,802 shares available for grant as of June 30, 2022.

The share reservation is not diminished by a total of 423,300 stock

options and 50,000 restricted stock awards granted outside the Lucid Diagnostics Inc.

2018 Equity Plan, as of June 30, 2022.

Diagnostics Inc.

stock options and restricted stock awards granted outside the Lucid Diagnostics Inc.

2018 Equity Plan, as of March 31,

Stock Options

Diagnostics Inc.

2018 Equity Plan - Stock Options

options issued and outstanding under the Lucid Diagnostics Inc.

2018 Equity Plan and including Lucid Diagnostics stock options granted

outside the plan is as follows:

Schedule of Stock Options Issued and Outstanding Activities

stock options granted under the Lucid Diagnostics Inc.

2018 Equity Plan and stock options granted outside such plan

are summarized as follows:

of Stock Options Issued and Outstanding Activities

Number of Stock Options

2 unchanged sentences

Outstanding stock options at December 31, 2021

Outstanding stock options at March 31, 2022

Vested and exercisable stock options at March 31, 2022

options granted under the Lucid Diagnostics Inc.

2018 Equity Plan generally vest ratably

over twelve quarters, with the vesting commencing with the grant date quarter, and have a

ten-year contractual term from date-of-grant.

Outstanding stock options at June 30, 2022 (2)

Vested and exercisable stock options at June 30, 2022

Stock options granted under the

Lucid Diagnostics Inc.

2018 Equity Plan and those granted outside such plan generally vest ratably over twelve quarters, with the

vesting commencing with the grant date quarter-end, and have a ten-year contractual term from date-of-grant.

The outstanding stock options presented in the table

above, are inclusive of 423,300 stock options granted outside the Lucid Diagnostics Inc.

2018 Equity Plan.

as of June 30, 2022 and

December 31, 2021.

Note 4, Related Party Transactions , for a summary of the stock-based compensation expense recognized with respect to the stock

3 unchanged sentences

Diagnostics Inc.

2018 Equity Plan – Restricted Stock Awards

summary of restricted stock award activity is as follows:

Restricted Stock Awards

Diagnostics Inc.

restricted stock awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan and restricted stock awards granted

outside such plan are summarized as follows:

of Restricted Stock Award Activity

2 unchanged sentences

Unvested restricted stock awards as of December 31, 2021

Unvested restricted stock awards as of March 31, 2022

January 7, 2022, 320,000

restricted stock awards were granted under

the Lucid Diagnostics Inc 2018 Equity Plan, with such restricted stock awards having a single vesting date on January 7, 2025, and an

aggregate grant date fair value of approximately $ 1.4

million, measured as the grant date closing

price of Lucid Diagnostics Inc.

common stock, with such aggregate estimated fair value recognized as stock-based compensation expense

ratably on a straight-line basis over the vesting period, which is commensurate with the service period.

The restricted stock awards

are subject to forfeiture if the requisite service period is not completed.

Unvested restricted stock awards as of June 30, 2022 (1)

restricted stock awards presented in the table above, are inclusive of 50,000 restricted stock awards granted outside the Lucid Diagnostics

2018 Equity Plan.

as of June 30, 2022 and December 31, 2021.

January 7, 2022, 320,000 restricted stock awards were granted under the Lucid Diagnostics Inc 2018 Equity Plan, with such restricted

stock awards having a single vesting date on January 7, 2025, and an aggregate grant date fair value of approximately $ 1.4 million, measured

as the grant date closing price of Lucid Diagnostics Inc.

common stock, with such aggregate estimated fair value recognized as stock-based

compensation expense ratably on a straight-line basis over the vesting period, which is commensurate with the service period.

The restricted

stock awards are subject to forfeiture if the requisite service period is not completed.

2014 Equity Plan

2014 Long-Term Incentive Equity Plan (the “PAVmed Inc.

2 unchanged sentences

2018 Equity Plan (as such equity plan is discussed above).

three Physician Inventors were each granted 25,000 stock options under the PAVmed Inc.

2014 Equity Plan, with a grant date of May 12,

2018, an exercise price of $ 1.59 per share of common stock of PAVmed Inc., vesting ratably on a quarterly basis commencing June 30, 2018

and ending March 31, 2021, and a contractual period of ten years from the date of grant.

Additionally, the three Physician Inventors

were each granted 50,000 stock options under the PAVmed Inc.

2014 Equity Plan, with a grant date of June 21, 2021, an exercise price

of $ 6.41 per share of common stock of PAVmed Inc., vesting ratably on a quarterly basis commencing June 30, 2021 and ending March 31,

2024, and a contractual period of ten years from the date of grant.

See Note 5, Related Party Transactions , for a summary of the

stock-based compensation expense recognized with respect to the stock options granted under the PAVmed Inc.

2014 Equity Plan to the Physician

Compensation Expense

2 unchanged sentences

Equity Plan, for the periods indicated, was as follows:

Schedule of Stock-Based Compensation Expense

Three Months Ended March 31,

of Stock-Based Compensation Expense

Months Ended June 30,

Lucid Diagnostics Inc 2018 Equity Plan – sales and marketing expenses

8 unchanged sentences

Diagnostics Inc.

2018 Equity Plan to employees of PAVmed Inc., the Physician Inventors (as discussed above), and members of the board

of directors of Lucid Diagnostics Inc., as well as the stock options granted under the PAVmed Inc.

2014 Equity Plan to the Physician

Inventors (as discussed above).

2018 Equity Plan to employees of PAVmed Inc., the Physician Inventors , and members of the board of directors of Lucid

Diagnostics Inc., as well as the stock options granted under the PAVmed Inc.

2014 Equity Plan to the Physician Inventors.

10 — Stock-Based Compensation - continued

of March 31, 2022, unrecognized stock-based compensation expense and weighted average remaining requisite service period with respect

of June 30, 2022, unrecognized stock-based compensation expense and weighted average remaining requisite service period with respect

to stock options and restricted stock awards issued under each of the Lucid Diagnostics Inc.

1 unchanged sentence

Equity Plan, as discussed above, is as follows:

Schedule of Unrecognized Compensation Expense and Weighted Average Remaining Service Period

Weighted Average Remaining Service Period (Years)

of Unrecognized Compensation Expense and Weighted Average Remaining Service Period

Unrecognized Expense

Weighted Average Remaining Service

Period (Years)

Lucid Diagnostics Inc.

7 unchanged sentences

2018 Equity Plan was based on

a weighted average estimated fair value of such stock options of $ 2.95 per share during the year ended March 31, 2022.

There were no

stock-based awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan during the period ended March 31, 2021.

a weighted average estimated fair value of such stock options of $1.48 per share during the period ended June 30, 2022.

The stock-based

1 unchanged sentence

Schedule of Stock-based Compensation Valuation Assumptions

Three Months Ended March 31,

Six Months Ended

Expected term of stock options (in years)

3 unchanged sentences

Diagnostics, Inc Employee Stock Purchase Plan (“ESPP”)

Lucid Diagnostics Inc Employee Stock Purchase Plan (“Lucid Diagnostics Inc ESPP”), initial six-month stock purchase

period is April 1, 2022 to September 30, 2022.

Lucid Diagnostics Inc Employee Stock Purchase Plan (“Lucid Diagnostics Inc ESPP”), initial six-month stock purchase period

is April 1, 2022 to September 30, 2022.

The Lucid Diagnostics Inc.

ESPP has a total reservation of 500,000

shares of common stock for which all shares are

available-for-issue as of March 31, 2022.

ESPP has a total reservation of 500,000 shares of common stock for

which all shares are available-for-issue as of June 30, 2022.

11 — Stockholders’ Equity

Diagnostics Inc.

were 35,171,796 and 34,917,907 shares of common stock issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022, PAVmed Inc.

holds 27,927,190 shares, representing a majority-interest equity ownership and has a controlling financial

interest in Lucid Diagnostics Inc.

of June 30, 2022 and December 31, 2021, there were 35,994,667 and 34,917,907 shares of common stock issued and outstanding, respectively.

As of June 30, 2022, PAVmed Inc.

holds 27,927,190 shares, representing a majority-interest equity ownership and PAVmed Inc.

has a controlling

financial interest in Lucid Diagnostics Inc.

Equity Facility - March 28, 2022

On March 28, 2022,

Lucid Diagnostics, Inc.

March 28, 2022, Lucid Diagnostics, Inc.

entered into a committed equity facility with an affiliate of Cantor Fitzgerald (“Cantor”).

the terms of the committed equity facility, Cantor has committed to purchase up to $ 50

Under the terms of the committed equity facility, Cantor has committed to purchase up to $ 50

million of Lucid Diagnostics Inc.

common stock from time to time at the request of the Company.

While there are distinct differences,

the facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows the Company to raise primary

equity capital on a periodic basis at prices based on the existing market price.

connection with the execution of the agreement for the committed equity facility, the Company agreed to pay Cantor $ 1.0 million as consideration

for its irrevocable commitment to purchase the shares upon the terms and subject to the satisfaction of the conditions set forth in such

In addition, pursuant to the agreement, we agreed to reimburse Cantor for certain of its expenses.

the Company also entered

into a registration rights agreement with Cantor.

the Company has the right to terminate the agreement at any time after initial satisfaction

of the conditions to Cantor’s obligation to purchase shares under the facility, at no cost or penalty, upon three trading days’

prior written notice.

from time to time at the request of the Company.

While there are distinct differences, the facility is structured similarly to a traditional

at-the-market equity facility, insofar as it allows the Company to raise primary equity capital on a periodic basis at prices based on

the existing market price.

As of June 30, 2022, there were no shares of common stock issued under the committed equity facility.

to June 30, 2022, as of August 10, 2022, under the committed equity facility, a total of 308,152

shares of common stock of the Company were issued

for proceeds of approximately $ 927 .

connection with the execution of the agreement for the committed equity facility, the Company paid Cantor $ 1.0

million as consideration for its irrevocable commitment to purchase the shares upon the terms and subject to the satisfaction of the

conditions set forth in such agreement.

In addition, pursuant to the agreement, we agreed to reimburse Cantor for certain of its

The Company also entered into a registration rights agreement with Cantor.

The Company has the right to terminate the

agreement at any time after initial satisfaction of the conditions to Cantor’s obligation to purchase shares under the

facility, at no cost or penalty, upon three trading days’ prior written notice.

12 — Net Loss Per Share

“Net loss per share basic and diluted” for the respective periods indicated - is as follows:

Schedule of Basic and Fully Diluted Net Loss Per Share

Three Months Ended March 31,

of Basic and Fully Diluted Net Loss Per Share

Three Months Ended

Six Months Ended

Weighted average common shares outstanding, basic and diluted

1 unchanged sentence

Net loss per share - basic and diluted

weighted-average number of shares of common stock outstanding for the periods ended March 31, 2022 and 2021 include the shares of the

weighted-average number of shares of common stock outstanding for the periods ended June 30, 2022 and 2021 include the shares of the

Company issued and outstanding during such periods, each on a weighted average basis.

6 unchanged sentences

from the computation of diluted weighted average shares outstanding are as follows:

Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Earnings Per Share

Three Months Ended March 31,

Lucid Diagnostics Inc.

2018 Equity Plan:

of Anti-dilutive Securities Excluded from Computation of Diluted Earnings Per Share

Stock options

Unvested restricted stock awards

The total of stock options and unvested restricted stock awards presented in the table above, are inclusive of 423,300 stock options as

of March 31, 2022 and 2021, and 50,000 restricted stock awards as of March 31, 2022, granted outside the Lucid Diagnostics Inc.

14 — Subsequent Events

October 5, 2021, PAVmed Subsidiary Corporation, a wholly-owned subsidiary of PAVmed Inc., acquired all of the outstanding common stock

of CapNostics, LLC (“CapNostics”) for total (gross) purchase consideration of approximately $ 2.1

million of cash, paid at the closing of the transaction.

In April 2022, following the approval from both the PAVmed and Lucid board of directors, the respective companies entered

into an agreement to transfer the CapNostics, LLC assets from PAVmed to Lucid as well as transferring the consulting agreement

with the previous principal owner of CapNostics, LLC.

The transfer price is $ 2.1

million for the assets.

has been in development as an Esophageal Ablation Device by PAVmed, with the intent to allow 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 April 2022, following the approval from both the PAVmed and Lucid board of directors have the Companies entered

into an intercompany license between PAVmed and Lucid such that Lucid will be granted the rights to commercialize EsoCure for the treating

dysplastic Barrett’s Esophagus, including a royalty arrangement whereby Lucid will pay PAVmed a 5 %

royalty on all EsoCure sales up to $ 100

million per calendar year, and 8% above that

Lucid will obligated to fund ongoing development costs and cumulative patent expenses.

EsoCure will become part of an integrated

suite of Lucid products addressing BE-EAC.

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-Q

Item 1. Financial Statements