What changed in this filing

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Item 9A. Controls and Procedures

2023-03-14 compared with 2022-04-06 · 911 added, 953 removed, 608 unchanged (75% of the section changed)

12 unchanged sentences

Report on Internal Control Over Financial Reporting

Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation

report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public

management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as such term

is defined in Exchange Act Rules 13(a)-15(f).

Our system of internal control over financial reporting is designed to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance

with accounting principles generally accepted in the U.S.

internal control over financial reporting includes those policies and procedures that:

to the maintenance of records, in reasonable detail, accurately and fairly reflect our transactions

and dispositions of our assets;

reasonable assurance our transactions are recorded as necessary to permit preparation of

our financial statements in accordance with accounting principles generally accepted in the

U.S., and our receipts and expenditures are being made only in accordance with authorizations

of our management and our directors;

reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use, or disposition of our assets could have a material effect on the financial statements.

to its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not

prevent or detect all misstatements.

Further, because of changes in conditions, effectiveness of internal controls over financial reporting

may vary over time.

Our system contains self-monitoring mechanisms, so actions will be taken to correct deficiencies as they are identified.

management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework

in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

on this evaluation, our management concluded our system of internal control over financial reporting was effective as of December 31,

Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over

financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant to the

rules of the SEC to permit us to provide only management’s report in this Form 10-K.

to Internal Controls Over Financial Reporting

have been no change in internal controls over financial

reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the year ended December 31, 2021

that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

has been no change in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange

Act) that occurred during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect,

our internal controls over financial reporting.

Other Information

18 unchanged sentences

following financial statements:

of Independent Registered Public Accounting Firm (PCAOB ID #688)

Balance Sheets

Statements of Operations

Statements of Changes in Equity (Deficit)

Statements of Cash Flows

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID #688)

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

financial statement schedules:

4 unchanged sentences

following exhibits:

Exhibits and Financial Statement Schedules -

following exhibits:

Incorporation

Asset Purchase Agreement, dated as of February 25, 2022, by and among LucidDx Labs Inc., Lucid Diagnostics Inc.

Purchase Agreement, dated as of February 25, 2022, by and among LucidDx Labs Inc., Lucid Diagnostics Inc.

and ResearchDx, Inc.

and Restated Certificate of Incorporation

Form of Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock

8-K (Preferred Offering)

and Restated Bylaws

Description of Registrant’s Securities

of Registrant’s Securities

Stock Certificate

Diagnostics Inc.

2018 Long-Term Incentive Equity Plan.

Lucid Diagnostics Inc.

Amended and Restated 2018 Long-Term Incentive Equity Plan.

and Restated License Agreement, dated as of August 23, 2021, by and between Case Western Reserve University and Lucid Diagnostics

11 unchanged sentences

and Lucid Diagnostics Inc.

Agreement, dated as of May 12, 2018, by and between Lucid Diagnostics Inc.

and Sanford Markowitz, M.D.+

Fifth Amendment to Management Services Agreement, dated as of November 10, 2021, by and between PAVmed Inc.

and Lucid Diagnostics Inc.

Sixth Amendment to Management Services Agreement, dated as of August 11, 2022, by and between PAVmed Inc.

and Lucid Diagnostics Inc.

Payroll and Benefit Expense Reimbursement Agreement, dated as of November 30, 2022, by and between PAVmed Inc.

and Lucid Diagnostics Inc.

Consulting Agreement, dated as of May 12, 2021, by and between Lucid Diagnostics Inc.

and Sanford Markowitz, M.D.

Agreement, dated as of May 12, 2018, by and between Lucid Diagnostics Inc.

and Amitabh Chak, M.D.+

Incorporation

Consulting Agreement, dated as of May 12, 2021, by and between Lucid Diagnostics Inc.

and Amitabh Chak, M.D.

Agreement, dated as of May 12, 2018, by and between Lucid Diagnostics Inc.

and Joseph Willis, M.D.+

Consulting Agreement, dated as of May 12, 2021, by and between Lucid Diagnostics Inc.

and Joseph Willis, M.D.

of Stock Option Agreement.

Form of Stock Option Agreement.

of Indemnification Agreement.

Form of Lock-Up Agreement.+

& Manufacturing Master Services Agreement, dated as of September 1, 2021, by and between Coastline International, Inc.

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of Restricted Stock Agreement.

Employment Agreement with Lishan Aklog, M.D.

Employment Agreement with Dennis M.

Employment Agreement with Shaun O’Neil.

Management Services Agreement, dated as of February 25, 2022, by and among LucidDx Labs Inc.

Agreement with Lishan Aklog, M.D.

Agreement with Dennis M.

Agreement with Shaun O’Neil

Employment Agreement with Michael Gordon

Services Agreement, dated as of February 25, 2022, by and between LucidDx Labs Inc.

and ResearchDx, Inc.

Termination Agreement, dated as of February 10, 2023, by and among Lucid Diagnostics Inc., LucidDx Labs Inc.

and ResearchDx, Inc.

Common Stock Purchase Agreement, dated as of March 28, 2022, by and between CF Principal Investments LLC and Lucid Diagnostics Inc.

Registration Rights Agreement, dated as of March 28, 2022, by and between CF Principal Investments LLC and Lucid Diagnostics Inc.

Controlled Equity Offering SM , dated as of November 23, 2022, by and between Cantor Fitzgerald & Co.

and Lucid Diagnostics Inc.

Registration Rights Agreement, dated as of March 7, 2023, by and between Lucid Diagnostics Inc.

and the purchasers of Series A Preferred Stock party thereto

8-K (Preferred Offering)

Diagnostics Inc.

Employee Stock Purchase Plan

Exhibits and Financial Statement Schedules -

following exhibits - continued:

Incorporation

Code of Ethics

List of Subsidiaries

Consent of Marcum LLP

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer pursuant to 18 U.S.C.

of Subsidiaries

of Marcum LLP

Certification

of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification

of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification

of Principal Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of

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of Principal Financial and Accounting Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley

XBRL Document Set for the consolidated financial statements and accompanying notes in Part II, Item 8, “Financial Statements

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Certain exhibits and schedules have been omitted pursuant to Item 601(b)(10) of Regulation S-K.

The registrant hereby undertakes to furnish

supplementally a copy of any omitted exhibit or schedule upon request by the Securities and Exchange Commission.

The registrant hereby undertakes to furnish a copy of any omitted exhibit or schedule upon request by the Securities and Exchange Commission.

Form 10-K Summary

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Executive Officer)

April 5, 2022

Financial Officer

Financial and Accounting Officer)

April 5, 2022

Aster Angagaw

April 5, 2022

Sanford Markowitz, M.D.

Markowitz, M.D.

Sokolov, M.D.

/s/ Ronald M.

April 5, 2022

DIAGNOSTICS INC.

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of Independent Registered Public Accounting Firm (PCAOB ID # 688 )

Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020

Consolidated Statements of Operations for the years ended December 31, 2021 and 2020

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2021 and 2020

Consolidated Statements of Cash Flows for the year ended December 31, 2021 and 2020

Notes to Consolidated Financial Statements

Balance Sheets as of December 31, 2022 and 2021

Statements of Operations for the years ended December 31, 2022 and 2021

Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2022 and 2021

Statements of Cash Flows for the years ended December 31, 2022 and 2021

to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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have audited the accompanying consolidated balance sheets of Lucid Diagnostics Inc.

and Subsidiary (the “Company”)

as of December 31, 2021 and 2020, the related consolidated statements of operations, changes in stockholders’ equity (deficit)

and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the

“financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years

in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

and Subsidiaries (the “Company”) as of

December 31, 2022 and 2021, the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash

flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period

ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

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thousands except number of shares and per share data)

December 31, 2021

December 31, 2020

expenses, deposits, and other current assets

current assets

Accounts receivable

Prepaid expenses, deposits, and other current assets

Total current assets

Fixed assets, net

Liabilities, Preferred Stock and Stockholders’

Equity (Deficit)

lease right-of-use assets

Preferred Stock and Stockholders’ Equity

expenses and other current liabilities

lease liabilities, current portion

- MSA Fee and operating expenses

current liabilities

Accounts payable

Accrued expenses and other current liabilities

- MSA Fee, operating expenses, and interest expense

Total liabilities

Commitments and contingencies (Note 11)

Stockholders’ Equity (Deficit):

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

lease liabilities, less current portion

and contingencies

Stockholders’

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

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

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

34,917,907 and 14,114,707 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

Accumulated deficit

Total Stockholders’ Equity (Deficit)

Total Liabilities and Stockholders’ Equity (Deficit)

accompanying notes to the financial statements.

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

40,518,792 and 34,917,907 shares issued and outstanding as of December 31,

2022 and December 31, 2021, respectively

paid-in capital

Stockholders’ Equity

Liabilities and Stockholders’ Equity

accompanying notes to the consolidated financial statements.

DIAGNOSTICS INC.

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thousands except number of shares and per share data)

Year Ended December 31,

Cost of revenue

Gross profit (loss)

Ended December 31,

and marketing

and administrative

of acquired intangible assets

and development

operating expenses

Sales and marketing

General and administrative

Research and development

Total operating expenses

loss from operations

Interest expense - Senior Unsecured Promissory Note

Loss before provision for income tax

Provision for income taxes

Net loss per share - basic and diluted

Weighted average common shares outstanding, basic and diluted

accompanying notes to the financial statements.

income (expense):

expense - Senior Unsecured Promissory Note

income (expense), net

before provision for income tax

for income taxes

loss per share - basic and diluted

average common shares outstanding, basic and diluted

accompanying notes to the consolidated financial statements.

DIAGNOSTICS INC.

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thousands except number of shares and per share data)

Additional Paid-In

Balance as of December 31, 2019

Exercise - stock options - Lucid Diagnostics Inc.

Paid-In Capital

as of December 31, 2020

of common stock - conversion of Senior Unsecured Promissory Note

of common stock - IPO, net of fees

compensation - Lucid Diagnostics Inc.

2018 Equity Plan

Stock-based compensation - Lucid Diagnostics Inc.

compensation - PAVmed Inc.

2014 Equity Plan

Issue of common stock - conversion of Senior Unsecured Promissory Note

Issue of common stock - conversion of Senior Unsecured Promissory Note, shares

Issuance of common stock - IPO, net of fees

Issuance of common stock - IPO, net of fees, shares

Stock-based compensation - PAVmed Inc.

as of December 31, 2021

- stock options - Lucid Diagnostics Inc.

2018 Equity Plan

Balance as of December 31, 2020

Issue of common stock - conversion of Senior Unsecured Promissory Note

Issuance of common stock - IPO, net of fees

Stock-based compensation - Lucid Diagnostics Inc.

compensation - Lucid Diagnostics Inc.

2018 Equity Plan

Stock-based compensation - PAVmed Inc.

compensation - PAVmed Inc.

2014 Equity Plan

Balance as of December 31, 2021

accompanying notes to the financial statements.

- restricted stock awards

- Installment Payment

- Committed Equity Facility, net of financing charges

- Employee Stock Purchase Plan

Settlement in Common Stock

as of December 31, 2022

accompanying notes to the consolidated financial statements.

DIAGNOSTICS INC.

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STATEMENTS OF CASH FLOWS

ENDED DECEMBER 31, 2021 and 2020

thousands except number of shares and per share data)

Year Ended December 31,

Cash flows from operating activities

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

Depreciation expense

Stock-based compensation - Lucid Diagnostics Inc.

Ended December 31,

flows from operating activities

to reconcile net loss to net cash used in operating activities

and amortization expense

compensation - Lucid Diagnostics Inc.

2018 Equity Plan

Stock-based compensation - PAVmed Inc.

compensation - PAVmed Inc.

2014 Equity Plan

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other current assets

Accounts payable

Accrued expenses and other current liabilities

Accrued CWRU License Agreement Fee

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

- Management Services Agreement Fee

- Operating expenses

- Employee Related Costs

Net cash flows used in operating activities

Cash flows from investing activities

Issue common stock - settle installment payment

in operating assets and liabilities:

expenses and other current assets

expenses and other current liabilities

CWRU License Agreement Fee

- operating expenses, employee related costs, MSA Fee

cash flows used in operating activities

flows from investing activities

Purchase of equipment

Net cash flows used in investing activities

Cash flows from financing activities

Proceeds – issue of common stock – initial public offering

Payment – offering costs – initial public offering

Proceeds – exercise of stock options

Proceeds – issue common stock – Employee Stock Purchase Plan

Proceeds – Due To:

Asset acquisition

cash flows used in investing activities

flows from financing activities

– issue of common stock – initial public offering

– issue of common stock – Committed Equity Facility

– offering costs – initial public offering

exercise of stock options

– issue common stock – Employee Stock Purchase Plan

- working capital cash advances

Net cash flows provided by financing activities

Net increase (decrease) in cash

Cash, beginning of period

Cash, end of period

accompanying notes to the financial statements.

cash flows provided by financing activities

increase (decrease) in cash

beginning of period

end of period

accompanying notes to the consolidated financial statements.

DIAGNOSTICS INC.

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1 — Summary Description of the Company

accompanying 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”), 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”).

Diagnostics Inc.

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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.

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

to commercial diagnostics tests and devices with scalable manufacturing capacity.

The Company is presently focused on expanding commercialization

across multiple sales channels, including:

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 and delivery of the collected

cell samples to ResearchDX Inc.

(“RDx”), a CLIA certified commercial laboratory service provider, for the performance of

the EsoGuard LDT.

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.

4, Patent License Agreement - Case Western Reserve University, for a further discussion of the Amended CWRU License Agreement.

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 screening tool to prevent esophageal adenocarcinoma

(“EAC”) deaths, through early detection of esophageal precancer in at-risk gastroesophageal reflux disease (“GERD,”

also commonly known as chronic heartburn, acid reflux or simply reflux) patients.

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

laboratory to commercial diagnostic tests and devices with scalable manufacturing capacity.

The Company is presently focused on

expanding commercialization across multiple sales channels, including:

the communication and education of medical practitioners and

clinicians of EsoGuard;

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

Recently, the American Gastroenterological Association (“AGA”) and the American College of Gastroenterology

(“ACG”) updated its clinical practice guidelines to now support Lucid’s EsoCheck Cell Collection Device and

EsoGuard Esophageal DNA Test as an acceptable alternative to endoscopy.Both guidelines expand the addressable market opportunity for

these products to now affirmatively include screening women.

The AGA updated guideline further expands the target population for the

first time to include asymptomatic patients who otherwise present with the certain risk factors.

Additionally, the Company is

developing expanded clinical evidence to support insurance reimbursement adoption by government and private insurers.

resources permit, the Company also intends to pursue development of other products and services, including EsoCure™, an esophageal

ablation device.

Diagnostics Inc.

3 unchanged sentences

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

million, before underwriting fees of $ 4.9

million, and approximately $ 0.7

million of offering costs incurred by

Note 1 — Summary Description of the Company - continued

of Wholly-Owned Subsidiary LucidDx Labs Inc.

- December 2021

December 2021, Lucid Diagnostics, Inc.

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

operate the Company’s new owned Commercial Lab Improvements Act (“CLIA”) certified, College of American

Pathologists (“CAP”) accredited commercial clinical laboratory.

The Company is in the process of completing

the operational capacity of its commercial clinical laboratory.

Purchase Agreement - “RDx APA” - February 2022

to December 31, 2021, on February 25, 2022, LucidDx Labs, Inc., entered into an asset purchase agreement (“RDx APA”) with

ResearchDx, Inc.

(“RDx”), an unrelated third-party.

Under the RDx APA, LucidDx Labs Inc.

acquired certain licenses and other

related assets necessary to operate the CLIA-certified, CAP-accredited commercial clinical laboratory.

The RDx APA acquired assets, along

with other LucidDx Labs Inc.

purchased and leased property and equipment, are being used to commence commercial clinical laboratory operations

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

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

Under the RDx APA, LucidDx Labs Inc.

will pay RDx an aggregate purchase price of up to $ 6.2 million for the acquired assets.

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 of quarterly payments.

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

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

2 — Summary of Significant Accounting Policies

Accounting Policies

3 unchanged sentences

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.

All intercompany

transactions and balances have been eliminated in consolidation.

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

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

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

(“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.

October 6, 2021, the Lucid Diagnostics Inc.

board of directors:

increased the authorized shares of common stock to 100.0 million shares;

and declared a 1.411-to-1.0 common stock-split.

All shares of common stock of the Company and per share amounts, for all periods presented,

have been adjusted for the common stock-split, with such adjustment rounded-up to the next whole share in lieu of a fractional share,

with no adjustment to the par value per share, inclusive of:

the number of shares of common stock issued and outstanding (and the corresponding

increase to common stock par value and decrease to additional paid in capital), along with the conversion price per share of the Senior

Unsecured Promissory Note;

basic and diluted weighted-average shares outstanding and the corresponding loss per share;

and applicable

notes to the financial statements, including:

stock options granted, stock option exercise prices, and the number of restricted stock

awards, and the respective fair value per share of the stock options and restricted stock awards, along with all other share and per

share amounts for all periods presented as applicable.

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

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Significant estimates in these

consolidated financial statements include those related to the estimated fair value of stock-based equity awards.

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.

Note 2 — Summary of Significant Accounting

Policies and Recent Accounting Standards Updates - continued

Significant Accounting Policies - continued

Financial Condition

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.

provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40,

4 unchanged sentences

to determine whether it is probable an entity will not meet its financial obligations within one year from the financial statement issuance

Under the provisions of ASC 205-40, substantial doubt about an entity’s ability to continue as a going concern exists when

Substantial doubt about an entity’s ability to continue as a going concern exists when

conditions and events, considered in the aggregate, indicate it is probable the entity will be unable to meet its financial obligations

as they become due within one year after the date the financial statements are issued.

Since its inception to the

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

have been funded by PAVmed Inc.

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

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

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.

incurs expense

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

and PAVmed Inc.

Note 4, Related Party Transactions, for information with respect to the Management Services Agreement;

See Note 5, Related

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

and Note 6, 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.

The Company is subject to

all of the risks and uncertainties typically faced by medical device and diagnostic and medical device companies that devote substantially

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 development activities 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 financial statements, as included herein in this

Annual Report on Form 10-K for the period ended December 31, 2021.

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 consolidated financial statements, as included herein

in this Annual Report on Form 10-K for the period ended December 31, 2022.

See Note 18, Subsequent Events , for a discussion of

the certain financing activities following December 31, 2022.

Note 2 — Summary of Significant Accounting

Policies - continued

Company maintains its cash at a major financial institution with high credit quality.

1 unchanged sentence

exceed federally insured limits.

The Company has not experienced losses on deposits with commercial banks

and financial institutions which exceed federally insured limits.

The Company has not experienced losses on deposits with commercial banks and financial institutions

which exceed federally insured limits.

costs consist of certain legal, accounting, and other advisory fees incurred related to the Company’s efforts to raise debt and

equity capital.

Offering costs in connection with equity financing are recognized as either an offset against the financing proceeds

to extent the underlying security is equity classified or a current period expense to extent the underlying security is liability classified

or for which the fair value option is elected.

Offering costs, lender fees, and warrants issued in connection with debt financing, to

the extent the fair value option is not elected, are recognized as debt discount, which reduces the reported carrying value of the debt,

with the debt discount amortized as interest expense, generally over the contractual term of the debt agreement, to result in a constant

rate of interest.

Offering costs associated with in-process capital financing are accounted for as deferred offering costs.

are recognized when the satisfaction of the performance obligation occurs, in an amount that reflects the consideration the Company expects

to collect in exchange for those services.

The Company’s revenue is primarily generated by its laboratory testing services utilizing

its EsoGuard Esophageal DNA tests.

The services are completed upon release of a patient’s test result to the ordering healthcare

Revenue recognized is inclusive of both variable consideration in connection with an individual patient’s third-party

insurance coverage policy and fixed consideration in connection with a contracted services arrangement with an unrelated third party

legal entity.

To determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, Revenue

from Contracts with Customers, the Company performs the following five steps:

(1) identify the contract(s) with a customer, (2) identify

the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance

obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

key aspects considered by the Company include the following:

Contracts —The

Company’s customer is primarily the patient, but the Company does not enter into a formal reimbursement contract with a patient.

The Company establishes a contract with a patient in accordance with other customary business practices, which is the point in time an

order is received from a provider and a patient specimen has been returned to the laboratory for testing.

Payment terms are a function

of a patient’s existing insurance benefits, including the impact of coverage decisions with Center for Medicare & Medicaid

Services (“CMS”) and applicable reimbursement contracts established between the Company and payers.

However, when a patient

is considered self-pay, the Company requires payment from the patient prior to the commencement of the Company’s performance obligations.

The Company’s consideration can be deemed variable or fixed depending on the structure of specific payer contracts, and the Company

considers collection of such consideration to be probable to the extent that it is unconstrained.

obligations —A performance obligation is a promise in a contract to transfer a distinct good or service (or a bundle of goods

or services) to the customer.

The Company’s contracts have a single performance obligation, which is satisfied upon rendering of

services, which culminates in the release of a patient’s test result to the ordering healthcare provider.

The Company elects the

practical expedient related to the disclosure of unsatisfied performance obligations, as the duration of time between providing testing

supplies, the receipt of a sample, and the release of a test result to the ordering healthcare provider is far less than one year.

price —The transaction price is the amount of consideration that the Company expects to collect in exchange for transferring

promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes).

consideration expected to be collected from a contract with a customer may include fixed amounts, variable amounts, or both.

the consideration derived from the contracts is deemed to be variable, the Company estimates the amount of consideration to which it

will be entitled in exchange for the promised goods or services.

The Company limits the amount of variable consideration included in

the transaction price to the unconstrained portion of such consideration.

In other words, the Company recognizes revenue up to the amount

of variable consideration that is not subject to a significant reversal until additional information is obtained or the uncertainty associated

with the additional payments or refunds is subsequently resolved.

the Company does not have significant historical experience or that experience has limited predictive value, the constraint over estimates

of variable consideration may result in no revenue being recognized upon delivery of patient EsoGuard test results to the ordering healthcare

As such, the Company recognizes revenue up to the amount of variable consideration not subject to a significant reversal until

additional information is obtained or the uncertainty associated with additional payments or refunds, if any, is subsequently resolved.

Differences between original estimates and subsequent revisions, including final settlements, represent changes in estimated expected

variable consideration, with the change in estimate recognized in the period of such revised estimate.

With respect to a contracted service

arrangement, the fixed consideration revenue is recognized on an as-billed basis upon delivery of the laboratory test report with realization

of such fixed consideration deemed probable based upon actual historical experience.

transaction price —The transaction price is allocated entirely to the performance obligation contained within the contract with

a customer on the basis of the relative standalone selling prices of each distinct good or service.

Expedients —The Company does not adjust the transaction price for the effects of a significant financing component, as at contract

inception, the Company expects the collection cycle to be one year or less.

Note 2 — Summary of Significant Accounting

Policies - continued

assets are stated at cost and depreciated using the straight-line method over the assets’ estimated useful lives.

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costs for maintenance and repairs are expensed as incurred.

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

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

All significant lease agreements

and contractual agreements with embedded lease agreements are accounted for under the provisions of ASC 842, wherein, if the contractual

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.

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

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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

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

See Note 9, Leases .

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

Accounting Policies - continued

Company recognizes revenue under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification

(“ASC”) Topic 606, Revenue from Contracts with Customers , (“ASC 606”).

At its inception, an arrangement

is accounted for under the provisions of ASC 606 as a contract with a customer when there is:

a legally enforceable contract between

the rights of the parties are identified;

the arrangement has commercial substance;

and collectability of the contract consideration

is deemed probable.

To determine revenue recognition for arrangements determined to be within the scope of ASC 606, the Company performs

the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize

revenue when (or as) the entity satisfies a performance obligation.

See Note 4, Revenue from Contracts with Customers , for further

information regarding revenue recognition.

costs consist of certain legal, accounting, and other advisory fees incurred related to the Company’s efforts to raise debt and

equity capital.

Offering costs in connection with equity financing are recognized as either an offset against the financing proceeds

to extent the underlying security is equity classified or a current period expense to extent the underlying security is liability classified

or for which the fair value option is elected.

Offering costs, lender fees, and warrants issued in connection with debt financing, to

the extent the fair value option is not elected, are recognized as debt discount, which reduces the reported carrying value of the debt,

with the debt discount amortized as interest expense, generally over the contractual term of the debt agreement, to result in a constant

rate of interest.

Offering costs associated with in-process capital financing are accounted for as deferred offering costs.

As of December

31, 2021 and December 31, 2020, there were no deferred offering costs.

intangible assets are recorded at cost and depreciated using the straight-line method over the assets’ estimated useful life.

Note 11, Intangible Assets, net , for further information with respect to purchased intangible assets.

- Long Lived Assets

Company reviews its long-lived assets, including intangible assets with finite lives, for recoverability whenever events or changes in

circumstances indicate the carrying amount of the assets may not be fully recoverable.

The Company evaluates assets for potential impairment

by comparing estimated future undiscounted net cash flows to the carrying amount of the asset.

If the carrying amount of the assets exceeds

the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets

and fair value which is generally an expected present value cash flow technique.

The assessment and determination of the existence of

an impairment indicator comprises measurable operating performance criteria as well as qualitative factors deemed relevant and appropriate

to such evaluation.

awards are made to members of the board of directors of the Company, the Company’s employees and non-employees, under each of the

Lucid Diagnostics Inc.

2018 Equity Plan and the PAVmed Inc.

2014 Equity Plan.

grant-date estimated fair value of the stock-based award is recognized on a straight-line basis over the requisite service period, which

is generally the vesting period of the respective stock-based award, with such straight-line recognition adjusted, as applicable, so

the cumulative expense recognized is at-least equal-to-or-greater-than the estimated fair value of the vested portion of the respective

stock-based award as of the reporting date.

Company uses the Black-Scholes valuation model to estimate the fair value of stock options granted under both the PAVmed Inc.

Plan and the Lucid Diagnostics Inc.

2018 Equity Plan, which requires the Company to make certain weighted-average valuation estimates

and assumptions for stock-based awards, principally as follows:

respect to the PAVmed Inc.

2014 Equity Plan, the expected stock price volatility is based

on the historical stock price volatility of PAVmed Inc.

common stock and the volatilities

of similar entities within the medical device industry over the period commensurate with

the expected term with respect to stock options granted to the board of directors and employees

in the years ended December 31, 2022 and 2021;

Note 2 — Summary of Significant Accounting

Policies - continued

respect to stock options granted under the Lucid Diagnostics Inc.

2018 Equity Plan, the expected

stock price volatility was based on the historical stock price volatility of similar entities

within the medical device industry over the period commensurate with the expected term with

respect to stock options granted to employees in the years ended December 31, 2022 and 2021;

risk-free interest rate is based on the interest rate payable on U.S.

Treasury securities

in effect at the time of grant for a period commensurate with either the expected term or

the remaining contractual term, as applicable, of the stock option;

expected dividend yield is based on annual dividends of $ 0.00 as there have not been dividends

paid to-date, and there is no plan to pay dividends for the foreseeable future.

price per share of Lucid Diagnostics Inc.

common stock used in the computation of estimated fair value of stock options and restricted

stock awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan is as follows:

(i) for the period October 14, 2021 to December

31, 2022 it is its quoted closing price per share;

and (ii) for the period January 1, 2021 to October 14, 2021, it was estimated using

a probability-weighted average expected return methodology (“PWERM”), which involves the determination of equity value under

various exit scenarios and an estimation of the return to the common stockholders under each scenario.

price per share of PAVmed Inc.

common stock used in the computation of estimated fair value of stock options and restricted stock awards

granted under the PAVmed Inc.

2014 Equity Plan is its quoted closing price per share.

Instruments Fair Value Measurements

ASC Topic 820, Fair Value Measurement, (ASC 820) defines fair value as the price which would be received to sell an asset or paid to

transfer a liability in an orderly transaction between market participants at a transaction measurement date.

The ASC 820 three-tier

fair value hierarchy prioritizes the inputs used in the valuation methodologies, as follows:

based on quoted prices for identical assets and liabilities in active markets.

based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in

active markets, quoted prices for identical or similar assets and liabilities in markets which are not active, or other inputs observable

or can be corroborated by observable market data.

based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made

by other market participants.

These valuations require significant judgment.

of December 31, 2022 and December 31, 2021, the carrying values of cash, and accounts payable, approximate their respective fair value

due to the short-term nature of these financial instruments.

and Development Expenses

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milestone can be objectively estimated.

Note 2 — Summary

of Significant Accounting Policies and Recent Accounting Standards Updates - continued

Accounting Policies - continued

awards are made to members of the board of directors of the Company, the Company’s employees and non-employees, under each of the

Lucid Diagnostics Inc.

2018 Long-Term Incentive Equity Plan (“Lucid Diagnostics Inc.

2018 Equity Plan”) and the PAVmed Inc.

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

2014 Equity Plan”).

grant-date estimated fair value of the stock-based

award is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective

stock-based award, with such straight-line recognition adjusted, as applicable, so the cumulative expense recognized is at-least equal-to-or-greater-than

the estimated fair value of the vested portion of the respective stock-based award as of the reporting date.

Company uses the Black-Scholes valuation model to estimate the fair value of stock options granted under both the PAVmed Inc.

Plan and the Lucid Diagnostics Inc.

2018 Equity Plan, which requires the Company to make certain weighted-average valuation estimates

and assumptions for stock-based awards, principally as follows:

respect to the PAVmed Inc.

2014 Equity Plan, the expected stock price volatility is based on the historical stock price volatility

of PAVmed Inc.

common stock and the volatilities of similar entities within the medical device industry over the period commensurate

with the expected term with respect to stock options granted to the board of directors and employees in the years ended December

31, 2021 and 2020;

respect to stock options granted under the Lucid Diagnostics Inc.

2018 Equity Plan, the expected stock price volatility was based

on the historical stock price volatility of similar entities within the medical device industry over the period commensurate with

the expected term with respect to stock options granted to employees in the year ended December 31, 2021;

There were no stock options

granted under the Lucid Diagnostics Inc.

2018 Equity Plan in the year ended December 31, 2020;

risk-free interest rate is based on the interest rate payable on U.S.

Treasury securities in effect at the time of grant for a period

commensurate with either the expected term or the remaining contractual term, as applicable, of the stock option;

expected dividend yield is based on annual dividends of $ 0.00 as there have not been dividends paid to-date, and there is no plan

to pay dividends for the foreseeable future.

price per share of Lucid Diagnostics Inc.

stock used in the computation of estimated fair value of stock options and restricted stock awards granted under the Lucid Diagnostics

2018 Equity Plan is as follows:

(i) for the period October 14, 2021 to December 31, 2021 it is its quoted closing price per share;

and (ii) for the period January 1, 2021 to October 14, 2021, it was estimated using a probability-weighted average expected return methodology

(“PWERM”), which involves the determination of equity value under various exit scenarios and an estimation of the return

to the common stockholders under each scenario;

and (iii) as of December 31, 2020, it was estimated using a discounted cash flow

analysis applied to a multi-year forecast of its future cash flows.

price per share of PAVmed Inc.

common stock used in the computation of estimated fair value

of stock options and restricted stock awards granted under the PAVmed Inc.

2014 Equity Plan

is its quoted closing price per share.

Note 2 — Summary of Significant Accounting

Policies and Recent Accounting Standards Updates - continued

Significant Accounting Policies - continued

Instruments Fair Value Measurements

ASC Topic 820, Fair Value Measurement, (ASC 820) defines fair value as the price which would be received to sell an asset or paid to

transfer a liability in an orderly transaction between market participants at a transaction measurement date.

The ASC 820 three-tier

fair value hierarchy prioritizes the inputs used in the valuation methodologies, as follows:

based on quoted prices for identical assets and liabilities in active markets.

based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities

in active markets, quoted prices for identical or similar assets and liabilities in markets which are not active, or other inputs

observable or can be corroborated by observable market data.

based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made

by other market participants.

These valuations require significant judgment.

of December 31, 2021 and December 31, 2020, the carrying values of cash, and accounts payable, approximate their respective fair value

due to the short-term nature of these financial instruments.

Policies - continued

Company accounts for income taxes using the asset and liability method, as required by FASB ASC Topic 740, Income Taxes, (ASC 740).

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valuation allowance reserve equal to the full amount of the deferred tax assets, net of deferred tax liabilities, has been recognized

as a charge to income tax expense as of December 31, 2021 and December 31, 2020.

as a charge to income tax expense as of December 31, 2022 and 2021.

Company recognizes the benefit of an uncertain tax position it has taken or expects to take on its income tax return if such a position

3 unchanged sentences

have any unrecognized tax benefits resulting from uncertain tax positions.

Note 2 — Summary of Significant Accounting

Policies and Recent Accounting Standards Updates - continued

Significant Accounting Policies - continued

Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision.

There were no

amounts accrued for penalties or interest as of December 31, 2021 and December 31, 2020 or recognized during the year ended December

31, 2021 and December 31, 2020.

The Company is not aware of any issues under review to potentially result in significant payments, accruals,

or material deviations from its position.

amounts accrued for penalties or interest as of December 31, 2022 and December 31, 2021 or recognized during the years ended December

31, 2022 and 2021.

The Company is not aware of any issues under review to potentially result in significant payments, accruals, or material

deviations from its position.

October 14, 2021, Lucid Diagnostics Inc.

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The Company’s common stock equivalents

include stock options and unvested restricted stock awards granted under

the Lucid Diagnostics Inc.

include stock options and unvested restricted stock awards granted under the Lucid Diagnostics Inc.

2018 Long-Term Incentive Equity Plan.

2 unchanged sentences

to compute the basic and diluted net loss per share for each reporting period presented.

Note 2 — Summary

of Significant Accounting Policies and Recent Accounting Standards Updates - continued

Act EGC Accounting Election

6 unchanged sentences

as public companies who are not an EGC.

Note 2 — Summary of Significant Accounting

Policies - continued

Reclassifications

prior-year amounts have been reclassified to conform to the current year presentation, which includes presenting costs of revenue within

operating expenses on the statements of operations, in the consolidated financial statements and accompanying notes to the consolidated

financial statements.

The impact of the reclassifications made to prior year amounts is not material and did not affect net loss.

Accounting Standards Updates Adopted

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accounting models previously contained in ASC 470-20 that required separate accounting for embedded conversion features.

also simplified the assessment of a financial instrument settlement to determine whether a contract is an entity’s own equity

qualifies for equity classification by removing certain conditions from ASC 815-4-25.

The ASU 2020-06 amendments are effective for fiscal

years beginning after December 15, 2023, and interim periods within those fiscal years.

Early adoption is permitted, but no earlier than

fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

The Company’s adoption of

the ASU 2020-06 guidance as of January 1, 2021 did not have an effect on the Company’s consolidated financial statements.

also simplified the assessment of a financial instrument settlement to determine whether a contract is an entity’s own equity qualifies

for equity classification by removing certain conditions from ASC 815-4-25.

The ASU 2020-06 amendments are effective for fiscal years

beginning after December 15, 2023, and interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal

years beginning after December 15, 2020, including interim periods within those fiscal years.

The Company’s adoption of the ASU

2020-06 guidance as of January 1, 2021 did not have an effect on the Company’s consolidated financial statements.

December 2019, the FASB issued ASU No.

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ASU 2019-12 guidance as of January 1, 2021 did not have an effect on the Company’s consolidated financial statements.

License Agreement – Case Western Reserve University

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 — Revenue from Contracts with Customers

Commercialization Agreement

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

ResearchDx Inc.

(“RDx”), an unrelated third-party.

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

7, Asset Purchase Agreement and Management Services Agreement .

the years ended December 31, 2022 and December 31, 2021, the Company recognized total revenue of $ 377 and $ 500 , respectively.

recognized revenue of $ 188 resulting from the delivery of patient EsoGuard test results.

Revenue recognized from customer contracts deemed

to include a variable consideration transaction price is limited to the unconstrained portion of the variable consideration.

In addition, the Company’s revenue for the year ended December 31, 2022, includes $ 189 of revenue recognized under the EsoGuard

Commercialization Agreement, which represented 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.

In the year ended December 31, 2021, the Company recognized total revenue of $ 500 under the EsoGuard Commercialization

cost of revenues principally includes the costs related to the Company’s laboratory operations (excluding estimated costs associated

with research activities), the costs related to the EsoCheck cell collection device, cell sample mailing kits and license royalties.

the year ended December 31, 2022, the cost of revenue was $ 3,614 and was primarily related to costs for our laboratory operations and

EsoCheck device supplies, however also includes $ 369 reflecting costs attributable to delivering the services under the EsoGuard Commercialization

Agreement for the period January 1, 2022 to February 25, 2022.

In the year ended December 31, 2021, the cost of revenue was $ 585 , which

solely related to the EsoGuard Commercialization Agreement.

4 — Patent License Agreement - Case Western Reserve University

Diagnostics Inc.

48 unchanged sentences

subject-to a minimum annual royalty fee.

base minimum annual royalty fee is $ 50 commencing January 1 following the first anniversary of the “First Commercial Sale”

of a “Licensed Product” (as such terms are defined in the Amended CWRU License Agreement).

The minimum annual royalty fee

increases to each of:

$ 150 if the annual “Net Sales” (as defined in the Amended CWRU License Agreement) exceed $ 25.0 million

up to $ 50.0 million;

$ 300 if annual Net Sales exceed $ 50.0 million up to $ 100.0 million;

and $ 600 if annual Net Sales exceed $ 100.0 million.

The Company recognized a 5.0 % royalty fee payment liability as of December 31, 2021 with respect to the revenue recognized under the

EsoGuard Commercialization Agreement, dated August 1, 2021, between Lucid Diagnostics Inc.

base minimum annual royalty fee is $ 50

commencing January 1 following the first anniversary of the “First Commercial Sale” of a “Licensed Product”

(as such terms are defined in the Amended CWRU License Agreement).

The minimum annual royalty fee increases to each of:

if the annual “Net Sales” (as defined in the Amended CWRU License Agreement) exceed $ 25.0

million up to $ 50.0

if annual Net Sales exceed $ 50.0

million up to $ 100.0

if annual Net Sales exceed $ 100.0

The Company recognized a 5.0 %

royalty fee payment liability as of December 31, 2022 and 2021 with respect to the revenue recognized under the EsoGuard

Commercialization Agreement, dated August 1, 2021, between Lucid Diagnostics Inc.

and Research Dx Inc.

The Company recorded a

royalty expense of $ 23

and $ 25 for the

years ended December 31, 2022 and 2021, respectively.

Additionally,

2 unchanged sentences

or 15 % of sub-license proceeds to extent the sub-license proceeds are realized after the first commercial Sale of a Licensed Product.

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

Agreements with Physician Inventors - Intellectual Property - CWRU License Agreement

15 unchanged sentences

2014 Long-Term Incentive Equity Plan”.

4 - Revenue from Contracts with Customers

is recognized when the satisfaction of the performance obligation occurs, which is when the delivery of product and /or the provision

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

In the year ended December

31, 2021, 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 Commercial Laboratory Improvements Act (“CLIA”) certified commercial laboratory service provider,

ResearchDX Inc.

(“RDx”), an unrelated third-party.

The EsoGuard Commercialization Agreement initial term is on a month-to-month

basis, and may be terminated by either party thereto, with or without cause, upon forty-five (45) days prior written notice.

February 25, 2022, the EsoGuard Commercialization Agreement was terminated in conjunction with the execution of an Asset Purchase

Agreement between LucidDx Labs Inc., a wholly-owned subsidiary of Lucid Diagnostics Inc., and RDx, as such agreement is further

discussed above in Note 1, Summary Description of the Company.

the year ended December 31, 2021, the Company recognized total revenue of $ 500 , which represents the minimum fixed monthly fee of $ 100

to be paid by RDx for the delivery of services under the EsoGuard Commercialization Agreement for the period from the agreement inception

date of August 1, 2021 to December 31, 2021.

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 year ended December

31, 2021 totaled $ 585 ,

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 fee incurred under the Amended CWRU License Agreement..

5 — 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

For the year ended December 31,

Cost of Revenue

CWRU – Royalty Fee

Cost of Revenue

General and Administrative Expense

CWRU – License Agreement - Amendment Fee - Milestone III

Stock-based compensation expense – Physician Inventors’ restricted stock awards

General and Administrative Expense

Research and Development Expense

Western Reserve University and Physician Inventors - Amended CWRU License Agreement

Western Reserve University (“CWRU”) and each of the three physician inventors (“Physician Inventors”) of the

intellectual property licensed under the amended and restated patent license agreement with CWRU, dated August 23, 2021 (the “Amended

CWRU License Agreement”), 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

Ended December 31,

– Royalty Fees

and Administrative Expense

CWRU – License Agreement - reimbursement of patent legal fees

EsoCheck devices provided to CWRU

Fees - Physician Inventors’ consulting agreements

Stock-based compensation expense – Physician Inventors’ stock options

Research and Development Expense

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.

Note 3, Patent License Agreement - Case Western Reserve University, for a discussion of:

the Amended CWRU License Agreement;

consulting agreements with the Physician Inventors;

and Note 12, Stock-Based Compensation, for information regarding each of the

Lucid Diagnostics Inc.

2018 Long-Term Incentive Equity Plan and the separate PAVmed Inc.

2014 Long-Term Incentive Equity Plan, including

the stock-based equity awards granted to the Physician Inventors.

Note 5 — Related Party Transactions - continued

compensation expense – Physician Inventors’ restricted stock awards

and Development Expense

CWRU – License Agreement - reimbursement of patent legal fees

- Physician Inventors’ consulting agreements

research agreement

compensation expense – Physician Inventors’ stock options

Related Party Expenses

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

incurs a service

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

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.

and PAVmed Inc.

board of directors.

Fee is charged on a monthly basis and is subject-to periodic adjustment corresponding with changes in the services provided by PAVmed

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.

recognized MSA Fee expense of $ 3,630 and $ 1,680 in the years ended December 31, 2021 and 2020, respectively.

Fee expense classification in the consolidated statement of operations for the periods noted is as follows:

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

December 31, 2021

December 31, 2020

Cost of Revenues

Sales & Marketing

General & Administrative

Research & Development

Total MSA Fee

and PAVmed Inc.

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 that commenced

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 per share).

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.

accordance with the MSA, on November 30, 2022 PAVmed elected to receive payment of $ 1,650 in aggregate monthly fees under the MSA through

the issuance of 750,818 shares of Lucid Diagnostics Inc.

Common Stock.

5 — Related Party Transactions - continued

MSA Fee expense classification in the consolidated statement of operations for the periods noted is as follows:

of MSA Fee Expense Classification in Statements of Operations

Ended December 31,

& Administrative

& Development

classification of the MSA Fee as presented above is based on the PAVmed Inc.

classification of employee salary expense.

this regard, PAVmed Inc.

classifies employee salary expense as cost-of-revenue for employees engaged in service delivery under the EsoGuard

Commercialization Agreement, and sales and marketing expenses for employees performing sales, marketing, and reimbursement activities

and functions, general and administrative, and research and development except for those employees who are engaged in product and services

engineering development and design and /or clinical trials activities, for which such employee salary is classified as research and development

In this regard,

classifies employee salary expense as cost-of-revenue for employees engaged in service delivery under the EsoGuard Commercialization

Agreement, and sales and marketing expenses for employees performing sales, marketing, and reimbursement activities and functions, general

and administrative, and research and development except for those employees who are engaged in product and services engineering development

and design and /or clinical trials activities, for which such employee salary is classified as research and development expense.

Related Party Transactions

7 unchanged sentences

Lucid Diagnostics Inc.

recognized as general and administrative expense

of $ 21 and $ 7 in the years ended December 31, 2021 and 2020, respectively, in connection with the consulting agreement.

recognized general and administrative expense

of $ 21 in the year ended December 31, 2021 in connection with the consulting agreement.

6 — 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

Balance - December 31, 2020

On Behalf Of (OBO) activities

ERC - Payroll & Benefits

Promissory Note Issuance

Conversion of Promissory Note to LUCD Common Stock

Interest on Promissory Note

Cash payments to PAVmed Inc.

Net Activity during 2020

Balance - December 31, 2021

Balance as of December 31, 2019

Net Activity during 2020

Balance as of December 31, 2020

Diagnostics Inc.

has 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 (MSA) between the Company and PAVmed Inc (the “MSA Fee”).

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

for the periods indicated is summarized as follows:

of Senior Unsecured Promissory Note

Senior Unsecured Promissory Note

Unsecured Senior Promissory Note

Capital Cash Advances

- December 31, 2020

Behalf Of (OBO) activities

- Payroll & Benefits

Note Issuance

of Promissory Note to LUCD Common Stock

on Promissory Note

payments to PAVmed Inc.

to PAVmed Inc.

settled in LUCD stock

- December 31, 2021

Behalf Of (OBO) activities

- Payroll & Benefits

payments to PAVmed Inc.

to PAVmed Inc.

settled in LUCD stock

- December 31, 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.

100 % of 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 11, Intangible Assets, net, with respect to the transferred intangible asset.

November 30, 2022, pursuant to a supplement to the CapNostics Assignment Agreement, the Company, PAVmed Sub and PAVmed agreed that the

Company would pay the price for the interests through the issuance to PAVmed of 1,145,086 shares of the Company’s common stock.

and Benefit Expense Reimbursement Agreement (“PBERA”)

November 30, 2022, the Company and PAVmed entered into a payroll and benefit expense reimbursement agreement (the “PBERA”).

Historically, PAVmed has paid for certain payroll and benefit-related expenses in respect of the Company’s personnel on behalf

of the Company, and the Company has reimbursed PAVmed for the same.

Pursuant to the PBERA, PAVmed will continue to pay such expenses,

and the Company will continue to reimburse PAVmed for the same.

The PBERA now provides that the expenses will be reimbursed on a quarterly

basis or at such other frequency as the parties may determine, in cash or, subject to approval by the board of directors of each of PAVmed

and the Company, in shares of the Company’s common stock, with such shares valued at the volume weighted average price of such

stock during the final ten trading days preceding the later of the two dates on which such stock issuance is approved by the board of

directors of each of PAVmed and the Company (subject to a floor price of $ 0.40 per share), or in a combination of cash and shares.

in no event shall the Company issue any shares of its common stock to PAVmed in satisfaction of all or any portion of the expenses if

the issuance of such shares of its common stock would exceed the maximum number of shares of common stock that the Issuer may issue under

the rules or regulations of The Nasdaq Stock Market LLC (“Nasdaq”), unless the Company obtains the approval of its stockholders

as required by the applicable rules of the Nasdaq for issuances of shares of its common stock in excess of such amount.

In accordance

with the PBERA, on November 30, 2022, PAVmed elected for the Company to reimburse PAVmed for $ 2,719 in accrued and unreimbursed payroll

and benefit-related expenses paid by PAVmed on behalf of the Company through the third quarter of 2022 through the issuance of 1,479,326

shares of the Company’s common stock.

Note 6 — Due To PAVmed Inc.

Services Agreement

accordance with the MSA, on November 30, 2022 PAVmed has elected to receive payment of $ 1,650 in monthly fees under the MSA through the

issuance of 750,818 shares of Lucid Diagnostics Inc.

Common Stock.

For further information about the MSA, see Note 5, Related Party

Transactions.

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 equipment.

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.

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

a 5 % 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.

Unsecured Promissory Note

13 unchanged sentences

common stock.

7 — Prepaid Expenses, Deposits, and Other Current and Non-Current Assets

7 — Asset Purchase Agreement and Management Services Agreement

Purchase Agreement - ResearchDx Inc.

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

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 storage.

Prior to February 25, 2022,

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

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

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 consolidated balance sheet, as further discussed in Note

11, Intangible Assets, net.

In the year ended December 31, 2022, a total of $ 3,200 of cash was paid with respect to the periodic

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 year ended December 31, 2022, as provided for in the APA-RDx, installment

payments were settled with the issuances of 326,701 shares of common stock of Lucid Diagnostics Inc., with such shares having fair values

of $ 653 (with the fair value measured as the quoted closing price on the dates the shares were issued), which was recognized as a current

period expense included in general and administrative expenses in the accompanying 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.

without cause or if it is terminated by mutual

agreement between the Company and RDx.

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:

material breach by RDx which is not cured within thirty days of LucidDx Labs Inc.

(ii) RDx becomes insolvent and /or bankrupt;

or (ii) 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 decisions.

Note 7 — Asset Purchase Agreement and Management

Services Agreement - continued

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 per quarter.

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.

of Management Services Agreement and Modification of Other Payment Obligations - ResearchDx Inc

February 14, 2023, through LucidDx Labs Inc, the Company entered into an agreement (the “MSA Termination Agreement”) with

RDx, pursuant to which the parties mutually agreed to terminate the MSA-RDx without cause.

The termination was effective as February

Until the termination of the MSA-RDx, RDx had continued to provide certain testing and related services for the Laboratory

in accordance with the terms of the MSA-RDx.

MSA Termination Agreement reduces the remaining amounts of the earnout payments and management fees due under the APA-RDx and the MSA-RDx

The payment was satisfied through the issuance of 553,436 shares of the Company’s common stock in February 2023.

was not required to make any cash payments in connection with the termination.

8 — 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

December 31, 2021

December 31, 2020

Advanced payments to service providers and suppliers

Prepaid insurance

EsoCheck cell collection supplies

EsoGuard mailer supplies

Total prepaid expenses, deposits and other current assets

Company entered into an agreement with a clinical research organization (“CRO”) in connection with EsoGuard clinical trials

(the “EsoGuard CRO Agreement”).

The term of the EsoGuard CRO Agreement is from the September 2019 effective date to the conclusion

of the respective clinical trials, but not to exceed 60 months from the effective date of the EsoGuard CRO Agreement.

The CRO agreement

may be cancelled with sixty days written notice, without an early termination fee.

The Company incurred an on-account deposit of $ 725

as of December 31, 2021 and 2020, respectively,

with the deposit classified as a non-current asset in the line item captioned “Other assets” on the accompanying consolidated

balance sheets as of December 31, 2021 and 2020.

See Note 11 , Commitment and Contingencies , for a discussion

of the EsoGuard CRO Agreement.

of Prepaid Expenses and Other Current Assets

payments to service providers and suppliers

cell collection supplies

mailer supplies

prepaid expenses, deposits and other current assets

9 — Fixed Assets

1 unchanged sentence

of Fixed Assets

Estimated Useful Life

December 31, 2021

December 31, 2020

Computer and office equipment

Laboratory equipment

Furniture and fixtures

Leasehold improvements

Assets under construction

Total Fixed Assets

Less Accumulated Depreciation

Total Fixed Assets, net

of remaining lease term or estimated useful life.

The assets under construction

presented above are with respect to the establishment of a Company owned and operated CLIA-certified, CAP-accredited clinical laboratory.

expense of $ 4 for the year ended December 31, 2021 is included in general and administrative expenses in the accompanying

consolidated statements of operations.

total fixed assets is inclusive of $ 98 of accounts payable and $ 16 of accrued expenses and other current liabilities in the accompanying

consolidated balance sheet as of December 31, 2021.

of December 31, 2021, the Company only had short-term leases for its Lucid Test Centers, resulting in rent expense of $ 24 for the year

ended December 31, 2021 (there was no such rent expense for the prior year ended December 31, 2020).

addition to the short-term leases as of December 31, 2021 noted above, the Company entered into additional lease agreements, each with

commencement dates subsequent to December 31, 2021, classified as operating leases and short-term leases, including for a commercial

clinical laboratory and additional Lucid Test Centers.

The total future lease payments

of both the (existing) short-term leases as of December 31, 2021 and the (new) short-term leases with commencement dates subsequent to

December 31, 2021, are $ 75 in 2022 and $ 9 in 2023, as of December 31, 2021.

The total future lease payments

of the (new) operating leases with commencement dates subsequent to December 31, 2021, as of December 31, 2021, are as follows:

of future minimum lease payments for capital leases

Total lease payments

and office equipment

under construction

Accumulated Depreciation

Fixed Assets, net

(1) Lesser of remaining

lease term or estimated useful life.

expense of $ 287 and $ 4 for the years ended December 31, 2022 and 2021, respectively, is included in general and administrative expenses

in the accompanying consolidated statements of operations.

the year ended December 31, 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.

components of lease expense were as follows:

of Components of Lease Expense

Ended December 31,

Company’s future lease payments as of December 31, 2022, which are presented as operating lease liabilities, current portion and

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

of Future Lease Payments of Operating Lease Liabilities

lease payments

imputed interest

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

Ended December 31,

Cash paid for amounts

included in the measurement of lease liabilities

cash flows from operating leases

investing and financing activities

assets obtained in exchange for new operating lease liabilities

Weighted-average

remaining lease term - operating leases (in years)

Weighted-average

discount rate - operating leases

of December 31, 2022, the Company’s right-of-use assets from operating leases are $ 2,008 , which are reporting in right-of-use assets

- operating leases in the consolidated balance sheets.

As of December 31, 2022, the Company has outstanding operating lease obligations

of $ 1,999 , of which $ 962 is reported in operating lease liabilities, current portion and $ 1,037 is reporting in operating lease liabilities

less current portion in the Company’s consolidated balance sheets.

The Company did not have operating leases as of December 31,

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.

11 — Intangible Assets, net

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

of Intangible Assets Accumulated Amortization

licenses and certifications and laboratory information management software

Intangible assets

Accumulated Amortization

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 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.

noted in Note 7, 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 transferred to the Company from RDx), and a laboratory information management software 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 $ 1,649 and $ 0 for the years ended December 31, 2022 and 2021, respectively, and

is included in amortization of acquired intangible assets in the accompanying consolidated statements of operations.

As of December 31,

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

12 — Accrued Expenses and Other Current Liabilities

expenses and other current liabilities for the periods indicated consist of the following:

expenses and other current liabilities consisted of the following items as of:

Schedule of Accrued Expenses and Other Current Liabilities

December 31, 2021

December 31, 2020

Compensation and Employee Benefits

CWRU License Agreement fee

CWRU License Agreement Amendment fee

CWRU Amended License Agreement - Royalty fee

Operating expenses

EsoGuard mailer

Total accrued expenses and other current liabilities

and Employee Benefits

Amended License Agreement - Royalty fee

accrued expenses and other current liabilities

Note 4, Patent License Agreement - Case Western Reserve University , for a discussion of the CWRU License Agreement.

amounts for operating expenses presented above relate to respective amounts incurred by the Company but not yet invoiced by the

respective vendors.

13 — Commitment and Contingencies

9 unchanged sentences

impact on the Company’s business, financial position, results of operations, and /or cash flows.

Trials - Agreement with Clinical Research Organization

Company entered into an agreement with a clinical research organization (“CRO”) in connection with EsoGuard clinical trials,

referred to as the EsoGuard CRO Agreement.

The CRO will assist the Company with conducting two concurrent clinical trials referred to

as the “EsoGuard screening study” and the “EsoGuard case control study”.

The term of the EsoGuard CRO Agreement

is from the September 2019 effective date to the conclusion of the respective clinical trials, but not to exceed 60 months from the effective

date of the EsoGuard™ CRO Agreement.

The CRO agreement may be cancelled with sixty days written notice, without an early termination

14 — Stock-Based Compensation

7 unchanged sentences

The Lucid Diagnostics Inc.

2018 Equity Plan is designed to enable Lucid

2018 Equity Plan is designed to enable Lucid Diagnostics

to offer employees, officers, directors, and consultants, as defined, an opportunity to acquire shares of common stock of Lucid

Diagnostics Inc.

to offer employees, officers, directors, and consultants, as defined, an opportunity to acquire shares of common stock

of Lucid Diagnostics Inc.

The types of awards that may be granted under the Lucid Diagnostics Inc.

2018 Equity Plan include stock options,

stock appreciation rights, restricted stock, and other stock-based awards subject to limitations under applicable law.

All awards are

subject to approval by the Lucid Diagnostics Inc.

2018 Equity Plan include stock options, stock

appreciation rights, restricted stock, and other stock-based awards subject to limitations under applicable law.

All awards are subject

to approval by the Lucid Diagnostics Inc.

board of directors.

total of 5,644,000 shares

of common stock of Lucid Diagnostics Inc.

total of 9,144,000 shares of common stock of Lucid Diagnostics Inc.

are reserved for issuance under the Lucid Diagnostics Inc.

2018 Equity Plan, with 2,752,615 shares

available for grant as of December 31, 2021.

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

Diagnostics Inc.

Plan, with 3,821,139 shares available for grant as of December 31, 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 December 31, 2021.

2018 Equity Plan, as of December 31, 2022.

In January 2023, the number of shares available for grant was increased by 2,500,000 in accordance with the evergreen provisions of the

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

Exercise Price

Outstanding stock options at December 31, 2019

Outstanding stock options at December 31, 2020

Outstanding stock options at December 31, 2021

Vested and exercisable stock options at December 31, 2021

Stock Options

Diagnostics Inc.

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

of Stock Options

Average Exercise Price

Contractual Term (Years)

stock options at December 31, 2020

stock options at December 31, 2021

stock options at December 31, 2022 (3)

and exercisable stock options at December 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.

in January 2020, 4,703 stock options issued under the Lucid Diagnostics Inc.

2018 Equity Plan were exercised for cash proceeds of $ 4,999 ,

resulting in the issue of the same number of shares of common stock of Lucid Diagnostics Inc.

three Physician Inventors were each granted 141,100

stock options outside of the Lucid Diagnostics

2018 Equity Plan, with a grant date of May 12, 2018, an exercise price of $ 0.35

per share of common stock of Lucid Diagnostics

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.

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 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.

intrinsic value is computed as the difference between the quoted price of the Lucid Diagnostics

common stock on each of December 31, 2022 and December 31, 2021 and the exercise price

of the underlying Lucid Diagnostics Inc.

stock options, to the extent such quoted price is

greater than the exercise price.

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 December 31, 2022 and

December 31, 2021.

Note 5, Related Party Transactions , for a summary of the stock-based compensation expense recognized with respect to the stock

options granted under the Lucid Diagnostics Inc.

2018 Equity Plan to the Physician Inventors.

Note 12 — Stock-Based Compensation

to December 31, 2022, in January and February 2023, the company granted 2,672,500 stock options with a weighted average exercise price

of $ 1.31 which will generally vest one-third after one year then ratably over the next eight quarters.

14 — Stock-Based Compensation - continued

Diagnostics Inc.

2018 Equity Plan – Restricted Stock Awards

of December 31, 2021, a total of 1,897,795

restricted stock awards were granted under

the Lucid Diagnostics Inc.

2018 Equity Plan, summarized as follows:

March 1, 2021, a total of 1,467,440 restricted stock awards were granted under the Lucid Diagnostics Inc.

2018 Equity Plan to employees

of PAVmed Inc., a member of the board of directors of Lucid Diagnostics Inc.

(who is also a member of the board of directors of PAVmed

Inc.), and to each of the three physician inventors of the intellectual property licensed under the CWRU License Agreement, with such

restricted stock awards having a single vesting date of March 1, 2023, and an aggregate grant date fair value of approximately $ 18.9

million, measured as discussed below, 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.

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

the stock-based compensation expense recognized with respect to the restricted stock awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan to the Physician Inventors.

April 2021, a total of 91,715 restricted stock awards were granted under the Lucid Diagnostics Inc 2018 Equity Plan, inclusive of such

restricted stock awards granted to an employee of PAVmed Inc.

and a consultant, with such restricted stock awards having a single vesting

date in April 2023, and an aggregate grant date fair value of approximately $ 1.2 million, measured as discussed below, 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.

As of December 31, 2021, a total of 7,055 restricted stock awards have been forfeited.

July 2021, a total of 84,660 restricted stock awards were granted under the Lucid Diagnostics Inc 2018 Equity Plan, inclusive of such

restricted stock awards granted to member of the board of directors of Lucid Diagnostics Inc.

with such restricted stock awards having

a single vesting date in July 2023, and an aggregate grant date fair value of approximately $ 1.1 million, measured as discussed below,

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.

September 2021, 169,320

restricted stock awards were granted under the

Lucid Diagnostics Inc 2018 Equity Plan, to a member of the board of directors of Lucid Diagnostics Inc.

with such restricted stock

awards vesting ratably over a two year period with a vesting dates of each of September 15, 2022 and 2023, and an aggregate

grant date fair value of approximately $ 2.3

million, measured as discussed below, 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.

October 14, 2021, 84,660

restricted stock awards were granted under the Lucid Diagnostics Inc 2018 Equity Plan, to a member of the board of directors of Lucid Diagnostics Inc.

with such restricted

stock awards having a single vesting date of October 14, 2023, and an aggregate grant date fair value of approximately

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.

December 15, 2021, 50,000

restricted stock awards were granted outside of the Lucid Diagnostics Inc 2018 Equity Plan, with such restricted stock

awards having a single vesting date on December 15, 2023, and an aggregate grant date fair value of approximately $ 0.3

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.

to December 31, 2021, as of March 29, 2022, additional stock-based equity grants under the Lucid Diagnostics Inc.

2018 Equity Plan included

1.8 million stock options with a weighted average exercise price of approximately $ 4.16 per share and the same vesting and contractual

term as discussed above;

and a total of 320,000 restricted stock awards with a weighted average grant date fair value of $ 4.52 per share

of Lucid Diagnostics Inc.

common stock, with single vesting date of three years from date of grant.

Note 12 — Stock-Based Compensation

Lucid Diagnostics Inc.

2018 Equity Plan –

Restricted Stock Awards - continued

price per share of Lucid Diagnostics Inc.

common stock used in the computation of estimated fair value of stock options and restricted

stock awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan is as follows:

(i) from October 14, 2021 to December 31, 2021

it is its quoted closing price per share on date of grant;

and (ii) for the period January 1, 2021 to October 13, 2021, it

was estimated using a probability-weighted average expected return methodology (“PWERM”), which involves the determination

of equity value under various exit scenarios and an estimation of the return to the common stockholders under each scenario, wherein,

the estimated fair value was based upon an analysis of future values, assuming various outcomes, based upon the probability-weighted

present value of expected future investment returns, considering each of the possible future outcomes available to Lucid Diagnostics

and (iii) as of December 31, 2020, it was estimated using a discounted cash flow analysis applied to a multi-year

forecast of its future cash flows.

PWERM principally involved (i) the identification of scenarios and related probabilities;

(ii) determine the equity value under each

and (iii) determine the common stock shareholders’ return in each scenario.

The two scenarios identified were an initial

public offering (“IPO”) of Lucid Diagnostics Inc.

common stock (“IPO scenario”);

and, to continue on as a private

company (“stay private scenario”).

With respect to the IPO scenario, the valuation of the Lucid Diagnostics Inc.

was computed using assumptions, including dates of the IPO, to calculate an estimated pre-money valuation;

and, with respect to the stay

private scenario, an income approach was used, wherein a risk-adjusted discount rate is applied to projected future cash flows.

awards during 2021, a relative weighting ranged from 75%-97.5% for to the IPO scenario and the relative weighting ranged from 2.5%-25%

for the stay private scenario .

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

of Restricted Stock Awards

Average Grant Date Fair Value

Unvested restricted

stock awards as of December 31, 2020

restricted stock awards as of December 31, 2021 (1)

Unvested restricted

stock awards as of December 31, 2021

restricted stock awards as of December 31, 2022 (1)

unvested restricted stock awards presented in the table above, are inclusive of 50,000 restricted

stock awards granted outside the Lucid Diagnostics Inc.

2018 Equity Plan as of December 31,

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

3 unchanged sentences

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

The PAVmed Inc.

2014 Equity Plan is designed to enable PAVmed

to offer employees, officers, directors, and consultants, as defined, an opportunity to acquire a proprietary interest in PAVmed

The types of awards that may be granted under the PAVmed Inc.

2014 Equity Plan include stock options, stock appreciation rights,

restricted stock awards, and other stock-based awards subject to limitations under applicable law.

The PAVmed Inc.

2014 Equity Plan grants

are subject-to approval of the PAVmed Inc.

board of directors compensation committee.

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

Note 12 — Stock-Based Compensation

14 — Stock-Based Compensation - continued

Compensation Expense

2 unchanged sentences

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

Schedule of Stock-Based Compensation Expense

Year Ended December 31,

Lucid Diagnostics Inc 2018 Equity Plan – sales and marketing expenses

Lucid Diagnostics Inc 2018 Equity Plan - general and administrative expense

Lucid Diagnostics Inc 2018 Equity Plan - research and development expenses

PAVmed Inc 2014 Equity Plan - sales and marketing expenses

PAVmed Inc 2014 Equity Plan - general and administrative expenses

PAVmed Inc 2014 Equity Plan - research and development expenses

Total stock-based compensation expense

of Stock-Based Compensation Expense

Ended December 31,

Diagnostics Inc 2018 Equity Plan – cost of revenue

Diagnostics Inc 2018 Equity Plan – sales and marketing expenses

Diagnostics Inc 2018 Equity Plan - general and administrative expenses

Diagnostics Inc 2018 Equity Plan - research and development expenses

Inc 2014 Equity Plan - cost of revenue

Inc 2014 Equity Plan - sales and marketing expenses

Inc 2014 Equity Plan - general and administrative expenses

Inc 2014 Equity Plan - research and development expenses

stock-based compensation expense

stock-based compensation expense, as presented above, is inclusive of:

1 unchanged sentence

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.

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

2 unchanged sentences

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)

Lucid Diagnostics Inc.

of Unrecognized Compensation Expense and Weighted Average Remaining Service Period

Average Remaining Service Period (Years)

Diagnostics Inc.

2018 Equity Plan

Stock Options

Restricted Stock Awards

2014 Equity Plan

Stock Options

Restricted Stock Awards

compensation expense recognized with respect to stock options granted under the Lucid Diagnostics Inc.

2018 Equity Plan was based on

a weighted average estimated fair value of such stock options of $ 5.13 per share during the year ended December 31, 2021.

no stock-based awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan during the year ended December 31, 2020.

The stock-based

compensation was calculated using the following weighted average Black-Scholes valuation model assumptions:

of Stock-based

Compensation Valuation Assumptions

Year Ended December 31,

Expected term of stock options (in years)

Expected stock price volatility

Risk free interest rate

Expected dividend yield

a weighted average estimated fair value of such stock options of $ 2.30 per share and $ 5.13 per share during the periods ended December

31, 2022 and 2021, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

Schedule of Stock-based Compensation Valuation Assumptions

Ended December 31,

term of stock options (in years)

stock price volatility

free interest rate

dividend yield

14 — Stock-Based Compensation - continued

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

Lucid Diagnostics Inc.

Employee Stock Purchase Plan (“Lucid Diagnostics Inc.

ESPP”), adopted by the Company’s

board of directors effective November 9, 2021, provides eligible employees to purchase shares of Lucid Diagnostics Inc.

common stock through payroll deductions during six month periods ending March 31 and September 30, wherein the purchase price

per share of common stock is 85% of the lower quoted closing price per at either the beginning or end of each six

month share purchase period.

Diagnostics Inc.

ESPP has a total reservation of 500,000 shares

of common stock of Lucid Diagnostics Inc.

of which 500,000 shares

are available-for-issue remaining as of December 31, 2021.

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

was April 1, 2022 to September 30, 2022.

A total of 84,030 shares of common stock of Lucid Diagnostics Inc were purchased for proceeds

of approximately $ 109 on September 30, 2022 under the Lucid Diagnostics Inc.

The Lucid Diagnostics Inc.

ESPP has a total reservation

of 500,000 shares of common stock of which 415,970 shares are available-for-issue as of December 31, 2022.

In January 2023, the number

of shares available-for-issue was increased by 500,000 in accordance with the evergreen provisions of the plan.

15 — Stockholders’ Equity

Company is authorized to issue 20 million shares of its preferred stock, par value of $ 0.001 per share, with such designation, rights,

and preferences as may be determined from time-to-time by the Company’s board of directors.

There were no shares of preferred stock

issued and outstanding as of December 31, 2021 and December 31, 2020.

Diagnostics Inc.

October 6, 2021, the Lucid Diagnostics Inc.

board of directors:

increased the authorized shares of common stock of Lucid Diagnostics

to 100.0 million shares, par value $ 0.001 ;

and declared a 1.411-to-1.0 common stock-split with respect to Lucid Diagnostics Inc.

common stock, as discussed below.

were 34,917,907 and 14,114,707 shares of common stock issued and outstanding as of December 31, 2021 and December 31, 2020, respectively.

of December 31, 2022 and December 31, 2021 there were 40,518,792 and 34,917,907 shares of common stock issued and outstanding, respectively.

As of December 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.

Ended December 31, 2021

Inc Conversion of the Senior Unsecured Promissory Note Principal - October 13, 2021

October 13, 2021, 15,803,200 shares of common stock of Lucid Diagnostics Inc.

were issued to PAVmed Inc.

upon the election by PAVmed

to convert the $ 22.4 million face value principal of a Senior Unsecured Promissory Note, dated June 1, 2021, under the terms of

such note, which was issued to PAVmed Inc.

by Lucid Diagnostics Inc.

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 offering 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 Company.

Ended December 31, 2020

the year ended December 31, 2020, 4,703

shares of common stock of the Company

were issued upon exercise of stock options for cash of approximately $ 5 .

See Note 12, Stock-Based Compensation , for a discussion of the Lucid Diagnostics Inc.

2018 Equity Plan.

Committed Equity Facility - March 28, 2022

Subsequent to December 31, 2021,

on March 28, 2022, Lucid Diagnostics, Inc.

holds 31,302,420 shares, representing a majority-interest equity ownership and PAVmed Inc.

controlling financial interest in Lucid Diagnostics Inc.

Equity Facility and ATM Facility

March 28, 2022, Lucid Diagnostics, Inc.

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

4 unchanged sentences

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

As of December 31, 2022, under the committed equity facility, a total of 680,263 shares of

common stock of the Company were issued for proceeds of approximately $ 1,807 .

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

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

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

The Company also entered

3 unchanged sentences

prior written notice.

In November 2022, the Company entered into an “at-the-market offering” for up to $ 6.5 million of its

common stock that may be offered and sold under a Controlled Equity Offering Agreement between the Company and Cantor Fitzgerald &

In the year ended December

31, 2022, there were no shares sold through the at-the-market equity facility.

Subsequent to

December 31, 2022, through March 9, 2023, we sold 230,068 shares through its at-the-market equity facility for

approximately $ 0.3 million.

16 — Income Taxes

1 unchanged sentence

of Income Tax (Benefit) Expense

Year Ended December 31,

Federal, State and Local

Ended December 31,

State and Local

Current and Deferred

tax (benefit) expense

and Deferred tax (benefit) expense

Valuation allowance reserve

Income tax (benefit)

tax (benefit) expense

reconciliation of the federal statutory income tax rate to the effective income tax rate for the respective period noted is as follows:

of Reconciliation of Federal Statutory Income Tax Rate

Year Ended December 31,

Ended December 31,

federal statutory rate

state and local income taxes, net of federal benefit

Permanent differences

Valuation allowance

Effective tax rate

Revaluation of state deferred taxes

tax effects of temporary differences which give rise to the net deferred tax assets for the respective period noted is as follows:

of Net Deferred Tax Assets

Year Ended December 31,

Deferred Tax Assets

Net operating loss

Stock-based compensation expense

Accrued expenses

Research and development tax credit carryforwards

Deferred tax assets

Deferred Tax Liabilities

Deferred tax assets, net of deferred tax liabilities

Ended December 31,

operating loss

compensation expense

& amortization

Research and development expenditures

and development tax credit carryforwards

Tax Liabilities

tax assets, net of deferred tax liabilities

valuation allowance

Deferred tax assets, net after valuation allowance

tax assets, net after valuation allowance

16 — Income Taxes - continued

tax assets and deferred tax liabilities resulting from temporary differences are measured using enacted tax rates expected to apply to

2 unchanged sentences

the tax rate is recognized as income or expense in the period the change in tax rate is enacted.

Note 14 — Income Taxes - continued

required by FASB ASC Topic 740, Income Taxes, (“ASC 740), a “more-likely-than-not” criterion is applied when assessing

11 unchanged sentences

if any, as of December 31, 2022 and 2021, as follows:

federal NOL carryforward of approximately $ 31.9 million and $ 13.5 million ,

respectively, with such federal NOL carryforward

not having a statutory expiration date;

and state NOL carryforward of approximately $ 31.9 million and $ 13.5 million , respectively,

with such state NOL carryforward having statutory expiration

dates commencing in 2036 .

The Company has not yet conducted a formal analysis and the NOL carryforward may be subject-to limitation under U.S.

Internal Revenue

Code (“IRC”) Section 382 (provided there was a greater than 50% ownership change, as computed under such IRC Section 382).

The Company did not have research and development (“R&D”) tax credit carryforward as of December 31, 2021.

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the pandemic

resulting from the outbreak of a novel strain of a coronavirus designated as the “Severe Acute Respiratory Syndrome Coronavirus

2” - or “SARS-CoV-2”.

The pandemic resulting from SARS-CoV-2 is commonly referred to by its resulting illness of “COVID-19”

(“coronavirus disease-2019”) and is referred to herein as the COVID-19 pandemic.

other provisions, the CARES Act increases the limitation on the allowed business interest expense deduction from 30 percent to 50 percent

of adjusted taxable income for tax years beginning January 1, 2019 and 2020 and allows businesses to immediately expense the full cost

of Qualified Improvement Property, retroactive to tax years beginning on or after January 1, 2018.

Additionally, the CARES Act permits

net operating loss carryovers (“NOLs”) and carrybacks to offset 100% of taxable income for taxable years beginning before

In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable

years to generate a refund of previously paid income taxes.

The Company evaluated the impact of these CARES Act provisions and determined

they did not have a material impact on the consolidated income tax provision.

As discussed herein, on October

14, 2021, Lucid Diagnostics Inc.

completed its initial public offering (“IPO”) of its common stock.

federal NOL carryforward of approximately $ 65.1 million and $ 31.9 million, respectively,

with such federal NOL carryforward not having a statutory expiration date;

and state NOL carryforward of approximately $ 65.1 million

and $ 31.9 million, respectively, with such state NOL carryforward having statutory expiration dates commencing in 2037 .

The Company has

not yet conducted a formal analysis and the NOL carryforward may be subject-to limitation under U.S.

Internal Revenue Code (“IRC”)

Section 382 (provided there was a greater than 50% ownership change, as computed under such IRC Section 382).

discussed herein, on October 14, 2021, Lucid Diagnostics Inc.

completed its initial public offering (“IPO”) of its common

While PAVmed Inc.

a majority-interest equity ownership and has a controlling financial interest, its ownership interest was reduced from 81.8477% before

the IPO to 79.9796% after the IPO.

holds a majority-interest equity ownership and has a controlling financial interest, its ownership interest

was reduced from 81.8477% before the IPO to 79.9796% after the IPO.

Accordingly, Lucid Diagnostics Inc.

is included in the PAVmed Inc and Subsidiaries consolidated income

tax returns through October 13, 2021, and effective October 14, 2021, Lucid Diagnostics Inc.

will file its income tax returns on a stand-alone

legal entity basis.

is included in the PAVmed Inc

and Subsidiaries consolidated income tax returns through October 13, 2021, and effective October 14, 2021, Lucid Diagnostics Inc.

file its income tax returns on a stand-alone legal entity basis.

The Lucid Diagnostics Inc.

stand-alone legal entity estimated income tax provision was computed on an assumed separate

income tax return for the periods presented through October 13, 2021, wherein, the estimated income tax provision of Lucid Diagnostics

stand-alone legal entity estimated income

tax provision was computed on an assumed separate income tax return for the periods presented through October 13, 2021, wherein, the

estimated income tax provision of Lucid Diagnostics Inc.

is computed as if its income tax returns were filed by Lucid Diagnostics Inc.

on a stand-alone legal entity basis.

Notwithstanding

the absence of a formal tax sharing agreement between PAVmed Inc.

and Lucid Diagnostics Inc., the Lucid Diagnostics Inc.

legal entity current tax expense and /or tax refund, if any, would be settled with PAVmed Inc.

(as opposed with the respective tax authority)

through October 13, 2021.

Notwithstanding the absence of a formal tax sharing agreement between PAVmed Inc.

and Lucid Diagnostics

Inc., the Lucid Diagnostics Inc.

stand-alone legal entity current tax expense and /or tax refund, if any, would be settled with PAVmed

(as opposed with the respective tax authority) through October 13, 2021.

The deferred tax asset and /or deferred tax liability;

1 unchanged sentence

and /or an uncertain tax position, if any;

each as discussed above, is determined based on Lucid Diagnostics Inc.

stand-alone legal entity

assumed filing of separate income tax returns.

each as discussed above, is determined

based on Lucid Diagnostics Inc.

stand-alone legal entity assumed filing of separate income tax returns.

Company files income tax returns in the United States in federal and applicable state and local jurisdictions.

5 unchanged sentences

or interest related to its income tax provision.

In August 2022, the U.S.

Congress passed the Inflation Reduction Act, which included a corporate minimum tax on book

earnings of 15%, an excise tax on corporate share repurchases of 1%, and certain climate change and energy tax credit incentives.

adoption of a corporate minimum tax of 15% is not expected to impact Lucid’s effective tax rate.

The excise tax of 1% on corporate

share buybacks will not have an impact on the Company’s effective tax rate.

17 — Net Loss Per Share

1 unchanged sentence

Schedule of Basic and Fully Diluted Net Loss Per Share

Year Ended December 31,

Weighted average common shares outstanding, basic and diluted

Ended December 31,

average common shares outstanding, basic and diluted

loss per share

Net loss per share - basic and diluted

loss per share - basic and diluted

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

8 unchanged sentences

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

Year Ended December 31,

Lucid Diagnostics Inc.

2018 Equity Plan:

Stock options

Unvested restricted stock awards (“RSAs”)

Stock options and unvested RSAs not granted under

Antidilutive securities excluded from computation of diluted weighted shares outstanding

restricted stock awards

18 — 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 March 2022, both the PAVmed and Lucid board of directors approved entering into a purchase and sale

of 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 March 2022, both the PAVmed and Lucid board of directors have approved entering 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 threshold.

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.

A Preferred Stock Offering

March 7, 2023, we entered into subscription agreements for the sale of 13,625 shares of Series A preferred stock (the

“ Series A Preferred Stock ”).

Each share of the Series A Preferred Stock has a stated value of $ 1,000

and a conversion price of $ 1.394 .

terms of the Series A Preferred Stock also include a one times preference on liquidation and a right to receive dividends equal to

20% of the number of shares into which such Series A Preferred Stock is convertible, payable on the one-year and two-year

anniversary of the issuance date .

The Series A Preferred Stock is a non-voting security, other than with respect to limited

matters related to changes in terms of the Series A Preferred Stock.

The aggregate gross proceeds from the sale of shares in such

offering were $ 13.625 million.

Private Placement - Securities Purchase Agreement

as of March 13, 2023, we entered into a Securities Purchase Agreement (“SPA”) with an accredited institutional

investor (“Investor”, “Lender”, and /or “Holder”), pursuant to which we agreed to sell, and the

Investor agreed to purchase a Senior Secured Convertible Note with a face value principal of $ 11.1 million (the “March

2023 Senior Convertible Note”).

The issuance of the March 2023 Senior Convertible Note is subject to customary closing

As of the date hereof, the March 2023 Senior Convertible Note has not yet been issued.

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 9A. Controls and Procedures