What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-13 compared with 2023-08-14 · 331 added, 302 removed, 198 unchanged (76% of the section changed)

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following discussion and analysis of our unaudited condensed consolidated financial condition and results of operations should be read

together with our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”), as filed with the

Securities and Exchange Commission (the “SEC”).

the context otherwise requires, references herein to (i) “we”, “us”, and “our”, and to the “Company”,

“Lucid” or “Lucid Diagnostics” are to the Company and its subsidiaries LucidDx Labs Inc.

together with our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”), as filed with the Securities

and Exchange Commission (the “SEC”).

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

and “Lucid Diagnostics” refer to Lucid Diagnostics Inc.

and its subsidiaries LucidDx Labs Inc.

(“LucidDx Labs”)

and CapNostics, LLC (“CapNostics”), (ii) “FDA” are to the Food and Drug Administration, (iii) “510(k)”

are to a premarket notification, submitted to the FDA by a manufacturer pursuant to § 510(k) of the Food, Drug and Cosmetic Act

and 21 CFR § 807 subpart E, (iv) “CLIA” are to the Clinical Laboratory Improvement Amendments of 1988 and associated

regulations set forth in 42 CFR § 493, and (v) “CE Mark” are to a “Conformité Européenne”

Mark, a mark indicating that a product such as a medical device conforms to the essential requirements of the relevant European directive.

and CapNostics, LLC (“CapNostics”), (ii) “FDA” refers to the Food and Drug Administration, (iii) “510(k)”

refers to a premarket notification, submitted to the FDA by a manufacturer pursuant to § 510(k) of the Food, Drug and Cosmetic Act

and 21 CFR § 807 subpart E, (iv) “CLIA” refers to the Clinical Laboratory Improvement Amendments of 1988 and associated

regulations set forth in 42 CFR § 493, (v) “CE Mark” refers to a “Conformité Européenne” Mark,

a mark indicating that a product such as a medical device conforms to the essential requirements of the relevant European directive,

and (vi) “LDT” refers to a diagnostic test, defined by the FDA as “an IVD that is intended for clinical use and designed,

manufactured and used within a single laboratory,” which is generally subject only to self-certification of analytical validity

under the CMS CLIA program.

FORWARD-LOOKING

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significantly from those expressed or implied in the forward-looking statements.

Factors that might cause such differences include, but are

not limited to, those discussed in Item 1A of Part I of the Form 10-K under the heading “Risk Factors.”

Factors that might cause such differences include, but

are not limited to, those discussed in Item 1A of Part I of the Form 10-K under the heading “Risk Factors.”

factors that may affect our actual results include:

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ability to obtain regulatory approval for the commercialization of our products;

risk that the FDA will cease to exercise enforcement discretion with respect to LDTs, like EsoGuard;

ability of our products to achieve market acceptance;

success in retaining or recruiting, or changes required in, our officers, key employees or

success in retaining or recruiting, or changes required in, our officers, key employees or directors;

potential ability to obtain additional financing when and if needed;

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related to our relationship with PAVmed;

estimates regarding expenses, future revenue, capital requirements and needs for additional

estimates regarding expenses, future revenue, capital requirements and needs for additional financing.

addition, our forward-looking statements do not reflect the potential impact of any future financings, acquisitions, mergers, dispositions,

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except as required by applicable law.

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

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

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

are a commercial-stage medical diagnostics technology company focused on the millions of patients who are at risk of developing esophageal

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

believe that our flagship product, the EsoGuard Esophageal DNA Test, performed on samples collected with the EsoCheck Esophageal Cell

Collection Device, constitutes the first and only commercially available diagnostic test capable of serving as a widespread tool for

the early detection of esophageal precancer, including Barrett’s Esophagus (“BE”), in at-risk GERD patients.

Early detection of esophageal precancer allows patients to undergo

appropriate monitoring and treatment, as indicated by clinical practice guidelines, in an effort to prevent progression to esophageal

the early detection of esophageal precancer, including Barrett’s Esophagus (“BE”), in at-risk patients.

Early detection

of esophageal precancer allows patients to undergo appropriate monitoring and treatment, as indicated by clinical practice guidelines,

in an effort to prevent progression to esophageal cancer.

is a bisulfite-converted next-generation sequencing (NGS) DNA assay performed on surface esophageal cells collected with EsoCheck.

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EsoGuard is commercially available in the U.S.

as a Laboratory Developed Test (LDT) performed at our

CLIA-certified laboratory.

Cell samples, including those collected with EsoCheck, as discussed below, are sent to our laboratory, for

testing and analyses using EsoGuard.

is an FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells

in a less than five-minute office.

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

which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells.

When vacuum suction is applied, the

balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted

region during device withdrawal.

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

cell collection device capable of such anatomically targeted and protected sampling.

as a LDT performed at our CLIA-certified laboratory.

samples, including those collected with EsoCheck, as discussed below, are sent to our laboratory, for testing and analyses using EsoGuard.

is an FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal

cells in a less than five-minute office procedure.

It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone

catheter from which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells.

suction is applied, the balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by

cells outside of the targeted region during device withdrawal.

We believe this proprietary Collect+Protect™ technology makes

EsoCheck the only noninvasive esophageal cell collection device capable of such anatomically targeted and protected

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

EsoCheck have been developed to provide an accurate, non-invasive, patient-friendly test for the early detection of EAC and BE,

including dysplastic BE and related precursors to EAC in patients with chronic GERD.

of Clinical Trials

is currently seeking to accelerate its collection of clinical utility data through a range of trials that can be efficiently

These efforts include a planned investigator-initiated, retrospective analysis of prospectively collected data on the 391

San Antonio fire fighters who underwent testing as part of a community-sponsored cancer awareness event described below (in respect

of which we expect to publish results in the second half of 2023);

a virtual-patient randomized controlled trial with intended

recruitment of at least 100 physician participants (in respect of which we expect to publish results this year);

a Lucid-sponsored

multi-center, prospective, observational study with 500 patients;

and a Lucid-sponsored registry at existing Lucid Test Centers,

whereby all patients undergoing EsoCheck testing will be given the opportunity to provide informed consent and contribute data about

their risk factors, EsoGuard results, and subsequent diagnostic and/or therapeutic journey.

Both Lucid-sponsored

observational/registry studies expect to have preliminary results and/or interim analysis submitted for peer review before the end

EsoCheck have been developed to provide an accurate, non-invasive, patient-friendly test for the early detection of EAC and BE, including

dysplastic BE and related precursors to EAC in patients with chronic gastroesophageal reflux disease (“GERD”), commonly known

as chronic heart burn, acid reflux, or just reflux.

of Clinical Trials and Publications

continues to accelerate its collection and publication of clinical utility data through a range of trials.

These efforts include an investigator-initiated,

retrospective analysis of prospectively collected data on San Antonio firefighters who underwent testing as part of a community-sponsored

cancer awareness event described below;

a virtual-patient randomized controlled trial with intended recruitment of at least 100 physician

participants;

a Lucid-sponsored multi-center, prospective, observational study with 500 patients;

and two Lucid-sponsored registries,

in which Lucid collects real-world clinical utility and clinical validity data on EsoGuard Esophageal DNA testing for the detection of

esophageal precancer in two distinct populations.

regard to the two registries, the Prospective REView of Esophageal Precancer DetectioN in AT-Risk Patients (PREVENT) Registry collects

data on EsoGuard testing in the commercial increased-risk population, while the PREVENT-Fire Fighters (PREVENT-FF) Registry focuses exclusively

on increased-risk firefighters.

Complete data for the San Antonio firefighter study has been accepted for peer review publication in

Journal of Gastrointestinal & Digestive System (ISSN:

Combined early interim results from the PREVENT and PREVENT-FF

registries focusing on provider decision impact has also been accepted for peer review publication in Journal of Gastroenterology &

Digestive Systems (ISSN:

results for the Lucid-sponsored observational study have been posted in preprint on medRxiv and are undergoing journal peer review.

for the Lucid-sponsored observational study is expected to be completed by the end of the year.

Similarly, results for the Lucid-sponsored

virtual-patient study are expected to be ready for analysis before the end of 2023.

#CheckYourFoodTube

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then, additional testing events have been hosted with the SAFD, and similar events have been held with fire departments throughout the

These events are ongoing and are an extension of Lucid’s satellite Lucid Test Center (“sLTC”) program,

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

of EsoGuard #CheckYourFoodTube Mobile Testing Unit

June 2023, Lucid launched its first EsoGuard #CheckYourFoodTube Mobile Test Unit (“mobile testing unit”),

with the inaugural mobile testing unit event being held in Sarasota, Florida.

The mobile testing unit is another channel

by which we are bringing EsoGuard testing to at-risk patients.

These events are ongoing and are an extension of Lucid’s satellite Lucid Test Center (“sLTC”) program, which

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

of Direct Contracting Strategic Initiative

March 2023, we launched a Direct Contracting Strategic Initiative (“DCSI”) to engage directly with large Administrative Services Only (“ASO”)

self-insured employers, unions and other entities, seeking to replicate the successes of other cancer screening diagnostic companies

that have deployed similar strategies.

In August 2023, the company announced it had contracted with the Ancira Automotive Group as a result of

this initiative, providing access to esophageal precancer testing for its employees at all 12 San Antonio locations.

New Revenue Cycle Management Provider

In May 2023, Lucid began to transition claims submission responsibility to a new revenue cycle management provider

that offered more robust capabilities for, among other things, claims processing and appeals.

The provider upgrade has been completed

and claim submissions resumed in June 2023.

Since completing the transition, the upgrade has demonstrated an improvement in speed of collections,

turnaround time to claim submission, percentage of claims paid, and actionable data for appeals.

March 2023, we launched a Direct Contracting Strategic Initiative (“DCSI”) to engage directly with large Administrative Services

Only (“ASO”) self-insured employers, unions and other entities, seeking to replicate the successes of other cancer screening

diagnostic companies that have deployed similar strategies.

In August 2023, the company announced it had contracted with the Ancira Automotive

Group as a result of this initiative, providing access to esophageal precancer testing for its employees at all 12 San Antonio locations.

Revenue Cycle Management Provider

May 2023, Lucid began to transition claims submission responsibility to a new revenue cycle management provider that offered more robust

capabilities for, among other things, claims processing and appeals.

The provider upgrade has been completed and claim submissions resumed

in June 2023.

Since completing the transition, the upgrade has continued to demonstrate an improvement in speed of collections, turnaround

time to claim submission, percentage of claims paid, and actionable data for appeals.

Personnel Update

Effective on November 6, 2023, Lucid’s

board of directors appointed Shaun M.

O’Neil as the President of Lucid.

O’Neil, who is 41 years old, also continues to

serve as the Chief Operating Officer of PAVmed and as the Chief Operating Officer of Lucid.

For additional biographical information about

O’Neil, please refer to Lucid’s definitive proxy statement on Schedule 14A filed on May 1, 2023, which information is

incorporated herein by reference.

Other than in connection with his service as an officer of PAVmed and Lucid, Mr.

O’Neil has not

engaged in any transactions with Lucid that are required to be reported pursuant to Item 404(a) of Regulation S-K.

A Preferred Stock Offering

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

$0.001 per share (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.

The Series A Preferred Stock is convertible into shares of our common stock at any time at the option

of the holder from and after the six-month anniversary of its issuance (or, if later, the effective date of an increase in our authorized share capital or the effective date of a registration

statement covering the resale of the underlying shares), and automatically converts into shares of our common stock on

the second anniversary of its issuance.

The terms of the Series A Preferred Stock also include a 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 each of

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.

March 7, 2023, we sold 13,625 shares of Series A convertible preferred stock, par value $0.001 per share (the “Series A Preferred

Stock”), solely to accredited investors.

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

price of $1.394.

The Series A Preferred Stock is convertible into shares of our common stock at any time at the option of the holder

from and after the six-month anniversary of its issuance (or, if later, the effective date of a registration statement covering the resale

of the underlying shares), and automatically converts into shares of our common stock on the second anniversary of its issuance.

terms of the Series A Preferred Stock also include a 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 each of the one-year and two-year anniversary of the issuance

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.

A-1 Preferred Stock Offering

October 17, 2023, we sold 5,000 shares of Series A-1 convertible preferred stock, par value $0.001 per share (the “Series A-1 Preferred

Stock”), solely to accredited investors.

The terms of the Series A-1 Preferred Stock are substantially identical to the terms of

the Series A Preferred Stock, except that the Series A-1 Preferred Stock has a conversion price of $1.2592.

The aggregate gross proceeds

from the sale of shares in such offering were $5.0 million.

Placement - Securities Purchase Agreement

as of March 13, 2023, we entered into a Securities Purchase Agreement (“SPA”) with an accredited institutional investor, 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 March 2023 Senior Convertible Note on March 21, 2023 pursuant to the SPA.

The March 2023 Senior Convertible Note proceeds were $9.925

million after deducting a $1.186 million lender fee and offering costs.

March 2023 Senior Secured Convertible Note has a 7.875% annual stated interest rate, a contractual conversion price of $5.00 per share

of the Company’s common stock (subject to standard adjustments in the event of any stock split, stock dividend, stock combination,

recapitalization or other similar transaction), and a contractual maturity date of the two-year anniversary of the date of issuance.

The principal and interest on the March 2023 Senior Convertible Note is convertible into or otherwise payable in shares of the Company’s

common stock (subject to the satisfaction of certain customary equity conditions and except for interest payable prior to September 21,

the March 2023 Senior Convertible Note, the Company is subject to certain customary affirmative and negative covenants regarding the

incurrence of indebtedness, the existence of liens, the repayment of indebtedness and the making of investments, the payment of cash

in respect of dividends, distributions or redemptions, the transfer of assets, the maturity of other indebtedness, and transactions with

affiliates, among other customary matters.

Under the March 2023 Senior Convertible Note, the Company is also subject to financial covenants

requiring that (i) the amount of our available cash equal or exceed $5.0 million at all times, (ii) the ratio of (a) the outstanding

principal amount of the notes issued under the SPA, accrued and unpaid interest thereon and accrued and unpaid late charges as of the

last day of any fiscal quarter commencing with September 30, 2023 to (b) the Company’s average market capitalization over the prior

ten trading days, not exceed 30%, and (iii) that the Company’s market capitalization shall at no time be less than $30 million.

November 2022, Lucid Diagnostics 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 Lucid Diagnostics and Cantor Fitzgerald & Co.

In the six months ended June 30, 2023, we sold 230,068 shares through our at-the-market equity facility for net proceeds of approximately

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

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 Note”).

We issued the March 2023 Note on March 21, 2023 pursuant to the SPA.

from the sale of the March 2023 Note were $9.925 million after deducting a $1.186 million lender fee and offering costs.

March 2023 Note has a 7.875% annual stated interest rate, a contractual conversion price of $5.00 per share of the Company’s common

stock (subject to standard adjustments in the event of any stock split, stock dividend, stock combination, recapitalization or other

similar transaction), and a contractual maturity date of the two-year anniversary of the date of issuance.

The principal of the March

2023 Note and accrued interest thereon is convertible at the option of the holder into the Company’s common stock at the contractual

conversion price.

In addition, the principal of the March 2023 Note amortizes over 18 months commencing six months after its issuance.

The amortization payments and accrued interest on the March 2023 Note are payable in shares of the Company’s common stock (subject

to the satisfaction of certain customary equity conditions and except for interest payable prior to September 21, 2023), at prices based

on the then current market price.

November 2022, Lucid Diagnostics 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 Lucid Diagnostics and Cantor Fitzgerald & Co.

In the nine months ended September 30, 2023, we sold 230,068 shares through our at-the-market equity facility for net proceeds of approximately

$0.3 million, after payment of 3% commissions.

No shares were sold through our at-the-market equity facility during the three months ended June 30, 2023.

No shares were sold through our at-the-market equity facility during the three months

ended September 30, 2023.

of Operations

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commercial laboratory service provider.

On February 25, 2022, the EsoGuard Commercialization Agreement was terminated upon the execution

of the APA-RDx.

On February 25, 2022, the EsoGuard Commercialization Agreement was terminated upon our acquisition,

pursuant to the APA-RDx, of certain assets necessary to operate our own CLIA certified laboratory.

For a fuller description of the APA-RDx,

see Note 6, Asset Purchase Agreement and Management Services Agreement , to our accompanying unaudited condensed consolidated financial

of revenues recognized from the delivery of patient EsoGuard test results includes costs related to EsoCheck device usage, shipment of

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the previously terminated EsoGuard Commercialization Agreement in February 2022, the cost of revenue recognized is inclusive of:

royalty fee incurred under the Amended CWRU License Agreement (as defined in Note 4, Related Party Transactions , to our

accompanying unaudited condensed consolidated financial statements);

the cost of EsoCheck devices and EsoGuard mailers (cell sample

shipping costs);

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

fee incurred under the Amended CWRU License Agreement (as defined in Note 4, Related Party Transactions , to our accompanying unaudited

condensed consolidated financial statements);

the cost of EsoCheck devices and EsoGuard mailers (cell sample shipping costs);

Test Centers operating expenses, including rent expense and supplies.

and marketing expenses

and marketing expenses consist primarily of salaries and related costs for employees engaged in sales and marketing activities, as well

as the portion of the MSA Fee allocated to sales and marketing expenses, which are principally costs related to PAVmed employees who

are performing services for the Company.

We anticipate our sales and marketing expenses will increase in the

future, to the extent we expand our commercial sales and marketing operations

as resources permit and insurance reimbursement coverage for our EsoGuard test expands.

as the portion of the MSA Fee (as defined in Note 4, Related Party Transactions , to our accompanying unaudited condensed consolidated

financial statements) allocated to sales and marketing expenses, which are principally costs related to PAVmed employees who are performing

services for the Company.

We anticipate our sales and marketing expenses will increase in the future, to the extent we expand our commercial

sales and marketing operations as resources permit and insurance reimbursement coverage for our EsoGuard test expands.

and administrative expenses

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incurred as a result of our being a public company), consulting fees, expenses associated with obtaining and maintaining patents within

our intellectual property portfolio, and certain employee costs, along with the portion of the MSA Fee (as defined in Note 4, Related

Party Transactions , to our accompanying unaudited condensed consolidated financial statements) allocated to general and administrative

our intellectual property portfolio, and certain employee costs, along with the portion of the MSA Fee allocated to general and administrative

anticipate our general and administrative expenses will increase in the future to the extent our business operations grow.

Furthermore, we anticipate continued expenses related to being a public

company, including fees and expenses for audit, legal, regulatory, tax-related services, insurance premiums and investor relations costs

associated with maintaining compliance as a public company.

we anticipate continued expenses related to being a public company, including fees and expenses for audit, legal, regulatory, tax-related

services, insurance premiums and investor relations costs associated with maintaining compliance as a public company.

and development expenses

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well as new innovations.

Our research and development activities, including our clinical trials, are focused principally on facilitating insurer reimbursement, encouraging physician adoption and developing product improvements or extending the

utility of the lead products in our pipeline, including EsoCheck and EsoGuard.

of Operations - continued

Our research and development activities, including our clinical trials, are focused principally on facilitating

insurer reimbursement, encouraging physician adoption and developing product improvements or extending the utility of the lead products

in our pipeline, including EsoCheck and EsoGuard.

of Dollar Amounts

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in millions, except for share and per share amounts.

months ended June 30, 2023 as compared to three months ended June 30, 2022

the three months ended June 30, 2023, revenue was $0.2 million as compared to $0.0 million for the corresponding period in the prior

The $0.2 million increase principally relates to the revenue for our EsoGuard Esophageal DNA Test performed in our own CLIA laboratory,

as compared to revenue from the EsoGuard Commercialization Agreement with RDx, in the prior year period, which was terminated on February

25, 2022 when the Company transitioned to its own laboratory operations.

the three months ended June 30, 2023, cost of revenue was approximately $1.5 million as compared to $0.0 million for the corresponding

period in the prior year.

The $1.5 million increase was principally related to:

● approximately

$0.6 million increase in laboratory facility and operations costs;

of Operations - continued

three months ended September 30, 2023 as compared to three months ended September 30, 2022

the three months ended September 30, 2023, revenue was $0.8 million as compared to $0.1 million for the corresponding period in the prior

The $0.7 million increase principally relates to the increase in volume of our EsoGuard Esophageal DNA Tests performed in our own

CLIA laboratory for the period and the consideration received for the performance of the EsoGuard Esophageal DNA Tests.

the three months ended September 30, 2023, cost of revenue remained relatively level, at approximately $1.6 million, as compared to the

corresponding period in the prior year.

The factors contributing to cost of revenue remaining relatively level were as follows:

approximately

$0.5 million increase in EsoCheck and EsoGuard supplies costs;

$0.3 million decrease in laboratory facility and operations costs;

approximately

$0.2 million increase in compensation related costs;

approximately

$0.1 million increase in EsoCheck and EsoGuard supplies costs.

and marketing expenses

the three months ended June 30, 2023, sales and marketing costs were approximately $4.0 million as compared to $3.9 million for

the three months ended September 30, 2023, sales and marketing costs were approximately $3.8 million as compared to $3.9 million for

the corresponding period in the prior year.

The net increase of $0.1 million was principally related to:

The net decrease of $0.1 million was principally related to:

approximately

$0.6 million increase in compensation related costs principally as a result of an increase

in headcount;

$0.2 million decrease related to the amended MSA with PAVmed;

approximately

$0.1 million increase in facility costs;

$0.4 million increase in compensation related costs, including stock-based compensation;

approximately

$0.6 million decrease in third party marketing expenses.

$0.3 million decrease in third party marketing, corporate information technology and consulting expenses.

and administrative expenses

the three months ended June 30, 2023, general and administrative costs were approximately $3.8 million as compared to $6.7 million

the three months ended September 30, 2023, general and administrative costs were approximately $4.3 million as compared to $5.7 million

for the corresponding period in the prior year.

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approximately

$0.9 million increase related to the amended MSA with PAVmed due to the growth

and expansion of our business and the services incurred through PAVmed;

$2.3 million decrease in stock-based compensation from RSA and stock option grants to Lucid employees and non-employees;

approximately

$2.5 million decrease in stock-based compensation from RSA and stock option grants to Lucid

employees and non-employees;

$0.7 million increase related to the amended MSA with PAVmed due to the growth and expansion of our business and the services incurred

through PAVmed;

approximately

$1.2 million decrease related to the termination of the MSA-RDx and lower general business expenses

primarily related to reduced insurance premiums and reduced third-party consulting fees and

professional recruiting services.

of Operations - continued

months ended June 30, 2023 as compared to three months ended June 30, 2022 - continued

$0.2 million increase related to compensation related costs.

and development expenses

the three months ended June 30, 2023, research and development costs were approximately $1.8 million, compared to $3.4 million for

the three months ended September 30, 2023, research and development costs were approximately $1.6 million, compared to $2.7 million for

the corresponding period in the prior year.

The net decrease of $1.1 million was principally related to:

● approximately

$1.8 million decrease in development costs, particularly in clinical trial activities and

outside professional and consulting fees with respect to EsoCure;

● approximately

$0.2 million increase in compensation related costs.

approximately $1.4 million decrease in development costs, particularly

in clinical trial activities and outside professional and consulting fees with respect to EsoCure;

approximately $0.3 million increase in compensation related

costs, including stock-based compensation.

of Acquired Intangible Assets

amortization of acquired intangible assets remained relatively level in the three months ended June 30, 2023, as compared to the

corresponding period in the prior year.

amortization of acquired intangible assets remained relatively level, at approximately $0.5 million, in the three months ended September

30, 2023, as compared to the corresponding period in the prior year.

Income and Expense

in fair value of convertible debt

the three months ended June 30, 2023, the change in the fair value of our convertible note was approximately $0.3 million of income,

related to the March 2023 Senior Convertible Note.

The March 2023 Convertible Note was initially measured at its issue-date estimated

fair value and subsequently remeasured at estimated fair value as of the reporting period date.

The Company initially recognized a $0.8

million fair value non-cash expense on the issue date.

the three months ended September 30, 2023, the change in the fair value of our convertible note was approximately $3.0 million of income,

related to the March 2023 Note.

The March 2023 Note was initially measured at its issue-date estimated fair value and subsequently remeasured

at estimated fair value as of each reporting period date.

The Company initially recognized a $0.8 million fair value non-cash expense

on the issue date.

Note 11 , Debt, to our accompanying unaudited condensed consolidated financial statements, for additional information with respect

to the March 2023 Senior Convertible Note.

to the March 2023 Note.

of Operations - continued

months ended June 30, 2023 as compared to six months ended June 30, 2022

the six months ended June 30, 2023, revenue was $0.6 million as compared to $0.2 million for the corresponding period in the prior

nine months ended September 30, 2023 as compared to nine months ended September 30, 2022

the nine months ended September 30, 2023, revenue was $1.4 million as compared to $0.3 million for the corresponding period in the prior

The $1.1 million increase principally relates to the revenue for our EsoGuard Esophageal DNA Test performed in our own CLIA laboratory,

as compared to revenue from the EsoGuard Commercialization Agreement with RDx, in the prior year period, which was terminated on February

25, 2022 when the Company transitioned to its own laboratory operations.

the six months ended June 30, 2023, cost of revenue was approximately $2.9 million as compared to $0.4 million for the corresponding

as compared to revenue from the EsoGuard Commercialization Agreement with RDx, recognized in first two months of the prior year period,

which was terminated on February 25, 2022 when Lucid Diagnostics transitioned to its own laboratory operations.

the nine months ended September 30, 2023, cost of revenue was approximately $4.5 million as compared to $2.0 million for the corresponding

period in the prior year.

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approximately

$1.1 million increase in laboratory facility and operations costs;

● approximately

$1.1 million increase in EsoCheck and EsoGuard supplies costs;

approximately

$0.7 million increase in laboratory facility and operations costs;

approximately

$0.7 million increase in compensation related costs.

and marketing expenses

the six months ended June 30, 2023, sales and marketing costs were approximately $8.2 million as compared to $7.2 million for the

corresponding period in the prior year.

the nine months ended September 30, 2023, sales and marketing costs were approximately $12.0 million as compared to $11.1 million for

the corresponding period in the prior year.

The net increase of $0.9 million was principally related to:

approximately

$1.9 million increase in compensation related costs principally as a result of an increase

in headcount;

$2.1 million increase in compensation related costs principally as a result of an increase in headcount, including stock-based compensation;

approximately

1 unchanged sentence

and administrative expenses

the six months ended June 30, 2023, general and administrative costs were approximately $10.3 million as compared to $12.6 million

the nine months ended September 30, 2023, general and administrative costs were approximately $15.0 million as compared to $18.5 million

for the corresponding period in the prior year.

1 unchanged sentence

approximately

$1.8 million increase related to the amended MSA with PAVmed due to the growth

and expansion of our business and the services incurred through PAVmed;

$5.5 million decrease in stock-based compensation;

approximately

$3.1 million decrease in stock-based compensation from RSA and stock option grants to Lucid

employees and non-employees;

$2.6 million increase related to the amended MSA with PAVmed due to the growth and expansion of our business and the services incurred

through PAVmed;

approximately

$1.0 million decrease related to the termination of the MSA-RDx and lower general business expenses primarily related to reduced

insurance premiums and reduced third-party consulting fees and professional recruiting services.

of Operations - continued

months ended June 30, 2023 as compared to six months ended June 30, 2022 - continued

$0.6 million decrease related to outside professional services and facility related costs.

and development expenses

the six months ended June 30, 2023, research and development costs were approximately $4.1 million, compared to $6.3 million for

the nine months ended September 30, 2023, research and development costs were approximately $5.3 million, compared to $8.8 million for

the corresponding period in the prior year.

1 unchanged sentence

approximately

$2.9 million decrease in development costs, particularly in clinical trial activities and

outside professional and consulting fees with respect to EsoCure;

$4.8 million decrease in development costs, particularly in clinical trial activities and outside professional and consulting fees

with respect to EsoCure;

approximately

$0.5 million increase related to the amended MSA with PAVmed due to the

growth and expansion of our business and the services incurred through PAVmed;

$0.6 million increase related to the amended MSA with PAVmed due to the growth and expansion of our business and the services incurred

through PAVmed;

approximately

$0.2 million increase in compensation related costs.

$0.7 million increase in compensation related costs, including stock-based compensation.

of Acquired Intangible Assets

amortization of acquired intangible assets remained relatively level in the six months ended June 30, 2023, as compared to the

corresponding period in the prior year.

amortization of acquired intangible assets increased to $1.5 million in the nine months ended September 30, 2023, as compared to $1.1

million in the corresponding period in the prior year.

The increase of $0.4 million in the current period was due to the timing

of the acquired intangible assets in 2022.

Income and Expense

in fair value of convertible debt

the six months ended June 30, 2023, the change in the fair value of our convertible note was approximately $0.5 million of

expense, related to the March 2023 Senior Convertible Note.

The March 2023 Convertible Note was initially measured at its issue date

estimated fair value and subsequently remeasured at estimated fair value as of the reporting period date.

The Company initially

recognized a $0.8 million fair value non-cash expense on the issue date.

the nine months ended September 30, 2023, the change in the fair value of our convertible note was approximately $3.5 million of expense,

related to the March 2023 Note.

The March 2023 Note was initially measured at its issue date estimated fair value and subsequently remeasured

at estimated fair value as of each reporting period date.

The Company initially recognized a $0.8 million fair value non-cash expense

on the issue date.

on Issue and Offering Costs - Senior Secured Convertible Note

the six months ended June 30, 2023, in connection with the issue of the March 2023 Senior Convertible Note, we recognized a total

of approximately $1.2 million of lender fee and offering costs paid by us.

the nine months ended September 30, 2023, in connection with the issue of the March 2023 Note, we recognized a total of approximately

$1.2 million of lender fee and offering costs paid by us.

of Operations - continued

nine months ended September 30, 2023 as compared to nine months ended September 30, 2022 - continued

Note 11 , Debt, to our accompanying unaudited condensed consolidated financial statements, for additional information with respect

to the March 2023 Senior Convertible Note.

to the March 2023 Note.

and Capital Resources

11 unchanged sentences

intends to pursue development of other products and services, including EsoCure, an Esophageal Ablation Device.

ability to generate revenue depends upon our ability to successfully advance the commercialization of EsoGuard, including

significantly expanding insurance reimbursement coverage, while also completing the clinical studies, product and service

development, and necessary regulatory approval thereof.

There are no assurances, however, we will be able to obtain an adequate

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

are 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

conducting clinical trials.

We experienced a net loss of approximately $27.6 million and used approximately $14.1 million of cash in

operations for the six months ended June 30, 2023.

Financing activities provided $24.2 million of cash during the six months ended

June 30, 2023.

We ended the quarter with cash on-hand of $32.6 million as of June 30, 2023.

We expect to continue to experience

recurring losses and negative cash flow from operations and will continue to fund our operations with debt and equity financing transactions.

Notwithstanding, however, with our cash on-hand as of the date hereof and the committed equity sources of financing described below,

the Company expects to be able to fund its operations and meet its financial obligations as they become due for the one year period from

the date of the issue of the Company’s unaudited condensed consolidated financial statements, as included herein in this Form 10-Q.

ability to generate revenue depends upon our ability to successfully advance the commercialization of EsoGuard, including significantly

expanding insurance reimbursement coverage, while also completing the clinical studies, product and service development, and necessary

regulatory approval thereof.

There are no assurances, however, we will be able to obtain an adequate level of financial resources required

for the long-term commercialization and development of our products and services.

are 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 conducting clinical trials.

We experienced a net loss of approximately $41.8 million and used

approximately $22.8 million of cash in operations for the nine months ended September 30, 2023.

Financing activities provided $24.5

million of cash during the nine months ended September 30, 2023.

We ended the quarter with cash on-hand of $24.1 million as of

September 30, 2023.

We expect to continue to experience recurring losses and negative cash flow from operations and will continue to

fund our operations with debt and equity financing transactions including current obligations on our existing convertible debt which in accordance with management’s plans

may include conversions to equity and refinancing our existing debt obligations to extend the maturity date.

Notwithstanding, however, with our cash on-hand as of the date

hereof and the committed equity sources of financing, described below, and conversion and refinancing of existing convertible notes, the Company expects to be able to fund its operations and meet

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

condensed consolidated financial statements, as included herein in this Form 10-Q.

A Preferred Stock Offering

March 7, 2023, we entered into subscription agreements for the sale of 13,625 shares of 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.

The Series A Preferred Stock is convertible into shares

of our common stock at any time at the option of the holder from and after the six-month anniversary of its issuance (or, if later, the effective date of an increase in our authorized share capital or the effective date of a registration

statement covering the resale of the underlying shares), and automatically

converts into shares of our common stock on the second anniversary of its issuance.

The terms of the Series A Preferred Stock also include

a 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 each of 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.

March 7, 2023, we sold 13,625 shares of Series A Preferred Stock, solely to accredited investors.

Each share of the Series A Preferred

Stock has a stated value of $1,000 and a conversion price of $1.394.

The Series A Preferred Stock is convertible into shares of our common

stock at any time at the option of the holder from and after the six-month anniversary of its issuance (or, if later, the effective date

of a registration statement covering the resale of the underlying shares), and automatically converts into shares of our common stock

on the second anniversary of its issuance.

The terms of the Series A Preferred Stock also include a 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 each of

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.

A-1 Preferred Stock Offering

October 17, 2023, we sold 5,000 shares of Series A-1 Preferred Stock, solely to accredited investors.

The terms of the Series A-1 Preferred

Stock are substantially identical to the terms of the Series A Preferred Stock, except that the Series A-1 Preferred Stock has a conversion

price of $1.2592.

The aggregate gross proceeds from the sale of shares in such offering were $5.0 million.

Placement - Securities Purchase Agreement

as of March 13, 2023, we entered into the SPA with an accredited institutional investor, pursuant to which we agreed to sell, and the investor agreed to purchase the March 2023 Senior

Secured Convertible Note with a face value principal of $11.1 million.

the March 2023 Senior Convertible Note on March 21, 2023 pursuant to the SPA.

The March 2023 Senior Convertible Note proceeds were

$9.925 million after deducting a $1.186 million lender fee and offering costs.