What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-12 · 250 added, 180 removed, 342 unchanged (56% of the section changed)

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

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

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

joint ventures or investments we may make.

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or otherwise, except as required by applicable law.

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”).

are a commercial-stage, cancer prevention 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

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

Analytical validation tests of EsoGuard demonstrated

approximately 97% analytical sensitivity, 95% analytical specificity, approximately 98% analytical accuracy, and 100% inter-assay and

intra-assay precision.

Two independent clinical validation case control studies funded by the National Institute of Health were

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

analysis of both studies demonstrated 84% sensitivity (95% confidence interval (“CI”) 76-90%), for detection of BE, and 86%

specificity (95% CI 81-91%).

Positive predictive value (“ PPV”) and negative predictive

value (“NPV”) were calculated using a BE prevalence of 10.6% published in a meta-analysis of U.S patients with gastroesophageal

reflux disease (“GERD”).

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

The assay has been evaluated in multiple studies,

demonstrating sensitivity of ~90% for detecting disease along the full esophageal precancer to cancer spectrum, with a negative predictive

value (NPV) of ~99%.

Sensitivity and NPV remain very high even for detecting early precancer, which is unprecedented for a molecular

diagnostic test .

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

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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 GERD, commonly known as chronic heartburn, acid reflux, or just reflux.

dysplastic BE and related precursors to EAC in patients with gastroesophageal reflux disease (“GERD”), commonly known as chronic heartburn, acid reflux, or just reflux.

American Journal of Gastroenterology Publication

On November 7, 2024, the Company

announced that its manuscript for its multi-center ESOGUARD BE-1 study has been accepted for publication in The American Journal of Gastroenterology,

the official journal of the American College of Gastroenterology (ACG).

This is the fourth publication presenting clinical validation

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

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

(Barrett’s Esophagus or BE).

With the acceptance for publication, the Company believes we now have a complete clinical evidence package

to submit our data to the MolDX program and formally seek Medicare coverage.

The prospective, multi-center study

presented data from a cohort of patients who met ACG guideline criteria for esophageal precancer screening and underwent non-endoscopic

EsoGuard testing followed by traditional upper endoscopy.

EsoGuard sensitivity and negative predictive value for detecting BE were approximately

88% and 99%, respectively.

Specificity and positive predictive value were approximately 81% and 30%, respectively.

No serious adverse

events were reported.

Agreements with PAVmed

August 6, 2024, PAVmed and the Company entered into a ninth amendment to the management services agreement between PAVmed and Lucid

(“MSA”) to increase the monthly fee thereunder from $0.83 million per month to $1.05 million per month, effective as of July

August 6, 2024, PAVmed and the Company entered into a ninth amendment to the management services agreement between PAVmed and Lucid (“MSA”)

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

March 22, 2024, PAVmed and the Company entered into an eighth amendment to the MSA to increase the monthly fee thereunder from $0.75

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of Dennis Matheis to Board of Directors

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

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

held on July 23, 2024).

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

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

shareholders meeting held on July 23, 2024).

In connection with his joining the board, Mr.

Matheis received a grant of an option to acquire 241,500 shares

of the Company’s common stock pursuant to the Company’s Amended and Restated 2018 Long-Term Incentive Equity Plan in accordance

with the Company’s existing compensation policy for non-employee directors.

Matheis received a grant of an option to

acquire 241,500 shares of the Company’s common stock pursuant to the Company’s Amended and Restated 2018 Long-Term

Incentive Equity Plan in accordance with the Company’s existing compensation policy for non-employee directors.

Developments - continued

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July 23, 2024, the Company filed an amendment to its Certificate of Incorporation to effectuate an increase in its authorized shares

from 200,000,000 to 300,000,000, in accordance with the shareholder approval of the same.

Such approval was granted at the annual meeting

from 200,000,000 to 300,000,000.

Such increase was approved at the annual meeting

of the Company’s stockholders held the same day.

Lucid IP Matters

On October 15, 2024, the Company

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

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

of its EsoGuard® Esophageal DNA Test.

EsoGuard utilizes next-generation

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

Such methylation has been shown

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

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

Although VIM methylation had been previously associated with

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

2023 Senior Convertible Note Refinancing

November 8, 2024, the Company gave notice to the holder of the March 2023 Senior Convertible Note that it was exercising its right pursuant

to such note to redeem the same for the redemption price specified in such note (the “Optional Redemption Price”).

to the terms of the March 2023 Senior Convertible Note, the Company has not less than ten business days, and not more than twenty business

days, from the date of the notice (the “Optional Redemption Notice Period”) to pay the Optional Redemption Price.

finance the payment of the Optional Redemption Price, the Company has entered into a securities purchase agreement with certain accredited

investors (the “2024 Note Investors”).

Under the agreement, subject to customary closing conditions, the Company has agreed

to issue, and each 2024 Note Investor has agreed to purchase, 12.0% senior secured convertible notes due 2029 (collectively, the “November

2024 Senior Convertible Notes”).

As of the date hereof, the aggregate commitments of the 2024 Note Investors exceed the Optional

Redemption Price.

Company expects to complete the issuance of the November 2024 Senior Convertible Notes and the redemption of the March 2023 Senior Convertible Note on or prior

to the end of the

Optional Redemption Notice Period, although there can be no assurance that such issuance and redemption will be completed

during such period, if at all.

B and Series B-1 Preferred Stock Offerings

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aggregate gross proceeds from the issuances of the Series B Preferred Stock and Series B-1 Preferred Stock were approximately $29.8 million.

As a result, the Company has concluded its Board-approved offering of $30 million of preferred stock.

of Operations

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to costs being incurred in one period that relate to revenues recognized in a later period.

expect that gross margin for our services will continue to fluctuate and be affected by EsoGuard test volume, our operating efficiencies,

expect that the gross margin for our services will continue to fluctuate and be affected by EsoGuard test volume, our operating efficiencies,

patient compliance rates, payer mix, the levels of reimbursement, and payment patterns of payers and patients.

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of laboratory supplies and acquiring, developing, and manufacturing preclinical prototypes;

Fee allocated to research and development.

portion of the MSA Fee allocated to research and development.

plan to incur research and development expenses for the foreseeable future as we continue the development of our existing products as

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of Operations - continued

three months ended June 30, 2024 as compared to three months ended June 30, 2023

the three months ended June 30, 2024, revenue was $1.0 million as compared to $0.2 million for the corresponding period in the prior

The $0.8 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 June 30, 2024, cost of revenue were approximately $1.6 million as compared to $1.5 million for the corresponding

three months ended September 30, 2024 as compared to the three months ended September 30, 2023

the three months ended September 30, 2024, revenue was $1.2 million as compared to $0.8 million for the corresponding period in the prior

The $0.4 million increase principally relates to the increase in volume of our EsoGuard Esophageal DNA Tests performed in our CLIA laboratory for the period and the consideration received for the performance of the EsoGuard Esophageal DNA Tests.

the three months ended September 30, 2024, the cost of revenue was approximately $1.7 million as compared to $1.6 million for the corresponding

period in the prior year.

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● approximately

$0.1 million increase in the CLIA laboratory supplies required to perform the EsoGuard Esophageal

DNA tests and royalty costs.

$0.2 million decrease in manufacturing costs associated with the EsoCheck devices and EsoGuard

Esophageal DNA Tests;

● approximately

$0.2 million increase in third party professional and IT related expenses;

● approximately

$0.1 million increase in compensation and stock-based compensation costs.

and marketing expenses

the three months ended June 30, 2024, sales and marketing costs were approximately $4.2 million as compared to $4.0 million for the corresponding

period in the prior year.

the three months ended September 30, 2024, sales and marketing costs were approximately $4.1 million as compared to $3.8 million for

the corresponding period in the prior year.

The net increase of $0.3 million was principally related to:

● approximately

$0.2 million increase in compensation related costs.

$0.3 million increase in compensation and stock-based compensation costs.

and administrative expenses

the three months ended June 30, 2024, general and administrative costs were approximately $4.9 million as compared to $3.8 million for

the corresponding period in the prior year.

the three months ended September 30, 2024, general and administrative costs were approximately $5.4 million as compared to $4.3 million

for the corresponding period in the prior year.

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

● approximately

$0.7 million increase in third-party professional services related to investor relations

and legal services;

● approximately

$0.6 million increase related to the amended MSA with PAVmed due to the growth and expansion

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● approximately

$0.3 million increase related to compensation related costs;

$0.4 million increase in compensation related costs;

● approximately

$0.2 million decrease in stock-based compensation from RSA and stock option grants to Lucid

employees and non-employees.

$0.1 million increase in third-party professional services related to investor relations

and other third-party professional services.

and development expenses

the three months ended June 30, 2024, research and development costs were approximately $1.4 million, compared to $1.8 million for the

corresponding period in the prior year.

The net decrease of $0.4 million was principally related to:

the three months ended September 30, 2024, research and development costs were approximately $1.7 million, compared to $1.6 million for

the corresponding period in the prior year.

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

● approximately

$0.4 million decrease in development costs, particularly in clinical trial activities and

$0.1 million increase in development costs, particularly in clinical trial activities and

outside professional and consulting fees.

of Acquired Intangible Assets

amortization of acquired intangible assets was approximately $0.1 million in the three months ended June 30, 2024, as compared to $0.5

amortization of acquired intangible assets was approximately $0.1 million in the three months ended September 30, 2024, as compared to

$0.5 million for the corresponding period in the prior year.

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in fair value of convertible debt

the three months ended June 30, 2024, the change in the fair value of our convertible note was approximately $0.6 million of income,

the three months ended September 30, 2024, the change in the fair value of our convertible note was approximately $0.3 million of expense,

related to the March 2023 Senior Convertible Note (as defined in Note 10, Debt , to our accompanying unaudited condensed consolidated

financial statements).

The March 2023 Senior Convertible 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.

The March 2023 Senior Convertible 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.

of Operations - continued

three months ended June 30, 2024 as compared to three months ended June 30, 2023 - continued

three months ended September 30, 2024 as compared to three months ended September 30, 2023 - continued

on Debt Extinguishment

the three months ended June 30, 2024, a debt extinguishment loss in the aggregate of approximately $0.5 million was recognized in connection

with our March 2023 Senior Convertible Note as discussed below.

the three months ended June 30, 2024, approximately $1.1 million of principal repayments

the three months ended September 30, 2024, a debt extinguishment loss in the aggregate of approximately $0.4 million was recognized in

connection with our March 2023 Senior Convertible Note as discussed below.

the three months ended September 30, 2024, approximately $1.1 million of principal repayments

along with approximately $0.2 million of interest expense thereon, were settled through the

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The conversions

resulted in a debt extinguishment loss of $0.5 million in the three months ended June 30,

The Company did not incur debt extinguishment loss in the three months ended June 30,

resulted in a debt extinguishment loss of $0.4 million in the three months ended September

The Company incurred less than $0.1 million of debt extinguishment losses in the

three months ended September 30, 2023.

Note 10 , Debt , to our accompanying unaudited condensed consolidated financial statements, for additional information with respect

to the March 2023 Senior Convertible Note.

six months ended June 30, 2024 as compared to six months ended June 30, 2023

the six months ended June 30, 2024, revenue was $2.0 million as compared to $0.6 million for the corresponding period in the prior year.

The $1.4 million increase principally relates to the revenue for our EsoGuard Esophageal DNA Test performed in our own CLIA laboratory

nine months ended September 30, 2024 as compared to nine months ended September 30, 2023

the nine months ended September 30, 2024, revenue was $3.1 million as compared to $1.4 million for the corresponding period in the prior

The $1.7 million increase principally relates to the revenue for our EsoGuard Esophageal DNA Test performed in our CLIA laboratory

for the period and the consideration received for the performance of the EsoGuard Esophageal DNA Test.

the six months ended June 30, 2024, cost of revenue was approximately $3.3 million as compared to $2.9 million for the corresponding

the nine months ended September 30, 2024, the cost of revenue was approximately $5.0 million as compared to $4.5 million for the corresponding

period in the prior year.

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● approximately

$0.2 million increase in the CLIA laboratory supplies required to perform the EsoGuard Esophageal

DNA tests and royalty costs;

$0.3 million decrease in manufacturing costs associated with the EsoCheck devices and EsoGuard

Esophageal DNA Tests;

● approximately

$0.3 million increase in compensation related costs, including stock-based compensation;

● approximately

$0.3 million increase in third party professional fees and IT services;

● approximately

$0.2 million increase in the CLIA laboratory supplies required to perform the EsoGuard Esophageal

DNA tests and in royalty costs for the test.

and marketing expenses

the six months ended June 30, 2024, sales and marketing costs were approximately $8.4 million as compared to $8.2 million for the corresponding

period in the prior year.

the nine months ended September 30, 2024, sales and marketing costs were approximately $12.5 million as compared to $12.0 million for

the corresponding period in the prior year.

The net increase of $0.5 million was principally related to:

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headcount and bonus structure and travel expenses;

● approximately

$0.1 million increase related to the amended MSA with PAVmed due to the growth and expansion

of our business and the services incurred through PAVmed.

and administrative expenses

the six months ended June 30, 2024, general and administrative costs were approximately $8.9 million as compared to $10.7 million for

the corresponding period in the prior year.

the nine months ended September 30, 2024, general and administrative costs were approximately $14.3 million as compared to $15.0 million

for the corresponding period in the prior year.

The net decrease of $0.7 million was principally related to:

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● approximately

$0.3 million increase in third-party professional fees and expenses related to investor relations

services and consulting fees.

$0.9 million increase in compensation costs;

● approximately

$0.1 million decrease in third-party professional fees, expenses related to the termination

of the management services agreement with our former laboratory provider, and expenses for finance and legal services.

and development expenses

the six months ended June 30, 2024, research and development costs were approximately $2.9 million, compared to $3.7 million for the

corresponding period in the prior year.

the nine months ended September 30, 2024, research and development costs were approximately $4.5 million, compared to $5.3 million for

the corresponding period in the prior year.

The net decrease of $0.8 million was principally related to:

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outside professional and consulting fees.

● approximately

$0.1 million increase in stock-based compensation.

of Operations - continued

nine months ended September 30, 2024 as compared to nine months ended September 30, 2023 - continued

of Acquired Intangible Assets

amortization of acquired intangible assets was approximately $0.5 million in the six months ended June 30, 2024, as compared to $1.0

amortization of acquired intangible assets was approximately $0.6 million in the nine months ended September 30, 2024, as compared to

$1.5 million for the corresponding period in the prior year.

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intangible assets being fully amortized in February 2024.

of Operations - continued

six months ended June 30, 2024 as compared to six months ended June 30, 2023 - continued

Income and Expense

in fair value of convertible debt

the six months ended June 30, 2024, the change in the fair value of our convertible note was approximately $0.9 million of income, related

to the March 2023 Senior Convertible Note (as defined in Note 10 , Debt , to our accompanying unaudited condensed consolidated financial

The March 2023 Senior Convertible 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 remeasurement as

a non-cash expense on the issue date.

the nine months ended September 30, 2024, the change in the fair value of our convertible note was approximately $0.6 million of income,

related to the March 2023 Senior Convertible Note (as defined in Note 10 , Debt , to our accompanying unaudited condensed consolidated

financial statements).

The March 2023 Senior Convertible 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 remeasurement

as a 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 Company did not incur lender fees and offering costs in the

six months ended June 30, 2024 .

the nine months ended September 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 Company did not incur lender fees and offering costs in

the nine months ended September 30, 2024 .

on Debt Extinguishment

the six months ended June 30, 2024, a debt extinguishment loss in the aggregate of approximately $0.7 million was recognized in connection

with our March 2023 Senior Convertible Note as discussed below.

the six months ended June 30, 2024, approximately $1.2 million of principal repayments along

with approximately $0.7 million of interest expense thereon, were settled through the issuance

of 2,661,181 shares of common stock of the Company, with such shares having a fair value

of approximately $2.5 million (with such fair value measured as the quoted closing price

of the common stock of the Company on the respective conversion date).

The conversions resulted

in a debt extinguishment loss of $0.7 million in the six months ended June 30, 2024.

Company did not incur debt extinguishment loss in the six months ended June 30, 2023.

the nine months ended September 30, 2024, a debt extinguishment loss in the aggregate of approximately $1.1 million was recognized in

connection with our March 2023 Senior Convertible Note as discussed below.

the nine months ended September 30, 2024, approximately $2.4 million of principal repayments

along with approximately $0.8 million of interest expense thereon, were settled through the

issuance of 4,777,898 shares of common stock of the Company, with such shares having a fair

value of approximately $4.3 million (with such fair value measured as the quoted closing

price of the common stock of the Company on the respective conversion date).

The conversions

resulted in a debt extinguishment loss of $1.1 million in the nine months ended September

The Company incurred less than $0.1 million of debt extinguishment losses in the

nine months ended September 30, 2023.

Note 10 , Debt , to our accompanying unaudited condensed consolidated financial statements, for additional information with respect

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fair value of the consideration given in the form of the issue of 31,790 shares of Series B Convertible Preferred Stock, with such fair

value recognized as the carrying value of such issued shares of Series B Convertible Preferred Stock, as compared to both the newly issued

Series B Convertible Preferred Stock (fair value of $12.5 million) and the carrying value of the extinguished Series A and Series A-1

value recognized as the carrying value of such issued shares of Series B Convertible Preferred Stock, as compared to the carrying value of the extinguished Series A and Series A-1

Convertible Preferred Stock (carrying value of $24.3 million), resulting in an excess of fair value of $7.5 million recognized as a deemed

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included as a component of net loss attributable to common stockholders, summarized as follows:

B Convertible Preferred Stock Issuance and Series A/A-1 Exchange Offer

Value - 44,285 shares of Series B Preferred Stock issued

Fair value related to newly issued Series B Preferred Stock (of 12,495 shares)

Series B Convertible Preferred Stock Issuance and Series A/A-1 Exchange Offer

March 13, 2024

Fair Value - 31,790 shares of Series B Preferred Stock issued in exchange for Series A and Series A-1 Preferred Stock

Carrying value related to Series A and Series A-1 Preferred Stock Exchanged for Series B Preferred Stock (of 24,295 shares)

Dividend Charged to Accumulated Deficit

Deemed Dividend Charged to Accumulated Deficit

and Capital Resources

current operational activities are principally focused on the commercialization of EsoGuard.

We are pursuing commercialization across

multiple sales channels, including:

the communication to and education of medical practitioners and clinicians regarding EsoGuard;

establishment of Lucid Test Centers for the collection of cell samples using EsoCheck;

We are pursuing commercialization

across multiple sales channels, including:

the communication to and education of medical practitioners and clinicians regarding

the establishment of Lucid Test Centers for the collection of cell samples using EsoCheck;

use of our mobile testing unit;

ongoing #CheckYourFoodTube

testing days;

and our direct contracting strategic initiative.

Additionally, we are developing expanded clinical evidence to support

insurance reimbursement adoption by government and private insurers.

Further, as resources permit, the Company also intends to pursue

development of other products and services.

ongoing #CheckYourFoodTube testing days;

and our direct contracting strategic initiative (including in the concierge medicine and employer markets sectors).

Additionally, we are developing expanded

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

Further, as resources permit, the

Company also intends to pursue development of other products and services.

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

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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 $21.6 million and used approximately $24.1 million of cash in

operations during the six month period ended June 30, 2024.

Financing activities provided $30.2 million of cash during the six month

period ended June 30, 2024.

We ended the quarter with cash on-hand of $24.9 million as of June 30, 2024.

We expect to continue to experience

recurring losses and negative cash flow from operations, and will continue to fund our operations with debt and/or 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.

The Company’s ability to continue operations

12 months beyond the issuance of the financial statements will depend upon generating substantial revenue that is conditioned on obtaining

positive third-party reimbursement coverage for its EsoGuard Esophageal DNA Test from both government and private health insurance providers,

increasing revenue through contracting directly with self-insured employers, and on raising additional capital through various potential

sources including equity and/or debt financings or refinancing existing debt obligations.

These factors raise substantial doubt about

the Company’s ability to continue as a going concern within one year after the date the accompanying unaudited condensed consolidated

financial statements are issued.

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 products and services, to ongoing research and

development activities, and to conducting clinical trials.

We experienced a net loss of approximately $34.0 million and used

approximately $34.3 million of cash in operations during the nine month period ended September 30, 2024.

Financing activities

provided $30.2 million of cash during the nine month period ended September 30, 2024.

We ended the quarter with cash on-hand of

$14.5 million as of September 30, 2024.

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

and will continue to fund our operations with debt and/or equity financing transactions, which in accordance with management’s

plans may include conversions of our existing debt to equity and refinancing our existing debt obligations to extend the maturity

The Company’s ability to continue operations 12 months beyond the issuance of the financial statements will depend upon

generating substantial revenue that is conditioned on obtaining positive third-party reimbursement coverage for its EsoGuard

Esophageal DNA Test from both government and private health insurance providers, increasing revenue through contracting directly

with self-insured employers, and upon raising additional capital through various potential sources including equity and/or debt

financings or refinancing existing debt obligations.

These factors raise substantial doubt about the Company’s ability to

continue as a going concern within one year after the date the accompanying unaudited condensed consolidated financial statements

Stock Offerings

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Placement - Securities Purchase Agreement

as of March 13, 2023, we entered into a Securities Purchase Agreement (the “SPA”) with an accredited institutional investor, pursuant to which we agreed to sell, and the

investor agreed to purchase the March 2023 Senior Convertible Note with a face value principal of $11.1 million.

We issued 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.

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

investor, pursuant to which we agreed to sell, and the investor agreed to purchase the March 2023 Senior Convertible Note with a

face value principal of $11.1 million.

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

The March 2023 Senior Convertible Note proceeds were $9.925 million after deducting a $1.186 million lender fee and offering

and Capital Resources - continued

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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 the Company’s available cash shall 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, shall not exceed 30%, and (iii) the Company’s market capitalization shall at no time be less than

$30 million (the “Financial Tests”).

As of June 30, 2024, the Company was in compliance, and as of the date hereof, the Company

is in compliance, with the Financial Tests.

the six month period ended June 30, 2024, approximately $1.2 million of principal repayments along with approximately $0.7 million of

interest expense thereon, were settled through the issuance of 2,661,181 shares of common stock of the Company, with such shares having

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 the Company’s available cash shall equal or exceed $5.0 million at all

times, (ii) the ratio of (a) the outstanding principal amount of the notes issued under the Note 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, shall not exceed 30%, and (iii) the Company’s

market capitalization shall at no time be less than $30 million (the “Financial Tests”).

As of September 30, 2024, the

Company was in compliance, and as of the date hereof, the Company is in compliance, with the Financial Tests.

the nine month period ended September 30, 2024, approximately $2.4 million of principal repayments along with approximately $0.8 million

of interest expense thereon, were settled through the issuance of 4,777,898 shares of common stock of the Company, with such shares having

a fair value of approximately $4.3 million (with such fair value measured as the respective conversion date quoted closing price of the

common stock of the Company).

March 2023 Senior Convertible Note Refinancing

On November 8, 2024, the

Company gave notice to the holder of the March 2023 Senior Convertible Note that it was exercising its right pursuant to such note

to redeem the same for the Optional Redemption Price specified in such note.

Pursuant to the terms of the March 2023 Senior

Convertible Note, the Company has not less than ten business days, and not more than twenty business days, from the date of the

notice (which we sometimes refer to as the “Optional Redemption Notice Period”) to pay the Optional Redemption

To finance the payment of

the Optional Redemption Price, the Company has entered into a securities purchase agreement with the 2024 Note Investors.

agreement, subject to customary closing conditions, the Company has agreed to issue, and each 2024 Note Investor has agreed to

purchase, the November 2024 Senior Convertible Notes, which are 12.0% senior secured convertible notes due 2029.

As of the date hereof, the aggregate commitments of the 2024 Note Investors

exceed the Lucid Optional Redemption Price.

The Company expects to complete

the issuance of the November 2024 Senior Convertible Notes and the redemption of the March 2023 Senior Convertible Note on or prior to

the end of the Optional Redemption Notice Period, although there can be no assurance that such issuance and redemption will be completed

during such period, if at all

Liquidity and Capital Resources - continued

The Company expects to complete

the issuance of the November 2024 Senior Convertible Notes and the redemption of the March 2023 Senior Convertible Note on or prior to

the end of the Optional Redemption Notice Period, although there can be no assurance that such issuance and redemption will be completed

during such period, if at all.

Equity Facility and ATM Facility

6 unchanged sentences

Cumulatively, a total of 680,263

shares of common stock of the Company were issued for net proceeds of approximately $1.8 million, after a 4% discount, as of June 30,

shares of common stock of the Company have been issued through our committed equity facility for net proceeds of approximately $1.8 million, after a 4% discount, as of September

November 2022, Lucid Diagnostics also entered into an “at-the-market offering” for up to $6.5 million of its common stock

1 unchanged sentence

Cumulatively, a total

of 230,068 shares of the Company were issued through our at-the-market equity facility for net proceeds of approximately $0.3 million,

after payment of 3% commissions, as of June 30, 2024.

of 230,068 shares of the Company have been issued through our at-the-market equity facility for net proceeds of approximately $0.3 million,

after payment of 3% commissions, as of September 30, 2024.

Agreements with PAVmed

our inception in May 2018 through our initial public offering in October 2021, our operations were funded by PAVmed providing working capital cash advances

and by PAVmed paying certain operating expenses on our behalf.

Additionally, our daily operations have been and continue to be conducted

in part by personnel employed by PAVmed, for which we incur an MSA Fee expense.

The MSA 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 Company and PAVmed boards of directors.

In this regard, in January 2024, the respective companies’

boards of directors approved an eighth amendment to the MSA to increase the MSA Fee to $0.83 million per month, effective January 1,

The eighth amendment to the MSA was executed on March 22, 2024.

Pursuant to the MSA, as amended by the eighth amendment, the parties

agreed PAVmed may elect to receive payment of the monthly MSA Fee in cash or in shares of our common stock, 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 be entitled to receive under the MSA, as amended, from and after the date

of the eighth amendment to the MSA, more than 9,644,135 shares of our common stock (representing 19.99% of our outstanding shares of

common stock as of immediately prior to the execution of the eighth amendment).

to June 30, 2024, in August 2024, the respective companies’ boards of directors approved the Company to enter into a ninth amendment

Under this amendment, the monthly fee due from the Company to PAVmed was increased from $0.83 million to $1.05 million, effective July 1,

of June 30, 2024, we had a Due To:

our inception in May 2018 through our initial public offering in October 2021, our operations were funded by PAVmed providing

working capital cash advances and by PAVmed paying certain operating expenses on our behalf.

Additionally, our daily operations have

been and continue to be conducted in part by personnel employed by PAVmed, for which we incur an MSA Fee expense.

The MSA 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 Company and PAVmed boards of

In March 2024, PAVmed and the Company were authorized by their respective boards of directors to enter, and they did

enter, into a eighth amendment to the MSA.

Under this amendment, the monthly fee due from the Company to PAVmed was increased from

$750 to $833, effective Janaury 1, 2024.

In August 2024, PAVmed and the Company were authorized by their respective boards of

directors to enter, and they did enter, into a ninth amendment to the MSA.

Under this amendment, the monthly fee due from the

Company to PAVmed was increased from $833 to $1,050, effective July 1, 2024.

to the MSA, as amended, PAVmed may elect to receive payment of the monthly MSA Fee in cash or in shares of our common stock,

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 be entitled to receive under the

MSA, as amended, from and after the date of the eighth amendment to the MSA, more than 9,644,135 shares of our common stock

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

of September 30, 2024, we had a Due To:

payment obligation liability of approximately $0.1 million, which liability is primarily

21 unchanged sentences

There have been no material changes to our critical accounting

policies and estimates in the six months ended June 30, 2024.

policies and estimates in the nine months ended September 30, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis