What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-13 · 208 added, 235 removed, 199 unchanged (69% of the section changed)

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Quarterly Report on Form 10-Q (this “Form 10-Q”), including the discussion and analysis of our unaudited condensed consolidated

financial condition and results of operations, contains forward-looking statements that involve

substantial risks and uncertainties.

All statements, other than statements of historical facts, contained in this Form 10-Q, including

statements regarding our future results of operations and financial position, business strategy and plans and objectives of management

for future operations, are forward-looking statements.

The words “may,” “will,” “should,” “expects,”

“plans,” “anticipates,” “could,” “intends,” “target,” “projects,”

“contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue”

or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking

statements contain these identifying words.

Forward-looking statements are not guarantees of future performance and the Company’s

actual results may differ 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.”

financial condition and results of operations, contains forward-looking statements that involve substantial risks and uncertainties.

All statements, other than statements of historical facts, contained in this Form 10-Q, including statements regarding our future results

of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking

The words “may,” “will,” “should,” “expects,” “plans,” “anticipates,”

“could,” “intends,” “target,” “projects,” “contemplates,” “believes,”

“estimates,” “predicts,” “potential” or “continue” or the negative of these terms or

other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these

identifying words.

Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ

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 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;

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

ability of our products to achieve market acceptance;

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

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

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 financing.

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,

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may not actually achieve the results, plans and/or objectives disclosed in our forward-looking statements, and the intended or

expected developments and/or other events disclosed in our forward-looking statements may not actually occur, and accordingly you

should not place undue reliance on our forward-looking statements.

You should read this Quarterly Report on Form 10-Q and the

documents we have filed as exhibits to this Form 10-Q and the Form 10-K completely and with the understanding our actual future

results may be materially different from what we expect.

We do not assume any obligation to update any forward-looking statements,

whether as a result of new information, future events or otherwise, except as required by applicable law.

expected results, developments and/or other events disclosed in our forward-looking statements may not actually occur, and

accordingly you should not place undue reliance on our forward-looking statements.

You should read this Quarterly Report on Form

10-Q and the documents we have filed as exhibits to this Form 10-Q and the Form 10-K completely and with the understanding our

actual future results may be materially different from what we expect.

We do not assume any obligation to update any forward-looking

statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

are a commercial-stage, cancer prevention medical diagnostics technology company focused on the millions of patients who are at risk

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diagnostic test .

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

in a less than five-minute office procedure.

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

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

When vacuum suction is applied,

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

region during device 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.

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 two 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.

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

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

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chronic heartburn, acid reflux, or just reflux.

2025 Confidentially Marketed Public Offering

April 11, 2025, the Company closed on the sale of 14,375,000 shares of its common stock at a price of $1.20 per share (the

“April 2025 Offering”).

The net proceeds of the April 2025 Offering, after deducting the estimated placement

agent’s fees and other expenses of $1.2 million, was approximately $16.1 million.

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

March 2025 Registered Direct Offering

On March 5, 2025, the Company closed on the sale of 13,939,331 shares of its common stock at a price of $1.10

per share (the “Offering”).

The net proceeds

of the Offering, after deducting the estimated placement agent’s fees and other expenses of $0.4 million, was approximately

$14.9 million.

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

corporate purposes.

November 2024, we submitted to MolDx our complete clinical evidence package in support of a request for reconsideration of the non-coverage

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the LCD to secure Medicare coverage for EsoGuard.

part of the LCD reconsideration process, MolDX-participating Medicare Administrative Contractors are scheduled to convene a Contractor

Advisory Committee (CAC) Meeting regarding the LCD on September 4, 2025.

Study Publications

In April 2025, the Company’s

fifth peer-reviewed clinical utility manuscript, “ Enhancing the Diagnostic Yield of EGD for Diagnosis of Barrett’s Esophagus

Through Methylated DNA Biomarker Triage ,” was published in Gastroenterology & Hepatology .

This manuscript presents

clinical utility data from the ENVET-BE study, which is the second to assess the clinical utility of EsoGuard in a real-world screening

The ENVET-BE study analyzed 209 EsoGuard-positive patients who underwent biomarker triage and confirmatory EGD in the 2023

calendar year, to test the hypothesis that EGDs performed on patients who first triage positive on EsoGuard have higher diagnostic yield

than screening EGDs alone.

The yield of screening EGDs was estimated by literature-established disease prevalence (10.6%).

increase in BE detection compared with the performance goal was observed for the full study population.

In the cohort meeting American

College of Gastroenterology (ACG) criteria for BE screening, the diagnostic yield was increased by 2.7-fold.

On August 1, 2025, the American

Journal of Gastroenterology e-published (ahead of printing) the manuscript “Nonendoscopic Detection of Barrett’s Esophagus

in Patients Without GERD Symptoms.” This investigator-initiated pilot study evaluated EsoGuard in 120 patients without GERD

symptoms, but who met American Gastroenterological Association (AGA) BE screening criteria.

Of 34 EsoGuard-positive patients, 27 underwent

EGD, confirming BE in 9 cases (PPV:

Of 86 EsoGuard-negative patients, 22 volunteered for EGD, with zero BE cases (NPV:

is the first study to assess EsoGuard in this expanded risk group and informed the design of a larger, ongoing NIH R01-funded study.

May 30, 2025, the Company entered into an “at-the-market offering” (“ATM”) for up to $25.0 million of its common

stock that may be offered and sold under a Controlled Equity Offering Agreement between the Company and Maxim Group LLC.

Developments - continued

2025 Confidentially Marketed Public Offering

April 11, 2025, the Company closed on the sale of 14,375,000 shares of its common stock at a price of $1.20 per share (the “April

2025 Offering”).

The net proceeds of the April 2025 Offering, after deducting the estimated placement agent’s fees and other

expenses of $1.2 million, was approximately $16.1 million.

The Company intends to use the net proceeds from the April 2025 Offering for

working capital and other general corporate purposes.

2025 Registered Direct Offering

March 5, 2025, the Company closed on the sale of 13,939,330 shares of its common stock at a price of $1.10 per share (the “Offering”).

The net proceeds of the Offering, after deducting the estimated placement agent’s fees and other expenses of $0.4 million, was

approximately $14.9 million.

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

Russell 2000® and 3000® Indexes

On June 27, 2025, the Company was added to the

Russell 2000® Index and the Russell 3000® Index, following the 2025 annual reconstitution by FTSE Russell.

Hoag Comprehensive Esophageal Precancer Testing

Program Using EsoGuard

On June 18, 2025, the Company announced that

Hoag, a nationally recognized regional healthcare delivery network, launched a comprehensive, integrated esophageal precancer testing

program using the Company’s EsoGuard® Esophageal DNA Test.

The Company will partner with Hoag to offer EsoGuard testing across

its digestive health, primary care, and concierge medicine programs.

Clinical Practice Guidelines Update

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

Developments - continued

Study Publications

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

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

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

The manuscript, entitled “Enhancing the Diagnostic Yield

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

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

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

The ENVET-BE study reviewed real-world

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

The overall positive diagnostic yield for BE was

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

The yield was

nearly three-fold higher in patients meeting American College of Gastroenterology (ACG) screening criteria.

Reimbursement Approval

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

Association, has issued a positive coverage policy for non-invasive screening of esophageal precancer and cancer in New York state.

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

society guidelines.

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

Shield Association, has issued a positive coverage policy for non-invasive screening of esophageal precancer and cancer in New York

The new policy, which became effective as of May 26, 2025, covers EsoGuard in patients who meet established criteria for

esophageal precancer testing consistent with professional society guidelines.

NIH Grant Related to EsoGuard and EsoCheck

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disease (GERD).

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

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

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

To accomplish this aim, 800 patients without

GERD symptoms who meet the American Gastroenterological Association’s (AGA) risk criteria for screening will be recruited across

five participating research centers:

University Hospitals, University of Colorado, Johns Hopkins University, University of North Carolina,

and Cleveland Clinic.

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

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

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

To accomplish this aim, 800 patients without GERD symptoms

who meet the American Gastroenterological Association’s (AGA) risk criteria for screening will be recruited across five participating

research centers:

University Hospitals, University of Colorado, Johns Hopkins University, University of North Carolina, and Cleveland

of Operations

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

as well as the portion of the MSA Fee (as defined in Note 5, 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.

as well as the portion of the MSA Fee (as defined in Note 5, 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

and administrative expenses

and administrative expenses consist primarily of professional fees for accounting, tax, audit and legal services (including those fees

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 allocated to general and administrative

and administrative expenses consist primarily of professional fees for accounting, tax, audit and legal services (including those

fees incurred as a result of our being a public company), consulting fees, employees costs involved in third-party payor

reimbursement contract negotiations and 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 allocated to general and

administrative expenses.

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

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in millions, except for share and per share amounts.

three months ended March 31, 2025 as compared to three months ended March 31, 2024

the three months ended March 31, 2025, revenue was $0.8 million as compared to $1.0 million for the corresponding period in the prior

The $0.2 million decrease 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 three months ended March 31, 2025, the cost of revenue was approximately $1.6 million as compared to $1.7 million for the corresponding

of Operations - continued

three months ended June 30, 2025 as compared to the three months ended June 30, 2024

the three months ended June 30, 2025, revenue was $1.2 million as compared to $1.0 million for the corresponding period in the prior

The $0.2 million increase principally relates to the increase in the consideration received for the performance of the EsoGuard

Esophageal DNA Tests.

the three months ended June 30, 2025, the cost of revenue remained relatively level at approximately $1.6 million, as compared to the corresponding

period in the prior year.

The $0.1 million decrease was principally related to:

and marketing expenses

the three months ended June 30, 2025, sales and marketing costs were approximately $4.0 million as compared to $4.2 million for the

corresponding period in the prior year.

The net decrease of $0.2 million was principally related to a decrease in compensation

and administrative expenses

the three months ended June 30, 2025, general and administrative costs were approximately $5.6 million as compared to $4.9 million for

the corresponding period in the prior year.

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

● approximately

$0.4 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

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

and development expenses

the three months ended June 30, 2025, research and development costs were approximately $1.3 million, compared to $1.4 million for

the corresponding period in the prior year.

The net decrease of $0.1 million was principally related to a decrease in development

costs, particularly in clinical trial activities and outside professional and consulting fees.

of Acquired Intangible Assets

the three months ended June 30, 2025, the amortization of acquired intangible assets remained relatively level at approximately $0.1 million, 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, 2025, the change in the fair value of our convertible notes was approximately $6.8 million of income,

related to the 2024 Senior Convertible Notes (as defined in Note 10, Debt , to our accompanying unaudited condensed consolidated

financial statements).

The 2024 Senior Convertible Notes was initially measured at the notes’ issue-date estimated fair value and

is subsequently remeasured at estimated fair value as of each reporting period date.

of Operations - continued

three months ended June 30, 2025 as compared to three months ended June 30, 2024 - continued

on Debt Extinguishment

The Company did not incur debt extinguishment

loss in the three months ended June 30, 2025.

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

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

issuance of 2,117,883 shares of common stock of the Company, with such shares having a fair

value of approximately $1.9 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 $0.5 million in the three months ended June 30,

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

to the 2024 Senior Convertible Notes.

six months ended June 30, 2025 as compared to six months ended June 30, 2024

the six months ended June 30, 2025, revenue remained relatively level at $2.0 million, as compared to the corresponding period in the

the six months ended June 30, 2025, the cost of revenue was approximately $3.1 million as compared to $3.3 million for the corresponding

period in the prior year.

The net decrease of $0.2 million was principally related to:

● approximately

$0.4 million decrease in the manufacturing costs associated with the EsoCheck devices and

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and marketing expenses

the three months ended March 31, 2025, sales and marketing costs were approximately $4.1 million as compared to $4.2 million for the

corresponding period in the prior year.

the six months ended June 30, 2025, sales and marketing costs were approximately $8.1 million as compared to $8.4 million for the corresponding

period in the prior year.

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

● approximately

$0.1 million decrease related to third-party professional marketing and information technology

● approximately

$0.2 million decrease in stock-based compensation;

● approximately

$0.1 million increase in cash compensation costs.

$0.1 million decrease related to third-party facility related expenses.

and administrative expenses

the three months ended March 31, 2025, general and administrative costs were approximately $6.2 million as compared to $4.1 million for

the six months ended June 30, 2025, general and administrative costs were approximately $11.8 million as compared to $8.9 million for

the corresponding period in the prior year.

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● approximately

$1.2 million increase related to financing related costs;

● approximately

$0.4 million increase in compensation and stock-based compensation costs;

$1.6 million increase related to third-party professional fees, primarily due to financing related costs;

● approximately

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● approximately

$0.1 million increase in third-party professional fees, including expenses related to investor

$0.4 million increase in stock-based compensation costs.

and development expenses

the three months ended March 31, 2025, research and development costs were approximately $1.4 million, compared to $1.5 million for the

the six months ended June 30, 2025, research and development costs were approximately $2.7 million, compared to $2.9 million for the

corresponding period in the prior year.

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of Operations - continued

three months ended March 31, 2025 as compared to three months ended March 31, 2024 - continued

six months ended June 30, 2025 as compared to six months ended June 30, 2024 - continued

of Acquired Intangible Assets

amortization of acquired intangible assets was approximately $0.1 million in the three months ended March 31, 2025, as compared to $0.4

amortization of acquired intangible assets was approximately $0.2 million in the six months ended June 30, 2025, 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 March 31, 2025 and 2024, the change in the fair value of our convertible note was approximately $14.5 million

of expense and $0.3 million of income, respectively, related to the 2024 Convertible Notes and the March 2023 Senior Convertible

Note (as defined in Note 10 , Debt , to our accompanying unaudited condensed consolidated financial statements).

Convertible Notes and March 2023 Senior Convertible Note were 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 six months ended June 30, 2025 and 2024, the change in the fair value of our convertible note was approximately $7.6 million of expense

and $0.9 million of income, respectively, related to the 2024 Convertible Notes and the March 2023 Senior Convertible Note (as defined

in Note 10 , Debt , to our accompanying unaudited condensed consolidated financial statements).

The 2024 Convertible Notes and March

2023 Senior Convertible Note were initially measured at their respective 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 Debt Extinguishment

the three months ended March 31, 2024, a debt extinguishment loss in the aggregate of approximately 0.2 million was recognized in connection

The Company did not incur debt

extinguishment loss in the six months ended June 30, 2025.

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 three months ended March 31, 2024, approximately $0.1 million of principal repayments

along with approximately $0.4 million of interest expense thereon, were settled through the

issuance of 543,298 shares of common stock of the Company, with such shares having a fair

value of approximately $0.7 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 $0.2 million in the three months ended March 31,

The Company did not incur debt extinguishment loss.in the three months ended March

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.

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

to the 2024 Convertible Notes and the March 2023 Senior Convertible Note.

to the 2024 Convertible Notes.

Dividend on Series A and Series A-1 Convertible Preferred Stock Exchange Offer

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sheet on March 13, 2024, with such deemed dividend included as a component of net loss attributable to common stockholders, summarized

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

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

March 13, 2024

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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.

expanding insurance reimbursement coverage.

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 products and services, to ongoing research and

development activities, and to conducting clinical trials.

We experienced a net loss of approximately $26.9 million and used

approximately $12.5 million of cash in operations during the quarter ended March 31, 2025.

Financing activities provided $15.4

million of cash during the quarter ended March 31, 2025.

We ended the quarter with cash on-hand of $25.2 million as of March 31,

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 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

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 are issued.

Stock Offerings

March 13, 2024, we entered into subscription agreements (each, a “Series B Subscription Agreement”) and exchange agreements

(each, a “Series B Exchange Agreement”) with certain accredited investors (collectively, the “Series B Investors”),

which agreements provided for (i) the sale to the Series B Investors of 12,495 shares of our newly designated Series B Convertible Preferred

Stock, par value $0.001 per share (the “Series B Preferred Stock”), at a purchase price of $1,000 per share, and (ii) the

exchange by the Series B Investors of 13,625 shares of our Series A Convertible Preferred Stock, par value $0.001 per share (the “Series

A Preferred Stock”), and 10,670 shares of our Series A-1 Convertible Preferred Stock, par value $0.001 per share (the “Series

A-1 Preferred Stock”), held by them for 31,790 shares of Series B Preferred Stock (collectively, the “Series B Offering and

Prior to the execution of the Series B Subscription Agreements and the Series B Exchange Agreements, we entered into

subscription agreements with certain of the Series B Investors providing for the sale to such investors of 5,670 shares of Series A-1

Preferred Stock, at a purchase price of $1,000 per share, which shares the investors immediately agreed to exchange for shares of Series

B Preferred Stock pursuant to the Series B Exchange Agreements (and are included in the 10,670 shares of Series A-1 Preferred Stock set

forth above).

Each share of the Series B Preferred Stock has a stated value of $1,000 and a conversion price of $1.2444.

the Series B Preferred Stock also include a one times preference on liquidation and a right to receive dividends equal to 20% of the

number of shares of our common stock into which such Series B Preferred Stock is convertible, payable on the one-year and two-year anniversary

of the issuance date.

The holders of the Series B Preferred Stock also will be entitled to dividends equal, on an as-if-converted to

shares of common stock basis, to and in the same form as dividends actually paid on shares of the common stock when, as, and if such

dividends are paid on shares of the common stock.

The Series B Preferred Stock is a voting security.

The aggregate gross proceeds of

these transactions were $18.16 million (inclusive of $5.67 million of aggregate gross proceeds from the sale of the Series A-1 Preferred

Stock that was immediately exchanged for Series B Preferred Stock in the transactions).

a result of 100% of the then-outstanding shares of Series A Preferred Stock and Series A-1 Preferred Stock being exchanged for shares

of Series B Preferred Stock in the Series B Offering and Exchange, no shares of Series A Preferred Stock or Series A-1 Preferred Stock

remain outstanding.

May 6, 2024, the Company issued approximately 11,634 shares of newly designated Series B-1 Convertible Preferred Stock (the “Series

B-1 Preferred Stock”).

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

Stock, except that the Series B-1 Preferred Stock has a conversion price of $0.7228.

The aggregate gross proceeds from the sale of shares

in such offering were $11.6 million.

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.

We experienced a net loss of approximately $31.3 million and used approximately $23.0 million of cash

in operations during the six months ended June 30, 2025.

Financing activities provided $31.9 million of cash during the six months ended June

We ended the quarter with cash on-hand of $31.1 million as of June 30, 2025.

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 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 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

and Capital Resources - continued

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working capital and other general corporate purposes.

Equity Facility and ATM Facility

March 2022, we entered into a committed equity facility with a Cantor affiliate.

Under the terms of the committed equity facility, the

Cantor affiliate has committed to purchase up to $50 million of our common stock from time to time at our request.

While there are distinct

differences, the committed equity facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows

us to raise primary equity capital on a periodic basis at prices based on the existing market price.

Cumulatively, a total of 680,263

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 March 31, 2025.

This facility terminates on August 1, 2025, which is the first of the month following the

36-month anniversary of the effective date of the registration statement for the same.

November 2022, Lucid Diagnostics also 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.

Cumulatively, a total

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 March 31, 2025.

Effective as of March 4, 2025, the Company terminated the prospectus supplement

for the “at-the-market offering”.

The Company will not make any sales of common stock in such offering unless and until a

new prospectus or prospectus supplement is filed.

2024 Senior Convertible Note Refinancing

November 22, 2024, the Company closed on the sale of $21.975 million in principal amount of 12.0% Senior Secured Convertible Notes due

2029 (collectively, the “2024 Convertible Notes”), in a private placement, to certain accredited investors (the “2024

Note Investors”).

The sale of the 2024 Convertible Notes was completed pursuant to the terms of that certain Securities Purchase

Agreement, dated as of November 12, 2024 , between the Company and the 2024 Note Investors.

The Company realized gross proceeds of $21.975

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

the sale of the 2024 Convertible Notes.

Company used a portion of the proceeds from the sale of the 2024 Convertible Notes to redeem the March 2023 Senior Convertible Note,

by paying the contractual redemption price of approximately $3.7 million.

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 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 January 1, 2024.

2024, PAVmed and the Company were authorized by their respective boards of directors to enter, and they did enter, into a ninth amendment

Under this amendment, the monthly fee due from the Company to PAVmed was increased from $833 to $1,050, effective July 1,

Pursuant 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 amendment).

Under the terms of PAVmed’s

convertible debt, PAVmed is required to elect that the MSA payments be made in cash.

of March 31, 2025, we had a Due To:

payment obligation liability of $0.0 million, which liability reflects that we had no

accrued obligations under a payroll and benefit expense reimbursement agreement (the “PBERA”) and the MSA, or with respect

to any other operating expenses paid by PAVmed on our behalf.

See our accompanying unaudited condensed consolidated financial statements

Note 5 , Related Party Transactions.

On May 30, 2025, the

Company entered into an “at-the-market offering” (“ATM”) for up to $25.0 million of its common stock that

may be offered and sold under a Controlled Equity Offering Agreement between the Company and Maxim Group LLC.

In the six months

ended June 30, 2025, the Company sold 215,421 shares through its at-the-market equity facility for net proceeds of

approximately $0.3 million, after payment of 3% commissions.

Accounting Estimates

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different assumptions or conditions.

Our critical accounting estimates are as disclosed in the Company’s Annual Report on Form 10-K

for the year ended December 31, 2024 as filed with the SEC on March 24, 2025.

There have been no material changes to our critical accounting estimates in the three months ended March 31, 2025.

Our critical accounting estimates are as disclosed in the Company’s Annual Report on Form

10-K for the year ended December 31, 2024 as filed with the SEC on March 24, 2025.

There have been no material changes to our critical

accounting estimates in the six months ended June 30, 2025.

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