What changed in this filing

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Item 1. Financial Statements

2021-08-16 compared with 2021-05-17 · 1023 added, 861 removed, 424 unchanged (82% of the section changed)

2 unchanged sentences

thousands except number of shares and per share data)

March 31, 2021

December 31, 2020

expenses, deposits, and other current assets

current assets

Prepaid expenses, deposits, and other current assets

Total current assets

Liabilities, Preferred Stock and Stockholders’

Current liabilities:

Accounts payable

Accrued expenses and other current liabilities

CARES Act Paycheck Protection Program note payable

Senior Secured Convertible Notes - at fair value

Senior Convertible Note - at fair value

Total liabilities

Commitments and contingencies (Note 4)

Stockholders’

Preferred Stock and Stockholders’ Deficit

expenses and other current liabilities

Act Paycheck Protection Program note payable

Secured Convertible Notes - at fair value

Convertible Note - at fair value

and contingencies (Note 5)

Stockholders’

Equity (Deficit):

Preferred stock, $0.001 par value.

stock, $ 0.001 par value.

Authorized, 20,000,000 shares;

Series B Convertible Preferred Stock, par value $0.001, issued and outstanding 1,241,438 at March 31, 2021 and 1,228,075 shares at December 31, 2020

Common stock, $0.001 par value.

Series B Convertible Preferred Stock, par value $ 0.001 , issued and outstanding

1,185,685 at June 30, 2021 and 1,228,075 shares at December 31, 2020

stock, $ 0.001 par value.

Authorized, 150,000,000 shares;

issued and outstanding, 81,424,744 shares at March 31, 2021 and 63,819,935 shares at December 31, 2020

Additional paid-in capital

Accumulated deficit

Total PAVmed Inc.

Stockholders’

Equity (Deficit)

Noncontrolling interests

Total Stockholders’

Equity (Deficit)

Total Liabilities and Stockholders’

Equity (Deficit)

82,576,816 and 63,819,935 shares outstanding as of June 30, 2021 and

December 31, 2020, respectively

paid-in capital

Stockholders’ Equity

Noncontrolling

Stockholders’ Equity (Deficit)

Liabilities and Stockholders’ Equity

accompanying notes to the unaudited condensed consolidated financial statements.

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thousands except number of shares and per share amounts)

Three Months Ended March 31,

and administrative

and development

operating expenses

Sales and marketing

General and administrative

Research and development

Total operating expenses

Loss from operations

Other income (expense):

Interest expense

Change in fair value - Senior Secured Convertible Notes and Senior Convertible Note

Offering costs - Senior Secured Convertible Note and Senior Convertible Note

Debt extinguishments loss - Senior Secured Convertible Notes

Other income (expense), net

Loss before provision for income tax

Provision for income taxes

Net loss before noncontrolling interests

Net loss attributable to the noncontrolling interests

Net loss attributable to PAVmed Inc.

from operations

income (expense):

in fair value - Senior Secured Convertible Notes and Senior Convertible Note

costs - Senior Secured Convertible Note and Senior Convertible Note

extinguishments loss - Senior Secured Convertible Notes

income (expense), net

before provision for income tax

for income taxes

loss before noncontrolling interests

loss attributable to the noncontrolling interests

loss attributable to PAVmed Inc.

Series B Convertible Preferred Stock dividends earned

Net loss attributable to PAVmed Inc.

loss attributable to PAVmed Inc.

common stockholders

Per share information:

Net loss per share attributable to PAVmed Inc.

share information:

loss per share attributable to PAVmed Inc.

- basic and diluted

Net loss per share attributable to PAVmed Inc.

common stockholders –

loss per share attributable to PAVmed Inc.

common stockholders – basic and diluted

average common shares outstanding,

basic and diluted

Weighted average common shares outstanding, basic and diluted

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the THREE MONTHS ENDED March 31, 2021

the THREE MONTHS ENDED June 30, 2021

thousands except number of shares and per share data)

Stockholders’

Balance at December 31, 2020

Stockholders’ Deficit

at March 31, 2021

Series B Convertible Preferred Stock dividends declared

Issue common stock –

conversion Series B Convertible Preferred

Issue common stock –

registered offerings, net

Issue common stock –

exercise Series Z warrants

Issue common stock upon partial conversions of Senior Secured Convertible

Issue common stock –

2014 Equity Plan stock option

Issue common stock - Employee Stock Purchase Plan

Stock-based compensation - PAVmed Inc.

2014 Equity Plan

Stock-based compensation - majority-owned subsidiary

Balance at March 31, 2021

common stock – conversion Series B Convertible Preferred Stock

common stock – registered offerings, net

common stock – registered offerings, net, shares

common stock – vesting of restricted stock awards

common stock – exercise Series Z warrants

Issue common stock upon partial conversions of Senior Secured Convertible Note

Issue common stock upon partial conversions of Senior Secured Convertible Note, shares

common stock – PAVmed Inc.

2014 Equity Plan stock option exercises

in Veris Health Inc.

compensation – PAVmed Inc.

common stock – majority-owned subsidiary exercise of stock options

common stock – Employee Stock Purchase Plan

common stock – Employee Stock Purchase Plan, shares

common stock – exercise Series S warrants

common stock – exercise Series S warrants, shares

compensation – majority-owned subsidiary

at June 30, 2021

$ ( 109,325 )

See accompanying notes to the unaudited condensed consolidated

financial statements.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES

IN EQUITY (DEFICIT)

for the SIX MONTHS ENDED June 30, 2021

(in thousands except number of shares and per share

Stockholders’ Deficit

at December 31, 2020

B Convertible Preferred Stock dividends declared

common stock – conversion Series B Convertible Preferred Stock

common stock – registered offerings, net

common stock – restricted stock awards vests

common stock – exercise Series Z warrants

common stock upon partial conversions of Senior Secured Convertible Note

common stock – PAVmed Inc.

2014 Equity Plan stock option exercises

common stock – Employee Stock Purchase Plan

in Veris Health Inc.

compensation - PAVmed Inc.

compensation - majority-owned subsidiary

at June 30, 2021

$ ( 109,325 )

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the THREE MONTHS ENDED March 31, 2020

the THREE and SIX MONTHS ENDED June 30, 2020

thousands except number of shares and per share data)

Stockholders’

Balance at December 31, 2019

Issue common stock –

upon partial conversions of Senior Secured

Convertible Note

Issue common stock –

Employee Stock Purchase Plan

Issue common stock –

exercise Series S warrants

Issue common stock –

conversion Series B Convertible Preferred

Series B Convertible Preferred Stock dividends declared

Vesting of restricted stock awards

Stock-based compensation - PAVmed Inc.

Stockholders’ Deficit

at March 31, 2020

common stock – upon partial conversions of Senior Secured Convertible Note

B Convertible Preferred Stock dividends declared

compensation - PAVmed Inc.

2014 Equity Plan

Issue common stock –

majority-owned subsidiary exercise of stock

Stock-based compensation - majority-owned subsidiary

Balance at March 31, 2020

compensation – majority-owned subsidiary

at June 30, 2020

Stockholders’ Deficit

at December 31, 2019

common stock – upon partial conversions of Senior Secured Convertible Note

common stock – Employee Stock Purchase Plan

common stock – exercise Series S warrants

common stock – conversion Series B Convertible Preferred Stock

B Convertible Preferred Stock dividends declared

of restricted stock awards

compensation - PAVmed Inc.

2014 Equity Plan

common stock – majority-owned subsidiary exercise of stock options

compensation - majority-owned subsidiary

at June 30, 2020

accompanying notes to the unaudited condensed consolidated financial statements.

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thousands except number of shares and per share data)

Three Months Ended March 31,

Cash flows from operating activities

Net loss - before noncontrolling interest (“NCI”)

Adjustments to reconcile net loss - before NCI to net cash used in operating activities

Depreciation expense

Stock-based compensation

Change in fair value - Senior Secured Convertible Notes and Senior Convertible Note

Debt extinguishment loss - Senior Secured Convertible Notes and Senior Convertible Note

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Accounts payable

Accrued expenses and other current liabilities

Net cash flows used in operating activities

Cash flows from investing activities

Purchase of equipment

Net cash flows used in investing activities

Cash flows from financing activities

Proceeds –

issue of common stock –

registered offerings

Payment –

offering costs –

registered offerings

Proceeds –

Months Ended June 30,

flows from operating activities

loss - before noncontrolling interest (“NCI”)

to reconcile net loss - before NCI to net cash used in operating activities

in fair value - Senior Secured Convertible Notes and Senior Convertible Note

extinguishment loss - Senior Secured Convertible Notes and Senior Convertible Note

in operating assets and liabilities:

expenses and other current assets

expenses and other current liabilities

cash flows used in operating activities

flows from investing activities

net of cash acquired

cash flows used in investing activities

flows from financing activities

– issue of common stock – registered offerings

– offering costs – registered offerings

– issue of Senior Secured Convertible Notes

– issue of Senior Convertible Note

Payment –

– Cares Act Paycheck Protection Program Loan

– repayment of Senior Convertible Note and Senior Secured Convertible Note

Payment –

Senior Convertible Note and Senior Secured Convertible Note –

– Senior Convertible Note and Senior Secured Convertible Note –

non-installment payments

Proceeds –

– exercise of Series Z warrants

Proceeds –

– exercise of Series S Warrants

Proceeds –

issue common stock –

Employee Stock Purchase Plan

Proceeds –

– issue common stock – Employee Stock Purchase Plan

– exercise of stock options

Proceeds –

exercise of stock options issued under equity incentive plan

of majority owned subsidiary

Net cash flows provided by financing activities

Net increase (decrease) in cash

Cash, beginning of period

Cash, end of period

– exercise of stock options issued under equity incentive plan of majority owned subsidiary

cash flows provided by financing activities

increase (decrease) in cash

beginning of period

end of period

accompanying notes to the unaudited condensed consolidated financial statements.

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in these accompanying notes are presented in thousands, except number of shares and per-share amounts.)

(“PAVmed”

or the “Company”) together with its majority owned subsidiaries, Lucid Diagnostics, Inc.

(“Lucid

Diagnostics”

or “LUCID”) and Solys Diagnostics, Inc.

(“Solys Diagnostics”

or “SOLYS”) were

organized to advance a broad pipeline of innovative medical technologies from concept to commercialization, employing a business model

focused on capital efficiency and speed to market.

The Company’s activities have focused on advancing the lead products towards

regulatory approval and commercialization, protecting its intellectual property, and building its corporate infrastructure and management

The Company operates in one segment as a medical device company.

ability of the Company to generate revenue depends upon the Company’s ability to successfully advance the commercialization of

1 — The Company

(“PAVmed” or the “Company”) together with its majority owned subsidiaries, Lucid Diagnostics, Inc.

Diagnostics” or “LUCID”), Solys Diagnostics, Inc.

(“Solys Diagnostics” or “SOLYS”) and Veris

(“Veris Health” or “VERIS”) were organized to advance a broad pipeline of innovative medical technologies

from concept to commercialization, employing a business model focused on capital efficiency and speed to market.

The Company’s

activities have focused on advancing the lead products towards regulatory approval and commercialization, protecting its intellectual

property, and building its corporate infrastructure and management team.

The Company operates in one segment as a medical technology

ability of the Company to generate revenue depends upon the Company’s ability to successfully advance the commercialization of

EsoGuard and CarpX while also completing the development and the necessary regulatory approvals of its other products and services.

has received 510(k) marketing clearance from the FDA as an esophageal cell collection device in June 2019;

completed the certification required by the Clinical Laboratory Improvement Amendment (“CLIA”) and accreditation of the

College of American Pathologists (“CAP”) making it commercially available as a Laboratory Developed Test (“LDT”)

at LUCID’s contract diagnostic laboratory service provider in California in December 2019;

completed the certification required by the Clinical Laboratory Improvement Amendment (“CLIA”) and accreditation of the

College of American Pathologists (“CAP”) making it commercially available as a Laboratory Developed Test (“LDT”)

at LUCID’s contract diagnostic laboratory service provider in California in December 2019;

developed as a patented, single-use, disposable, minimally invasive device designed as a precision cutting tool to treat carpal tunnel

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procedure successfully performed in December 2020.

the Company’s current operational activities are principally focused on the commercialization of EsoGuard and CarpX its development

activities are focused on pursuing FDA approval and clearance of other lead products in our product portfolio pipeline, including EsoGuard

IVD, PortIO, DisappEAR, NextFlo, and EsoCure.

Company has financed its operations principally through the public and private issuances of its common stock, preferred stock, warrants,

IVD, PortIO, DisappEAR, NextFlo, EsoCure and digital health technologies acquired by the Company’s majority-owned subsidiary Veris

(as discussed in Note 4, Acquisition of Oncodisc Inc.

Company has financed its operations principally through the public and private issuances of its common stock, preferred stock, common

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Notwithstanding, however, together with the cash

on-hand as of March 31, 2021, the Company expects to be able to fund its future operations for one year from the date of the issue of

the Company’s unaudited condensed consolidated financial statements, as included in the Company’s Quarterly Report on Form

10-Q for the three months ended March 31, 2021.

on-hand as of June 30, 2021, the Company expects to be able to fund its future operations for one year from the date of the issue of

the Company’s unaudited condensed consolidated financial statements, as included in the Company’s Quarterly Report on Form

10-Q for the period ended June 30, 2021.

2 — Summary of Significant Accounting Policies

Accounting Policies

Company’s significant accounting policies are as disclosed in the Company’s annual report on Form 10-K for the year ended

December 31, 2020 as filed with the SEC on March 15, 2021, except as otherwise noted herein below.

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The Company holds a majority ownership

interest and has controlling financial interest in Lucid Diagnostics Inc.

and Solys Diagnostics Inc., with the corresponding noncontrolling

interest included as a separate component of consolidated stockholders’

equity (deficit), including the recognition in the

consolidated statement of the net loss attributable to the noncontrolling interest based on the respective minority ownership interest

of each respective entity.

condensed consolidated balance sheet as of March 31, 2021, which has been derived from audited consolidated financial statements, and

the unaudited condensed consolidated financial statements, have been prepared in accordance with accounting principles generally accepted

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

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

Commission (“SEC”) regarding interim financial reporting.

As permitted under SEC rules, certain footnotes or other financial

information normally required by U.S.

GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2020

has been derived from audited consolidated financial statements at such date but does not include all the information required by U.S.

GAAP for complete consolidated financial statements.

These unaudited condensed consolidated financial statements have been prepared on

the same basis as the Company’s annual consolidated financial statements, and in the opinion of management, include all adjustments,

consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s consolidated financial information.

results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the

year ending December 31, 2021 or for any other interim period or for any other future periods.

The accompanying unaudited condensed consolidated

financial statements and related consolidated financial information should be read in conjunction with the audited consolidated financial

statements and related notes thereto as of and for the year ended December 31, 2020 included in the Company’s Annual Report on

Form 10-K filed with the SEC on March 15, 2021.

amounts in these accompanying notes to the accompanying unaudited condensed consolidated financial statements are presented in thousands,

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

interest and has controlling financial interest in each of:

Lucid Diagnostics Inc., Solys Diagnostics Inc.

and Veris Health Inc., with

the corresponding noncontrolling interest included as a separate component of consolidated stockholders’ equity (deficit), including

the recognition in the unaudited condensed consolidated statement of the net loss attributable to the noncontrolling interest based on

the respective minority interest equity ownership of each majority-owned subsidiary.

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

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

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

and Exchange Commission (“SEC”) regarding interim financial reporting.

As permitted under SEC rules, certain footnotes or

other financial information normally required by U.S.

GAAP have been condensed or omitted.

The balance sheet as of December 31, 2020

has been derived from audited consolidated financial statements at such date.

The accompanying unaudited condensed consolidated financial

statements have been prepared on the same basis as the Company’s annual consolidated financial statements, and in the opinion of

management, include all adjustments, consisting only of routine recurring adjustments, necessary for a fair presentation of the Company’s

unaudited condensed consolidated financial information.

results of operations for the three and six months ended June 301, 2021 are not necessarily indicative of the results to be expected

for the year ending December 31, 2021 or for any other interim period or for any other future periods.

The accompanying unaudited condensed

consolidated financial statements and related unaudited condensed consolidated financial information should be read in conjunction with

the audited consolidated financial statements and related notes thereto as of and for the year ended December 31, 2020 included in the

Company’s Annual Report on Form 10-K as filed with the SEC on March 15, 2021.

amounts in the accompanying unaudited notes to the unaudited condensed consolidated financial statements are presented in thousands,

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

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

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and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the

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

Due to inherent

uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates.

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

These estimates and assumptions include valuing equity securities

in share-based payment arrangements and estimating the fair value of financial instruments recorded as liabilities.

In addition, management’s

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

inflows and outflows.

date of the unaudited condensed consolidated financial statements, as well as the reported amounts of expenses during the reporting period.

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

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

These estimates and assumptions include the estimated

fair value of stock-based equity awards, and the estimated fair value of financial instruments recognized as liabilities.

management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and

timing of future cash inflows and outflows.

2 — Summary of Significant Accounting Policies - continued

Adopted Accounting Standards

August 2020, the FASB issued its Accounting Standards Update (“ASU”) 2020-06, Debt –

Debt with Conversion and Other

Options (Subtopic 470-20) and Derivatives and Hedging –

Contracts in Entity’s Own Equity (Subtopic 815 –

40) , (“ASU

2020-06”).

August 2020, the FASB issued its Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other

Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40) , (“ASU

ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity,

including convertible instruments and contracts on an entity’s own equity.

The ASU2020-06 amendments are effective for fiscal years

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adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal

The Company’s adoption of the ASU 2020-06 guidance as of January 1, 2021, had no effect on its unaudited condensed consolidated

financial statements.

December 2019, the FASB issued ASU No.

2019-12, “Income Taxes:

Simplifying the Accounting for Income Taxes”, (“ASU

2019-12”).

2019-12, “Income Taxes:

Simplifying the Accounting for Income Taxes”, (“ASU

The guidance of ASU 2019-12 removes certain exceptions for recognizing deferred taxes for investments, performing intra-period

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2019-12 is required for annual and interim financial statements beginning after December 15, 2020.

The Company’s adoption of the

ASU 2019-12 guidance as of January 1, 2021 had no effect on the Company’s unaudited condensed consolidated financial statements.

Related Party Transactions

Company’s majority-owned subsidiary Lucid Diagnostics entered into a patent license agreement with Case Western Reserve University

(“CWRU”

and “CWRU License Agreement”) in May 2018.

In connection with the CWRU License Agreement, CWRU and each

of the three physician inventors of the intellectual property licensed under the CWRU License Agreement hold minority equity ownership

interests in Lucid Diagnostics Inc.

During the three months ended March 31, 2021 and 2020, the Company incurred expenses with respect

to CWRU and the three physician inventors, summarized as follows:

For the three months ended

CWRU License Agreement –

reimbursement of patent legal fees

EsoCheck devices provided to CWRU

Fees - Physician Inventors’

consulting agreements

Stock-based compensation expense - Physician Inventors’

stock options

and restricted stock awards

Total Related Party Expenses

The Company’s adoption of the

ASU 2019-12 guidance as of January 1, 2021 had no effect on the Company’s unaudited condensed consolidated financial statements.

Note 3 — Related Party Transactions

Western Reserve University and Physician Inventors - CWRU License Agreement

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

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

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

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

Schedule of Incurred Expenses of Minority Shareholders

the three months ended

the six months ended

General and Administrative Expense

Stock-based compensation expense – Physician

Inventors’ restricted stock awards

Research and Development Expense

License Agreement - reimbursement of patent legal fees

devices provided to CWRU

- Physician Inventors’ consulting agreements

compensation expense – Physician Inventors’ stock options

Related Party Expenses

Diagnostics Inc.

entered into consulting agreements with each of the three physician inventors of the intellectual property licensed

under the CWRU License Agreement, providing for compensation on a contractual rate per hour for consulting services provided.

The consulting

agreements have a thirty-six month term ending May 12, 2021.

Additionally, each of the three physician inventors were granted stock options

under the PAVmed Inc.

2014 Long-Term Incentive Equity Plan and were granted stock options and restricted stock awards under the

Lucid Diagnostics Inc.

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

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

upon the agreements’ renewal effective May 12, 2021.

Additionally, as discussed below, each of the Physician Inventors have

been granted stock options under the PAVmed Inc.

2014 Long-Term Incentive Equity Plan, and stock options and restricted stock awards

under the Lucid Diagnostics Inc.

2018 Long-Term Incentive Equity Plan.

of March 31, 2021, the Company has payables of $27 for such related party transactions.

Note 7, Stock-Based Compensation , for information regarding each of the “PAVmed Inc.

2014 Long-Term Incentive Equity Plan”

and the separate “Lucid Diagnostics Inc.

2018 Long-Term Incentive Equity Plan”;

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

25,000 stock options under the PAVmed Inc.

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

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

period of ten years from the date of grant.

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

Subsequent to

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

2014 Equity Plan, with a grant

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

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

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

2018 Equity Plan to each of the three Physician Inventors, with such restricted stock awards having a single vesting date of March 1, 2023, with the fair

value of such restricted stock awards recognized as stock-based compensation expense ratably on a straight-line basis over the vesting

period, which is commensurate with the service period.

The restricted stock awards are subject to forfeiture if the requisite service

period is not completed.

Note 8, Stock-Based Compensation , for information regarding each of the “PAVmed Inc.

2014 Long-Term Incentive Equity Plan”

and the separate.

“Lucid Diagnostics Inc 2018 Long-Term Incentive Equity Plan”;

and Note 11, Noncontrolling Interest ,

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and the corresponding noncontrolling interests.

Related Party Transactions

Lucid Diagnostics Inc.

previously entered into a consulting agreement with Stanley N.

Lapidus, effective July 1, 2020 with such

consulting agreement providing for compensation on a contractual rate per hour for consulting services provided.

In July 2021, Mr.

Lapidus was appointed as Vice Chairman of the Board of Directors of Lucid Diagnostics Inc.

Lucid Diagnostics Inc.

recognized as

general and administrative expense $ 8 and $ 14 in the three and six months ended June 30, 2021, respectively, in connection with the

consulting agreement.

4 — Acquisition of Oncodisc Inc

May 28, 2021, Veris Health Inc., a majority-owned subsidiary of PAVmed Inc., acquired all of the outstanding common stock of

Oncodisc Inc.

(“Oncodisc”) for total (gross) purchase consideration of approximately $ 261 ,

consisting of:

the issue of 1,564,514 shares

of common stock of Veris Health Inc., with such shares having an estimated fair value of approximately $ 6 ;

and cash paid of approximately $ 255 ,

inclusive of approximately $ 155 paid

at the time of the transaction closing and the remaining balance paid subsequent to June 30, 2021.

Additionally, the cash acquired

was approximately $ 108 and

liabilities assumed were approximately $ 50 .

The acquisition of Oncodisc was accounted for by Veris Health Inc as an asset acquisition.

Veris Health Inc.

has allocated the

preliminary purchase price based upon the respective fair values as of the date of acquisition as follows:

of Assets Acquired and Liabilities Assumed

asset - in-process research and development

asset - assembled workforce

net assets acquired

intangible asset recognized for the in-process research and development (“IPRD”) of $ 133 was determined to have no alternative

future use and was recognized as a current period research and development expense.

The intangible asset recognized for the assembled

workforce of approximately $ 70 , which is included in “Other assets” on the accompanying unaudited condensed consolidated

balance sheet, has an expected useful life of one year, and is being recognized as a research and development expense on a ratable basis

over such period, commencing in June 2021.

See Note 11, Noncontrolling Interest , for a discussion of Veris Health Inc.

the corresponding noncontrolling interests.

5 — Commitment and Contingencies

November 2020, a stockholder of the Company, on behalf of himself and other similarly situated stockholders, filed a complaint in the

Delaware Court of Chancery alleging broker non-votes were not properly counted in accordance with the Company’s bylaws at the Company’s

Annual Meeting of Stockholders on July 24, 2020, and, as a result, asserted certain matters deemed to have been approved were not so

5 unchanged sentences

However, to avoid any uncertainty and the expense of

further litigation, on January 5, 2021, the Company’s Board of Directors determined it would be advisable and in the best interests

of the Company and its stockholders to re-submit these proposals to the Company’s stockholders for ratification and/or approval.

further litigation, on January 5, 2021, the Company’s Board of Directors determined it would be advisable and in the best interests

of the Company and its stockholders to re-submit these proposals to the Company’s stockholders for ratification and/or approval.

In this regard, the Company held a special meeting of stockholders on March 4, 2021, at which such matters were ratified and approved.

15 unchanged sentences

Notwithstanding, legal proceedings are subject-to inherent uncertainties, and an unfavorable outcome could include monetary damages,

and excessive verdicts can result from litigation, and as such, could result in a material adverse impact on the Company’s business,

financial position, results of operations, and /or cash flows.

1 unchanged sentence

potential risks, the Company may in the future incur judgments or enter into settlements of claims which may have a material adverse

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

License Agreement –

Case Western Reserve University

CWRU License Agreement requires Lucid Diagnostics Inc.

to achieve certain milestones with respect to regulatory filings and clearances

and commercialization of products and services.

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

License Agreement – Case Western Reserve University

patent license agreement between the Company’s majority-owned subsidiary Lucid Diagnostics Inc.

and Case Western Reserve University

- the “CWRU License Agreement” - requires Lucid Diagnostics Inc.

to pay a minimum annual royalty of a percentage of recognized

net sales revenue resulting from the commercialization of the products and /or services developed using the CWRU License Agreement licensed

intellectual property, with the minimum amount of royalty payments based on net sales of such products and services, if any.

no such contractual minimum annual royalty payment has been required.

Additionally,

the CWRU License Agreement contains each of:

certain regulatory milestones with respect to FDA submissions and clearances;

and a commercialization

milestone with respect to a first sale of a product or service, each within a contractually proscribed period of time from the May 12,

2018 effective date of the CWRU License Agreement.

If Lucid Diagnostics Inc.

does not meet the remaining commercialization and regulatory

clearance milestones listed in the CWRU License Agreement, then CWRU has the right, in its sole discretion, to require PAVmed Inc.

transfer to CWRU 80% of the shares of common stock of Lucid Diagnostics Inc.

did not achieve one of the regulatory milestones and the

commercialization milestone, then CWRU had the right, in its sole discretion, to require PAVmed Inc.

to transfer to CWRU 80 %

of the shares of common stock of Lucid Diagnostics

then held by PAVmed Inc.

Additionally, Lucid Diagnostics

is required to pay a minimum annual royalty of a percentage of recognized net sales revenue resulting from the commercialization

of the products and /or services developed using the CWRU License Agreement intellectual property, with the minimum amount of royalty

payments based on net sales of such products and services, if any.

Lucid diagnostics Inc.

has achieved the requisite milestones in accordance with the timing specified

by the CWRU License Agreement.

Diagnostics Inc.

entered into the EsoGuard Commercialization Agreement with ResearchDX Inc.

(“RDx”), effective August

1, 2021, providing for RDx to license from Lucid Diagnostics Inc.

its proprietary EsoGuard assay.

The EsoGuard Commercialization

Agreement provides for RDx to pay a minimum monthly fee to Lucid Diagnostics Inc., with such fee payment subject-to the royalty payment

requirements of the CWRU License Agreement.

The EsoGuard Commercial Agreement initial term is on a month-to-month basis, and may

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

6 — Financial Instruments Fair Value Measurements

1 unchanged sentence

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

Fair Value Measurement on a Recurring Basis at

Reporting Date Using (1)

March 31, 2021

Senior Secured Convertible Note - November 2019

Senior Convertible Note - April 2020

Senior Secured Convertible Note –

December 31, 2020

Senior Secured Convertible Note - November 2019

Senior Convertible Note - April 2020

Senior Secured Convertible Note –

Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis

Value Measurement on a Recurring Basis at

Date Using (1)

Secured Convertible Note - November 2019

Convertible Note - April 2020

Secured Convertible Note – August 2020

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

2 unchanged sentences

Note (Series-A and Series-B), dated November 19, 2019, and the Senior Secured Convertible Note dated December 27, 2018, were each accounted

for under the fair value option (“FVO”) election, wherein, each of the convertible notes were initially measured

at their respective issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at

each reporting period date, with the resulting fair value adjustment recognized as other income (expense) in the unaudited

condensed consolidated statement of operations.

were no fair value measurements as of March 31, 2021 as each of the convertible notes were repaid-in-full as of March 31, 2020 (as discussed

herein below in Note 6, Debt ).

The estimated fair value of each of the convertible notes as of December 31, 2020, were computed

using a Monte Carlo simulation of the present value of its cash flows using a synthetic credit rating analysis and a required rate-of-return,

and were therefore classified within the Level 3 category, as the fair value was determined using both observable inputs and unobservable

Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value attributable

to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities)

estimated fair values reported utilized the Company’s common stock price along with certain Level 3 inputs, as discussed

above, in the development of Monte Carlo simulation models, discounted cash flow analyses, and /or Black-Scholes valuation models.

estimated fair values are subjective and are affected by changes in inputs to the valuation models /analyses, including the Company’s

common stock price, the Company’s dividend yield, the risk-free rates based on U.S.

Treasury security yields, and certain other

Level-3 inputs including, assumptions regarding the estimated volatility in the value of the Company’s common stock price.

in these assumptions can materially affect the estimated fair values.

fair value and face value principal of outstanding convertible notes as of March 31, 2021 and December 31, 2020 was as follows:

for under the fair value option (“FVO”) election, wherein, each of the convertible notes were initially measured at their

respective issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting

period date, with the resulting fair value adjustment recognized as other income (expense) in the unaudited condensed consolidated statement

of operations.

were no fair value measurements as of June 30, 2021 as each of the convertible notes were previously repaid-in-full in the three months

ended March 31, 2021, as discussed herein below in Note 7, Debt .

The estimated fair value of each of the convertible notes as

of December 31, 2020, were computed using a Monte Carlo simulation of the present value of its cash flows using a synthetic credit rating

analysis and a required rate-of-return, and were therefore classified within the Level 3 category, as the fair value was determined using

both observable inputs and unobservable inputs.

Unrealized gains and losses associated with liabilities within the Level 3 category include

changes in fair value attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable

long- dated volatilities) inputs.

estimated fair values reported utilized the Company’s common stock price along with certain Level 3 inputs, as discussed above,

in the development of Monte Carlo simulation models, discounted cash flow analyses, and /or Black-Scholes valuation models.

The estimated

fair values are subjective and are affected by changes in inputs to the valuation models /analyses, including the Company’s common

stock price, the Company’s dividend yield, the risk-free rates based on U.S.

Treasury security yields, and certain other Level-3

inputs including, assumptions regarding the estimated volatility in the value of the Company’s common stock price.

Changes in these

assumptions can materially affect the estimated fair values.

of the convertible notes, as such convertible notes are discussed below, were repaid-in-full during the three months ended March 31,

The fair value and face value principal of outstanding convertible notes at December 31, 2020 were as follows:

Summary of Outstanding Debt

Maturity Date

Stated Interest Rate

Conversion Price per Share

Face Value Principal Outstanding

November 2019 Senior Secured Convertible Note

September 30, 2021

April 2020 Senior Convertible Note

April 30, 2022

August 2020 Senior Secured

Convertible Note

August 6, 2022

Balance - March 31, 2021 (1)

November 2019 Senior Secured Convertible Note

September 30, 2021

April 2020 Senior Convertible Note

April 30, 2022

August 2020 Senior Secured

Interest Rate

Price per Share

Value Principal Outstanding

2019 Senior Secured Convertible Note

2020 Senior Convertible Note

2020 Senior Secured

Convertible Note

August 6, 2022

Balance - December 31, 2020

discussed below, during the three months ended March 31, 2021 all remaining convertible notes

were repaid, including:

the November 2019 Senior Convertible Note being repaid-in-full as

of January 5, 2021;

and both the April 2020 Senior Convertible Note and the August 2020 Senior

Convertible Note were repaid-in-full as of March 2, 2021.

- December 31, 2020

Secured Convertible Note issued November 4, 2019 - Series A and Series B -

(“November

2019 Senior Convertible Notes”)

respect to the November 2019 Senior Convertible Notes, in the year ended December 31, 2020, approximately $13,044 of installment principal

repayments and the payment of interest thereon of approximately $465, were settled through the issuance of 8,854,004 shares of common

stock of the Company, with a fair value of approximately $18,802 (with such fair value measured as the respective conversion date quoted

closing price of the common stock of the Company).

As of December 31, 2020, the November 2019 Senior Convertible Notes remaining unpaid

outstanding face value principal was approximately $956.

November 2019 Senior Convertible Note was repaid-in-full as of January

5, 2021, with the remaining principal balance of approximately $956, along with the payment of interest thereon of approximately

$7, were settled with the issuance of 667,668 shares common stock of the Company, with a fair value of approximately $1,723 (with such

fair value measured as the respective conversion date quoted closing price of the common stock of the Company).

2019 Senior Convertible Notes”)

“November 2019 Senior Convertible Notes” remaining unpaid outstanding face value principal of approximately $ 956 as of December

31, 2020 was repaid-in-full as of January 5, 2021, with the remaining principal balance, along with the payment of interest thereon of

approximately $ 7 , settled with the issuance of 667,668 shares common stock of the Company, with a fair value of approximately $ 1,723

(with such fair value measured as the respective conversion date quoted closing price of the common stock of the Company).

Convertible Note issued April 30, 2020 - (“April 2020 Senior Convertible Note”)

“April 2020 Senior Convertible Note” unpaid outstanding face value principal of approximately $ 4,111 as of December 31, 2020

was repaid-in-full in March 2021, as discussed herein below.

In the six months ended June 30, 2021 and 2020, approximately $ 52 and $ 54 ,

respectively, of non-installment payments were paid in cash.

Secured Convertible Note issued August 6, 2020 - (“August 2020 Senior Convertible Note”)

“August Senior Convertible Note” unpaid outstanding face value principal of approximately $ 7,750 as of December 31, 2020

was repaid-in-full in March 2021, as discussed herein below.

In the six months ended June 30, 2021, approximately $ 102 of non-installment

payments were paid in cash.

There were no such payments in the corresponding period of the prior year.

7 — Debt - continued

Notes - continued

Convertible Note issued April 30, 2020 - (“April 2020 Senior Convertible Note”)

Company issued a Senior Convertible Note dated April 30, 2020, with a face value principal of approximately $4,111, a stated interest

rate of 7.875% per annum, and, at the election of the holder, was convertible into shares of common stock of the Company at a contractual

conversion price of $5.00 per share - the “April 2020 Senior Convertible Note”.

In the three months ended March 31, 2021,

approximately $52 of non-installment payments were paid in cash.

There were no such payments in the corresponding period of the prior

The outstanding face value principal of the April 2020 Senior Convertible Note was repaid-in-full in March 2021, as discussed herein

Secured Convertible Note issued August 6, 2020 - (“August 2020 Senior Convertible Note”)

Company issued a Senior Secured Convertible Note dated August 6, 2020, with a face value principal of approximately $7,750, a stated

interest rate of 7.875% per annum, and, at the election of the holder, was convertible into shares of common stock of the Company at

a contractual conversion price of $5.00 per share - the “August 2020 Senior Convertible Note”.

In the three months

ended March 31, 2021, approximately $102 of non-installment payments were paid in cash.

There were no such payments in the corresponding

period of the prior year.

The outstanding face value principal of the April 2020 Senior Convertible Note was repaid-in-full in March

2021, as discussed herein below.

Principal Repayments -

April 2020 Senior Convertible Note and August 2020 Senior Convertible Note

On January 30, 2021, the Company paid

in cash a $350 partial principal repayment of the April 2020 Senior Convertible Note;

and on March 2, 2021, the Company paid in cash

a total of $14,466 of principal repayments, resulting in both the April 2020 Senior Convertible Note and the August 2020 Senior Convertible

Note being repaid-in-full as of such date.

The Company recognized a debt extinguishment loss of approximately $2,955 in the three months

ended March 31, 2021 in connection with the repayments of the April 2020 Senior Convertible Note and the August 2020 Senior Convertible

Senior Secured Convertible

Note issued December 27, 2018 - (“December 2018 Senior Convertible Note”)

The Company previously issued a

Senior Secured Convertible Note dated December 27, 2018, with a $7.75 million face value principal, a stated interest rate of 7.875%

per annum, and, at the election of the holder, was convertible into shares of common stock of the Company at a contractual

conversion price of $1.60 per share (“December 2018 Senior Convertible Note”).

In the three months ended March 31, 2020,

with respect to the December 2018 Senior Convertible Notes, approximately $1,642 of installment principal repayments and the payment

of interest thereon of approximately $4, were settled through the issue of 2,042,901 shares of common stock of the Company, with a

fair value of approximately $2,834 (with such fair value measured as the respective conversion date quoted closing price of the

common stock of the Company).

Further, the December 2018 Senior Convertible Note was paid-in-full as of June 4, 2020, with the

remaining principal balance of approximately $50 and the payment of interest thereon of approximately $2, settled by the issue of

32,297 shares of common stock of the Company, with a fair value of approximately $68, with such fair value measured as noted

Repayments - April 2020 Senior Convertible Note and August 2020 Senior Convertible Note

January 30, 2021, the Company paid in cash a $ 350 partial principal repayment of the April 2020 Senior Convertible Note;

2, 2021, the Company paid in cash a total of $ 14,466 of principal repayments, resulting in both the April 2020 Senior Convertible Note

and the August 2020 Senior Convertible Note being repaid-in-full as of such date.

The Company recognized a debt extinguishment loss of

approximately $ 2,955 in the six months ended June 30, 2021 in connection with the repayments of the April 2020 Senior Convertible Note

and the August 2020 Senior Convertible Note.

reconciliation in the fair value of debt during the six months ended June 30, 2021 is as follows:

Schedule of Senior Convertible Note Estimated Fair

2019 Senior Secured Convertible Notes

2020 Senior Convertible Note

2020 Senior Secured Convertible Note

of Balance Sheet Fair Value Components

Income (Expense)

Value - December 31, 2020

repayments – common stock

Non-installment

payments – common stock

Non-installment

payments – cash

in fair value

repayments - cash

Value at June 30, 2021 (1)

Income (Expense) - Change in fair value - six months ended June 30, 2021 (1)

discussed above, all remaining convertible notes were previously repaid during the three

months ended March 31, 2021.

7 — Debt - continued

reconciliation in the fair value of debt during each of the three months ended March 31, 2021 and 2020 is as follows:

December 2018 Senior Secured Convertible Note

November 2019 Senior Secured Convertible Notes

April 2020 Senior Convertible Note

August 2020 Senior Secured Convertible Note

Sum of Balance Sheet Fair Value Components

Other Income (Expense)

Fair Value - December 31, 2020

Installment repayments –

Non-installment payments –

Change in fair value

Principal repayments - cash

Fair Value at March 31, 2021

Other Income (Expense) - Change in fair value - three months ended March 31, 2021

Fair Value –

December 31, 2019

Face value principal –

Fair value adjustment –

Installment repayments –

Non-installment payments –

Change in fair value

Lender Fee - November 2019 Senior Secured Convertible Note - Series B

Fair Value at March 31, 2020

Other Income (Expense) - Change in fair value - three months ended March 31, 2020

Senior Convertible Notes presented above were each accounted for under the ASC 825-10-15-4 fair value option (“FVO”) election,

reconciliation in the fair value of debt during the three and six months ended June 30, 2020 is as follows:

2018 Senior Secured Convertible Note

2019 Senior Secured Convertible Notes

2020 Senior Convertible Note

of Balance Sheet Fair Value Components

Income (Expense)

Value - December 31, 2019

value principal – issue date

value adjustment – issue date

repayments – common stock

Non-installment

payments – common stock

Non-installment

payments – cash

in fair value

Fee - November 2019 Senior Secured Convertible Note - Series B

Value at March 31, 2020

Income (Expense) - Change in fair value - three months ended March 31, 2020

value principal – issue date

value adjustment – issue date

repayments – common stock

Non-installment

payments – common stock

Non-installment

payments – cash

in fair value

Fee - April 2020 Senior Convertible Note

Value at June 30, 2020

Income (Expense) - Change in fair value - three months ended June 30, 2020

Income (Expense) - Change in fair value - six months ended June 30, 2020

Senior Convertible Notes presented above were each accounted for under the ASC 825-10-15-4 fair value option (“FVO”) election,

wherein, the financial instrument is initially measured at its issue-date estimated fair value and subsequently remeasured at estimated

6 unchanged sentences

April 8, 2020 the Company entered into a loan agreement with JP Morgan Chase, N.A., and received approximately $ 300 of proceeds, pursuant

to the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) Paycheck Protection Program (“PPP”)

- the “PPP Loan”.

As of March 31, 2021, and to date, no principal or interest payments have been made.

Additionally, the

Company has submitted its PPP Loan forgiveness application on April 21, 2021 and is currently awaiting a final determination of the forgiveness

to the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) Paycheck Protection Program (“PPP”)

- the “PPP Loan”.

Through the life of the PPP Loan, the Company made no principal or interest payments.

The Company submitted

its PPP Loan forgiveness application on April 21, 2021 and the forgiveness application was approved on June 9, 2021.

Upon PPP Loan forgiveness,

the Company recognized a gain of $ 300 in its unaudited condensed consolidated results of operations for the three and six month periods

ended June 30, 2021.

8 — Stock-Based Compensation

2014 Long-Term Incentive Equity Plan

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

2014 Equity Plan”), provides for the granting, subject

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

2014 Equity Plan”), provides for the granting, subject

to approval by the compensation committee of the PAVmed Inc.

1 unchanged sentence

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

As of March 31, 2021, the PAVmed Inc.

2014 Equity Plan

has 1,679,239 shares available-for-grant of stock-based awards, with such shares available for grant, not diminished by 500,854 PAVmed

stock options previously granted outside the PAVmed Inc.

As of June 30, 2021, the PAVmed Inc.

Plan has 1,374,239

shares available-for-grant of stock-based awards,

with such shares available for grant, not diminished by 500,854

stock options previously granted

outside the PAVmed Inc.

2014 Equity Plan.

2 unchanged sentences

2014 Equity Plan is as follows:

Intrinsic Value (2)

Outstanding stock options at December 31, 2020

Outstanding stock options at March 31, 2021

Vested and exercisable stock options at March 31, 2021

Schedule of Summarizes Information About Stock Options

Stock Options

Average Exercise Price

Contractual Term (Years)

stock options at December 31, 2020

stock options - June 30, 2021

and exercisable stock options - June 30, 2021

options granted under the PAVmed Inc.

2014 Equity Plan generally vest ratably over twelve

quarters, with the vesting commencing with the grant date quarter, and have a ten-year contractual

term from date-of-grant.

2014 Equity Plan generally vest ratably over twelve quarters, with the vesting commencing with

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

intrinsic value is computed as the difference between the quoted price of the PAVmed Inc.

common stock on each of March 31, 2021 and December 31, 2020 and the exercise price of the

underlying PAVmed Inc.

stock options, to the extent such quoted price is greater than the

exercise price.

to March 31, 2021, as of May 14, 2021, a total of 1,170,000 stock options with a weighted average exercise price of $4.49

per share of common stock of the Company were granted under the PAVmed Inc.

2014 Equity Plan, each vesting and having a contractual

term as described above.

common stock on each of June 30, 2021 and

December 31, 2020 and the exercise price of the underlying PAVmed Inc.

stock options, to the extent such quoted price is greater

than the exercise price.

8 — Stock-Based Compensation - continued

2014 Long-Term Incentive Equity Plan - Restricted Stock Awards

May 1, 2020, a total of 950,000 restricted stock awards were granted under the PAVmed Inc.

2014 Equity Plan, vesting as

450,000 restricted stock awards vesting ratably on an annual basis over a three year period with an initial annual

vesting date of May 1, 2021;

and 500,000 restricted stock awards vesting on May 1, 2023.

The fair value of the restricted

stock awards of approximately $1,938, measured using the grant date quoted closing price per share of PAVmed Inc.

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

April 1, 2021, a total of 300,000 restricted stock awards were granted to employees under the PAVmed Inc.

2 014 Equity Plan, with such

restricted stock awards having a single vesting date of April 1, 2024.

The (April 1, 2021) restricted stock awards fair value of approximately

$ 1,491 , which was measured using the grant date quoted closing price per share of PAVmed Inc.

common stock, is being recognized as stock-based

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

The restricted

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

A total of 1,650 restricted

stock awards were previously granted under the PAVmed Inc.

2014 Equity Plan, with such restricted stock awards having an aggregate fair

value of approximately $ 2,680 , which was measured using the respective grant date quoted closing price per share of PAVmed Inc.

stock, with the fair value being recognized as stock-based compensation expense ratably on a straight-line basis over the vesting period,

which is commensurate with the service period.

The restricted stock awards are subject to forfeiture if the requisite service

period is not completed.

March 15, 2019, a total of 700,000 restricted stock awards were granted under the PAVmed Inc.

2014 Equity Plan, vesting as

233,334 restricted stock awards vested on March 15, 2020;

and 466,666 restricted awards vesting on March 15, 2022.

The fair value of the restricted stock awards of approximately $742, measured using the grant date quoted closing price

per share of PAVmed Inc.

common stock, is being recognized as stock-based compensation expense ratably on a straight-line

basis over the vesting period, which is commensurate with the service period.

The restricted stock awards are subject to

forfeiture if the requisite service period is not completed.

to March 31, 2021, on April 1, 2021, a total of 300,000 restricted stock awards were granted to employees under the PAVmed Inc.

Equity Plan, with such restricted stock awards having a single vesting date of April 1, 2024.

The restricted stock awards are subject

to forfeiture if the requisite service period is not completed.

The vesting of the previously granted restricted stock awards is as follows:

233,334 vested

on March 15, 2020;

466,666 vesting on March 15, 2022;

450,000 vesting ratably on an annual basis over a three year period with the initial

annual vesting date on May 1, 2021;

and 500,000 restricted stock awards having a single vesting date of May 1, 2023 .

The restricted stock

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

Diagnostics Inc.

1 unchanged sentence

Lucid Diagnostics Inc.

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

2018 Equity Plan”), provides for

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

2018 Equity Plan”), provides for

the granting, subject to approval by the Lucid Diagnostics Inc.

1 unchanged sentence

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

As of March 31, 2021, the Lucid Diagnostics Inc.

As of June 30, 2021, the Lucid Diagnostics Inc.

Equity Plan has 2,200,000 shares of common stock of Lucid Diagnostics Inc.

4 unchanged sentences

2018 Equity Plan is as follows:

Outstanding stock options at December 31, 2020

Outstanding stock options at March 31, 2021

Vested and exercisable stock options at March 31, 2021

of Summarizes Information About Stock Options

stock options at December 31, 2020

stock options at June 30, 2021

and exercisable stock options at June 30, 2021

options granted under the Lucid Diagnostics Inc.

2018 Equity Plan generally vest ratably

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

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

the three months ended March 31, 2020, 3,333 stock options issued under the Lucid Diagnostics Inc.

2018 Equity Plan were exercised for

cash proceeds of $5, resulting in the issue of a corresponding number of shares of common stock of Lucid Diagnostics Inc.

2018 Equity Plan generally vest ratably over twelve quarters, with the vesting commencing

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

8 — Stock-Based Compensation - continued

Diagnostics Inc.

2018 Long-Term Incentive Equity Plan –

Restricted Stock Awards

2018 Long-Term Incentive Equity Plan – Restricted Stock Awards

March 1, 2021, a total of 1,040,000 restricted stock awards were granted under the Lucid Diagnostics Inc.

2018 Equity Plan to

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

(who is also a member of the board of directors

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

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

$18.9 million, measured as discussed below, with such aggregate estimated fair value recognized as stock-based compensation

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

The restricted

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

Subsequent to March 31, 2021, as of

May 14, 2021, a total of 65,000 restricted stock awards were granted under the Lucid Diagnostics Inc 2018 Equity Plan.

The estimated fair

value of the restricted stock awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan, as discussed above, was determined

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

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

In this regard,

the Lucid Diagnostics Inc.

common stock grant-date estimated fair value was based upon an analysis of future values, assuming

various outcomes, based upon the probability-weighted present value of expected future investment returns, considering each of

the possible future outcomes available to Lucid Diagnostics Inc.

2018 Equity Plan to employees

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

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

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

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

million, measured as discussed below, with such aggregate estimated fair value recognized as stock-based compensation expense ratably

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

The restricted stock awards are subject

to forfeiture if the requisite service period is not completed.

April 2021, a total of 65,000 restricted stock awards were granted under the Lucid Diagnostics Inc 2018 Equity Plan, inclusive of such

restricted stock awards granted to an employee of PAVmed Inc.

and a consultant.

with such restricted stock awards having a single vesting

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

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

commensurate with the service period.

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

estimated fair value of the restricted stock awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan, as discussed above, was

determined using a probability-weighted average expected return methodology (“PWERM”),

which involves the determination of equity value under various exit scenarios and an estimation of the return to the common stockholders

under each scenario.

In this regard, the Lucid Diagnostics Inc.

common stock grant-date estimated fair value was based upon an analysis

of future values, assuming various outcomes, based upon the probability-weighted present value of expected future investment returns,

considering each of the possible future outcomes available to Lucid Diagnostics Inc.

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

(ii) determine the equity value under

each scenario;

and (iii) determine the common stock shareholders’

return in each scenario.

The two scenarios identified

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

common stock (“IPO scenario”);

to continue on as a private company (“stay private scenario”).

With respect to the IPO scenario, the valuation of

the Lucid Diagnostics Inc.

common stock was computed using assumptions, including dates of the IPO, to calculate an estimated

pre-money valuation;

and, with respect to the stay private scenario, an income approach was used, wherein a risk-adjusted discount

rate is applied to projected future cash flows.

A relative weighting of 75% was applied to the IPO scenario and 25% was assigned

to the stay private scenario.

Compensation Expense

consolidated stock-based compensation expense recognized for both the PAVmed Inc.

(ii) determine the equity value under each

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

The two scenarios identified were an initial

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

common stock (“IPO scenario”);

and, to continue on as a private

company (“stay private scenario”).

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

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

and, with respect to the stay

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

weighting of 75% was applied to the IPO scenario and 25% was assigned to the stay private scenario.

8 — Stock-Based Compensation - continued

Stock-Based Compensation Expense

consolidated stock-based compensation expense recognized by each of PAVmed Inc.

and Lucid Diagnostics Inc.

for both the PAVmed Inc.

Equity Plan and the Lucid Diagnostics Inc.

Equity Plan, with respect to stock options and restricted stock awards as discussed above, for the periods indicated, was as follows:

For the Three Months Ended

Sales and marketing expenses

General and administrative expenses

Research and development expenses

consolidated stock-based compensation expense presented above includes $805 and $16 in the three months ended March 31, 2021 and

2020, respectively, recognized by Lucid Diagnostics Inc., with respect to each of:

stock options and restricted stock awards

granted under the Lucid Diagnostics Inc.

2018 Equity Plan to employees of PAVmed Inc.

and to non-employee consultants, with each

providing services to Lucid Diagnostics Inc.;

and, stock options granted under the PAVmed Inc.

2014 Equity Plan to non-employee

consultants providing services to Lucid Diagnostics Inc., summarized as follows for the periods noted:

Three Months Ended

Lucid Diagnostics Inc 2018 Equity Plan –

general and administrative expense

Lucid Diagnostics Inc 2018 Equity Plan –

research and development expenses

PAVmed Inc 2014 Equity Plan - research and development expenses

Total stock-based compensation expense –

2018 Equity Plan, with respect to stock options and restricted stock awards as discussed above,

for the periods indicated, was as follows:

of Stock-Based Compensation Awards Granted

operations expenses

and administrative expenses

and development expenses

stock-based compensation expenses

Compensation Expense Recognized by Lucid Diagnostics Inc.

noted, the consolidated stock-based compensation expense presented above is inclusive of stock-based compensation expense recognized

by Lucid Diagnostics Inc., inclusive of each of:

stock options granted under the PAVmed Inc.

2014 Equity Plan to the three physician

inventors of the intellectual property underlying the CWRU License Agreement (“Physician Inventors”) (as discussed above

in Note 3, Related Party Transactions );

and stock options and restricted stock awards granted to employees of PAVmed Inc.

non-employee consultants under the Lucid Diagnostics Inc.

2018 Equity Plan.

stock-based compensation expense recognized by Lucid Diagnostics Inc.

for both the PAVmed Inc.

2014 Equity Plan and the Lucid Diagnostics

2018 Equity Plan, with respect to stock options and restricted stock awards as discussed above, for the periods indicated, was as

of Stock-Based Compensation Expense Classified in Research and Development Expenses

Diagnostics Inc 2018 Equity Plan – general and administrative expense

Diagnostics Inc 2018 Equity Plan – research and development expenses

Inc 2014 Equity Plan - research and development expenses

stock-based compensation expense –

recognized by Lucid Diagnostics Inc

8 — Stock-Based Compensation - continued

Compensation Expense - continued

of March 31, 2021, unrecognized stock-based compensation expense and weighted average remaining requisite service period with respect

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

Consolidated Stock-Based Compensation Expense - continued

consolidated unrecognized stock-based compensation expense and weighted average remaining requisite service period with respect to stock

options and restricted stock awards issued under each of the PAVmed Inc.

2014 Equity Plan and the Lucid Diagnostics Inc.

Equity Plan, as discussed above, is as follows:

Weighted Average

Service Period

Plan, as discussed above, is as follows:

of Unrecognized Compensation Expense

Weighted Average Remaining Service Period

2014 Equity Plan

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Restricted Stock Awards

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

2014 Equity Plan was based on a weighted

average estimated fair value of such stock options of $2.79 per share and $1.34 per share during the three months ended March 31, 2021

and 2020, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

Three Months Ended March 31,

Stock-based compensation expense

recognized with respect to stock options granted under the PAVmed Inc.

2014 Equity Plan was based on a weighted average estimated fair

value of such stock options of 3.32 per share and $ 1.28 per share during the six months ended June 30, 2021 and 2020, respectively,

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

Schedule of Fair Values of Stock Options Granted Using Black-scholes Valuation

Model Assumptions

Six Months Ended June 30,

Expected term of stock options (in years)

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Expected dividend yield

The restricted

stock awards granted under the PAVmed Inc.

2014 Equity Plan resulted in stock-based compensation expense recognized of $185

and $62 in general and administrative expense, in the three months ended March 31, 2021 and 2020, respectively, and $38 in

research and development expense in the three months ended March 31, 2021 (there was no such research and development expense in the

corresponding period of the prior year).

Employee Stock Purchase Plan (“ESPP”)

Employee Stock Purchase Plan (“PAVmed Inc.

ESPP”), adopted by the Company’s board of directors effective

Employee Stock Purchase Plan (“ESPP”)

Employee Stock Purchase Plan (“PAVmed Inc.

ESPP”), adopted by the Company’s board of directors effective

April 1, 2019, provides eligible employees the opportunity to purchase shares of PAVmed Inc.

common stock through payroll deductions

during six month periods, wherein the purchase price per share of common stock is the lower of 85% of the quoted closing price

per share of PAVmed Inc.

during six month periods, wherein the purchase price per share of common stock is the lower of 85% of the quoted closing price per share

of PAVmed Inc.

common stock at the beginning or end of each six month share purchase period.

ESPP share purchase dates are March 31 and September 30.

A total of 203,480 and 154,266 shares of common stock of

the Company were purchased for proceeds of approximately $304 and $126, on the ESPP purchase dates of March 31, 2021 and 2020,

respectively.

of March 31, 2021, the PAVmed Inc.

ESPP has a total reservation of 750,000 shares of common stock of PAVmed Inc., with 157,153

shares available-for-issue remaining after the March 31, 2021 ESPP purchase noted above.

The PAVmed Inc.

ESPP share purchase dates

are March 31 and September 30.

A total of 203,480 and 154,266 shares of common stock of the Company were purchased for proceeds of approximately

$ 304 and $ 126 , on the ESPP purchase dates of March 31, 2021 and 2020, respectively.

The PAVmed Inc.

ESPP has a total reservation of 1,250,000

shares of common stock of PAVmed Inc., with 657,193 shares available-for-issue remaining as of June 30, 2021.

9 — Preferred Stock

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

and preferences as may be determined by the Company’s board of directors.

There were 1,185,685 and 1,228,075 shares of Series B

Convertible Preferred Stock (classified in permanent equity) issued and outstanding as of March 31, 2021 and December 31, 2020.

the three months ended March 31, 2021, the Company’s board-of-directors declared approximately $72 of Series B Convertible Preferred

Stock dividends, earned as of December 31, 2020, which were settled by the issue of an additional 24,198 shares of Series B Convertible

Preferred Stock.

In the corresponding period of the prior year, the board of directors declared approximately $69 of such dividends,

earned as of each of December 31, 2019, which were settled by the issue of an additional 23,182 shares of Series B Convertible Preferred

to March 31, 2021, in April 2021, the Company’s board-of-directors declared a Series B Convertible Preferred Stock dividend earned

as of March 31, 2021 and payable as of April 1, 2021, of approximately $75 to be settled by the issue of an additional 25,046 shares

of Series B Convertible Preferred Stock (with such dividend not recognized as a dividend payable as the Company’s board of directors

had not declared such dividends payable as of March 31, 2021).

Stockholders’

Equity and Common Stock Purchase Warrants

Convertible Preferred Stock (classified in permanent equity) issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.

The Series B Convertible Preferred Stock

the six months ended June 30, 2021, at each of the respective holders’ election, a total of 91,634 shares of Series B Convertible

Preferred Stock were converted into the same number of shares of common stock of PAVmed Inc.

Subsequent to June 30, 2021, as of August

12, 2021, a total of 91,063 shares of Series B Convertible Preferred Stock were converted into the same number of shares

of common stock of the Company.

of June 30, 2021, the Company’s board-of-directors declared an aggregate of approximately $ 148 of Series B Convertible Preferred

Stock dividends, inclusive of approximately $ 73 earned as of December 31, 2020 and $ 75 earned as of March 31, 2021, which were settled

by the issue of an additional aggregate 49,244 shares of Series B Convertible Preferred Stock.

In the corresponding period of the prior

year, the board of directors declared an aggregate of approximately $ 140 of Series B Convertible Preferred Stock dividends, inclusive

of approximately $ 70 earned as of December 31, 2019 and $ 70 earned as of March 31, 2020, which were settled by the issue of an additional

aggregate 46,663 shares of Series B Convertible Preferred Stock.

to June 30, 2021, in July 2021, the Company’s board-of-directors declared a Series B Convertible Preferred Stock dividend earned

as of June 30, 2021 and payable as of July 1, 2021, of approximately $ 74 , which will be settled by the issue of an additional 24,577

shares of Series B Convertible Preferred Stock (with such dividend not recognized as a dividend payable as of June 30, 2021, as the Company’s

board of directors had not declared such dividends payable as of such date).

10 — Stockholders’ Equity and Common Stock Purchase Warrants

Company is authorized to issue up to 150 million shares of its common stock, par value of $ 0.001 per share.

There were 82,576,816 and

63,819,935 shares of common stock issued and outstanding as of March 31, 2021 and December 31, 2020, respectively.

Months Ended March 31, 2021

63,819,935 shares of common stock issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.

Months Ended June 30, 2021

the three months ended June 30, 2021, a total of 880,441 shares of common stock of the Company were issued resulting from a corresponding

number of Series Z Warrants exercised for cash of $ 1.60 per share.

the three months ended June 30, 2021, 80,799 shares of common stock of the Company were issued upon conversion of a corresponding

number of shares of Series B Convertible Preferred Stock.

See Note 9, Preferred Stock , for a discussion of the Series B Convertible

Preferred Stock.

the three months ended June 30, 2021, 40,832 shares of common stock of the Company were issued upon exercise of stock options for

cash of approximately $ 51 .

See Note 8, Stock-Based Compensation , for a discussion of the PAVmed Inc.

2014 Equity Plan.

Months Ended June 30, 2021

January 5, 2021, a total of 6,000,000 shares of common stock of the Company were issued for gross proceeds of approximately $ 13,434 ,

1 unchanged sentence

The shares of common stock were issued in a registered direct offering pursuant to a Prospectus Supplement dated January 5, 2021

with respect to the Company’s effective shelf registration statement on Form S-3 (File No.

February 23, 2021, a total of 9,782,609 shares of common stock of the Company were issued for proceeds of approximately $ 41,566 ,

1 unchanged sentence

The shares of common stock were issued in an underwritten registered

offering pursuant to a final Prospectus Supplement dated February 23, 2021, with respect to the Company’s effective shelf registration

statement on Form S-3 (File No.

333-248709 and File No.

the three months ended March 31, 2021, a total of 860,217 shares of common stock of the Company were issued resulting from

a corresponding number of Series Z Warrants exercised for cash of $1.60 per share.

Subsequent to March 31, 2021, as of May

14, 2021, a total of 672,954 Series Z Warrants were exercised for cash at a $1.60 per share, resulting in the issue

of a corresponding number of shares of common stock of the Company.

January 2021, 667,668 shares of the Company’s common stock were issued upon conversion, at the election of the holder, of the

the six months ended June 30, 2021, a total of 1,740,658 shares of common stock of the Company were issued resulting from a corresponding

number of Series Z Warrants exercised for cash of $ 1.60 per share.

Subsequent to June 30, 2021, as of August 12, 2021, a total

of 508,548 Series Z Warrants were exercised for cash at the $ 1.60 per share exercise price, resulting in the

issue of the same number of shares of common stock of the Company.

January 2021, 667,668 shares of the Company’s common stock were issued upon conversion, at the election of the holder, of the

November 2019 Senior Convertible Note remaining face value principal of approximately $ 956 along with approximately $ 7 of interest

thereon, as discussed in Note 7, Debt .

the three months ended March 31, 2021, 10,835 shares of common stock of the Company were issued upon conversion of a corresponding

number of shares of Series B Convertible Preferred Stock.

See Note 8, Preferred Stock , for a discussion of the Series B Convertible

Preferred Stock.

the three months ended March 31, 2021, 80,000 shares of common stock of the Company were issued upon exercise of stock options for

the six months ended June 30, 2021, 91,634 shares of common stock of the Company were issued upon conversion of the same number of

shares of Series B Convertible Preferred Stock.

Subsequent to June 30, 2021, as of August 12, 2021, 91,063 shares of common

stock of the Company were issued upon conversion of the same number of shares of Series B Convertible Preferred Stock.

Preferred Stock , for a discussion of the Series B Convertible Preferred Stock.

the six months ended June 30, 2021, 120,832 shares of common stock of the Company were issued upon exercise of stock options for

cash of approximately $ 131 .

See Note 7, Stock-Based Compensation , for a discussion of the PAVmed Inc.

Subsequent to June 30, 2021, as of August 12, 2021, 24,500 shares of common stock of the Company

were issued upon exercise of the same number of stock options for cash of approximately $ 52 .

See Note 8, Stock-Based Compensation ,

for a discussion of the PAVmed Inc.

2014 Equity Plan.

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Purchase Plan, as discussed in Note 8, Stock-Based Compensation .

Stockholders’

Equity and Common Stock Purchase Warrants - continued

Note 10 — Stockholders’ Equity

and Common Stock Purchase Warrants - continued

Stock Purchase Warrants

common stock purchase warrants (classified in permanent equity) outstanding as of the dates indicated are as follows:

Common Stock Purchase Warrants Issued and Outstanding at

Schedule of Outstanding Warrants to Purchase Common Stock

Common Stock Purchase Warrants Issued and Outstanding

Series Z Warrants

1 unchanged sentence

Series W Warrants

the three months ended March 31, 2021, 860,217 Series Z Warrants were exercised for cash at their exercise price per share, resulting

in the issue of a corresponding number of shares of common stock of the Company.

Additionally, subsequent to March 31, 2021, as of May

14, 2021, a total of 672,954 Series Z Warrants were exercised for cash at their exercise price per share, resulting in the issue

of a corresponding number of shares of common stock of the Company.

During the three and six months

ended June 30, 2021, 880,441 and 1,740,658 , respectively, Series Z Warrants were exercised for cash at their exercise price per share,

resulting in the issue of a corresponding number of shares of common stock of the Company.

Additionally, subsequent to June 30, 2021,

as of August 12, 2021, a total of 508,548 Series Z Warrants were exercised for cash at the $ 1.60 per share exercise

price, resulting in the issue of the same number of shares of common stock of the Company.

Unit Purchase Options (UPO) expired unexercised as of January 29, 2021.

the three months ended March 31, 2020, the remaining 1,199,383 Series S Warrants were exercised for cash at their exercise price of $0.01

per share, resulting in the issue of a corresponding number of shares of common stock of the Company.

11 — Noncontrolling Interest

noncontrolling interest (“NCI”) included as a component of consolidated total stockholders’

equity is with respect

to the Company’s majority-owned subsidiaries Lucid Diagnostics Inc.

and Solys Diagnostics Inc., summarized for the periods indicated

Three Months Ended

March 31, 2021

noncontrolling interest (“NCI”) included as a component of consolidated total stockholders’ equity is with respect

to each of the Company’s majority-owned subsidiaries:

Lucid Diagnostics Inc., Solys Diagnostics Inc., and Veris Health Inc., with

the NCI summarized for the periods indicated as follows:

of Noncontrolling Interest of Stockholders' Equity

Six Months Ended

June 30, 2021

December 31, 2020

NCI – equity (deficit) – beginning of period

Lucid Diagnostics Inc.

2018 Equity Plan stock option exercise

Investment in Veris Health Inc.

Net loss attributable to NCI – Lucid Diagnostics Inc.

Net loss attributable to NCI – Solys Diagnostics Inc.

Net loss attributable to NCI – Veris Health Inc.

Lucid Diagnostics Inc.

2018 Equity Plan stock option exercise

Stock-based compensation expense - Lucid Diagnostics Inc.

2 unchanged sentences

Diagnostics Inc.

of each of March 31, 2021, and December 31, 2020, there were 10,003,333 shares of common stock of Lucid Diagnostics Inc.

of each of June 30, 2021, and December 31, 2020, there were 10,003,333 shares of common stock of Lucid Diagnostics Inc.

issued and outstanding;

2 unchanged sentences

has a controlling financial

interest, as of March 31, 2021 and December 31, 2020, respectively.

Accordingly, Lucid Diagnostics Inc.

is a consolidated majority-owned

subsidiary of the Company, for which a provision of a noncontrolling interest (NCI) is included as a separate component of consolidated

stockholders’

equity in the unaudited condensed consolidated balance sheet as of March 31, 2021 and December 31, 2020, along with

the recognition of a net loss attributable to the NCI in the unaudited condensed consolidated statement of operations for the three months

ended March 31, 2021 and 2020.

The minority equity ownership interest of the Lucid Diagnostics Inc.

common stock includes:

943,464 shares held by Case Western

Reserve University (“CWRU”), 289,679 shares held by each of the three individual physician inventors of the intellectual

property underlying the CWRU License Agreement (“Physician Inventors”);

and 3,333 shares held by an unrelated third-party

consultant upon the exercise the same number of stock options issued under the Lucid Diagnostics Inc.

2018 Equity Plan.

Lucid Diagnostics Inc.

is a consolidated majority-owned subsidiary of the Company, for which a provision of a noncontrolling interest

(NCI) is included as a separate component of consolidated stockholders’ equity in the unaudited condensed consolidated balance

sheet as of June 30, 2021 and December 31, 2020, along with the recognition of a net loss attributable to the NCI in the unaudited condensed

consolidated statement of operations for the three and six months ended June 30, 2021 and 2020.

Note 3, Related Party Transactions , with respect to CWRU and the three Physician Inventors;

and Note 8, Stock-Based Compensation ,

with respect to the Lucid Diagnostics Inc.

2018 Equity Plan.

Diagnostics Inc.

of March 31, 2021 and December 31, 2020, there were 9,189,190 shares of common stock of Solys Diagnostics Inc.

of each of June 30, 2021 and December 31, 2020, there were 9,189,190 shares of common stock of Solys Diagnostics Inc.

issued and outstanding,

4 unchanged sentences

is a consolidated majority-owned subsidiary

of the Company, for which a provision of a noncontrolling interest (NCI) is included as a separate component of consolidated stockholders’

equity in the unaudited condensed consolidated balance sheet as of March 31, 2021 and December 31, 2020, along with the recognition of

a net loss attributable to the NCI in the unaudited condensed consolidated statement of operations for the three months ended March 31,

2021 and 2020.

of the Company, for which a provision of a noncontrolling interest (NCI) is included as a separate component of consolidated stockholders’

equity in the unaudited condensed consolidated balance sheet as of June 30, 2021 and December 31, 2020, along with the recognition of

a net loss attributable to the NCI in the unaudited condensed consolidated statement of operations for the three and six months ended

June 30, 2021 and 2020.

of June 30, 2021, there were 8,000,000 shares of common stock of Veris Health Inc.

issued and outstanding, of which PAVmed Inc.

an 80.44 % majority-interest ownership and has a controlling financial interest, with the remaining 19.56 % minority-interest ownership

held by an unrelated third-party.

Accordingly, Veris Health Inc.

is a consolidated majority-owned subsidiary of the Company, for which

a provision of a noncontrolling interest (NCI) is included as a separate component of consolidated stockholders’ equity in the

unaudited condensed consolidated balance sheet as of June 30, 2021 along with the recognition of a net loss attributable to the NCI in

the unaudited condensed consolidated statement of operations for the period of May 28, 2021 to June 30, 2021, upon its formation and

contemporaneous acquisition of Oncodisc Inc., as such acquisition is discussed in Note 4, Acquisition of Oncodisc Inc.

12 — Loss Per Share

“Net loss per share - attributable to PAVmed Inc.

- basic and diluted”

and “Net loss per share - attributable to PAVmed

common stockholders - basic and diluted”

- for the respective periods indicated - is as follows:

respective “Net loss per share - attributable to PAVmed Inc.

- basic and diluted” and “Net loss per share - attributable

to PAVmed Inc.

common stockholders - basic and diluted” - for the periods indicated - is as follows:

Schedule of Comparison of Basic and Fully Diluted Net Loss Per Share

Three Months Ended

Six Months Ended

Net loss - before noncontrolling interest

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Net loss - as reported, attributable to PAVmed Inc.

Series B Convertible Preferred Stock dividends - earned (1) :

Series B Convertible Preferred Stock dividends:

Net loss attributable to PAVmed Inc.

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common stockholders

common stock equivalents have been excluded from the computation of diluted weighted average shares outstanding as their inclusion would

be anti-dilutive, are as follows:

2014 Equity Plan stock options and restricted stock awards

Series B Convertible Preferred Stock dividends earned as of the each of the respective periods noted, are included in the calculation

of basic and diluted net loss attributable to PAVmed Inc.

common stockholders for each respective period presented.

Notwithstanding,

the Series B Convertible Preferred Stock dividends are recognized as a dividend payable only upon the dividend being declared payable

by the Company’s board of directors.

weighted-average number of shares of common stock outstanding for the three and six months ended June 30, 2021 and 2020

include the shares of the Company issued and outstanding during such periods, each on a weighted average basis.

The basic weighted average

number of shares common stock outstanding excludes common stock equivalent incremental shares, while diluted weighted average number

of shares outstanding includes such incremental shares.

However, as the Company was in a loss position for all periods presented, basic

and diluted weighted average shares outstanding are the same, as the inclusion of the incremental shares would be anti-dilutive.

common stock equivalents excluded from the computation of diluted weighted average shares outstanding are as follows:

Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share

2014 Equity Plan stock options and

unvested restricted stock awards

Unit purchase options - as to shares of common stock

2 unchanged sentences

Series W Warrants

Series B Convertible Preferred Stock (3)

Series B Convertible Preferred Stock dividends earned as of the each of the respective periods noted, are included in the

calculation of basic and diluted net loss attributable to PAVmed Inc.

common stockholders for each respective period presented.

Notwithstanding, the Series B Convertible Preferred Stock dividends are recognized as a dividend payable only upon the

dividend being declared payable by the Company’s board of directors.

weighted-average number of shares of common stock outstanding for the three months ended March 31, 2021 and 2020 include the shares

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

The basic weighted average number of

shares outstanding excludes common stock equivalent incremental shares, while diluted weighted average number of shares outstanding

includes such incremental shares.

However, as the Company was in a loss position for all periods presented, basic and diluted weighted

average shares outstanding are the same, as the inclusion of the incremental shares would be anti-dilutive.

converted, at the election of the holder, the shares of Series B Convertible Preferred Stock issued and outstanding would

result in the issue of the same number of additional shares of common stock of the Company.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

B Convertible Preferred Stock (3)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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, 2020 (the “Form 10-K”) as filed with the Securities

and Exchange Commission (the “SEC”).

Unless the context otherwise requires, references herein to “we”, “us”,

and “our”, and to the “Company”

or “PAVmed”

are to PAVmed Inc.

together with our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Form 10-K”) as filed with the Securities

and Exchange Commission (the “SEC”).

Unless the context otherwise requires, references herein to “we”, “us”,

and “our”, and to the “Company” or “PAVmed” are to PAVmed Inc.

and Subsidiaries, including each of

the PAVmed Inc.

majority-owned subsidiary, Lucid Diagnostics Inc.

(“Lucid Diagnostics”

or “LUCID”) and Solys

Diagnostics, Inc.

(“Solys Diagnostics”

or “SOLYS”).

majority-owned subsidiaries of:

Lucid Diagnostics Inc.

(“Lucid Diagnostics” or “LUCID”),

Solys Diagnostics, Inc.

(“Solys Diagnostics” or “SOLYS”), and Veris Health Inc.

(“Veris Health” or

Forward-Looking

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

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

3 unchanged sentences

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

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

3 unchanged sentences

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:

7 unchanged sentences

ability to protect our intellectual property;

ability to complete strategic acquisitions;

ability to manage growth and integrate acquired operations;

our ability to identify and complete strategic acquisitions

and integrate the acquired operations;

ability to manage growth;

liquidity and trading of our securities;

3 unchanged sentences

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

status as an “emerging growth company”

under the JOBS Act.

status as an “emerging growth company” under the JOBS Act.

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

7 unchanged sentences

events, or otherwise, except as required by applicable law.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

and Subsidiaries (“PAVmed”

or “the Company”) is a highly differentiated, multi-product, commercial-stage

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

and Subsidiaries (“PAVmed” or “the Company”) is a highly differentiated, multi-product, commercial-stage

technology medical device company organized to advance a broad pipeline of innovative medical technologies from concept to commercialization,

employing a business model focused on capital efficiency and speed to market.

Since inception on June 26, 2014, the Company’s activities

have focused on advancing its lead products towards regulatory approval and commercialization, protecting its intellectual property,

and building its corporate infrastructure and management team.

Company operates in one segment as a medical device company, with the following lines-of-business:

Health”, “Minimally Invasive Interventions”, “Infusion Therapy”, and “Emerging Innovations”.

The Company has ongoing operations conducted through PAVmed Inc.

The Company operates in one segment

as a medical technology company, with the following lines-of-business:

“GI Health”, “Minimally Invasive Interventions”,

“Infusion Therapy”, “Digital Health”, and “Emerging Innovations”.

The Company has ongoing

operations conducted through PAVmed Inc.

and its majority-owned subsidiaries of Lucid Diagnostics, Inc.

(“Lucid

Diagnostics”

or “LUCID”), and Solys Diagnostics, Inc.

(“Solys Diagnostics”

or “SOLYS”).

and /or its subsidiaries have proprietary rights to the trademarks used herein, including, among others, PAVmed™, Lucid Diagnostics™,

Caldus™, CarpX ®

, DisappEAR™, EsoCheck ®

, EsoGuard ®

, EsoCheck Cell Collection

, EsoCure Esophageal Ablation Device™, NextCath™, NextFlo™, PortIO™, and “Innovating

at the Speed of Life”™.

Solely as a matter of convenience, trademarks and trade names referred to herein may or may not be

accompanied with the requisite marks of “™”

or “®”, however, the absence of such marks is not intended

to indicate, in any way, PAVmed Inc.

or its subsidiaries will not assert, to the fullest extent possible under applicable law, their

respective rights to such trademarks and trade names.

(“Lucid Diagnostics”

or “LUCID”), Solys Diagnostics, Inc.

(“Solys Diagnostics” or “SOLYS”) and Veris Health Inc.

Health” or “VERIS”).

and /or its subsidiaries have proprietary rights to the trademarks used herein, including, among others, PAVmed™, Lucid Diagnostics™,

LUCID™, Veris Health™, VERIS™, Oncodisc™, Solys Diagnostics™, SOLYS™, Caldus™, CarpX ® ,

DisappEAR™, EsoCheck ® , EsoGuard ® , EsoCheck Cell Collection Device ® , EsoCure Esophageal

Ablation Device™, NextCath™, NextFlo™, PortIO™, and “Innovating at the Speed of Life”™.

as a matter of convenience, trademarks and trade names referred to herein may or may not be accompanied with the requisite marks of “™”

However, the absence of such marks is not intended to indicate, in any way, PAVmed Inc.

or its subsidiaries

will not assert, to the fullest extent possible under applicable law, their respective rights to such trademarks and trade names.

multiple products and services are in various phases of development, regulatory clearances, approvals, and commercialization.

EsoCheck device received 510(k) marketing clearance from the U.S.

Food and Drug Administration (“FDA”), in June 2019

as an esophageal cell collection device;

and, EsoGuard has been established as a Laboratory Developed Test (“LDT”), and

was launched commercially in December 2019 after Clinical Laboratory Improvement Amendment (“CLIA”) and College of American

Pathologists accreditation of the test at Lucid Diagnostics commercial diagnostic laboratory partner ResearchDx Inc., headquartered

in Irvine, California.

CarpX device is a patented, single-use, disposable, minimally-invasive surgical device designed as a precision cutting tool to treat

carpal tunnel syndrome while reducing recovery times that was cleared by the FDA under section 510(k) in April 2020, with the first

commercial procedure successfully performed in December 2020.

other products in development have not yet received clearance or approval to be marketed or sold in the U.S.

or elsewhere.

been granted patents by the United States Patent and Trademark Office (“USPTO”) for CarpX, PortIO, and Caldus;

acquired licenses to certain patents and intellectual property for:

DisappEAR from Tufts University and a group of academic centers;

the intellectual property licensed from Case Western Reserve University (“CWRU”) underlying the technology developed

for the EsoGuard diagnostic LDT and the EsoCheck cell sample collection device.

Food and Drug Administration (“FDA”), in June 2019

and European CE Mark Certification in May 2021 as an esophageal cell collection device;

and, EsoGuard has been established as a Laboratory

Developed Test (“LDT”), completed European CE Mark Certification in June 2021, and was launched commercially in December

2019 after Clinical Laboratory Improvement Amendment (“CLIA”) and College of American Pathologists accreditation of the

test at Lucid Diagnostics commercial diagnostic laboratory partner ResearchDx Inc., headquartered in Irvine, California.

2021, Lucid Diagnostics launched a strategic partnership with direct-to-consumer telemedicine company UpScriptHealth to support our

commercialization efforts.

Also in August 2021, we tested our first patients referred by primary care physicians (“PCPs”)

in three Lucid Test Centers opened in the Phoenix metropolitan area.

CarpX device is a patented, single-use, disposable, minimally-invasive surgical device designed

as a precision cutting tool to treat carpal tunnel syndrome while reducing recovery times

that was cleared by the FDA under section 510(k) in April 2020, with the first commercial

procedure successfully performed in December 2020.

In May 2021 European CE Mark Certification

was received for CarpX.

May 2021, we formed Veris Health, which is our newest majority-owned subsidiary.

in May 2021, Veris Health acquired

Oncodisc Inc (“Oncodisc”), a digital health company with ground breaking

tools to improve personalized cancer care through remote patient monitoring.

core technologies include the first intelligent implantable vascular healthcare platform

that provides patients and physicians with new tools to improve outcomes and optimize the

delivery of cost-effective care through remote monitoring and data analytics.

access port contains biologic sensors capable of generating continuous data on key physiologic

parameters known to predict adverse outcomes in cancer patients undergoing treatment.

communication to the patient’s smartphone and its cloud-based digital healthcare platform

efficiently and effectively delivers actionable real time data to patients and physicians.

The technologies are the subject of multiple patent applications and one allowed patent awaiting

final issuance.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

discussed herein below, our current lines-of-business are as follows:

Health - EsoGuard Esophageal DNA Laboratory Developed Test, EsoCheck Esophageal Cell Collection Device, and

EsoCure Esophageal Ablation Device with Caldus Technology;

Health - EsoGuard Esophageal DNA Test, EsoCheck Esophageal Cell Collection Device, and EsoCure Esophageal

Ablation Device with Caldus Technology;

Invasive Interventions - CarpX Minimally Invasive Surgical Device for Carpal Tunnel Syndrome;

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Infusion Platform Technology;

Health – Veris Health implantable vascular healthcare platform through remote

monitoring and data analytics;

Innovations - Non-invasive laser-based glucose monitoring, single-use ventilators, resorbable pediatric ear tubes and mechanical

circulatory support cannulas.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

EsoCheck, and EsoCure

and EsoCheck are based on patented technology licensed from Case Western Reserve University (“CWRU”) through our majority-owned

subsidiary Lucid Diagnostics Inc.

EsoGuard and EsoCheck have been developed to provide an accurate, non-invasive, patient-friendly screening

test for the early detection of adenocarcinoma of the esophagus (“EAC”) and Barrett’s Esophagus (“BE”),

including dysplasia and related pre-cursors to EAC in patients with chronic gastroesophageal reflux (“GERD”).

based on our patented Caldus Technology and is being developed by us to treat BE.

is a molecular diagnostic esophageal DNA test shown in a published human study to be highly accurate at detecting BE, as well as EAC.

EsoCheck is a non-invasive cell collection device designed to sample cells from a targeted region of the esophagus in a five-minute office-based

procedure, without the need for endoscopy.

Both EsoGuard and EsoCheck are commercially available, as separately marketed products, for

physicians to prescribe for U.S.

is in development as an “Esophageal Ablation Device”

with the intent to allow a clinician to treat dysplastic BE before it

can progress to EAC, a highly lethal esophageal cancer, and to do so without the need for complex and expensive capital equipment.

have successfully completed a pre-clinical feasibility animal study of EsoCure demonstrating excellent, controlled circumferential ablation

of the esophageal mucosal lining.

We plan to conduct additional development work and animal testing of EsoCure to support a planned FDA

510(k) submission in early 2022.

are currently marketing the EsoGuard diagnostic LDT through a network of independent representatives working with our in-house sales

Center for Medicare and Medicaid Services (“CMS”) finalized the Clinical Laboratory Fee Schedule determination

for the EsoGuard Esophageal DNA Test (CPT code 0114U) in the amount of $1,938.10, with such reimbursement expected to be applicable from

January 1, 2021 to December 31, 2023.

In addition, we have entered into a manufacturing agreement with medical device contract manufacturer

Coastline International Inc.

to serve as a high-volume, lower-cost manufacturer of the EsoCheck device.

longer-term strategy is to secure a specific indication, based on published guidelines, for BE screening in certain at-risk populations

using EsoGuard on samples collected with EsoCheck.

This use of EsoGuard together with EsoCheck as a screening system must be cleared

or approved by the FDA as an in vitro diagnostic (“IVD”), device.

In September 2019, we entered into an agreement with a

clinical research organization to assist us with two ongoing clinical trials for EsoGuard as an IVD device, which are actively enrolling

patients and consist of a screening study (ESOGUARD-BE-1) and a case control study (ESOGUARD-BE-2).

February 2020, we received a FDA “Breakthrough Device Designation”

for EsoGuard as an IVD device.

and EsoCheck are based on patented technology licensed from Case Western Reserve University (“CWRU”) through our majority-owned

subsidiary, Lucid.

EsoGuard and EsoCheck have been developed to provide an accurate, non-invasive, patient-friendly screening test for

the early detection of adenocarcinoma of the esophagus (“EAC”) and Barrett’s Esophagus (“BE”), including

dysplastic BE and related pre-cursors to EAC in patients with chronic gastroesophageal reflux (“GERD”).

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

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

The assay was evaluated in a 408-patient multicenter

case-control study published in Science Translational Medicine, and showed greater than 90% sensitivity and specificity at detecting

esophageal precancer and all conditions along the BE-EAC spectrum, including on samples collected with EsoCheck (Moinova, et al.

2018 Jan 17;10(424):

EsoGuard is commercially available in the U.S.

as a Laboratory Developed Test (LDT) performed

at our CLIA-certified laboratory partner, ResearchDx Inc.

(“RDx”), which does business as “PacificDx”.

Cell samples, including those collected with EsoCheck, as discussed below, are sent to RDx, for testing and analyses using our proprietary

EsoGuard NGS DNA assay.

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.

is in development as an Esophageal Ablation Device, with the intent to allow a clinician to treat dysplastic BE before it can progress

to EAC, a highly lethal esophageal cancer, and to do so without the need for complex and expensive capital equipment.

We have successfully

completed a pre-clinical feasibility animal study of EsoCure demonstrating excellent, controlled circumferential ablation of the esophageal

mucosal lining.

We have also completed an acute and survival animal study of EsoCure ™ Esophageal Ablation Device, demonstrating

successful direct thermal balloon catheter ablation of esophageal lining through working channel of standard endoscope.

We plan to conduct

additional development work and animal testing of EsoCure to support a future FDA 510(k) submission.

In December 2019, we secured

“gapfill” determination for the EsoGuard PLA code 0114U through the United States Department of Health and Human Services

(“HHS”) Centers for Medicare and Medicaid Services (“CMS”) Clinical Laboratory Fee Schedule (“CLFS”)

process, which has allowed us to engage directly with Medicare contractor Palmetto GBA, LLC and its MolDx Program on CMS payment and

In October 2020, CMS granted EsoGuard final Medicare payment determination of $1,938.01, effective January 1, 2021.

still awaiting Medicare local coverage determination from MolDx, which we understand is working to clear a significant backlog of reviews.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

GI Health - continued

EsoGuard, EsoCheck, and EsoCure

are also aggressively pursuing EsoGuard private payor payment and coverage in the United States.

Our first advisor board meeting with medical directors

of major insurers provided positive feedback and good alignment with our strategic approach.

Although the claim cycle can be

prolonged during the early commercialization of a new test, PacificDx is starting to receive out-of-network private insurance

payments on our behalf.

initial EsoGuard commercialization efforts focused on gastroenterology (GI) physicians who have generally embraced our message that EsoGuard

has the potential to expand the funnel of BE-EAC patients who will need long-term EGD surveillance and, potentially, treatment with endoscopic

esophageal ablation.

We have utilized a hybrid sales model with full-time sales management and approximately fifty independent sales

representatives.

We significantly expanded our full-time commercial team in 2021 and are actively recruiting full-time territory managers

EsoGuard testing has accelerated as pandemic-related healthcare facility limitations have eased.

are now expanding EsoGuard commercialization to target primary care physicians (PCPs).

The vast majority of at-risk GERD patients are

cared for by PCPs and never see a gastroenterologist.

To assure sufficient testing capacity and geographic coverage during this expansion,

we are building our own network of Lucid Test Centers, where Lucid-employed clinical personnel will perform the EsoCheck procedure for

EsoGuard testing.

We have hired personnel and leased medical office space to launch three pilot Lucid Test Centers in the Phoenix metropolitan

The next phase of this pilot program will be to establish an EsoGuard Telemedicine Program, in partnership with an independent

third-party telemedicine provider, UpScriptHealth, that can accommodate EsoGuard self-referrals from direct-to-consumer marketing.

active clinical research and development program seeks to expand the clinical evidence of our products’ efficacy to support our

ongoing regulatory, reimbursement and commercial efforts.

We are actively enrolling patients in two international multicenter clinical

trials to support FDA PMA approval of EsoGuard, used with EsoCheck, as an IVD indicated to detect NDBE.

ESOGUARD-BE-1 is a screening

study which will enroll approximately 500 to 900 male GERD patients over 50 years of age with one other risk factor.

ESOGUARD-BE-2 is

a case control study which will enroll approximately 500 male GERD patients with a previous diagnosis of NDBE, LGD, HGD, or EAC, along

with normal controls.

February 2020, we received FDA “Breakthrough Device Designation” for EsoGuard as an IVD device.

The FDA Breakthrough Device

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to temporarily cover all Breakthrough Devices for three years while determining permanent coverage.

have received ISO 13485:2016 certification for Lucid Diagnostics quality management system and filed a European Union CE Mark regulatory

submission for EsoCheck in November 2020, having confirmed that EsoGuard falls under the self-declaration category of the European Union

regulatory requirements

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

have received ISO 13485:2016 certification for Lucid’s quality management system and received CE Mark certification for EsoCheck

in May 2021 which allows it to be marketed in CE Mark European countries, which include the European Economic Area (the EU, Norway, Iceland,

and Lichtenstein), Switzerland, and, until July 1, 2023, the United Kingdom.

In June 2021, we completed the European Directive

98/79/EC for In-Vitro Diagnostic Medical Devices (“IVDD”) CE Mark certification for EsoGuard after Lucid and its European

Union (“EU”) authorized representative completed the Commission of the European Union (“EC”) declaration

of conformity procedure, including the associated technical documentation, ensuring and declaring EsoGuard meets the essential requirements

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

Invasive Interventions

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to a partner, particularly outside the United States, with its own robust distribution channels.

have received ISO 13485:2016 certification for PAVmed’s quality management system and filed a European Union CE Mark regulatory

submission for CarpX in December 2020.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

have received ISO 13485:2016 certification for PAVmed’s quality management system and received CE Mark certification for CarpX

in May 2021 which allows it to be marketed in CE Mark European countries, which include the European Economic Area (the EU, Norway, Iceland,

and Lichtenstein), Switzerland, and, until July 1, 2023, the United Kingdom.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

is a novel, patented, implantable, intraosseous vascular access device which does not require accessing the central venous system and

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data with a clinical safety study in the U.S.

following FDA clearance of our Investigational Device Exemption (“IDE”) submission

to begin clinical testing in dialysis patients to support a future de novo regulatory submission.

is a patented, disposable, and highly accurate infusion platform technology including intravenous (“IV”) infusion

sets and disposable infusion pumps designed to eliminate the need for complex and expensive electronic infusion pumps for most of the

estimated one million infusions of fluids, medications and other substances delivered each day in hospitals and outpatient settings in

is a patented, disposable, and highly accurate infusion platform technology including intravenous (“IV”) infusion sets and

disposable infusion pumps designed to eliminate the need for complex and expensive electronic infusion pumps for most of the estimated

one million infusions of fluids, medications and other substances delivered each day in hospitals and outpatient settings in the U.S.

NextFlo is designed to deliver highly accurate gravity-driven infusions independent of the height of the IV bag.

constant flow by incorporating a proprietary, passive, pressure-dependent variable flow-resistor consisting entirely of inexpensive,

easy-to-manufacture disposable mechanical parts.

NextFlo testing has demonstrated constant flow rates across a wide range of IV bag heights,

with accuracy rates comparable to electronic infusion pumps.

It maintains constant

flow by incorporating a proprietary, passive, pressure-dependent variable flow-resistor consisting entirely of inexpensive, easy-to-manufacture

disposable mechanical parts.

NextFlo testing has demonstrated constant flow rates across a wide range of IV bag heights, with accuracy

rates comparable to electronic infusion pumps.

are seeking a long-term strategic partnership or acquiror.

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and financial partners.

The process is active with ongoing discussion with multiple parties and we are simultaneously progressing toward

an initial FDA 510(k) submission for the NextFlo IV Infusion System planned for later in 2021.

Discussions and technologic diligence engagement with large strategic partners to license NextFlo technology

for disposable infusion pumps continue while PAVmed advances technology towards self-commercialization.

We have initiated design freeze

verification testing in preparation for final verification and validation testing of NextFlo IV Infusion Set, to support FDA 510(k) submission

and clearance targeted for the first half of 2022.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

Digital Health

Veris Health Inc.

May 2021, we formed Veris Health, which is our newest majority majority-owned subsidiary, focused on digital health technology.

Also in May 2021, Veris Health acquired Oncodisc Inc.

(“Oncodisc”), a digital health company with groundbreaking

tools to improve personalized cancer care through remote patient monitoring.

was founded by experienced physician entrepreneurs, James Mitchell, M.D., who joins Veris Health as its full-time Chief Medical

Officer, and Andrew Thoreson, M.D., who will serve as a Veris Health consultant.

Oncodisc’s core technologies include the

first intelligent implantable vascular access port with biologic sensors and wireless communication, combined with an oncologist-designed

remote digital healthcare platform that provides patients and physicians with new tools to improve outcomes and optimize the delivery

of cost-effective care through remote monitoring and data analytics.

was founded in 2018 by Mitchell, a radiation-oncologist, and Thoreson, an interventional radiologist, who previously co-founded Redsmith,

Inc., an interventional catheter company whose technology was acquired by C.R.

Bard Inc., now BD Inc.

BDX), in 2017.

received a National Science Foundation (“NSF”) Small Business Innovation Research (“SBIR”) grant award to support

its early work and completed both the MedTech Innovator Accelerator and UCSF Rosenman Institute Accelerator programs.

groundbreaking vascular access port contains biologic sensors capable of generating continuous data on key physiologic parameters

known to predict adverse outcomes in cancer patients undergoing treatment.

Wireless communication to the patient’s smartphone

and its cloud-based digital healthcare platform efficiently and effectively delivers actionable real time data to patients and

The technologies are the subject of multiple patent applications and one allowed patent awaiting final issuance.

is targeting FDA 510(k) clearance of the intelligent implantable vascular access port and launch of the remote digital healthcare

platform for the last six months of 2022.

planned Veris Health business model seeks to generate 100% recurring revenue through oncology practice and hospital-based subscriptions.

These entities would purchase seats on the platform and pay a monthly remote monitoring charge to drive revenues from remote patient

monitoring and device implantation under existing CPT codes, as well as established CMS Oncology Care Model (OCM) bonuses and CMS Quality

Reporting Program incentives.

Veris Health also anticipates strong demand for its intelligent implantable vascular access port

and remote monitoring platform from oncology biotherapeutic companies to support clinical trials of their novel immunotherapy and chemotherapy

agents with continuous physiologic data and transformative analytics.

Innovations include a diversified and expanding portfolio of innovative products designed to address unmet clinical needs across a broad

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In June 2020, we announced the execution of a letter of intent to consummate a series of agreements

to develop and utilize Canon Virginia’s commercial grade and scalable aqueous silk fibroin molding process to manufacture PAVmed’s

DisappEAR molded pediatric ear tubes for commercialization.

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corporate and commercial synergies.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

of the COVID-19 Pandemic

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including the United States.

On March 11, 2020, the United Nations World Health Organization (“WHO”) declared

a pandemic resulting from the spread of the coronavirus, with such pandemic commonly referred to by its resulting illness,

“COVID-19”.

The COVID-19 pandemic is ongoing, and we continue to monitor the ongoing impact of the COVID-19 pandemic

on the United States national economy, the global economy, and our business.

On March 11, 2020, the United Nations World Health Organization (“WHO”) declared a pandemic

resulting from the spread of the coronavirus, with such pandemic commonly referred to by its resulting illness, “COVID-19”.

The COVID-19 pandemic is ongoing, and we continue to monitor the ongoing impact of the COVID-19 pandemic on the United States national

economy, the global economy, and our business.

COVID-19 pandemic may have an adverse impact on our operations, supply chains, and distribution systems and /or those of our contractors

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to contain the coronavirus and the impact of such efforts.

addition, the spread of the coronavirus has disrupted the United States’

healthcare and healthcare regulatory systems which

could divert healthcare resources away from, or materially delay FDA approval with respect to our products.

addition, the spread of the coronavirus has disrupted the United States’ healthcare and healthcare regulatory systems which could

divert healthcare resources away from, or materially delay FDA approval with respect to our products.

our clinical trials have been and may be further affected by the COVID-19 pandemic, as site initiation and patient enrollment may be

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imposed by governments, and the inability to access clinical test sites for initiation and monitoring.

COVID-19 pandemic may have an adverse impact on the economies and financial markets of many countries, including the United States,

resulting in an economic downturn that could adversely affect demand for our products and services and /or our product candidates.

COVID-19 pandemic may have an adverse impact on the economies and financial markets of many countries, including the United States, resulting

in an economic downturn that could adversely affect demand for our products and services and /or our product candidates.

we are continuing to monitor and assess the effects of the COVID-19 pandemic on our business, the ultimate impact of the COVID-19 pandemic

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consolidated results of operations, and /or consolidated cash flows, the adverse impact could be material.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

of Operations

and marketing expenses

and marketing expenses consist primarily of salaries and related costs for sales operations and marketing personnel, travel expenses,

and marketing supplies expenses.

anticipate our sales and marketing expenses will increase in the future, as we anticipate an increase in payroll and related expenses

operations expenses

operations expenses consist primarily of salaries and related costs for sales, sales operations, marketing, and payor reimbursement

personnel, along with advertising and promotion expenses.

anticipate our commercial operations expenses will increase in the future, as we anticipate an increase in payroll and related expenses

related to the roll-out of our commercial sales and marketing operations as we execute on our business strategy.

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improvements or extending the utility of the lead products in our pipeline, including CarpX, EsoCheck and EsoGuard, along with advancing

our DisappEAR, PortIO, NextFlo, and non-invasive glucose monitoring products through their respective development phase .

our DisappEAR, PortIO, NextFlo, non-invasive glucose monitoring and digital health products through their respective development phase.

Income and Expense, net

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and interest expense with respect to one of our convertible notes.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

months ended March 31, 2021 versus March 31, 2020

and marketing expenses

the three months ended March 31, 2021, sales and marketing costs were approximately $1.4 million, compared to $0.4 million for the corresponding

prior year period, with a $0.8 million increase principally relating to increased headcount in sales and marketing personnel and a $0.2

million increase principally related to consulting and professional services with respect to increased commercial activities.

Presentation of Dollar Amounts

All dollar amounts in this Item 2.

Discussion and Analysis of Financial Condition and Results of Operations are presented in thousands, if not otherwise noted as being

presented in millions, except for the number of shares and per share amounts.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

Results of Operations - continued

months ended June 30, 2021 versus June 30, 2020

operations expenses

the three months ended June 30, 2021, commercial operations costs were approximately $2.0 million as compared to $0.5 million for the

corresponding period in the prior year, with the $1.5 million increase principally resulting from:

approximately $0.8 million

with respect to increased staffing in commercial operations, including sales, marketing, and payor reimbursement personnel,

along with higher stock-based compensation expense;

and approximately $0.7 million with respect to increased consulting and professional

services fees.

and administrative expenses

the three months ended March 31, 2021, general and administrative costs were approximately $3.4 million, compared to $2.2

million for the three months ended March 31, 2020.

The net increase of $1.2 million was principally related to:

the three months ended June 30, 2021, general and administrative costs were approximately $6.7 million as compared to $2.4 million for

the corresponding period in the prior year, with the $4.3 million increase principally related to:

approximately

$0.8 million increase in compensation related costs principally related to staffing levels and other costs related to the growth

of our business;

$3.8 million increase in compensation related costs principally related to:

increased staffing levels, higher stock-based compensation

approximately

$0.3 million in consulting services related to patents, regulatory compliance,

legal processes for contract review and public company expenses;

$0.4 million in consulting services related to patents, regulatory compliance, legal processes for contract review and public company

approximately

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and development expenses

the three months ended March 31, 2021, research and development costs were approximately $3.3 million, compared to $2.6 million for the

corresponding period in the prior year, with the $0.7 million increase principally resulting from increased development costs and consulting

fees with respect to CarpX, NextFlo, Port IO, EsoCure, EsoGuard and a glucose monitoring project at SOLYS.

the three months ended June 30, 2021, research and development costs were approximately $4.3 million, compared to $2.1 million for the

corresponding period in the prior year, with the $2.2 million increase principally related to:

approximately

$0.3 million increase in compensation related costs principally related to increased staffing levels, higher stock-based compensation

approximately

$1.9 million in increased development costs and consulting fees with respect to CarpX, NextFlo, Port IO, EsoCure, EsoGuard, a glucose

monitoring project, and a digital health project.

Income and Expense

the three months ended June 30, 2021, our PPP loan related to the CARES Act of $0.3 million was forgiven by the Small Business Administration.

No principal or interest payments were ever made and accordingly we recorded a gain of $0.3 million.

in fair value of convertible debt

the three months ended March 31, 2021, the non-cash income (expense) recognized for the change in the fair value of our convertible notes

was approximately $1.7 million of other income, as compared to $8.4 million of other income for the three months ended March 31, 2020

inclusive of the recognition of current period other expense of approximately $0.7 million of lender fees and offering costs incurred

with respect to the funding in the prior year on March 30, 2020 of the Series B component of the Senior Secured Convertible Note dated

November 19, 2019 (“November 2019 Senior Convertible Notes”).

the three months ended June 30, 2020, non-cash income (expense) recognized for the change in the fair value of our convertible notes

was approximately $2.1 million of other income.

from Extinguishment of Debt

the prior year period of three months ended June 30, 2020, a loss from extinguishment of debt of approximately $2.7 million was recognized,

with such loss resulting from the difference between:

the face value principal repayments and the corresponding payments of the interest

as compared to the fair value of the shares of our common stock issued upon conversion of such convertible note, with such fair

value measured as the respective issue date closing quoted price per share of our common stock.

Note 7, Debt , of our unaudited condensed consolidated financial statements for additional information with respect to the convertible

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

Results of Operations - continued

months ended June 30, 2021 versus June 30, 2020

operations expenses

the six months ended June 30, 2021, commercial operations were approximately $3.4 million as compared to $0.8 million for the corresponding

period in the prior year, with the $1.8 million increase principally resulting from:

approximately $1.6 million with respect

to increased staffing in commercial operations, including sales, marketing, and reimbursement personnel, along with higher stock-based

compensation expense;

and approximately $1.0 million with respect to increased consulting and professional services fees.

and administrative expenses

the six months ended June 30, 2021, general and administrative costs were approximately $10.1 million as compared to $4.7 million for

the corresponding period in the prior year, with the $5.4 million increase was principally related to:

approximately

$4.7 million increase in compensation related costs principally related to:

increased staffing levels, higher stock-based compensation

approximately

$0.6 million in consulting services related to patents, regulatory compliance, legal processes for contract review and public company

approximately

$0.1 million in general business expenses.

and development expenses

the six months ended June 30, 2021, research and development costs were approximately $7.6 million as compared to $4.7 million for the

corresponding period in the prior year, with the $2.9 million increase principally related to:

approximately

$0.4 million increase in compensation related costs principally related to increased staffing levels, higher stock-based compensation

approximately

$2.5 million in increased development costs and consulting fees with respect to CarpX, NextFlo, Port IO, EsoCure, EsoGuard, a glucose

monitoring project and a digital health project.

Income and Expense

the six months ended June 30, 2021, our PPP loan related to the CARES Act of $0.3 million was forgiven by the Small Business Administration.

No principal or interest payments were ever made and accordingly we recorded a gain of $0.3 million.

in fair value of convertible debt

the six months ended June 30, 2021, the non-cash income (expense) recognized for the change in the fair value of our convertible notes

was approximately $1.7 million of other income, as compared to $5.9 million of other expense for the six months ended June 30,

The change in the fair value adjustment of the convertible

notes is principally related to each of the convertible notes being repaid-in-full during the three months ended March 31, 2021, as discussed

herein below under “

Other Income and Expense - Loss from Extinguishment of Debt ”.

notes is principally related to each of the convertible notes being repaid-in-full during the six months ended June 30, 2021, as discussed

herein below under “ Other Income and Expense - Loss from Extinguishment of Debt ”.

Note 6, Financial Instruments Fair Value Measurements , of our unaudited condensed consolidated financial statements for a further

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statements for a further discussion the Series A and Series B November 2019 Senior Convertible Notes.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

months ended March 31, 2021 versus March 31, 2020 - continued

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

months ended June 30, 2021 versus June 30, 2020 - continued

from Extinguishment of Debt

the three months ended March 31, 2021, a debt extinguishment loss in the aggregate of approximately $3,715 was recognized in connection

the six months ended June 30, 2021, a debt extinguishment loss in the aggregate of approximately $3.7 million was recognized in connection

with the convertible notes, as discussed below.

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stock, with a fair value of approximately $1,723 (with such fair value measured as the respective conversion date quoted closing

price of our common stock), resulting in the recognition of a loss from extinguishment of debt of approximately $760 in the three

months ended March 31, 2021;

January 30, 2021, we paid in cash a $350 partial principal repayment of the Senior Convertible Note dated April 30, 2020 (“April

2020 Senior Convertible Note”);

price of our common stock), resulting in the recognition of a loss from extinguishment of debt of approximately $760 in the six months

ended June 30, 2021;

January 30, 2021, we paid in cash a $350 partial principal repayment of the Senior Convertible Note dated April 30, 2020 (“April

2020 Senior Convertible Note”);

and on March 2, 2021, we made a cash payment of approximately $14,466, resulting in the repayment-in-full

on such date of both the April 2020 Senior Convertible Note and the Senior Secured Convertible Note dated August 6, 2021, resulting

in the recognition of a loss from extinguishment of debt of approximately $2,955 in the three months ended March 31, 2021.

the prior year period of three months ended March 31, 2020, a loss from extinguishment of debt of approximately $1.2 million was recognized,

in the recognition of a loss from extinguishment of debt of approximately $2,955 in the six months ended June 30, 2021.

the prior year period of six months ended June 30, 2020, a loss from extinguishment of debt of approximately $3.9 million was recognized,

with such loss resulting from the difference between:

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value measured as the respective issue date closing quoted price per share of our common stock.

Note 6, Debt , of our unaudited condensed consolidated financial statements for a further discussion of the convertible notes.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

and Capital Resources

have financed our operations principally through the public and private issuances of our common stock, preferred stock, common stock

purchase warrants, and debt.

We are subject to all of the risks and uncertainties typically faced by medical device and diagnostic and

medical device companies that devote substantially all of their efforts to the commercialization of their initial product and services

and ongoing R&D and clinical trials.

We expect to continue to experience recurring losses from operations and will continue to fund

our operations with debt and/or equity financing transactions.

Notwithstanding, however, together with the cash on-hand as of March 31,

2021 of $48.5 million from the cash proceeds from the issue of shares of common stock of the Company.

in January and February

2021, as discussed herein below, partially used to repay all of our remaining outstanding convertible debt we expect to be able to fund

our future operations for one year from the date of the issue of our unaudited condensed consolidated financial statements as included

here in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

the three months ended we issued shares of our common stock and received proceeds from the exercise of our Series Z Warrants, as discussed

herein below, which resulted in approximately $56.4 million of gross proceeds, before placement agent fees and expenses and additional

offering costs incurred by us.

Additionally, we repaid-in-full the outstanding principal balances of all our convertible notes.

January 5, 2021, 6,000,000 shares of our common stock were issued for gross proceeds of approximately $13,440, before a

placement agent fee and expenses of approximately $951, and offering costs incurred by us of approximately $71;

and, on February 23,

2021, 9,782,609 shares of our common stock were issued for proceeds of approximately $41,576, before offering costs incurred by

us of approximately $290.

the three months ended March 31, 2021, a total of 860,217 of our Series Z Warrants were exercised at their exercise price of $1.60

per share of our common stock, resulting in cash proceeds of approximately $1,376, and the issue of the same number

of our shares of common stock.

Subsequent to March 31, 2021, as of May 14, 2021, a total of 672,954 of our Series Z Warrants were

exercised for cash at a $1.60 per share of our common stock, resulting in the issue of the same number of shares of our common

Additionally,

in the three months ended March 31, 2021, we repaid-in-full all of the outstanding principal balances of our convertible notes, as discussed

herein above under “

Other Income and Expense - Loss from Extinguishment of Debt ”.

our unaudited condensed consolidated financial statements Note 9, Debt , for a discussion of our convertible notes;

Stockholders Equity and Common Stock Purchase Warrants , for a further discussion of and the issue of our common stock.

Accounting Policies and Significant Judgments and Estimates

discussion and analysis of our consolidated financial condition and consolidated results of operations is based on our unaudited condensed

consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United

States of America (“U.S.

GAAP”).

The preparation of these unaudited condensed consolidated financial statements requires

us to make estimates and assumptions affecting the reported amounts of assets, liabilities, and equity, along with the disclosure of

contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of

expenses during the corresponding periods.

In accordance with U.S.

GAAP, we base our estimates on historical experience and on various

other assumptions we believe are reasonable under the circumstances.

Actual results may differ from these estimates under different assumptions

or conditions.

Please see Note 2, Summary of Significant Accounting Policies , of our unaudited condensed consolidated financial

statements included in this Form 10-Q, for a summary of significant accounting policies.

In addition, reference is made to Part I, Item

Management’s Discussion and Analysis of Financial Condition and Results of Operation ”

in our previously

filed Annual Report on Form 10-K for the year ended December 31, 2020 (“Form 10-K), for a summary of our critical accounting policies

and significant judgments and estimates.

There have been no other material changes to our critical accounting policies or significant

judgments and estimates as discussed in our Form 10-K.

Note 7, Debt , of our unaudited condensed consolidated financial statements, for additional information with respect to the convertible

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

What changed 10-Q

Item 1. Financial Statements