What changed in this filing

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Item 1. Financial Statements

2021-11-22 compared with 2021-08-16 · 688 added, 880 removed, 567 unchanged (73% of the section changed)

4 unchanged sentences

current assets

Fixed assets, net

Intangible assets, net

Preferred Stock and Stockholders’ Deficit

6 unchanged sentences

Equity (Deficit):

stock, $ 0.001 par value.

stock, $ 0.001 par

Authorized, 20,000,000 shares;

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

Series B Convertible Preferred Stock, par value $ 0.001 ,

issued and outstanding 1,091,448

September 30, 2021 and 1,228,075

at December 31, 2020

stock, $ 0.001 par value.

Authorized, 150,000,000 shares;

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

December 31, 2020, respectively

84,400,822 and 63,819,935 shares outstanding as of September 30, 2021

and December 31, 2020, respectively

paid-in capital

6 unchanged sentences

thousands except number of shares and per share amounts)

September 30,

and administrative

24 unchanged sentences

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the THREE MONTHS ENDED June 30, 2021

the THREE MONTHS ENDED September 30, 2021

thousands except number of shares and per share data)

Stockholders’ Deficit

at March 31, 2021

Series B Convertible Preferred Stock dividends declared

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.

- June 30, 2021

$ ( 109,325 )

declared - Series B Convertible Preferred Stock

- Series B Convertible Preferred Stock

- Series Z Warrants

- Series W Warrants

- stock options

- Employee Stock Purchase Plan

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

- Senior Secured Convertible Note

- Senior Secured Convertible Note , shares

offerings, net

offerings, net , shares

- restricted stock awards vests

- restricted stock awards vests , shares

common stock of

majority-owned subsidiary

- Series S warrants

- Series S warrants , shares

- stock options - majority-owned subsidiary

- September 30, 2021

$ ( 121,625 )

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

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the THREE MONTHS ENDED September 30, 2020

thousands except number of shares and per share data)

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.

- June 30, 2020

declared - Series B Convertible Preferred Stock

- Senior Secured Convertible Note

- Series Z warrants

- Employee Stock Purchase Plan

compensation - PAVmed Inc.

compensation – majority-owned subsidiary

at June 30, 2021

$ ( 109,325 )

- September 30, 2020

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the THREE and SIX MONTHS ENDED June 30, 2020

the NINE MONTHS ENDED September 30, 2021

thousands except number of shares and per share data)

Stockholders’ Deficit

at March 31, 2020

common stock – upon partial conversions of Senior Secured Convertible Note

B Convertible Preferred Stock dividends declared

- December 31, 2020

declared - Series B Convertible Preferred Stock

- Series B Convertible Preferred Stock

offerings, net

- restricted stock awards vests

- Series Z warrants

- Series W warrants

- Senior Secured Convertible Note

- stock options

- Employee Stock Purchase Plan

common stock of

majority-owned subsidiary

compensation - PAVmed Inc.

2014 Equity Plan

compensation – majority-owned subsidiary

at June 30, 2020

compensation -

majority-owned subsidiary

- September 30, 2021

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the NINE MONTHS ENDED September 30, 2020

thousands except number of shares and per share data)

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

- December 31, 2019

declared - Series B Convertible Preferred Stock

- Series B Convertible Preferred Stock

- Senior Secured Convertible Note

- Series S warrants

- Series Z warrants

- Employee Stock Purchase Plan

- restricted stock awards

- restricted stock awards vests

- stock options - majority-owned subsidiary

compensation - PAVmed Inc.

2014 Equity Plan

common stock – majority-owned subsidiary exercise of stock options

compensation - majority-owned subsidiary

at June 30, 2020

at September 30, 2020

accompanying notes to the unaudited condensed consolidated financial statements.

1 unchanged sentence

thousands except number of shares and per share data)

Months Ended June 30,

Months Ended September 30,

flows from operating activities

loss - before noncontrolling interest (“NCI”)

loss - before non controlling interest (“NCI”)

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

and amortization expense

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

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– exercise of Series S warrants

– issue common stock – Employee Stock Purchase Plan

– exercise of stock options

– issue common stock – Employee Stock Purchase Plan

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

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(“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

Diagnostics” or “LUCID”), Veris Health, Inc.

(“Veris Health” or “VERIS”), and Solys Diagnostics,

(“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.

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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

stock purchase warrants, and debt.

The Company is subject to all of the risks and uncertainties typically faced by medical device and

diagnostic and medical device companies that devote substantially all of their efforts to the commercialization of their initial product

and services and ongoing R&D and clinical trials.

The Company expects to continue to experience recurring losses from operations,

and will continue to fund its operations with debt and equity financing transactions.

Notwithstanding, however, together with the cash

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

Diagnostics Inc.

Initial Public Offering - October 14, 2021

to September 30, 2021, on October 14, 2021, Lucid Diagnostics Inc.

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

stock under an effective registration statement on Form S-1 (SEC File No.

333-259721), wherein a total of 5.0

million IPO shares of common stock of Lucid Diagnostics

were issued, with such total IPO shares inclusive of 571,428

shares issued to PAVmed Inc., at an IPO offering

price of $ 14.00

per share, resulting gross proceeds of $70.0

million, before underwriting fees of $ 4.9

million, and approximately $ 0.7

million of offering costs incurred by Lucid Diagnostics

See Note 12, Noncontrolling Interest, with respect to Lucid Diagnostics Inc.

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

Accounting Policies

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interest and has controlling financial interest in each of:

Lucid Diagnostics Inc., Solys Diagnostics Inc.

and Veris Health Inc., with

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

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

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

See Note 12, Noncontrolling Interest ,

for a discussion of each of the majority-owned subsidiaries noted above.

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

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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.

consolidated results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the consolidated

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 PAVmed Inc and Subsidiaries 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.

to September 30, 2021, effective October 6, 2021, the Lucid Diagnostics Inc.

board of directors:

increased the authorized shares of common

stock of Lucid Diagnostics Inc.

million shares;

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

with respect to Lucid Diagnostics Inc.

common stock (with no adjustment to the par value per share).

All shares of Lucid

Diagnostics Inc.

common stock, stock options, and restricted stock awards, and per share amounts, have been adjusted for the

common stock-split and are presented for all periods on a retrospective basis.

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.

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

Accounting Policies - continued

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

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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

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

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

Revenue Recognition

The Company recognizes revenue

under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)

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

At its inception, an arrangement is accounted for under

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

a legally enforceable contract between the parties;

of the parties are identified;

the arrangement has commercial substance;

and collectability of the contract consideration is deemed probable.

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

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

(ii) identify the performance obligations in the contract;

(iii) determine the transaction

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

and (v) recognize revenue when (or as) the

entity satisfies a performance obligation.

of Cash Flows - Supplemental Information

unaudited condensed consolidated statement of cash flows supplemental information as of September 30, 2021 is as follows:

used in investing activities with respect to the purchase of fixed assets of $ 192 is net of $ 153 included in accounts payable and $ 60

included in accrued expenses and other current liabilities in the accompanying unaudited condensed consolidated balance sheet as of September

and cash flows from financing activities with respect to proceeds from exercise of warrants of $ 4,115 is net of each of $ 568

of exercise proceeds from the exercise of 354,996 Series Z Warrants, and $ 20 from the exercise of 3,945 Series W Warrants, with such

exercise proceeds received from the Company’s transfer agent subsequent to September 30, 2021 on October 4, 2021, with such amounts

due from the transfer agent included prepaid expenses, deposits, and other current assets, in the accompanying unaudited condensed consolidated

balance sheet as of September 30, 2021.

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

stock purchase warrants, and debt.

The Company is subject to all of the risks and uncertainties typically faced by medical device and

diagnostic and medical device companies that devote substantially all of their efforts to the commercialization of their initial product

and services and ongoing R&D and clinical trials.

The Company expects to continue to experience recurring losses from operations

and will continue to fund its operations with debt and equity financing transactions.

Notwithstanding, however, with the cash on-hand

as of the date hereof, 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 herein in this Quarterly Report on Form 10-Q for

the period ended September 30, 2021.

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

Accounting Standards Updates

August 2020, the FASB issued 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”).

ASU 2020-06 simplifies

the accounting for certain financial instruments with characteristics of liabilities and equity, by eliminating the beneficial conversion

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

ASU 2020-06 also simplified the assessment of a financial instruments settlement to determine whether a contract is an entity’s

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

The ASU 2020-06 amendments are effective

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

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.

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

December 2019, the FASB issued ASU No.

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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

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

Accounting Standards Updates

Not Yet Adopted

ASC Topic 842, Leases , (“ASC 842”) (ASU No.

2016-02, Leases , February-2016 - “ASU 2016-02” )

which established a right-of-use (“ROU”) model requiring a lessee to recognize a ROU asset and a lease liability for

all leases with terms greater-than 12 months.

Leases are classified as either finance or operating, with classification affecting the

pattern of expense recognition in the income statement.

The ASC 842 effective date for the Company is December 31, 2022 for its annual

financial statements, and for interim quarterly financial statements commencing March 31, 2023.

3 — Patent License Agreement – Case Western Reserve University

Company, through its majority-owned subsidiary Lucid Diagnostics Inc., entered into a patent license agreement with Case Western Reserve

University (“CWRU”), captioned the Amended and Restated License Agreement and dated August 23, 2021 (“Amended CWRU

License Agreement”).

The Amended CWRU License Agreement is a successor to and replaced in its entirety the previous CWRU License

Agreement, dated May 12, 2018, between Lucid Diagnostics Inc.

The Amended CWRU License Agreement terminates upon the expiration

of certain related patents, or on May 12, 2038 in countries where no such patents exist, or upon expiration of any exclusive marketing

rights granted by the FDA or other U.S.

government agency, whichever comes later.

Amended CWRU License Agreement (as did the predecessor CWRU License Agreement) provides for the exclusive worldwide license of the intellectual

property rights for the proprietary technologies of two distinct technology components - the “EsoCheck Cell Collection Device”

referred to as “EsoCheck®”;

and a panel of proprietary methylated DNA biomarkers, a laboratory developed test (“LDT”),

referred to as “EsoGuard®”;

and together are collectively referred to as the “EsoGuard Technology”.

CWRU License Agreement Fee was $ 273 ,

of which $ 50

was previously paid in 2018.

On the August

23, 2021 effective date of the Amended CWRU License Agreement, the remaining balance of $ 223

became payable, and such amount was paid

in September 2021.

Additionally, also in September 2021, the Company paid a $ 10

amendment fee in connection with the Amended

CWRU License Agreement.

Additionally, the Amended CWRU License Agreement provides for each of patent fees reimbursement payments;

and royalty payments - each as discussed below.

Fees Reimbursement

Diagnostics Inc.

is responsible for reimbursement of certain CWRU billed patent fees.

See Note 4, Related Party Transactions ,

for patent fee reimbursement payments paid to CWRU in the three and nine months ended September 30, 2021 and 2020.

The (predecessor) CWRU License

Agreement contained milestones, including regulatory milestones with respect to the FDA 501(k) submission of EsoCheck and the FDA clearance

of EsoCheck, respectively regulatory submissions and clearances;

which were achieved in accordance with the requisite contractual due

dates, for which a $ 75 research and development expense was recognized and paid with respect to the achievement of the regulatory milestone

related to FDA clearance of EsoCheck.

The CWRU License Agreement was amended effective February 12, 2021, to:

change the achievement

date of commercialization milestone from November 2020 to August 2021;

to eliminate the payment with respect to the commercialization

and to add a non-refundable $ 100 payment to CWRU in consideration for such changes to the commercialization milestone (“CWRU

License Agreement Amendment Fee”), with such fee recognized as general and administrative expense as of December 31, 2020 and paid

in February 2021.

The regulatory milestone related to FDA PMA submission of a licensed product (“PMA Milestone”) is included

in the Amended CWRU License Agreement, and is the sole remaining unachieved milestone, for which a $ 200 milestone payment would be payable

to CWRU upon its achievement.

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

the Amended CWRU License Agreement.

the Company is required to pay a royalty fee to CWRU with respect to the “Licensed Products”

(as defined in the CWRU License Agreement) of a percentage of “Net Sales”, as defined in the Amended CWRU License Agreement,

5.0 % of Net Sales up to $ 100.0 million per year;

and 8.0 % of Net Sales of $ 100.0 million or greater per year, with such amounts

subject-to a minimum annual royalty fee.

base minimum annual royalty fee is $ 50

commencing January 1 following the first anniversary of the

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

The minimum annual royalty fee increases to each of:

if the annual “Net Sales” (as

defined in the Amended CWRU License Agreement) exceed $ 25.0

million up to $ 50.0

if annual Net Sales exceed $ 50.0

million up to $ 100.0

if annual Net Sales exceed $ 100.0

The Company recognized a 5.0 %

royalty fee payment liability as of September 30, 2021 with respect to the revenue recognized under the EsoGuard Commercialization Agreement,

dated August 1, 2021, between Lucid Diagnostics Inc.

and Research Dx Inc.

Prior to September 30, 2021, no royalty fee has been incurred

under the CWRU license agreements.

Additionally,

the Company is required to pay a royalty fee on (sub-license) “Other Proceeds” (as defined in the Amended CWRU License Agreement)

30 % of sub-license proceeds to extent the sub-license proceeds are realized prior to the first commercial Sale of a Licensed Product;

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

Agreements with Physician Inventors - Intellectual Property - CWRU License Agreement

Diagnostics Inc.

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

under the Amended CWRU License Agreement (“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 each of the respective

the agreements’ renewal effective May 12, 2021.

Additionally, each of the Physician Inventors have been granted stock options and

restricted stock awards under the Lucid Diagnostics Inc.

2018 Long-Term Incentive Equity Plan;

and stock options under the PAVmed Inc.

2014 Long-Term Incentive Equity Plan.

See Note 4, Related Party Transactions , with respect to the consulting fee expense

and stock based compensation expense recognized with respect to the Physician Inventors consulting agreements and stock options and restricted

awards discussed above;

and Note 9, Stock-Based Compensation , for information regarding each of the “Lucid Diagnostics

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

2014 Long-Term Incentive Equity Plan”.

4 — Related Party Transactions

Western Reserve University and Physician Inventors - CWRU License Agreement

5 unchanged sentences

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

the nine months ended

– Royalty Fee

and Administrative Expense

– License Agreement - Amendment Fee -

Milestone III

compensation expense – Physician Inventors’ restricted stock awards

and Development Expense

License Agreement - reimbursement of patent legal fees

4 unchanged sentences

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.

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.

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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.

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

2014 Long-Term Incentive Equity Plan”

and the separate.

2014 Long-Term Incentive Equity

Plan” and the separate.

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

and Note 11, Noncontrolling Interest ,

for a discussion of Lucid Diagnostics Inc.

and Note 12, Noncontrolling

Interest , for a discussion of Lucid Diagnostics Inc.

and the corresponding noncontrolling interests.

4 —Related Party Transactions - continued

Related Party Transactions

Lucid Diagnostics Inc.

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.

Lapidus, effective June 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.

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:

recognized as general and administrative

in the three and nine months ended September

30, 2021, respectively, and $ 3 and $ 4 in the three and nine months ended September 30, 2020, respectively, in connection with

the consulting agreement.

5 — Acquisitions

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

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

the issue of 1,564,514 shares

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and cash paid of approximately

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.

$ 255 , inclusive of approximately $ 155 paid at the time of the transaction closing and the remaining balance paid in the three months

ended September 30, 2021.

Additionally, the cash acquired was approximately $ 108 and liabilities assumed were approximately $ 50 .

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

has allocated the preliminary

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

Schedule of Assets Acquired and Liabilities Assumed

asset - in-process research and development

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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.

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

See Note 12, Noncontrolling Interest , for a discussion of Veris Health Inc.

the corresponding noncontrolling interests.

and the corresponding noncontrolling

October 5, 2021, PAVmed Subsidiary Corporation, a majority-owned subsidiary of PAVmed Inc., acquired all of the outstanding common stock

of CapNostics, LLC (“CapNostics”) for total (gross) purchase consideration of approximately $ 2,000 of cash, paid at the closing

of the transaction.

6 — 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

approved (including matters relating to the increase in the size of the 2014 Equity Plan and the ESPP).

The relief sought under the complaint

includes certain corrective actions by the Company, but does not seek any specific monetary damages.

The Company does not believe it

is clear the prior approval of these matters is invalid or otherwise ineffective.

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.

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

The parties have reached agreement on a proposed term sheet to settle the complaint, the terms of which do not contemplate payment of

monetary damages to the putative class in the proceeding.

The settlement of the complaint is pending and is subject to court approval.

November 2, 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 approved (including matters relating to the

increase in the size of the 2014 Equity Plan and the ESPP).

The relief sought under the complaint includes certain corrective actions

by the Company, but does not seek any specific monetary damages.

The Company does not believe it is clear the prior approval of these

matters is invalid or otherwise ineffective.

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.

In this regard, the Company held a

special meeting of stockholders on March 4, 2021, at which such matters were ratified and approved.

The parties have reached agreement

on a proposed Settlement Term Sheet Agreement, dated January 28, 2021, to settle the complaint, the terms of which do not contemplate

payment of monetary damages to the putative class in the proceeding.

The settlement of the complaint is pending and is subject to court

December 23, 2020, Benchmark Investments, Inc.

16 unchanged sentences

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.

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.

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.

7 — Financial Instruments Fair Value Measurements

15 unchanged sentences

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.

were no fair value measurements as of September 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 8, 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,

28 unchanged sentences

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.

In the three months ended September 30, 2020 approximately $ 81 of non-installment

payments were paid in cash.

In the nine months ended September 30, 2021 and 2020, approximately $ 52 and $ 135 , respectively, of non-installment

payments were paid in cash.

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

1 unchanged sentence

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

In the nine months ended September 30, 2021 and 2020, approximately $ 102

and $ 93 , respectively, of non-installment payments were paid in cash.

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

3 unchanged sentences

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

approximately $ 2,955 in the nine months ended September 30, 2021 in connection with the repayments of the April 2020 Senior Convertible

Note and the August 2020 Senior Convertible Note.

8 — Debt - continued

Notes - continued

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

Schedule of Senior Convertible Note Estimated Fair Value

2019 Senior Secured Convertible Notes

11 unchanged sentences

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.

Value at September 30, 2021 (1)

Income (Expense) - Change in fair value - nine months ended September 30, 2021 (1)

discussed above, all remaining convertible notes were previously repaid during the three months ended March 31, 2021.

8 — Debt - continued

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

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

2018 Senior Secured Convertible Note

1 unchanged sentence

2020 Senior Convertible Note

2020 Senior Secured Convertible Note

of Balance Sheet Fair Value Components

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in fair value

Fee - November 2019 Senior Secured Convertible Note - Series B

Fee - November 2019 Senior Secured Convertible Notes

Value at March 31, 2020

12 unchanged sentences

Income (Expense) - Change in fair value - six months ended June 30, 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 - August 2020 Senior Secured Convertible Note

Value at September 30, 2020

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

Income (Expense) - Change in fair value - nine months ended September 30, 2020

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

5 unchanged sentences

Financial Instruments Fair Value Measurements , for a further discussion of fair value assumptions.

8 — Debt – continued

Act Paycheck Protection Program Loan

6 unchanged sentences

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.

the Company recognized a gain of $ 300 in its unaudited condensed consolidated results of operations in the nine months ended September

9 — Stock-Based Compensation

5 unchanged sentences

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

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.

As of September 30, 2021, the PAVmed Inc.

Plan has 1,249,653 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.

6 unchanged sentences

Contractual Term (Years)

stock options at December 31, 2020

stock options - June 30, 2021

and exercisable stock options - June 30, 2021

stock options - December 31, 2020

stock options - September 30, 2021

and exercisable stock options - September 30, 2021

options granted under the PAVmed Inc.

2 unchanged sentences

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

common stock on each of June 30, 2021 and

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

common stock on each of September 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

11 unchanged sentences

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

233,334 vested

on March 15, 2020;

total of 1,650,000 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.

common 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 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.

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.

6 unchanged sentences

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

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

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

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

2018 Equity Plan has 2,850,220

shares of common stock of Lucid Diagnostics Inc.

available-for-grant of stock-based awards.

3 unchanged sentences

2018 Equity Plan is as follows:

of Summarizes Information About Stock Options

Schedule 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

stock options at September 30, 2021

and exercisable stock options at September 30, 2021

options granted under the Lucid Diagnostics Inc.

4 unchanged sentences

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

As of September 30, 2021, a total of 1,813,135

restricted stock awards were granted under the Lucid Diagnostics Inc.

2018 Equity Plan, summarized as follows:

A total of 1,467,440 restricted stock

awards were granted under the Lucid Diagnostics Inc.

2018 Equity Plan in March 2021, inclusive of grants 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 (“Physician Inventors”),

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.

on a straight-line basis over the vesting period, which is commensurate with the service period, and classified in general and administrative

expense in the accompanying unaudited condensed statement of operations.

The restricted stock awards are subject to forfeiture if the

requisite service period is not completed.

See Note 4, Related Party Transactions , for a summary of the stock based compensation

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

2018 Equity Plan to the Physician

A total of 91,715 restricted stock awards

were granted under the Lucid Diagnostics Inc.

2018 Equity Plan in April 2021, inclusive of grants to an employee of PAVmed Inc.

member of the board of directors of Lucid Diagnostics Inc., 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, with approximately $ 1.1 million classified in general and administrative expense and $ 0.1 million classified

in research and development expense in the accompanying unaudited condensed statement of operations.

Subsequent to September 30, 2021,

as of October 1, 2021, 7,055 restricted stock awards granted in April 2021 were forfeited upon the employee’s termination of employment.

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

A total of 253,980 restricted stock awards

were granted under the Lucid Diagnostics Inc.

2018 Equity Plan in the three months ended September 30, 2021, to members of the board

of directors of Lucid Diagnostics Inc., with 169,320 restricted stock awards having annual vesting dates on the grant date anniversary

in each of September 2022 and 2023;

and 84,660 restricted stock awards having a single vesting date in July 2023.

The restricted stock

awards granted in the three months ended September 30, 2021, had an aggregate grant date fair value of approximately 3.4 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, classified in general and administrative expense in the

accompanying unaudited condensed statement of operations.

Subsequent to September 30, 2021, as of

October 14, 2021, an additional 84,660 restricted stock awards were granted under the Lucid Diagnostics Inc.

2018 Equity Plan to a member

of the board of directors of Lucid Diagnostics Inc.

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

19 unchanged sentences

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.

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

for the stay private scenario.

9 — Stock-Based Compensation - continued

6 unchanged sentences

for the periods indicated, was as follows:

of Stock-Based Compensation Awards Granted

Schedule of Stock-Based Compensation Awards Granted

September 30,

operations expenses

10 unchanged sentences

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

non-employee consultants under the Lucid Diagnostics Inc.

and non-employee consultants under the Lucid Diagnostics Inc.

2018 Equity Plan.

3 unchanged sentences

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

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

September 30,

Diagnostics Inc 2018 Equity Plan – general and administrative expense

4 unchanged sentences

9 — Stock-Based Compensation - continued

Consolidated Stock-Based Compensation Expense - continued

Stock-Based Compensation Expense - continued

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

2 unchanged sentences

Plan, as discussed above, is as follows:

of Unrecognized Compensation Expense

Weighted Average Remaining Service Period

Schedule of Unrecognized Compensation Expense

Average Remaining Service Period

2014 Equity Plan

Stock Options

Restricted Stock Awards

Lucid Diagnostics Inc.

Diagnostics Inc.

2018 Equity Plan

Stock Options

Restricted Stock Awards

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)

Expected stock price volatility

Risk free interest rate

Expected dividend yield

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 $ 3.47 per share and $ 1.28 per share during the nine months ended September 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

Months Ended September 30,

term of stock options (in years)

stock price volatility

free interest rate

dividend yield

Employee Stock Purchase Plan (“ESPP”)

9 unchanged sentences

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.

A total of 203,480 shares 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.

A total of 31,112 shares and 152,289

shares of common stock of the Company were purchased for proceeds of approximately $ 131 and $ 231 , on the ESPP purchase dates of September

30, 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.

ESPP has a total reservation of 1,250,000 shares of common stock of PAVmed Inc.

626,081 shares are available-for-issue remaining as of September 30, 2021.

10 — Preferred Stock

2 unchanged sentences

There were 1,091,448 and 1,228,075 shares of Series B

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

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

the nine months ended September 30, 2021, at each of the respective holders’ election, a total of 210,448 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

of September 30, 2021, the Company’s board-of-directors declared an aggregate of approximately $ 221 of Series B Convertible Preferred

Stock dividends, inclusive of approximately $ 73 earned as of December 31, 2020, $ 75 earned as of March 31, 2021, and $ 74 earned as of

June 30, 2021 which were settled by the issue of an additional aggregate 73,821 shares of Series B Convertible Preferred Stock.

corresponding period of the prior year, the board of directors declared an aggregate of approximately $ 211 of Series B Convertible Preferred

Stock dividends, inclusive of approximately $ 70 earned as of December 31, 2019, $ 70 earned as of March 31, 2020, and $ 71 earned as of

June 30, 2020 which were settled by the issue of an additional aggregate 70,279 shares of Series B Convertible Preferred Stock.

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

earned as of September 30, 2021 and payable as of October 1, 2021, of approximately $ 67 , which will be settled by the issue of an additional

22,471 shares of Series B Convertible Preferred Stock (with such dividend not recognized as a dividend payable as of September 30, 2021,

as the Company’s board of directors had not declared such dividends payable as of such date).

11 — Common Stock 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 84,400,822 and

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 ,

before a placement agent fee and expenses of approximately $ 951 , and offering costs incurred by the Company of approximately $ 71 .

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

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 ,

before a placement agent fee and expenses of approximately $ 951 ,

and offering costs incurred by the Company of approximately $ 71 .

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 ,

February 23, 2021, a total of 9,782,609

shares of common stock of the Company were

issued for proceeds of approximately $ 41,566 ,

before offering costs incurred by the Company of approximately $ 290 .

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.

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 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 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 .

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.

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

the nine months ended September 30, 2021, 210,448

shares of common stock of the Company were

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

See Note 10, Preferred Stock ,

for a discussion of the Series B Convertible Preferred Stock.

the nine months ended September 30, 2021, an aggregate of 2,931,070 shares of common stock

of the Company were issued upon exercise of common stock purchase warrants, including 2,927,125

with respect to Series Z Warrants;

and 3,945 with respect to Series W Warrants.

to September 30, 2021, as of November 18, 2021, 1,946,259 shares of common stock of the Company

were issued upon exercise of the same number of Series Z Warrants.

the nine months ended September 30, 2021, 604,500

shares of common stock of the Company were

issued upon exercise of stock options for cash of approximately $ 953 .

Subsequent to September 30, 2021, as of November 18, 2021, 16,664 shares of common stock of the Company were issued upon exercise

of the same number of stock options for cash of approximately $ 26 .

See Note 9, Stock-Based Compensation , for a discussion of the PAVmed Inc.

2014 Equity Plan.

March 31, 2021, 203,480 shares of common stock were purchased by employees through participation in the PAVmed Inc.

Employee Stock

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

Note 10 — Stockholders’ Equity

and Common Stock Purchase Warrants - continued

March 31, 2021 and September 30, 2021, the PAVmed Inc.

Employee Stock Purchase Plan purchased 203,480

shares and 31,112

shares, respectively, of common stock of

See in the Note 9, Stock-Based Compensation , for a discussion of the PAVmed Inc.

Employee Stock Purchase

11 — Common Stock and Common Stock Purchase Warrants - continued

Stock Purchase Warrants

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Schedule of Outstanding Warrants to Purchase Common Stock

Common Stock Purchase Warrants Issued and Outstanding

Stock Purchase Warrants Issued and Outstanding at

- Series Z Warrants

UPO - Series Z Warrants

Series W Warrants

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.

the three and nine months ended September 30, 2021, a total of 1,186,467

and 2,927,125

shares of common stock of the Company were issued,

respectively, resulting from the exercise cash of $ 1.60

per share of the same number of Series Z Warrants.

Subsequent to September 30, 2021, as of November 18, 2021, a total of 1,946,259 Series Z Warrants were exercised for cash of $ 1.60

per share, resulting in the issue of the same

number of shares of common stock of the Company.

the three and nine months ended September 30, 2021, a total of 3,945 shares of common stock of the Company were issued resulting from

the exercise for cash of $ 5.00 per share of the same number of Series W Warrants.

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

12 — Noncontrolling Interest

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

noncontrolling interest (“NCI”) included as a component of consolidated total stockholders’ equity is summarized for the periods indicated as follows:

Schedule of Noncontrolling Interest of Stockholders' Equity

September 30, 2021

December 31, 2020

NCI – equity (deficit) – beginning of period

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.

– equity (deficit) – beginning of period

in Veris Health Inc.

loss attributable to NCI – Lucid Diagnostics Inc.

loss attributable to NCI – Solys Diagnostics Inc.

loss attributable to NCI – Veris Health Inc.

Diagnostics Inc.

2018 Equity Plan stock option exercise

Stock-based compensation expense - Lucid Diagnostics Inc.

compensation expense - Lucid Diagnostics Inc.

2018 Equity Plan

NCI – equity (deficit) – end of period

– equity (deficit) – end of period

consolidated NCI presented above is with respect to the Company’s consolidated majority-owned subsidiaries, inclusive of:

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;

of which PAVmed Inc.

holds 8,187,499 shares, representing equity ownership interest of 81.85 %, and PAVmed Inc.

has a controlling financial

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.

and Solys Diagnostics Inc., as a component of consolidated total stockholders’ equity as of September 30, 2021

and December 31, 2020, and the recognition of a net loss attributable to the NCI in the unaudited condensed consolidated statement of

operations for the three and nine months ended September 30, 2021 and 2020;

and Veris Health Inc.

as a component of consolidated total

stockholders’ equity as of September 30, 2021, and the recognition of a net loss attributable to the NCI in the unaudited condensed

consolidated statement of operations for the three months ended September 30, 2021 and for the period May 28, 2021 (inception date) to

September 30, 2021.

Diagnostics Inc.

of September 30, 2021 and December 31, 2020, PAVmed Inc.

holds a 81.85 % majority -interest equity ownership and has a controlling

financial interest in Lucid Diagnostics Inc., with the remaining 18.15 % minority-interest equity ownership held by Case Western Reserve

University (“CWRU”);

the individual physician inventors of the intellectual property underlying the Amended CWRU License

Agreement (the “Physician Inventors”);

and a consultant upon the exercise of stock options issued under the Lucid Diagnostics

2018 Equity Plan.

to September 30, 2021, on October 13, 2021, Lucid Diagnostics Inc.

issued 15,803,200

shares of its common stock to PAVmed Inc.

the election by PAVmed Inc.

to convert the $ 22.4

million face value principal under the terms

of a Senior Unsecured Promissory Note, dated June 1, 2021.

The Senior Unsecured Promissory Note was issued by Lucid Diagnostics Inc.

to PAVmed Inc.

with a face value principal of $ 22.4 million, which replaced the aggregate outstanding and payable balance of the intercompany

as of June 1, 2021, had an annual interest rate of 7.875 %,

a contractual maturity date of May

18, 2028 , and, at the election of PAVmed Inc., provided for the partial or full repayment of the face value principal and accrued

but unpaid interest thereon by the issue of shares of Lucid Diagnostics Inc.

common stock at a conversion price of $ 1.42 per share of

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.

common stock.

to September 30, 2021, on October 14, 2021, Lucid Diagnostics Inc.

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

stock under an effective registration statement on Form S-1 (SEC File No.

333-259721), wherein a total of 5.0

million IPO shares of common stock of

Lucid Diagnostics Inc.

were issued, with such total IPO shares inclusive of 571,428

shares issued to PAVmed Inc., at an IPO

offering price of $ 14.00

per share, resulting gross proceeds of

million, before underwriting fees of $ 4.9

million, and approximately $ 0.7

million of offering costs incurred by

Lucid Diagnostics Inc.

12 — Noncontrolling Interest - continued

of September 30, 2021, PAVmed Inc.

holds an 80.44 %

majority-interest ownership and has a controlling financial interest in Veris Health Inc., with the remaining 19.56 %

minority-interest ownership held by an unrelated third-party.

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,

of which PAVmed Inc.

holds a 90.3235 % majority-interest ownership and has a controlling financial interest, with the remaining 9.6765 %

of each of September 30, 2021 and December 31, 2020, PAVmed Inc.

holds a 90.3235 %

majority-interest ownership and has a controlling financial interest in Solys Diagnostics Inc., with the remaining 9.6765 %

minority-interest ownership held by unrelated third parties.

Accordingly, Solys 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.

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

13 — Net Loss Per Share

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

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

Three Months Ended

Six Months Ended

Net loss - before noncontrolling interest

Net loss attributable to noncontrolling interest

Net loss - as reported, attributable to PAVmed Inc.

Series B Convertible Preferred Stock dividends:

Net loss attributable to PAVmed Inc.

loss - before noncontrolling interest

loss attributable to noncontrolling interest

loss - as reported, attributable to PAVmed Inc.

B Convertible Preferred Stock dividends:

loss attributable to PAVmed Inc.

common stockholders

Weighted average common shares outstanding, basic and diluted

average common shares outstanding, basic and diluted

Loss per share

Basic and diluted

Net loss - as reported, attributable to PAVmed Inc.

Net loss attributable to PAVmed Inc.

loss - as reported, attributable to PAVmed Inc.

loss attributable to PAVmed Inc.

common stockholders

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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:

weighted-average number of shares of common stock outstanding for the three and six months ended September 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.

The 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

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unvested restricted stock awards

Unit purchase options - as to shares of common stock

Unit purchase options - as to shares underlying Series Z Warrants

Series Z Warrants

Series W Warrants

purchase options - as to shares of common stock

purchase options - as to shares underlying Series Z Warrants

B Convertible Preferred Stock

Antidilutive securities excluded from computation of diluted weighted shares outstanding

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

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the PAVmed Inc.

majority-owned subsidiaries of:

and its majority-owned subsidiaries, including:

Lucid Diagnostics Inc.

(“Lucid Diagnostics” or “LUCID”),

Solys Diagnostics, Inc.

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

(“Veris Health” or

(“Lucid Diagnostics”

or “LUCID”), Veris Health Inc.

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

Diagnostics” or “SOLYS”).

Forward-Looking

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

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

results of operations and consolidated financial position, our estimates regarding expenses, future revenue, capital and operating expenditure

requirements and needs for additional financing, our business strategy and plans and the objectives of management for future operations,

are forward-looking statements.

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

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

“believes,” “estimates,” “predicts,” “potential” or “continue” or the negative

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

contain these identifying words.

Forward-looking statements are not guarantees of future performance and our actual results may differ

significantly from the results discussed in the forward-looking statements.

Factors that might cause such differences include, but are

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

statements, other than statements of historical facts, contained in this Form 10-Q, including without limitation statements regarding

our future consolidated results of operations and consolidated financial position, our estimates regarding expenses, future revenue,

capital and operating expenditure requirements and needs for additional financing, our business strategy and plans and the objectives

of management for future operations, are forward-looking statements.

The words “may,” “will,” “should,”

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

“projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential”

or “continue” or the negative of these terms or other similar expressions are intended to identify forward-looking statements,

although not all forward-looking statements contain these identifying words.

Forward-looking statements are not guarantees of future

performance and our actual results may differ significantly from the results discussed in the forward-looking statements.

might cause such differences include, but are not limited to, those discussed in Item 1A of Part I of the Form 10-K under the heading

“Risk Factors.”

factors that may affect our actual results include:

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ability to protect our intellectual property;

our ability to identify and complete strategic acquisitions

and integrate the acquired operations;

ability to identify and complete strategic acquisitions and integrate the acquired operations;

ability to manage growth;

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rely on our forward-looking statements.

You should read this Form 10-Q and the Form 10-K, and the documents we have filed as exhibits

to this Form 10-Q and the Form 10-K, completely and with the understanding our actual future results may be materially different from

what we expect.

We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future

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

You should read this Form 10-Q, together with the Form 10-K, and the documents we

have filed as exhibits to this Form 10-Q and the Form 10-K, completely and with the understanding our actual future results may be materially

different from what we expect.

We do not assume any obligation to update any forward-looking statements, whether as a result of new information,

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

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

PAVmed 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,

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and building its corporate infrastructure and management team.

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”), Solys Diagnostics, Inc.

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

Health” or “VERIS”).

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, Veris

Health, and Solys Diagnostics.

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

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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.

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.

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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.

test at Lucid Diagnostics commercial diagnostic laboratory partner ResearchDx Inc.

(“RDx”), headquartered in Irvine,

In August 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”)

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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 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;

Therapy - PortIO Implantable Intraosseous Vascular Access Device and NextFlo Highly Accurate Disposable Intravenous

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.

EsoCheck, and EsoCure

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

Program was created to offer patients more timely access to breakthrough technologies which provide for more effective treatment or diagnosis

of life-threatening or irreversibly debilitating human disease or conditions by expediting their development, assessment and review through

enhanced communications and more efficient and flexible clinical study design, including more favorable pre/post market data collection

Breakthrough Devices receive priority FDA review, and a bipartisan bill before Congress (H.R.

5333) seeks to require Medicare

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

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

is a minimally invasive surgical device for use in the treatment of carpal tunnel syndrome which received FDA 510(k) marketing clearance

in April 2020, with the first commercial procedure successfully performed in December 2020.

believe CarpX is designed to allow the physician to relieve the compression on the median nerve without an open incision or the need

for endoscopic or other imaging equipment.

To use CarpX, the operator first advances a guidewire through the carpal tunnel under the

ligament, and then advanced over the wire and positioned in the carpal tunnel under ultrasonic and/or fluoroscopic guidance.

CarpX balloon is inflated it creates tension in the ligament positioning the cutting electrodes underneath it and creates space within

the tunnel, providing anatomic separation between the target ligament and critical structures such as the median nerve.

Radiofrequency

energy is briefly delivered to the electrodes, rapidly cutting the ligament, and relieving the pressure on the nerve.

We believe CarpX

will be significantly less invasive than existing treatments.

are commercializing CarpX through a network of independent U.S.

sales representatives and/or inventory-stocking medical distributors

together with our in-house sales management and marketing teams.

Our focus on CarpX, and other high margin products and services, is

particularly suitable to this mode of distribution.

A high gross margin allows us to properly incentivize our distributors, which in

turn allows us to attract the top distributors with the most robust networks in our targeted specialties.

Independent distributors play

an even larger role in many parts of Europe, most of Asia and emerging markets worldwide.

may eventually choose to build (or obtain through a strategic acquisition) our own sales and marketing team to commercialize CarpX, along

with some or all of our products, if it is in our long-term interests.

We may also choose to enter into distribution agreements with

larger strategic partners whereby we take full responsibility for the manufacturing of CarpX but outsource some or all of its distribution

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 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

does not have an indwelling intravascular component.

It is designed to be highly resistant to occlusion and may not require regular flushing.

It features simplified, near-percutaneous insertion and removal, without the need for surgical dissection or radiographic confirmation.

It provides a near limitless number of potential access sites and can be used in patients with chronic total occlusion of their central

The absence of an intravascular component will likely result in a very low infection rate.

on encouraging animal data, we are preparing to initiate a long-term (60-day implant duration) first-in-human clinical study in dialysis

patients or those with poor venous access in Colombia, South America and intend to fulfill the likely FDA request for human clinical

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 the U.S.

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

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.

We have been running a formal M&A process for NextFlo targeting strategic

and financial partners.

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

range of clinical conditions.

We are evaluating a number of these product opportunities and intellectual property covering a wide spectrum

of clinical conditions, which have either been developed internally or have been presented to us by clinician innovators and academic

medical institutions for consideration of a partnership to develop and commercialize these products.

This collection of products includes,

without limitation, initiatives in non-invasive laser-based glucose monitoring, mechanical circulatory support cannulas, single-use ventilators

and resorbable pediatric ear tubes.

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.

Furthermore, we are exploring other opportunities to grow our business and

enhance shareholder value through the acquisition of pre-commercial or commercial stage products and/or companies with potential strategic

corporate and commercial synergies.

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

of the COVID-19 Pandemic

in December 2019, an outbreak of a novel strain of a coronavirus occurred.

The coronavirus spread on a global basis to other countries,

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.

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

of our laboratory partner, and increase our expenses, including as a result of impacts associated with preventive and precautionary measures

being taken, restrictions on travel, quarantine polices, and social distancing.

Such adverse impact may include, for example, the inability

of our employees and /or those of our contractors or laboratory partner to perform their work or curtail their services provided to us.

expect the significance of the COVID-19 pandemic, including the extent of its effect on our consolidated financial condition and consolidated

operational results and cash flows, to be dictated by the success of United States and global efforts to mitigate the spread of and /or

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.

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

delayed, for example, due to prioritization of hospital resources toward the virus and /or illness response, as well as travel restrictions

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.

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

(or a similar health epidemic) is highly uncertain and subject to change, and therefore, its impact on our consolidated financial condition,

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

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.

and administrative expenses

and administrative expenses consist primarily of salaries and related costs for personnel, travel expenses, facility-related costs, professional

fees, accounting and legal services, consultants and expenses associated with obtaining and maintaining patents within our intellectual

property portfolio.

anticipate our general and administrative expenses will increase in the future, as we anticipate an increase in payroll and related expenses

related with the growth and expansion of our business operations objectives.

We also anticipate continued expenses related to being a

public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance as a public company,

insurance premiums and investor relations costs.

and development expenses

and development expenses are recognized in the period they are incurred and consist principally of internal and external expenses incurred

for the research and development of our products, including:

costs charged to us by various external contract research organizations we contract with to conduct preclinical studies and engineering

and benefit costs associated with our chief medical officer and engineering personnel;

associated with regulatory filings;

license fees;

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

design engineering studies;

expense for facilities maintained solely for research and development purposes.

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

well as new innovations.

Our research and development activities are focused principally on obtaining FDA approvals and developing product

improvements or extending the utility of the lead products in our pipeline, including CarpX, EsoCheck and EsoGuard, along with advancing

our DisappEAR, PortIO, NextFlo, non-invasive glucose monitoring and digital health products through their respective development phase.

Income and Expense, net

income and expense, net, consists principally of changes in fair value of our convertible notes, losses on extinguishment of debt upon

repayment of such convertible notes;

and interest expense with respect to one of our convertible notes.

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 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

$3.8 million increase in compensation related costs principally related to:

increased staffing levels, higher stock-based compensation

approximately

$0.4 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 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 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 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

discussion of the change in fair value of our convertible notes, and Note 7, Debt, of our unaudited condensed consolidated financial

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 June 30, 2021 versus June 30, 2020 - continued

from Extinguishment of Debt

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.

January 5, 2021, the repayment of the remaining face value principal of the November 2019 Senior Convertible Note of approximately

$956, along with the payment of interest thereon of approximately $7, were settled with the issuance of 667,668 shares of our common

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 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 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:

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

In connection with it formation, Veris Health

acquired Oncodisc Inc (“Oncodisc”), a digital health company with ground breaking tools to improve personalized cancer

care through remote patient monitoring.

Oncodisc’s 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.

Its 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 physicians.

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

awaiting final issuance.

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