What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-22 compared with 2021-08-16 · 461 added, 39 removed, 16 unchanged (97% of the section changed)

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 – 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.

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 coverage.

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

January 1, 2021.

We are 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

Health - continued

EsoCheck, and EsoCure

are also aggressively pursuing EsoGuard U.S.

private payor payment and coverage.

We recently held our initial advisory board meetings

with medical directors of major insurers to obtain feedback and guidance on the type of clinical data that will be helpful in securing

payment and coverage.

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 previously relied upon 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 and sales representatives nationwide.

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

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 Company employed clinical personnel will perform the EsoCheck procedure

for EsoGuard testing.

We have launched three pilot Lucid Test Centers in the Phoenix metropolitan area and have recently announced

new test centers in Utah, Colorado, and Nevada.

We are currently preparing for the launch 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, including a FDA PMA submission for approval of EsoGuard and EsoCheck as

an in vitro device (“IVD”), as currently, EsoGuard and EsoCheck are permitted to be marketed separately, but not in combination.

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.

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 of the IVDD.

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.

After an initial slowdown in commercialization

related to COVID, more recently we have recruited new sales leadership and have recently trained seven new surgeons to perform the CarpX

procedure with five more scheduled to undergo training.

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.

may seek a long-term strategic partnership or acquiror with respect to NextFlo, as we continue to have periodic discussions continue

with large strategic partners to license the NextFlo technology for disposable infusion pumps.

Notwithstanding, we continue

to advance the 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

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

connection with its formation, Veris Health acquired 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 physicians.

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

Veris Health 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.

Any such effect could have a materially adverse impact

on our consolidated financial condition, consolidated results of operations, and /or consolidated cash flows.

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

of Operations

is recognized with respect to the EsoGuard Commercialization Agreement, dated August 1, 2021, between the Company’s majority-owned

subsidiary, Lucid Diagnostics Inc., and ResearchDX Inc.

(“RDx”), CLIA certified commercial laboratory service provider.

cost of revenue recognized with respect to the revenue recognized under the EsoGuard Commercialization Agreement is inclusive of:

fee incurred under the Amended CWRU License Agreement;

employee related costs of employees engaged in the administration to patients

of the EsoCheck cell sample collection procedure (principally at the LUCID Test Centers);

the EsoCheck devices and EsoGuard mailers (cell

sample shipping costs) distributed to medical practitioners locations and the LUCID Test Centers;

and LUCID Test Centers operating expenses,

including rent expense and supplies.

operations expenses

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

employees engaged with third-party payor reimbursement contract negotiation and management, as well as advertising and promotion expenses.

We 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.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations - continued

Results of Operations - continued

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.

of Dollar Amounts

dollar amounts in this Item 2.

Management’s 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

of Operations - continued

months ended September 30, 2021 versus September 30, 2020

the three months ended September 30, 2021, revenue was $0.2 million as compared to no revenue in the corresponding period in the prior

The $0.2 million increase principally relates to our EsoGuard Commercialization Agreement, dated August 1, 2021, which resulted

in revenue recognition of $0.1 million per month in each of August and September 2021.

the three months ended September 30, 2021, cost of revenue was approximately $0.1 million as compared to no cost of revenue for the corresponding

period in the prior year.

The $0.1 million increase principally relates to costs associated with our commercialization agreement that

started in August 2021.

operations expenses

the three months ended September 30, 2021, commercial operations costs were approximately $2.4 million as compared to $0.7 million for

the corresponding period in the prior year, with the $1.7 million increase principally resulting from approximately $1.1 million with

respect to increased staffing in commercial operations, including sales, marketing, and payor reimbursement personnel, higher stock-based

compensation expense of $0.3 million;

and approximately $0.3 million with respect to increased consulting and professional services fees.

and administrative expenses

the three months ended September 30, 2021, general and administrative costs were approximately $6.0 million as compared to $2.2 million

for the corresponding period in the prior year, with the $3.8 million increase principally related to:

approximately

$2.3 million increase in compensation related costs principally related to higher stock-based compensation expense and increased

staffing levels;

approximately

$1.4 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.

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

of Operations - continued

months ended September 30, 2021 versus September 30, 2020 - continued

and development expenses

the three months ended September 30, 2021, research and development costs were approximately $5.3 million, compared to $2.6 million for

the corresponding period in the prior year, with the $2.7 million increase principally related to:

approximately

$0.5 million increase in compensation related costs principally related to increased staffing levels, higher stock-based compensation

approximately

$2.2 million in increased development costs, particularly increased clinical trial activities, and consulting fees with respect

to CarpX, NextFlo, Port IO, EsoCure, EsoGuard, a glucose monitoring project, and a digital health project.

Income and Expense

in fair value of convertible debt

the three months ended September 30, 2020, non-cash income (expense) recognized for the change in the fair value of our convertible notes

was approximately $0.4 million of other income.

There was no such change in fair value during the three months ended September 30,

2021, as the convertible notes were repaid-in-full as of March 31, 2021.

from Extinguishment of Debt

the three months ended September 30, 2020, a loss from extinguishment of debt of approximately $0.7 million was recognized, with such

loss resulting from the difference between:

the face value principal repayments and the corresponding payments of the interest thereon;

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.

There was no such loss from extinguishment

of debt during the three months ended September 30, 2021, as the convertible notes were repaid-in-full as of March 31, 2021.

our unaudited condensed consolidated financial statements Note 8, Debt , for additional information with respect to the

convertible notes.

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

of Operations - continued

months ended September 30, 2021 versus September 30, 2020

the nine months ended September 30, 2021, revenue was $0.2 million as compared to no revenue in the corresponding period in the

The $0.2 million increase principally relates to our EsoGuard Commercialization Agreement, dated August 1, 2021, which resulted

in revenue recognition of $0.1 million per month in each of August and September 2021.

the nine months ended September 30, 2021, cost of revenue was approximately $0.1 million as compared to no cost of revenue for

the corresponding period in the prior year.

The $0.1 million increase principally relates to costs associated with our commercialization

agreement that started in August 2021.

operations expenses

the nine months ended September 30, 2021, commercial operations were approximately $5.8 million as compared to $1.5 million for the corresponding

period in the prior year, with the $4.3 million increase principally resulting from approximately $2.3 million with respect to increased

staffing in commercial operations, including sales, marketing, and reimbursement personnel, higher stock-based compensation expense of

$0.7 million and approximately $1.3 million with respect to increased consulting and professional services fees.

and administrative expenses

the nine months ended September 30, 2021, general and administrative costs were approximately $16.1 million as compared to $6.9 million

for the corresponding period in the prior year, with the $9.2 million increase was principally related to:

approximately

$7.0 million increase in compensation related costs principally related to higher stock-based compensation expense and increased

staffing levels, and

approximately

$2.0 million in consulting services related to patents, regulatory compliance, legal processes for contract review and public company

approximately

$0.2 million in general business expenses.

and development expenses

the nine months ended September 30, 2021, research and development costs were approximately $12.9 million as compared to $7.3 million

for the corresponding period in the prior year, with the $5.6 million increase principally related to:

approximately

$0.8 million increase in compensation related costs principally related to increased staffing levels, higher stock-based compensation

approximately

$4.8 million in increased development costs, particularly increased clinical trial activities, and consulting fees with respect

to CarpX, NextFlo, Port IO, EsoCure, EsoGuard, a glucose monitoring project and a digital health project.

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

of Operations - continued

months ended September 30, 2021 versus September 30, 2020 - continued

Income and Expense

the nine months ended September 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 nine months ended September 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 $5.5 million of other expense for the nine months ended September

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 nine months ended September 30, 2021, as discussed herein below under “ Other Income and Expense -

Loss from Extinguishment of Debt ”.

Note 7, 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 8, Debt, of our unaudited condensed consolidated

financial statements for a further discussion the Series A and Series B November 2019 Senior Convertible Notes.

from Extinguishment of Debt

the nine months ended September 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 nine months ended September 30, 2020, a loss from extinguishment of debt of approximately $4.6 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.

our unaudited condensed consolidated financial statements Note 8, Debt , for additional information with respect to the

convertible notes.

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

and Capital Resources

1 unchanged sentence

purchase warrants, and debt.

We are subject to all of the risks and uncertainties typically faced by medical device and diagnostic and

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

and ongoing R&D and clinical trials.

We expect to continue to experience recurring losses from operations and will continue to fund

our operations with debt and/or equity financing transactions.

Notwithstanding, however, together with the cash on-hand as of June 30,

2021 of $43.2 million from the cash proceeds from the issue of shares of common stock of the Company.

in January and February 2021, as

discussed herein below, partially used to repay all of our remaining outstanding convertible debt we expect to be able to fund our future

operations for one year from the date of the issue of our unaudited condensed consolidated financial statements as included here in our

Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.

the six months ended June 30, 2021 we issued shares of our common stock and received proceeds from the exercise of our Series Z Warrants,

as discussed herein below, which resulted in approximately $57.8 million of gross proceeds, before placement agent fees and expenses

and additional offering costs incurred by us.

Additionally, we repaid-in-full the outstanding principal balances of all our convertible

the nine months ended September 30, 2021 we issued shares of our common stock and received proceeds from the exercise of our Series Z

Warrants, as discussed herein below, which resulted in approximately $59.7 million of gross proceeds, before placement agent fees and

expenses and additional offering costs incurred by us.

Additionally, we repaid-in-full the outstanding principal balances of all our

convertible notes.

January 5, 2021, we issued 6,000,000 shares of our common stock for gross proceeds of approximately $13,440, before a placement agent

2 unchanged sentences

9,782,609 shares of our common stock for proceeds of approximately $41,576, before offering costs incurred by us of approximately $290.

During the six months ended June

30, 2021, a total of 1,740,658 of our Series Z Warrants were exercised at their exercise price of $1.60 per share of our common stock,

resulting in cash proceeds of approximately $2,785, and the issue of the same number of our shares of common stock.

Subsequent to June

30, 2021, as of August 12, 2021, a total of 508,548 of our 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 our common stock.

the nine months ended September 30, 2021, a total of 2,927,125 of our Series Z Warrants were exercised at their exercise price of $1.60

per share of our common stock, resulting in the issue of the same number of our shares of common stock, with cash proceeds of

approximately $4,115 received as of September 30, 2021, and $568 received subsequent to September 30, 2021 on October 4, 2021.

Subsequent to September 30, 2021, as of November 18, 2021, a total of 1,946,259 of our 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 our common stock.

Additionally,

in the six months ended June 30, 2021, we repaid-in-full all of the outstanding principal balances of our convertible notes, as discussed

herein above under “ Other Income and Expense - Loss from Extinguishment of Debt ”.

in the nine months ended September 30, 2021, we repaid-in-full all of the outstanding principal balances of our convertible notes, as

discussed herein above under “ Other Income and Expense - Loss from Extinguishment of Debt ”.

to September 30, 2021, on October 14, 2021, Lucid Diagnostics, a majority-owned subsidiary of PAVmed, completed an initial

public offering (“IPO”) of its common stock under an effective registration statement on Form S-1 (SEC File No.

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 $70.0 million, before

underwriting fees of $4.9 million, and approximately $0.7 million of offering costs incurred by Lucid Diagnostics.

our unaudited condensed consolidated financial statements Note 8, Debt , for a discussion of our convertible notes;

Stockholders Equity and Common Stock Purchase Warrants , for a further discussion of and the issue of our common stock.

11, Common Stock and Common Stock Purchase Warrants , for a further discussion of and the issue of our common stock.

are subject to all of the risks and uncertainties typically faced by medical device and diagnostic and medical device companies that

devote substantially all of their efforts to the commercialization of their initial product and services and ongoing research and development

and clinical trials.

We expect to continue to experience recurring losses from operations and will continue to fund our operations with

debt and/or equity financing transactions.

Notwithstanding, however, with the cash on-hand as of the date hereof, we expect to be able

to fund our future operations for one year from the date of the issue of our unaudited condensed consolidated financial statements as

included herein in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.

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

Accounting Policies and Significant Judgments and Estimates

discussion and analysis of our consolidated financial condition and consolidated results of operations is based on our unaudited condensed

consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United

States of America (“U.S.

The preparation of these unaudited condensed consolidated financial statements requires

us to make estimates and assumptions affecting the reported amounts of assets, liabilities, and equity, along with the disclosure of

contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of

expenses during the corresponding periods.

discussion and analysis of our (unaudited) consolidated financial condition and consolidated results of operations is based on our unaudited

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

the United States of America (“U.S.

The preparation of these unaudited condensed consolidated financial statements

requires us to make estimates and assumptions affecting the reported amounts of assets, liabilities, and equity, along with the disclosure

of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts

of expenses during the corresponding periods.

In accordance with U.S.

3 unchanged sentences

or conditions.

Please see Note 2, Summary of Significant Accounting Policies , of our unaudited condensed consolidated financial

statements included in this Form 10-Q, for a summary of significant accounting policies.

In addition, reference is made to Part I, Item

7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operation ” in our previously

filed Annual Report on Form 10-K for the year ended December 31, 2020 (“Form 10-K), for a summary of our critical accounting policies

and significant judgments and estimates.

There have been no other material changes to our critical accounting policies or significant

judgments and estimates as discussed in our Form 10-K.

Please see Note 2, Summary of Significant Accounting Policies and Recent Accounting Standards Updates , of our unaudited

condensed consolidated financial statements included in this Form 10-Q, for a summary of significant accounting policies.

reference is made to Part I, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operation ”

in our previously filed Annual Report on Form 10-K for the year ended December 31, 2020 (“Form 10-K), for a summary of our critical

accounting policies and significant judgments and estimates.

There have been no other material changes to our critical accounting policies

or significant judgments and estimates as discussed in our Form 10-K, except as discussed in Note 2, Summary of Significant Accounting

Policies and Recent Accounting Standards Updates , of our unaudited condensed consolidated financial statements included in this Form

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis