What changed in this filing

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Item 1. Financial Statements

2022-05-16 compared with 2021-11-22 · 624 added, 978 removed, 277 unchanged (85% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

thousands except number of shares and per share data)

thousands except number of shares and per share data - unaudited)

expenses, deposits, and other current assets

current assets

Fixed assets, net

Intangible assets, net

Preferred Stock and Stockholders’ Deficit

lease right-of-use assets

Preferred Stock and Stockholders’ Equity

expenses and other current liabilities

Act Paycheck Protection Program note payable

Secured Convertible Notes - at fair value

Convertible Note - at fair value

lease liabilities, current portion

purchase consideration payable

current liabilities

lease liabilities, less current portion

long-term liabilities

and contingencies (Note 10)

Stockholders’

Equity (Deficit):

stock, $ 0.001 par

stock, $ 0.001 par value.

Authorized, 20,000,000 shares;

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

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

1,136,210 at March 31, 2022 and 1,113,919 shares at December 31, 2021

stock, $ 0.001 par value.

Authorized, 150,000,000 shares;

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

and December 31, 2020, respectively

86,911,646 and 86,367,845 shares outstanding as of March 31, 2022 and December

31, 2021, respectively

paid-in capital

1 unchanged sentence

Noncontrolling

Stockholders’ Equity (Deficit)

Stockholders’ Equity

Liabilities and Stockholders’ Equity

1 unchanged sentence

CONSOLIDATED STATEMENTS OF OPERATIONS

thousands except number of shares and per share amounts)

September 30,

thousands except number of shares and per share amounts - unaudited)

Months Ended March 31,

profit (loss)

and marketing

and administrative

3 unchanged sentences

income (expense):

in fair value - contingent consideration payable

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

costs - Senior Secured Convertible Note and Senior Convertible Note

extinguishments loss - Senior Secured Convertible Notes

13 unchanged sentences

common stockholders – basic and diluted

average common shares outstanding,

basic and diluted

average common shares outstanding, basic and diluted

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the THREE MONTHS ENDED September 30, 2021

thousands except number of shares and per share data)

Stockholders’ Deficit

- June 30, 2021

the THREE MONTHS ENDED March 31, 2022

thousands except number of shares and per share data - unaudited)

Stockholders’ Equity (Deficit)

- December 31, 2021

$ ( 138,910 )

declared - Series B Convertible Preferred Stock

- Series B Convertible Preferred Stock

stock awards vestings

- Series Z warrants

- Series W Warrants

- stock options

- stock options of majority-owned subsidiary

- Employee Stock Purchase Plan

of subsidiary equity transactions

compensation - PAVmed Inc.

compensation - majority-owned subsidiary

- 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

- March 31, 2022

$ ( 155,849 )

1 unchanged sentence

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

- 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

- September 30, 2020

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the NINE MONTHS ENDED September 30, 2021

thousands except number of shares and per share data)

Stockholders’ Deficit

the THREE MONTHS ENDED March 31, 2021

thousands, except number of shares and per share data - unaudited)

Stockholders’ Equity (Deficit)

- 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

common stock – registered offerings, net

common stock upon partial conversions of Senior Secured Convertible Note

common stock – exercise Series Z warrants

common stock – conversion Series B Convertible Preferred Stock

B Convertible Preferred Stock dividends declared

common stock - Employee Stock Purchase Plan

- stock options

- Employee Stock Purchase Plan

common stock of

majority-owned subsidiary

compensation - PAVmed Inc.

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

- 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

compensation - majority-owned subsidiary

at September 30, 2020

- March 31, 2021

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

thousands except number of shares and per share data)

Months Ended September 30,

thousands, except number of shares and per share data - unaudited)

Months Ended March 31,

flows from operating activities

loss - before non controlling interest (“NCI”)

loss - before noncontrolling interest (“NCI”)

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

and amortization expense

value adjustment to contingent consideration payable

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

extinguishment loss - Senior Secured Convertible Notes and Senior Convertible Note

lease expense

in operating assets and liabilities:

3 unchanged sentences

flows from investing activities

Acquisitions,

net of cash acquired

3 unchanged sentences

– offering costs – registered offerings

– issue of Senior Secured Convertible Notes

– issue of Senior Convertible Note

– Cares Act Paycheck Protection Program Loan

– repayment of Senior Convertible Note and Senior Secured Convertible Note

– Senior Convertible Note and Senior Secured Convertible Note –

non-installment payments

– Senior Convertible Note and Senior Secured Convertible Note – non-installment payments

– exercise of Series Z warrants

– exercise of Series S warrants

– exercise of stock options

– issue common stock – Employee Stock Purchase Plan

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

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

Treasury Stock – payment of employee

payroll tax obligation in connection with stock-based compensation

cash flows provided by financing activities

6 unchanged sentences

1 — The Company

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

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.

The Company’s

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

property, and building its corporate infrastructure and management team.

The Company operates in one segment as a medical technology

of the Business

Inc and Subsidiaries, referred to herein as “PAVmed” or the “Company” is comprised of PAVmed Inc.

and its wholly-owned

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

(“Lucid Diagnostics” or “LUCID”),

Veris Health Inc.

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

(“Solys Diagnostics”

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

model focused on capital efficiency and speed to market.

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

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

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

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

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

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

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

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

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

syndrome while reducing recovery times, received 510(k) marketing clearance from the FDA in April 2020 with the first commercial

procedure successfully performed in December 2020.

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

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

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

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.

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

The Company has financed

its operations principally through public and private issuances of its common stock, preferred stock, common stock purchase warrants,

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

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

activities and conducting clinical trials.

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

and other debt and equity committed sources of financing, the Company expects to be able to fund its 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 March 31, 2022.

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

1 unchanged sentence

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

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

December 31, 2021 as filed with the SEC on April 6, 2022, except as otherwise noted herein below.

of Presentation

accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned

subsidiaries.

All intercompany transactions and balances have been eliminated in consolidation.

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

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

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

and Exchange Commission (“SEC”), and include the accounts of the Company and its wholly-owned and majority-owned subsidiaries.

All significant intercompany transactions and balances have been eliminated in consolidation.

The Company holds a majority-ownership

interest and has controlling financial interest in each of:

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

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

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

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

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

the recognition in the unaudited condensed consolidated statement of operations of a net loss attributable to the noncontrolling interest

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

See Note 16, 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

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

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

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

As permitted under SEC rules, certain footnotes or

other financial information normally required by U.S.

GAAP have been condensed or omitted.

The balance sheet as of December 31, 2020

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

The accompanying unaudited condensed consolidated financial

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

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

unaudited condensed consolidated financial information.

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.

The Company manages its operations as a single operating segment

for the purposes of assessing performance and making operating decisions.

amounts in the accompanying consolidated financial statements and these notes thereto are presented in thousands of dollars, if not otherwise

noted as being presented in millions of dollars, except for shares and per share amounts.

Consideration

Consideration relates to the potential payment for an acquisition that is contingent upon the achievement of the acquired business meeting

certain milestones.

The Company records contingent consideration at fair value at the date of acquisition based on the consideration

expected to be transferred.

For potential payments related to milestone achievements, the Company estimated the

fair value based on the probability of achievement of such milestones.

The assumptions utilized in the calculation of the acquisition

date fair value include probability of success and the discount rates.

Contingent consideration involves certain assumptions requiring

significant judgment and actual results may differ from assumed and estimated amounts.

Contingent consideration is remeasured each reporting

period, and subsequent changes in fair value, including accretion for the passage of time, are recognized within other income (expense),

net in the Company’s unaudited condensed consolidated statements of operations.

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

GAAP, management is required to make estimates

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

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

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

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

These estimates and assumptions include the estimated

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

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

timing of future cash inflows and outflows.

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 did not have an effect on the Company’s financial

December 2019, the FASB issued ASU No.

2019-12, “Income Taxes:

Simplifying the Accounting for Income Taxes”, (“ASU

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

allocation, and calculating income taxes in interim periods, and adds revised guidance to reduce complexity in certain areas, including

recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group.

Adoption of the guidance of ASU

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

The Company’s adoption of the

ASU 2019-12 guidance as of January 1, 2021 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.

and assumptions that affect the reported amounts of assets, inclusive of acquired intangible assets and the determination of corresponding

carrying value reserve, if any, and liabilities and the disclosure of contingent losses, as of the date of the consolidated financial

statements, as well as the reported amounts of revenue and expenses during the reporting period.

Significant estimates in these consolidated

financial statements include those related to the estimated fair value of stock-based equity awards, contingent consideration

and common stock purchase warrants.

Other significant estimates include the provision or benefit for income taxes and the corresponding

valuation allowance on deferred tax assets.

Additionally, management’s assessment of the Company’s ability to continue as

a going concern involves the estimation of the amount and timing of future cash inflows and outflows.

On an ongoing basis, the Company

evaluates its estimates and assumptions.

The Company bases its estimates on historical experience and on various other assumptions believed

to be reasonable.

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

by changes in these estimates.

Accounting Standards Updates Adopted

December 31, 2021, the Company adopted FASB ASC Topic 842, Leases, (“ASC 842”).

ASC 842 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.

classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

The Company’s adoption of ASC 842 did not have an effect on the Company’s consolidated financial statements.

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

The Company has a patent

license agreement with Case Western Reserve University (“CWRU”) which provides for each of patent fees reimbursement payments,

milestone payments and royalty payments - each as discussed below.

For further details of this agreement, see Note 3 of the Company’s

Consolidated Financial Statements in the Company’s Form 10-K for the year ended December 31, 2021.

Diagnostics Inc.

1 unchanged sentence

See Note 5, 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”

for patent fee reimbursement payments paid to CWRU in the periods ended March 31, 2022 and 2021.

The CWRU License Agreement contained

milestones 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 such that a 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.

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

5.0 % of Net Sales up to $ 100.0

million per year;

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”.

The Company recorded a royalty expense of $ 10 for the three months ended March 31, 2022

4 — Revenue from Contracts with Customers

is recognized when the satisfaction of the performance obligation occurs, which is when the delivery of product and /or the provision

of service is rendered, and is measured as the amount of estimated consideration expected to be realized.

In the period ended March 31,

2022, the Company recognized revenue under the EsoGuard Commercialization Agreement, dated August 1, 2021, as discussed below.

Commercialization Agreement

Company, through its majority-owned subsidiary, Lucid Diagnostics Inc., entered into the EsoGuard Commercialization Agreement, dated

August 1, 2021, with its Commercial Laboratory Improvements Act (“CLIA”) certified commercial laboratory service provider,

ResearchDx Inc.

(“RDx”), an unrelated third-party.

The EsoGuard Commercialization Agreement 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.

February 25, 2022, the EsoGuard Commercialization Agreement was terminated in conjunction with the execution of an Asset Purchase Agreement

between LucidDx Labs Inc., a wholly-owned subsidiary of Lucid Diagnostics Inc.

and RDx, as such agreement is further discussed in Note

6 , Acquisitions .

the period ended March 31, 2022, the Company recognized total revenue of $ 189 , which represents the minimum fixed monthly fee of $ 100

to be paid by RDx for the delivery of services under the EsoGuard Commercialization Agreement for the period from the agreement inception

date of August 1, 2021 and prorated to February 25, 2022.

The monthly fee was deemed to be collectible for such period as RDx has timely

paid the applicable respective monthly fee.

cost of revenue recognized with respect to the revenue recognized under the EsoGuard Commercialization Agreement for the period ended

March 31, 2022 totaled $ 369 , inclusive of employee related costs of employees engaged in the delivery of the administration to patients

of the EsoCheck cell sample collection procedure, EsoCheck devices and EsoGuard mailers (cell sample shipping costs) distributed to medical

practitioners’ locations and the Lucid Test Centers;

Lucid Test Centers operating expenses, including rent expense and supplies;

and royalty fees incurred under the Amended CWRU License Agreement.

5 — Related Party Transactions

3 unchanged sentences

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

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

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

Schedule of Incurred Expenses of Minority Shareholders

the three months ended

the nine months ended

Months Ended March 31,

– Royalty Fee

and Administrative Expense

– License Agreement - Amendment Fee -

Milestone III

compensation expense – Physician Inventors’ restricted stock awards

1 unchanged sentence

License Agreement - reimbursement of patent legal fees

devices provided to CWRU

- Physician Inventors’ consulting agreements

research agreement

compensation expense – Physician Inventors’ stock options

14 unchanged sentences

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

Subsequent to

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

2014 Equity Plan, with a grant

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

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

Each of the Physician

Inventors were granted 50,000 stock options under the PAVmed Inc.

2014 Equity Plan, with a grant date of June 21, 2021, an exercise price

of $ 6.41 per share of common stock of PAVmed Inc., vesting ratably on a quarterly basis commencing June 30, 2021 and ending March 31,

2024, and a contractual period of ten years from the date of grant.

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

6 unchanged sentences

2014 Long-Term Incentive Equity

Plan” and the separate.

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

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

and Note 16, Noncontrolling

5 unchanged sentences

previously entered into a consulting agreement with Stanley N.

Lapidus, effective June 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

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

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

and cash paid of approximately

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

recognized general and administrative expense

in the period ended March 31, 2021 in connection with the consulting agreement.

entered into a consulting agreement with Andrew Thoreson, M.D.

effective June 2021 with such consulting agreement providing

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

Veris Health Inc.

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

asset - assembled workforce

net assets acquired

intangible asset recognized for the in-process research and development (“IPRD”) of $ 133

was determined to have no alternative future

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

The intangible asset recognized for the assembled workforce

of approximately $ 70 ,

which is included in “Other assets” on the accompanying unaudited condensed consolidated balance sheet, has an expected useful

life of one year, and is being recognized as a research and development expense on a ratable basis over such period, commencing in June

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

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.

recognized general and administrative

expense of $ 25 in the period ended March 31, 2022 in connection with the consulting agreement.

6 — Acquisitions

Asset Purchase Agreement - ResearchDx

On February 25, 2022, LucidDx

Labs, Inc., entered into an asset purchase agreement (“APA”) with ResearchDx, Inc.

(“RDx”), an unrelated third-party

Under the RDx APA, LucidDx Labs Inc.

acquired certain assets from RDx to be combined with LucidDx Labs Inc.

purchased and leased property and equipment to establish a Company-owned CLIA certified, CAP accredited commercial clinical laboratory

capable of performing the EsoGuard® Esophageal DNA assay, inclusive of DNA extraction, next generation sequencing (“NGS”)

and specimen storage.

Prior to consummation of the RDx APA, RDx provided such laboratory services at its owned CLIA-certified, CAP-accredited

As of March 31, 2022, the

Company’s preliminary analysis is that the RDx APA transaction is a business combination, resulting in the recognition and measurement

of a preliminary purchase consideration in accordance with the valuation methodology described in Note 2, Summary of Significant Accounting

Policies and Recent Accounting Standards Updates .

the terms of the RDx APA, LucidDx Labs Inc.

will pay RDx an aggregate purchase price of up to $ 6.2

million for the acquired assets.

million is comprised of non-contingent purchase

consideration of $ 1.0

million (included in “Accrued expenses

and other liabilities” on the accompanying unaudited condensed consolidated balance sheets, as of March 31, 2022), and contingent

purchase consideration of a total of $ 5.2

million face value, with such contingent

purchase consideration having a preliminary $ 4,714

initial estimated fair value as of the

transaction date.

The preliminary $ 5,714 purchase consideration (inclusive of both the non-contingent and contingent purchase consideration

discussed above) is unallocated as of March 31, 2022, and as such is included in intangible assets in the accompanying unaudited consolidated

balance sheet.

The preliminary estimated fair value of the contingent purchase price consideration and the identification and estimated

fair value of acquired assets are subject-to further revision.

Concurrent with the RDx APA,

LucidDx Labs Inc.

and RDx also entered into a management services agreement (“RDx MSA”), with a term of three years , and

a total of approximately $ 1.8 million payable in equal quarterly payments.

Forma Information

RDx acquisition impact for purposes of pro forma financial disclosures would have primarily impacted the Company’s EsoGuard Commercialization

Agreement with RDx.

The impact is reflected in the table below:

Of Business Acquisition Pro Forma Information

Three Months Ended March 31,

Basic and diluted net loss per share

7 — Prepaid Expenses, Deposits, and Other Current Assets

expenses and other current assets consisted of the following as of:

Schedule of Prepaid Expenses and Other Current Assets

payments to service providers and suppliers

financing charges

cell collection supplies

mailer supplies

prepaid expenses, deposits and other current assets

disclosure of cash flow information related to the Company’s cash and non-cash activities with its leases are as follows:

of Supplemental Balance Sheet Information Related to Cash and Non-cash Activities with Leases

Months Ended March 31,

paid for amounts included in the measurement of lease liabilities

cash flows from operating leases

investing and financing activities

assets obtained in exchange for new operating lease liabilities

Weighted-average

remaining lease term - operating leases (in years)

Weighted-average

discount rate - operating leases

of March 31, 2022, the Company’s right-of-use assets from operating leases are $ 2,951 , which are reporting in right-of-use assets

- operating leases in the unaudited condensed consolidated balance sheets.

As of March 31, 2022, the Company has outstanding operating

lease obligations of $ 2,981 , of which $ 873 is reported in operating lease liabilities, current portion and $ 2,108 is reporting in operating

lease liabilities less current portion in the Company’s unaudited condensed consolidated balance sheets.

The Company did not have

operating leases as of December 31, 2021.

The Company calculates its incremental borrowing rates for specific lease terms, used to discount

future lease payments, as a function of the financing terms the Company would likely receive on the open market.

Company executed lease agreements for:

office space in Horsham, Pennsylvania, which commenced May 1, 2022;

and a new light manufacturing

facility in Riverton, Utah, with expected commencement of October 2022.

9 — Intangible Assets

assets, less accumulated amortization, consisted of the following as of:

of Intangible Assets

Identified finite intangible assets

Unallocated purchase consideration 1

Intangible asset

Accumulated Amortization

Intangible Assets, net

Note 6, Acquisitions - Asset Purchase Agreement - Research Dx Inc.

, for a discussion

of the “unallocated purchase consideration” recognized as an intangible asset

as of March 31, 2022, as presented in the table above.

expense of the acquired intangible assets discussed above was $ 123

for the period ended March 31, 2022 (there was

no such amortization expense for the prior period ended March 31, 2021), and is included in general and administrative expenses in the

accompanying consolidated statements of operations.

As of March 31, 2022, the estimated future amortization expense associated with the

Company’s identified finite-lived intangible assets (except for the unallocated purchase consideration included in total

intangible asset presented above) for each of the five succeeding fiscal years is as follows:

of Estimated Amortization Expense for Intangible Assets

(remainder of year)

10 — Commitment and Contingencies

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

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 did not seek any specific monetary damages.

The Company did

not believe it was clear the prior approval of these matters was 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 approval by the Court.

The settlement hearing before the Court is scheduled for November 3, 2022.

December 23, 2020, Benchmark Investments, Inc.

2 unchanged sentences

of New York alleging the registered direct offerings of shares of common stock of the Company completed in December 2020 were in violation

of provisions set forth in an engagement letter between the Company and the plaintiff.

The plaintiff is seeking monetary damages of up

to $ 1.3 million.

The Company disagrees with the allegations set forth in the complaint and intends to vigorously contest the complaint.

of provisions set forth in an engagement letter between the Company and Kingswood Capital Markets, a “division” of Benchmark

Investments, Inc.

On December 16, 2021, the court granted PAVmed’s motion to dismiss the case for lack of subject matter jurisdiction.

On February 7, 2022, Benchmark Investments LLC, which claimed to be affiliated with Benchmark Investments, Inc., filed a new complaint

in the Supreme Court of the State of New York, New York County, asserting claims similar to those in the federal action, and adding to

its allegations that financings conducted by the Company in January 2021 and February 2021 also violated the Company’s engagement

letter with Kingswood Capital Markets.

The Company disagrees with the allegations set forth in the complaint and intends to vigorously

contest the complaint.

the ordinary course of our business, particularly as it begins commercialization of its products, the Company may be subject to certain

12 unchanged sentences

Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis

Value Measurement on a Recurring Basis at

Date Using (1)

Secured Convertible Note - November 2019

Convertible Note - April 2020

Secured Convertible Note – August 2020

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

Level-2 represents significant other observable inputs, and Level-3 represents significant unobservable inputs.

Senior Secured Convertible Note dated August 6, 2020, the Senior Convertible Note dated April 30, 2020, the Senior Secured Convertible

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

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

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

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

of operations.

were no fair value measurements as of 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,

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

The estimated

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

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

Treasury security yields, and certain other Level-3

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

Changes in these

assumptions can materially affect the estimated fair values.

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

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

Summary of Outstanding Debt

Maturity Date

Interest Rate

Price per Share

Value Principal Outstanding

2019 Senior Secured Convertible Note

2020 Senior Convertible Note

2020 Senior Secured

Convertible Note

- December 31, 2020

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

2019 Senior Convertible Notes”)

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

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

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

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

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

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

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

In the 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”)

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

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

In the 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

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

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

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

The Company recognized a debt extinguishment loss of

approximately $ 2,955 in the 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

2020 Senior Convertible Note

2020 Senior Secured Convertible Note

of Balance Sheet Fair Value Components

Income (Expense)

Value - December 31, 2020

repayments – common stock

Non-installment

payments – common stock

Non-installment

payments – cash

in fair value

repayments – cash

Value at 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 nine months ended September 30, 2020 is as follows:

2018 Senior Secured Convertible Note

2019 Senior Secured Convertible Notes

2020 Senior Convertible Note

2020 Senior Secured Convertible Note

of Balance Sheet Fair Value Components

Income (Expense)

Value - December 31, 2019

value principal – issue date

value adjustment – issue date

repayments – common stock

Non-installment

payments – common stock

Non-installment

payments – cash

in fair value

Fee - November 2019 Senior Secured Convertible Notes

Value at March 31, 2020

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

value principal – issue date

value adjustment – issue date

repayments – common stock

Non-installment

payments – common stock

Non-installment

payments – cash

in fair value

Fee - April 2020 Senior Convertible Note

Value at June 30, 2020

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

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

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,

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

fair value on a recurring basis at each reporting period date, with the resulting fair value adjustment recognized as other income (expense)

in the consolidated statement of operations.

In this regard, as provided for by ASC 825-10-50-30(b), the estimated fair value adjustment

is presented as a single line item within other income (expense) in the accompanying consolidated statement of operations.

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

8 — Debt – continued

Act Paycheck Protection Program Loan

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

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

- the “PPP Loan”.

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

The Company submitted

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

Upon PPP Loan forgiveness,

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

Value Measurement on a Recurring Basis at Reporting

consideration payable

As noted above, as presented in the fair value hierarchy table,

Level-1 represents quoted prices in active markets for identical items, Level-2 represents significant other observable inputs, and Level-3

represents significant unobservable inputs.

There were no transfers between the respective Levels during the period ended March 31, 2022.

value measurements of contingent consideration

Company recorded $ 4.9

million, which is the fair value, of contingent consideration

related to the RDx acquisition.

The Company is required to make contingent consideration payments of up to $ 5.2

million related to the RDx APA agreement.

contingent agreement is based on achieving milestones to obtain certain certifications and licensing rights.

The Company estimated

the fair value on a probability based model that assessed achievement of such milestones.

The model used present

value factors, that applied probability ranges of 94-99%, a discount rate of 7.875% and achievement times ranging from one month to six

months to achieve the respective milestones.

final settlement of contingent consideration liabilities for the acquisition could vary from current estimates based on

the actual results of the financial measures described above.

This liability is considered to be a Level 3 financial liability that is

re-measured each reporting period.

The change in fair value of contingent consideration for these acquisitions is included in other income

(expense), net.

following table presents a reconciliation of the liability measured at fair value on a recurring basis using significant unobservable

inputs (Level 3):

of Reconciliation of Liability Measured at Fair Value on a Recurring Basis

value of contingent consideration at the date of acquisition

in fair value of contingent consideration

consideration payable

of December 31, 2021 there were no fair value measurements.

Note 12, Debt for convertible notes the Company has entered into subsequent to March 31, 2022.

to March 31, 2022, on April 4, 2022, the Company entered into a Senior Secured Convertible Note in the amount of $ 27.5

million, pursuant to a Securities Purchase

Agreement (“SPA”) with an accredited institutional investor.

Under the SPA, the Company agreed to sell, and the investor

agreed to purchase, up to an additional $ 22.5 in additional initial principal amount of Senior Secured Convertible Notes (for an aggregate

of $ 50.0 million in initial principal amount of Secured Promissory Notes) upon the satisfaction of certain conditions (as more fully

described below).

The notes are being offered and sold in a registered direct offering under the Company’s effective shelf registration

statement (the “Offering”).

The purchase price of the Secured Promissory Notes is $1,000 for each $1,100 in principal amount

of the notes, representing an original issue discount of $100 per $1,100 in principal amount of the notes .

We herein refer to the Senior

Secured Convertible Notes issued from time to time under the SPA as March 2022 Notes.

to the SPA we completed an initial closing for the sale of $ 27.5

million in principal amount of March 2022 Notes,

of which the investor funded and the Company received cash proceeds of $ 24.9

million on April 5, 2022, after deduction of

to certain conditions being met or waived, from time to time after such time that stockholder approval for an increase in our authorized

shares from 150 million to 250 million is obtained, but before March 31, 2024, one or more additional closings for up to the remaining

principal amount of March 2022 Notes may occur, upon five trading days’ notice by us to the investor.

The aggregate principal amount

of March 2022 Notes that may be offered in the additional closings may not be more than $22.5 million .

The investor’s obligation to purchase the notes at each additional closing is subject to certain conditions set forth in the March

2022 SPA (including minimum price and volume thresholds, maximum ratio of debt to market capitalization, and minimum market capitalization),

which may be waived by the Required Holders (as defined in the March 2022 SPA).

Under the March 2022 SPA, the investor will be required

to purchase March 2022 Notes in the additional closings if such conditions are met or waived.

In addition, from and after March 31, 2023,

the investor may by written notice to us elect to require us to issue up to $ 22.5

million in initial principal amount of March

2022 Notes, so long as in doing so it would not cause the ratio of (a) the outstanding principal amount of the March 2022 Notes (including

the additional March 2022 Notes), accrued and unpaid interest thereon and accrued and unpaid late charges to (b) our average market capitalization

over the prior ten trading days, to exceed 25%.

If we fail to complete the sale of the additional March 2022 Notes contemplated

by any such written notice, or if the investor is unable to deliver any such notice prior to March 31, 2024 as a result of the limitation

described in the preceding sentence, then we will be obligated to pay a break-up fee to the investor at such time in an aggregate amount

equal to $ 1.35

March 2022 Notes have a voluntary fixed conversion price of $ 5.00

per share, a stated interest rate of 7.875 %

per annum, and a maturity of 24 months (subject to extension in certain circumstances).

The March 2022 Notes will be secured by all our

existing and future assets (including those of our significant subsidiaries, other than Lucid and its subsidiaries), but including only

of Lucid’s outstanding common stock held by us, pursuant to a security agreement by and between the Company and the investor.

will be subject to certain customary affirmative and negative covenants regarding the rank of the March 2022 Notes, the incurrence of

indebtedness, the existence of liens, the repayment of indebtedness and the making of investments, the payment of cash in respect of

dividends, distributions or redemptions, the transfer of assets, the maturity of other indebtedness, and transactions with affiliates,

among other customary matters.

We also will be subject to financial covenants requiring that (i)

the amount of our available cash equal or exceed $8.0 million at all times, (ii) the ratio of (a) the outstanding principal amount of

the March 2022 Notes, accrued and unpaid interest thereon and accrued and unpaid late charges to (b) our average market capitalization

over the prior ten trading days, not exceed 30%, and (iii) that our market capitalization shall at no time be less than $75 million.

The March 2022 Notes include certain customary

events of default.

13 — Stock-Based Compensation

1 unchanged sentence

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

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

to approval by the compensation committee of the PAVmed Inc.

board of directors, of stock options, stock appreciation rights, restricted

2014 Equity Plan”) is designed to enable PAVmed Inc.

offer employees, officers, directors, and consultants, as defined, an opportunity to acquire shares of common stock of PAVmed Inc.

types of awards that may be granted under the PAVmed Inc.

2014 Equity Plan include stock options, stock appreciation rights, restricted

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

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.

2014 Long-Term Incentive Equity Plan - Stock Options

All awards are subject to approval by the PAVmed Inc.

board of directors.

total of 16,352,807 shares of common stock of PAVmed Inc.

are reserved for issuance under the PAVmed Inc.

2014 Equity Plan, with 2,776,706

shares available for grant as of March 31, 2022.

The share reservation is not diminished by a total of 600,854 PAVmed Inc.

stock options

and restricted stock awards granted outside the PAVmed Inc.

2014 Equity Plan as of March 31, 2022.

2014 Equity Plan - Stock Options

options issued and outstanding under the PAVmed Inc.

2014 Equity Plan is as follows:

2014 Equity Plan and including PAVmed stock options granted outside the plan is

Schedule of Summarizes Information About Stock Options

Stock Options

of Stock Options

Average Exercise Price

Contractual Term (Years)

stock options - December 31, 2020

stock options - September 30, 2021

and exercisable stock options - September 30, 2021

stock options at December 31, 2021

stock options at March 31, 2022

and exercisable stock options at March 31, 2022

options granted under the PAVmed Inc.

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

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

2014 Equity Plan generally vest ratably over twelve

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

term from date-of-grant.

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

common stock on each of 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

than the exercise price.

common stock on each of March 31, 2022 and December 31, 2021 and the exercise price of the

underlying PAVmed Inc.

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

exercise price.

2014 Equity Plan - Restricted Stock Awards

summary of PAVmed Inc.

2014 Equity Plan restricted stock award activity is as follows:

Schedule of Restricted Stock Award Activity

of Stock Options

Average Grant Date Fair Value

restricted stock awards as of December 31, 2021

restricted stock awards as of March 31, 2022

13 — Stock-Based Compensation - continued

2014 Long-Term Incentive Equity Plan - Restricted Stock Awards

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

2014 Equity Plan, with such

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

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

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

common stock, is being recognized as stock-based

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

The restricted

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

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.

Diagnostics Inc.

1 unchanged sentence

Lucid Diagnostics Inc.

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

2018 Equity Plan”), provides for

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

board of directors, of stock options, stock appreciation rights, restricted

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

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.

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

2018 Equity Plan”) is separate and apart

from the PAVmed Inc.

2014 Equity Plan discussed above.

The Lucid Diagnostics Inc.

2018 Equity Plan is designed to enable Lucid Diagnostics

to offer employees, officers, directors, and consultants, as defined, an opportunity to acquire shares of common stock of Lucid

Diagnostics Inc.

2018 Long-Term Incentive Equity Plan - Stock Options

The types of awards that may be granted under the Lucid Diagnostics Inc.

2018 Equity Plan include stock options, stock

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

All awards are subject

to approval by the Lucid Diagnostics Inc.

board of directors.

total of 5,644,000 shares of common stock of Lucid Diagnostics Inc.

are reserved for issuance under the Lucid Diagnostics Inc.

Plan, with 733,541 shares available for grant as of March 31, 2022, with the share reservation not diminished by a total of 473,300 Lucid

Diagnostics Inc.

stock options and restricted stock awards granted outside the Lucid Diagnostics Inc.

2018 Equity Plan.

Diagnostics Inc.

2018 Equity Plan - Stock Options

options issued and outstanding under the Lucid Diagnostics Inc.

2018 Equity Plan is as follows:

2018 Equity Plan and including Lucid Diagnostics options granted outside

the plan is as follows:

Schedule of Summarizes Information About Stock Options

of Stock Options

Average Exercise Price

Contractual Term (Years)

stock options at December 31, 2021

stock options at September 30, 2021

and exercisable stock options at September 30, 2021

stock options at March 31, 2022

and exercisable stock options at March 31, 2022

options granted under the Lucid Diagnostics Inc.

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

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

9 — Stock-Based Compensation - continued

2018 Equity Plan generally vest ratably

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

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

Diagnostics Inc.

2018 Long-Term Incentive Equity Plan – Restricted Stock Awards

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, 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.

2018 Equity Plan, as discussed above, was

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

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

under each scenario.

In this regard, the Lucid Diagnostics Inc.

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

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

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

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

(ii) determine the equity value under each

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

The two scenarios identified were an initial

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

common stock (“IPO scenario”);

and, to continue on as a private

company (“stay private scenario”).

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

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

and, with respect to the stay

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

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.

2018 Equity Plan – Restricted Stock Awards

summary of Lucid Diagnostics Inc.

2018 Equity Plan restricted stock award activity is as follows:

Schedule of Restricted Stock Award Activity

of Restricted Stock Awards

Average Grant Date Fair Value

restricted stock awards as of December 31, 2021

Unvested restricted stock awards as of March 31, 2022

January 7, 2022, 320,000

restricted stock awards were granted under the

Lucid Diagnostics Inc 2018 Equity Plan, with such restricted stock awards having a single vesting date on January 7, 2025, and an aggregate

grant date fair value of approximately $ 1.4

million, measured as the grant date closing price

of Lucid Diagnostics Inc.

common stock, 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.

13 — Stock-Based Compensation - continued

7 unchanged sentences

Schedule of Stock-Based Compensation Awards Granted

September 30,

operations expenses

Months Ended March 31,

and marketing expenses

and administrative expenses

and development expenses

stock-based compensation expenses

stock-based compensation expense

Compensation Expense Recognized by Lucid Diagnostics Inc.

6 unchanged sentences

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

and non-employee consultants under the Lucid Diagnostics Inc.

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

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

September 30,

Diagnostics Inc 2018 Equity Plan – general and administrative expense

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

Months Ended March 31,

Diagnostics Inc 2018 Equity Plan – sales and marketing expenses

Diagnostics Inc 2018 Equity Plan – general and administrative expenses

Diagnostics Inc 2018 Equity Plan – research and development expenses

Inc 2014 Equity Plan - sales and marketing expenses

Inc 2014 Equity Plan - general and administrative expenses

Inc 2014 Equity Plan - research and development expenses

stock-based compensation expense –

recognized by Lucid Diagnostics Inc

stock-based compensation expense – recognized by Lucid Diagnostics Inc

13 — Stock-Based Compensation - continued

Stock-Based Compensation Expense - continued

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

3 unchanged sentences

Schedule of Unrecognized Compensation Expense

Average Remaining Service Period

Average Remaining Service Period (Years)

2014 Equity Plan

3 unchanged sentences

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:

average estimated fair value of such stock options of $ 1.22 per share and $ 2.79 per share during the periods ended March 31, 2022 and

2021, 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,

Months Ended March 31,

term of stock options (in years)

2 unchanged sentences

dividend yield

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

2018 Equity Plan was based on

a weighted average estimated fair value of such stock options of $ 2.95 per share during the year ended March 31, 2022.

There were no

stock-based awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan during the period ended March 31, 2021.

The stock-based

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

of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions

Months Ended March 31,

term of stock options (in years)

stock price volatility

free interest rate

dividend yield

13 — Stock-Based Compensation - continued

Employee Stock Purchase Plan (“ESPP”)

Employee Stock Purchase Plan (“PAVmed Inc.

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

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

common stock through payroll deductions

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

of PAVmed Inc.

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

The PAVmed Inc.

ESPP share purchase dates

are March 31 and September 30.

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.

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

total of 194,240

shares and 203,480

shares of common stock of the Company were purchased

for proceeds of approximately $ 217

on March 31, 2022 and 2021, respectively under the PAVmed Inc Employee Stock Purchase Plan (“PAVmed Inc ESPP”).

ESPP has a total reservation of 3,010,690

shares of common stock of PAVmed Inc.

shares are available-for-issue as of March 31,

Diagnostics, Inc Employee Stock Purchase Plan (“ESPP”)

Lucid Diagnostics Inc Employee Stock Purchase Plan (“Lucid Diagnostics Inc ESPP”), initial six-month stock purchase

period is April 1, 2022 to September 30, 2022.

The Lucid Diagnostics Inc.

ESPP share purchase dates are March 31 and September

The Lucid Diagnostics Inc.

ESPP has a total reservation of 500,000

shares of common stock of Lucid Diagnostics

for which all shares are available-for-issue as of March 31, 2022.

14 — Preferred Stock

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

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

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

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.

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).

of March 31, 2022 and 2021, there were 1,136,210 and 1,241,438 shares of Series B Convertible Preferred Stock (classified in permanent

equity) issued and outstanding, respectively.

Series B Convertible Preferred Stock dividends earned are included in the calculation of basic and diluted net loss attributable to PAVmed

common stockholders for each of the corresponding periods presented.

Notwithstanding, the Series B Convertible Preferred Stock dividends

are recognized as a dividend payable only upon the dividend being declared payable by the Company’s board of directors.

to March 31, 2022, in April 2022, the Company’s board-of-directors declared a Series B Convertible Preferred Stock dividend earned

as of March 31, 2022 and payable as of April 1, 2022, of approximately $ 68 ,

which will be settled by the issue of an additional

shares of Series B Convertible Preferred

Stock (with such dividend not recognized as a dividend payable as of March 31, 2022, as the Company’s board of directors had not

declared such dividends payable as of such date).

15 — 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 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 ,

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.

333-248709 and File No.

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 .

the period ended March 31, 2022, 237,499

shares of common stock of the Company were issued

upon exercise of stock options for cash of approximately $ 241 .

See Note 13, Stock-Based Compensation , for a discussion of the PAVmed Inc.

2014 Equity Plan.

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

During the period

ended, the PAVmed Inc.

Employee Stock Purchase Plan purchased 194,240

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

shares of common stock of the Company.

13, Stock-Based Compensation , for a discussion of the PAVmed Inc.

Employee Stock Purchase Plan.

Stock Purchase Warrants

1 unchanged sentence

Schedule of Outstanding Warrants to Purchase Common Stock

Stock Purchase Warrants Issued and Outstanding at

- Series Z Warrants

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.

Stock Purchase Warrants Issued and Outstanding

Average Exercise Price / Share

the period ended March 31, 2022, a total of 5 Series Z Warrants were exercised for cash at $ 1.60 per share, resulting in the issue of

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

remaining 377,873

Series W Warrants expired unexercised as of January

16 — Noncontrolling Interest

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

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

– 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.

loss attributable to NCI

of subsidiary equity transactions

Diagnostics Inc.

3 unchanged sentences

– equity (deficit) – end of period

16 — Noncontrolling Interest - continued

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

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.

Lucid Diagnostics Inc., Veris Health Inc.

and Solys Diagnostics Inc., as a component of consolidated total

stockholders’ equity as of March 31, 2022 and December 31, 2021;

and the recognition of a net loss attributable to the

NCI in the unaudited condensed consolidated statement of operations with respect to Lucid Diagnostics Inc.

and Solys Diagnostics

for the three months ended March 31, 2022 and 2021;

and with respect to Veris Health Inc.

for the three

months ended March 31, 2022 (as the Veris Health Inc inception date was May 28, 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.

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

of March 31, 2022, there were 35,171,796

shares of common stock of Lucid Diagnostics

issued and outstanding, of which, PAVmed Inc.

holds 27,927,190

shares, representing a majority ownership

equity interest and a controlling financial interest in Lucid Diagnostics Inc., and accordingly, Lucid Diagnostics Inc.

is a consolidated

majority-owned subsidiary of PAVmed Inc.

March 28, 2022, Lucid Diagnostics Inc.

entered into a committed equity facility with an affiliate of Cantor Fitzgerald (“Cantor”).

Under the terms of the committed equity facility, Cantor has committed to purchase up to $ 50 million of Lucid Diagnostics Inc.

stock from time to time at the request of Lucid Diagnostics Inc.

connection with the execution of the agreement for the committed equity facility, Lucid Diagnostics Inc.

agreed to pay Cantor $ 1.0 million

as consideration for its irrevocable commitment to purchase the shares upon the terms and subject to the satisfaction of the conditions

set forth in such agreement.

In addition, pursuant to the agreement, Lucid Diagnostics agreed to reimburse Cantor for certain of its

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

also entered into a registration rights agreement with Cantor.

Lucid Diagnostics Inc.

12 — Noncontrolling Interest - continued

of September 30, 2021, PAVmed Inc.

has the right

to terminate the agreement at any time after initial satisfaction of the conditions to Cantor’s obligation to purchase shares under

the facility, at no cost or penalty, upon three trading days’ prior written notice.

of March 31, 2022, there were 8,000,000

shares of common stock of Veris Health Inc.

and outstanding, of which PAVmed Inc.

holds an 80.44 %

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

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 March 31, 2022 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 December 31, 2021, upon

its formation and contemporaneous acquisition of Oncodisc Inc.

Diagnostics Inc.

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 %

of each of March 31, 2022 and December 31, 2021, 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 %

minority-interest ownership held by unrelated third parties.

5 unchanged sentences

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

Months Ended March 31,

loss - before noncontrolling interest

1 unchanged sentence

loss - as reported, attributable to PAVmed Inc.

B Convertible Preferred Stock dividends:

B Convertible Preferred Stock dividends – earned

loss attributable to PAVmed Inc.

1 unchanged sentence

average common shares outstanding, basic and diluted

Loss per share

loss - as reported, attributable to PAVmed Inc.

1 unchanged sentence

common stockholders

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

be anti-dilutive, are as follows:

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

4 unchanged sentences

by the Company’s board of directors.

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:

weighted-average number of shares of common stock outstanding for the periods ended March 31, 2022 and 2021 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

2014 Equity Plan stock options and

unvested restricted stock awards

purchase options - as to shares of common stock

purchase options - as to shares underlying Series Z Warrants

Stock options and restricted stock awards

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

following discussion and analysis of our unaudited condensed consolidated financial condition and results of operations should be read

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

and Exchange Commission (the “SEC”).

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

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

and Subsidiaries, including each of

the PAVmed Inc.

and its majority-owned subsidiaries, including:

Lucid Diagnostics Inc.

(“Lucid Diagnostics”

or “LUCID”), Veris Health Inc.

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

Diagnostics” or “SOLYS”).

Forward-Looking

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

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

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:

limited operating history;

financial performance, including our ability to generate revenue;

ability to obtain regulatory approval for commercialization of our products;

ability of our products to achieve market acceptance;

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

potential ability to obtain additional financing when and if needed;

ability to sustain status as a going concern;

ability to protect our intellectual property;

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

ability to manage growth;

liquidity and trading of our securities;

regulatory or operational risks;

cybersecurity

related to the COVID-19 pandemic;

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

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

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

joint ventures, or investments we may make.

may not actually achieve the plans, intentions, and /or expectations disclosed in our forward-looking statements, and you should not

rely on our forward-looking statements.

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

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,

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

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

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

and building its corporate infrastructure and management team.

Company operates in one segment as a medical 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™,

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

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

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

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

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

or its subsidiaries will

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

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

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

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

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

and, EsoGuard has been established as a Laboratory

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

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

test at Lucid Diagnostics commercial diagnostic laboratory partner ResearchDx Inc.

(“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”)

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

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

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

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

procedure successfully performed in December 2020.

In May 2021 European CE Mark Certification

was received for CarpX.

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

In 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.

The total stock options and restricted stock awards are inclusive of 500,854 stock options as of March 31, 2022 and

and 100,000 restricted stock awards as of March 31, 2022, granted outside the PAVmed Inc.

2014 Equity Plan.

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