What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-16 · 869 added, 659 removed, 242 unchanged (86% of the section changed)

2 unchanged sentences

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

expenses, deposits, and other current assets

June 30, 2022

December 31, 2021

Current assets:

lease right-of-use assets

Preferred Stock and Stockholders’ Equity

expenses and other current liabilities

lease liabilities, current portion

purchase consideration payable

Accounts receivable

Prepaid expenses, deposits, and other current assets

Total current assets

Fixed assets, net

Operating lease right-of-use assets

Intangible assets, net

Liabilities, Preferred Stock and Stockholders’ Equity

Current liabilities:

lease liabilities, less current portion

Accounts payable

Accrued expenses and other current liabilities

Operating lease liabilities, current portion

Senior Secured Convertible Notes - at fair value

Purchase consideration payable

Total current liabilities

Long-term liabilities

and contingencies (Note 10)

Stockholders’

stock, $ 0.001 par value.

Operating lease liabilities, less current portion

Total long-term liabilities

Total liabilities

Commitments and contingencies (Note 9)

Stockholders’ Equity:

Preferred stock, $ 0.001 par value.

Authorized, 20,000,000 shares;

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.

Series B Convertible Preferred Stock, par value $ 0.001 , issued and outstanding 1,158,950 at June 30, 2022 and 1,113,919 shares at December 31, 2021

Common stock, $ 0.001 par value.

Authorized, 250,000,000 shares;

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

31, 2021, respectively

paid-in capital

Stockholders’ Equity

Noncontrolling

87,023,211 and 86,367,845 shares outstanding as of June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

Treasury stock

Total PAVmed Inc.

Stockholders’ Equity

Liabilities and Stockholders’ Equity

Noncontrolling interests

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

accompanying notes to the unaudited condensed consolidated financial statements.

1 unchanged sentence

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

Months Ended March 31,

profit (loss)

and marketing

and administrative

and development

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

Gross profit (loss)

Operating expenses:

from operations

income (expense):

in fair value - contingent consideration payable

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

extinguishments loss - Senior Secured Convertible Notes

income (expense), net

before provision for income tax

for income taxes

loss before noncontrolling interests

loss attributable to the noncontrolling interests

loss attributable to PAVmed Inc.

Sales and marketing

General and administrative

Research and development

Total operating expenses

Loss from operations

Other income (expense):

Interest expense

Change in fair value - Senior Secured Convertible Note

Loss on issue and offering costs - Senior Secured Convertible Note

Debt extinguishments loss - Senior Secured Convertible Notes

Debt forgiveness

Other income (expense), net

Loss before provision for income tax

Provision for income taxes

Net loss before noncontrolling interests

Net loss attributable to the noncontrolling interests

Net loss attributable to PAVmed Inc.

Series B Convertible Preferred Stock dividends earned

loss attributable to PAVmed Inc.

Net loss attributable to PAVmed Inc.

common stockholders

share information:

loss per share attributable to PAVmed Inc.

Per share information:

Net loss per share attributable to PAVmed Inc.

- basic and diluted

loss per share attributable to PAVmed Inc.

Net loss per share attributable to PAVmed Inc.

common stockholders – basic and diluted

average common shares outstanding, basic and diluted

Weighted average common shares outstanding, basic and diluted

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the THREE MONTHS ENDED March 31, 2022

the THREE MONTHS ENDED June 30, 2022

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

Stockholders’ Equity (Deficit)

- December 31, 2021

Series B Convertible Preferred Stock

Additional Paid-In

Non controlling

Balance - March 31, 2022

$ ( 155,849 )

declared - Series B Convertible Preferred Stock

stock awards vestings

- Series Z warrants

- stock options

- stock options of majority-owned subsidiary

- Employee Stock Purchase Plan

of subsidiary equity transactions

compensation - PAVmed Inc.

compensation - majority-owned subsidiary

- March 31, 2022

Dividends declared - Series B Convertible Preferred Stock

Vest - restricted stock awards

Exercise - stock options

Exercise - stock options of majority-owned subsidiary

Impact of subsidiary equity transactions

Stock-based compensation - PAVmed Inc.

Stock-based compensation - majority-owned subsidiary

Treasury stock

Balance - June 30, 2022

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the SIX MONTHS ENDED June 30, 2022

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

Stockholders’ Equity (Deficit)

Series B Convertible Preferred Stock

Additional Paid-In

Non controlling

Balance - December 31, 2021

$ ( 138,910 )

Dividends declared - Series B Convertible Preferred Stock

Exercise - Series Z Warrants

Vest - restricted stock awards

Exercise - stock options

Exercise - stock options of majority-owned subsidiary

Purchase - Employee Stock Purchase Plan

Impact of subsidiary equity transactions

Stock-based compensation - PAVmed Inc.

Stock-based compensation - majority-owned subsidiary

Treasury stock

Balance - June 30, 2022

$ ( 181,442 )

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the THREE MONTHS ENDED March 31, 2021

the THREE MONTHS ENDED June 30, 2021

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

Stockholders’ Equity (Deficit)

- December 31, 2020

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

compensation - PAVmed Inc.

2014 Equity Plan

compensation - majority-owned subsidiary

- March 31, 2021

Series B Convertible Preferred Stock

Additional Paid-In

Non controlling

Balance - March 31, 2021

$ ( 97,778 ) -

Dividends declared - Series B Convertible Preferred Stock

Conversions - Series B Convertible Preferred Stock

Vest - restricted stock awards

Exercise - Series Z warrants

Exercise - stock options

Stock-based compensation - PAVmed Inc.

Stock-based compensation - majority-owned subsidiary

Investment in Veris Health Inc.

Balance - June 30, 2021

$ ( 109,325 ) -

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

the SIX MONTHS ENDED June 30, 2021

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

Months Ended March 31,

flows from operating activities

loss - before noncontrolling interest (“NCI”)

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

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:

expenses and other current assets

expenses and other current liabilities

cash flows used in operating activities

flows from investing activities

Acquisitions,

net of cash acquired

cash flows used in investing activities

flows from financing activities

– issue of common stock – registered offerings

– offering costs – registered offerings

– repayment of Senior Convertible Note and Senior Secured Convertible Note

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

– exercise of Series Z warrants

– exercise of stock options

Stockholders’ Equity (Deficit)

Series B Convertible Preferred Stock

Additional Paid-In

Non controlling

Balance - December 31, 2020

$ ( 88,275 ) -

Issue common stock – registered offerings, net

Issue common stock upon partial conversions of Senior Secured Convertible Note

Issue common stock – exercise Series Z warrants

Issue common stock – conversion Series B Convertible Preferred Stock

Series B Convertible Preferred Stock dividends declared

Issue common stock - Employee Stock Purchase Plan

– 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

increase (decrease) in cash

beginning of period

end of period

Exercise - stock options

Vest - restricted stock awards

Stock-based compensation - PAVmed Inc.

Stock-based compensation - majority-owned subsidiary

Investment in Veris Health Inc.

Balance - June 30, 2021

$ ( 109,325 ) -

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

Six Months Ended June 30,

Cash flows from operating activities

Net loss - before noncontrolling interest (“NCI”)

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

Depreciation and amortization expense

Stock-based compensation

In-process R&D charge

Issue common stock of majority-owned subsidiary - settle installment payment

Change in fair value - Senior Secured Convertible Note

Loss upon Issuance - Senior Secured Convertible Note

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

Debt forgiveness

Non-cash lease expense

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other current and non-current assets

Accounts payable

Accrued expenses and other current liabilities

Net cash flows used in operating activities

Cash flows from investing activities

Purchase of equipment

Payments - Acquisitions, net of cash

Net cash flows used in investing activities

Cash flows from financing activities

Proceeds – issue of common stock – registered offerings

Payment – offering costs – registered offerings

Proceeds – issue of Senior Secured Convertible Note

Payment – repayment of Senior Convertible Note and Senior Secured Convertible Note

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

Proceeds – exercise of Series Z warrants

Proceeds – exercise of stock options

Proceeds – issue common stock – Employee Stock Purchase Plan

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

Purchase Treasury Stock – payment of employee payroll tax obligation in connection with stock-based compensation

Net cash flows provided by financing activities

Net increase (decrease) in cash

Cash, beginning of period

Cash, end of period

accompanying notes to the unaudited condensed consolidated financial statements.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8 unchanged sentences

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

(“Solys Diagnostics”

(“Solys Diagnostics” or

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

2 unchanged sentences

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

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

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

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

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.

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, 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

are no assurances, however, the Company will be able to obtain an adequate level of financial resources required for the long-term commercialization

and development of its products and services.

Company has financed its operations principally through 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

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

and meet its financial obligations as they become due for the one year period 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 June 30, 2022.

2 — Summary of Significant Accounting Policies

Accounting Policies

2 unchanged sentences

of Presentation

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.

accompanying unaudited condensed consolidated financial statements of PAVmed Inc.

and Subsidiaries 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., 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 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.

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.

holds a majority-ownership interest and has controlling financial interest in each of:

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 operations of a net loss attributable

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

15, Noncontrolling Interest , for a discussion of each of the majority-owned subsidiaries noted above.

The Company manages its

operations as a single operating segment for the purposes of assessing performance and making operating decisions.

amounts in the accompanying unaudited condensed 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.

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, inclusive of acquired intangible assets and the determination of corresponding

and assumptions that affect the reported amounts of 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

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.

is responsible for reimbursement of certain CWRU billed patent fees.

See Note 5, Related Party Transactions ,

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;

of Net Sales of $ 100.0

million or greater per year, with such amounts

subject-to a minimum annual royalty fee.

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

Significant estimates in these (unaudited)

condensed consolidated financial statements include those related to the estimated fair value of debt obligations, stock-based equity

awards, intangible assets, and common stock purchase warrants.

Other significant estimates include the estimated incremental borrowing

rate, 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.

2 — Summary of Significant Accounting Policies - continued

Accounting Policies - Continued

Company adopted FASB ASC Topic 842, Leases , (“ASC 842”) effective December 31, 2021, with such adoption not

having an effect on the Company’s consolidated financial statements.

significant lease agreements and contractual agreements with embedded lease agreements are accounted for under the provisions of ASC

842, wherein, if the contractual arrangement:

involves the use of a distinct identified asset;

provides for the right to substantially

all the economic benefits from the use of the asset throughout the contractual period;

and provides for the right to direct the use

of the asset.

A lease agreement is accounted for as either a finance lease (generally with respect real estate) or an operating lease

(generally with respect to equipment).

Under both a finance lease and an operating lease, the Company recognizes as of the lease commencement

date a lease right-of-use (“ROU”) asset and a corresponding lease payment liability.

lease ROU asset represents the Company’s right to use an underlying asset for the lease term, and the lease liability represents

its contractual obligation to make lease payments.

The lease ROU asset is measured at the lease commencement date as the present value

of the future lease payments plus initial direct costs incurred.

The Company recognizes lease expense of the amortization of the lease

ROU asset for an operating lease on a straight-line basis over the lease term;

and for financing leases on a straight-line basis unless

another basis is more representative of the pattern of economic benefit.

The operating ROU asset also includes any lease incentives received

for improvements to leased property, when the improvements are lessee-owned.

Improvements to leased property that are lessor-owned,

the Company includes amounts the Company incurred for the improvements as ROU assets which are amortized on a straight-line basis over

the life of the lease.

lease liability is measured at the lease commencement date with the discount rate generally based on the Company’s incremental

borrowing rate (to the extent the lease implicit rate is not known nor determinable), with interest expense recognized using the interest

method for financing leases.

leases may include options to extend or terminate the agreement.

The Company does not assume renewals in determination of the lease term

unless the renewals are deemed to be reasonably certain at lease commencement.

As well, an option to terminate is considered unless it

is reasonably certain the Company will not exercise the option.

The Company elected the practical expedient to not recognize a lease

ROU asset and lease payment liability for leases with a term of twelve months or less (“short-term leases”), resulting in

the aggregate lease payments being recognized on a straight line basis over the lease term.

The Company’s leases with a commencement

date prior to January 1, 2022 were short-term leases and therefore did not require recording a ROU asset or lease liability at December

Additionally, the Company elected the practical expedient to not separate lease and non-lease components.

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

Accounting Policies - Continued

Value Option (“FVO”) Election

a Securities Purchase Agreement dated March 31, 2022, the Company issued a Senior Secured Convertible Note dated April 4, 2022 - referred

to herein as the “April 2022 Senior Convertible Note” - which is accounted under the “fair value option election”

as discussed below.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Derivative

and Hedging , (“ASC 815”), a financial instrument containing embedded features and /or options may be required to be bifurcated

from the financial instrument host and recognized as separate derivative asset or liability, with the bifurcated derivative asset or

liability initially measured at estimated fair value as of the transaction issue date and then subsequently remeasured at estimated fair

value as of each reporting period balance sheet date.

Alternatively,

FASB ASC Topic 825, Financial Instruments , (“ASC 825”) provides for the “fair value option” (“FVO”)

In this regard, ASC 825-10-15-4 provides for the FVO election (to the extent not otherwise prohibited by ASC 825-10-15-5) to

be afforded to financial instruments, wherein the financial instrument is initially measured at estimated fair value as of the transaction

issue date and then subsequently remeasured at estimated fair value as of each reporting period balance sheet date, with changes in the

estimated fair value recognized as other income (expense) in the statement of operations.

The estimated fair value adjustment of the

April 2022 Senior Convertible Note is presented in a single line item within other income (expense) in the accompanying unaudited condensed

consolidated statement of operations (as provided for by ASC 825-10-50-30(b)).

Further, as required by ASC 825-10-45-5, to the extent

a portion of the fair value adjustment is attributed to a change in the instrument-specific credit risk, such portion would be recognized

as a component of other comprehensive income (“OCI”) (for which there was no such adjustment with respect to the April 2022

Senior Convertible Note).

Note 10, Financial Instruments Fair Value Measurements , with respect to the FVO election;

and Note 11, Debt , for a discussion

of the April 2022 Senior Convertible Note.

3 — Revenue from Contracts with Customers

1 unchanged sentence

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

In the period ended March 31,

In the period ended June 30,

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;

The 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

The EsoGuard Commercialization Agreement was on a month-to-month basis, and was terminated on February 25, 2022 upon the

execution of an asset purchase agreement (“APA”) dated February 25, 2022, between LucidDx Labs Inc.

(a wholly-owned subsidiary

of Lucid Diagnostics Inc.) and RDx, with such agreement further discussed in Note 5, Asset Purchase Agreement and Management Services

the six months ended June 30, 2022, the Company recognized total revenue of $ 189 , under the EsoGuard Commercialization Agreement, which

represents the minimum fixed monthly fee of $ 100 for the period January 1, 2022 to the February 25, 2022 termination date as discussed

above, 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 January

1, 2022 to February 25, 2022 totaled $ 369 , inclusive of employee related costs of personnel 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

and royalty fees incurred under the Amended CWRU License Agreement.

4 — Related Party Transactions

Western Reserve University and Physician Inventors - CWRU License Agreement

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

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

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

Western Reserve University and Physician Inventors - Amended CWRU License Agreement

Western Reserve University (“CWRU”) and each of the three physician inventors (“Physician Inventors”) of the

intellectual property licensed under the amended and restated patent license agreement with CWRU, dated August 23, 2021 (the

“Amended CWRU License Agreement”), each hold a minority equity ownership interest in Lucid Diagnostics Inc.

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

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

Schedule of Incurred Expenses of Minority Shareholders

Months Ended March 31,

– Royalty Fee

and Administrative Expense

compensation expense – Physician Inventors’ restricted stock awards

and Development Expense

License Agreement - reimbursement of patent legal fees

- Physician Inventors’ consulting agreements

research agreement

compensation expense – Physician Inventors’ stock options

Related Party Expenses

Diagnostics Inc.

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

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

renewal effective May 12, 2021.

Additionally, as discussed below, each of the Physician Inventors have been granted stock options under

the PAVmed Inc.

2014 Long-Term Incentive Equity Plan, and stock options and restricted stock awards under the Lucid Diagnostics Inc.

2018 Long-Term Incentive Equity Plan.

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

25,000 stock options under the PAVmed Inc.

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

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

period of ten years from the date of grant.

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

Each of the Physician

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

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

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

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

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

2018 Equity Plan to each of the three Physician

Inventors, with such restricted stock awards having a single vesting date of March 1, 2023, with the fair value of such restricted stock

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

with the service period.

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

Three Months Ended

Six Months Ended

Cost of Revenue

CWRU – Royalty Fee

General and Administrative Expense

Stock-based compensation expense – Physician Inventors’ restricted stock awards

Research and Development Expense

Amended CWRU License Agreement - reimbursement of patent legal fees

Fees - Physician Inventors’ consulting agreements

Sponsored research agreement

Stock-based compensation expense – Physician Inventors’ stock options

Total Related Party Expenses

Note 12, Stock-Based Compensation , for information regarding each of the “PAVmed Inc.

2014 Long-Term Incentive Equity

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

and Note 16, Noncontrolling

Interest , for a discussion of Lucid Diagnostics Inc.

2014 Long-Term Incentive Equity Plan”

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

and Note 15, Noncontrolling Interest ,

for a discussion of Lucid Diagnostics Inc.

and the corresponding noncontrolling interests.

5 — Related Party Transactions - continued

Related Party Transactions

8 unchanged sentences

recognized general and administrative expense

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

of $ 8 and $ 14 in the three and six months ended June 30, 2021 in connection with the consulting agreement.

June 2021, Veris Health Inc.

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.

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

Thoreson holds a partial ownership interest in the legal entity which holds a minority interest in Veris Health

Veris Health Inc.

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

general and administrative expense of $ 13

in the three and six months ended June 30, 2022 in connection with the consulting agreement.

5 — Asset Purchase Agreement and Management Services Agreement

Purchase Agreement - ResearchDx Inc.

Labs Inc., a wholly-owned subsidiary of Lucid Diagnostics Inc., entered into an asset purchase agreement (“APA”) dated February

25, 2022, with ResearchDx, Inc.

(“RDx”), an unrelated third-party - “APA-RDx”.

Under the APA-RDx, LucidDx Labs

acquired certain assets from RDx which were combined with LucidDx Labs Inc.

purchased and leased property and equipment to establish

a Company-owned Commercial Lab Improvements Act (“CLIA”) certified, College of American Pathologists (“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 February 25, 2022, RDx provided such laboratory

services at its owned CLIA-certified, CAP-accredited clinical laboratory.

The total purchase price consideration payable under the APA-RDx is a face

value of $ 3,200 comprised of three contractually specified periodic payments.

The APA-RDx is being accounted for as an asset acquisition,

with the recognition of an intangible asset of approximately $ 3,200 , which is included in “Intangible assets, net” on the

accompanying unaudited condensed consolidated balance sheet, as further discussed in Note 8, Intangible Assets, net .

and six months ended June 30, 2022, a total of $ 2,200 of cash was paid with respect to the periodic payments.

Subsequent to June 30, 2022,

in July 2022, $ 1,000 of cash was paid with respect to the remaining unpaid balance of the periodic payments.

Additionally,

the APA-RDx requires the Company to pay a total of $ 3,000 to be paid as twelve (12) equal installment payments commencing May 25, 2022

and then on each three month anniversary thereof, inclusive of a final installment payment on February 25, 2025, with such installment payments recognized as current period expense as

In the three and six

months ended June 30, 2022, as provided for in the APA-RDx, an installment payment was settled by the issue of 117,371 shares of common

stock of Lucid Diagnostics Inc., with such shares having a fair value of $ 239 (with the fair value measured as the quoted closing price

on the date the shares were issued), which was recognized as a current period expense included in general and administrative expenses

in the accompanying unaudited condensed consolidated statement of operations.

APA-RDx provides for each of an acceleration and a cancellation of the remaining unpaid installment payments, summarized as follows:

The payment of the remaining unpaid installment payments will be accelerated as immediately due and payable as of the date the “MSA-RDx” (as such agreement is discussed below) is either terminated by LucidDx Labs Inc.

or if it is terminated by mutual agreement between LucidDx Labs Inc.

The payment of the remaining unpaid installment payments will be cancelled if the MSA-RDx is terminated by LucidDx Labs Inc.

for cause, defined as the occurrence of any one of:

(i) a material breach by RDx which is not cured within thirty days of LucidDx Labs Inc.

written notice;

(ii) RDx becomes insolvent and /or bankrupt;

or (ii) RDx fails to comply with applicable statutes, is barred from participating in federal health care programs, or by action of changes in law or regulation, or by action of judicial interpretation of law, or by judicial civil proceedings decisions.

Services Agreement - Research Dx Inc

and RDx entered into a separate management services agreement (“MSA-RDx”), dated and effective February 25, 2022,

with such agreement having a term of three years commencing on the agreement’s effective date, and an initial fee of $ 150 per quarter.

The MSA-RDx provides for the cancellation of the remaining unpaid installment payments upon termination

of the MSA-RDx for any reason or no reason by either party thereto.

6 — Prepaid Expenses, Deposits, and Other Current Assets

1 unchanged sentence

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:

June 30, 2022

December 31, 2021

Advanced payments to service providers and suppliers

Prepaid insurance

EsoCheck cell collection supplies

EsoGuard mailer supplies

CarpX devices

Total prepaid expenses, deposits and other current assets

the six months ended June 30, 2022, the Company entered into additional lease agreements that have commenced and are classified as operating

leases and short-term leases, including for each of:

a research and development facility;

a commercial clinical laboratory;

Lucid Test Centers;

and for office space.

Company’s future lease payments as of June 30, 2022, which are presented as operating lease liabilities, current portion and

operating lease liabilities, less current portion on the Company’s unaudited condensed consolidated balance sheets are as follows:

Schedule of future minimum lease payments for capital leases

2022 (remainder of year)

Total lease payments

imputed interest

Present value of lease liabilities

Supplemental 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

Six Months Ended June 30,

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

Non-cash investing and financing activities

Right-of-use 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 June 30, 2022, the Company’s right-of-use assets from operating leases are $ 3,205 , 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

As of June 30, 2022, the Company has outstanding operating

lease obligations of $ 3,126 , of which $ 943 is reported in operating lease liabilities, current portion and $ 2,183 is reporting in operating

4 unchanged sentences

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

8 — Intangible Assets, net

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

of Intangible Assets Accumulated Amortization

June 30, 2022

December 31, 2021

Defensive asset

Laboratory licenses and certifications and laboratory information management software

Total Intangible assets

Less 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:

defensive technology intangible asset was recognized by PAVmed Subsidiary Corp upon its acquisition of CapNostics, LLC, an unrelated

third-party, for total purchase consideration paid on the October 5, 2021 acquisition date of approximately $ 2.1

million in cash.

The CapNostics LLC transaction

was accounted for as an asset acquisition, resulting in the recognition of the defensive technology intangible asset.

The defensive technology

intangible asset is being amortized on a straight-line basis over an expected useful life 60

months commencing on the acquisition date.

As noted in Note 5, Asset

Purchase Agreement and Management Services Agreement , the asset purchase agreement between the Company and ResearchDx Inc.

is being accounted as asset acquisition.

The intangible assets recognized under the APA-RDx are the laboratory licenses and certifications,

inclusive of inclusive of a CLIA certification, CAP accreditation, and clinical laboratory licenses for five (5) U.S.

States transfer

to the Company from RDx, and a laboratory information management software (“LIMSDx”) perpetual-use royalty-free license granted

under the APA-RDx, with such intangible asset having a useful life of twenty-four months commencing on the APA-RDx February 25, 2022 transaction

expense of the intangible assets discussed above was $ 650 and $ 6 for the three month periods ended June 30, 2022 and 2021,

respectively, and $ 773

for the six month periods ended June 30, 2022 and 2021, respectively, and is included in general and administrative expenses in the

accompanying unaudited condensed consolidated statements of operations.

As of June 30, 2022, the estimated future amortization

expense associated with the Company’s identified finite-lived intangible assets for each of the five succeeding fiscal years is as

of Estimated Amortization Expense for Intangible Assets

1 unchanged sentence

9 — Commitment and Contingencies

Court of Chancery Complaint

November 2, 2020, a stockholder of the Company, on behalf of himself and other similarly situated stockholders, filed a complaint in

1 unchanged sentence

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.

were not so approved (including matters relating to the increase in the size of the PAVmed Inc.

2014 Long-Term Incentive Equity Plan

and the PAVmed Inc.

Employee Stock Purchase Plan).

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.

In connection with the foregoing, on August 3, 2022, the parties agreed that plaintiff’s

counsel would not seek an award from the Court in excess of $ 450 , to be paid by the Company, upon Court approval, as compensation for

the benefits conferred by the settlement, and the Company would not object to an award of up to such maximum amount.

Such agreement was

approved by the Company’s board of directors as of August 5, 2022.The settlement of the complaint and plaintiff’s counsel’s

fee award is subject-to the approval of the Court.

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

December 23, 2020, Benchmark Investments, Inc.

filed a complaint against the Company in the U.S.

District Court of the Southern District

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 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.

/ Benchmark Investments LLC

On December 23, 2020, Benchmark

Investments, Inc.

filed a complaint against the Company in the U.S.

District Court of the Southern District 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 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 a successor to 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.

has made a motion to dismiss this complaint for Benchmark Investments LLC’s lack of standing, which motion is pending.

In any event,

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

10 unchanged sentences

Fair Value Measurements

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

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

Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis

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

Value Measurement on a Recurring Basis at Reporting Date Using (1)

Secured Convertible Note - April 2022

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 June 30, 2022.

discussed in Note 11, Debt , the Company issued a Senior Secured Convertible Note dated April 4, 2022, with an initial $ 27.5 million

face value principal (“April 2022 Senior Convertible Note”).

The April 2022 Senior Convertible Note is 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.

estimated fair value of the financial instruments classified within the Level 3 category 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 value of the April 2022 Senior Convertible Note as of each of April 4, 2022 and June 30, 2022, 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, using

the following assumptions:

of Fair Value Assumption Used

Convertible Note:

April 4, 2022

Convertible Note:

June 30, 2022

Face value principal payable

Required rate of return

Conversion Price

Value of common stock

Expected term (years)

Risk free rate

Dividend yield

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.

The Company entered into a Securities Purchase Agreement (“SPA”) dated March 31, 2022, with an accredited institutional

investor (“Investor”, “Lender”, and /or “Holder”), wherein, the Company agreed to sell, and the Investor

agreed to purchase an aggregate of $ 50.0 million face value principal of debt - comprised of:

an initial issuance of $ 27.5 million face

value principal;

and up to an additional $ 22.5 million of face value principal (upon the satisfaction of certain conditions).

is being issued in a registered direct offering under the Company’s effective shelf registration statement.

the SPA dated March 31, 2022, the Company issued a Senior Secured Convertible Note dated April 4, 2022, referred to herein as the “April

2022 Senior Convertible Note”, with such note having a $ 27.5 million face value principal, a 7.875 % annual stated interest rate,

a contractual conversion price of $ 5.00 per share of the Company’s common stock (subject to standard adjustments in the event of

any stock split, stock dividend, stock combination, recapitalization or other similar transaction), and a contractual maturity date of

April 4, 2024.

The April 2022 Senior Convertible Note may be converted into shares of common stock of the Company at the Holder’s

election, as discussed below.

April 2022 Senior Convertible Note proceeds were $ 25.0 million after deducting a $ 2.5 million lender fee;

and additionally, the Company

incurred total offering costs of approximately $ 601 , inclusive of the payment of a total of $ 450 placement agent fees.

The lender fee

and offering costs were recognized as of the April 4, 2022 issue date as a current period expense in other income (expense) in the consolidated

statement of operations.

the period from April 4, 2022 to October 3, 2022, the Company is required to pay interest expense only (on the $ 27.5 million face value

principal), at 7.875 % per annum, computed on a 360 day year.

The Company paid in cash interest expense of approximately $ 523 for the

period April 4, 2022 to June 30, 2022;

and approximately $ 181 subsequent to June 30, 2022 as of August 10, 2022.

October 4, 2022, and then on each of the successive first and tenth trading day of each month thereafter through to and including

April 1, 2024 (each referred to as an “Installment Date”);

and on the April 4, 2024 maturity date, the Company will be

required to make a principal repayment of $ 724

together with accrued interest thereon, with such 38 payments referred to herein as the “Installment Amount”, settled in

shares of common stock of the Company, subject to customary equity conditions, including minimum share price and volume thresholds,

or at the election of the Company, in cash, in whole or in part.

addition to the Installment Amount repayments, the Holder may elect to accelerate the conversion of future Installment Amount repayments,

and interest thereon, subject to certain restrictions, as defined, utilizing the then current conversion price of the most recent Installment

Date conversion price.

to certain conditions being met or waived, from time to time, one or more additional closings may occur, for up to the remaining $ 22.5

million face value principal, upon five trading days’ notice given by the Company to the Investor.

The Investor’s obligation

to purchase the additional notes at each additional closing is subject to certain conditions set forth in the SPA dated March 31, 2022,

including, among others, contractual closing requirements:

minimum price and trading volume thresholds of the Company’s common

the maximum ratio of debt to market capitalization (as defined);

and minimum market capitalization (as defined), with such requirements

being waived by the Investor in its sole discretion.

Additionally,

effective March 31, 2023, the Investor may by written notice elect to require the Company to issue additional notes of up to $ 22.5 million

in face value principal, so long as in doing so it would not cause the ratio of (a) the outstanding principal amount of the April 2022 Senior Convertible Note (and any additional notes issued under the SPA dated March 31, 2022), 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 the Company does not issue the additional 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.

described in the preceding sentence, then the Company will be obligated to pay up to a maximum of a $1.35 million a break-up fee .

11 — Debt - continued

The payment of all amounts due

and payable under the April 2022 Senior Convertible Note is guaranteed by the Company and its wholly-owned and majority-owned subsidiaries,

except for Lucid Diagnostics Inc and its wholly-owned subsidiaries;

and the obligations under the April 2022 Senior Convertible Note are

secured by all of the assets of the Company and each guarantor, except only up to 9.99% of the shares of common stock of Lucid Diagnostics

held by PAVmed Inc.

are pledged to secure the indebtedness under the April 2022 Senior Convertible Note.

is subject to certain customary affirmative and negative covenants regarding the rank of the notes, along with the incurrence of further

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.

The Company is subject to financial covenants requiring:

(i) a minimum of $8.0 million of available cash at all times;

(ii) the ratio of (a) the outstanding principal amount of the April 2022 Senior Convertible Note, (and any additional notes issued under

the SPA dated March 31, 2022), accrued and unpaid interest thereon and accrued and unpaid late charges to (b) the Company’s average

market capitalization over the prior ten trading days, to not exceed 30% (the “Debt to Market Cap Ratio Test”);

the Company’s market capitalization to at no time be less than $75 million.

(the “Market Cap Test” and, together with

the Debt to Market Cap Ratio Test, the “Financial Tests”).

The Company is currently in compliance with these financial covenants,

although from time to time since the date of issuance of the April 2022 Senior Convertible Note through August 10, 2022 (including, in

the case of the Debt to Market Cap Ratio Test, as of June 30, 2022), the Company was not in compliance with the Financial Tests.

August 9, 2022, the Investor agreed to waive any such non-compliance during such aforementioned time periods, under each of the SPA dated

March 31, 2022 and the April 2022 Senior Convertible Note.

connection with the waiver dated August 9, 2022, the Company and the Investor also amended the April 2022 Senior Convertible Note to

permit the Investor to convert up to $ 5.0

million of the face value principal of the April 2022 Senior Convertible Note at the then current conversion price as if the date of

conversion were an Installment Date, i.e.

a price per share of common stock equal to the lower of (i) the fixed conversion price

then in effect (currently $ 5.00 )

and (ii) 82.5 %

of the average VWAP of the Company’s common stock for each of the two trading days with the lowest VWAP of the Company’s

common stock during the ten consecutive trading day period ending and including the trading day immediately prior to the applicable

conversion date, but in the case of clause (ii), not less than $ 0.18

As contemplated by such amendment, subsequent

to June 30, 2022, on August 10, 2022, approximately $ 2,882

of principal repayments along with approximately $ 6

of interest expense thereon, were settled through the issuance of 3,000,867

shares of common stock of the Company, with such shares having a fair value of approximately $ 5,462

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

fair value and face value principal of outstanding of the April 2022 Senior Convertible Note as of June 30, 2022 is as follows:

Summary of Outstanding Debt

Contractual Maturity Date

Stated Interest Rate

Conversion Price per Share

Face Value Principal Outstanding

April 2022 Senior Convertible Note

April 4, 2024

Balance as of June 30, 2022

Company did not have convertible debt outstanding at December 31, 2021.

During the six month period ended June 30, 2021, the Company

recognized debt extinguishment losses of approximately $ 3,715 , in connection with repaying-in-full all remaining convertible notes outstanding

April 2022 Senior Convertible Note is 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

(unaudited) condensed 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.

See Note 10, Financial Instruments Fair Value Measurements , for a further discussion of fair value assumptions.

12 — Stock-Based Compensation

11 unchanged sentences

2014 Equity Plan, with 2,830,092

shares available for grant as of March 31, 2022.

shares available for grant as of June 30, 2022.

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

1 unchanged sentence

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 and including PAVmed stock options granted outside the plan is

2014 Equity Plan as of June 30, 2022.

Stock Options

stock options granted under the PAVmed Inc.

2014 Equity Plan and stock options granted outside such plan are summarized 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 March 31, 2022

and exercisable stock options at March 31, 2022

Number of Stock Options

Weighted Average Exercise Price

Remaining Contractual Term (Years)

Intrinsic Value (2)

Outstanding stock options at December 31, 2021

( 1,437,143 )

Outstanding stock options at June 30, 2022 (3)

Vested and exercisable stock options at June 30, 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 and those granted outside such plan generally vest ratably over twelve quarters,

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

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

common stock on each of March 31, 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:

common stock on each of June 30, 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.

outstanding stock options presented in the table above, are inclusive of 500,854 stock options granted outside the PAVmed Inc.

as of June 30, 2022 and December 31, 2021.

Restricted Stock Awards

restricted stock awards granted under the PAVmed Inc.

2014 Equity Plan and restricted stock awards granted outside such plan are

summarized 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

Number of Restricted Stock Awards

Weighted Average Grant Date Fair Value

Unvested restricted stock awards as of December 31, 2021

Unvested restricted stock awards as of June 30, 2022 (1)

unvested restricted stock awards presented in the table above, are inclusive of 100,000 restricted stock awards granted outside the

2014 Equity Plan.

as of June 30, 2022 and December 31, 2021.

12 — Stock-Based Compensation - continued

18 unchanged sentences

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.

Plan, with 3,932,802 shares available for grant as of June 30, 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.

1 unchanged sentence

Diagnostics Inc.

2018 Equity Plan - Stock Options

options issued and outstanding under the Lucid Diagnostics Inc.

2018 Equity Plan and including Lucid Diagnostics options granted outside

the plan is as follows:

Stock Options

Diagnostics Inc.

stock options granted under the Lucid Diagnostics Inc.

2018 Equity Plan and stock options granted outside such plan

are summarized 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 March 31, 2022

and exercisable stock options at March 31, 2022

Number of Stock Options

Weighted Average Exercise Price

Remaining Contractual Term (Years)

Outstanding stock options at December 31, 2021

Outstanding stock options at June 30, 2022 (2)

Vested and exercisable stock options at June 30, 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.

2018 Equity Plan and those granted outside such 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.

outstanding stock options presented in the table above, are inclusive of 423,300 stock options granted outside the Lucid Diagnostics

2018 Equity Plan.

as of June 30, 2022 and December 31, 2021.

Diagnostics Inc.

2018 Equity Plan – Restricted Stock Awards

summary of Lucid Diagnostics Inc.

2018 Equity Plan restricted stock award activity is as follows:

Restricted Stock Awards

Diagnostics Inc.

restricted stock awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan and restricted stock awards granted

outside such plan are summarized 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.

Number of Restricted Stock Awards

Weighted Average Grant Date Fair Value

Unvested restricted stock awards as of December 31, 2021

Unvested restricted stock awards as of June 30, 2022 (1)

unvested restricted stock awards presented in the table above, are inclusive of 50,000 restricted stock awards granted outside the

Lucid Diagnostics Inc.

2018 Equity Plan.

as of June 30, 2022 and December 31, 2021.

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.

12 — Stock-Based Compensation - continued

7 unchanged sentences

Schedule of Stock-Based Compensation Awards Granted

Months Ended March 31,

and marketing expenses

and administrative expenses

and development expenses

stock-based compensation expense

Three Months Ended

Six Months Ended

Sales and marketing expenses

General and administrative expenses

Research and development expenses

Total stock-based compensation expense

Compensation Expense Recognized by Lucid Diagnostics Inc.

8 unchanged sentences

2018 Equity Plan.

stock-based compensation expense recognized by Lucid Diagnostics Inc.

The stock-based compensation expense recognized

by Lucid Diagnostics Inc.

for both the PAVmed Inc.

2014 Equity Plan and the Lucid Diagnostics

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

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

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

13 — Stock-Based Compensation - continued

2014 Equity Plan and the Lucid Diagnostics Inc.

2018 Equity Plan, with respect to

stock options and restricted stock awards as discussed above, for the periods indicated, was as follows:

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

Three Months Ended

Six Months Ended

Lucid Diagnostics Inc 2018 Equity Plan – sales and marketing expenses

Lucid Diagnostics Inc 2018 Equity Plan – general and administrative expenses

Lucid Diagnostics Inc 2018 Equity Plan – research and development expenses

PAVmed Inc 2014 Equity Plan - sales and marketing expenses

PAVmed Inc 2014 Equity Plan - general and administrative expenses

PAVmed Inc 2014 Equity Plan - research and development expenses

Total stock-based compensation expense – recognized by Lucid Diagnostics Inc

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 (Years)

Unrecognized Expense

Weighted Average Remaining Service Period (Years)

2014 Equity Plan

Diagnostics Inc.

Stock Options

Restricted Stock Awards

Lucid Diagnostics Inc.

2018 Equity Plan

Stock Options

Restricted Stock Awards

12 — Stock-Based Compensation - continued

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

2014 Equity Plan was based on a weighted

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

average estimated fair value of such stock options of $0.74 per share and $3.32 per share during the periods ended June 30, 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 March 31,

term of stock options (in years)

stock price volatility

free interest rate

dividend yield

Six Months Ended

Expected term of stock options (in years)

Expected stock price volatility

Risk free interest rate

Expected dividend yield

compensation expense recognized with respect to stock options granted under the 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:

a weighted average estimated fair value of such stock options of $ 1.48 per share during the year ended June 30, 2022.

There were no stock-based

awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan during the period ended June 30, 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

Six Months Ended

Expected term of stock options (in years)

Expected stock price volatility

Risk free interest rate

Expected dividend yield

Employee Stock Purchase Plan (“ESPP”)

total of 194,240

shares and 203,480

shares of common stock of the Company were purchased

for proceeds of approximately $ 217

total of 194,240 shares and 203,480 shares of common stock of the Company were purchased for proceeds of approximately $ 217 and $ 304 ,

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,

ESPP has a total reservation of 1,750,000 shares of common stock of PAVmed Inc.

of which 931,841 shares are available-for-issue

as of June 30, 2022.

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.

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 30.

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.

Diagnostics Inc.

ESPP has a total reservation of 500,000 shares of common stock of Lucid Diagnostics Inc.

for which all shares are available-for-issue

as of June 30, 2022.

13 — Preferred Stock

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).

Series B Convertible Preferred Stock dividends are 8.0 % per annum based on the $ 3.00 per share stated value of the Series B Convertible

Preferred Stock, with such dividends compounded quarterly, accumulate, and are payable in arrears upon being declared by the Company’s

board of directors.

The Series B Convertible Preferred Stock dividends earned are included in the calculation of basic and diluted net

loss attributable to PAVmed Inc.

common stockholders for each of the respective corresponding periods presented in the accompanying unaudited

condensed consolidated statement of operations, inclusive of dividends earned of $ 68 as of the three months ended March 31, 2022 and

$ 70 as of the three months ended June 30, 2022;

and dividends earned of $ 75 as of the three months ended March 31, 2021 and $ 74 as of

the three months ended June 30, 2021.

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.

In this regard, in the six months ended June 30, 2022, the Company’s board-of-directors

declared Series B Convertible Preferred Stock dividends of an aggregate of approximately $ 135 , inclusive of approximately $ 67 earned

as of December 31, 2021, and approximately $ 68 earned as of March 31, 2022, with each such dividends settled by the issue of an aggregate

45,031 additional shares of Series B Convertible Preferred Stock, inclusive of 22,291 shares issued with respect to the dividends earned

as of December 31, 2021, and 22,740 shares issued with respect to the dividends earned as of March 31, 2022.

In the six months ended

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

$ 148 , inclusive of approximately $ 73 earned as of December 31, 2020, and approximately $ 75 earned as of March 31, 2021, with each such

dividends settled by the issue of an aggregate 49,244 additional shares of Series B Convertible Preferred Stock, inclusive of 24,198

shares issued with respect to the dividends earned as of December 31, 2020, and 25,046 shares issued with respect to the dividends earned

as of March 31, 2021.

to June 30, 2022, in July 2022, the Company’s board-of-directors declared a Series B Convertible Preferred Stock dividend earned

as of June 30, 2022 and payable as of July 1, 2022, of approximately $ 70 , to be settled by the issue of an additional 23,196 shares of

Series B Convertible Preferred Stock (with such dividend not recognized as a dividend payable as of June 30, 2022, as the Company’s

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

14 — Common Stock and Common Stock Purchase Warrants

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.

During the period

ended, the PAVmed Inc.

Employee Stock Purchase Plan purchased 194,240

shares of common stock of the Company.

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

Employee Stock Purchase Plan.

June 2022, the Company received shareholder approval to issue up to 250 million shares of its common stock, an increase of 100

million shares.

the six months ended June 30, 2022, 299,999 shares of common stock of the

Company were issued upon exercise of stock options for cash of approximately $ 302 ;

during the six months ended June 30, 2022, a

total of 194,240 shares of common stock of the Company were issued under the PAVmed Inc.

Employee Stock Purchase Plan (“ESPP”).

See Note 12, Stock-Based Compensation , for a discussion of each of the PAVmed Inc.

2014 Equity Plan and the PAVmed Inc ESPP.

Stock Purchase Warrants

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

Schedule of Outstanding Warrants to Purchase Common Stock

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

of June 30, 2022 and December 31, 2021, Series Z Warrants outstanding totaled 11,937,450 and 11,937,455 , respectively.

A Series Z Warrant

is exercisable to purchase one share of common stock of the Company at an exercise price of $ 1.60 per share, and expire April 30, 2024 .

During the six months ended June 30, 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.

of December 31, 2021, Series W Warrants outstanding totaled 377,873 .

The remaining 377,873 Series W Warrants expired unexercised as of

January 29, 2022 .

15 — Noncontrolling Interest

2 unchanged sentences

Schedule of Noncontrolling Interest of Stockholders' Equity

– equity (deficit) – beginning of period

in Veris Health Inc.

loss attributable to NCI

of subsidiary equity transactions

Diagnostics Inc.

June 30, 2022

December 31, 2021

NCI – equity (deficit) – beginning of period

Investment in Veris Health Inc.

Net loss attributable to NCI - Lucid Diagnostics Inc.

Net loss attributable to NCI – Solys Diagnostics Inc.

Net loss attributable to NCI – Veris Health Inc.

Impact of subsidiary equity transactions

Lucid Diagnostics Inc.

2018 Equity Plan stock option exercise

compensation expense - Lucid Diagnostics Inc.

Stock-based compensation expense - Lucid Diagnostics Inc.

2018 Equity Plan

– equity (deficit) – end of period

16 — Noncontrolling Interest - continued

Stock-based compensation expense - Veris Health Inc.

2021 Equity Plan

NCI – equity (deficit) – end of period

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

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;

Diagnostics Inc., Veris Health Inc.

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

June 30, 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 Inc.

for the three and six months ended June 30,

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).

for the three and six months ended June 30, 2022 and from the period of May 28,

2021 to June 30, 2021 (as the Veris Health Inc.

inception date was May 28, 2021).

Diagnostics Inc.

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

shares of common stock of Lucid Diagnostics

of June 30, 2022, there were 35,171,796 shares of common stock of Lucid Diagnostics Inc.

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.

holds 27,927,190 shares, representing a majority ownership equity interest and PAVmed Inc.

has 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.

2 unchanged sentences

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.

also entered into a registration rights agreement with Cantor.

Lucid Diagnostics 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, with the remaining 19.56 %

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

While there are distinct differences, the facility is structured similarly to

a traditional at-the-market equity facility, insofar as it allows the Company to raise primary equity capital on a periodic basis at

prices based on the existing market price.

As of June 30, 2022, there were no shares of common stock issued under the committed equity

Subsequent to June 30, 2022, as of August 10, 2022, under the committed equity facility, a total of 308,152 shares of common

stock of Lucid Diagnostics Inc.

were issued for proceeds of approximately $ 927 .

of June 30, 2022, there were 8,000,000 shares of common stock of Veris Health Inc.

issued and outstanding, of which PAVmed Inc.

an 80.44 % majority-interest ownership and PAVmed Inc.

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.

is a consolidated majority-owned subsidiary of the Company,

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

in the unaudited condensed consolidated balance sheet as of June 30, 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 March 31, 2022 and December 31, 2021, there were 9,189,190 shares of common stock of Solys Diagnostics Inc.

of each of June30, 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 %

holds a 90.3235 % majority-interest ownership and PAVmed Inc.

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

loss attributable to noncontrolling interest

loss - as reported, attributable to PAVmed Inc.

B Convertible Preferred Stock dividends – earned

loss attributable to PAVmed Inc.

Three Months Ended

Six Months Ended

Net loss - before noncontrolling interest

Net loss attributable to noncontrolling interest

Net loss - as reported, attributable to PAVmed Inc.

Series B Convertible Preferred Stock dividends – earned

Net loss attributable to PAVmed Inc.

common stockholders

average common shares outstanding, basic and diluted

loss - as reported, attributable to PAVmed Inc.

loss attributable to PAVmed Inc.

Weighted average common shares outstanding, basic and diluted

Loss per share

Basic and diluted

Net loss - as reported, attributable to PAVmed Inc.

Net loss attributable to PAVmed Inc.

common stockholders

7 unchanged sentences

by the Company’s board of directors.

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

weighted-average number of shares of common stock outstanding for the periods ended June 30, 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:

The basic weighted average number of shares of

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

outstanding includes such incremental shares.

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

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

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

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

Stock options and restricted stock awards

B Convertible Preferred Stock

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.

Series Z Warrants

Series W Warrants

Series B Convertible Preferred Stock

total stock options and restricted stock awards are inclusive of 500,854 stock options as of June 30, 2022 and 2021;

and 100,000 restricted

stock awards as of June 30, 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