What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-15 compared with 2022-05-16 · 369 added, 281 removed, 150 unchanged (81% of the section changed)

3 unchanged sentences

and Exchange Commission (the “SEC”).

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

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

and Subsidiaries, including each of

the PAVmed Inc.

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

“Company” or “PAVmed” are to PAVmed Inc.

and Subsidiaries, including PAVmed Inc.

wholly-owned subsidiary PAVmed Subsidiary Corp;

and its majority-owned subsidiaries, including:

Lucid Diagnostics Inc.

(“Lucid Diagnostics” or “LUCID”),

Veris Health Inc.

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

(“Solys Diagnostics” or

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

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

Diagnostics, Inc.

(“Solys Diagnostics” or “SOLYS”).

FORWARD-LOOKING

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

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

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

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

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

36 unchanged sentences

of innovative medical technologies from concept to commercialization, employing a business model focused on capital efficiency and speed

Since the Company’s inception of PAVmed Inc.

on June 26, 2014, its activities have focused on advancing

its lead products towards regulatory approval and commercialization, protecting its intellectual property, and building its corporate

Since the Company’s inception on June 26, 2014, its activities have focused on advancing its lead products

through regulatory approval, expanding commercial operations, and protecting its intellectual property, while building its corporate

infrastructure and management team.

The Company has ongoing operations conducted through PAVmed Inc.

The Company has ongoing operations conducted both through PAVmed Inc.

and its majority-owned subsidiaries.

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

“Medical Devices”,

“Diagnostics”, “Digital Health”, and “Emerging Innovations”.

Our products, services, and

opportunities, as discussed herein and in Item 1 of Part I of the Form 10-K under the heading Business Background and Overview, are as

Diagnostics - EsoGuard Esophageal DNA Laboratory Developed Test,

EsoCheck Esophageal Cell Collection Device, and EsoCure Esophageal Ablation Device with Caldus Technology;

Medical Devices - CarpX Minimally Invasive Surgical Device for Carpal

Tunnel Syndrome;

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

Intravenous Infusion Platform Technology;

Digital Health - Veris cancer healthcare platform and implantable

intelligent vascular port combining remote monitoring and data analytics;

Emerging Innovations -Include a diversified and expanding portfolio

of innovative products designed to address unmet clinical needs across a broad range of clinical conditions.

We are evaluating a

number of these product opportunities and intellectual property covering a wide spectrum of clinical conditions, which have either

been developed internally or have been presented to us by clinician innovators and academic medical institutions for consideration

of a partnership to develop and commercialize these products.

“Diagnostics”, “Medical

Devices”, and “Digital Health”.

products, services, and opportunities, as discussed herein and in Item 1 of Part I of the Form 10-K under the heading Business Background

and Overview, are as follows:

Diagnostics - EsoGuard Esophageal DNA Laboratory Developed Test- and EsoCheck

Esophageal Cell Collection Device;

Medical Devices – CarpX Minimally Invasive Surgical Device for Carpal Tunnel Syndrome, – EsoCure Esophageal

Ablation Device with Caldus Technology, and PortIO Implantable Intraosseous Vascular Access Device.

Digital Health – Veris Cancer Care Platform with implantable smart device, remote monitoring and data analytics.

pursuing a number of research and development project and product opportunities across these three segments, which have either been developed

internally or have been presented to us by clinician innovators and academic medical institutions for consideration.

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

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

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

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

and, EsoGuard has been established as a

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

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

(“CAP”) accreditation of the test at Lucid Diagnostics commercial diagnostic laboratory partner ResearchDx Inc.

(“RDx”), headquartered in Irvine, California.

On February 25, 2022, Lucid Diagnostics’ wholly owned subsidiary,

LucidDx Labs Inc.

(“LucidDx Labs”) acquired from RDx certain licenses and other related assets necessary for LucidDx

Labs to operate its own new CLIA-certified, CAP-accredited clinical laboratory located in Lake Forest, CA.

In August 2021, Lucid

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

commercialization efforts.

Also in August 2021, we tested our first patients referred by primary care physicians

(“PCPs”) in our initial Lucid Test Centers opened in the Phoenix metropolitan area.

We have since expanded our Lucid

Test Centers into six additional cities expanding from its origin in the Southwest United States and stretching to the

Overview - continued

connection with our efforts to expand our presence in the diagnostic market, we are developing EsoCure as an Esophageal Ablation

Device, with the intent to allow a clinician to treat dysplastic BE before it can progress to EAC, a highly lethal esophageal cancer,

and to do so without the need for complex and expensive capital equipment.

We believe that the EsoGuard Esophageal DNA Test, performed on samples collected with the EsoCheck Esophageal Cell

Collection Device, constitutes the first and only commercially available diagnostic test capable of serving as a widespread screening

tool to prevent esophageal adenocarcinoma (“EAC”)

deaths, through early detection of esophageal precancer in at-risk gastroesophageal reflux disease (“GERD”) patients.

Company has advanced the proprietary technologies underlying EsoGuard and EsoCheck from the academic research laboratory to commercial

diagnostics tests and devices with scalable manufacturing capacity.

The Company is presently focused on expanding commercialization across

multiple sales channels, including:

the communication and education of medical practitioners and clinicians of EsoGuard;

and establishing

“Lucid Diagnostics Test Centers” for the collection of cell samples using EsoCheck.

Previously the collected cell samples

were sent to ResearchDx Inc.

(“RDx”), an unrelated third-party CLIA-certified commercial laboratory service provider, for

the performance of the EsoGuard LDT.

On February 25, 2022, Lucid Diagnostics’ wholly owned subsidiary, LucidDx Labs Inc.

Labs”) acquired from RDx certain licenses and other related assets necessary for LucidDx Labs to operate its own new Clinical Laboratory

Improvement Amendments (“CLIA”) certified, College of American Pathologists (“CAP”) accredited clinical laboratory

located in Lake Forest, CA.

RDx was previously responsible for submitting claims for EsoGuard tests performed and was receiving out-of-network

private insurance payments.

As part of the transition to our own lab, we also contracted with a revenue cycle management (“RCM”)

provider to submit claims on our behalf.

The RCM provider will have complete oversight of payer claims, appeals processes, patient billing,

online payment collection, and claims tracking.

With the appropriate licenses and certifications for billing and credentialing secured,

and our recently having put in place the necessary back office systems, claims for more than 1,000 tests performed since the establishment

of our own lab are now being processed, including 850 tests in the three months ended June 30, 2022 (although not having yet secured reimbursed

rates from Medicare and Medicaid, the Company does not know the amount per claim it will receive from payors).

Refer to Note 3 of

our Condensed Consolidated Financial Statements for more information on Revenue from Contracts with Customers.

Presently, recognized

revenue for GAAP purposes is subject to actual amounts collected during the period.

Accordingly, since the RCM began submitting

claims processed from our own lab subsequent to June 30, 2022, there were no collections during the three months ended June 30, 2022.

connection with our efforts to expand our presence in the diagnostic market, we are developing EsoCure as an Esophageal

Ablation Device, with the intent to allow a clinician to treat dysplastic Barrett’s Esophagus (“BE”) before it can progress to EAC, a highly lethal esophageal

cancer, and to do so without the need for complex and expensive capital equipment.

We have successfully completed a pre-clinical feasibility

animal study of EsoCure demonstrating excellent, controlled circumferential ablation of the esophageal mucosal lining.

completed an acute and survival animal study of EsoCure™ Esophageal Ablation Device, demonstrating successful direct thermal

balloon catheter ablation of esophageal lining through the working channel of a standard endoscope.

We plan to conduct additional

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

CarpX is a minimally invasive surgical device for use

in the treatment of carpal tunnel syndrome which received FDA 510(k) marketing clearance in April 2020, with the first commercial

procedure successfully performed in December 2020.

After an initial slowdown in commercialization related to COVID, more recently

we have recruited new sales leadership and have recently trained eight new surgeons to perform the CarpX procedure with four more

scheduled to undergo training in the coming months.

Our limited-release commercialization efforts thru 2022 are focused on engaging

key opinion hand surgeons designed to solicit input for ergonomic improvements to the device, procedure development and surgical-time

optimization, and ease of use.

Concurrently, we are presently working on improvements to the device that will be released in stages

over the next several quarters

We believe CarpX is designed to allow the physician

to relieve the compression on the median nerve without an open incision or the need for endoscopic or other imaging equipment.

use CarpX, the operator first advances a guidewire through the carpal tunnel under the ligament, and then advanced over the wire

and positioned in the carpal tunnel under ultrasonic and/or fluoroscopic guidance.

When the CarpX balloon is inflated it creates

tension in the ligament positioning the cutting electrodes underneath it and creates space within the tunnel, providing anatomic

separation between the target ligament and critical structures such as the median nerve.

Radiofrequency energy is briefly delivered

to the electrodes, rapidly cutting the ligament, and relieving the pressure on the nerve.

We believe CarpX will be significantly

less invasive than existing treatments .

May 2021, we formed Veris Health, and concurrently, acquired Oncodisc Inc (“Oncodisc”), a digital health company

with ground breaking tools to improve personalized cancer care through remote patient monitoring.

Oncodisc’s core technologies

include the first intelligent implantable vascular healthcare platform that provides patients and physicians with new tools to improve

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

Its vascular access port

contains biologic sensors capable of generating continuous data on key physiologic parameters known to predict adverse outcomes in

cancer patients undergoing treatment.

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

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

The technologies are the subject

of multiple patent applications and one allowed patent awaiting final issuance.

Our other products in development have not yet received

clearance or approval to be marketed or sold in the U.S.

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”) executed in March 2022 with an accredited institutional investor (“investor”).

Under the SPA,

the Company agreed to sell, and the investor agreed to purchase, up to an additional $22.5 million initial principal amount of

Senior Secured Convertible Notes (for an aggregate of $50.0 million in initial principal) upon the satisfaction of certain

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.

A further discussion of the SPA dated, March 31,

2022, can be found herein below under Liquidity and Capital Resources - PAVmed Inc - Private Placement - Securities Purchase

In March 2022, Lucid Diagnostics,

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

Under the terms of

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

common stock from time to time at the request

We have also completed

an acute and survival animal study of EsoCure, demonstrating successful direct thermal balloon catheter

ablation of esophageal lining through the working channel of a standard endoscope.

We plan to conduct additional development work and

animal testing of EsoCure to support a future FDA 510(k) submission.

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

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

Our limited-release commercialization efforts

through 2022 are focused on engaging key opinion hand surgeons designed to solicit input for ergonomic improvements to the device, procedure

development and surgical-time optimization, and ease of use.

In May 2021, we formed Veris Health, and concurrently,

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

care through remote patient monitoring which we now refer to as our Veris Cancer Care Platform.

These core technologies

include the first intelligent implantable vascular healthcare platform that provides patients and physicians with new tools to

improve outcomes and optimize the delivery of cost-effective care through remote monitoring and data analytics.

Its vascular access

port contains biologic sensors capable of generating continuous data on key physiologic parameters known to predict adverse outcomes

in cancer patients undergoing treatment.

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

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

The technologies are

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

We plan to seek commercialization

through a de novo process, and, as such, we’ll commercialize the digital health offering in three phases.

The three phases are

called Veris Solar, Veris Mercury, and Veris Venus which include software, device, and data.

Recently, we had a favorable meeting

with the FDA surrounding the Mercury phase.

PortIO is an implantable intraosseous vascular access device that is being developed as a means for infusing fluids,

medications, and other substances directly into the bone marrow cavity and from there into the central venous circulation.

We are pursuing

an FDA clearance for use in patients with a need for longer-term vascular access under de novo classification of section 513(f)2 of the

The broader clearance is being pursued in discussion with FDA following our previous initial submission to the FDA for a 510(k)

premarket notification for use in patients only requiring 24-hour emergency type vascular access.

PortIO completed its first-in-human

clinical study in Colombia, South America, and has recently successfully implanted seven additional patients.

We are currently working

with our partners to first pursue a European study to support EU CE Mark clearance followed by providing additional human data for U.S.

Recent Developments

Guideline Update – ACG and AGA

April 2022, the American College of Gastroenterology (“ACG”) updated its clinical guideline to support esophageal precancer

(“Barrett’s Esophagus”, “BE”) screening to prevent highly lethal esophageal cancer (“EAC”)

utilizing Lucid Diagnostics’ EsoGuard® DNA Test on samples collected with our EsoCheck® Cell Collection Device.

guideline reiterates the ACG’s long-standing recommendation for esophageal precancer screening in at-risk patients with gastroesophageal

reflux disease (“GERD”), commonly known as chronic heartburn, acid reflux or simply reflux.

In its Recommendation 5, the

ACG suggests a single screening endoscopy in patients with chronic GERD symptoms and 3 or more additional risk factors for BE, including

male sex, age >50 yr, White race, tobacco smoking, obesity, and family history of BE or EAC in a first-degree relative.

and importantly for the first time, the clinical guideline also endorses nonendoscopic biomarker screening as an acceptable alternative

to costly and invasive endoscopy by stating in its Recommendation 6 that the ACG suggests that a swallowable, nonendoscopic capsule device

combined with a biomarker is an acceptable alternative to endoscopy for screening for BE.

The clinical guideline specifically mentions

EsoCheck, along with Lucid Diagnostics’ EsophaCap® device, as such swallowable, nonendoscopic esophageal cell collection devices,

as well as methylated DNA biomarkers such as EsoGuard.

The summary of evidence for this recommendation cites the seminal NIH-funded multicenter,

case-control study published in 2018 in Science Translational Medicine, which demonstrated that EsoGuard is highly accurate at detecting

esophageal precancer and cancer, including on samples collected with EsoCheck.

July 2022, the American Gastroenterology Association (“AGA”) published updated clinical guidance that mirrors the same furnished

by the ACG as described above , endorsing the use of non-invasive screening tools like

our EsoCheck® Cell Collection Device, which is cited in its guideline, as an acceptable alternative to endoscopy to directly address

the need for noninvasive screening tools that are easy to administer, patient friendly, and cost-effective for the detection of

The clinical practice update by the AGA also significantly expands the target population for esophageal precancer screening, including

for EsoGuard and EsoCheck, by recommending, for the first time, screening in at-risk patients without symptoms of reflux.

The AGA does so by adding a history of chronic GERD as merely an additional, seventh, risk factor to the six risk factors for BE and

EAC that have traditionally identified at-risk symptomatic patients recommended for screening.

As a result, chronic symptomatic GERD

is no longer a mandatory prerequisite and asymptomatic patients with three of the other six risk factors (e.g., male sex, age >50

yr, White race, tobacco smoking, obesity, and family history of BE) are now considered appropriate for screening.

BE-1 and BE-2 Clinical Trials

In 2021 the Lucid Diagnostics

began conducting two concurrent clinical trials, including each of:

the “EsoGuard screening study” (“BE-1”);

and the “EsoGuard case-control study” (“BE-2”), to expand the clinical evidence for the technologies and to support

a United States Food and Drug Administration (“FDA”) pre-market approval (“PMA”) of the use of EsoGuard and EsoCheck

as an in-vitro diagnostic medical device (“IVD”).

However, in light of the recently published proposed Local Coverage Determination

(“LCD”) DL39256, the recently updated AGA guidance, and the ACG update to its clinical guideline that supports screening to

prevent highly lethal esophageal cancer (“EAC”) utilizing our EsoGuard® DNA Test on samples collected with our EsoCheck®

Cell Collection Device, the Company has determined to prioritize its clinical trial efforts and resources towards supporting studies that

will help secure insurance reimbursement adoption by government and private insurers.

Consequently, we have decided to delay for the time

being the BE-1 trial while continuing to enroll GERD patients with a previous diagnosis of nondysplastic BE, low grade dysplasia, high

grade dysplasia,, or EAC in the BE-2 case-control study through Q2 2023.

Recent Developments - continued

Purchase Agreement - March 31, 2022

Senior Secured Convertible Note - April 4, 2022

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

(“Investor”, “Lender”, and /or “Holder”), wherein, we 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

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

being issued in a registered direct offering under our effective shelf registration statement.

See our accompanying unaudited

condensed consolidated financial statements Note 11, Debt , for further discussion of the SPA dated March 31, 2022 and the

April 2022 Senior Convertible Note, including a description of a recent waiver and amendment.

Diagnostics Inc.

- Committed Equity Facility

March 2022, our majority-owned subsidiary Lucid Diagnostics, Inc.

entered into a committed equity facility with an affiliate of Cantor

Fitzgerald (“Cantor”).

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

of Lucid Diagnostics Inc.

While there are distinct differences, the facility is structured similarly to a traditional at-the-market equity

facility, insofar as it allows Lucid Diagnostics Inc.

to raise primary capital on a periodic basis at prices based on the existing market

of SARS-CoV-2 - COVID-19 Pandemic

in December 2019, there was an outbreak of a novel strain of a coronavirus occurred, with such coronavirus designated by the United

Nations (UN) World Health Organization (“WHO”) as the “Severe Acute Respiratory Syndrome Coronavirus 2” - or

“SARS-CoV-2”.

The SARS-CoV-2 spread on a global basis to other countries, including the United States.

2020, the WHO declared a pandemic resulting from SARS-CoV-2, with such pandemic commonly referred to by its resulting illness of coronavirus

disease 2019, or “COVID-19”.

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

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

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

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

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

Such adverse impact may include, for example, the inability

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

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

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

to contain the SARS-CoV-2 and the impact of such efforts.

addition, the spread of the SARS-CoV-2 has disrupted the United States’ healthcare and healthcare regulatory systems which could

divert healthcare resources away from, or materially delay United States Food and Drug Administration (“FDA”) approval with

respect to our products.

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

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

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

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

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

we are continuing to monitor and assess the effects of the COVID-19 pandemic on our business, the ultimate impact of the COVID-19 pandemic

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

consolidated results of operations, and /or consolidated cash flows, the adverse impact could be material.

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

While there are distinct differences,

the facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows Lucid Diagnostics Inc.

primary 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 of Lucid Diagnostics Inc.

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 Operations

2 unchanged sentences

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

On February 25, 2022, the EsoGuard Commercialization Agreement was terminated upon the execution of an Asset Purchase

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

On February 25, 2022, the EsoGuard Commercialization Agreement was terminated upon the execution of an Asset Purchase Agreement between

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

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

21 unchanged sentences

insurance premiums and investor relations costs.

Results of Operations - continued

Overview - continued

and development expenses

11 unchanged sentences

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

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

our PortIO and NextFlo products, our Digital Health product, and two of our Emerging Innovation product candidates through

their respective development phase, including our DisappEAR reabsorable ear tubes product and a non-invasive glucose monitoring product.

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

advancing our Veris Cancer Care Platform and EsoCure and PortIO products.

of Operations - continued

Income and Expense, net

income and expense, net, consists principally of changes in fair value of our contingent consideration and our convertible notes

and losses on extinguishment of debt upon repayment of such convertible notes.

Presentation of Dollar Amounts

All dollar amounts in this Management’s

Discussion and Analysis of Financial Condition and Results of Operations are presented in thousands of dollars, if not otherwise indicated

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

months ended March 31, 2022 as

compared to three months ended March 31, 2021

the three months ended March 31, 2022, revenue was $0.2 million as compared to no revenue in the corresponding period in the prior year.

income and expense, net, consists principally of changes in fair value of our contingent consideration and our convertible notes and

losses on extinguishment of debt upon repayment of such convertible notes.

of Dollar Amounts

dollar amounts in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are presented in thousands

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

of Operations - continued

months ended June 30, 2022 as compared to three months ended June 30, 2021

Company did not recognize revenue nor cost of revenue during the three months ended June 30, 2022 and June 30, 2021.

and marketing expenses

the three months ended June 30, 2022, sales and marketing costs were approximately $4.9 million, compared to $1.9 million for the corresponding

period in the prior year.

The net increase of $3.0 million was principally related to:

approximately

$2.2 million increase in compensation related costs principally related to an increase in headcount;

approximately

$0.3 million increase in stock based compensation from RSA grants to Lucid and PAVmed employees and non-employees, and an increase

in stock options granted corresponding with the increase in the number of employees;

approximately

$0.5 million increase in outside professional services related to EsoCheck, EsoGuard and consulting and professional services fees.

and administrative expenses

the three months ended June 30, 2022, general and administrative costs were approximately $11.8 million, compared to $6.8 million for

the corresponding period in the prior year.

The net increase of $5.0 million was principally related to:

approximately

$1.3 million increase in compensation related costs principally related to an increase in headcount;

approximately $1.1 million decrease stock based compensation primarily

due to the absence in the current year of stock-based compensation expense incurred in the prior year period resulting from the acceleration

of vesting of stock options granted to former members of the Company’s board of directors in June 2021, partially offset by an increase

in stock options granted corresponding with the increase in the number of employees;

approximately

$3.4 million increase in consulting services related to patents, regulatory compliance, legal processes for contract review, transition

of public relations and investor relations firms, and public company expenses;

approximately $0.6 million of amortization expense related to our intangible assets;

approximately

$0.8 million increase in general business expenses.

and development expenses

the three months ended June 30, 2022, research and development costs were approximately $6.7 million as compared to $4.3 million for

the corresponding period in the prior year.

The net increase $2.5 million was principally related to:

approximately $2.1 million increase in development costs, particularly

in clinical trial activities and outside professional and consulting fees with respect to EsoCheck, EsoCure, CarpX, our Veris Cancer Care

Platform and PortIO, and

approximately

$0.4 million increase in compensation related costs and related to expanded clinical and engineering staff.

Other Income and Expense

in fair value of convertible debt

the three months ended June 30, 2022, the non-cash expense recognized for the change in the fair value of our convertible notes was approximately

$2.0 million, related to the April 2022 Senior Convertible Note.

The April 2022 Senior Convertible Note was initially measured

at its issue-date estimated fair value and subsequently remeasured at estimated fair value as of the reporting period

The Company initially recognized a $2.6 million fair value non-cash expense on the issue-date.

This initial recognition was partially

offset by a $0.6 million decrease in estimated fair value upon remeasurement as of June 30, 2022.

Loss on Issue and Offering Costs - Senior Secured

Convertible Note

In the three months ended June 30, 2022, in connection with the issue of the April 2022 Senior Convertible Note,

we recognized a total of approximately $3.1 million of other expense, inclusive of approximately $2.5 million of lender fee non-cash expense,

and approximately $0.6 million of offering costs paid by us.

our unaudited condensed consolidated financial statements Note 11 , Debt , for additional information with respect to the April 2022 Senior Convertible Note.

of Operations - continued

months ended June 30, 2022 as compared to six months ended June 30, 2021

the six months ended June 30, 2022, revenue was $0.2 million as compared to no revenue in the corresponding period in the prior year.

The $0.2 million relates to our EsoGuard Commercialization Agreement, dated August 1, 2021, which resulted in revenue recognition of

$0.1 million per month beginning August 2021 - through the February 25, 2022 termination date of such agreement.

the three months ended March 31, 2022, cost of revenue was approximately $0.4 million as compared to no cost of revenue in the corresponding

$0.1 million per month commencing August 2021 and ending February 2022 upon the February 25, 2022 termination date of such agreement.

the six months ended June 30, 2022, cost of revenue was approximately $0.4 million as compared to no cost of revenue in the corresponding

period in the prior year.

1 unchanged sentence

and marketing expenses

the three months ended March 31, 2022, sales and marketing costs were approximately $3.9 million, compared to $1.4 million for the corresponding

the six months ended June 30, 2022, sales and marketing costs were approximately $8.8 million, compared to $3.3 million for the corresponding

period in the prior year.

1 unchanged sentence

approximately

$1.6 million increase in compensation related costs principally related to an increase in headcount and severance expense incurred

for 2 former employees;

$3.8 million increase in compensation related costs principally related to an increase in headcount;

approximately

4 unchanged sentences

and administrative expenses

the three months ended March 31, 2022, general and administrative costs were approximately $9.4 million, compared to $3.4 million for

the six months ended June 30, 2022, general and administrative costs were approximately $21.4 million, compared to $10.2 million for

the corresponding period in the prior year.

6 unchanged sentences

approximately

$2.3 million in consulting services related to patents, regulatory compliance, legal processes for contract review, transition of

public relations and investor relations firms, and public company expenses;

$5.7 million increase in consulting services related to patents, regulatory compliance, legal processes for contract review, transition

of public relations and investor relations firms, and public company expenses;

approximately $0.7 million of amortization expense related to our intangible assets;

approximately

$0.8 million in general business expenses.

$1.6 million increase in general business expenses.

and development expenses

the three months ended March 31, 2022, research and development costs were approximately $5.9 million as compared to $3.3 million for

the corresponding period in the prior year.

the six months ended June 30, 2022, research and development costs were approximately $12.7 million as compared to $7.6 million for the

corresponding period in the prior year.

The net increase $5.1 million was principally related to:

approximately

$2.1 million increase in development costs, particularly in clinical trial activities and outside professional and consulting fees

with respect to EsoCheck, EsoCure, CarpX, NextFlo, Port IO, our Digital Health product, and one of our Emerging Innovation product

candidates (the non-invasive glucose monitoring product);

approximately $4.1 million increase in development costs, particularly

in clinical trial activities and outside professional and consulting fees with respect to EsoCheck, EsoCure, CarpX, our Veris Cancer Care

Platform and PortIO, and

approximately

$1.0 million increase in compensation related costs and related to expanded clinical and engineering staff.

Three months ended March 31, 2022 as compared

to three months ended March 31, 2021 - continued

of Operations - continued

months ended June 30, 2022 as compared to six months ended June 30, 2021 - continued

Income and Expense

in fair value of convertible debt

the three months ended March 31, 2021, the non-cash income (expense) recognized for the change in the fair value of our convertible notes

was approximately $1.7 million.

The change in the fair value adjustment of the convertible notes is principally related to each of the

convertible notes being repaid-in-full during the three months ended March 31, 2021, as discussed herein below under “Other Income

and Expense - Loss from Extinguishment of Debt”.

the six months ended June 30, 2022, the non-cash expense recognized for

the change in the fair value of our convertible notes was approximately $2.0 million, related to the April 2022 Senior Convertible Note.

The April 2022 Senior Convertible Note was initially measured at its issue-date estimated fair value and subsequently remeasured at estimated

fair value as of the reporting period date.

The Company initially recognized a $2.6 million fair value non-cash expense

on the issue-date.

This initial recognition was partially offset by a $0.6 million decrease in fair value upon remeasurement June 30,

on Issue and Offering Costs - Senior Secured Convertible Note

In the six months ended June 30, 2022, in connection with the issue of the April 2022 Senior Convertible Note, we

recognized a total of approximately $3.1 million of other expense, inclusive of approximately $2.5 million of lender fee non-cash expense,

and approximately $0.6 million of offering costs paid by us.

from Extinguishment of Debt

the three months ended March 31, 2021, a debt extinguishment loss in the aggregate of approximately $3.7 million was recognized in connection

with the convertible notes, as discussed below.

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

the payment of interest thereon, of approximately $1.0 million, were settled with the issuance of 667,668 shares of

our common stock, with a fair value of approximately $1,7 million (with such fair value measured as the respective conversion

date quoted closing price of our common stock), resulting in the recognition of a loss from extinguishment of debt of approximately

$0.8 million in the six months ended June 30, 2021;

the prior year six months ended June 30, 2021, a debt extinguishment loss

in the aggregate of approximately $3.7 million was recognized in connection with the (previous) convertible notes, as discussed below.

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

payment of interest thereon of approximately $1.0 million, were settled with the issuance of 667,668 shares of our common stock,

with a fair value of approximately $1.7 million (with such fair value measured as the respective conversion date quoted closing price

of our common stock), resulting in the recognition of a loss from extinguishment of debt of approximately $0.8 million in the six

months ended June 30, 2021;

January 30, 2021, we paid in cash a $350 partial principal repayment of the Senior Convertible Note dated April 30, 2020 (“April

3 unchanged sentences

in the recognition of a loss from extinguishment of debt of approximately $2,955 in the six months ended June 30, 2021.

our unaudited condensed consolidated financial statements Note 12 , Debt , for additional information with respect

to the convertible notes.

our unaudited condensed consolidated financial statements Note 11 , Debt , for additional information with respect to the April 2022 Senior Convertible Note.

and Capital Resources

Our current operational activities are principally focused

on the commercialization of EsoGuard and CarpX, and our development activities are focused on pursuing FDA approval and clearance of other

lead products in our product portfolio pipeline.

Our ability to generate revenue depends upon successfully advancing the commercialization

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

There 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.

have financed our operations principally through the public and private issuances of our common stock, preferred stock, common stock

5 unchanged sentences

our operations with debt and/or equity financing transactions.

Notwithstanding, however, with the cash on-hand as of March 31, 2022,

we expect to be able to fund our future operations for one year from the date of the issue of our unaudited condensed consolidated financial

statements, as included in this Quarterly Report on Form 10-Q for the period ended March 31, 2022.

Stock Transactions

the three months ended March 31, 2022:

issued 237,499 shares of our common stock

for cash proceeds of approximately $241 upon exercise of stock options granted under the PAVmed Inc 2014 Equity Plan,

as such equity plan is discussed in Note 13, Stock-Based Compensation , of our unaudited condensed consolidated

financial statements.

issued 194,240 shares of our common stock under the

Employee Stock Purchase Plan (“ESPP”), as such ESPP is discussed in Note 13, Stock-Based Compensation ,

of our unaudited condensed consolidated financial statements.

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 the 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 or issuable under the SPA as March

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 lender fees.

to certain conditions being met or waived, from time to time after such time 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.

Notwithstanding, however, with the cash on-hand as of the date hereof and other debt and equity committed sources of financing, we

expect to be able to fund our future operations for one year from the date of the issue of our unaudited condensed consolidated financial

statements, as included in this Quarterly Report on Form 10-Q for the period ended June 30, 2022.

of Shares of Our Common Stock

the six months ended June 30, 2022

issued 299,999 shares of our common stock for cash proceeds of approximately $0.3 million upon exercise of stock options granted under the

PAVmed Inc 2014 Equity Plan, as such plan is discussed in Note 12, Stock-Based Compensation , of our unaudited condensed

consolidated financial statements.

issued 194,240 shares of our common stock for proceeds of approximately $0.2 million under the PAVmed Inc.

Employee Stock Purchase

Plan (“ESPP”), as such plan is discussed in Note 12, Stock-Based Compensation of our unaudited condensed

consolidated financial statements.

Purchase Agreement - March 31, 2022

Senior Secured Convertible Note - April 4, 2022

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

“Lender”, and /or “Holder”), pursuant to which we 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).

the SPA dated March 31, 2022, we 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 our common stock at the Holder’s election.

During the period from April 4, 2022 to October 3, 2022, we are 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.

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

and additionally, we incurred

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

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 us to the Investor.

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

If we fail to complete the sale of the additional March 2022 Notes contemplated by any such written notice, or if the investor

is unable to deliver any such notice prior to March 31, 2024 as a result of the limitation described in the preceding sentence, then

we will be obligated to pay a break-up fee to the investor at such time in an aggregate amount equal to $1.35 million.

Liquidity and Capital Resources - continued

We will not pay any selling

commission to any party in connection with the Offering, although we will pay a financial advisory fee equal to 1.8% of the gross proceeds

from the Offering to an independent financial advisor.

We estimate that the net cash proceeds will be approximately $20.4 million from

the additional closings of the Offering, after deducting the estimated expenses of the Offering, assuming the sale of all of the March

The 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 9.99% of Lucid’s outstanding common stock

held by us, pursuant to a security agreement by and between the Company and the investor.

the date six months after the issuance of a March 2022 Note, on the 1st and 10th trading day of each calendar month thereafter, and on

the maturity date (each an “Installment Date”), the Company will make an amortization payment on the March 2022 Note in an

amount equal to the initial principal balance of the note divided by the total number of such amortization payments (such that the entire

initial principal balance will be repaid by the maturity date), plus any amounts that have been deferred or accelerated to the applicable

installment date, plus all accrued and unpaid interest and any late charges (the “Installment Amount”).

Each Installment

Amount will be satisfied in shares of the Company’s common stock, subject to certain customary equity conditions (including

minimum price and volume thresholds) at 100% of the Installment Amount or otherwise (or at our election, in whole or in part) in cash

at 115% of the Installment Amount.

The conversion price for any Installment Amount so converted will be based on the then current market

price, but not more than the fixed conversion price then in effect and not less than a floor price.

The March 2022 Notes also may required

to be repaid in shares of our common stock, at a price per share of our common stock based on the then current market price,

but not more than the fixed conversion price then in effect and not less than a floor price, upon the occurrence of certain events of

We may be required to repay the March 2022 Notes, in cash, at a premium to the outstanding principal balance, upon the

occurrence of an event of default or upon a Change of Control (as defined in the March 2022 Notes).

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.

Diagnostics Inc - Committed Equity Facility

In March 2022, Lucid Diagnostics

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

Under the terms of

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

common stock from time to time at the request

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 our common stock;

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.

and Capital Resources - continued

Securities Purchase Agreement

- March 31, 2022

- Senior Secured Convertible

Note - April 4, 2022 - continued

Under the April 2022 Senior Convertible Note and the SPA, we are subject to certain customary affirmative and negative

covenants regarding 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 are subject to financial covenants requiring that (i) the amount

of our available cash equal or exceed $8,000,000 at all times, (ii) the ratio of (a) the outstanding principal amount of the notes issued

under the SPA, 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% (the “Debt to Market Cap Ratio Test”), and (iii) that our market capitalization shall

at no time be less than $75 million (the “Market Cap Test” and, together with the Debt to Market Cap Ratio Test, the “Financial

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.

As of 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

In connection with such waiver, the Company and the Investor also amended the April 2022 Senior Convertible to permit

the Investor to convert up to $5,000,000 of the principal amount 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 per share.

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 our common stock, 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 our common stock).

Diagnostics Inc.

- Committed Equity Facility

March 2022, our majority-owned subsidiary Lucid Diagnostics, Inc.

entered into a committed equity facility with Cantor.

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

of Lucid Diagnostics Inc.

While there are distinct differences, the facility is structured similarly to a traditional at-the-market equity

facility, insofar as it allows Lucid Diagnostics Inc.

to raise primary equity capital on a periodic basis at prices based on the existing

market price.

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

While there are distinct differences,

the facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows Lucid Diagnostics Inc.

primary 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 of Lucid Diagnostics Inc.

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.

Accounting Policies and Significant Judgments and Estimates

11 unchanged sentences

or conditions.

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

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

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

ended December 31, 2021 as filed with the SEC on April 6, 2022, except as otherwise noted in Note 2, Summary of Significant Accounting Policies and Recent Accounting Standards Updates , of our unaudited

condensed consolidated financial statements included herein in this Form 10-Q.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis