What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-15 · 475 added, 371 removed, 148 unchanged (85% of the section changed)

3 unchanged sentences

and Exchange Commission (the “SEC”).

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.

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

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

Diagnostics, Inc.

(“Solys Diagnostics” or “SOLYS”).

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

or “PAVmed” are to PAVmed Inc.

and Subsidiaries, including its majority-owned subsidiaries, including Lucid Diagnostics Inc.

(“Lucid Diagnostics” or “LUCID”)

and Veris Health Inc.

(“Veris Health” or “VERIS”).

FORWARD-LOOKING

17 unchanged sentences

ability of our products to achieve market acceptance;

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

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

potential ability to obtain additional financing when and if needed;

5 unchanged sentences

● cybersecurity

related to SARS-CoV-2 /COVID-19 pandemic;

impact of the material weakness identified by our management;

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

related to the COVID-19 pandemic;

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

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

9 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 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.

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 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:

“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.

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.

The Company operates in one segment as a medical technology company, with

the following lines of business:

Diagnostics, Medical Devices and Digital Health.

Our products and services in each line of business, as discussed below

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 Test and EsoCheck Esophageal Cell Collection Device;

Devices - CarpX Minimally Invasive Surgical Device for Carpal Tunnel Syndrome;

EsoCure Esophageal

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

Health - Veris Cancer Care Platform with implantable smart device, remote monitoring and

data analytics.

are also pursuing a number of research and development project and product opportunities across these three lines of business, which

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

products and services are in various phases of development, regulatory approval and commercialization, as follows:

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,”

also commonly known as chronic heartburn, acid reflux or simply reflux) patients.

The Company has advanced the proprietary technologies

underlying EsoGuard and EsoCheck from the academic research laboratory to commercial diagnostics tests and devices with scalable manufacturing

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 the establishment of “Lucid Diagnostics Test Centers”

for the collection of cell samples using EsoCheck.

Previously the collected cell samples were sent to ResearchDx Inc.

an unrelated third-party Clinical Laboratory Improvement Amendments (“CLIA”) certified commercial laboratory service provider,

for the performance of EsoGuard.

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.

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.

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

provider has joint oversight of payer claims, appeals processes, patient billing, online payment collection, and claims tracking.

the point when submission by the RCM began in August 2022, more than 2,000 claims had accumulated since the commencement of our CLIA

laboratory operations (LucidDX Labs, on February 25, 2022).

These claims and other claims that were subsequently generated are now being

processed, including 1,088 tests in the three months ended September 30, 2022.

Refer to Note 3 of our Condensed Consolidated Financial

Statements for more information on Revenue from Contracts with Customers.

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 Esophageal DNA Test on samples collected with our EsoCheck Cell

Collection Device.

The clinical guideline reiterates the ACG’s long-standing recommendation for esophageal precancer screening

in at-risk patients with GERD.

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 greater than 50 years, White race, tobacco smoking,

obesity, and family history of BE or EAC in a first-degree relative.

Furthermore, 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 our

EsophaCap device, as such swallowable, nonendoscopic esophageal cell collection devices.

The clinical guideline also mentions

methylated DNA markers (like those detected by the EsoGuard test) as such a biomarker .

The summary of evidence for this recommendation includes a reference to 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 BE.

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

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 greater than 50 years, White race, tobacco smoking, obesity, and family history of BE) are now considered at-risk

patients recommended for screening.

2021 the Lucid Diagnostics Inc.

began conducting two concurrent clinical trials, 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”) application 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 a biomarker test like EsoGuard on samples collected

with a swallowable, nonendoscopic capsule device like EsoCheck, the Company has determined to prioritize its

clinical trial efforts and resources towards supporting studies that will help secure insurance

reimbursement adoption for EsoGuard and EsoCheck 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.

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.

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.

As a result of this clinical input, we have initiated a product development

project to incorporate intraluminal ultrasound into the device to include real time imaging

of the ligament to be cut together with critical anatomic structures.

The design and development

work, including cadaver testing is expected to culminate in a FDA submission and clearance

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.

The core technologies incorporated in the Veris Cancer Care Platform 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

will deliver 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 of the implantable device through a FDA 510(k)

process, and, as such, we will begin to commercialize the digital health offering in three phases which include software, device,

The initial launch will be in conjunction with a package we are calling Veris Solar, with Veris branded OEM Bluetooth

enabled connected health care devices.

The next product, which we call Veris Mercury, is an implantable physiologic monitor designed

to be implanted in conjunction with a traditional vascular access port for chemotherapy or other treatments.

We have recently

completed a successful pre-submission meeting with the FDA, which provided us with an outline for a clear path to 510(k) clearance of Veris Mercury with a submission in 2023 (although there can be no assurance as to product clearance).

will be the third product in the development process which will include full integration of the implantable monitor with the

vascular access port.

We are working with the FDA to finalize the regulatory path for Veris Venus to determine if it

will be a 510(k) submission or a de novo pathway.

Overview - continued

connection with our efforts to expand our presence in the EAC diagnostic market, we are also

developing the EsoCure Esophageal Ablation Device, with the intent to allow a clinician

to treat dysplastic BE before it can progress to EAC, a highly lethal esophageal cancer,

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

We have successfully

completed a pre-clinical feasibility animal study of EsoCure demonstrating excellent, controlled

circumferential ablation of the esophageal mucosal lining.

An acute and survival animal study

of EsoCure Esophageal Ablation Device has also been completed, 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.

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 FDCA.

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 earlier this year successfully

implanted seven additional patients for a series of infusions over seven days and a successful

explant of the device.

The next set of patients will have device implanted for 60 days which

will influence the regulatory path of pursuing a CE Mark in Europe or to proceed with a US

Recruitment of these patients is underway.

Manufacturing Update

October 4, 2022, Lucid completed its first full day of manufacturing of EsoCheck at Coastline International, a high-volume

manufacturing company.

Through mid-2023, we expect to transition from our current manufacturer, Sage Product Development, to

Coastline International as the manufacturing process is further optimized.

Cell Collection Device Update

October 2022, the FDA announced they completed their review of the EsoCheck 510(k) (#K222366) premarket notification of intent to market

the device and granted the use of the EsoCheck Cell Collection Device for the collection and retrieval of surface cells of the esophagus

in the general population of adults and adolescents, 12 years of age and older.

This action by the FDA now expands the targeted US patient

population to include adolescents not previously covered by the Company’s initial EsoCheck 510(k) clearance.

Health Update

the end of August, we moved our software platform from a development environment to a production environment.

At the same time, we initiated

our HIPAA and SOC2 audits which were completed in October.

During the quarter we completed a presubmission meeting with the FDA, outlining

a clear regulatory pathway for our first intelligent implantable device.

Opportunities - Novosound Agreement

October 2022, PAVmed entered into an option agreement with Novosound Ltd, a Scottish company specializing in the design and manufacturing

of ultrasound sensors using a proprietary thin-film technique.

Pursuant to the terms of the agreement, PAVmed and Novosound will collaborate

on an research and development project leveraging Novosound’s ultrasound platform technology for development of novel intravascular

ultrasound (“IVUS”) imaging devices, with PAVmed having the option to license the technology on an exclusive basis for use

in intravascular imaging.

Purchase Agreement - March 31, 2022 - Senior Secured Convertible Note - April 4, 2022 and Senior Secured Convertible Note - September

Effective as of March 31, 2022, we

entered into a Securities Purchase Agreement (“SPA”) 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 Senior Secured Convertible Notes.

The SPA provided for the sale to the Investor

of an initial Senior Secured Convertible Note with a face value principal of $27.5 million, which closed on April 4, 2022 (the

“April 2022 Senior Convertible Note”).

The SPA also provided for sales of additional Senior Secured Convertible Notes in

one or more additional closings (upon the satisfaction of certain conditions), with an aggregate face value principal of up to an

additional $22.5 million.

The April 2022 Senior Convertible Note proceeds were $24.4 million after deducting a $2.5 million lender

fee and the Company’s offering costs of approximately $0.6 million, inclusive primarily of $0.5 million placement agent

On September 8, 2022, we completed an additional closing under the SPA, in which we sold to the Investor an additional Senior

Secured Convertible Note with a face value principal of $11.25 million (the “September 2022 Senior Convertible Note”).

The September 2022 Senior Convertible Note proceeds were $10.0 million after deducting a $1.0 million lender fee and the

Company’s offering costs of approximately $0.2 million, inclusive primarily of placement agent

our accompanying unaudited condensed consolidated financial statements Note 11, Debt , for further discussion of the SPA dated

March 31, 2022 and the senior convertible notes.

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

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

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.

Under the terms of the facility, Cantor committed to purchase up to $50 million of Lucid Diagnostics common stock from time to time upon the request of Lucid Diagnostics.

While there are distinct differences, the facility is

structured similarly to a traditional at-the-market equity facility, insofar as it allows Lucid Diagnostics to raise primary capital

on a periodic basis at prices based on the existing market price.

Through September 30, 2022, 680,263 shares of common stock of Lucid

Diagnostics were issued under this facility for total proceeds of approximately $1.8 million.

of Operations

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

subsidiary, Lucid Diagnostics Inc., and ResearchDx Inc.

Company recognized revenue resulting from the delivery of patient EsoGuard test results for which cash collections have occurred or payment

was reasonably assured.

Additionally, revenue was recognized with respect to the EsoGuard Commercialization Agreement, dated August 1,

2021, between the Lucid Diagnostics Inc.

and ResearchDx Inc.

(“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.

the Company’s wholly-owned subsidiary of LucidDx Labs Inc.

of revenues recognized from the delivery of patient EsoGuard test results includes costs related to EsoCheck device usage, shipment

of test collection kits, royalties and the cost of services to process tests and provide results to physicians.

We incur expenses

for tests in the period in which the activities occur, therefore, gross margin as a percentage of revenue may vary from quarter to

quarter due to costs being incurred in one period that relate to revenues recognized in a later period.

expect that gross margin for our services will continue to fluctuate and be affected by EsoGuard test volume, our operating efficiencies,

patient compliance rates, payer mix, the levels of reimbursement, and payment patterns of payers and patients.

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

24 unchanged sentences

for the research and development of our products, including:

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

costs charged to us by various external contract research organizations we contract with

to conduct clinical and preclinical studies and engineering design and development;

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

6 unchanged sentences

well as new innovations.

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

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

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

of Operations - continued

Our research and development activities, including our clinical trials, are focused principally on obtaining FDA approvals, facilitating insurer reimbursement, encouraging physician adoption and developing 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.

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.

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.

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

upon repayment of such convertible notes.

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

of Dollar Amounts

dollar amounts in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are presented as dollars in millions, except for per share amounts.

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

the three months ended September 30, 2022, revenue was $0.1 million as compared to $0.2 million in the corresponding period in the prior

The $0.1 million decrease principally relates to the termination of the EsoGuard Commercialization Agreement with RDx, as the Company

transitioned to its own laboratory operations effective February 25, 2022.

The decrease was offset by revenue for our EsoGuard Esophageal

DNA Test performed in our own CLIA laboratory for the three months ended September 30, 2022.

the three months ended September 30, 2022, cost of revenue was approximately $1.6 million as compared to $0.1 million for the corresponding

period in the prior year.

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

The $1.5 million increase principally related to:

● approximately

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

$0.2 million increase in compensation related costs as a result of 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;

$0.4 million increase in EsoCheck and EsoGuard supplies usage costs;

● approximately

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

$0.9 million increase in laboratory operations costs.

and marketing expenses

the three months ended September 30, 2022, sales and marketing costs were approximately $4.7 million, compared to $2.3 million for the

corresponding period in the prior year.

The net increase of $2.4 million was principally related to:

● approximately

$2.1 million increase in compensation related costs, including stock based compensation of approximately $0.3 million with respect to restricted

stock awards to Lucid Diagnostics and PAVmed employees and non-employees, and an increase in stock options granted

corresponding with the increase in headcount;

● approximately

$0.3 million increase in consulting and outside professional services.

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 three months ended September 30, 2022, general and administrative costs were approximately $10.3 million, compared to $6.1 million

for the corresponding period in the prior year.

The net increase of $4.2 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;

$1.8 million increase in compensation related costs principally as a result of an increase

in headcount;

● 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;

$0.4 million increase in stock based compensation primarily due to the absence in the current

year of stock based compensation expense incurred in the prior year resulting from the

acceleration of vesting of stock options granted to former members of the Company’s

board of directors, partially offset by an increase in stock options granted

corresponding with the increase in the number of employees;

● approximately

$1.5 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

$0.5 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 three months ended September 30, 2022, research and development costs were approximately $6.2 million as compared to $5.3 million

for the corresponding period in the prior year.

The net increase $0.9 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

$0.2 million increase in development costs, particularly in clinical trial activities and

outside professional and consulting fees with respect to EsoCheck, CarpX, Veris Cancer

Care Platform, EsoCure and PortIO;

● approximately

$0.7 million increase in compensation related costs and related to expanded clinical and

engineering staff.

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.

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

was approximately $0.3 million of income, related to both the April 2022 and September 2022 Senior Convertible Notes.

The April 2022

and September 2022 Senior Convertible Notes were initially measured at their issue-date estimated fair value and subsequently remeasured

at estimated fair value as of the reporting period date.

The Company initially recognized a $0.9 million fair value non-cash expense on the September 2022 Senior Convertible

Note issue-date.

This initial recognition was more than offset by $1.2 million of decreases in fair value upon remeasurements through

September 30, 2022.

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 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

Three months ended September 30, 2022 as

compared to three months ended September 30, 2021 - continued

on Issue and Offering Costs - Senior Secured Convertible Note

the three months ended September 30, 2022, in connection with the issue of the September 2022 Senior Convertible Note, we recognized

a total of approximately $1.2 million of other expense, inclusive of approximately $1.0 million of lender fee non-cash expense, and approximately

$0.2 million of offering costs paid by us.

our unaudited condensed consolidated financial statements Note 11 , Debt , for additional information with respect to the September

2022 Senior Convertible Note.

on Debt Extinguishment

the three months ended September 30, 2022, a debt extinguishment loss in the aggregate of approximately $5.1 million was recognized in

connection with our April 2022 Senior Convertible Note as discussed below.

August 2022, approximately $5.0 million of principal repayments along with less than $0.1 million of

interest expense thereon, were settled through the issuance of 5,013,908 shares of common

stock of the Company, with such shares having a fair value of approximately $10.1 million (with

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

stock of the Company).

The conversions resulted in a debt extinguishment loss of $5.1 million

in the three months ended September 30, 2022.

months ended September 30, 2022 as compared to nine months ended September 30, 2021

the nine months ended September 30, 2022, revenue was $0.3 million as compared to $0.2 million in the corresponding period in the prior

The $0.1 million increase principally relates to revenue for laboratory services rendered for our EsoGuard Esophageal DNA Test

performed in our own CLIA laboratory.

The increase was partially offset by the termination of the EsoGuard Commercialization Agreement,

with RDx as the Company transitioned to its own laboratory operations effective February 25, 2022.

the nine months ended September 30, 2022, cost of revenue was approximately $2.0 million as compared to $0.1 million for the corresponding

period in the prior year.

The $0.4 million increase principally relates to costs associated with the EsoGuard Commercialization Agreement

The $1.9 million increase principally related to:

● approximately

$0.4 million increase in compensation related costs as a result of an increase in headcount;

● approximately

$0.6 million increase in EsoCheck and EsoGuard supplies usage costs;

● approximately

$0.9 million increase in laboratory operations costs.

and marketing expenses

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.

the nine months ended September 30, 2022, sales and marketing costs were approximately $13.6 million, compared to $5.6 million for the

corresponding period in the prior year.

The net increase of $8.0 million was principally related to:

● approximately

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

$5.5 million increase in compensation related costs principally as a result of an increase

in headcount;

● approximately

$0.7 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;

$1.0 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

$1.1 million increase in outside professional services related to EsoCheck, EsoGuard and consulting and professional services fees.

$1.5 million increase in consulting and outside professional services, and for EsoCheck and EsoGuard marketing supplies.

and administrative expenses

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.

the nine months ended September 30, 2022, general and administrative costs were approximately $31.0 million, compared to $16.3 million

for the corresponding period in the prior year.

The net increase of $14.7 million was principally related to:

● approximately

$2.5 million increase in compensation related costs principally related to an increase in headcount;

$4.3 million increase in compensation related costs principally as a result of an increase

in headcount;

● approximately

$0.7 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;

$1.0 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

$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;

$7.7 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

$1.7 million increase in general business expenses.

Results of Operations - continued

Nine months ended September 30, 2022 as

compared to nine months ended September 30, 2021 - continued

and development expenses

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 nine months ended September 30, 2022, research and development costs were approximately $18.9 million as compared to $12.9 million

for the corresponding period in the prior year.

The net increase $6.0 million was principally related to:

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.

of Operations - continued

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

$4.3 million increase in development costs, particularly in clinical trial activities and

outside professional and consulting fees with respect to EsoCheck, CarpX, Veris Cancer

Care Platform, EsoCure and PortIO;

● approximately

$1.7 million increase in compensation related costs and related to expanded clinical and

engineering staff.

Income and Expense

in fair value of convertible 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,

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

approximately $1.7 million, related to both the April 2022 and September 2022 Senior Convertible Notes.

The April 2022 and September 2022

Senior Convertible Notes were 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 $3.5 million fair value non-cash expense on the issue-dates.

This initial recognition was partially offset by $1.8 million of decreases in fair value upon remeasurements through September 30, 2022.

the nine months ended September 30, 2021, the non-cash income (expense) recognized for the change in the fair value of our convertible

notes was approximately $1.7 million of other income.

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

related to each of the convertible notes being repaid-in-full during the nine months ended September 30, 2021, as discussed herein below

under “Loss from Extinguishment of Debt.”

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.

the nine months ended September 30, 2022, in connection with the issue of both the April 2022 and September 2022 Senior Convertible

Notes, we recognized a total of approximately $4.3 million of other expense, inclusive of approximately $3.5 million of lender fee

non-cash expense, and approximately $0.8 million of offering costs paid by us.

from Extinguishment of Debt

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

the nine months ended September 30, 2022, a debt extinguishment loss in the aggregate of approximately $5.1 million was recognized in

connection with our April 2022 Senior Convertible Note as discussed below.

August 2022, approximately $5.0 million of principal repayments along with less than $0.1 million of

interest expense thereon, were settled through the issuance of 5,013,908 shares of common

stock of the Company, with such shares having a fair value of approximately $10.1 million (with

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

stock of the Company).

The conversions resulted in a debt extinguishment loss of $5.1 million

in the nine months ended September 30, 2022.

the prior year nine months ended September 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 nine months ended September 30,

January 30, 2021, we paid in cash a $350 partial principal repayment of the Senior Convertible

Note dated April 30, 2020 (“April 2020 Senior Convertible Note”);

2, 2021, we made a cash payment of approximately $14.5 million, resulting in the repayment-in-full

on such date of both the April 2020 Senior Convertible Note and the Senior Secured Convertible

Note dated August 6, 2021, resulting in the recognition of a loss from extinguishment of

debt of approximately $3.0 million in the nine months ended September 30, 2021.

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

2022 Senior Convertible Note.

and on March 2, 2021, we made a cash payment of approximately $14,466, resulting in the repayment-in-full

on such date of both the April 2020 Senior Convertible Note and the Senior Secured Convertible Note dated August 6, 2021, resulting

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

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.

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, we 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 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.

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 Form 10-Q.

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

the nine months ended September 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 2014 Equity Plan, as such equity

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 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.

issued 385,938 shares of our common stock for proceeds of approximately $0.4 million under

the PAVmed Employee Stock Purchase Plan (“ESPP”), as such plan is discussed

in Note 12, Stock-Based Compensation of our unaudited condensed consolidated financial

Purchase Agreement - March 31, 2022 - Senior Secured Convertible Notes - April 4, 2022 and September 8, 2022

Effective as of March 31, 2022,

we entered into the SPA with the Investor, pursuant to which we agreed to sell, and the Investor agreed to purchase an aggregate of $50.0

million face value principal of Senior Secured Convertible Notes.

The SPA provided for the sale of the initial Senior Secured Convertible Note with a face value principal of $27.5 million, which closed on April 4, 2022 (referred

to as the “April 2022 Senior Convertible Note”).

The SPA also provided for sales of additional Senior Secured Convertible

Notes in one or more additional closings (upon the satisfaction of certain conditions), with an aggregate face value principal of up

to an additional $22.5 million.

The April 2022 Senior Secured

Convertible Note has 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 or otherwise

paid in shares of our common stock as described in Note 11, Debt .

On September 8, 2022, we completed

an additional closing under the SPA, in which we sold to the Investor an additional Senior Secured Convertible Note with a face value

principal of $11.25 million (referred to as the “September 2022 Senior Convertible Note”).

The September 2022 Senior Secured

Convertible Note has 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 September 6, 2024.

The September 2022 Senior Convertible Note may be converted

into or otherwise paid in shares of our common stock as described in Note 11, Debt .

The April 2022 Senior Convertible

Note proceeds were $24.4 million after deducting a $2.5 million lender fee and the Company’s offering costs of approximately $0.6

million, inclusive primarily of $0.5 million placement agent fees.

The September 2022 Senior Convertible Note proceeds were $10.0 million

after deducting a $1.0 million lender fee and the Company’s total offering costs of approximately $0.2 million, inclusive primarily

of placement agent fees.

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).

the Senior Convertible Notes 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 $8.0 million 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% (except that such maximum percentage is 50% for the period from September 8, 2022 through

March 5, 2023) (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

As of September 30, 2022, the Company was in compliance with the Financial Tests.

In addition, the Company presently

is in compliance with the Financial Tests.

August 9, 2022, the Company and the Investor also agreed, in connection with the waiver described in Note 11 above, that the Investor

may convert up to $5.0 million 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.

As contemplated

by such amendment, in August 2022, approximately $5.0 million of principal repayments along with less than $0.1 million of interest expense

thereon, were settled through the issuance of 5,103,908 shares of our common stock.

See Note 11 , Debt ,

for additional information about the SPA and the Senior Secured Convertible Notes.

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.

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.

March 2022, our majority-owned subsidiary, Lucid Diagnostics, 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 common stock from time

to time at the request of Lucid Diagnostics.

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

at-the-market equity facility, insofar as it allows Lucid Diagnostics to raise primary equity capital on a periodic basis at prices

based on the existing market price.

As of September 30, 2022, under the committed equity facility, a total of 680,263 shares of common

stock of Lucid Diagnostics were issued for proceeds of approximately $1.8 million.

Accounting Policies and Significant Judgments and Estimates

11 unchanged sentences

or conditions.

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.

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

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