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Item 1. Business

2023-03-14 compared with 2022-04-06 · 687 added, 1237 removed, 380 unchanged (84% of the section changed)

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

From inception on June 26, 2014, thru 2020, the Company’s activities were technology-focused on advancing its lead products towards

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

Beginning in 2020 through 2021 our activities and efforts are best described as transition years focused mainly on infrastructure

expansion including personnel, systems, and facilities.

Additionally, the focus increasingly involved building out the commercial foundation

including reimbursement with CMS and private payor engagement, sales operations, clinical services and Lucid Test Centers.

For the years

2022 and beyond, the central focus will be predominantly on commercial expansion and execution including the acceleration of EsoGuard

commercialization and the transition of NextFlo, EsoCure, Veris, and the next generation of CarpX from pre-commercial activities to commercial

Company operates in one segment as a medical device company with four operating divisions which include Medical Devices, Diagnostics,

Digital Health, and Emerging Innovations.

As resources permit, we will continue to explore internal and external innovations that fulfill

our project selection criteria without limiting ourselves to any target specialty or condition.

In addition to activities ongoing at

the parent company level, the Company also has ongoing operations conducted in three majority owned subsidiaries:

Lucid Diagnostics,

(“Lucid Diagnostics” or “LUCID”) incorporated in May 2018, Veris Health, Inc.

(“Veris”) founded

in May 2021 with the acquisition of Oncodisc, Inc and its digital health technologies, and Solys Diagnostics, Inc.

(“Solys Diagnostics”

or “SOLYS”) incorporated in October 2019.

October 14, 2021, Lucid Diagnostics completed an initial public offering (“IPO”) of its common stock under an effective

registration statement on Form S-1 (SEC File No.

333-259721), wherein a total of 5.0 million IPO shares of common stock of Lucid Diagnostics

were issued, with such total IPO shares inclusive of 571,428 shares issued to PAVmed Inc., at an IPO offering price of $14.00 per

share, resulting in gross proceeds to Lucid Diagnostics Inc.

of $70.0 million, before underwriting fees of $4.9 million,

and approximately $0.7 million of offering costs incurred by Lucid Diagnostics Inc.

and its subsidiaries have proprietary rights to the trademarks used herein, including, among others, PAVmed™, Lucid Diagnostics™,

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

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

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

Solely as a matter of convenience, trademarks

and trade names referred to herein may or may not be accompanied with the requisite marks of “™” or “®”.

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

or its subsidiaries will not assert, to the fullest

extent possible under applicable law, their respective rights to such trademarks and trade names.

multiple products are in various phases of development, regulatory clearances, approvals, and commercialization, including:

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

Food and Drug Administration

(“FDA”), in June 2019 and European CE Mark Certification in May 2021 as an esophageal

cell collection device;

and, EsoGuard has been established as a Laboratory Developed Test

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

commercially in December 2019 after Clinical Laboratory Improvement Amendment (“CLIA”)

and College of American Pathologists accreditation of the test at Lucid Diagnostics commercial

diagnostic laboratory partner ResearchDx Inc.

(“RDx”), headquartered in Irvine,

On February 25, 2022, Lucid Diagnostics new, wholly owned subsidiary, LucidDx

(“LucidDx Labs”) acquired from ResearchDx, Inc.

a CLIA-certified, CAP-accredited clinical laboratory operator located in Irvine, CA, 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 three Lucid Test Centers opened

in the Phoenix metropolitan area.

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

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

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

procedure successfully performed in December 2020.

In May 2021 European CE Mark Certification

was received for CarpX.

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

In connection

with it formation, Veris Health acquired Oncodisc Inc (“Oncodisc”), a digital

health company with ground breaking tools to improve personalized cancer care through remote

patient monitoring.

Oncodisc’s core technologies include the first intelligent implantable

vascular healthcare platform that provides patients and physicians with new tools to improve

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

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

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.

discussed herein below, our current lines-of-business are as follows:

● Diagnostics

- EsoGuard Esophageal DNA Test, EsoCheck Esophageal Cell Collection Device;

Esophageal Ablation Device with Caldus Technology;

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

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

Disposable Intravenous Infusion Platform Technology;

Health – Veris cancer healthcare platform and implantable intelligent vascular

port combining remote monitoring and data analytics;

Medical Devices – NextVent single-use ventilators;

FlexMO medical circulatory

support cannulas;

Veris Cardiac Monitor;

DisappEAR resorbable pediatric ear tubes;

Solys Noninvasive glucose monitoring;

EsoCheck, and EsoCure

and EsoCheck are based on patented technology licensed from Case Western Reserve University (“CWRU”) through our majority-owned

subsidiary, Lucid.

EsoGuard and EsoCheck have been developed to provide an accurate, non-invasive, patient-friendly screening test for

the early detection of adenocarcinoma of the esophagus (“EAC”) and Barrett’s Esophagus (“BE”), including

dysplastic BE and related pre-cursors to EAC in patients with chronic gastroesophageal reflux (“GERD”).

current central focus is predominantly on commercial expansion and execution including the acceleration of EsoGuard and Veris Cancer

Care Platform commercialization.

As resources permit, we will continue to explore internal and external innovations that fulfill our

project selection criteria without limiting ourselves to any target specialty or condition.

More broadly, we strive to maintain balance

within our pipeline with shorter-term, lower-risk projects with the prospect for rapid commercialization and revenue generation supporting

development of longer-term projects.

At the same time, we are continuously re-assessing each project’s long-term commercial potential

relative to other projects in our pipeline, accelerating or decelerating the project and reallocating resources accordingly.

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

Diagnostics, Medical Devices

and Digital Health.

Below is a summary of each of our key products within these sectors, including in particular EsoGuard and the

Veris Cancer Care Platform, currently our two leading products.

We 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.

believe that the flagship product of our majority-owned subsidiary Lucid Diagnostics Inc.

LUCD) (“Lucid”), 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.

is a bisulfite-converted next-generation sequencing (NGS) DNA assay performed on surface esophageal cells collected with EsoCheck.

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as a Laboratory Developed Test (LDT) performed at our

CLIA-certified laboratory partner, ResearchDx Inc.

(“RDx”), which does business as “PacificDx”.

Cell samples,

including those collected with EsoCheck, as discussed below, are sent to RDx, for testing and analyses using our proprietary EsoGuard

NGS DNA assay.

CLIA-certified laboratory.

Cell samples, including those collected with EsoCheck, as discussed below, are sent to our laboratory for

testing and analyses using our proprietary EsoGuard NGS DNA assay.

is an FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells

in a less than five-minute office.

It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone catheter from

which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells.

When vacuum suction is applied, the

balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted

in a less than five-minute office procedure.

It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone catheter

from which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells.

When vacuum suction is applied,

the balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted

region during device withdrawal.

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cell collection device capable of such anatomically targeted and protected sampling.

December 2019, we secured “gapfill” determination for the EsoGuard PLA code 0114U through the United States Department of

Health and Human Services (“HHS”) Centers for Medicare and Medicaid Services (“CMS”) Clinical Laboratory Fee

Schedule (“CLFS”) process, which has allowed us to engage directly with Medicare contractor Palmetto GBA, LLC and its MolDx

Program on CMS payment and coverage.

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

January 1, 2021.

We are still awaiting Medicare local coverage determination from MolDx, which we understand is working to clear a significant

backlog of reviews.

are also aggressively pursuing EsoGuard U.S.

private payor payment and coverage.

We recently held our initial advisory board meetings

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

payment and coverage.

Although the claim cycle can be prolonged during the early commercialization of a new test, PacificDx is starting

to receive out-of-network private insurance payments on our behalf.

initial EsoGuard commercialization efforts focused on gastroenterology (GI) physicians who have generally embraced our message that EsoGuard

has the potential to expand the funnel of BE-EAC patients who will need long term EGD surveillance and, potentially, treatment with endoscopic

esophageal ablation.

We have previously relied upon a hybrid sales model with full-time sales management and approximately fifty independent

sales representatives.

We significantly expanded our full-time commercial team in 2021 and are actively recruiting full-time territory

managers and sales representatives nationwide.

Our Lucid Vice President of Sales and three Area Sales Directors (“ASD”) oversee

a growing number of Sales Representatives, Market Development Mangers (“MDM”) and Clinical Specialists.

EsoGuard testing

has accelerated as pandemic-related healthcare facility limitations have eased.

EsoGuard commercialization efforts span multiple channels including targeting primary care physicians and consumers in addition to GI

To assure sufficient testing capacity and geographic coverage, as part of this expansion, we are building our own network

of Lucid Test Centers, staffed by Lucid-employed clinical personnel, where patients can undergo the EsoCheck procedure and have the sample

sent for EsoGuard testing, starting with three test centers launched in the Phoenix metropolitan area.

We have expanded our test centers

to include Salt Lake City, Utah, Henderson, Nevada, and Denver, Colorado.

We are currently expanding into Portland, Oregon, Seattle,

Washington, and Boise, Idaho.

have also established an EsoGuard Telemedicine Program, in partnership with UpScript, LLC, an independent third-party telemedicine provider,

that accommodates EsoGuard self-referrals from direct-to-consumer marketing.

active clinical research and development program seeks to expand the clinical evidence of our products’ efficacy to support our

ongoing regulatory, reimbursement and commercial efforts, including an FDA PMA submission for approval of EsoGuard and EsoCheck as an

in vitro diagnostics (“IVD”) device, as currently, EsoGuard and EsoCheck are permitted to be marketed separately,

but not in combination.

We are actively enrolling patients in two international multicenter clinical trials to support FDA PMA approval

of EsoGuard, used with EsoCheck, as an IVD indicated to detect NDBE.

ESOGUARD-BE-1 is a screening study which will enroll approximately

500 to 900 male GERD patients over 50 years of age with one other risk factor.

ESOGUARD-BE-2 is a case control study which will enroll

approximately 500 male GERD patients with a previous diagnosis of NDBE, LGD, HGD, or EAC, along with normal controls.

February 2020, we received FDA “Breakthrough Device Designation” for EsoGuard as an in-vitro diagnostic medical device (“IVD”).

The FDA Breakthrough Device Program was created to offer patients more timely access to breakthrough technologies which provide for more

effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions by expediting their development,

assessment and review through enhanced communications and more efficient and flexible clinical study design, including more favorable

pre/post market data collection balance.

The Centers for Medicare and Medicaid Services and the United States Congress continue to work

to provide an expedited coverage pathway for emerging technologies.

have received ISO 13485:2016 certification for Lucid’s quality management system and received CE Mark certification for EsoCheck

in May 2021 which allows it to be marketed in CE Mark European countries, which include the European Economic Area (the EU, Norway, Iceland,

and Lichtenstein), Switzerland, and, until July 1, 2023, the United Kingdom.

In June 2021, we completed the European Directive 98/79/EC

for In-Vitro Diagnostic Medical Devices (“IVDD”) CE Mark certification for EsoGuard after Lucid and its European Union (“EU”)

authorized representative completed the Commission of the European Union (“EC”) declaration of conformity procedure, including

the associated technical documentation, ensuring and declaring EsoGuard meets the essential requirements of the IVDD.

is in development as an Esophageal Ablation Device, with the intent to allow a clinician to treat dysplastic BE before it can progress

to EAC, a highly lethal esophageal cancer, and to do so without the need for complex and expensive capital equipment.

We have successfully

completed a pre-clinical feasibility animal study of EsoCure demonstrating excellent, controlled circumferential ablation of the esophageal

mucosal lining.

We have also completed an acute and survival animal study of EsoCure™ Esophageal Ablation Device, demonstrating

successful direct thermal balloon catheter ablation of esophageal lining through working channel of standard endoscope.

We plan to conduct

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

March 2022, both the PAVmed and Lucid board of directors have approved entering into an intercompany license between PAVmed and Lucid

such that Lucid will be granted the rights to commercialize EsoCure for the treating dysplastic Barrett’s Esophagus, including

a royalty arrangement whereby Lucid will pay PAVmed a 5% royalty on all EsoCure sales up to $100 million per calendar year, and 8% above

that threshold.

Lucid will obligated to fund ongoing development costs and cumulative patent expenses.

EsoCure will become part of an

integrated suite of Lucid products addressing BE-EAC.

Furthermore, should PAVmed acquire businesses or commercial products or develop

technologies that may be partially or wholly synergistic with Lucid’s lead products and therefore provide the opportunity to create

value, Lucid may also seek to negotiate an arms-length commercial license from PAVmed to market the relevant commercial products that

may originate from PAVmed’s development or acquisition initiatives.

To that end, In March 2022, both the PAVmed and Lucid board

of directors have approved entering into a purchase and sale of the CapNostics, LLC assets from PAVmed to Lucid as well as transferring

the consulting agreement with the previous principal owner of CapNostics, LLC.

The transfer price is $2.1 million

for the assets, the same purchase price paid by PAVmed’s subsidiary.

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 released

in stages over the next several quarters.

believe CarpX is designed to allow the physician to relieve the compression on the median nerve without an open incision or the need

for endoscopic or other imaging equipment.

To use CarpX, the operator first advances a guidewire through the carpal tunnel under the

ligament, and then advanced over the wire and positioned in the carpal tunnel under ultrasonic and/or fluoroscopic guidance.

CarpX balloon is inflated it creates tension in the ligament positioning the cutting electrodes underneath it and creates space within

the tunnel, providing anatomic separation between the target ligament and critical structures such as the median nerve.

Radiofrequency

energy is briefly delivered to the electrodes, rapidly cutting the ligament, and relieving the pressure on the nerve.

We believe CarpX

will be significantly less invasive than existing treatments.

presently have a National Sales Director, one Sales Representative, and one Clinical Specialist that are overseeing our CarpX commercial

As we broaden adoption of the device beyond key opinion leaders.

we intend to commercialize CarpX through a network of independent

sales representatives and/or inventory stocking medical distributors together with our in-house sales management and marketing teams.

Our focus on CarpX, and other high margin products and services, is particularly suitable to this mode of distribution.

margin allows us to properly incentivize our distributors, which in turn allows us to attract the top distributors with the most robust

networks in our targeted specialties.

Independent distributors play an even larger role in many parts of Europe, most of Asia and emerging

markets worldwide.

may also choose to enter into distribution agreements with larger strategic partners whereby we take full responsibility for the manufacturing

of CarpX but outsource some or all of its distribution to a partner, particularly outside the United States, with its own robust distribution

have received ISO 13485:2016 certification for PAVmed’s quality management system and received CE Mark certification for CarpX

in May 2021 which allows it to be marketed in CE Mark European countries, which include the European Economic Area (the EU, Norway, Iceland,

and Lichtenstein), Switzerland, and, until July 1, 2023, the United Kingdom.

is a novel, patented, implantable, intraosseous vascular access device which does not require accessing the central venous system and

does not have an indwelling intravascular component.

It is designed to be highly resistant to occlusion and may not require regular flushing.

It features simplified, near-percutaneous insertion and removal, without the need for surgical dissection or radiographic confirmation.

It provides a near limitless number of potential access sites and can be used in patients with chronic total occlusion of their central

The absence of an intravascular component will likely result in a very low infection rate.

on encouraging animal data, we have initiated a long-term (60-day implant duration) first-in-human clinical study in dialysis patients

or those with poor venous access in Colombia, South America and intend to fulfill the likely FDA request for human clinical data with

a clinical safety study in the U.S.

following FDA clearance of our Investigational Device Exemption (“IDE”) submission to

begin clinical testing in dialysis patients to support a future de novo regulatory submission.

In March of 2022, the First-In-Human implantations

of PortIO devices were successfully performed at the Clinica Porto Azul in Barranquilla, Colombia.

is a patented, disposable, and highly accurate infusion platform technology including intravenous (“IV”) infusion sets and

disposable infusion pumps designed to eliminate the need for complex and expensive electronic infusion pumps for most of the estimated

one million infusions of fluids, medications and other substances delivered each day in hospitals and outpatient settings in the U.S.

NextFlo is designed to deliver highly accurate gravity-driven infusions independent of the height of the IV bag.

It maintains constant

flow by incorporating a proprietary, passive, pressure-dependent variable flow-resistor consisting entirely of inexpensive, easy-to-manufacture

disposable mechanical parts.

NextFlo testing has demonstrated constant flow rates across a wide range of IV bag heights, with accuracy

rates comparable to electronic infusion pumps.

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

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

Notwithstanding, we continue to advance

the technology towards self-commercialization.

We have initiated design freeze verification testing in preparation for final verification

and validation testing of NextFlo IV Infusion Set, to support FDA 510(k) submission and clearance targeted for the second half of 2022.

recently hired a director of sales who will focus on all aspects of NextFlo’s commercial launch including and not limited to creating

and executing the sales strategy, hiring/mentoring the commercial launch team, and collaborating with internal resources on product development

and marketing.

Target customers include Acute Inpatient Care, Outpatient Care, Infusion Centers, Home Infusions, Outpatient Pharmacy,

EMS, and the Department of Defense.

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

In connection

with its formation, Veris Health acquired Oncodisc, a digital health company with groundbreaking tools to improve personalized cancer

care through remote patient monitoring.

was founded by experienced physician entrepreneurs, James Mitchell, M.D., who joins Veris Health as its full-time Chief Medical Officer,

and Andrew Thoreson, M.D., who will serve as a Veris Health consultant.

Oncodisc’s core technologies include the first intelligent

implantable vascular access port with biologic sensors and wireless communication, combined with an oncologist-designed remote digital

healthcare platform that provides patients and physicians with new tools to improve outcomes and optimize the delivery of cost-effective

care through remote monitoring and data analytics.

was founded in 2018 by Mitchell, a radiation oncologist, and Thoreson, an interventional radiologist, who previously co-founded Redsmith,

Inc., an interventional catheter company whose technology was acquired by C.R.

Bard Inc., now BD Inc.

Oncodisc received

a National Science Foundation (“NSF”) Small Business Innovation Research (“SBIR”) grant award to support its

early work and completed both the MedTech Innovator Accelerator and UCSF Rosenman Institute Accelerator programs.

groundbreaking vascular access port contains biologic sensors capable of generating continuous data on key physiologic parameters known

to predict adverse outcomes in cancer patients undergoing treatment.

Wireless communication to the patient’s smartphone and its

cloud-based digital healthcare platform efficiently and effectively delivers actionable real time data to patients and physicians.

technologies are the subject of multiple patent applications and one issued patent.

planned Veris Health business model seeks to generate 100% recurring revenue through oncology practice and hospital-based subscriptions.

These entities would purchase seats on the platform and pay a monthly remote monitoring charge to drive revenues from remote patient

monitoring and device implantation under existing CPT codes, as well as established CMS Oncology Care Model (OCM) bonuses and CMS Quality

Reporting Program incentives.

Veris Health also anticipates strong demand for its intelligent implantable vascular access port and remote

monitoring platform from oncology biotherapeutic companies to support clinical trials of their novel immunotherapy and chemotherapy agents

with continuous physiologic data and transformative analytics.

addition to targeting the oncology market, Veris plan to expand into cardiovascular diseases, end-stage renal disease, and lung disorders

We have already initiated R&D efforts around an enhanced implantable cardiac monitor capable of detecting cardiac arrhythmias

and other physiologic parameters critical for high-risk cardiac patients.

Future devices will combine novel sensing technology with seamless

communication, engaging user interface design, and data analytics driving actionable clinical insights for patients with congestive heart

These technologies will then be expanded for high-risk kidney disease and pulmonary patients.

Medical Devices

Innovations include a diversified and expanding portfolio of innovative products designed to address unmet clinical needs across a broad

range of clinical conditions.

We are evaluating a number of these product opportunities and intellectual property covering a wide spectrum

of clinical conditions, which have either been developed internally or have been presented to us by clinician innovators and academic

medical institutions for consideration of a partnership to develop and commercialize these products.

This collection of products includes:

NextVent (single use ventilators);

FlexMO (medical circulatory support cannulas);

Veris Cariac monitor;

DisappEAR (resorbable

pediatric ear tubes);

and Solys (Noninvasive glucose monitoring).

In June 2020, we announced the execution of a letter of intent

to consummate a series of agreements to develop and utilize Canon Virginia’s commercial grade and scalable aqueous silk fibroin

molding process to manufacture PAVmed’s DisappEAR molded pediatric ear tubes for commercialization.

Furthermore, we are exploring

other opportunities to grow our business and enhance shareholder value through the acquisition of pre-commercial or commercial stage

products and/or companies with potential strategic corporate and commercial synergies.

majority owned subsidiary, Lucid Diagnostics, Inc.

LUCD) is a commercial-stage medical diagnostics technology company focused

on the millions of patients with gastroesophageal reflux disease (GERD), also known as chronic heartburn, acid reflux or simply reflux,

who are at risk of developing esophageal precancer and cancer, specifically highly lethal esophageal adenocarcinoma (EAC).

believe that our lead products, the EsoGuard ® Esophageal DNA Test performed on samples collected with the EsoCheck ®

Esophageal Cell Collection Device, constitute the first and only commercially available diagnostic test capable of serving as a

widespread screening tool to prevent EAC deaths, through early detection of esophageal precancer in at-risk GERD patients.

The technologies

were highlighted in the NCI’s Annual Plan and Budget Proposal for FY2020 to Congress as one of the year’s significant advances

in cancer prevention.

We believe EsoGuard could have as great an impact in preventing EAC deaths as widespread Pap test screening has

had in preventing cervical cancer deaths.

just over three years since our inception, we have advanced the technologies underlying EsoGuard and EsoCheck from the academic research

laboratory to commercial products within scalable business model.

EsoGuard is commercialized in the U.S.

as a Laboratory Developed Test

(LDT) and was granted final Medicare payment determination of $1,938.01, effective January 1, 2021.

EsoCheck is commercialized in the

as a 510(k)-cleared esophageal cell collection device.

EsoGuard, used with EsoCheck, was granted FDA Breakthrough Device designation

and is the subject of two large, actively enrolling, international multicenter PMA clinical trials.

Gastroesophageal

reflux disease (GERD), a pathologic condition in which stomach fluid, including acid, inappropriately refluxes into the lower esophagus,

is ubiquitous and can lead to highly lethal esophageal adenocarcinoma (EAC).

Our opportunity is to prevent EAC deaths through the early

detection of esophageal precancer and cancer in millions of at-risk GERD patients.

2021, approximately 20,000 U.S.

GERD patients are projected to be diagnosed with EAC and approximately 16,000 will die from it.

80% of EAC patients will die within five years of diagnosis, making it the second most lethal cancer in the U.S.

EAC has increased 500% over the past four decades, while the incidences of other common cancers have declined or remained flat.

all cases, EAC silently progresses until it manifests itself with new symptoms of advanced disease.

EAC is nearly always invasive at

diagnosis, and, unlike other common cancers, mortality rates are high even in its earlier stages.

to 50 million, or one in four, U.S.

adults have weekly GERD symptoms.

Although symptoms can be ameliorated with medications, including

proton pump inhibitors (PPIs) such as Nexium® and Prilosec®, medications do not prevent progression to esophageal precancer or

Esophagus (BE) is an esophageal precancer and complication of GERD characterized by pathologic transformation of surface esophageal cells.

Dysplastic BE is a late esophageal precancer characterized by further premalignant pathologic transformation called dysplasia.

is believed to arise from BE as the culmination of pathologic changes along the BE-EAC precancer-cancer spectrum—from nondysplastic

BE (NDBE), to low-grade dysplastic BE (LGD), high-grade dysplastic BE (HGD) and finally EAC.

Dysplastic BE can be cured with endoscopic

esophageal ablation which reliably halts progression to EAC.

subgroup of long-standing or severe GERD patients at-risk for BE and progression to EAC is

well defined in clinical practice guidelines, including the American College of Gastroenterology

(ACG) BE Guidelines.

Risk factors include age over 50 years, male gender, White race, obesity,

smoking history and a family history of BE-EAC.

The ACG BE Guidelines recommend screening

for patients with a five-year history of, or severe, GERD and three or more risk factors.

The highest risk symptomatic GERD cohort recommended for screening consists of the estimated

13 million U.S.

men over 50 with one additional risk factor.

An estimated 60% of at-risk

GERD patients are Medicare beneficiaries.

Unfortunately,

for a variety of reasons, less than 10% of at-risk GERD patients who are recommended for screening undergo traditional invasive upper

gastrointestinal endoscopy (EGD).

We believe that the profound tragedy of an EAC diagnosis is that likely death could have been prevented

if the at-risk GERD patient had been screened and then undergone surveillance and curative endoscopic esophageal ablation of dysplastic

mortality rates are high even in early stage EAC, preventing EAC deaths requires detection and intervention at the precancer stage.

of the necessary elements for such an early detection program are already well established—an at-risk population (at-risk GERD

patients), a precancer (BE), and an intervention which can halt progression to EAC (endoscopic esophageal ablation).

The only missing

element for such an early detection program is a widespread screening tool that can detect BE prior to EAC.

Gastroesophageal

reflux disease (GERD), a pathologic condition in which stomach fluid, including acid, inappropriately refluxes into the lower esophagus,

is ubiquitous and can lead to highly lethal esophageal adenocarcinoma (EAC).

Our opportunity is to prevent EAC deaths through the early

detection of esophageal precancer and cancer in millions of at-risk GERD patients.

and EsoCheck are based on patented technology licensed by Lucid from Case Western Reserve University (“CWRU”).

EsoCheck have been developed to provide an accurate, non-invasive, patient-friendly screening test for the early detection of adenocarcinoma

of the esophagus (“EAC”) and Barrett’s Esophagus (“BE”), including dysplastic BE and related pre-cursors

to EAC in patients with chronic gastroesophageal reflux (“GERD”).

2023, approximately 20,000 U.S.

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diagnosis, and, unlike other common cancers, mortality rates are high even in its earlier stages.

to 50 million, or one in four, U.S.

adults have weekly GERD symptoms.

Although symptoms can be ameliorated with medications, including

proton pump inhibitors (PPIs) such as Nexium ® and Prilosec ® , medications do not prevent progression to

esophageal precancer or cancer.

Esophagus (BE) is an esophageal precancer and complication of GERD characterized by pathologic transformation of surface esophageal cells.

Dysplastic BE is a late esophageal precancer characterized by further premalignant pathologic transformation called dysplasia.

is believed to arise from BE as the culmination of pathologic changes along the BE-EAC precancer-cancer spectrum—from nondysplastic

BE (NDBE), to low-grade dysplastic BE (LGD), high-grade dysplastic BE (HGD) and finally EAC.

Dysplastic BE can be cured with endoscopic

esophageal ablation which reliably halts progression to EAC.

subgroup of long-standing or severe GERD patients at-risk for BE and progression to EAC is well defined in clinical practice guidelines,

including the American College of Gastroenterology (ACG) BE Guidelines.

Risk factors include age over 50 years, male gender, White race,

obesity, smoking history and a family history of BE-EAC.

The ACG BE Guidelines recommend screening for patients with a five-year history

of, or severe, GERD and three or more risk factors.

The highest risk symptomatic GERD cohort recommended for screening consists of the

discussed below under the heading “Clinical Guidelines for At-Risk Population”, the American Gastroenterology Association

(“AGA”) recently significantly expanded the target population for esophageal precancer screening, recommending screening

in at-risk patients without symptoms of GERD.

Based on this revision, we believe the cohort recommended for screening consists of an

estimated 30 million U.S.

men over 50 with one additional risk factor.

An estimated 60% of at-risk GERD patients are Medicare beneficiaries.

individuals with at least 3 established risk factors for BE.

Accordingly, we believe EsoGuard’s total

addressable U.S.

market opportunity exceeds $60 billion based on an effective Medicare payment of $1,938 and the estimated 30 million

patients recommended for screening by clinical practice guidelines.

(In December 2019, we secured “gapfill” determination

for EsoGuard’s PLA code 0114U through the CMS CLFS process.

This allowed us to engage directly with Medicare contractor Palmetto

GBA and its MolDx Program on CMS payment and coverage.

In October 2020, CMS granted EsoGuard final Medicare payment determination of

$1,938.01, effective January 1, 2021.)

Unfortunately,

for a variety of reasons, less than 10% of at-risk GERD patients who are recommended for screening undergo traditional invasive upper

gastrointestinal endoscopy (EGD).

We believe that the profound tragedy of an EAC diagnosis is that likely death could have been prevented

if the at-risk GERD patient had been screened and then undergone surveillance and curative endoscopic esophageal ablation of dysplastic

for a variety of reasons, less than 10% of at-risk patients who are recommended for screening undergo traditional invasive upper gastrointestinal

endoscopy (EGD).

We believe that the profound tragedy of an EAC diagnosis is that likely death could have been prevented if the at-risk

patient had been screened and then undergone surveillance and curative endoscopic esophageal ablation of dysplastic BE.

mortality rates are high even in early stage EAC, preventing EAC deaths requires detection and intervention at the precancer stage.

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capable of serving as a widespread screening tool to prevent EAC deaths through early detection of esophageal precancer and cancer in

at-risk GERD patients.

is a bisulfite-converted next-generation sequencing (NGS) DNA assay performed on surface esophageal cells collected with EsoCheck.

quantifies methylation at 31 sites on two genes, Vimentin (VIM) and Cyclin A1 (CCNA1).

The assay was evaluated in a 408-patient multicenter

case-control study published in Science Translational Medicine, and showed greater than 90% sensitivity and specificity at detecting

esophageal precancer and all conditions along the BE-EAC spectrum, including on samples collected with EsoCheck (Moinova, et al.

2018 Jan 17;10(424):

Large ongoing clinical trials seek to replicate these results, including a prospective

screening study of at-risk GERD patients.

EsoGuard is commercially available in the U.S.

as a Laboratory Developed Test (LDT) performed

at our CLIA-certified laboratory partner, ResearchDx Inc.

dba PacificDx.

is an FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells

in a less than five-minute office.

It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone catheter from

which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells.

When vacuum suction is applied, the

balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted

region during device withdrawal.

We believe this proprietary Collect+Protect ™ technology makes EsoCheck the only noninvasive

esophageal cell collection device capable of such anatomically targeted and protected sampling.

The sample is sent by overnight express

mail to our third-party CLIA-certified laboratory partner for EsoGuard testing.

Status of EsoGuard and EsoCheck

patients with 3 or more risk factors.

Guidelines for At-Risk Population

subgroup of long-standing or severe GERD patients at-risk for BE and progression to EAC is well defined in clinical practice guidelines,

including the American College of Gastroenterology (ACG) BE Guidelines.

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.

ACG clinical guideline entitled “ Diagnosis and Management of Barrett’s Esophagus:

An Updated ACG Guideline ,”

the first such update since 2016, was published online last year in the American Journal of Gastroenterology.

The clinical guideline

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

For the first

time, however, the clinical guideline also endorses nonendoscopic biomarker screening as an acceptable alternative to costly and invasive

endoscopy stating that “a swallowable nonendoscopic capsule device combined with a biomarker is an acceptable alternative to endoscopy

for BE.” The clinical guideline specifically mentions EsoCheck, along with Lucid’s 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 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 AGA published in their “Clinical Practice Update on New Technology and Innovation for Surveillance and Screening

in Barrett’s Esophagus” updated clinical guidance that mirrors the same furnished by the ACG as described above, endorsing

the use of non-endoscopic cell collection tools to screen for BE like our EsoCheck Cell Collection Device, which is cited in the update,

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 of GERD.

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.

Commercialization

EsoGuard commercialization efforts span multiple channels including targeting primary care physicians and GI physicians, who have generally

embraced our message that EsoGuard has the potential to expand the funnel of BE-EAC patients who will need long term EGD surveillance

and, potentially, treatment with endoscopic esophageal ablation.

assure sufficient testing capacity and geographic coverage, we have built our own network of Lucid Test Centers, staffed by Lucid-employed

clinical personnel, where patients can undergo the EsoCheck procedure and have the sample sent for EsoGuard testing at Lucid’s

CLIA-certified laboratory.

Our current test center network currently includes locations in metropolitan areas in Arizona, California,

Colorado, Florida, Idaho, Illinois, Nevada, Ohio, Oregon, Texas and Utah.

addition to our base test center network, Lucid has established a satellite test center program, whereby we are expanding our footprint

by making our personnel available to perform cell collection services in physician offices.

Further, we have sought to expand our outreach

by successfully conducting multiple “#CheckYourFoodTube Precancer Testing Event” for organizations such as the San Antonio

Fire Department, where samples are collected from the organization’s employees for testing with EsoGuard at Lucid’s CLIA-certified

have also established an EsoGuard Telemedicine Program, in partnership with UpScript, LLC, an independent third-party telemedicine provider,

that accommodates EsoGuard self-referrals from direct-to-consumer marketing.

Reimbursement

and Market Access

noted above, in December 2019, we secured “gapfill” determination for EsoGuard’s PLA code 0114U through the CMS CLFS

This allowed us to engage directly with Medicare contractor Palmetto GBA and its MolDx Program on CMS payment and coverage.

In October 2020, CMS granted EsoGuard final Medicare payment determination of $1,938.01, effective January 1, 2021.

proposed Local Coverage Determination (“LCD”) DL39256, entitled “ Molecular Testing for Detection of Upper Gastrointestinal

Metaplasia, Dysplasia, and Neoplasia ” was published recently on the Center for Medicare and Medicaid Services (“CMS”)

website by MAC Palmetto GBA.

The proposed LCD is a further step in Lucid’s efforts to secure Medicare coverage and payment for

The proposed LCD, which the CMS website explicitly characterizes as a “work in progress” for “public review,”

outlines criteria that MolDX expects upper gastrointestinal precancer and cancer molecular diagnostic tests to meet.

These criteria include

active GERD with at least two risk factors, as well as evidence of analytic validity, clinical validity, and clinical utility.

the proposed LCD indicated that it found that no currently existing test has fulfilled all criteria, it indicated that it will “monitor

the evidence and will provide coverage based on the pertinent literature and society recommendations.” Notably, the proposed LCD

pre-dated, and therefore does not include consideration of, the most recent AGA clinical practice update endorsing swallowable, nonendoscopic

capsule devices combined with a biomarker, such as EsoCheck and EsoGuard, as an alternative to endoscopy.

The publication of the proposed

LCD triggers a written comment period, and MolDX also held an open meeting on May 10, 2022, during which stakeholders and other interested

parties will have the opportunity to address the proposed LCD.

We presented at the public meeting and made a written submission during

the comment period as well.

A final LCD will not be issued until the MAC has had the opportunity to assess and consider all stakeholder

we await a Palmetto MolDX LCD coverage determination, Lucid is aggressively pursuing EsoGuard commercial insurer payment and coverage.

Although the claim adjudication cycle can be prolonged during the early commercialization of a new test, Lucid has received out-of-network

commercial insurance payments for the EsoGuard test, and has entered into agreements with insurers that provide access to, in the aggregate,

over 70 million patients.

Utility and Clinical Trials

Demonstrating

EsoGuard’s clinical utility, which requires providing evidence that the test has a meaningful impact on clinical practice, is very

important for a variety of purposes, including, importantly, for Medicare and private payor payment and coverage.

It has been established

that one of the most important factors to private payors in deciding whether to grant payment and coverage will be demonstration that

the EsoGuard test, when ordered by physicians, provides information that can be used to

identify or exclude patients who would benefit from additional management and/or treatment.

Clinical utility studies are also important

for general EsoGuard commercialization by facilitating physician understanding of test indications and potential benefit to the patients.

are currently seeking to accelerate our collection of clinical utility data through a range of trials that can be efficiently executed.

These efforts include a planned investigator-initiated, retrospective analysis of prospectively collected data on the approximately 400

San Antonio fire fighters who underwent testing as part of a community-sponsored cancer awareness event (in

respect of which we expect to publish results in the first half of 2023) ;

an ongoing investigator-initiated, retrospective, single-center,

study with 500 patients (in respect of which we expect to publish results mid-2023), a virtual-patient randomized controlled trial with

intended recruitment of 100-200 physician participants (in respect of which we expect to publish

results this year) ;

a Lucid-sponsored multi-center, prospective, observational study with 500 patients;

and a Lucid-sponsored

registry at existing Lucid Test Centers, whereby all patients undergoing EsoCheck testing will be given the opportunity to provide informed

consent and contribute data about their risk factors, EsoGuard results, and subsequent diagnostic and/or therapeutic journey.

Both Lucid-sponsored

observational/registry studies expect to have preliminary results and/or interim analysis before the end of 2023.

previously disclosed, consequently, we have decided to delay for the time being the two previously commenced clinical trials, the “EsoGuard

screening study” (“BE-1”) and the “EsoGuard case-control study” (“BE-2”), as we are devoting

our clinical resources to the studies cited above, which we expect will more efficiently generate the clinical data we are currently

prioritizing to drive EsoGuard commercialization.

Manufacturing

is currently manufactured for us by our partners Coastline International, a high-volume device manufacturer, and Sage Product

Through mid-2023, we expect to further transition from Sage to Coastline as the manufacturing process is further

Our current line capacity can produce up to 25,000 units per year.

With Coastline’s improvement and expansion,

there is capacity to scale exponentially.

Our EsoGuard Specimen Kits are currently manufactured for us by our partner Path-Tec.

warehousing, logistics, fulfillment and customer support of our products is managed for us by our partners HealthLink International

(a leading third-party logistics company) and Path-Tec.

the terms of Lucid’s license agreement with Case Western Reserve University (“CWRU”), Lucid acquired an exclusive worldwide

right to use the intellectual property rights to the EsoGuard and EsoCheck technology for the detection of changes in the esophagus and

on sample preservation.

Lucid is required to pay CWRU royalties on net sales of licensed products as follows:

5% of net sales of less

than $100 million per year;

and 8% of net sales greater than $100 million per year.

Lucid is also required to pay CWRU minimum annual

royalty payments as follows:

$50,000 per year, beginning January 1 following the first anniversary of a commercial sale of a licensed

$150,000 per year, if net sales of a licensed product exceed $25 million in a year;

$300,000 per year, if net sales of a licensed

product exceed $50 million in a year;

and $600,000 per year, if net sales of a licensed product exceed $100 million in a year.

yearly royalty amounts are subject to increase based on the percentage change in the CPI-W Consumer Price Index and are credited against

the royalties otherwise due.

The license agreement was subject to four regulatory and commercialization milestones, of which one remains

unachieved and unpaid.

The remaining milestone is the FDA PMA submission of a licensed product, upon the achievement of which we will

pay CWRU a milestone payment of $200,000.

The license agreement terminates upon the expiration of the last-to-expire licensed patent,

or on May 12, 2038, in countries where no such patents exist, or upon expiration of any exclusive marketing rights for a licensed product

that have been granted by FDA or other U.S.

government agency, whichever comes later.

The EsoCheck patents, which are currently the last

to expire, begin to expire in May 2035.

June 2019, we received FDA 510(k) clearance to market EsoCheck in the U.S.

as a device indicated for use in the collection and retrieval

of surface cells of the esophagus in adults.

In December 2019, our CLIA-certified laboratory partner, completed documentation of EsoGuard

analytical validity allowing us to commercialize it as a Laboratory Developed Test (LDT).

In May 2021, we received CE Mark certification

for EsoCheck, and in June 2021, we completed CE Mark self-certification for EsoGuard, indicating both may be marketed in CE Mark European

status as a commercially available LDT is dependent on the FDA exercising enforcement discretion for LDTs.

Notwithstanding the fact that

FDA has exercised such discretion despite indicating through non-binding communications and documents it might consider no longer doing

so, and the fact that HHS recently forbade FDA from requiring premarket review of LDTs absent a formal rulemaking process, pending legislation

seeking to revamp the regulatory framework of diagnostic tests keeps the regulatory landscape for LDTs such as EsoGuard uncertain.

mitigate that risk long-term, we have decided to pursue FDA PMA approval for EsoGuard, as an IVD.

In October 2019, we participated in

a FDA pre-submission meeting and received feedback on a proposed initial indication for use and the design of our two international multi-center

clinical studies to support a PMA application for FDA approval of EsoGuard on samples collected with EsoCheck.

We expect to complete

enrollment by the end of 2022 and submit our PMA by early 2023.

Manufacturing

is currently manufactured for us by our partner Sage Product Development Inc.

on a line that can produce over ten thousand units per

In July 2021 we entered into an agreement to transfer the EsoCheck manufacturing line to high-volume manufacturer Coastline International

The initial term of the agreement expires on September 1, 2023, subject to automatic renewal for successive two-year terms unless

either party notifies the other of intent to terminate the agreement no less than 90 days prior to the initial termination date or the

expiration of any successive term.

The agreement, as amended, provides per unit pricing for up to 250,000 units per year, a non-recurring

charge to cover the costs associated with the transfer process, and a detailed timeline that allows for the flexibility to move production

to Coastline later in 2022 as test volumes increase.

The manufacturing line is being designed to allow capacity to be scaled to over

one million units per year.

Our EsoGuard Specimen Kits are manufactured for us by our partner ResearchDx and can be transferred to a

higher volume manufacturer whenever demand dictates.

The warehousing, logistics, fulfillment and customer support of our products is

managed for us by our partner HealthLink International, a leading third-party logistics company.

Reimbursement

December 2019, we secured “gapfill” determination for EsoGuard’s PLA code 0114U through the CMS CLFS process.

allowed us to engage directly with Medicare contractor Palmetto GBA and its MolDx Program on CMS payment and coverage.

In October 2020,

CMS granted EsoGuard final Medicare payment determination of $1,938.01, effective January 1, 2021.

We are still awaiting Medicare local

coverage determination from MolDx, which we understand is working to clear a significant backlog of reviews.

are also aggressively pursuing EsoGuard U.S.

private payor payment and coverage.

We recently held our first advisory board meeting with

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

and coverage.

Although the claim cycle can be prolonged during the early commercialization of a new test, PacificDx has received out-of-network

private insurance payments on our behalf.

Commercialization

initial EsoGuard commercialization efforts on gastroenterology (GI) physicians who have generally embraced our message that EsoGuard

has the potential to expand the funnel of BE-EAC patients who will need long-term EGD surveillance and, potentially, treatment with endoscopic

esophageal ablation.

At the outset of our commercialization, we utilized a hybrid sales model with full-time sales management but have

since transitioned and significantly expanded our full-time commercial team in 2021 and are actively recruiting full-time territory market

develop managers and sales representatives nationwide.

EsoGuard testing has begun accelerating as pandemic-related healthcare facility

limitations have eased.

are now expanding EsoGuard commercialization to target primary care physicians (PCPs).

The vast majority of at-risk GERD patients are

cared for by PCPs and never see a gastroenterologist.

To assure sufficient testing capacity and geographic coverage during this expansion,

we are building our own network of Lucid Test Centers, where Lucid-employed clinical personnel will perform the EsoCheck procedure for

EsoGuard testing.

We have hired personnel and leased medical office space and have launched three pilot Lucid Test Centers in the Phoenix

metropolitan area and added centers in Utah, Colorado, and Nevada.

We are presently focused on adding Centers in Oregon, Washington,

Additionally, we have established an EsoGuard Telemedicine Program, in partnership with an independent third-party telemedicine

provider, that can accommodate EsoGuard self-referrals from direct-to-consumer marketing.

In July 2021, we entered into an agreement

with UpScript, LLC (“UpScript”) to develop and operate a web-based platform to allow individuals access to licensed physicians

and healthcare professionals in order to engage in a telemedicine consult.

UpScript will develop, operate, and maintain a Lucid website

for individuals to request a Laboratory Test and access physicians and other healthcare professionals that are each qualified by law

for professional services they are providing.

The Lucid website will have the ability to transmit the requests from individuals and return

a test order, if authorized.

UpScript will transmit any such test order to the CLIA-certified laboratory directed by Lucid in order arrange

for the performance of the specimen collection with the EsoCheck and performance of the laboratory test (EsoGuard).

Research & Development

active clinical research and development program seeks to expand the clinical evidence of our products’ efficacy to support our

ongoing regulatory, reimbursement and commercial efforts.

We are actively enrolling patients in two international multicenter clinical

trials to support FDA PMA approval of EsoGuard, used with EsoCheck, as an IVD indicated to detect NDBE.

ESOGUARD-BE-1 is a screening

study which will enroll approximately 500 to 900 male GERD patients over 50 years of age with one other risk factor.

ESOGUARD-BE-2 is

a case control study which will enroll approximately 500 male GERD patients with a previous diagnosis of NDBE, LGD, HGD, or EAC, along

with normal controls.

Approximately one-half of the U.S.

sites and one European site are actively enrolling.

We expect to complete enrollment

in both trials by the end of 2022 or the early part of 2023 and submit our PMA to FDA by mid-2023.

Growth Strategy

believe EsoGuard’s total addressable U.S.

market opportunity exceeds $25 billion based on an effective Medicare payment of $1,938

and the over 13 million U.S.

male at-risk GERD patients recommended for screening by clinical practice guidelines.

We believe that EsoGuard,

used with EsoCheck, as the first and only commercially available test capable of serving as a widespread BE-EAC screening tool, has the

potential to become the standard of care to detect esophageal precancer in at-risk GERD patients.

EsoGuard Commercialization Across Multiple Channels

first pillar of our overall growth strategy is to expand EsoGuard commercialization across multiple channels, targeting primary care

physicians (PCPs) and consumers in addition to GI physicians.

We continue to accelerate the expansion of our sales and marketing team

targeting these multiple channels.

have the opportunity to educate PCPs that GERD can lead to EAC, and that, for the first time, they can refer their at-risk GERD patients

for testing using a non-endoscopic alternative to EGD.

We believe our Lucid Test Centers will play a critical role in significantly growing

EsoGuard testing from PCP referrals.

After advancing the pilot program in Phoenix, we are steadily expanding our Lucid Test Centers to

other metropolitan areas, first in Western U.S.

states and then nationwide.

believe that direct-to-consumer (DTC) education and marketing will help drive our long-term growth.

We believe that educating consumers

on the link between GERD and BE-EAC, and the availability of a simple noninvasive test to detect esophageal precancer, will encourage

those at risk to consider EsoGuard testing.

We have launched an EsoGuard Telemedicine Program with DTC marketing in Phoenix and will

expand it to other metropolitan areas once we demonstrate an acceptable return on investment.

Our Clinical Evidence to Support Commercialization, Reimbursement and Regulatory Efforts

second pillar of our growth strategy is to aggressively expand the clinical evidence for our products to support our commercialization,

reimbursement and regulatory efforts, as well as to secure recommendations in clinical practice guidelines, an important value creation

We are currently undertaking multiple ongoing and future clinical trials to build this evidence.

seek to accelerate completion of our ongoing ESOGUARD-BE-1 and ESOGUARD-BE-2 clinical trials to support FDA PMA approval of EsoGuard,

used with EsoCheck, as an IVD.

We will then work with FDA, pursuant to our Breakthrough Device designation, to extend the ESOGUARD-BE-1

to enroll sufficient patients to support an expanded indication to detect dysplastic BE, a substantial but potentially highly rewarding

Finally, we are planning several EsoGuard/EsoCheck clinical utility studies, including a large registry and a study using

electronic medical record screening to assess an EsoGuard-driven strategy to find BE-EAC disease in at-risk GERD patients.

Our Manufacturing and Laboratory Testing Capacity

are in the process of scaling our operational capacity, enhance efficiency and improve operating margins as demand for our products grows.

We will complete transfer of EsoCheck manufacturing to a high-volume partner in 2022, which will provide sufficient long-term manufacturing

capacity and substantially lower per-unit cost of goods.

We anticipated doing the same for EsoGuard Specimen Kit manufacturing as demand

Although the CLIA-certified laboratory at ResearchDX has sufficient capacity to meet EsoGuard testing for the medium-term,

we believe it is in our long-term interest to secure our own CLIA-certified laboratory, to increase capacity further, streamline billing

and claims management, and decrease per-test cost of goods.

On February 25.

2022, Lucid Diagnostics new, wholly owned subsidiary, LucidDx

acquired from ResearchDx, Inc., a CLIA-certified, CAP-accredited clinical laboratory operator located in Irvine, CA, 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.

Our Product Portfolio

seek to expand our product portfolio with at least two highly synergistic technologies under development—BE-EAC progression markers

and PAVmed’s EsoCure device—that would create a fully integrated suite of products to address the diagnosis, monitoring and

treatment of BE-EAC.

We have the opportunity to license and develop biomarkers with the potential to discriminate between NDBE and dysplastic

BE on samples collected with EsoCheck, which we believe would revolutionize NDBE surveillance.

When dysplastic BE is identified, endoscopic

esophageal ablation is indicated to cure the BE and halt progression to EAC.

EsoCure has certain key features which give it the potential,

once cleared and clinically available, to unseat the dominant RF ablation technology.

We intend to pursue these and any other technologies

which synergize with our lead products, improve our competitive position or otherwise provide the opportunity to create value.

of 2022, both the PAVmed and Lucid boards approved entering into an intercompany license agreement for Lucid to formally license EsoCure.

of surface cells of the esophagus in adults followed by FDA 510(k) clearance in 2022, expanding the use of EsoCheck in adults and pediatric

populations in the U.S.

In December 2019, our CLIA-certified then-laboratory partner, completed documentation of EsoGuard analytical

validity allowing us to commercialize it as a Laboratory Developed Test (LDT).

February 2020, we received FDA “Breakthrough Device Designation” for EsoGuard as an in-vitro diagnostic (“IVD”)

medical device.

The FDA Breakthrough Device Program was created to offer patients more timely access to breakthrough technologies which

provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions by expediting

their development, assessment and review through enhanced communications and more efficient and flexible clinical study design, including

more favorable pre/post market data collection balance.

The Centers for Medicare and Medicaid Services and the United States Congress

continue to work to provide an expedited coverage pathway for emerging technologies.

May 2021, we received CE Mark certification for EsoCheck (under the Medical Devices Directive 93/42/EEC), and in June 2021, we completed

CE Mark self-certification for EsoGuard (under the European In-Vitro Diagnostic Devices Directive (IVDD 98/79/EC)), indicating both may

be marketed in CE Mark European countries.

longer-term strategy is to secure a specific indication, based on published guidelines, for BE screening in certain at-risk populations

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This use of EsoGuard together with EsoCheck as a screening system must be cleared

or approved by the FDA as an in vitro diagnostic (“IVD”), device.

In September 2019, we entered into an agreement with a

clinical research organization to assist us with two ongoing clinical trials for EsoGuard as an IVD device, which are actively enrolling

patients and consist of a screening study (ESOGUARD-BE-1) and a case control study (ESOGUARD-BE-2).

screening study is enrolling GERD patients without a prior diagnosis of BE or EAC who satisfy ACG BE screening guidelines.

The case control

study is enrolling patients with a previous diagnosis of non-dysplastic BE, dysplastic BE (both low and high-grade) or EAC.

In both studies,

EsoGuard is comparing to the gold standard of endoscopy with biopsies.

In February 2020, EsoGuard has received Breakthrough Device designation

from the FDA for its EsoGuard Esophageal DNA Test on esophageal samples collected using its EsoCheck Cell Collection Device in a prevalent

well-defined group of patients at elevated risk for esophageal dysplasia due to chronic GERD.

Breakthrough Device

Food and Drug Administration “Breakthrough Device” designation relates to the FDA’s Breakthrough Device Program

that was created to offer patients more timely access to breakthrough technologies which provide for more effective treatment or diagnosis

of life-threatening or irreversibly debilitating human disease or conditions by expediting their development, assessment and review through

enhanced communications and more efficient and flexible clinical study design, including more favorable pre- and post-market data collection.

Breakthrough Devices receive priority FDA review, and the Centers for Medicare and Medicaid Services and the United States Congress continue

to work to provide an expedited coverage pathway for emerging technologies.

to our Breakthrough Device discussions with FDA, we intend to extend enrollment in the ESOGUARD-BE-1 screening study until it is sufficiently

powered to support expansion to the above proposed indication for use to include detection of dysplastic BE.

FDA indicated that although

they would have preferred to a study powered for HGD, they understood that the study size would be impracticable and that they would

be open to including LGD.

It also indicated that it would consider study designs with some enrichment and, potentially, interim analysis

and approval to mitigate sample size.

We will be working with FDA to finalize an extension of our current screening study to support

such an expanded dysplastic BE indication once FDA resumes Breakthrough Device meetings for IVDs, which are currently on hold as the

branch works to clear a Covid-19 pandemic related backlog.

This study will be a substantial, capital-intensive, but potentially highly

rewarding undertaking.

Although the study size is yet to be determined and will depend on negotiations with FDA, it will be in the thousands.

Clinical Utility Studies

Demonstrating

EsoGuard clinical utility requires providing evidence that it has a meaningful impact on the clinical care of patients undergoing the

It does not require demonstrating the performance of the assay, i.e.

, the negative and positive predictive values.

Our PMA trials are designed and powered to do so.

Clinical utility studies need to demonstrate that patients with a positive EsoGuard

test undergoes confirmatory EGD which leads to a specific intervention, e.g.

, implementation of an NDBE surveillance program or

ablation of dysplastic BE.

Ideally, the near-term EGD rate of EsoGuard negative patients should be low.

In other words, EsoGuard testing

should be able to triage patient to EGD vs.

no EGD, with EGD positive patients receiving an intervention, which would not have happened

if the patient had not been triaged by EsoGuard.

Demonstrating

EsoGuard’s clinical utility is very important for a variety of purposes, including, importantly, for private payor payment and

Our recent advisor board meeting with medical directors of private insurers confirmed this.

They strongly indicated that one

of the most important factors in their future decision to grant payment and coverage will be demonstrating that physicians order the

test and, when they do, that clinical utility can be demonstrated.

utility studies are also important for general EsoGuard commercialization to physician who want to know that it can “find disease”.

A recent U.K.

study from Dr.

Fitzgerald’s team is a good example.

They published a large study of GERD patients in a primary care

setting who underwent screening with Cytosponge/TFF-3 and showed that they were able to identify patients with BE and the occasional

This was not a performance study with routine EGD so the authors could not say how many BE-EAC patients were missed, which was likely

non-trivial given the published data on suboptimal Cytosponge/TFF-3 performance.

However, the study was useful in convincing U.K.

to initiate mobile testing centers around the country.

shortly will launch an EsoGuard Registry study as our primary study to demonstrate clinical utility.

Every patient undergoing EsoCheck

testing will be asked to provide informed consent for us to collect limited post-procedural data from the patient’s physician on

care received after EsoGuard testing, most importantly whether they underwent EGD and, if so, what the results showed.

are also in discussions with a large academic medical center to initiate a clinical utility study in which investigators would use the

network-wide electronic medical record to systematically identify at-risk GERD patients, offer them EsoGuard testing and compare them

to historical controls also identified from the database.

The study would seek to demonstrate that an EsoGuard-guided strategy identifies

more BE-EAC patient than historical practice.

we are helping investigators at a VA medical center launch a Department of Defense supported study to compare the positive predictive

value of EsoGuard followed by EGD compared to EGD alone and the relative costs of each strategy.

The study would seek to demonstrate

that EsoGuard increases the positive rate of EGD, an important measure of the clinical utility of a noninvasive diagnostic test.

Esophagitis Using EsoCheck

are exploring additional EsoCheck applications beyond our core focus of BE-EAC.

The application with the greatest potential may be the

monitoring of patients with Eosinophilic Esophagitis (EoE).

EoE is a rapidly emerging allergy-mediated inflammatory condition of the

esophagus similar to, and often associated with, inflammatory bowel disease (IBD).

Although underappreciated by the medical community

and frequently confused with GERD, EoE has a prevalence comparable to IBD and exacts a significant burden on patients.

It can lead to

swallowing difficulties, esophageal scarring, food impaction and pain.

Current treatment includes oral steroids and an elimination diet.

Several anti-inflammatory biologics are being evaluated to treat EoE.

Since inflammation can persist despite resolution of symptoms,

treatment courses can be very difficult and costly for patients, requiring multiple and frequent invasive endoscopies with biopsies.

To date, efforts to replace endoscopy with a noninvasive diagnostic device have proven unsuccessful.

March 2020, we entered into a clinical trial research agreement with the University of Pennsylvania to perform a pilot study to assess

whether EsoCheck can detect the eosinophils characteristic of active EoE and potentially serve as a less-invasive, more efficient, and

cost-effective alternative to endoscopic biopsies in the management of EoE patients.

The study, entitled “ Pilot Study of EsoCheck

Compared to Biopsies and Brush Cytology During Endoscopy for Evaluation of Eosinophilic Esophagitis ”, was led by Gary W.

M.D., an internationally renowned expert on esophageal disease with specific experience and expertise in the management of EoE.

which has been completed, was a prospective cross-sectional pilot feasibility study of ten patients with suspected or established EoE

scheduled for a clinically indicated upper endoscopy.

The patients underwent esophageal sampling using EsoCheck, with the sample sent

for traditional cytologic analysis, followed by EGD, including brushings and biopsies.

The study results have yet to be published but

preliminary reports indicate that EsoCheck is able to detect a meaningful number of eosinophils in patients with active disease.

already initiated discussions with Dr.

Falk to lead a larger multicenter follow-up study powered to document EsoCheck’s sensitivity

and specificity in detecting active EoE, compared to EGD with brushings and biopsy.

and EsoCheck Intellectual Property

Diagnostics business will depend on proprietary medical device and diagnostic technologies, including the EsoCheck and EsoGuard technology

licensed by us.

We intend to vigorously protect our proprietary technologies’ intellectual property rights in patents, trademarks

and copyrights, as available through registration in the United States and internationally.

Patent protection and other proprietary rights

are thus essential to our Diagnostics business.

The EsoCheck and EsoGuard technology is protected by patents in the United States and

internationally, and our policy is to continue to aggressively file patent applications, both independently and in collaboration with

CWRU, as appropriate, to protect this technology and other proprietary technologies of ours relating to our Diagnostics business, including

inventions and improvements to inventions.

Under the CWRU License Agreement, CWRU has agreed to apply for patent coverage, at our expense,

in any country requested by us, to the extent such protection is reasonably attainable.

We seek patent protection, as appropriate, on:

product itself including all embodiments with future commercial potential;

methods of using the product;

methods of manufacturing the product.

addition to filing and prosecuting patent applications in the United States, we intend to file counterpart patent applications in Canada,

the European Union and other countries worldwide.

Foreign filings can be cumbersome and expensive, and we will pursue such filings when

we believe they are warranted as we try to balance our international commercialization plans with our desire to protect the global value

of the technology.

term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.

In most countries

in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application.

In the United States,

a patent’s term may be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution

by the patentee, and a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative

delays by the USPTO in granting a patent.

intend to continuously reassess and fine-tune our intellectual property strategy in order to fortify the position of our Diagnostics

business in the United States and internationally.

Prior to acquiring or licensing a technology from a third party, we will evaluate

the existing proprietary rights, our ability to adequately obtain and protect these rights and the likelihood or possibility of infringement

upon competing rights of others.

will also rely upon trade secrets, know-how, continuing technological innovation, and may rely upon licensing opportunities in the future,

to develop and maintain our competitive position in our Diagnostics business.

We intend to protect our proprietary rights through a variety

of methods, including confidentiality agreements and/or proprietary information agreements with suppliers, employees, consultants, independent

contractors and other entities who may have access to proprietary information.

We will generally require employees to assign patents

and other intellectual property to us as a condition of employment with us.

All our consulting agreements will pre-emptively assign to

us all new and improved intellectual property that arise during the term of the agreement.

and EsoCheck Competition

or approved by the FDA as an IVD device.

February 25, 2022, our new, 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.

Since March 2022, we have conducted EsoGuard testing at our own laboratory with, until recently, the assistance of

RDx, which had continued to provide certain testing and related services for the laboratory in accordance with the terms of a management

services agreement (“MSA-RDx”), dated and effective February 25, 2022.

Recently, however, the Company accelerated the development

of internal resources necessary to operate the laboratory entirely on its own.

Accordingly, Lucid’s subsidiary LucidDx Labs and

RDx agreed terminate the MSA-RDx effective as of February 10, 2023, such that LucidDx Labs now operates the laboratory itself, which

the Company believes will improve the efficiency of the performance of the EsoGuard assay.

market for esophageal cancer (i.e., EAC) and pre-cancer (i.e., BE, with or without dysplasia) screening is large, consisting of

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test faces competition from procedure-based detection technologies such as upper endoscopy, and other screening technologies such as

pill-based imaging solutions like PillCam Eso, cleared by the FDA in November 2004, and transnasal esophagoscopy, a flexible tube with

a miniature camera that is inserted into the nose and advanced through the esophagus into the upper portion of the stomach.

device faces competition from other manufactures with devices designed to collect cell samples from targeted regions of the esophagus.

For example, Cytosponge is a small mesh sponge within a soluble gelatin capsule that dissolves in the stomach and then is pulled thru

the targeted region brushing the lining of the esophagus and then later retrieved, although, unlike EsoCheck, it is unprotected from

contamination.

Interpace Diagnostics (Nasdaq:

IDXG), NeoGenomics (Nasdaq:

NEO) and Cernostics (private) are developing progression type

test for known patients with BE aimed at assessing or predicting the likely development of EAC.

Our competitors may also be developing

additional methods of detecting esophageal cancer and pre-cancer that have not yet been announced.

the market for our Diagnostics products is highly competitive and is characterized by extensive research and clinical efforts and rapid

technological change.

In order to compete effectively, EsoGuard and EsoCheck will have to achieve market acceptance, receive adequate

insurance coverage and reimbursement, be cost effective and be simultaneously safe and effective.

We believe that the principal competitive

factors in our markets are:

accuracy and the quality of outcomes for medical conditions;

by physicians and the medical device market generally;

of use and reliability;

leadership and superiority;

marketing and distribution;

price and qualification for coverage and reimbursement.

multi-cancer early detection products.

Our EsoCheck device faces competition from other manufactures with devices designed to collect

cell samples from targeted regions of the esophagus.

For example, Cytosponge is a small mesh sponge within a soluble gelatin capsule

that dissolves in the stomach and then is pulled thru the targeted region brushing the lining of the esophagus and then later retrieved,

although, unlike EsoCheck, it is unprotected from contamination.

Our competitors may also be developing additional methods of detecting

esophageal cancer and pre-cancer that have not yet been announced.

the market for our products is highly competitive and is characterized by extensive research and clinical efforts and rapid technological

In order to compete effectively, EsoGuard and EsoCheck will have to achieve market acceptance, receive adequate insurance coverage

and reimbursement, be cost effective and be simultaneously safe and effective.

We believe that the principal competitive factors in our

diagnostic accuracy and the quality of outcomes for medical conditions;

acceptance by physicians and the medical device market generally;

ease of use and reliability;

technical leadership and superiority;

effective marketing and distribution;

speed to market;

product price and qualification for coverage and reimbursement.

of our existing and potential competitors have substantially greater financial, marketing, sales, distribution, manufacturing and technological

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to respond to such technical advances.

Notwithstanding

that the market for BE and EAC screening is highly competitive, we believe that EsoCheck, currently cleared by the FDA pursuant to a

510(k), and EsoGuard, the first and only DNA-based non-invasive BE screening LDT test on the market today, compare favorably to other

available products and services.

When used in combination after achieving FDA approval as an IVD medical device through the PMA process,

the use of EsoGuard, on samples collected using EsoCheck, may offer an accurate, lower cost, non-invasive approach, that does not require

endoscopy, to screen for BE and EAC.

The test may be performed in five minutes, without sedation, in an outpatient ambulatory setting

such as a primary care or family practice physician’s office or a freestanding diagnostic facility.

and EsoCheck Specific Government Regulation

and Other Privacy Laws

Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical

Health Act (“HIPAA”) established comprehensive protection for the privacy and security of health information.

The HIPAA standards

apply to three types of organizations, or “Covered Entities”:

health plans, healthcare clearinghouses, and healthcare providers

that conduct certain healthcare transactions electronically.

Covered Entities and their business associates must have in place administrative,

physical, and technical standards to guard against the misuse of individually identifiable health information.

We perform activities

that may implicate HIPAA, such as providing clinical laboratory testing services and entering specific kinds of relationships with Covered

Entities and business associates of Covered Entities.

Penalties for violations of HIPAA include civil money and criminal penalties.

activities must also comply with other applicable privacy laws, which impose restrictions on the access, use and disclosure of personal

More state and international privacy laws are being adopted.

Many state laws are not preempted by HIPAA because they are

more stringent or are broader in scope than HIPAA.

Beginning in 2020 we will also need to comply with the California Consumer Privacy

Act of 2018, which protects personal information other than health information covered by HIPAA.

In the E.U., the General Data Protection

Regulation (“GDPR”) took effect in May 2018 and imposes increasingly stringent data protection and privacy rules.

laws may impact our business and may change periodically, which could have an effect on our business operations if compliance becomes

substantially costlier than under current requirements.

Our failure to comply with these privacy laws or significant changes in the laws

restricting our ability to obtain patient samples and associated patient information could significantly impact our business and our

future business plans.

Self-Referral

federal “self-referral” law, commonly referred to as the “Stark” law, provides that physicians who, personally

or through a family member, have ownership interests in or compensation arrangements with a laboratory are prohibited from making a referral

to that laboratory for laboratory tests reimbursable by Medicare, and also prohibits laboratories from submitting a claim for Medicare

payments for laboratory tests referred by physicians who, personally or through a family member, have ownership interests in or compensation

arrangements with the testing laboratory.

The Stark law contains several specific exceptions which, if met, permit physicians who have

ownership or compensation arrangements with a testing laboratory to make referrals to that laboratory and permit the laboratory to submit

claims for Medicare payments for laboratory tests performed pursuant to such referrals.

We are subject to comparable state laws, some

of which apply to all payers regardless of source of payment, and do not contain identical exceptions to the Stark law.

Transportation

commercialization activities for EsoGuard subject us to regulations of the Department of Transportation, the United States Postal Service,

and the Centers for Disease Control and Prevention that apply to the surface and air transportation of clinical laboratory specimens.

Environmental

The cost of compliance with federal,

state and local provisions related to the protection of the environment has had no material effect on our Diagnostics business.

were no material capital expenditures for environmental control facilities in the years ended December 31, 2021 and 2020.

- Percutaneous Device to Treat Carpal Tunnel Syndrome

Tunnel Syndrome (“CTS”) is the most common cumulative trauma disorder and accounts for over half of all occupational injuries.

The carpal tunnel is an anatomic compartment in the wrist through which tendons and the median nerve pass.

Cumulative trauma leads to

inflammation which manifests itself clinically through its compressive effect on the median nerve, resulting in motor and sensory dysfunction

A survey published in the Journal of the American Medical Association reported 2.5% of U.S.

adults, or approximately five

million individuals, have CTS and about 600,000 surgical procedures are performed annually for CTS.

According to the Centers for Disease

Control and Prevention, CTS accounts for two million office visits per year.

Of the CTS patients that are candidates for surgery, an

estimated 1.5 million CTS patients continue to suffer in silence rather than undergoing traditional invasive surgery due to concerns

over the prolonged recovery time associated with an open incision.

According to the Agency for Health Care Policy and Research, CTS costs

over $20.0 billion in annual workers’ compensation costs.

Devices and Their Limitations

who have failed to improve with physical therapy or other non-invasive treatments are candidates for interventions which seek to relieve

the compression of the median nerve by cutting the transverse carpal ligament, which forms the superficial wall of the carpal tunnel.

Traditional surgical approaches are effective but are invasive and must be performed in a surgical operating room.

Endoscopic approaches

are less invasive, but are more technically challenging, more expensive and have been associated with higher complication rates.

approaches still require a surgical incision and some surgical dissection before the endoscope is passed into the carpal tunnel.

less-invasive devices are currently on the market.

One device attempts to use transillumination to guide blind passage of a protected

knife and the other passes a saw-like device blindly or by ultrasound guidance.

Technical limitations have hindered market acceptance

of these devices.

have developed CarpX as a patented, single-use disposable, minimally invasive medical device designed as a precision cutting tool to

treat carpal tunnel syndrome while reducing recovery times.

We believe our device will allow the physician to relieve the compression

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

To use our device, the operator first

advances a guidewire through the carpal tunnel under the ligament.

Our device is then advanced over the wire and positioned in the carpal

tunnel under ultrasonic and/or fluoroscopic guidance.

When the balloon is inflated it creates tension in the ligament positioning the

Cancer Care Platform

May 2021, we formed Veris Health, a majority-owned subsidiary, focused on digital health technology.

In connection with its formation,

Veris Health acquired Oncodisc, a digital health company with groundbreaking tools to improve personalized cancer care through remote

patient monitoring.

Oncodisc’s core technologies include the first intelligent implantable vascular access port with biologic sensors

and wireless communication, combined with an oncologist-designed remote digital healthcare platform that provides patients and physicians

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

was founded in 2018 experienced physician entrepreneurs, James Mitchell, M.D., who joined Veris Health as its full-time Chief Medical

Officer, and Andrew Thoreson, M.D., who serves as a Veris Health consultant.

They previously co-founded Redsmith, Inc., an interventional

catheter company whose technology was acquired by C.R.

Bard Inc., now BD Inc.

Oncodisc received a National Science Foundation

(“NSF”) Small Business Innovation Research (“SBIR”) grant award to support its early work and completed both

the MedTech Innovator Accelerator and UCSF Rosenman Institute Accelerator programs.

Veris Cancer Care Platform (“CCP”) is a digital cancer care platform with physiologic data collection, symptom reporting

and telehealth functions, designed to improve personalized cancer care through remote patient monitoring.

Cancer patients enrolled in

the Veris CCP receive a VerisBox™ with Veris-branded Bluetooth enabled connected health care devices.

The devices transmit clinical

data to cancer care teams to detect early signs of common cancer-related complications, provide longitudinal trends of physiologic and

clinical data, and offer data-driven risk management tools for precision oncology.

Veris CCP integrates directly with practices’

and systems’ Electronic Health Record (“EHR”) systems, allowing care teams to easily view and interact with this data.

We are also currently developing a groundbreaking implantable physiologic monitor containing biologic sensors capable of generating continuous

data on key physiologic parameters known to predict adverse outcomes in cancer patients undergoing treatment.

The implantable will seamlessly

interact with the Veris CCP.

These technologies are the subject of multiple patent applications and one issued patent.

Health leverages a business-to-business sales model.

Its software-as-a-service recurring-revenue business model seeks to generate 100%

recurring revenue through oncology practice and hospital-based subscriptions.

These entities pay monthly fees for each patient on the

platform, through which they are able to drive revenues from remote physiologic monitoring (and, in the future, device implantation)

under existing CPT codes, as well as through the upcoming CMS Enhancing Oncology Model (EOM) bonuses and incentives.

Veris also plans

to build a commercialization model around the oncology data it is collecting.

We have identified multiple potential use cases across

a number of verticals, including clinical trials, commercial use cases, and as a means to improve patient care.

addition to targeting the oncology market, Veris plans to expand into the hospital-at-home market, cardiovascular diseases, end-stage

renal disease, and lung disorders like COPD.

We have already initiated R&D efforts around an enhanced implantable cardiac monitor

capable of detecting cardiac arrhythmias and other physiologic parameters critical for high-risk cardiac patients.

Future devices will

combine novel sensing technology with seamless communication, engaging user interface design, and data analytics driving actionable clinical

insights for patients with congestive heart failure.

These technologies will then be expanded for high-risk kidney disease and pulmonary

2022, approximately 1.9 million people in the U.S.

were newly diagnosed with cancer, and cancer incidence in the U.S.

is expected to

continue to increase.

Cancer patients face high rates of complications during the courses of their treatment which drive poor patient

outcomes and healthcare costs.

One driver of these issues is avoidable hospitalizations.

We believe Veris Health’s offerings can

help drive costs down and improve outcomes through providing care teams with better, more continuous data.

on the aforementioned cancer prevalence in the U.S.

and our current business model, we believe Veris Health’s total addressable

market opportunity exceeds $2 billion.

In the future, we believe this opportunity will only expand through the implantable physiologic

monitor, data commercialization, and the expansion into other markets aside from oncology.

Commercialization/Sales

Veris commercialization efforts have targeted the full spectrum of oncology care providers, with a focus on independent oncology practices,

participants in CMS’s Oncology Care Model (OCM) and EOM, and innovative, progressive health systems.

The growing adoption of value-based

models has provided a strong tailwind, as the Veris CCP addresses many requirements of these programs, including electronic Patient Reported

Outcomes (“ePROs”) and the use of data for quality improvement.

Manufacturing

components comprising the Veris Cancer Care Platform are currently supplied to us by our partners TransTek and their U.S.-based subsidiary,

Each has passed a SOC-2 audit by an outside auditor.

The final packaging of the overall box and order fulfillment is managed

by Impilo, a partner with TransTek and Mio Labs.

The customer support is currently managed internally, while partnering with Zendesk

for customer service management.

Veris CCP software is considered a non-device Medical Device Data System (“MDDS”) that is excluded from the statutory definition

of a medical device under the FDC Act and as confirmed in the FDA’s MDDS Guidance:

Medical Device Data Systems, Medical Image Storage

Devices, and Medical Image Communications Devices.

Therefore, Veris CCP is not subject to the FDA’s regulatory requirements for

Health is also developing an implantable cardiac monitor and is currently interacting with the FDA via pre-submission process, seeking

agreement on regulatory strategy and required testing to seek clearance of the monitor.

We current plan to make our 510(k) submission

for the implantable monitor in late 2023.

Veris Health is currently sourcing the devices included in the VerisBox™ from the third-party 510(k) holders for those products,

such holders are responsible for any losses, damages, claims or other liabilities that may arise with respect to those devices used with

the Veris CCP software, notwithstanding Veris Health commercial branding being added to the devices or the devices’ packaging.

market for cancer patient care is large.

There are many existing competitors in the remote patient monitoring space, some of which

possess significantly greater financial and other resources and development capabilities than us.

Our Veris CCP faces competition from

other digital care platforms providing many of the same features, including EHR integration and remote patient monitoring capabilities.

While we are not aware of other implantable physiologic monitors containing biologic sensors, our competitors may also be developing

similar devices that have not yet been announced.

is a summary of certain of the other leading products within our development pipeline.

While we currently are devoting substantially

all of our resources to the acceleration of EsoGuard and Veris Cancer Care Platform commercialization, as resources permit, we will continue

to explore innovative technologies, such as our EsoCure, CarpX and NextFlo products as more fully described below, that fulfill our project

selection criteria without limiting ourselves to any target specialty or condition.

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.

When resources permit, we plan to conduct additional

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

is a patented, single-use, disposable, minimally invasive surgical device for use in the treatment of carpal tunnel syndrome.

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, and therefore will be significantly less invasive than existing treatments.

To use CarpX, the operator first

advances a guidewire through the carpal tunnel under the ligament, and then advanced over the wire and positioned in the carpal tunnel

under ultrasonic and/or fluoroscopic guidance.

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 our device will be significantly less invasive than existing treatments.

We also believe it will

allow for more extensive lateral dissection within the tunnel and more reliable division of the ligament, resulting in lower recurrence

rates than some of the endoscopic approaches.

The USPTO has issued U.S.

Patent 10,335,189 which covers the technology underlying PAVmed’s

CarpX minimally invasive device developed to treat carpal tunnel syndrome.

The patent, assigned to PAVmed at its founding, lists Lishan

Aklog, M.D., PAVmed’s Chairman and Chief Executive Officer, and Brian J.

deGuzman, M.D., its Chief Medical Officer, as inventors.

We have advanced, in partnership with our design and contract manufacturing partners, our CarpX product from concept to working prototypes,

completed successful benchtop and cadaver testing confirming the device consistently cuts the transverse carpal ligament, as well as

commercial design and development, and performed pre-submission verification and validation testing.

January 2019, following an in-person pre-submission meeting, the FDA recommended clinical testing to definitively document CarpX procedural

safety in humans and indicated data from a properly structured clinical study outside of the U.S.

would be acceptable, precluding the

need to engage in the time-consuming FDA Investigational Device Exemption (IDE) process required for U.S.

We offered to amend

our previously planned first-in-human (“FIH”) clinical trial in New Zealand to meet this clinical testing recommendation

and postponed the initiation of the amended study until study parameters were finalized with the FDA.

The CarpX FIH safety study was

designed as a single-arm, two-center, two-surgeon, 20-patient study of the CarpX procedure in carpal tunnel syndrome patients, with a

device safety primary endpoint defined as the absence of certain serious device-related adverse events over a limited 90-day follow-up

All 20 patients underwent successful CarpX procedures.

observations from the study strongly support CarpX’s clinical and commercial potential.

Surgeons were able to achieve the same

anatomic result as traditional open surgery using a minimally invasive approach.

Endoscopic visualization showed that CarpX cut the ligament

cleanly and precisely, without evidence of thermal spread beyond the target tissue cut line.

Procedure times fell after a short learning

curve, indicating that CarpX minimally invasive carpal tunnel release can be performed in the same or less time as traditional open surgery.

The final set of procedures were performed through 5-10 mm keyhole incisions, with no incision crossing the base of the palm, an area

known to be problematic for healing, resulting in delayed recovery and persistent pain after traditional open surgery.

The surgeons also

observed that the CarpX balloon appeared to create more space within the carpal tunnel than traditional carpal tunnel release, which

could favorably impact long-term outcomes.

Sales and Marketing

received FDA marketing clearance under section 510(k) in April 2020 for our CarpX minimally invasive surgical device for use in the treatment

of carpal tunnel syndrome and after months of delay caused by the COVID-19 pandemic, the first commercial procedure was successfully

performed in December 2020.

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 released in stages over the next several quarters.

We presently have a National Sales Director, one Sales Representative, and one

Clinical Specialist that are overseeing our CarpX commercial efforts.

As we broaden adoption of the device beyond key opinion leaders.

we intend to commercialize CarpX through a network of independent U.S.

sales representatives and/or inventory stocking medical distributors

together with our in-house sales management and marketing teams.

Our focus on CarpX, and other high margin products and services, is

particularly suitable to this mode of distribution.

A high gross margin allows us to properly incentivize our distributors, which in

turn allows us to attract the top distributors with the most robust networks in our targeted specialties.

Independent distributors play

an even larger role in many parts of Europe, most of Asia and emerging markets worldwide.

have received ISO 13485:2016 certification for PAVmed’s quality management system and received CE Mark certification for CarpX

in May 2021 which allows it to be marketed in CE Mark European countries, which include the European Economic Area (the EU, Norway, Iceland,

and Lichtenstein), Switzerland, and, until July 1, 2023, the United Kingdom.

– Implantable Intraosseous Vascular Access Device

access devices, including peripheral intravenous catheters, central venous lines, peripherally inserted central catheters, tunneled catheters

or implanted ports, are used to deliver various medications, fluids, blood products, nutrition or other therapeutic agents to patients

with a wide variety of clinical conditions over multiple episodes spanning a period of days to weeks to months.

A report by iData Research

Group estimates the market for such devices to be several billion dollars annually.

The market is moderately fragmented and highly commoditized,

with slight premium pricing for modest features, including anti-infective coating, anti-thrombotic properties, tip location and power

injector compatibility.

Devices and Their Limitations

chronically ill patients requiring long-term vascular access devices have poor or no central venous access as a result of repeated instrumentation

of the veins or the presence of pacemaker and defibrillator leads, resulting in thrombosis or scarring.

In addition, patients with renal

failure need preservation of their peripheral and central veins for future dialysis access.

The decades-old core technologies underlying

currently available long-term vascular access devices have several limitations which relate directly to the intravascular component of

Up to 10% of such devices become infected, which can lead to costly and severe complications and even death (van de Wetering,

Cochrane Database 2013).

Since they are in constant contact with the blood stream, current devices require regular flushes to clear stagnant

blood and prevent thrombus formation and occlusion.

Despite these maneuvers, up to one-third of long-term vascular access devices become

occluded at some point during their implantation period (Baskin, et al., Lancet 2009) and the resulting clot can dislodge as an embolism

causing further downstream complications.

This complication requires treatment with clot-dissolving agents or removal and implantation

of a new device at an alternative site which in turn can lead to additional complications.

Finally, most long-term vascular access devices

require surgical insertion and removal, radiographic confirmation of tip placement and careful handling by trained clinicians to prevent

the introduction of air into the circulation.

intraosseous route provides a means for infusing fluids, medications and other substances directly into the bone marrow cavity which

communicates with the central venous circulation via nutrient and emissary veins.

This route is well established, having been used for

decades in a variety of settings including trauma, especially military trauma, and pediatric emergencies.

It has been shown to be bioequivalent

to the intravenous route.

Complication rates are low and there are few contraindications.

Recently, physicians have expanded the use

of the intraosseous route to non-emergent clinical scenarios.

Currently available intraosseous devices pass through the skin into the

bone and are therefore limited to short term use.

We have developed a novel, implantable intraosseous vascular access device which does

not require accessing the central venous system and does not have an indwelling intravascular component.

It is designed to be highly

resistant to occlusion and, we believe, may not require regular flushing.

It features simplified, near-percutaneous insertion and removal,

without the need for surgical dissection or radiographic confirmation.

It provides a near limitless number of potential access sites

and can be used in patients with chronic total occlusion of their central veins.

We believe the absence of an intravascular component

will result in a very low infection rate.

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.

received FDA 510(k) marketing clearance in April 2020, with the first commercial procedure successfully performed in December 2020.

May 2021 European CE Mark Certification was received for CarpX.

Our limited-release commercialization efforts through 2022 were 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, and will

continue to pursue that project, as resources permit.

PortIO implantable intraosseous vascular access device 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.

have advanced, in partnership with our design and contract manufacturing partners, our PortIO product from concept to working prototypes,

benchtop, animal, and cadaver testing, commercial design and development, verification and validation testing.

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.

The GLP animal study requested by the FDA has

been completed along with supplementary cadaver and animal studies.

Of significance toward our belief of PortIO will one day become the

answer to solve many of the current drawbacks intravenous access devices regularly encounter, our supplemental animal testing has demonstrated

maintenance-free patency over a six-month implant duration.

Based on this encouraging animal data, we have initiated a long-term (60-day

implant duration) first-in-human clinical study in dialysis patients or those with poor venous access in Colombia, South America and

intend to fulfill the likely FDA request for human clinical data with a clinical safety study in the U.S.

following FDA clearance of

our Investigational Device Exemption (“IDE”), submission to begin clinical testing in dialysis patients to support a future

de novo regulatory submission.

In March of 2022, the First-In-Human implantations of PortIO devices were successfully performed at the

Clinica Porto Azul in Barranquilla, Colombia.

– Highly-Accurate Disposable Infusion Platform Technology

day, over one million patients receive some type of infusion and 90% of hospitalized patients receive an intravenous infusion at some

point during their hospital stay.

(Husch et al.

Quality & Safety in Health Care 2005;

Unlike twenty years ago, nearly

all inpatient infusions, including routine ones which do not require flow adjustment, are delivered by expensive electric infusion pumps

instead of with simple gravity.

An increasing number of these patients are receiving infusions of medications or other substances outside

of a hospital, in ambulatory facilities and at home.

Disposable infusion pumps (“DIPs”) have many attractive features that

favor their use in these settings over outpatient electric infusion pumps.

Patients tend to favor DIPs because they are small, disposable,

simple to operate, easy to conceal, and allow for greater mobility.

They are used to deliver medications including antibiotics, local

anesthetics and opioids.

According to a report by Transparency Market Research, the overall global infusion market is estimated to be

over $5.0 billion annually.

DIPs account for approximately 10% of this market and inpatient infusion sets for about 20%.

Devices and Their Limitations

pump errors are a serious ongoing problem and represent a large share of the overall human and economic burden of medical errors.

infusion pumps have become expensive, high-maintenance devices and have been plagued in recent years with recalls due to serious software

and hardware problems.

These pumps are designed for fine titration of infusions in complex patients such as those in a critical care

Using them for routine administration of medications or fluids is technological overkill.

We believe there is a significant

market opportunity for a simple, disposable device which can be incorporated into a standard infusion set and eliminate the need for

expensive, problem-prone infusion pumps for routine inpatient infusions.

In terms of outpatient infusions, currently marketed DIPs are

powered by elastomeric membranes, compressed springs, compressed gas or vacuum and controlled by mechanical flow limiters.

limitation of DIPs is they can be highly inaccurate in actual use because they can be susceptible to changes in operating conditions

(e.g., temperature, atmospheric pressure, viscosity, back pressure, partial filing and prolonged storage).

As a result, their safety

profiles make them unsuitable for use with medications, such as chemotherapeutics, where flow accuracy is critical to achieve the desired

therapeutic effect and avoid complications.

The FDA’s MAUDE database includes numerous reports of complications and even deaths

as a result of DIPs infusing a particular medication too slowly or too fast.

We believe there is a significant market opportunity for

highly accurate disposable infusion pumps for outpatient use.

have developed a highly accurate infusion system with variable flow resistors.

We acquired U.S.

Patent 8,622,976 issued January 7, 2014,

and associated U.S.

and international patent applications, “System and Methods for Infusion of Fluids Using Stored Potential Energy

and a Variable Flow Resistor”.

We have built on the principles underlying this patent and developed a new concept whereby the variable

resistor does not have to be mechanically linked to the infusion drive mechanism.

This simplifies the design and expands the range of

potential follow-on products.

We have performed extensive computer simulation, built protypes, and conducted benchtop testing on various

embodiments and have demonstrated highly accurate flow rates across a wide range of driving pressures.

NextFlo platform technology includes a highly accurate, disposable intravenous (“IV”) infusion set.

NextFlo maintains constant

flow by incorporating a proprietary, passive, pressure-dependent variable flow-resistor consisting entirely of inexpensive, easy-to-manufacture

disposable mechanical parts.

We believe this technology will permit hospitals to return to gravity-driven infusions and eliminate expensive

and troublesome electronic pumps for most of the over one million infusions of fluids, medications and other substances delivered each

day in hospitals and outpatient settings in the United States.

NextFlo disposable IV infusion set has achieved a key milestone in its quest to eliminate the need for complex and expensive electronic

infusion pumps.

NextFlo testing has now repeatedly demonstrated it can achieve constant flow rates across a wide range of IV bag heights,

with accuracy rates comparable to electronic infusion pumps.

Deloitte Consulting LLP has completed a comprehensive market research and

strategic analysis of NextFlo demonstrating a very large addressable market An initial FDA 510(k) submission for the NextFlo IV Infusion

Set is planned for the second half of 2022.

recently hired a director of sales who will focus on all aspects of NextFlo’s commercial launch including and not limited to creating

and executing the sales strategy, hiring/mentoring the commercial launch team, and collaborating with internal resources on product development

and marketing.

Target customers include Acute Inpatient Care, Outpatient Care, Infusion Centers, Home Infusions, Outpatient Pharmacy,

EMS, and the Department of Defense.

Health - implantable vascular healthcare platform

development continues in parallel with software platform development, with integration of the software and hardware teams ensuring end-to-end

functionality.

Device R&D is led by the internal PAVmed technical team, leveraging consultants with expertise in active implantable

devices, medical hardware, and firmware.

In Q4 2021, Veris successfully completed feasibility animal testing of multiple device prototypes.

Design freeze on the initial Veris intelligent implantable device is expected by the end of 2022, followed by filing for 510(k) clearance

Veris has also initiated regulatory and commercial strategies for the European Union.

addition to targeting the oncology market, Veris plan to expand into cardiovascular diseases, end-stage renal disease, and lung disorders

We have already initiated R&D efforts around an enhanced implantable cardiac monitor capable of detecting cardiac arrhythmias

and other physiologic parameters critical for high-risk cardiac patients.

Future devices will combine novel sensing technology with seamless

communication, engaging user interface design, and data analytics driving actionable clinical insights for patients with congestive heart

These technologies will then be expanded for high-risk kidney disease and pulmonary patients.

are currently recruiting a Veris Chief Commercial Officer to assist with further developing the sales strategy and hiring the commercial

launch team to lay the groundwork with customer targets including major cancer centers and oncology practices.

We are planning a limited

commercial release of the first product to key accounts with wearable connected devices when the software is completed, currently

expected in the six months ended Dec 31, 2022.

Innovations include a diversified and expanding portfolio of innovative products designed to address unmet clinical needs across a broad

range of clinical conditions.

We are evaluating a number of these product opportunities and intellectual property covering a wide spectrum

of clinical conditions, which have either been developed internally or have been presented to us by clinician innovators and academic

medical institutions for consideration of a partnership to develop and commercialize these products.

This collection of products includes,

without limitation, initiatives in non-invasive laser-based glucose monitoring, mechanical circulatory support cannulas, single-use ventilators

and resorbable pediatric ear tubes.

In June 2020, we announced the execution of a letter of intent to consummate a series of agreements

to develop and utilize Canon Virginia’s commercial grade and scalable aqueous silk fibroin molding process to manufacture PAVmed’s

DisappEAR molded pediatric ear tubes for commercialization.

Furthermore, we are exploring other opportunities to grow our business and

enhance shareholder value through the acquisition of pre-commercial or commercial stage products and/or companies with potential strategic

corporate and commercial synergies.

Financing Transactions Generally

PAVmed Inc and Subsidiaries

financing transactions in the year ended December 31, 2021, resulted in approximately $117.0 million of gross proceeds, before placement

agent fees and expenses and offering costs, including $62.0 gross proceeds resulting from the issue of shares of Lucid Diagnostics Inc.

common stock at an offering price of $14.00 per share in an IPO on October 14, 2021, with such gross proceeds of $62.0 million not including

the purchase by PAVmed Inc.

of 571,428 shares of Lucid Diagnostics Inc.

common stock at the $14.00 IPO offering price.

PAVmed ATM Facility

In December 2021, we filed Form

S-3 registration statement (File No.

333-261814) with the SEC (a “Shelf Registration”) and a base prospectus to provide future

financing for the Company in either common stock, shares of preferred stock, warrants, debt securities or units of one or more classes

of securities not to exceed $275 million.

Also included in the registration statement is a prospectus supplement (the “ATM Prospectus”)

for an “at-the-market offering” for up to $50 million of our common stock that may be offered and sold under a Controlled

Equity Offering Agreement between us and Cantor Fitzgerald & Co.

March 2022 Notes

Subsequent to December 31, 2021,

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

, for the sale of up to $50,000,000 in initial principal amount of Senior Secured Convertible Promissory Notes (the “March 2022

Notes”), in a registered direct offering (the “Offering”), for a purchase price equal to $1,000 for each $1,100 in

principal amount of March 2022 Notes.

Pursuant to the SPA we executed

the agreements for 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 .

Subject to certain conditions

being met or waived, from time to time after such time that stockholder approval for an increase in our authorized shares from 150 million

to 250 million is obtained, but before March 31, 2024, one or more additional closings for up to the remaining principal amount of March

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

The aggregate principal amount of March 2022 Notes

that may be offered in the additional closings may not be more than $22.5 million .

The investor’s obligation to purchase the notes

at each additional closing is subject to certain conditions set forth in the March 2022 SPA (including minimum price and volume thresholds,

maximum ratio of debt to market capitalization, and minimum market capitalization), which may be waived by the Required Holders (as defined

in the March 2022 SPA).

Under the March 2022 SPA, the investor will be required to purchase March 2022 Notes in the additional closings

if such conditions are met or waived.

In addition, from and after March 31, 2023, the investor may by written notice to us elect to require

us to issue up to $22.5 million in initial principal amount of March 2022 Notes, so long as in doing so it would not cause the ratio of

(a) the outstanding principal amount of the March 2022 Notes (including the additional March 2022 Notes), accrued and unpaid interest

thereon and accrued and unpaid late charges to (b) our average market capitalization over the prior ten trading days, to exceed 25%.

If we fail to complete the sale of the additional 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 .

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.

The Company estimates 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 2022 Notes.

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.

Recent Events - continued

PAVmed March 2022 Notes - continued

On 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 amortization payment 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.

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 Offering was made pursuant

to the Company’s existing shelf registration statement on Form S-3 (Registration No.

333-261814), which was filed with the SEC

on December 21, 2021 and declared effective by the SEC on January 7, 2022.

A prospectus supplement relating to the Offering, together

with the accompanying base prospectus included in the registration statement, was filed with the SEC on April 4, 2022.

Lucid Equity Facility

to December 31, 2021, on March 28, 2022, Lucid Diagnostics, Inc.

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 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.

Lucid Laboratory Asset Acquisition

to December 31, 2021, on February 25, 2022, Lucid Diagnostics, Inc., through its wholly-owned subsidiary LucidDx Labs, Inc., entered

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

(“RDx”), an unrelated third-party.

RDx APA, LucidDx Labs Inc.

acquired certain licenses and other related assets necessary to operate a CLIA-certified, CAP-accredited commercial

clinical laboratory.

The RDx APA acquired assets, along with other LucidDx Labs Inc.

purchased and leased property and equipment, are

being used to commence laboratory operations to perform the EsoGuard® Esophageal DNA assay, inclusive of DNA extraction, next generation

sequencing (“NGS”) and specimen storage.

Prior to consummation of the RDx APA, RDx provided such laboratory services at its

owned CLIA-certified, CAP-accredited laboratory.

Under the RDx APA, LucidDx Labs Inc.

will pay RDx an aggregate purchase price of up

to $6.2 million for the acquired assets.

Concurrent with the RDx APA, LucidDx Labs Inc.

and RDx also entered into a management services

agreement (“RDx MSA”), with a term of three years, and a total of approximately $1.8 million of quarterly payments.

business will depend on our ability to create or acquire proprietary medical device technologies to commercialize.

We intend to vigorously

protect our proprietary technologies’ intellectual property rights in patents, trademarks and copyrights, as available through

registration in the United States and internationally.

We currently have applied for or own 72 patents across 10 families of products.

Patent protection and other proprietary rights are thus essential to our business.

Our policy is to aggressively file patent applications

to protect our proprietary technologies including inventions and improvements to inventions.

The intraosseous route provides a means for

infusing fluids, medications and other substances directly into the bone marrow cavity which communicates with the central venous circulation

via nutrient and emissary veins.

This route is well established, having been used for decades in a variety of settings including trauma,

especially military trauma, and pediatric emergencies.

It has been shown to be bioequivalent to the intravenous route.

Complication rates

are low and there are few contraindications.

Currently available intraosseous devices pass through the skin into the bone and are therefore

limited to short term use.

PortIO is a novel, implantable intraosseous vascular access device which does not require accessing the central

venous system and does not have an indwelling intravascular component.

It is designed to be highly resistant to occlusion and, we believe,

may not require regular flushing.

It features simplified, near-percutaneous insertion and removal, without the need for surgical dissection

or radiographic confirmation.

of Lucid Clinical Trials

is currently seeking to accelerate our collection of clinical utility data through a range of trials that can be efficiently executed.

These efforts include a planned investigator-initiated, retrospective analysis of prospectively collected data on the approximately 400

San Antonio fire fighters who underwent testing as part of a community-sponsored cancer awareness event (in

respect of which we expect to publish results in the first half of 2023) ;

an ongoing investigator-initiated, retrospective, single-center,

study with 500 patients (in respect of which we expect to publish results mid-2023), a virtual-patient randomized controlled trial with

intended recruitment of 100-200 physician participants (in respect of which we expect to publish

results this year) ;

a Lucid-sponsored multi-center, prospective, observational study with 500 patients;

and a Lucid-sponsored

registry at existing Lucid Test Centers, whereby all patients undergoing EsoCheck testing will be given the opportunity to provide informed

consent and contribute data about their risk factors, EsoGuard results, and subsequent diagnostic and/or therapeutic journey.

Both Lucid-sponsored

observational/registry studies expect to have preliminary results and/or interim analysis before the end of 2023.

previously disclosed, consequently, Lucid has decided to delay for the time being the two previously commenced clinical trials, the “EsoGuard

screening study” (“BE-1”) and the “EsoGuard case-control study” (“BE-2”), as Lucid is devoting

our clinical resources to the studies cited above, which we expect will more efficiently generate the clinical data Lucid is currently

prioritizing to drive EsoGuard commercialization.

Labs Laboratory Operations Update

February 14, 2023, Lucid Diagnostics and LucidDx Labs Inc.

entered into an agreement (the “MSA Termination Agreement ”)

with RDx, pursuant to which the parties mutually agreed to terminate the MSA-RDx without cause.

The termination was effective as February

Until the termination of the MSA-RDx, RDx had continued to provide certain testing and related services for the Laboratory

in accordance with the terms of the MSA-RDx.

Recently, however, Lucid accelerated the development of internal resources necessary to

operate the Laboratory entirely on its own.

Accordingly, the Company believes that termination of the MSA-RDx will improve the efficiency

of the performance of the EsoGuard assay.

other things, the MSA Termination Agreement reduces the remaining amounts of the earnout payments and management fees due under the APA-RDx

and the MSA-RDx to $725,000 (from the $3,450,000 that would otherwise have been payable under the APA and MSA if the MSA had remained

in effect through the balance of its stated term), resulting in a net savings to Lucid Diagnostics of $2,725,000.

The payment was satisfied

through the issuance of 553,436 shares of Lucid Diagnostics’ common stock on February 25, 2023.

Lucid Diagnostics was not required

to make any cash payments in connection with the termination.

#CheckYourFoodTube

January 2023, Lucid successfully completed its first #CheckYourFoodTube Precancer Testing Event, in partnership with Rachelle Hamblin,

M.D., M.P.H., and the San Antonio Fire Department (SAFD), to detect esophageal precancer in at-risk members of the department.

testing event was held over two weekends in January, which has been designated as Firefighter Cancer Awareness Month by the International

Association of Fire Fighters (IAFF).

A total of 391 members, nearly one-quarter of the department, who were deemed by Dr.

be at-risk for esophageal precancer, underwent a brief, on-site, noninvasive cell collection procedure, performed by Lucid clinical personnel

using its EsoCheck ® Esophageal Cell Collection Device.

Firefighters with suspected esophageal precancer based on a positive

EsoGuard result were identified, including some less than forty years of age, and will undergo appropriate monitoring and treatment,

as indicated by clinical practice guidelines, to prevent progression to esophageal cancer.

These events, which Lucid looks to expand

across the country, are an extension of Lucid’s recently introduced and expanding satellite Lucid Test Center (sLTC) program, which

brings our precancer testing directly to patients—at their physician’s office and now at large testing day events.

demonstrated that its nurse practitioners can each perform up to fifty EsoCheck procedures in a day, and its laboratory team handled

over two hundred incoming samples in a day, while maintaining turnaround times at target.

These successes provide an excellent foundation

for future testing events as we continue to drive EsoGuard commercialization using all the tools at our disposal.

Health Commercialization Update

December 2022, Veris Health signed a license agreement for the Veris CCP software with its first customer, New Jersey Cancer Care.

Veris Health onboarded the first cohort of patients of that practice onto the Veris CCP as well, and has signed license agreements with

two additional cancer centers.

These successes lay the groundwork for Veris Health’s expansion plans with respect to the Veris

CCP software as it seeks to onboard cancer centers and patients across the country.

December 29, 2022, the Company received a notice from the Listing Qualifications Department of Nasdaq stating that, for the prior 30

consecutive business days (through December 28, 2022), the closing bid price of the Company’s common stock had been below the minimum

of $1 per share required for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2).

The notification letter

stated that the Company would be afforded 180 calendar days (until June 27, 2023) to regain compliance.

In order to regain compliance,

the closing bid price of the Company’s common stock must be at least $1 for a minimum of ten consecutive business days.

2023, the Company distributed a proxy statement for a special meeting of shareholders to be held on March 31, 2023 (the “Special

Meeting”), at which the Company will be seeking approval of an amendment to the Company’s Certificate of Incorporation, to

effect, at any time prior to the one-year anniversary date of the Special Meeting, (i) a reverse split of the Company’s outstanding

shares of common stock at a specific ratio, ranging from 1-for-5 to 1-for-15, to be determined by the board of directors of the Company

in its sole discretion, and (ii) an associated reduction in the number of shares of common stock the Company is authorized to issue,

from 250,000,000 shares to 50,000,000 shares.

If the proposed reverse stock split is approved, the Company anticipates it will regain

compliance with the Nasdaq requirements for continued listing.

Payroll and Benefit Expense Reimbursement Agreement

November 30, 2022, PAVmed and Lucid entered into a payroll and benefit expense reimbursement agreement (the “PBERA”).

Historically,

PAVmed has paid for certain payroll and benefit-related expenses in respect of Lucid’’s personnel on behalf of Lucid, and

Lucid has reimbursed PAVmed for the same.

Pursuant to the PBERA, PAVmed will continue to pay such expenses, and Lucid will continue to

reimburse PAVmed for the same.

The PBERA now provides that the expenses will be reimbursed on a quarterly basis or at such other frequency

as the parties may determine, in cash or, subject to approval by the board of directors of each of PAVmed and Lucid, in shares of Lucid’s

common stock, with such shares valued at the volume weighted average price of such stock during the final ten trading days preceding

the later of the two dates on which such stock issuance is approved by the board of directors of each of PAVmed and Lucid (subject to

a floor price of $0.40 per share), or in a combination of cash and shares.

However, in no event shall Lucid issue any shares of its common

stock to PAVmed in satisfaction of all or any portion of the expenses if the issuance of such shares of its common stock would exceed

the maximum number of shares of common stock that the Issuer may issue under the rules or regulations of The Nasdaq Stock Market LLC

(“Nasdaq”), unless Lucid obtains the approval of its stockholders as required by the applicable rules of the Nasdaq for issuances

of shares of its common stock in excess of such amount.

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

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.

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.

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 fees.

our accompanying consolidated financial statements Note 14, Debt , for further discussion of the SPA dated March 31, 2022 and the

senior convertible notes.

Diagnostics Inc.

- Committed Equity Facility and ATM Facility

March 2022, our majority-owned subsidiary, Lucid Diagnostics, entered into a committed equity facility with an affiliate of Cantor Fitzgerald

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 December 31, 2022, 680,263 shares of common stock of Lucid Diagnostics were issued under

this facility for total proceeds of approximately $1.8 million.

November 2022, Lucid Diagnostics also entered into an “at-the-market offering” for up to $6.5 million of its common stock

that may be offered and sold under a Controlled Equity Offering Agreement between Lucid Diagnostics and Cantor Fitzgerald & Co.

the year ended December 31, 2022, there were no Lucid Diagnostics shares sold through their at-the-market equity facility.

to December 31, 2022, through March 9, 2023, Lucid Diagnostics sold 230,068 shares through its at-the-market equity facility for approximately

$0.3 million.

Diagnostics - Series A Preferred Stock Offering

March 7, 2023, Lucid entered into subscription agreements for the sale of 13,625 shares (the “ Lucid Series A

Preferred Stock ”).

Each share of the Lucid Series A Preferred Stock has a stated value of $1,000 and a conversion price of

The terms of the Lucid Series A Preferred Stock also include a one times preference on liquidation and a right to receive

dividends equal to 20% of the number of shares of Lucid common stock into which such Lucid Series A Preferred Stock is convertible,

payable on the one-year and two-year anniversary of the issuance date.

The Lucid Series A Preferred Stock is a non-voting security,

other than with respect to limited matters related to changes in terms of the Lucid Series A Preferred Stock.

The aggregate gross

proceeds from the sale of shares in such offering were $13.625

Diagnostics - Private Placement - Securities Purchase Agreement

as of March 13, 2023, Lucid entered into a Securities Purchase Agreement (“Lucid SPA”) with an accredited

institutional investor (“Lucid Investor”, “Lucid Lender”, and /or “Lucid Holder”), pursuant to

which Lucid agreed to sell, and the Lucid Investor agreed to purchase a Senior Secured Convertible Note with a face value principal

of up to $11.1 million (the “March 2023 Lucid Senior Convertible Note”).

The issuance of the March 2023 Lucid Senior

Convertible Note is subject to customary closing conditions.

March 2023 Lucid Senior Secured Convertible Note would have a 7.875% annual stated interest rate, a contractual conversion price of $5.00

per share of Lucid’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 the two-year anniversary of the date of issuance.

The March 2023 Lucid Senior Convertible Note would be convertible into or otherwise paid in shares of Lucid’s common stock.

the March 2023 Lucid Senior Convertible Note, Lucid is and would be 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.

Under the March 2023 Lucid Senior Convertible Note, Lucid would also be subject to financial

covenants requiring that (i) the amount of Lucid’s available cash equal or exceed $5.0 million at all times, (ii) the ratio of (a) the

outstanding principal amount of the notes issued under the Lucid SPA, accrued and unpaid interest thereon and accrued and unpaid

late charges to (b) Lucid’s average market capitalization over the prior ten trading days, not exceed 30%, and (iii) that

Lucid’s market capitalization shall at no time be less than an amount to be agreed upon.

business depends on our ability to create or acquire proprietary medical device and diagnostics technologies to commercialize.

or have the right to use intellectual property rights, such as patents, trademarks, copyrights, trade secrets and know-how, pertaining

to our EsoCheck and EsoGuard technology, our Veris technology and our EsoCure, CarpX and PortIO products, among other technologies and

intend to vigorously protect our proprietary technologies’ intellectual property rights in patents, trademarks and copyrights,

as available through registration in the United States and internationally.

We currently have applied for, license or own 55 domestic

and foreign patents across 11 families of products, including patents protecting our EsoCheck, EsoGuard and Veris technology.

the patents protecting certain of our owned and licensed technology will first begin to expire is as set forth in the table below (although

currently pending patent applications, both foreign and domestic, are positioned to provide protection beyond such date in each instance).

protection and other proprietary rights are thus essential to our business.

Our policy is to aggressively file patent applications to

protect our proprietary technologies including inventions and improvements to inventions.

We seek patent protection, as appropriate,

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methods of manufacturing the product.

addition to filing and prosecuting patent applications in the United States, we intend to file counterpart patent applications in Europe,

Canada, Japan, Australia, China and other countries worldwide.

Foreign filings can be cumbersome and expensive, and we will pursue such

filings when we believe they are warranted as we try to balance our international commercialization plans with our desire to protect

the global value of the technology.

addition to filing and prosecuting patent applications in the United States, we intend to file counterpart patent applications in other

countries worldwide where there is a value in doing so.

Foreign filings can be cumbersome and expensive, and we will pursue such filings

when we believe they are warranted as we try to balance our international commercialization plans with our desire to protect the global

value of the technology.

term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.

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a patent’s term may be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution

by the patentee, and a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative

by the patentee, and a patent’s term may be lengthened by patent term adjustment (PTA), which compensates a patentee for administrative

delays by the U.S.

Patent and Trademark Office in granting a patent.

Patent and Trademark Office in granting a patent, or patent term extension, which restores time lost due to regulatory

intend to continuously reassess and fine-tune our intellectual property strategy in order to fortify our position in the United States

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our ability to adequately obtain and protect these rights and the likelihood or possibility of infringement upon competing rights of

will also rely upon trade secrets, know-how, continuing technological innovation, and may rely upon licensing opportunities in the future,

to develop and maintain our competitive position.

also rely upon trade secrets, know-how, continuing technological innovation, and upon licensing opportunities, to develop and

maintain our competitive position.

We intend to protect our proprietary rights through a variety of methods, including

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and other entities who may have access to proprietary information.

We will generally require employees to assign patents and other intellectual

property to us as a condition of employment with us.

All of our consulting agreements will pre-emptively assign to us all new and improved

intellectual property that arise during the term of the agreement.

We will generally require employees to assign patents and other

intellectual property to us as a condition of employment with us.

All of our consulting agreements will pre-emptively assign to us

all new and improved intellectual property that arise during the term of the agreement.

also has (directly or through its subsidiaries) proprietary rights to a range of trademarks, including, among others, PAVmed™,

Lucid Diagnostics™, LUCID™, VERIS™, Oncodisc™, CarpX®, EsoCheck®, EsoGuard®, EsoCheck Cell Collection

Device®, Collect + Protect®, EsoCure Esophageal Ablation Device™, NextFlo™, and PortIO™.

(Solely as a matter

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

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

or its subsidiaries will

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

Insurance Coverage and Reimbursement

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from industry associations to accelerate the acquisition of satisfactory reimbursement levels.

“ EsoGuard and EsoCheck—Reimbursement and Market Access ” above for a fuller discussion of the reimbursement status

for EsoCheck and EsoGuard.

for New Medical Device Innovation

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market acceptance, receive adequate insurance coverage and reimbursement, be cost effective and be simultaneously safe and effective.

“ EsoGuard and EsoCheck—Competition ” and “ Veris Cancer Care Platform—Competition ” above

for a fuller discussion of the competitive environment for our key products, EsoCheck, EsoGuard and the Veris Cancer Care Platform.

products we develop must be cleared by the FDA before they are marketed in the United States.

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We work closely with our contract manufacturers to assure our products are in strict compliance with these regulations.

Certification, Accreditation and Licensing

CLIA-certified laboratory is subject to U.S.

and state laws and regulations regarding the operation of clinical laboratories.

CLIA requirements

and laws of certain states, including those of California, New York, Maryland, Pennsylvania, Rhode Island and Florida, impose certification

requirements for clinical laboratories, and establish standards for quality assurance and quality control, among other things.

CLIA provides

that a state may adopt different or more stringent regulations than federal law and permits states to apply for exemption from CLIA if

the state’s laboratory laws are equivalent to, or more stringent than, CLIA.

For example, the State of New York’s clinical

laboratory regulations, which have received an exemption from CLIA, contain provisions that are in certain respects more stringent than

Therefore, as long as New York maintains a licensure program that is CLIA-exempt, Lucid will need to comply with New York’s

clinical laboratory regulations in order to offer Lucid clinical laboratory products and services in New York.

has current certificates to perform clinical laboratory testing.

Clinical laboratories are subject to inspection by regulators and to

sanctions for failing to comply with applicable requirements.

Sanctions available under CLIA and certain state laws include prohibiting

a laboratory from running tests, requiring a laboratory to implement a corrective plan, and imposing civil monetary penalties.

CLIA-certified laboratory fails to meet any applicable requirements of CLIA or state law, that failure could adversely affect any future

CMS consideration of its technologies, prevent their approval entirely, and/or interrupt the commercial sale of any products and services

and otherwise cause Lucid to incur significant expense.

addition to FDA restrictions on marketing and promotion of drugs and devices, other federal and state laws restrict our business practices.

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laws regarding payments or other items of value provided to healthcare providers.

of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is possible

some of our business activities, including certain sales and marketing practices and the provision of certain items and services to our

customers, could be subject to challenge under one or more of such laws.

If our operations are found to be in violation of any of the

health regulatory laws described above or any other laws that apply to us, we may be subject to penalties, including potentially significant

criminal and civil and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government

healthcare programs, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the

curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results

of operations.

To the extent any of our products are sold in a foreign country, we may be subject to similar foreign laws, which may

include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation

of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.

of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is

possible that some of our business activities, including certain sales and marketing practices and the provision of certain items

and services to our customers, could be subject to challenge under one or more of such laws.

If our operations are found to be in

violation of any of the health regulatory laws described above or any other laws that apply to us, we may be subject to penalties,

including potentially significant criminal and civil and administrative penalties, damages, fines, disgorgement, imprisonment,

exclusion from participation in government healthcare programs, contractual damages, reputational harm, administrative burdens,

diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect

our ability to operate our business and our results of operations.

To the extent any of our products are sold in a foreign country,

we may be subject to similar foreign laws, which may include, for instance, applicable post-marketing requirements, including safety

surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or transfers

of value to healthcare professionals.

Payment Sunshine Act

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and debarment from government contracts.

and future legislative proposals to further reform healthcare or reduce healthcare costs may result in lower reimbursement for our products,

or for the procedures associated with the use of our products, or limit coverage of our products.

The cost containment measures that

payors and providers are instituting and the effect of any healthcare reform initiative implemented in the future could significantly

reduce our revenues from the sale of our products.

Alternatively, the shift away from fee-for-service agreements to capitated payment

models may support the value of our products which can be shown to decrease resource utilization and lead to cost saving-for both payors

and providers.

and Other Privacy Laws

Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical

Health Act (“HIPAA”) established comprehensive protection for the privacy and security of health information.

The HIPAA standards

apply to three types of organizations, or “Covered Entities”:

health plans, healthcare clearinghouses, and healthcare providers

that conduct certain healthcare transactions electronically.

Covered Entities and their business associates must have in place administrative,

physical, and technical standards to guard against the misuse of individually identifiable health information.

Some of our activities,

including at our Lucid Test Centers and within our clinical trials, involve interactions with patients and their health information which

implicate HIPAA.

Our activities also involve us entering into specific kinds of relationships with Covered Entities and business associates

of Covered Entities, which also implicate HIPAA.

Penalties for violations of HIPAA include civil money and criminal penalties.

activities must also comply with other applicable privacy laws, which impose restrictions on the access, use and disclosure of personal

More state and international privacy laws are being adopted.

Many state laws are not preempted by HIPAA because they are

more stringent or are broader in scope than HIPAA.

Since 2020 we have also had to comply with the California Consumer Privacy Act of

2018, which protects personal information other than health information covered by HIPAA.

In the E.U., the General Data Protection Regulation

(“GDPR”) took effect in May 2018 and imposes increasingly stringent data protection and privacy rules.

All of these laws

may impact our business and may change periodically, which could have an effect on our business operations if compliance becomes substantially

costlier than under current requirements.

Our failure to comply with these privacy laws or significant changes in the laws restricting

our ability to obtain stool, blood and other patient samples and associated patient information could significantly impact our business

and our future business plans.

Self-Referral

federal “self-referral” law, commonly referred to as the “Stark” law, provides that physicians who, personally

or through a family member, have ownership interests in or compensation arrangements with a laboratory are prohibited from making a referral

to that laboratory for laboratory tests reimbursable by Medicare, and also prohibits laboratories from submitting a claim for Medicare

payments for laboratory tests referred by physicians who, personally or through a family member, have ownership interests in or compensation

arrangements with the testing laboratory.

The Stark law contains a number of specific exceptions which, if met, permit physicians who

have ownership or compensation arrangements with a testing laboratory to make referrals to that laboratory and permit the laboratory

to submit claims for Medicare payments for laboratory tests performed pursuant to such referrals.

We are subject to comparable state

laws, some of which apply to all payors regardless of source of payment, and do not contain identical exceptions to the Stark law.

International

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the life of the product.

as of March 29, 2022, we have 89 full-time compensated employees, inclusive of our of Chairman of the Board of Directors

and Chief Executive Officer (“CEO”), our President and Chief Financial Officer (“CFO”), our Chief Operating Officer

(“COO”) and our Chief Medical Officer (“CMO”) (with each comprising our named executive officers).

are covered by a collective bargaining agreement.

We consider our relationship with our employees to be good.

Safety and Health

addition to its comprehensive regulation of health and safety in the workplace in general, the Occupational Safety and Health Administration

has established extensive requirements aimed specifically at laboratories and other healthcare-related facilities.

In addition, because

Lucid’s operations may require employees to use certain hazardous chemicals, Lucid also must comply with regulations on hazard

communication and hazardous chemicals in laboratories.

These regulations require Lucid, among other things, to develop written programs

and plans, which must address methods for preventing and mitigating employee exposure, the use of personal protective equipment, and

Transportation

commercialization activities for EsoGuard subject Lucid to regulations of the Department of Transportation, the United States Postal

Service, and the Centers for Disease Control and Prevention that apply to the surface and air transportation of clinical laboratory specimens.

Environmental

cost of compliance with federal, state and local provisions related to the protection of the environment has had no material effect on

our business.

There were no material capital expenditures for environmental control facilities in the years ended December 31, 2022,

2021 and 2020.

as of March 9, 2023 we had 124 employees (all of whom were full-time employees), inclusive of our executive officers —

our Chairman of the Board of Directors and Chief Executive Officer (“CEO”), our President and Chief Financial Officer (“CFO”),

our Chief Operating Officer (“COO”), our Chief Medical Officer (“CMO”) and our General Counsel and Secretary

(“General Counsel”).

No employees are covered by a collective bargaining agreement.

We consider our relationship with our

employees to be good.

were incorporated in Delaware on June 26, 2014.

Our corporate headquarters address is One Grand Central Place, Suite 4600, 60 East 42nd Street, New York, New York 10165, and

our main telephone number is (212) 949-4319.

make available free of charge through our website - www.pavmed.com - our periodic reports and registration statements filed with the

United States Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K, Quarterly Reports on

Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the

Securities Exchange Act of 1934, as amended, or the “Exchange Act.” We make these reports available through our website as

soon as reasonably practicable after we electronically file such reports with, or furnish such reports to the SEC.

Our corporate headquarters address is 360 Madison Avenue, 25th Floor, New York, NY 10017,

and our main telephone number is (212) 949-4319.

make available free of charge through our website (www.pavmed.com) our periodic reports and registration statements filed with the United

States Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,

Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities

Exchange Act of 1934, as amended, or the “Exchange Act.” We make these reports available through our website as soon as reasonably

practicable after we electronically file such reports with, or furnish such reports to the SEC.

also make available, free of charge on our website, the reports filed with the SEC by our named executive officers, directors, and 10%

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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-K

Item 1. Business