What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-14 compared with 2022-04-06 · 494 added, 552 removed, 129 unchanged (89% of the section changed)

1 unchanged sentence

following discussion and analysis of our consolidated financial condition and results of operations should be read together with our

consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.

Some of the information contained

in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our

plans and strategy for our business and related financing, includes forward-looking statements involving risks and uncertainties and

should be read together with the “Forward-Looking Statements” and “Risk Factors” sections of this Annual Report

on Form 10-K for a discussion of important factors which could cause actual results to differ materially from the results described in

or implied by the forward-looking statements contained in the following discussion and analysis.

Unless the context otherwise requires,

references herein to “we”, “us”, and “our”, and to the “Company” or “PAVmed”

are to PAVmed Inc.

and Subsidiaries.

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

and its wholly-owned

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

(“Lucid Diagnostics” or “LUCID”),

Veris Health, Inc.

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

(“Solys Diagnostics”

Company is a highly differentiated, multi-product,

commercial-stage medical technology company organized to advance a broad pipeline of innovative medical technologies from concept to

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

Since the inception of PAVmed

on June 26, 2014, the Company’s activities have focused on advancing its lead products towards regulatory approval and

commercialization, protecting its intellectual property, and building its corporate infrastructure and management team.

consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K (the “Financial Statements”).

Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including

information with respect to our plans and strategy for our business and related financing, includes forward-looking statements involving

risks and uncertainties and should be read together with the “Forward-Looking Statements” and “Risk Factors”

sections of this Annual Report on Form 10-K for a discussion of important factors which could cause actual results to differ materially

from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

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

or “PAVmed” are to PAVmed Inc.

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

(“Lucid Diagnostics” or “LUCID”) and Veris Health Inc.

(“Veris Health” or “VERIS”).

is a highly differentiated, multi-product, commercial-stage medical technology company organized to advance a broad pipeline of innovative

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

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:

“Medical Devices”,

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

The Company has ongoing operations conducted

through PAVmed Inc.

and its majority-owned subsidiaries of Lucid Diagnostics, Veris Health, and Solys Diagnostics.

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

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

Food and Drug Administration

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

cell collection device;

and, EsoGuard has been established as a Laboratory Developed Test

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

commercially in December 2019.

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.

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

In connection

with its 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 in Item 1 Business Background and Overview:

● Diagnostics

- EsoGuard Esophageal DNA Laboratory Developed Test, EsoCheck Esophageal Cell Collection

Device, and EsoCure Esophageal Ablation Device with Caldus Technology;

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

Infusion Therapy

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

Intravenous Infusion Platform Technology;

Health - Veris cancer healthcare platform and implantable intelligent vascular port combining

remote monitoring and data analytics;

Innovations - NextVent single-use ventilators;

FlexMO medical circulatory support cannulas;

Veris Cardiac Monitor;

DisappEAR resorbable pediatric ear tubes;

Solys Noninvasive

glucose monitoring.

The Company’s

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, inclusive of $62.0 gross proceeds resulting from the issue of shares of Lucid Diagnostics

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.

the year ended December 31, 2021 a total of 4,877,484 PAVmed Inc.

Series Z Warrants (“PAVMZ”) were exercised

for cash at a $1.60 per share of our common stock, resulting in the issue of a corresponding number of shares of our common stock.

December 2021, PAVmed Inc.

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.

Subsequent to December 31,

2021, on March 31, 2022, PAVmed Inc.

entered into a Securities Purchase Agreement (“SPA”) with an accredited institutional

investor (“investor”) in a private placement, pursuant to which PAVmed Inc.

agreed to sell, and the investor agreed to purchase,

up to $50.0 million in initial principal amount of Secured Promissory Notes.

The purchase price of the Secured Promissory Notes is $1,000

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

A further discussion of the SPA dated March 31, 2022 can be found herein below under Liquidity and Capital Resources - Financings

Subsequent to December 31, 2021 - PAVmed Inc - Private Placement - Securities Purchase Agreement .

Subsequent to December 31,

2021, in March 2022, Lucid Diagnostics, Inc.

entered into a committed equity facility with an affiliate of 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 capital on a periodic basis at prices based on the existing market

of SARS-CoV-2 - COVID-19 Pandemic

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

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

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

On March 11, 2020, the WHO declared a pandemic resulting from SARS-CoV-2, with such pandemic commonly

referred to by its resulting illness of “COVID-19” (“coronavirus disease-2019”), and is referred to herein as

the “COVID-19 pandemic”.

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

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

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

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

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

Such adverse impact may include, for example, the inability

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

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

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

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

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

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

respect to our products.

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

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

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

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

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

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

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

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

Diagnostics, Medical Devices and

Digital Health.

Above in Part I, Item 1 - Business 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..

of Lucid Clinical Trials

is currently seeking to accelerate its 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

prioritzing 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 and implemented, 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.

Note 14, Debt , to the Financial Statements 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.

In 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

In the year ended December 31, 2022, there were no Lucid Diagnostics shares sold through their at-the-market equity facility.

Subsequent 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.

of Operations

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

subsidiary, Lucid Diagnostics Inc., and ResearchDX Inc.

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

Company recognized revenue resulting from the delivery of patient EsoGuard test results when the Company considered the collection

of such consideration to be probable to the extent that it is unconstrained.

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

2021, between the Lucid Diagnostics Inc.

and ResearchDx Inc.

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

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

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

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

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

We incur expenses for tests

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

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

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

patient compliance rates, payor mix, the levels of reimbursement, and payment patterns of payors and patients.

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

9 unchanged sentences

as advertising and promotion expenses.

We anticipate our sales and marketing expenses will increase in the future, as we anticipate an

increase in payroll and related expenses related to the roll-out of our commercial sales and marketing operations as we execute on our

business strategy.

We anticipate our sales and marketing expenses will increase in the future, to the extent we expand our commercial sales and marketing operations as resources permit.

and administrative expenses

2 unchanged sentences

expenses associated with obtaining and maintaining patents within our intellectual property portfolio.

anticipate our general and administrative expenses will increase in the future, as we anticipate an increase in payroll and related expenses

related with the growth and expansion of our business operations objectives.

anticipate our general and administrative expenses will increase in the future as and to the extent our business operations grow.

We also anticipate continued expenses related to being a

5 unchanged sentences

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

to conduct preclinical studies and engineering studies;

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

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

4 unchanged sentences

expense for facilities maintained solely for research and development purposes.

plan to incur research and development expenses for the foreseeable future as we continue the development of our existing products as

well as new innovations.

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

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

our DisappEAR, PortIO, NextFlo, non-invasive glucose monitoring and digital health products through their respective development phase.

current research and development activities, including our clinical trials, are focused principally on the acceleration of EsoGuard and

Veris Cancer Care Platform commercialization.

We will resume research and development activities with respect to as

well as applicable new technologies, as resources permit.

Income and Expense, net

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

repayment of such convertible notes;

gain on PPP loan forgiveness;

and interest expense recognized in connection with one of our convertible

ended December 31, 2021 versus December 31, 2020

the year ended December 31, 2021, revenue was $0.5 million as compared to no revenue in the corresponding period in the prior year.

$0.5 million increase principally relates to our EsoGuard Commercialization Agreement, dated August 1, 2021, which resulted in revenue

recognition of $0.1 million per month beginning August 2021.

the year ended December 31, 2021, cost of revenue was approximately $0.6 million as compared to no cost of revenue in the corresponding

period in the prior year.

The $0.6 million increase principally relates to costs associated with our commercialization agreement that

started in August 2021.

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

upon repayment of such convertible notes.

of Operations - continued

of Dollar Amounts

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

in millions, except for per share amounts.

year ended December 31, 2022 as compared to the year ended December 31, 2021

the year ended December 31, 2022, revenue was $0.4 million as compared to $0.5 million in the prior year.

The $0.1 million decrease principally

relates to the termination of the EsoGuard Commercialization Agreement with RDx, as the Company transitioned to its own laboratory operations

effective February 25, 2022.

The decrease was partially offset by revenue for our EsoGuard Esophageal DNA Test performed in our own CLIA

laboratory for the year ended December 31, 2022.

the year ended December 31, 2022, cost of revenue was approximately $3.6 million as compared to $0.6 million in the prior year.

million increase principally related to:

● approximately

$0.5 million increase in compensation related costs as a result of an increase in headcount;

● approximately

$0.8 million increase in EsoCheck and EsoGuard supplies usage costs;

● approximately

$1.7 million increase in laboratory operations costs.

and marketing expenses

the year ended December 31, 2021, sales and marketing costs were approximately $8.9 million, compared to $2.8 million for the corresponding

period in the prior year.

the year ended December 31, 2022, sales and marketing costs were approximately $19.3 million, compared to $8.9 million in the prior year.

The net increase of $10.4 million was principally related to:

● approximately

$3.7 million increase in compensation related costs principally related to an increase

in headcount and severance expense incurred for 2 former employees;

$7.4 million increase in compensation related costs principally as a result of an increase

in headcount;

● approximately

$0.9 million increase in stock based compensation from RSA grants to Lucid and PAVmed employees

and non-employees, and an increase in stock options granted corresponding with the increase

in the number of employees;

$1.2 million increase in stock based compensation from RSA grants to Lucid Diagnostics and

PAVmed employees and non-employees, and an increase in stock options granted corresponding

with the increase in headcount;

● approximately

$1.5 million increase in outside professional services related to EsoCheck, EsoGuard

and consulting and professional services fees.

$1.6 million increase in consulting and outside professional services;

● approximately

$0.2 million increase general business expenses.

and administrative expenses

the year ended December 31, 2021, general and administrative costs were approximately $25.6 million, compared to $9.6 million for the

corresponding period in the prior year.

the year ended December 31, 2022, general and administrative costs were approximately $41.0 million, compared to $25.4 million in the

The net increase of $15.6 million was principally related to:

● approximately

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

$3.5 million increase in compensation related costs principally as a result of an increase

in headcount;

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● approximately

$4.2 million in consulting services related to patents, regulatory compliance, legal

processes for contract review, transition of PR and IR firms, and public company expenses;

$9.2 million increase in consulting services related to patents, regulatory compliance, legal

processes for contract review, transition of public relations and investor relations firms,

and public company expenses;

● approximately

$1.1 million in general business expenses.

$1.6 million increase in general business expenses.

and development expenses

the year ended December 31, 2021, research and development costs were approximately $19.8 million as compared to $11.0 million for the

corresponding period in the prior year.

the year ended December 31, 2022, research and development costs were approximately $25.5 million as compared to $19.8 million in the

The net increase $5.7 million was principally related to:

1 unchanged sentence

$3.2 million increase in development costs, particularly in clinical trial activities and

outside professional and consulting fees with respect to EsoCheck, EsoCure, CarpX, NextFlo,

Port IO, a glucose monitoring project, and a digital health project;

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

CarpX, EsoCure and PortIO;

● approximately

1 unchanged sentence

engineering staff.

● approximately

$0.4 million increase in stock based compensation from RSA grants to Lucid and PAVmed employees

and non-employees, and an increase in stock options granted corresponding with the increase

in the number of employees.

As mentioned above, above we have

paused research and development with respect to CarpX, EsoCure and PortIO.

Until such time as resources permit, we expect to devote our

research and development efforts to EsoGuard, EsoCheck and the Veris Cancer Care Platform.

of Acquired Intangible Assets

the year ended December 31, 2022, the amortization of acquired intangible assets was approximately $1.8 million as compared to $0.1 million

in the prior year.

The net increase was principally related to the purchase of a defensive asset in Q4 2021 and the purchase of laboratory

licenses and certifications and laboratory information management software in Q1 2022.

of Operations - continued

year ended December 31, 2022 as compared to the year ended December 31, 2021 - continued

Income and Expense

the year ended December 31, 2021, our PPP loan related to the CARES Act of $0.3 million was forgiven by the Small Business Administration.

No principal or interest payments were ever made and accordingly we recorded a gain of $0.3 million.

in fair value of convertible debt

the year ended December 31, 2022, the non-cash expense recognized for the change in the fair value of our convertible notes was approximately

$1.3 million, related to both the April 2022 and September 2022 Senior Convertible Notes.

The April 2022 and September 2022 Senior Convertible

Notes were initially measured at their issue-date estimated fair value and subsequently remeasured at estimated fair value as of the

reporting period date.

The Company initially recognized a $3.5 million fair value non-cash expense on the issue-dates.

This initial recognition

was partially offset by $2.2 million of decreases in fair value upon remeasurements through December 31, 2022.

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

was approximately $1.7 million, as compared to $6.0 million of other expense for the year ended December 31, 2020.

The change in the

fair value adjustment of the convertible notes is principally related to each of the convertible notes being repaid-in-full during the

year ended December 31, 2021, as discussed herein below under “Other Income and Expense - Loss from Extinguishment of Debt”.

Note 12, Financial Instruments Fair Value Measurements , and Note 13, Debt , of our consolidated financial

statements for a further discussion of the change in fair value of our convertible notes, and “Liquidity and Capital Resources”,

was approximately $1.7 million of other income.

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

to each of the convertible notes being repaid-in-full during the year ended December 31, 2021, as discussed herein below under “Loss

from Extinguishment of Debt.”

on Issue and Offering Costs - Senior Secured Convertible Note

the year ended December 31, 2022, in connection with the issue of both the April 2022 and the September 2022 Senior Convertible Notes,

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

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

on Debt Extinguishment

the year ended December 31, 2022, a debt extinguishment loss in the aggregate of approximately $5.4 million was recognized in connection

with the convertible notes, as discussed below.

with our April 2022 Senior Convertible Note as discussed below.

2022, approximately $6.0 million of principal repayments along with $0.4 million of interest

expense thereon, were settled through the issuance of 7,189,358 shares of common stock of

the Company, with such shares having a fair value of approximately $11.8 million (with such

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

stock of the Company).

The conversions resulted in a debt extinguishment loss of $5.4 million

in the year ended December 31, 2022.

the prior year ended December 31, 2021, a debt extinguishment loss in the aggregate of approximately $3.7 million was recognized in connection

with the (previous) convertible notes, as discussed below.

January 5, 2021, the repayment of the remaining face value principal of the November 2019

Senior Convertible Note of approximately $956, along with the payment of interest thereon

of approximately $7, were settled with the issuance of 667,668 shares of our common stock,

with a fair value of approximately $1,723 (with such fair value measured as the respective

conversion date quoted closing price of our common stock), resulting in the recognition of

a loss from extinguishment of debt of approximately $760 in the six months ended June 30,

Senior Convertible Note, along with the payment of interest thereon of approximately $1.0

million, were settled with the issuance of 667,668 shares of our common stock, with a fair

value of approximately $1.7 million (with such fair value measured as the respective conversion

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

extinguishment of debt of approximately $0.8 million in the year ended December 31, 2021;

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

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

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

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

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

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

debt of approximately $2,955 in the six months ended June 30, 2021.

the prior year ended December 31, 2020, a loss from extinguishment of debt of approximately $6.5 million was recognized, with such loss

resulting from the difference between:

the face value principal repayments and the corresponding payments of the interest thereon;

compared to the fair value of the shares of our common stock issued upon conversion of such convertible note, with such fair value measured

as the respective issue date closing quoted price per share of our common stock.

our consolidated financial statements Note 13, Debt , for additional information with respect to the convertible notes.

Company has total estimated federal and state net operating loss (“NOL”) carryforward of approximately $104.1

million and $63.0 million as of December 31, 2021 and 2020, respectively, which is available to reduce future taxable income, of which

approximately $13.8 million have statutory expiration dates commencing in 2036, and approximately $90.3 million

which do not have a statutory expiration date.

The Company has not yet conducted a formal analysis and the NOL carryforward may be subject-to

limitation under U.S.

Internal Revenue Code (“IRC”) Section 382 (provided there was a greater than 50% ownership change,

as computed under such IRC Section 382).

The State and Local NOL carryforwards of approximately 103.9 million have statutory

expiration dates commencing in 2036.

The Company has total estimated research and development (“R&D”) tax credit carryforward

of approximately 0.4 million as of December 31, 2021 which are available to reduce future tax expense and have statutory

expiration dates commencing in 2036.

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the pandemic

resulting from the outbreak of a novel strain of a coronavirus designated as the “Severe Acute Respiratory Syndrome Coronavirus

2” - or “SARS-CoV-2”.

The pandemic resulting from SARS-CoV-2 is commonly referred to by its resulting illness of “coronavirus

disease-2019” (“COVID-19”), and is referred to herein as the COVID-19 pandemic.

other provisions, the CARES Act increases the limitation on the allowed business interest expense deduction from 30 percent to 50 percent

of adjusted taxable income for tax years beginning January 1, 2019 and 2020 and allows businesses to immediately expense the full cost

of Qualified Improvement Property, retroactive to tax years beginning on or after January 1, 2018.

Additionally, the CARES Act permits

net operating loss carryovers (“NOLs”) and carrybacks to offset 100% of taxable income for taxable years beginning before

In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable

years to generate a refund of previously paid income taxes.

The Company evaluated the impact of these CARES Act provisions and determined

they did not have a material impact on the consolidated income tax provision.

our consolidated financial statements Note 18, Income Taxes , for additional information with respect to our income tax

provision, deferred tax assets, and deferred tax liabilities.

debt of approximately $3.0 million in the year ended December 31, 2021.

Note 14 , Debt , to the Financial Statements, for additional information with respect to the April 2022 and the September 2022 Senior

Convertible Note.

and Capital Resources

current operational activities are principally focused on the commercialization of EsoGuard and the Veris Cancer Care Platform, and,

as resource permit, our development activities would be focused on pursuing FDA approval and clearance of other lead products in our

product portfolio pipeline.

Our ability to generate revenue depends upon successfully advancing the commercialization of EsoGuard and

the Veris Cancer Care Platform while, as resources permit, also completing the development and the necessary regulatory approvals of

our other products and services.

There are no assurances, however, we will be able to obtain an adequate level of financial resources

required for the short-term or long-term commercialization and development of its products and services.

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

4 unchanged sentences

We expect to continue to experience recurring losses from operations, and will continue to fund

our operations with debt and equity financing transactions.

Notwithstanding, however, together with the cash on-hand as of December 31,

2021, we expect to be able to fund our future operations for one year from the date of the issue of our consolidated financial statements

as included in our Annual Report on Form 10-K for the year ended December 31, 2021.

Ended December 31, 2021

January 5, 2021, a total of 6,000,000 shares of common stock of PAVmed Inc.

for gross proceeds of approximately $13,434, before a placement agent fee and expenses of

approximately $951, and offering costs incurred by the Company of approximately $71.

shares of common stock were issued in a registered direct offering pursuant to a Prospectus

Supplement dated January 5, 2021 with respect to the Company’s effective shelf registration

statement on Form S-3 (File No.

February 23, 2021, a total of 9,782,609 shares of common stock of PAVmed Inc.

issued for proceeds of approximately $41,566, before offering costs incurred by the Company

of approximately $290.

The shares of common stock were issued in an underwritten registered

offering pursuant to a final Prospectus Supplement dated February 23, 2021, with respect

to the Company’s effective shelf registration statement on Form S-3 (File No.

January 2021, 667,668 shares of PAVmed Inc.

common stock were issued upon conversion,

at the election of the holder, of the November 2019 Senior Convertible Note remaining face

value principal of approximately $956 along with approximately $7 of interest thereon, as

discussed in Note 13, Debt .

the year ended December 31, 2021, 210,448 shares of PAVmed Inc.

common stock were

issued upon conversion of the same number of shares of Series B Convertible Preferred Stock.

See Note 15, Preferred Stock , for a discussion of the Series B Convertible

Preferred Stock.

the year ended December 31, 2021, an aggregate of 4,881,429 shares of PAVmed Inc.

common stock were issued upon exercise of common stock purchase warrants,

including 4,877,484 with respect to Series Z Warrants;

and 3,945 with respect to Series W

the year ended December 31, 2021, 621,164 shares of PAVmed Inc.

common stock were

issued upon exercise of stock options for cash of approximately $980.

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

2014 Equity Plan.

the year ended, the PAVmed Inc.

Employee Stock Purchase Plan purchased 234,592 shares of

common stock of the Company.

See Note 14, Stock-Based Compensation , for a discussion

of the PAVmed Inc.

Employee Stock Purchase Plan.

Ended December 31, 2020

2020, a total of 10,647,500 shares of PAVmed Inc.

common stock were

issued for gross proceeds of approximately $17,036, before a total placement agent fee and

expenses of approximately $1,004, and total offering costs of approximately $100.

of common stock were issued in two registered direct offerings pursuant to a respective Prospectus

Supplement dated December 11, 2020 and December 18, 2020, each with respect to the Company’s

effective shelf registration statement on Form S-3 (File No.

2020, a total of 10,929,202 shares of common stock of PAVmed Inc.

were issued upon

partial conversions of each of the December 2018 Senior Convertible Note and the November

2019 Senior Convertible Notes, as discussed in Note 13, Debt .

2020, 306,555 shares of PAVmed Inc.

common stock were purchased by employees through

participation in the PAVmed Inc.

Employee Stock Purchase Plan, as discussed in Note 14,

Stock-Based Compensation .

the year ended December 31, 2021, the Company repaid-in-full all of the outstanding principal balances of our convertible notes, as discussed

herein above under “ Other Income and Expense - Loss from Extinguishment of Debt ”.

See our consolidated financial statements

Note 13, Debt, for additional information with respect to prior year debt funding.

October 14, 2021, Lucid Diagnostics Inc.

completed an initial public offering (“IPO”) of its common stock under an effective

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

333-259721), wherein a total of 5.0 million shares of common stock were issued, inclusive

of 571,428 issued to PAVmed Inc., at an IPO offering price of $14.00 per share, resulting gross proceeds to Lucid Diagnostics Inc.

$70.0 million, before underwriting fees of $4.9 million, and approximately $0.7 million of offering costs incurred by Lucid Diagnostics

(Lucid Diagnostics Inc.

is a majority-owned subsidiary of PAVmed Inc., and PAVmed Inc.

has a controlling financial interest in Lucid Diagnostics Inc., both before and after the Lucid Diagnostics Inc.

In this regard, PAVmed Inc.

held 81.8477% and 79.9796% of Lucid Diagnostics Inc.

common stock issued and outstanding before and after the Lucid Diagnostics Inc.

IPO, respectively, with such percentages computed excluding the common shares underlying unvested restricted stock awards granted under the Lucid Diagnostics Inc.

Long-Term Equity Incentive Plan.)

Lucid Diagnostics Inc - Committed Equity Facility

Subsequent to December 31,

2021, in March 2022, Lucid Diagnostics, Inc.

entered into a committed equity facility with an affiliate of Cantor.

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

our operations with debt and/or equity financing transactions.

Notwithstanding, however, with the cash on-hand as of the date hereof

and other debt and equity committed sources of financing, we expect to be able to fund our future operations for one year from the date

of the issue of the Financial Statements.

of Shares of Our Common Stock

the year ended December 31, 2022

issued 299,999 shares of our common stock for cash proceeds of approximately $0.3 million

upon exercise of stock options granted under the PAVmed 2014 Equity Plan, as such equity

plan is discussed in Note 15, Stock-Based Compensation , to the Financial Statements.

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

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

Note 15, Stock-Based Compensation, to the Financial Statements.

issued 106,225 shares of our common stock for proceeds of approximately $0.1 million from

the sale of shares through PAVmed’s at-the-market equity facility through Cantor Fitzgerald

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

as of March 31, 2022, we entered into the SPA with the Investor, pursuant to which we agreed to sell, and the Investor agreed to purchase

an aggregate of $50.0 million face value principal of Senior Secured Convertible Notes.

The SPA provided for the sale of the initial

Senior Secured Convertible Note with a face value principal of $27.5 million, which closed on April 4, 2022 (referred to as the “April

2022 Senior Convertible Note”).

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

closings (upon the satisfaction of certain conditions), with an aggregate face value principal of up to an additional $22.5 million.

The April 2022 Senior Secured Convertible Note has a 7.875% annual stated interest rate, a contractual conversion price of $5.00 per

share of the Company’s common stock (subject to standard adjustments in the event of any stock split, stock dividend, stock combination,

recapitalization or other similar transaction), and a contractual maturity date of April 4, 2024.

The April 2022 Senior Convertible Note

may be converted into or otherwise paid in shares of our common stock as described in Note 14, Debt.

The April 2022 Senior Convertible

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

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

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

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

The September

2022 Senior Secured Convertible Note has a 7.875% annual stated interest rate, a contractual conversion price of $5.00 per share of the

Company’s common stock (subject to standard adjustments in the event of any stock split, stock dividend, stock combination, recapitalization

or other similar transaction), and a contractual maturity date of September 6, 2024.

The September 2022 Senior Convertible Note may be

converted into or otherwise paid in shares of our common stock as described in Note 14, Debt.

The September 2022 Senior Convertible Note

proceeds were $10.0 million after deducting a $1.0 million lender fee and the Company’s total offering costs of approximately $0.2

million, inclusive primarily of placement agent fees.

and Capital Resources - continued

August 9, 2022, the Company and the Investor also agreed, in connection with the waiver described in Note 14, Debt , to the Financial

Statements, that the Investor may convert up to $5.0 million of the principal amount of the April 2022 Senior Convertible Note at the

then current conversion price as if the date of conversion were an Installment Date, i.e.

a price per share of common stock equal to

the lower of (i) the fixed conversion price then in effect (currently $5.00) and (ii) 82.5% of the average VWAP of the Company’s

common stock for each of the two trading days with the lowest VWAP of the Company’s common stock during the ten consecutive trading

day period ending and including the trading day immediately prior to the applicable conversion date, but in the case of clause (ii),

not less than $0.18 per share.

As contemplated by such amendment, in the year ended December 31, 2022, approximately $6.0 million of

principal repayments along with $0.4 million of interest expense thereon, were settled through the issuance of 7,189,358 shares of our

common stock.

the Senior Convertible Notes and the SPA, we are subject to certain customary affirmative and negative covenants regarding the incurrence

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

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

among other customary matters.

We also are subject to financial covenants requiring that (i) the amount of our available cash equal or

exceed $8.0 million at all times, (ii) the ratio of (a) the outstanding principal amount of the notes issued under the SPA, accrued and

unpaid interest thereon and accrued and unpaid late charges to (b) our average market capitalization over the prior ten trading days,

not exceed 30% (except that such maximum percentage is 50% for the period from September 8, 2022 through March 5, 2023) (the “Debt

to Market Cap Ratio Test”), and (iii) that our market capitalization shall at no time be less than $75 million (the “Market

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

From time to time from and

after September 8, 2022, including as of December 31, 2022, the Company was not in compliance with the Financial Tests.

As of March 12,

2023, the Investor agreed to waive any such non-compliance during such aforementioned time periods, under the Senior Convertible Notes

Accordingly, as of the date of this Form 10-K, the Company is in compliance with the Financial Tests.

Note 14 , Debt , to the Financial Statements for additional information about the SPA and the Senior Secured Convertible Notes.

Diagnostics - Series A Preferred Stock Offering

On 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 $1.394.

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

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 million.

Diagnostics - Private Placement - Securities Purchase Agreement

Effective 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

The issuance of the March 2023 Lucid Senior Convertible Note is subject to customary closing conditions.

The 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.

and Capital Resources - continued

December 2021, we entered into 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.

In the year ended December 31, 2022,

the Company sold 106,225 shares through their at-the-market equity facility for approximately $79.

Subsequent to December 31, 2022, through

March 9, 2023, we sold 1,081,997 shares through their at-the-market equity facility for approximately $0.5 million.

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

- Committed Equity Facility and ATM Facility

March 2022, our majority-owned subsidiary, Lucid Diagnostics, entered into a committed equity facility with Cantor.

Under the terms of

the committed equity facility, Cantor has committed to purchase up to $50 million of Lucid Diagnostics common stock from time to time

at the request of Lucid Diagnostics.

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

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

market price.

Financings Subsequent to December 31, 2021

Inc - Private Placement - Securities Purchase Agreement

Subsequent to December 31, 2021,

on March 31, 2022, we entered into the March 2022 SPA with an accredited institutional investor , for the sale of up to $50.0 million in

initial principal amount of March 2022 Notes, in a registered direct offering (which we refer to as 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.

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.

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

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

March 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.

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 March 2022 Notes also may be repaid in shares of our common stock,

at price per share of our common stock based on the then current market price, but not more than the fixed conversion price then in effect

and not less than a floor price, upon the occurrence of certain events of default.

We may be required to repay the March 2020 Notes,

in cash, at a premium to the outstanding principal balance, upon the occurrence of an event of default or upon a Change of Control (as

defined in the March 2020 Notes).

We will be subject to certain customary affirmative

and negative covenants regarding the rank of the March 2022 Notes, the incurrence of indebtedness, the existence of liens, the repayment

of indebtedness and the making of investments, the payment of cash in respect of dividends, distributions or redemptions, the transfer

of assets, the maturity of other indebtedness, and transactions with affiliates, among other customary matters.

We also will be subject

to financial covenants requiring that (i) the amount of our available cash equal or exceed $8.0 million at all times, (ii) the ratio of

(a) the outstanding principal amount of the March 2022 Notes, accrued and unpaid interest thereon and accrued and unpaid late charges

to (b) our average market capitalization over the prior ten trading days, not exceed 30%, and (iii) that our market capitalization shall

at no time be less than $75 million.

The March 2022 Notes include certain customary events of default.

As of December 31, 2022, under the committed equity facility, a total of 680,263 shares of common stock of Lucid Diagnostics

were issued for proceeds of approximately $1.8 million.

In 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.

In 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.

Accounting Policies and Significant Judgments and Estimates

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financial statements.

Company recognizes revenue under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification

(“ASC”) Topic 606, Revenue from Contracts with Customers , (“ASC 606”).

At its inception, an arrangement

is accounted for under the provisions of ASC 606 as a contract with a customer when there is:

a legally enforceable contract between

the rights of the parties are identified;

the arrangement has commercial substance;

and collectability of the contract consideration

is deemed probable.

To determine revenue recognition for arrangements determined to be within the scope of ASC 606, the Company performs

the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize

revenue when (or as) the entity satisfies a performance obligation.

and Development Expenses

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used in research and development activities, and fees incurred for access to certain facilities of contract research service providers.

Instruments Fair Value Measurements

ASC Topic 820, Fair Value Measurement, (ASC 820) defines fair value as the price which would be received to sell an asset or paid to

transfer a liability in an orderly transaction between market participants at a transaction measurement date.

The ASC 820 three-tier

fair value hierarchy prioritizes the inputs used in the valuation methodologies, as follows:

based on quoted prices for identical assets and liabilities in active markets.

based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in

active markets, quoted prices for identical or similar assets and liabilities in markets which are not active, or other inputs observable

or can be corroborated by observable market data.

based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made

by other market participants.

These valuations require significant judgment.

recurring and non-recurring estimated fair value measurements are subjective and are affected by changes in inputs to the valuation models,

including the Company’s common stock price, and certain Level 3 inputs, including, the assumptions regarding the estimated volatility

in the value of the Company’s common stock price;

the Company’s dividend yield;

the likelihood and timing of future dilutive

transactions, as applicable, along with the risk-free rates based on U.S.

Treasury security yields.

Changes in these assumptions can

materially affect the estimated fair values.

Value Option (“FVO”) Election

Senior Secured Convertible Notes and Senior Convertible Note are each a debt host financial instrument containing embedded features and

/or options which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject

to initial and subsequent periodic estimated fair value measurements under ASC 815.

Notwithstanding, FASB ASC Topic 825, Financial Instruments,

(“ASC 825”) provides for the “fair value option” (“FVO”) election.

In this regard, ASC 825-10-15-4

provides for the FVO election (to the extent not otherwise prohibited by ASC 825-10-15-5) to be afforded to financial instruments, wherein

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

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

in the accompanying consolidated statement of operations.

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

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

Further, as required by ASC 825-10-45-5, to the extent a portion of the fair value adjustment is attributed to a change in the instrument-specific

credit risk, such portion would be recognized as a component of other comprehensive income (“OCI”).

Notwithstanding, there

was no such portion of the fair value adjustment attributed to a change in the instrument-specific credit risk in the years ended December

31, 2021 and 2020.

Financial Instruments - Derivatives

Company evaluates its financial instruments to determine if those instruments or any embedded components of those instruments potentially

qualify as derivatives required to be separately accounted for in accordance with FASB ASC Topic 815, Derivatives and Hedging (ASC 815).

The accounting for warrants issued to purchase shares of common stock of the Company is based on the specific terms of the respective

warrant agreement, and are generally classified as equity, but may be classified as a derivative liability if the warrant agreement provides

required or potential full or partial cash settlement.

A warrant classified as a derivative liability, or a bifurcated embedded conversion

or settlement option classified as a derivative liability, is initially measured at its issue-date fair value, with such fair value subsequently

adjusted at each reporting period, with the resulting fair value adjustment recognized as other income or expense.

If upon the occurrence

of an event resulting in the warrant liability or the embedded derivative liability being subsequently classified as equity, or the exercise

of the warrant or the conversion option, the fair value of the derivative liability will be adjusted on such date-of-occurrence, with

such date-of-occurrence fair value adjustment recognized as other income or expense, and then the derivative liability will be derecognized

at such date-of-occurrence fair value.

STOCK-BASED COMPENSATION

awards are made to members of the board of directors of the Company, the Company’s

employees and non-employees, under each of the PAVmed Inc.

2014 Long-Term Incentive Equity

Plan (“PAVmed Inc.

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

to herein as the “April 2022 Senior Convertible Note”, and a Senior Secured Convertible Note dated September 8, 2022, referred

to herein as the “September 2022 Senior Convertible Note”, which are accounted under the “fair value option election”

as discussed below.

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

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

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

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

value as of each reporting period balance sheet date.

Alternatively,

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

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

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

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

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

The estimated fair value adjustment of the

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

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

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

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

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

Note or the September 2022 Senior Convertible Note).

Note 13, Financial Instruments Fair Value Measurements , with respect to the FVO election;

and Note 14, Debt , for a discussion

of the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note.

awards are made to members of the board of directors of the Company, the Company’s employees and non-employees, under each of the

2014 Equity Plan and the Lucid Diagnostics Inc.

2018 Long-Term

Incentive Equity Plan (“Lucid Diagnostics Inc.

2018 Equity Plan.

Company accounts for stock-based compensation in accordance with the provisions of FASB ASC Topic 718, Stock Compensation (“ASC

grant-date estimated fair value of the stock-based award is recognized on a straight-line basis over the requisite service period, which

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respect to the PAVmed Inc.

2014 Equity Plan, the expected stock price volatility is based on the historical stock price volatility

of PAVmed Inc.

common stock and the volatilities of similar entities within the medical device industry over the period commensurate

with the expected term with respect to stock options granted to the board of directors and employees in the years ended December

31, 2021 and 2020;

2014 Equity Plan, the expected stock price volatility is based

on the historical stock price volatility of PAVmed Inc.

common stock and the volatilities

of similar entities within the medical device industry over the period commensurate with

the expected term with respect to stock options granted to the board of directors and employees

in the years ended December 31, 2022 and 2021;

respect to stock options granted under the Lucid Diagnostics Inc.

2018 Equity Plan, the expected stock price volatility was based

on the historical stock price volatility of similar entities within the medical device industry over the period commensurate with

the expected term with respect to stock options granted to employees in the year ended December 31, 2021;

There were no

stock options granted under the Lucid Diagnostics Inc.

2018 Equity Plan in the year ended December 31, 2020;

2018 Equity Plan, the expected

stock price volatility was based on the historical stock price volatility of similar entities

within the medical device industry over the period commensurate with the expected term with

respect to stock options granted to employees in the years ended December 31, 2022 and 2021;

risk-free interest rate is based on the interest rate payable on U.S.

Treasury securities in effect at the time of grant for a period

commensurate with either the expected term or the remaining contractual term, as applicable, of the stock option;

expected dividend yield is based on annual dividends of $0.00 as there have not been dividends paid to-date, and there is no plan

to pay dividends for the foreseeable future.

Treasury securities

in effect at the time of grant for a period commensurate with either the expected term or

the remaining contractual term, as applicable, of the stock option;

expected dividend yield is based on annual dividends of $0.00 as there have not been dividends

paid to-date, and there is no plan to pay dividends for the foreseeable future.

price per share of PAVmed Inc.

common stock used in the computation of estimated fair value of stock options granted under the PAVmed

2014 Equity Plan is its quoted closing price per share.

Prior to the Lucid Diagnostics Inc.

IPO, the price per share of Lucid Diagnostics

common stock used in the computation of estimated fair value of stock options granted under the Lucid Diagnostics Inc.

Plan was estimated using a discounted cash flow method applied to a multi-year forecast of its future cash flows.

After its IPO, the

price per share of Lucid Diagnostics Inc.

common stock used in the computation of estimated fair value of stock options granted under

the Lucid Diagnostics Inc.

common stock used in the computation of estimated fair value of stock options and restricted stock awards

granted under the PAVmed Inc.

2014 Equity Plan is its quoted closing price per share.

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

an effect on the Company’s consolidated financial statements.

All significant lease agreements and contractual agreements with

embedded lease agreements are accounted for under the provisions of ASC 842, wherein, if the contractual arrangement:

involves the use

of a distinct identified asset;

provides for the right to substantially all the economic benefits from the use of the asset throughout

the contractual period;

and, provides for the right to direct the use of the asset.

A lease agreement is accounted for as either a finance

lease (generally with respect real estate) or an operating lease (generally with respect to equipment).

Under both a finance lease and

an operating lease, the Company recognizes as of the lease commencement date a lease right-of-use (“ROU”) asset and a corresponding

lease payment liability.

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

its contractual obligation to make lease payments.

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

of the future lease payments plus initial direct costs incurred.

The Company recognizes lease expense of the amortization of the lease

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

and for financing leases on a straight-line basis unless

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

The lease liability is measured at the lease commencement date

with the discount rate generally based on the Company’s incremental borrowing rate (to the extent the lease implicit rate is not

known nor determinable), with interest expense recognized using the interest method for financing leases.

Company accounts for income taxes using the asset and liability method, as required by FASB ASC Topic 740, Income Taxes, (ASC 740).

tax liabilities or receivables are recognized for estimated income tax payable and/or refundable for the current year.

Deferred tax assets

and deferred tax liabilities are recognized for estimated future tax consequences attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their respective tax basis, along with net operating loss and tax credit carryforwards.

Deferred tax assets and deferred tax liabilities are measured using enacted tax rates expected to apply to taxable income in the years

in which those temporary differences are expected to be recovered or settled.

Changes in deferred tax assets and deferred tax liabilities

are recorded in the provision for income taxes.

ASC 740, a “more-likely-than-not” criterion is applied when assessing the estimated realization of deferred tax assets through

their utilization to reduce future taxable income, or with respect to a deferred tax asset for tax credit carryforward, to reduce future

A valuation allowance is established, when necessary, to reduce deferred tax assets, net of deferred tax liabilities, when

the assessment indicates it is more-likely-than-not, the full or partial amount of the net deferred tax asset will not be realized.

a result of the evaluation of the positive and negative evidence bearing upon the estimated realizability of net deferred tax assets,

and based on a history of operating losses, it is more-likely-than-not the deferred tax assets will not be realized, and therefore a

valuation allowance reserve equal to the full amount of the deferred tax assets, net of deferred tax liabilities, has been recognized

as a charge to income tax expense as of December 31, 2021 and 2020.

Company recognizes the benefit of an uncertain tax position it has taken or expects to take on its income tax return if such a position

is more-likely-than-not to be sustained upon examination by the taxing authorities, with the tax benefit recognized being the largest

amount having a greater than 50% likelihood of being realized upon ultimate settlement.

As of December 31, 2021, the Company does not

have any unrecognized tax benefits resulting from uncertain tax positions.

Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision.

There were no

amounts accrued for penalties or interest as of December 31, 2021 and December 31, 2020 or recognized during the years ended December

31, 2021 and 2020.

The Company is not aware of any issues under review to potentially result in significant payments, accruals, or material

deviations from its position.

October 14, 2021, Lucid Diagnostics Inc.

completed an initial public offering (“IPO”) of its common stock under an effective

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

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

were issued, with such total IPO shares inclusive of 571,428 shares issued to PAVmed Inc.

The price per share of Lucid Diagnostics

common stock used in the computation of estimated fair value of stock options and restricted stock awards granted under the Lucid

Diagnostics Inc.

2018 Equity Plan is as follows:

(i) for the period October 14, 2021 to December 31, 2022 it is its quoted closing price

and (ii) for the period January 1, 2021 to October 14, 2021, it was estimated using a probability-weighted average expected

return methodology (“PWERM”), which involves the determination of equity value under various exit scenarios and an estimation

of the return to the common stockholders under each scenario.

Accounting Standards Updates Adopted

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accounting models previously contained in ASC 470-20 that required separate accounting for embedded conversion features.

also simplified the assessment of a financial instrument settlement to determine whether a contract is an entity’s own equity

qualifies for equity classification by removing certain conditions from ASC 815-4-25.

The ASU 2020-06 amendments are effective for fiscal

years beginning after December 15, 2023, and interim periods within those fiscal years.

Early adoption is permitted, but no earlier than

fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

The Company’s adoption of

the ASU 2020-06 guidance as of January 1, 2021 did not have an effect on the Company’s consolidated financial statements.

also simplified the assessment of a financial instrument settlement to determine whether a contract is an entity’s own equity qualifies

for equity classification by removing certain conditions from ASC 815-4-25.

The ASU 2020-06 amendments are effective for fiscal years

beginning after December 15, 2023, and interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal

years beginning after December 15, 2020, including interim periods within those fiscal years.

The Company’s adoption of the ASU

2020-06 guidance as of January 1, 2021 did not have an effect on the Company’s consolidated financial statements.

December 2019, the FASB issued ASU No.

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ASU 2019-12 guidance as of January 1, 2021 did not have an effect on the Company’s consolidated financial statements.

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

ASC 842 established a right-of-use (“ROU”)

model requiring a lessee to recognize a ROU asset and a lease liability for all leases with terms greater-than 12 months.

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

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

sheet arrangements

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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 7. Management’s Discussion and Analysis