What changed in this filing

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Item 9A. Controls and Procedures

2023-03-14 compared with 2022-04-06 · 1225 added, 1330 removed, 757 unchanged (77% of the section changed)

39 unchanged sentences

to Internal Controls Over Financial Reporting

There have been no change

in internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during

the year ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over

financial reporting.

has been no change in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange

Act) that occurred during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect,

our internal controls over financial reporting.

Other Information

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Directors, Executive Officers and Corporate Governance

information required by this Item 10 is incorporated by reference to our Proxy Statement for the 2021 Annual Meeting of Stockholders

information required by this Item 10 is incorporated by reference to our Proxy Statement for our 2023 Annual Meeting of Stockholders

to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2022.

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following financial statements:

of Independent Registered Public Accounting Firm (PCAOB ID#688)

Report of Independent Registered Public Accounting Firm (PCAOB ID#688)

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Equity (Deficit)

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

6 unchanged sentences

following exhibits:

Incorporation

Asset Purchase Agreement, dated as of February 25, 2022, by and among LucidDx Labs Inc., Lucid Diagnostics Inc.

and ResearchDx, Inc.

Certificate of Incorporation

3 unchanged sentences

Certificate of Amendment to Certificate of Incorporation, dated July 24, 2020

Certificate of Amendment to Certificate of Incorporation, dated June 21, 2022

Form of Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock

Certificate of Elimination - Series A Convertible Preferred Stock and Series A-1 Convertible Preferred Stock (6)

Amended and Restated Bylaws

Description of Registrant’s Securities

Specimen PAVmed Inc.

Common Stock Certificate (1)

Specimen PAVmed Inc.

Series Z Warrant Certificate (5)

Specimen Common Stock Certificate

Specimen Series Z Warrant Certificate

Amended and Restated Series Z Warrant Agreement, dated as of June 8, 2018, by and between PAVmed Inc.

and Continental Stock Transfer & Trust Company, as Warrant Agent

Form of Senior Secured Convertible Note (15)

Form of PAVmed Inc.

Senior Secured Convertible Note

Patent Option Agreement

1 unchanged sentence

Form of Letter Agreement with Pavilion Venture Partners LLC

Letter agreement regarding corporate opportunities executed by Dr.

Lishan Aklog, M.D.

Letter agreement regarding corporate opportunities executed by Lishan Aklog, M.D.

Letter agreement regarding corporate opportunities executed by Michael Glennon

Letter agreement regarding corporate opportunities executed by Dr.

Brian deGuzman, M.D.

Securities Purchase Agreement between PAVmed Inc.

and the purchasers of the Series A Preferred Stock Units (2)

Registration Rights Agreement between PAVmed Inc.

and the purchasers of the Series A Preferred Stock Units (2)

Letter agreement regarding corporate opportunities executed by Brian deGuzman, M.D.

Amended and Restated Employment Agreement between PAVmed Inc.

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deGuzman, M.D.

Employment Agreement between PAVmed Inc.

and Shaun O’Neil (18)

Fourth Amended and Restated 2014 Long-Term Incentive Equity Plan (10)(12)

Fifth Amended and Restated 2014 Long-Term Incentive Equity Plan

Employee Stock Purchase Plan

Common Stock Purchase Agreement, dated as of March 28, 2022, by and between CF Principal Investments LLC and Lucid Diagnostics Inc.(14)

Registration Rights Agreement, dated as of March 28, 2022, by and between CF Principal Investments LLC and Lucid Diagnostics Inc.(14)

Asset Purchase Agreement, dated as of February 25, 2022, by and among LucidDx Labs Inc., Lucid Diagnostics Inc.

Employment Agreement between PAVmed Inc.

and Michael A.

Employment Agreement between PAVmed Inc.

Amended and Restated License Agreement, dated as of August 23, 2021, by and between Case Western Reserve University and Lucid Diagnostics Inc.

Form of Stock Option Agreement

Form of Indemnification Agreement

Management Services Agreement, dated as of February 25, 2022, by and between LucidDx Labs Inc.

and ResearchDx, Inc.

Management Services Agreement, dated as of February 25, 2022, by and among LucidDx Labs Inc.

Termination Agreement, dated as of February 10, 2023, by and among Lucid Diagnostics Inc., LucidDx Labs Inc.

and ResearchDx, Inc.

Controlled Equity Offering SM , dated as of December 21, 2021, by and between Cantor Fitzgerald & Co.

and PAVmed Inc.

Form of Securities Purchase Agreement

1 unchanged sentence

Form of Voting Agreement

Common Stock Purchase Agreement, dated as of March 28, 2022, by and between CF Principal Investments LLC and Lucid Diagnostics Inc.

Registration Rights Agreement, dated as of March 28, 2022, by and between CF Principal Investments LLC and Lucid Diagnostics Inc.

Controlled Equity Offering SM , dated as of November 23, 2022, by and between Cantor Fitzgerald & Co.

and Lucid Diagnostics Inc.

Form of Code of Ethics

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Instance Document

Taxonomy Extension Schema

XBRL Instance Document

XBRL Taxonomy Extension Schema

Taxonomy Extension Calculation Linkbase

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Cover Page Interactive Data File (embedded within the Inline XBRL document)

by reference to the Registrant’s Registration Statement on Form S-1 - SEC File No.

by reference to the Registrant’s Current Report on Form 8-K filed February 1, 2017.

by reference to the Registrant’s Current Report on Form 8-K filed May 3, 2016.

by reference to the Registrant’s Current Report on Form 8-K filed July 19, 2016.

by reference to the Registrant’s Current Report on Form 8-K filed April 5, 2018.

by reference to the Registrant’s Current Report on Form 8-K/A filed April 20, 2018.

by reference to the Registrant’s Current Report on Form 8-K filed June 8, 2018.

by reference to the Registrant’s Current Report on Form 8-K filed October 2, 2018.

by reference to the Registrant’s Current Report on Form 8-K filed March 20, 2019.

by reference to the Registrant’s Definitive Proxy Statement on Schedule 14A filed June 11, 2020

by reference to the Registrant’s Current Report on Form 8-K filed June 27, 2019.

by reference to the Registrant’s Current Report on Form 8-K filed July 27, 2020.

by reference to the Registrant’s Current Report on Form 8-K filed January 15, 2021.

Incorporated by reference to Lucid Diagnostic Inc.’s

Current Report on Form 8-K filed on April 1, 2022.

Incorporated by reference to the Registrant’s

Current Report on Form 8-K filed April 4, 2022

Incorporated by reference to the Registrant’s

Definitive Proxy Statement on Schedule 14A filed April 30, 2021

Incorporated by reference to Lucid Diagnostic

Inc.’s Current Report on Form 8-K filed on March 3, 2022).

Incorporated by reference to the Registrant’s

Current Report on Form 8-K filed February 24, 2022.

contract or compensatory plan or arrangement.

Management contract or compensatory plan or arrangement.

Filed herewith

Lucid Diagnostics Inc.

Form 10-K Summary

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TO CONSOLIDATED FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020

Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 688 )

Consolidated Balance Sheets as of December 31, 2022 and 2021

Consolidated Statements of Operations for the years ended December 31, 2022 and 2021

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Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the year ended December 31, 2021

Consolidated Statements of Cash Flows for the year ended December 31, 2021 and 2020

Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021

Notes to Consolidated Financial Statements

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or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

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does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

of Lucid Diagnostics Inc.

(LUCD) common stock prior to its IPO

Valuation of Convertible Notes

Audit Matter Description

Company estimates the fair value of LUCD common stock for purpose of share based compensation utilizing valuation models with unobservable

Unlike Level 1 and 2 inputs, Level 3 inputs are unobservable, supported by little or no market activity and are significant to

the conclusion of fair value of LUCD common stock.

and challenging judgment is required by management to determine the assumptions and valuation methodology to conclude on material Level

3 inputs that result in the conclusion of fair value of LUCD common stock.

Auditing management’s models to determine the fair value

was complex and required judgment, particularly when evaluating inputs such as discount rates, probability of event occurring, estimated

IPO value, number of common equivalent shares, projections, guideline companies, weighting of the income approach and market approach,

public company multiples, and multiples of revenue.

These assumptions are affected by potential future outcomes, market and industry

factors as well as estimates of the LUCD’s future growth.

described in Note 14 to the consolidated financial statements, the Company issued $38.75 million in aggregate principal of Senior Secured

Convertible Notes pursuant to a Securities Purchase Agreement dated March 31, 2022.

The Senior Secured Convertible Notes contain conversion

and redemption features.

The Company elected to account for the Senior Secured Convertible Notes under the fair value option in accordance

with ASC 825.

The fair value of the Senior Secured Convertible Notes was $33.65 million as of December 31, 2022.

identified the valuation of convertible notes as a critical audit matter as auditing the Company’s fair value of the Senior Secured Convertible

Notes was complex and involved a high degree of subjectivity because the Company used a complex valuation methodology that incorporated

significant management assumptions including debt yield and implied volatility.

Also, this matter caused us to use increased effort including

involvement of professionals with specialized skill and knowledge.

the Critical Audit Matter Was Addressed in the Audit

audit procedures to address this critical audit matter included the following:

We obtained an understanding

of the design of controls associated with the Company’s process to establish a valuation methodology and determine assumptions

used in valuation models to conclude on fair value.

For example, we gained an understanding of management’s review controls

over the significant assumptions described above as well as over the data used in the valuation models.

With assistance from

our valuation specialists, we evaluated the reasonableness of the valuation methodology and significant assumptions;

tested inputs

for reasonableness, including discount rates, guideline companies, weighting of the income approach and market approach, public company

multiples and multiples of revenue;

and corroborated with audit evidence from external sources or comparisons to other companies

in the industry.

We gained an understanding

of the Company’s process used to develop projections and tested inputs including probability of event occurring, estimated

IPO value, and number of common equivalent shares for reasonableness.

Further, we evaluated audit evidence from events or transactions

occurring after the measurement date for comparison to management’s estimate.

audit procedures related to the valuation of convertible notes included the following, among others:

We obtained an understanding of the design of the Company’s controls over the valuation of the convertible notes, including controls

over management’s review of the valuation model and the significant assumptions used in determining the fair value of the convertible

With assistance of our valuation specialists, we audited the fair value of the Senior Secured Convertible Notes,

valuation methodology and key assumptions used in determining the fair value of the Senior Secured Convertible Notes by:

Evaluating the appropriateness of the valuation model and techniques used in determining the fair value;

Assessing whether significant valuation assumption inputs, including debt yield and implied volatility are consistent with those that

would be used by market participants through the testing of source information, checking the mathematical accuracy of the calculation,

and developing independent estimates and comparing to those selected by management, where applicable;

Recalculating the fair value that management arrived to verify it was reasonable.

We tested the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

have served as the Company’s auditor since 2019.

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thousands except number of shares and per share data)

expenses, deposits, and other current assets

December 31, 2022

December 31, 2021

Current assets:

Preferred Stock and Stockholders’ Deficit

expenses and other current liabilities

Act Paycheck Protection Program note payable

Secured Convertible Notes - at fair value

Convertible Note - at fair value

and contingencies (Note 11)

Stockholders’

Equity (Deficit):

stock, $ 0.001 par value.

Accounts receivable

Prepaid expenses, deposits, and other current assets

Total current assets

Fixed assets, net

Operating lease right-of-use assets

Intangible assets, net

Liabilities, Preferred Stock and Stockholders’ Equity

Current liabilities:

Accounts payable

Accrued expenses and other current liabilities

Operating lease liabilities, current portion

Senior Secured Convertible Notes - at fair value

Total current liabilities

Operating lease liabilities, less current portion

Total liabilities

Commitments and contingencies (Note 12)

Stockholders’ Equity:

Preferred stock, $ 0.001 par value.

Authorized, 20,000,000 shares;

Series B Convertible Preferred Stock, par value $ 0.001 , issued and outstanding

1,113,919 at December 31, 2021 and 1,228,075 shares at December 31, 2020

stock, $ 0.001 par value.

Series B Convertible Preferred Stock, par value $ 0.001 , issued and outstanding 1,205,759 at December 31, 2022 and 1,113,919 shares at December 31, 2021

Common stock, $ 0.001 par value.

Authorized, 250,000,000 shares;

86,367,845 and 63,819,935 shares outstanding as of December 31, 2021 and

December 31, 2020, respectively

paid-in capital

94,510,537 and 86,367,845 shares outstanding as of December 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

Treasury stock

Total PAVmed Inc.

Stockholders’ Equity

Noncontrolling

Stockholders’ Equity (Deficit)

Liabilities and Stockholders’ Equity

Noncontrolling interests

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

accompanying notes to the consolidated financial statements.

STATEMENTS OF OPERATIONS

thousands except number of shares and per share amounts)

Ended December 31,

profit (loss)

and marketing

and administrative

and development

thousands except number of shares and per share data)

Years Ended December 31,

Operating expenses:

from operations

income (expense):

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

costs - Senior Secured Convertible Note and Senior Convertible Note

extinguishments loss - Senior Secured Convertible Notes

income (expense), net

before provision for income tax

for income taxes

loss before noncontrolling interests

loss attributable to the noncontrolling interests

loss attributable to PAVmed Inc.

Cost of revenue

Sales and marketing

General and administrative

Amortization of acquired intangible assets

Research and development

Total operating expenses

Net loss from operations

Other income (expense):

Interest expense

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

Loss on issue and offering costs - Senior Secured Convertible Note

Debt extinguishments loss - Senior Secured Convertible Notes

Debt forgiveness

Other income (expense), net

Loss before provision for income tax

Provision for income taxes

Net loss before noncontrolling interests

Net loss attributable to the noncontrolling interests

Net loss attributable to PAVmed Inc.

Series B Convertible Preferred Stock dividends earned

loss attributable to PAVmed Inc.

Net loss attributable to PAVmed Inc.

common stockholders

share information:

loss per share attributable to PAVmed Inc.

Per share information:

Net loss per share attributable to PAVmed Inc.

- basic and diluted

loss per share attributable to PAVmed Inc.

Net loss per share attributable to PAVmed Inc.

common stockholders – basic and diluted

average common shares outstanding, basic and diluted

Weighted average common shares outstanding, basic and diluted

accompanying notes to the consolidated financial statements.

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Stockholders’ Equity (Deficit)

B Convertible Preferred Stock

- December 31, 2021

$ ( 138,910 )

declared - Series B Convertible Preferred Stock

- Series B Convertible Preferred Stock

common stock - registered offerings, net

Issue common stock – exercise Series S warrants

Issue common stock – exercise Series S warrants, shares

- restricted stock awards vests

common stock - PAVM ATM Facility

- restricted stock awards

- Series Z warrants

- Series W warrants

- Senior Secured Convertible Note

- stock options

- stock options of majority-owned subsidiary

- Employee Stock Purchase Plan

common stock of majority-owned subsidiary

- majority-owned subsidiary common stock - Employee Stock Purchase Plan

- majority-owned subsidiary common stock - Committed Equity Facility, net of financing charges

of subsidiary equity transactions

of common stock of majority-owned subsidiary

- majority-owned subsidiary common stock - Settlement APA-RDx - Installment Payment

compensation - PAVmed Inc.

compensation - majority-owned subsidiary

common stock of majority- owned subsidiary exercise of stock options

compensation - majority-owned subsidiaries

- December 31, 2022

$ ( 228,169 )

(1) Primarily

represents the impact of the Lucid Diagnostics Inc.

See Note 17, Noncontrolling

Interest for further information.

accompanying notes to the consolidated financial statements.

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thousands, except number of shares and per share data)

Stockholders’ Deficit

Stockholders’ Equity (Deficit)

B Convertible Preferred Stock

- December 31, 2020

declared - Series B Convertible Preferred Stock

- Series B Convertible Preferred Stock

common stock – registered offerings, net

common stock upon partial conversions of Senior Secured Convertible Note

- restricted stock awards

- Series Z warrants

- Series W warrants

- Senior Secured Convertible Note

common stock – exercise Series S warrants

common stock – exercise Series Z warrants

common stock – conversion Series B Convertible Preferred Stock

- Series B Convertible Preferred Stock

B Convertible Preferred Stock dividends declared

declared - Series B Convertible Preferred Stock

common stock - Employee Stock Purchase Plan

- stock options

- Employee Stock Purchase Plan

of restricted stock awards

of subsidiary equity transactions

compensation - PAVmed Inc.

2014 Equity Plan

compensation - majority-owned subsidiary

common stock of majority- owned subsidiary exercise of stock options

in Veris Health Inc.

- December 31, 2021

$ ( 138,910 )

accompanying notes to the consolidated financial statements.

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thousands, except number of shares and per share data)

Ended December 31,

flows from operating activities

loss - before noncontrolling interest (“NCI”)

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

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

extinguishment loss - Senior Secured Convertible Notes and Senior Convertible Note

in operating assets and liabilities:

expenses and other current assets

expenses and other current liabilities

cash flows used in operating activities

flows from investing activities

Acquisitions,

net of cash acquired

cash flows used in investing activities

flows from financing activities

- issue of common stock - initial public offering - majority-owned subsidiary common stock

- offering costs - initial public offering - majority-owned subsidiary common stock

– issue of common stock – registered offerings

– offering costs – registered offerings

– issue of Senior Secured Convertible Notes

– issue of Senior Convertible Note

– Cares Act Paycheck Protection Program Loan

– repayment of Senior Convertible Note and Senior Secured Convertible Note

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

– exercise of Series Z warrants

– exercise of Series W warrants

– exercise of Series S warrants

– exercise of stock options

– issue common stock – Employee Stock Purchase Plan

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

cash flows provided by financing activities

increase (decrease) in cash

beginning of period

end of period

Year Ended December 31,

Cash flows from operating activities

Net loss - before noncontrolling interest (“NCI”)

$ ( 103,238 )

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

Depreciation and amortization expense

Stock-based compensation

In-process R&D charge

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

Change in fair value - Senior Secured Convertible Note

Loss upon Issuance - Senior Secured Convertible Note

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

Debt forgiveness

Non-cash lease expense

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses, deposits and current and other assets

Accounts payable

Accrued expenses and other current liabilities

Net cash flows used in operating activities

Cash flows from investing activities

Purchase of equipment

Asset acquisitions, net of cash

Net cash flows used in investing activities

Cash flows from financing activities

Proceeds – issue of common stock - initial public offering - majority-owned subsidiary

Payment – offering costs - initial public offering - majority-owned subsidiary common stock

Proceeds – issue of common stock – registered offerings

Payment – offering costs – registered offerings

Proceeds – issue of Senior Secured Convertible Note, net of offering costs

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

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

Proceeds – issue of common stock - At-The-Market Facility

Proceeds – majority-owned subsidiary common stock - Committed Equity Facility

Proceeds – exercise of Series Z warrants

Proceeds – exercise of Series W warrants

Proceeds – exercise of stock options

Proceeds – issue common stock – Employee Stock Purchase Plan

Proceeds – majority-owned subsidiary common stock – Employee Stock Purchase Plan

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

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

Net cash flows provided by financing activities

Net increase (decrease) in cash

Cash, beginning of period

Cash, end of period

accompanying notes to the consolidated financial statements.

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of the Business

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

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

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

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”)

and Veris Health Inc.

(“Veris Health” or “VERIS”).

and Solys Diagnostics, Inc.

(“Solys Diagnostics” or “SOLYS”).

Company is organized to advance a broad pipeline

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

The Company’s activities have focused on advancing the lead products towards regulatory approval and commercialization,

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

ability of the Company to generate revenue depends upon the Company’s ability to successfully advance the commercialization of

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

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

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

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

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

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:

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.

2 — Summary of Significant Accounting Policies

Accounting Policies

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controlling financial interest in each of:

Lucid Diagnostics Inc., Veris Health Inc., and Solys Diagnostics Inc., with the corresponding

noncontrolling interest included as a separate component of consolidated stockholders’ equity (deficit), including the recognition

in the consolidated statement of operations of a net loss attributable to the noncontrolling interest based on the respective minority-interest

equity ownership of each majority-owned subsidiary.

See Note 17, Noncontrolling Interest , for a discussion of each of the majority-owned

subsidiaries noted above.

The Company manages its operations as a single operating segment for the purposes of assessing performance

and making operating decisions.

amounts in the accompanying consolidated financial statements and these notes thereto are presented in thousands of

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

Lucid Diagnostics Inc.

and Veris Health Inc., with the corresponding noncontrolling interest

included as a separate component of consolidated stockholders’ equity (deficit), including the recognition in the consolidated

statement of operations of a net loss attributable to the noncontrolling interest based on the respective minority-interest equity ownership

of each majority-owned subsidiary.

See Note 18, Noncontrolling Interest , for a discussion of each of the majority-owned subsidiaries

The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating

amounts in the accompanying consolidated financial statements and these notes thereto are presented in thousands of dollars, if not otherwise

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

preparing the consolidated financial statements in conformity with U.S.

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Significant estimates in these consolidated financial

statements include those related to the estimated fair value of stock-based equity awards, financial instruments recognized as liabilities,

debt obligations, and common stock purchase warrants.

Other significant estimates include the provision or benefit for income taxes and

the corresponding valuation allowance on deferred tax assets.

Additionally, management’s assessment of the Company’s ability

to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows.

On an ongoing basis,

the Company evaluates its estimates and assumptions.

The Company bases its estimates on historical experience and on various other assumptions

believed to be reasonable.

Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be

affected by changes in these estimates.

statements include those related to the estimated fair value of stock-based equity awards, intangible assets, financial instruments recognized

as liabilities, debt obligations, and common stock purchase warrants.

Other significant estimates include the estimated incremental borrowing

rate, the provision or benefit for income taxes and the corresponding valuation allowance on deferred tax assets.

Additionally, management’s

assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash

inflows and outflows.

On an ongoing basis, the Company evaluates its estimates and assumptions.

The Company bases its estimates on historical

experience and on various other assumptions believed to be reasonable.

Due to inherent uncertainty involved in making estimates, actual

results reported in future periods may be affected by changes in these estimates.

Note 2 — Summary of Significant Accounting

Policies - continued

provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40,

Presentation of Financial Statements - Going Concern (“ASC 205-40”) requires management to assess an entity’s

ability to continue as a going concern within one year of the date of the financial statements are issued.

In each reporting period,

including interim periods, an entity is required to assess conditions known and reasonably knowable as of the financial statement issuance

date to determine whether it is probable an entity will not meet its financial obligations within one year from the financial statement

issuance date.

Presentation of Financial Statements - Going Concern (“ASC 205-40”) requires management to assess an entity’s ability

to continue as a going concern within one year of the date of the financial statements are issued.

In each reporting period, including

interim periods, an entity is required to assess conditions known and reasonably knowable as of the financial statement issuance date

to determine whether it is probable an entity will not meet its financial obligations within one year from the financial statement issuance

Substantial doubt about an entity’s ability to continue as a going concern exists when conditions and events, considered

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Annual Report on Form 10-K for the year ended December 31, 2022.

See Note 20, Subsequent Events , for a discussion of the committed

sources of financing noted above.

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

Accounting Policies - continued

Company maintains its cash at a major financial institution with high credit quality.

1 unchanged sentence

exceed federally insured limits.

The Company has not experienced any losses on deposits with commercial banks and financial institutions

The Company has not experienced losses on deposits with commercial banks and financial institutions

which exceed federally insured limits.

9 unchanged sentences

Offering costs associated with in-process capital financing are accounted for as deferred offering costs.

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.

See Note 4, Revenue from Contracts with Customers , for further

information regarding revenue recognition.

Note 2 — Summary of Significant Accounting Policies and Recent

Accounting Standards Updates - continued

Significant Accounting Policies - continued

are recognized when the satisfaction of the performance obligation occurs, in an amount that reflects the consideration the Company expects

to collect in exchange for those services.

The Company’s revenue is primarily generated by its laboratory testing services utilizing

its EsoGuard Esophageal DNA tests.

The services are completed upon release of a patient’s test result to the ordering healthcare

Revenue recognized is inclusive of both variable consideration in connection with an individual patient’s third-party

insurance coverage policy and fixed consideration in connection with a contracted services arrangement with an unrelated third party

legal entity.

To determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, Revenue

from Contracts with Customers, the Company performs the following five steps:

(1) identify the contract(s) with a customer, (2) identify

the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance

obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

key aspects considered by the Company include the following:

Contracts —The

Company’s customer is primarily the patient, but the Company does not enter into a formal reimbursement contract with a patient.

The Company establishes a contract with a patient in accordance with other customary business practices, which is the point in time an

order is received from a provider and a patient specimen has been returned to the laboratory for testing.

Payment terms are a function

of a patient’s existing insurance benefits, including the impact of coverage decisions with Center for Medicare & Medicaid

Services (“CMS”) and applicable reimbursement contracts established between the Company and payers.

However, when a patient

is considered self-pay, the Company requires payment from the patient prior to the commencement of the Company’s performance obligations.

The Company’s consideration can be deemed variable or fixed depending on the structure of specific payer contracts, and the Company

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

obligations —A performance obligation is a promise in a contract to transfer a distinct good or service (or a bundle of goods

or services) to the customer.

The Company’s contracts have a single performance obligation, which is satisfied upon rendering of

services, which culminates in the release of a patient’s test result to the ordering healthcare provider.

The Company elects the

practical expedient related to the disclosure of unsatisfied performance obligations, as the duration of time between providing testing

supplies, the receipt of a sample, and the release of a test result to the ordering healthcare provider is far less than one year.

price —The transaction price is the amount of consideration that the Company expects to collect in exchange for transferring

promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes).

consideration expected to be collected from a contract with a customer may include fixed amounts, variable amounts, or both.

the consideration derived from the contracts is deemed to be variable, the Company estimates the amount of consideration to which it

will be entitled in exchange for the promised goods or services.

The Company limits the amount of variable consideration included in

the transaction price to the unconstrained portion of such consideration.

In other words, the Company recognizes revenue up to the amount

of variable consideration that is not subject to a significant reversal until additional information is obtained or the uncertainty associated

with the additional payments or refunds is subsequently resolved.

Note 2 — Summary of Significant Accounting

Policies - continued

the Company does not have significant historical experience or that experience has limited predictive value, the constraint over estimates

of variable consideration may result in no revenue being recognized upon delivery of patient EsoGuard test results to the ordering healthcare

As such, the Company recognizes revenue up to the amount of variable consideration not subject to a significant reversal until

additional information is obtained or the uncertainty associated with additional payments or refunds, if any, is subsequently resolved.

Differences between original estimates and subsequent revisions, including final settlements, represent changes in estimated expected

variable consideration, with the change in estimate recognized in the period of such revised estimate.

With respect to a contracted service

arrangement, the fixed consideration revenue is recognized on an as-billed basis upon delivery of the laboratory test report with realization

of such fixed consideration deemed probable based upon actual historical experience.

transaction price —The transaction price is allocated entirely to the performance obligation contained within the contract with

a customer on the basis of the relative standalone selling prices of each distinct good or service.

Expedients —The Company does not adjust the transaction price for the effects of a significant financing component, as at contract

inception, the Company expects the collection cycle to be one year or less.

assets are stated at cost and depreciated using the straight-line method over the assets’ estimated useful lives.

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costs for maintenance and repairs are expensed as incurred.

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

an effect on the Company’s consolidated financial statements.

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

842, wherein, if the contractual arrangement:

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

All significant lease agreements

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

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.

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.

provides for the right to substantially all the economic benefits from

the use of the asset throughout the contractual period;

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

A lease agreement

is accounted for as either a finance lease (generally with respect real estate) or an operating lease (generally with respect to equipment).

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

asset and a corresponding lease payment liability.

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

its contractual obligation to make lease payments.

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

of the future lease payments plus initial direct costs incurred.

The Company recognizes lease expense of the amortization of the lease

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

and for financing leases on a straight-line basis unless

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

The operating ROU asset also includes any lease incentives received

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

For improvements to leased property that are lessor-owned,

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

the life of the lease.

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

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

method for financing leases.

leases may include options to extend or terminate the agreement.

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

See Note 9, Leases .

intangible assets are recorded at cost and depreciated using the straight-line method over the assets’ estimated useful life.

See Note 6, Acquisitions, for further information with respect to purchased intangible assets.

Note 10, Intangible Assets, net , for further information with respect to purchased intangible assets.

- Long Lived Assets

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to such evaluation.

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

Accounting Policies - continued

Note 2 — Summary of Significant Accounting

Policies - continued

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 Long-Term Incentive Equity Plan (“PAVmed Inc.

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 718”).

grant-date estimated fair value of the stock-based

award is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective

stock-based award, with such straight-line recognition adjusted, as applicable, so the cumulative expense recognized is at-least equal-to-or-greater-than

the estimated fair value of the vested portion of the respective stock-based award as of the reporting date.

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

is generally the vesting period of the respective stock-based award, with such straight-line recognition adjusted, as applicable, so

the cumulative expense recognized is at-least equal-to-or-greater-than the estimated fair value of the vested portion of the respective

stock-based award as of the reporting date.

Company uses the Black-Scholes valuation model to estimate the fair value of stock options granted under both the PAVmed Inc.

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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;

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 and restricted stock

awards granted under the PAVmed 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.

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

The price per share of Lucid Diagnostics Inc.

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

stock awards granted under the Lucid Diagnostics 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, 2021 it is its quoted closing price per share;

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;

and (iii) as of December 31, 2020,

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

Note 2 — Summary of Significant Accounting Policies and Recent

Accounting Standards Updates - continued

Significant Accounting Policies - continued

(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.

Instruments Fair Value Measurements

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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 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

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These valuations require significant judgment.

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.

Note 2 — Summary of Significant Accounting

Policies - continued

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

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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.

Note 2 — Summary of Significant Accounting Policies and Recent

Accounting Standards Updates - continued

Significant Accounting Policies - continued

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.

Instruments - Derivatives

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captioned “research and development expenses” in the accompanying consolidated statements of operations.

Note 2 — Summary of Significant Accounting

Policies - continued

Company has entered into agreements with third parties to acquire technologies for potential commercial development.

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milestone can be objectively estimated.

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

Accounting Policies - continued

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

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The Company’s common stock equivalents

include convertible preferred stock, common stock purchase warrants, unit purchase options, and stock options.

include convertible preferred stock, common stock purchase warrants, and stock options.

Notwithstanding,

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Note 2 — Summary of Significant Accounting

Policies and Recent Accounting Standards Updates - continued

Significant Accounting Policies - continued

Policies - continued

Act EGC Accounting Election

Company’s designation as an “emerging growth company” or “EGC” under the Jumpstart Our Business

Startups Act of 2012 (the “JOBS Act”), expired during 2021.

As an EGC, the company had irrevocably elected to adopt new

or revised accounting standards using the effective date applicable to private companies.

With the expiry of its EGC designation, effective

December 31, 2021, the Company adopted the previously deferred accounting standards in accordance with the effective date applicable

to non-EGC public companies, as such effective dates are applicable to SEC smaller reporting company requirements.

Company’s designation as an “emerging growth company” or “EGC” under the Jumpstart Our Business Startups

Act of 2012 (the “JOBS Act”), expired during 2021.

As an EGC, the company had irrevocably elected to adopt new or revised

accounting standards using the effective date applicable to private companies.

With the expiry of its EGC designation, effective December

31, 2021, the Company adopted the previously deferred accounting standards in accordance with the effective date applicable to non-EGC

public companies, as such effective dates are applicable to SEC smaller reporting company requirements.

Reclassifications

prior-year amounts have been reclassified to conform to the current year presentation, which includes presenting costs of revenue within

operating expenses on the statements of operations, in the consolidated financial statements and accompanying notes to the consolidated

financial statements.

The impact of the reclassifications made to prior year amounts is not material and did not affect net loss.

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.

Leases are 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.

See Note 9, Leases .

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

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

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

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

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

3 — Revenue from Contracts with Customers

Commercialization Agreement

Company, through its majority-owned subsidiary, Lucid Diagnostics Inc., entered into the EsoGuard Commercialization Agreement, dated

August 1, 2021, with its former commercial laboratory service provider, ResearchDx Inc.

(“RDx”), an unrelated third-party.

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

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

(a wholly-owned subsidiary of Lucid

Diagnostics Inc.) and RDx, with such agreement further discussed in Note 6 , Asset Purchase Agreement and Management Services Agreement.

the years ended December 31, 2022 and December 31, 2021, the Company recognized total revenue of $ 377 and $ 500 , respectively.

recognized revenue of $ 188 resulting from the delivery of patient EsoGuard test results.

Revenue recognized from customer contracts deemed

to include a variable consideration transaction price is limited to the unconstrained portion of the variable consideration.

In addition, the Company’s revenue for the year ended December 31, 2022 includes $ 189 of revenue recognized under the EsoGuard

Commercialization Agreement, which represented the minimum fixed monthly fee of $ 100 for the period January 1, 2022 to the February 25,

2022 termination date as discussed above.

The monthly fee was deemed to be collectible for such period as RDx has timely paid the applicable

respective monthly fee.

In the year ended December 31, 2021, the Company recognized total revenue of $ 500 under the EsoGuard Commercialization

cost of revenues principally includes the costs related to the Company’s laboratory operations (excluding estimated costs associated

with research activities), the costs related to the EsoCheck cell collection device, cell sample mailing kits and license royalties.

the year ended December 31, 2022, the cost of revenue was $ 3,614 and was primarily related to costs for our laboratory operations and

EsoCheck device supplies, however also includes $ 369 reflecting costs attributable to delivering the services under the EsoGuard Commercialization

Agreement for the period January 1, 2022 to February 25, 2022.

In the year ended December 31, 2021, the cost of revenue was $ 585 , which

solely related to the EsoGuard Commercialization Agreement.

4 — Patent License Agreement - Case Western Reserve University

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which a $ 200 milestone payment would be payable to CWRU upon its achievement.

3 — Patent License Agreement – Case Western Reserve University - continued

the Amended CWRU License Agreement, the Company is required to pay a royalty fee to CWRU with respect to the “Licensed Products”

11 unchanged sentences

and $ 600 if annual Net Sales exceed $ 100.0 million.

The Company recognized a 5.0 % royalty fee payment liability as of December 31, 2021 with respect to the revenue recognized under the

EsoGuard Commercialization Agreement, dated August 1, 2021, between Lucid Diagnostics Inc.

The Company recognized a 5.0 % royalty fee payment liability as of December 31, 2022 and 2021 with respect to the revenue recognized under

the EsoGuard Commercialization Agreement, dated August 1, 2021, between Lucid Diagnostics Inc.

and Research Dx Inc.

The Company recorded

a royalty expense of $ 23 and $ 25 for the years ended December 31, 2022 and 2021, respectively.

Additionally,

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2014 Long-Term Incentive Equity Plan”.

4 - Revenue from Contracts with Customers

is recognized when the satisfaction of the performance obligation occurs, which is when the delivery of product and /or the provision

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

In the year ended December

31, 2021, the Company recognized revenue under the EsoGuard Commercialization Agreement, dated August 1, 2021, as discussed below.

Commercialization Agreement

Company, through its majority-owned subsidiary, Lucid Diagnostics Inc., entered into the EsoGuard Commercialization Agreement, dated

August 1, 2021, with its Commercial Laboratory Improvements Act (“CLIA”) certified commercial laboratory service provider,

ResearchDX Inc.

(“RDx”), an unrelated third-party.

The EsoGuard Commercialization Agreement is on a month-to-month

basis, and may be terminated by either party thereto, with or without cause, upon forty-five (45) days prior written notice.

February 25, 2022, the EsoGuard Commercialization Agreement was terminated in conjunction with the execution of an Asset Purchase Agreement

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

and RDx, as such agreement is further discussed in Note

20, Subsequent Events .

the year ended December 31, 2021, the Company recognized total revenue of $ 500 , which represents the minimum fixed monthly fee of $ 100

to be paid by RDx for the delivery of services under the EsoGuard Commercialization Agreement for the period from the agreement inception

date of August 1, 2021 to December 31, 2021.

The monthly fee was deemed to be collectible for such period as RDx has timely paid the

applicable respective monthly fee.

cost of revenue recognized with respect to the revenue recognized under the EsoGuard Commercialization Agreement for the year ended

December 31, 2021 totaled $ 585 ,

inclusive of employee related costs of employees engaged in the delivery of the administration to patients of the EsoCheck

cell sample collection procedure;

EsoCheck devices and EsoGuard mailers (cell sample shipping costs) distributed to medical

practitioners’ locations and the Lucid Test Centers;

Lucid Test Centers operating expenses, including rent

expense and supplies;

and royalty fees incurred under the Amended CWRU License Agreement.

5 — Related Party Transactions

Western Reserve University and Physician Inventors - CWRU License Agreement

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

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

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

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

Schedule of Incurred Expenses of Minority Shareholders

the year ended December 31,

– Royalty Fee

and Administrative Expense

– License Agreement - Amendment Fee - Milestone III

compensation expense – Physician Inventors’ restricted stock awards

and Development Expense

License Agreement - reimbursement of patent legal fees

devices provided to CWRU

- Physician Inventors’ consulting agreements

compensation expense – Physician Inventors’ stock options

Related Party Expenses

Diagnostics Inc.

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

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

renewal effective May 12, 2021.

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

the PAVmed Inc.

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

2018 Long-Term Incentive Equity Plan.

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

25,000 stock options under the PAVmed Inc.

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

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

period of ten years from the date of grant.

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

Each of the Physician

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

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

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

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

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

2018 Equity Plan to each of the three Physician

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

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

with the service period.

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

Western Reserve University and Physician Inventors - Amended CWRU License Agreement

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

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

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

The expenses incurred with respect

to the Amended CWRU License Agreement and the three Physician Inventors, as classified in the accompanying consolidated statement of

operations for the periods indicated are summarized as follows:

of Incurred Expenses of Minority Shareholders

Years Ended December 31,

Cost of Revenue

CWRU – Royalty Fees

General and Administrative Expense

Amended CWRU – License Agreement - reimbursement of patent legal fees

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

Research and Development Expense

Amended CWRU – License Agreement - reimbursement of patent legal fees

Fees - Physician Inventors’ consulting agreements

Sponsored research agreement

Stock-based compensation expense – Physician Inventors’ stock options

Total Related Party Expenses

Note 15, Stock-Based Compensation , for information regarding each of the “PAVmed Inc.

2014 Long-Term Incentive Equity

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

and Note 17, Noncontrolling

Interest , for a discussion of Lucid Diagnostics Inc.

2014 Long-Term Incentive Equity Plan”

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

and Note 18, Noncontrolling Interest ,

for a discussion of Lucid Diagnostics Inc.

and the corresponding noncontrolling interests.

5 —Related Party Transactions - continued

Related Party Transactions

7 unchanged sentences

Lucid Diagnostics Inc.

recognized as general and administrative expense

of $ 21 and $ 7 in the years ended December 31, 2021 and 2020, respectively, in connection with the consulting agreement.

recognized general and administrative expense

of $ 21 in the year ended December 31, 2021 in connection with the consulting agreement.

June 2021, Veris Health Inc.

entered into a consulting agreement with Andrew Thoreson, M.D.

effective June 2021 with such consulting agreement providing

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

Veris Health Inc.

recognized general and administrative

expense of $ 54 in the year ended December 31, 2021 in connection with the consulting agreement.

6 — Acquisitions

May 28, 2021, Veris Health Inc., a majority-owned subsidiary of PAVmed Inc., acquired all of the outstanding common stock of Oncodisc

(“Oncodisc”) for total purchase consideration of approximately $ 261 , consisting of:

the issue of 1,564,514 shares of

common stock of Veris Health Inc., with such shares having an estimated fair value of approximately $ 6 ;

and cash paid of approximately

Additionally, the cash acquired was approximately $ 108 and liabilities assumed were approximately $ 50 .

The acquisition of Oncodisc

was accounted for by Veris Health Inc as an asset acquisition.

which provides for compensation on a contractual

rate per hour for consulting services provided.

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

interest in Veris Health Inc.

Veris Health Inc.

has allocated the preliminary purchase price based upon

the respective fair values as of the date of acquisition as follows:

Schedule of Assets Acquired and Liabilities Assumed

- Oncodisc Inc.

asset - in process R&D

current assets

asset - assembled workforce

net assets acquired

intangible asset recognized for the in-process research and development (“IPRD”) of $ 133

was determined to have no alternative future

use and was recognized as a current period research and development expense.

The intangible asset recognized for the assembled workforce

of approximately $ 70 ,

which is included in “Intangible assets, net” on the accompanying consolidated balance sheet, has an expected useful

life of one year, and is being recognized on a ratable basis over such period, which commenced in June 2021.

Noncontrolling Interest , for a discussion of Veris Health Inc.

and the corresponding noncontrolling interests.

October 5, 2021, PAVmed Subsidiary Corporation, a majority-owned subsidiary of PAVmed Inc., acquired the membership interest of

CapNostics, LLC (“CapNostics”) for total (gross) purchase consideration of approximately $ 2.1

million of cash paid at the closing of the

The acquisition of CapNostics was accounted for as an asset acquisition.

The intangible asset recognized for the defensive

technology of approximately $ 2.1

million, which is included in “Intangible

assets, net” on the accompanying consolidated balance sheet, has an expected useful life of five

years , and is being recognized on a ratable

basis over such period, which commenced in October 2021.

The Company has allocated the preliminary purchase price based upon the respective fair values as of the date of acquisition as follows:

Schedule of Assets Acquired and Liabilities Assumed

- CapNostics, LLC

current assets

asset - defensive technology

net assets acquired

- Acquired Intangible Assets

expense of the acquired intangible assets discussed above was $ 146 for the year ended December 31, 2021 (there was no such amortization

expense for the prior year ended December 31, 2020), and is included in general and administrative expenses in the accompanying consolidated

statements of operations.

The scheduled future amortization expense of such acquired intangible assets is as follows:

$ 449 for the year

$ 420 for each of the years 2023, 2024, and 2025;

and $ 319 for the year 2026.

7 — Prepaid Expenses, Deposits, and Other Current and Non-Current Assets

Current Assets

recognized general and administrative expense of $ 56 and $ 54 in the years ended December

31, 2022 and 2021, respectively, in connection with the consulting agreement.

6 — Asset Purchase Agreement and Management Services Agreement

Purchase Agreement - ResearchDx Inc.

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

25, 2022, with ResearchDx, Inc.

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

Under the APA-RDx, LucidDx Labs

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

purchased and leased property and equipment to establish

a Company-owned Commercial Lab Improvements Act (“CLIA”) certified, College of American Pathologists (“CAP”)

accredited commercial clinical laboratory capable of performing the EsoGuard® Esophageal DNA assay, inclusive of DNA extraction,

next generation sequencing (“NGS”) and specimen storage.

Prior to February 25, 2022, RDx provided such laboratory services

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

total purchase price consideration payable under the APA-RDx is a face value of $ 3,200 comprised of three contractually specified periodic

The APA-RDx is being accounted for as an asset acquisition, with the recognition of an intangible asset of approximately $ 3,200 ,

which is included in “Intangible assets, net” on the accompanying consolidated balance sheet, as further discussed in Note

10, Intangible Assets, net.

In the year ended December 31, 2022, a total of $ 3,200 , of cash was paid with respect to the periodic

Additionally,

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

and then on each three month anniversary thereof, inclusive of a final installment payment on February 25, 2025, with such installment

payments recognized as current period expense as incurred.

In the year ended December 31, 2022, as provided for in the APA-RDx, installment

payments were settled with the issuances of 326,701 shares of common stock of Lucid Diagnostics Inc., with such shares having fair values

of $ 653 (with the fair value measured as the quoted closing price on the dates the shares were issued), which was recognized as a current

period expense included in general and administrative expenses in the accompanying consolidated statement of operations.

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

payment of the remaining unpaid installment payments will be accelerated as immediately due and payable as of the date the “MSA-RDx”

(as such agreement is discussed below) is either terminated by LucidDx Labs Inc.

without cause or if it is terminated by mutual agreement

between LucidDx Labs Inc.

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

defined as the occurrence of any one of:

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

written notice;

(ii) RDx becomes insolvent and /or bankrupt;

or (ii) RDx fails to comply with applicable statutes, is barred from

participating in federal health care programs, or by action of changes in law or regulation, or by action of judicial interpretation

of law, or by judicial civil proceedings decisions.

Services Agreement - ResearchDx Inc

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

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

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

or no reason by either party thereto.

of Management Services Agreement and Modification of Other Payment Obligations - ResearchDx Inc

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.

MSA Termination Agreement reduces the remaining amounts of the earnout payments and management fees due under the APA-RDx and the MSA-RDx

The payment was satisfied through the issuance of 553,436 shares of Lucid Diagnostics’ common stock in February 2023.

Lucid Diagnostics was not required to make any cash payments in connection with the termination.

7 — Prepaid Expenses, Deposits, and Other Current Assets

expenses and other current assets consisted of the following as of:

Schedule of Prepaid Expenses and Other Current Assets

payments to service providers and suppliers

of Prepaid Expenses and Other Current Assets

December 31, 2022

December 31, 2021

Advanced payments to service providers and suppliers

Prepaid insurance

cell collection supplies

mailer supplies

EsoCheck cell collection supplies

EsoGuard mailer supplies

Veris Box supplies

CarpX devices

prepaid expenses, deposits and other current assets

Company, through its majority-owned subsidiary Lucid Diagnostics Inc., entered into an agreement with a clinical research organization

(“CRO”) in connection with EsoGuard clinical trials (the “EsoGuard CRO Agreement”).

The term of the EsoGuard

CRO Agreement is from the September 2019 effective date to the conclusion of the respective clinical trials, but not to exceed 60 months

from the effective date of the EsoGuard CRO Agreement.

The CRO agreement may be cancelled with sixty days written notice, without an

early termination fee.

The Company incurred an on-account deposit of $ 725

as of December 31, 2021 and 2020, respectively,

with the deposit classified as a non-current asset in the line item captioned “Other assets” on the accompanying consolidated

balance sheets as of December 31, 2021 and 2020.

See Note 11, Commitment and Contingencies , for a discussion of the EsoGuard

CRO Agreement.

Total prepaid expenses, deposits and other current assets

8 — Fixed Assets

assets, less accumulated depreciation, consisted of the following as of:

Schedule of Fixed Assets

and office equipment

under construction

Accumulated Depreciation

Fixed Assets, net

(1) Lesser of remaining lease term or estimated useful life.

The assets under

construction presented above are with respect to the establishment of a Company-owned CLIA-certified, CAP-accredited commercial

clinical laboratory.

The total fixed assets is inclusive of $ 99 of accounts payable and $ 16 of accrued expenses and other current liabilities in the accompanying consolidated balance sheet as of December 31, 2021.

Depreciation expense of $ 80 and $ 23 for the years ended December 31, 2021 and 2020, respectively, is included in general and administrative expenses in the accompanying consolidated statements of operations.

of December 31, 2021, the Company only had short-term leases, inclusive of:

an office rental agreement is on a month-to-month basis, with

a 5% per annum increase in the monthly lease payment effective February 1 of each year, with such rental agreement able to be cancelled

with two months written notice;

and two other month-to-month office space rental agreements, each of which have an April 30, 2022 termination

The total rent expense incurred under month-to-month rental agreements was $ 191 and $ 189 , for the years ended December 31, 2021

and 2020, respectively.

addition to the short-term leases as of December 31, 2021 noted above, the Company entered into additional lease agreements, each

with commencement dates subsequent to December 31, 2021, classified as operating leases and short-term leases, including for each

of Fixed Assets

Estimated Useful Life

December 31, 2022

December 31, 2021

Computer and office equipment

Laboratory equipment

Furniture and fixtures

Leasehold improvements

Assets under construction

Total Fixed Assets

Less Accumulated Depreciation

Total Fixed Assets, net

(1) Lesser of remaining

lease term or estimated useful life.

expense of $ 673 and $ 80 for the years ended December 31, 2022 and 2021, respectively, is included in general and administrative expenses

in the accompanying consolidated statements of operations.

the year ended December 31, 2022, the Company entered into additional lease agreements that have commenced and are classified as operating

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

a research and development facility;

a commercial clinical laboratory;

a light manufacturing facility;

additional Lucid Test

Lucid Test Centers;

and for office space.

of December 31, 2021, with respect to short-term leases:

the total future lease payments of both the (existing) short-term leases effective

as of December 31, 2021 plus the (new) short-term leases (i.e.

the new short-term leases with commencement dates subsequent to December

31, 2021), are $ 178 in 2022 and $ 9 in 2023.

of December 31, 2021, with respect to operating leases:

the total future lease payments of the (new) operating leases (i.e.

the new operating

leases with commencement dates subsequent to December 31, 2021), are as follows:

of future minimum lease payments for capital leases

components of lease expense were as follows:

Schedule of Lease Expense

Year Ended December 31,

Operating lease cost

Short-term lease cost

Variable lease cost

Total lease cost

Company’s future lease payments as of December 31, 2022, which are presented as operating lease liabilities, current portion and

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

of Future Minimum Lease Payments for Operating Leases

Total lease payments

imputed interest

Present value of lease liabilities

disclosure of cash flow information related to the Company’s cash and non-cash activities with its leases are as follows:

Schedule of Supplemental Balance Sheet Information Related to Cash and Non-cash Activities with Leases

Year Ended December 31,

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

Non-cash investing and financing activities

Right-of-use assets obtained in exchange for new operating lease liabilities

Weighted-average remaining lease term - operating leases (in years)

Weighted-average discount rate - operating leases

of December 31, 2022, the Company’s right-of-use assets from operating leases are $ 3,037 , which are reporting in right-of-use assets

- operating leases in the consolidated balance sheets.

As of December 31, 2022, the Company has outstanding operating lease obligations

of $ 2,987 , of which $ 1,141 is reported in operating lease liabilities, current portion and $ 1,846 is reporting in operating lease liabilities

less current portion in the Company’s consolidated balance sheets.

The Company did not have operating leases as of December 31,

The Company calculates its incremental borrowing rates for specific lease terms, used to discount future lease payments, as a function

of the financing terms the Company would likely receive on the open market.

September 2022, the Company entered into a lease agreement for its principal corporate offices, in New York, New York.

The lease agreement

term is from the September 15, 2022 execution date to the date which is seven years and eight months from the lease commencement date,

with the rent abated for the first eight months of the lease term .

The lease commenced on February 1, 2023.

The aggregate (undiscounted)

rent payments are approximately $ 3.2 million over the lease term.

10 — Intangible Assets, net

assets, less accumulated amortization, consisted of the following as of:

Schedule of Intangible Assets Accumulated Amortization

Estimated Useful Life

December 31, 2022

December 31, 2021

Defensive asset

Laboratory licenses and certifications and laboratory information management software

Total Intangible assets

Less Accumulated Amortization

Intangible Assets, net

defensive technology intangible asset was recognized upon its acquisition of CapNostics, LLC, an unrelated third-party, for total purchase

consideration paid on the October 5, 2021 acquisition date of approximately $ 2.1 million in cash.

The CapNostics LLC transaction was

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

The defensive technology

intangible asset is being amortized on a straight-line basis over an expected useful life 60 months commencing on the acquisition date.

intangible assets recognized under the APA-RDx are the laboratory licenses and certifications, inclusive of a CLIA certification, CAP

accreditation, and clinical laboratory licenses for five (5) U.S.

States transfer to the Company from RDx, and a laboratory information

management software perpetual-use royalty-free license granted under the APA-RDx, with such intangible asset having a useful life of

twenty-four months commencing on the APA-RDx February 25, 2022 transaction date.

expense of the intangible assets discussed above was $ 1,784 and $ 146 for the years ended December 31, 2022 and 2021, respectively, and

is included in amortization of acquired intangible assets in the accompanying consolidated statements of operations.

As of December 31,

2022, the estimated future amortization expense associated with the Company’s finite-lived intangible assets for each of the five

succeeding fiscal years is as follows:

Schedule of Estimated Amortization Expense for Intangible Assets

11 — Accrued Expenses and Other Current Liabilities

1 unchanged sentence

Schedule of Accrued Expenses and Other Current Liabilities

and Employee Benefits

License Agreement fee

License Agreement Amendment fee

Amended License Agreement - Royalty fee

mailer supplies

accrued expenses and other current liabilities

December 31, 2022

December 31, 2021

Compensation and Employee Benefits

CWRU Amended License Agreement - Royalty fee

Operating expenses

Total accrued expenses and other current liabilities

“Compensation and Employee Benefits” includes:

4 unchanged sentences

Stock-Based Compensation , for additional information on the PAVmed Inc.

Note 3, Patent License Agreement - Case Western Reserve University , for a discussion of the CWRU License Agreement.

amounts for operating expenses and EsoGuard supplies presented above relate to respective amounts incurred by the Company but

not yet invoiced by the respective vendors.

12 — Commitment and Contingencies

Trials - Agreement with Clinical Research Organization

Company, through its majority-owned subsidiary Lucid Diagnostics Inc., entered into an agreement with a clinical research organization

(“CRO”) in connection with EsoGuard clinical trials, referred to as the EsoGuard CRO Agreement.

The CRO will assist the Company

with conducting two concurrent clinical trials referred to as the “EsoGuard screening study” and the “EsoGuard case

control study”.

The term of the EsoGuard CRO Agreement is from the September 2019 effective date to the conclusion of the respective

clinical trials, but not to exceed 60 months from the effective date of the EsoGuard™ CRO Agreement.

The CRO agreement may be cancelled

with sixty days written notice, without an early termination fee.

Court of Chancery Complaint

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

1 unchanged sentence

Company’s Annual Meeting of Stockholders on July 24, 2020, and, as a result, asserted certain matters deemed to have been approved

were not so approved (including matters relating to the increase in the size of the 2014 Equity Plan and the ESPP).

The relief sought

under the complaint includes certain corrective actions by the Company, but did not seek any specific monetary damages.

The Company did

not believe it was clear the prior approval of these matters was invalid or otherwise ineffective.

However, to avoid any uncertainty

and the expense of further litigation, on January 5, 2021, the Company’s Board of Directors determined it would be advisable and

in the best interests of the Company and its stockholders to re-submit these proposals to the Company’s stockholders for ratification

and/or approval.

In this regard, the Company held a special meeting of stockholders on March 4, 2021, at which such matters were ratified

and approved.

The parties have reached agreement on a proposed Settlement Term Sheet Agreement, dated January 28, 2021, to settle the

complaint, the terms of which do not contemplate payment of monetary damages to the putative class in the proceeding.

The settlement

of the complaint is pending approval by the Court.

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

2014 Long-Term Incentive Equity Plan

and the PAVmed Inc.

Employee Stock Purchase Plan).

The relief sought under the complaint included certain corrective actions by the Company,

but did not seek any specific monetary damages.

The Company did not believe it was clear the prior approval of these matters was invalid

or otherwise ineffective.

However, to avoid any uncertainty and the expense of further litigation, on January 5, 2021, the Company’s

board of directors determined it would be advisable and in the best interests of the Company and its stockholders to re-submit these

proposals to the Company’s stockholders for ratification and/or approval.

In this regard, the Company held a special meeting of

stockholders on March 4, 2021, at which such matters were ratified and approved.

The parties reached agreement on a Settlement Term Sheet

Agreement, dated January 28, 2021, to settle the complaint, the terms of which did not contemplate payment of monetary damages to the

putative class in the proceeding.

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

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

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

The settlement and a plaintiff’s

fee award of $ 450 were approved by the Court on November 3, 2022, with such award having been subsequently paid by the Company in December

Investments, Inc.

/ Benchmark Investments LLC

December 23, 2020, Benchmark Investments, Inc.

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

District Court of the Southern District

of New York alleging the registered direct offerings of shares of common stock of the Company completed in December 2020 were in violation

of provisions set forth in an engagement letter between the Company and the Kingswood Capital Markets, a “division” of Benchmark

Investments, Inc.

On December 16, 2021, the court granted PAVmed’s motion to dismiss the case for lack of subject matter jurisdiction.

On February 7, 2022, Benchmark Investments LLC, which claimed to be affiliated with Benchmark Investments, Inc., filed a new complaint

in the Supreme Court of the State of New York, New York County, asserting claims similar to those in the federal action, and adding to

its allegations that financings conducted by the Company in January 2021 and February 2021 also violated the Company’s engagement

letter with Kingswood Capital Markets.

The Company disagrees with the allegations set forth in the complaint and intends to vigorously

contest the complaint.

District Court of the Southern

District of New York alleging the registered direct offerings of shares of common stock of the Company completed in December 2020

were in violation of provisions set forth in an engagement letter between the Company and Kingswood Capital Markets, a

“division” of Benchmark Investments, Inc.

On December 16, 2021, the court granted PAVmed’s motion to dismiss the

case for lack of subject matter jurisdiction.

On February 7, 2022, Benchmark Investments LLC, which claimed to be a successor to

Benchmark Investments, Inc., filed a new complaint in the Supreme Court of the State of New York, New York County, asserting claims

similar to those in the federal action, and adding to its allegations that financings conducted by the Company in January 2021 and

February 2021 also violated the Company’s engagement letter with Kingswood Capital Markets.

On February 13, 2023, the Company

entered into a settlement agreement (the “Settlement Agreement”) with EF Hutton, a division of Benchmark Investments,

LLC (f/k/a Kingswood Capital Markets, a division of Benchmark Investments, Inc.) (“EF Hutton”) and Benchmark

Investments, LLC (f/k/a Benchmark Investments, Inc.).

Pursuant to the Settlement Agreement, the Company has paid EF Hutton $ 450

in full and final satisfaction of all claims and disputes the parties made or could have made against one another arising out of or

relating in any way to the above described actions.

The Settlement Agreement also included a mutual release and certain other

covenants that are customary for agreements of this nature.

As of December 31, 2022, the Company has fully accrued for this settlement, which is included in accrued expenses

and other current liabilities on the Company’s consolidated balance sheets.

the ordinary course of our business, particularly as it begins commercialization of its products, the Company may be subject to certain

10 unchanged sentences

Fair Value Measurements

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

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

Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis

Value Measurement on a Recurring Basis at Reporting

Secured Convertible Note - November 2019

Convertible Note - April 2020

Secured Convertible Note – August 2020

Fair Value Measurement on a Recurring Basis at

Reporting Date Using (1)

Level-1 Inputs

Level-2 Inputs

Level-3 Inputs

December 31, 2022

Senior Secured Convertible Note - April 2022

Senior Secured Convertible Note - September 2022

(1) As noted above,

3 unchanged sentences

Levels during the year ended December 31, 2022.

notes are accounted for under the fair value option (“FVO”) election, wherein, each of the convertible notes were initially

measured at their respective issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis

at each reporting period date, with the resulting fair value adjustment recognized as other income (expense) in the consolidated statement

of operations.

were no fair value measurements as of December 31, 2021 as each of the convertible notes were previously repaid-in-full in the three

months ended March 31, 2021, as discussed herein below in Note 13, Debt .

The estimated fair value of each of the convertible

notes as of December 31, 2020, were computed using a Monte Carlo simulation of the present value of its cash flows using a synthetic

credit rating analysis and a required rate-of-return, and were therefore classified within the Level 3 category, as the fair value was

determined using both observable inputs and unobservable inputs.

Unrealized gains and losses associated with liabilities within the Level

3 category include changes in fair value attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g.,

changes in unobservable long- dated volatilities) inputs.

estimated fair value of each of the convertible notes as of December 31, 2020, were computed using a Monte Carlo simulation of the present

value of its cash flows using a synthetic credit rating analysis and a required rate-of-return, using the following assumptions:

Secured Convertible Notes and Senior Convertible Note - Fair Value and Fair Value Assumptions – December 31, 2020:

of Fair Value Assumption Used

2019 Senior Secured Convertible Notes

2020 Senior Convertible Note

Secured Convertible Note

value principal payable

rate of return

of common stock

discussed in Note 14, Debt , the Company issued Senior Secured Convertible Notes dated April 4, 2022 and September 8, 2022, with

an initial $ 27.5 million face value principal (“April 2022 Senior Convertible Note”) and an initial $ 11.25 million face value

principal (“September 2022 Senior Convertible Note”), respectively.

Both convertible notes are accounted for under the ASC

825-10-15-4 fair value option (“FVO”) election, wherein, the financial instrument is initially measured at its issue-date

estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date.

estimated fair value of the financial instruments classified within the Level 3 category was determined using both observable inputs

and unobservable inputs.

Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair

value attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-

dated volatilities) inputs.

estimated fair value of the April 2022 Senior Convertible Note as of each of April 4, 2022 and December 31, 2022, and the estimated fair

value of the September 2022 Senior Convertible Note as of each of September 8, 2022 and December 31, 2022 were computed using a Monte

Carlo simulation of the present value of its cash flows using a synthetic credit rating analysis and a required rate-of-return, using

the following assumptions:

Schedule of Fair Value Assumption Used

April 2022 Senior Convertible Note:

April 4, 2022

September 2022 Senior Convertible Note:

September 8, 2022

April 2022 Senior Convertible Note:

December 31, 2022

September 2022 Senior Convertible Note:

December 31, 2022

Face value principal payable

Required rate of return

Conversion Price

Value of common stock

Expected term (years)

Risk free rate

Dividend yield

estimated fair values reported utilized the Company’s common stock price along with certain Level 3 inputs (as discussed above),

1 unchanged sentence

The estimated

fair values are subjective and are affected by changes in inputs to the valuation models /analyses, including the Company’s common

stock price, the Company’s dividend yield, the risk-free rates based on U.S.

Treasury security yields, and certain other Level-3

inputs including, assumptions regarding the estimated volatility in the value of the Company’s common stock price.

Changes in these

assumptions can materially affect the estimated fair values.

of the convertible notes, as such convertible notes are discussed below, were repaid-in-full during the three months ended March 31,

The fair value and face value principal of outstanding convertible notes at December 31, 2020 were as follows:

Summary of Outstanding Debt

Interest Rate

Price per Share

Value Principal Outstanding

2019 Senior Secured Convertible Note

fair values are subjective and are affected by changes in inputs to the valuation models and analyses, including the Company’s

common stock price, the Company’s dividend yield, the risk-free rates based on U.S.

Treasury security yields, and certain other

Level-3 inputs including, assumptions regarding the estimated volatility in the value of the Company’s common stock price.

in these assumptions can materially affect the estimated fair values.

PAVmed - Senior Secured Convertible Notes

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

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

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

an initial issuance of $ 27.5 million face value

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

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

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

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

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

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

April 4, 2024.

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

the same SPA, the Company issued an additional Senior Secured Convertible Note dated September 8, 2022, referred to herein as the “September

2022 Senior Convertible Note”, with such note having a $ 11.25 million face value principal, a 7.875 % annual stated interest rate,

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

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

September 6, 2024.

2020 Senior Convertible Note

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

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

and additionally, the Company

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

The lender fee

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

consolidated statement of operations.

September 2022 Senior Convertible Note proceeds were $ 10.2 million after deducting a $ 1.0 million lender fee;

and additionally, the Company

incurred total offering costs of approximately $ 209 , inclusive of the payment of a total of $ 184 placement agent fees.

The lender fee

and offering costs were recognized as of the September 8, 2022 issue date as a current period expense in other income (expense) in the

Company’s consolidated statement of operations.

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

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

The Company paid in cash interest expense of approximately $ 994 for the

year ended December 31, 2022.

the period from September 8, 2022 to March 6, 2023, the Company is required to pay interest expense only (on the $ 11.25 million face

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

The Company paid in cash interest expense of approximately $ 278 for

the year ended December 31, 2022;

and approximately $ 150 subsequent to December 31, 2022 as of March 9, 2023.

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

$ 1,273 , related to both the April 2022 and September 2022 Senior Convertible Notes, which are presented in Change in fair value - Senior

Secured Convertible Notes and Senior Convertible Note in the Company’s consolidated statements of operations.

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 $ 3,550 fair value non-cash expense on the

This initial recognition was partially offset by $ 2,277 of decreases in fair value upon remeasurements through December

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

$ 1,682 , which are presented in Change in fair value - Senior Secured Convertible Notes and Senior Convertible Note in the Company’s

consolidated statements of operations.

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

then outstanding convertible notes being repaid-in-full during the year ended December 31, 2021.

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

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

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

to make a principal repayment of $ 724 together with accrued interest thereon, with such 38 payments referred to herein as the “Installment

Amount”, settled in shares of common stock of the Company, subject to customary equity conditions, including minimum share price

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

March 6, 2023, and then on each of the successive first and tenth trading day of each month thereafter through to and including September

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

and on the September 6, 2024 maturity date, the Company will be required

to make a principal repayment of $ 296 together with accrued interest thereon, with such 38 payments referred to herein as the “Installment

Amount”, settled in shares of common stock of the Company, subject to customary equity conditions, including minimum share price

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

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

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

Date conversion price.

Note 14 — Debt - continued

to certain conditions being met or waived, from time to time, one or more additional closings may occur, for up to the remaining $ 11.25

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

The Investor’s obligation

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

including, among others, contractual closing requirements:

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

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

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

being waived by the Investor in its sole discretion.

Additionally,

effective March 31, 2023, the Investor may by written notice elect to require the Company to issue additional notes of up to $ 11.25 million

in face value principal, so long as in doing so it would not cause the ratio of (a) the outstanding principal amount of the April 2022

Senior Convertible Note and the September 2022 Senior Convertible Note (and any additional notes issued under the SPA dated March 31,

2022), accrued and unpaid interest thereon and accrued and unpaid late charges to (b) our average market capitalization over the prior

ten trading days, to exceed 25%.

If the Company does not issue the additional notes contemplated by any such written notice, or if the

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

then the Company will be obligated to pay up to a maximum of a $1.35 million a break-up fee .

payment of all amounts due and payable under both senior convertible notes are guaranteed by the Company and its subsidiaries, except

for Lucid Diagnostics Inc and its subsidiaries;

and the obligations under both senior convertible notes are secured by all of the assets

of the Company and each guarantor, except in the case of the Lucid Diagnostics Inc.

common stock held by PAVmed Inc.

only 9.99 % of Lucid

Diagnostics Inc.’s issued and outstanding common stock is pledged to secure the indebtedness of the convertible notes.

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

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

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

affiliates, among other customary matters.

Company is subject to financial covenants requiring:

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

(ii) the ratio of

(a) the outstanding principal amount of the total senior convertible notes outstanding, accrued and unpaid interest thereon and

accrued and unpaid late charges to (b) the Company’s average market capitalization over the prior ten trading days, to not

exceed 30% (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) the Company’s market capitalization to at no time be less than $75 million.

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

time from and after September 8, 2022, including as of December 31, 2022, the Company was not in compliance with the Financial

As of March 12, 2023, the investor agreed to waive any such non-compliance during such aforementioned time periods,

under the Senior Convertible Notes and the SPA.

Company and the investor also entered into a waiver dated August 9, 2022 whereby the April 2022 Senior Convertible Note was amended to

permit the Investor to convert up to $ 5.0 million of the face value principal of the April 2022 Senior Convertible Note at the then current

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

a price per share of common stock equal to the lower of

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

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

ending and including the trading day immediately prior to the applicable conversion date, but in the case of clause (ii), not less than

$ 0.18 per share.

As contemplated by such amendment, in the year ended December 31, 2022, approximately $ 6,003 of principal repayments

along with approximately $ 370 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 $ 11,807 (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.

Subsequent to December 31, 2022, as of March 9, 2023, approximately $ 522 of principal repayments

along with approximately $ 155 of interest expense thereon, were settled through the issuance of 1,852,261 shares of common stock

of the Company, with such shares having a fair value of approximately $ 1,102 (with such fair value measured as the respective conversion

date quoted closing price of the common stock of the Company).

fair value and face value principal outstanding of the Senior Convertible Notes as of December 31, 2022 are as follows:

Summary of Outstanding Debt

Contractual Maturity Date

Stated Interest Rate

Conversion Price per Share

Face Value Principal Outstanding

April 2022 Senior Convertible Note

April 4, 2024

2020 Senior Secured Convertible Note

August 6, 2022

as of December 31, 2020

Secured Convertible Note issued November 4, 2019 - Series A and Series B - (“November 2019 Senior Convertible Notes”)

“November 2019 Senior Convertible Notes” remaining unpaid outstanding face value principal of approximately $ 956

as of December 31, 2020 was repaid-in-full as

of January 5, 2021, with the remaining principal balance, along with the payment of interest thereon of approximately $ 7 ,

settled with the issuance of 667,668

shares common stock of the Company, with a fair

value of approximately $ 1,723

(with such fair value measured as the respective

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

of debt of approximately $ 760 .

Convertible Note issued April 30, 2020 - (“April 2020 Senior Convertible Note”)

“April 2020 Senior Convertible Note” unpaid outstanding face value principal of approximately $ 4,111 as of December 31, 2020

was repaid-in-full in March 2021, as discussed herein below.

In the years ended December 31, 2021 and 2020, approximately $ 52 and $ 215 ,

respectively, of non-installment payments were paid in cash.

Secured Convertible Note issued August 6, 2020 - (“August 2020 Senior Convertible Note”)

“August Senior Convertible Note” unpaid outstanding face value principal of approximately $ 7,750 as of December 31, 2020

was repaid-in-full in March 2021, as discussed herein below.

In the years ended December 31, 2021 and 2020, approximately $ 102 and $ 246 ,

respectively, of non-installment payments were paid in cash.

Repayments - April 2020 Senior Convertible Note and August 2020 Senior Convertible Note

January 30, 2021, the Company paid in cash a $ 350 partial principal repayment of the April 2020 Senior Convertible Note;

2, 2021, the Company paid in cash a total of $ 14,466 of principal repayments, resulting in both the April 2020 Senior Convertible Note

and the August 2020 Senior Convertible Note being repaid-in-full as of such date.

The Company recognized a debt extinguishment loss of

approximately $ 2,955 in the year ended December 31, 2021 in connection with the repayments of the April 2020 Senior Convertible Note

and the August 2020 Senior Convertible Note.

13 — Debt - continued

Notes - continued

reconciliation of the fair value of the convertible notes for the year ended December 31, 2021 is as follows:

Schedule of Senior Convertible Note Estimated Fair Value

2019 Senior Secured Convertible Notes

2020 Senior Convertible Note

2020 Senior Secured Convertible Note

of Balance Sheet Fair Value Components

Income (Expense)

Value - December 31, 2020

repayments – common stock

Non-installment

payments – common stock

Non-installment

payments – cash

in fair value

repayments - cash

Value at December 31, 2021 (1)

Income (Expense) - Change in fair value – year ended December 31, 2021 (1)

(1) As discussed above,

all remaining convertible notes were previously repaid during the three months ended March 31, 2021.

reconciliation of the fair value of the convertible notes for the year ended December 31, 2020 is as follows:

2018 Senior Secured Convertible Note

2019 Senior Secured Convertible Notes

2020 Senior Convertible Note

2020 Senior Secured Convertible Note

of Balance Sheet Fair Value Components

Income (Expense)

Value - December 31, 2019

value principal – issue date

value adjustment – issue date

repayments – common stock

Non-installment

payments – common stock

Non-installment

payments – cash

in fair value

2019 Senior Secured Convertible Note - Series B;

2020 Senior Convertible Note;

2020 Senior Secured Convertible Note

Value at December 31, 2020

Income (Expense) - Change in fair value – year ended December 31, 2020

Senior Convertible Notes presented above were each accounted for under the ASC 825-10-15-4 fair value option (“FVO”) election,

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

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

in the consolidated statement of operations.

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

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

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

September 2022 Senior Convertible Note

September 6, 2024

Balance as of December 31, 2022

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

During the year ended December 31, 2021, the Company recognized

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

Note 13, Financial Instruments Fair Value Measurements , for a further discussion of fair value assumptions.

14 — Debt - continued

Act Paycheck Protection Program Loan

April 8, 2020 the Company entered into a loan agreement with JP Morgan Chase, N.A., and received approximately $ 300 of proceeds, pursuant

to the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) Paycheck Protection Program (“PPP”)

- the “PPP Loan”.

Through the life of the PPP Loan, the Company made no principal or interest payments.

The Company submitted

its PPP Loan forgiveness application on April 21, 2021 and the forgiveness application was approved on June 9, 2021.

Upon PPP Loan forgiveness,

the Company recognized a gain of $ 300 in its consolidated statements of operations in the year ended December 31, 2021.

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 $ 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.

As of the date hereof, the March 2023 Lucid Senior Convertible Note has not yet been issued.

15 — Stock-Based Compensation

16 unchanged sentences

2014 Equity Plan as of December 31, 2022.

2014 Equity Plan - Stock Options

options issued and outstanding under the PAVmed Inc.

2014 Equity Plan and including PAVmed stock options granted outside the plan

is as follows:

In January 2023, the number of

shares available for grant was increased by 4,700,000 in accordance with the evergreen provisions of the plan.

Stock Options

stock options granted under the PAVmed Inc.

2014 Equity Plan and stock options granted outside such plan are summarized as follows:

Schedule of Summarizes Information About Stock Options

of Stock Options

Average Exercise Price

Contractual Term (Years)

stock options at December 31, 2019

stock options at December 31, 2020

and exercisable stock options at December 31, 2020

stock options at December 31, 2020

stock options at December 31, 2021

and exercisable stock options at December 31, 2021

Number of Stock Options

Weighted Average Exercise Price

Remaining Contractual Term (Years)

Intrinsic Value (2)

Outstanding stock options at December 31, 2020

Outstanding stock options at December 31, 2021

Vested and exercisable stock options at December 31, 2021

Outstanding stock options at December 31, 2021

( 1,655,894 )

Outstanding stock options at December 31, 2022 (3)

Vested and exercisable stock options at December 31, 2022

options granted under the PAVmed Inc.

2014 Equity Plan generally vest ratably over twelve

quarters, with the vesting commencing with the grant date quarter, and have a ten-year contractual

term from date-of-grant.

2014 Equity Plan and those granted outside such plan

generally vest ratably over twelve quarters, with the vesting commencing with the grant date

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

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

common stock on each of December 31, 2021 and 2020 and the exercise price of the underlying

stock options, to the extent such quoted price is greater than the exercise price.

common stock on each of December 31, 2022 and December 31, 2021 and the exercise price of

the underlying PAVmed Inc.

stock options, to the extent such quoted price is greater than

the exercise price.

outstanding stock options presented in the table above, are inclusive of 500,854 stock options

granted outside the PAVmed Inc.

2014 Equity Plan, as of December 31, 2022 and December 31,

15 — Stock-Based Compensation - continued

2014 Long-Term Incentive Equity Plan - continued

2014 Equity Plan - Restricted Stock Awards

April 1, 2021, a total of 300,000 restricted stock awards were granted to employees under the PAVmed Inc.

2014 Equity Plan, with such

restricted stock awards having a single vesting date of April 1, 2024 .

The (April 1, 2021) restricted stock awards fair value of approximately

$ 1.5 million, which was measured using the grant date quoted closing price per share of PAVmed Inc.

common stock, is recognized

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

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

December 15, 2021, a total of 100,000

restricted stock awards were granted to consultants

outside of the PAVmed Inc.

Equity Plan, with such restricted stock awards having a single vesting date of December 15, 2023 .

The (December 15, 2021) restricted stock awards fair value of approximately $ 0.3

million, which was measured using the grant date

quoted closing price per share of PAVmed Inc.

common stock, is recognized as stock-based compensation expense ratably on a straight-line

basis over the vesting period, which is commensurate with the service period.

The restricted stock awards are subject to forfeiture if

the requisite service period is not completed.

total of 1,650,000 restricted stock awards were previously granted under the PAVmed Inc.

2014 Equity Plan, with such restricted stock

awards having an aggregate fair value of approximately $ 2.7 million, which was measured using the respective grant date quoted closing

price per share of PAVmed Inc.

common stock, with the fair value recognized as stock-based compensation expense ratably on a straight-line

basis over the vesting period, which is commensurate with the service period.

The vesting of the previously granted restricted stock

awards is as follows:

233,334 vested on March 15, 2020;

466,666 vesting on March 15, 2022;

450,000 vesting ratably on an annual basis

over a three year period with the initial annual vesting date on May 1, 2021;

and 500,000 restricted stock awards having a single vesting

date of May 1, 2023 .

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

to December 31, 2021, as of March 29, 2022, additional stock-based equity grants of 3.1 million stock options with a weighted average exercise price of $ 1.67

were granted under the PAVmed Inc 2014 Equity Plan.

to December 31, 2022, in January 2023, the company granted 7,070,000 stock options with a weighted average exercise price of $ 0.48 for

which will generally vest one-third after one year then ratably over the next eight quarters.

Restricted Stock Awards

restricted stock awards granted under the PAVmed Inc.

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

summarized as follows:

Schedule of Restricted Stock Award Activity

Number of Restricted Stock Awards

Weighted Average Grant Date Fair Value

Outstanding restricted stock awards as of December 31, 2020

Unvested restricted stock awards as of December 31, 2021 (1)

Unvested restricted stock awards as of December 31, 2021

Unvested restricted stock awards as of December 31, 2022 (1)

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

stock awards granted outside the PAVmed Inc.

2014 Equity Plan as of December 31, 2022 and

December 31, 2021.

Diagnostics Inc.

15 unchanged sentences

board of directors.

total of 5,644,000 shares

of common stock of Lucid Diagnostics Inc.

total of 9,144,000 shares of common stock of Lucid Diagnostics Inc.

are reserved for issuance under the Lucid Diagnostics Inc.

2018 Equity Plan, with 2,752,615 shares

available for grant as of December 31, 2021, with the share reservation not diminished by a total of 473,300 Lucid

Diagnostics Inc.

Plan, with 3,821,139 shares available for grant as of December 31, 2022.

The share reservation is not diminished by a total of 423,300

stock options and 50,000 restricted stock awards granted outside the Lucid Diagnostics Inc.

2018 Equity Plan, as of December 31, 2022.

In January 2023, the number of shares available for grant was increased by 2,500,000 in accordance with the evergreen provisions of the

15 — Stock-Based Compensation - continued

Diagnostics Inc.

2018 Equity Plan - Stock Options

options issued and outstanding under the Lucid Diagnostics Inc.

2018 Equity Plan and including Lucid Diagnostics options granted outside

the plan is as follows:

Stock Options

Diagnostics Inc.

stock options granted under the Lucid Diagnostics Inc.

2018 Equity Plan and stock options granted outside such plan

are summarized as follows:

Schedule of Summarizes Information About Stock Options

of Stock Options

Average Exercise Price

Contractual Term (Years)

stock options at December 31, 2019

stock options at December 31, 2020

and exercisable stock options at December 31, 2020

stock options at December 31, 2020

stock options at December 31, 2021

and exercisable stock options at December 31, 2021

Number of Stock Options

Weighted Average Exercise Price

Remaining Contractual Term (Years)

Intrinsic Value (2)

Outstanding stock options at December 31, 2020

Outstanding stock options at December 31, 2021

Vested and exercisable stock options at December 31, 2021

Outstanding stock options at December 31, 2021

Outstanding stock options at December 31, 2022 (3)

Vested and exercisable stock options at December 31, 2022

options granted under the Lucid Diagnostics Inc.

2018 Equity Plan generally vest ratably

over twelve quarters, with the vesting commencing with the grant date quarter, and have a

ten-year contractual term from date-of-grant.

Diagnostics Inc.

2018 Equity Plan – Restricted Stock Awards

of December 31, 2021, a total of 1,897,795

restricted stock awards were granted under

the Lucid Diagnostics Inc.

2018 Equity Plan, summarized as follows:

March 1, 2021, a total of 1,467,440 restricted stock awards were granted under the Lucid Diagnostics Inc.

2018 Equity Plan to employees

of PAVmed Inc., a member of the board of directors of Lucid Diagnostics Inc.

(who is also a member of the board of directors of PAVmed

Inc.), and to each of the three physician inventors of the intellectual property licensed under the CWRU License Agreement, with such

restricted stock awards having a single vesting date of March 1, 2023, and an aggregate grant date fair value of approximately $ 18.9

million, measured as discussed below, with such aggregate estimated fair value recognized as stock-based compensation expense ratably

on a straight-line basis over the vesting period, which is commensurate with the service period.

The restricted stock awards are subject

to forfeiture if the requisite service period is not completed.

April 2021, a total of 91,715 restricted stock awards were granted under the Lucid Diagnostics Inc 2018 Equity Plan, inclusive of such

restricted stock awards granted to an employee of PAVmed Inc.

and a consultant, with such restricted stock awards having a single vesting

date in April 2023, and an aggregate grant date fair value of approximately $ 1.2 million, measured as discussed below, with such aggregate

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

commensurate with the service period.

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

As of December 31, 2021, a total of 7,055 restricted stock awards have been forfeited.

July 2021, a total of 84,660 restricted stock awards were granted under the Lucid Diagnostics Inc 2018 Equity Plan, inclusive of such

restricted stock awards granted to member of the board of directors of Lucid Diagnostics Inc.

with such restricted stock awards having

a single vesting date in July 2023, and an aggregate grant date fair value of approximately $ 1.1 million, measured as discussed below,

with such aggregate estimated fair value recognized as stock-based compensation expense ratably on a straight-line basis over the vesting

period, which is commensurate with the service period.

The restricted stock awards are subject to forfeiture if the requisite service

period is not completed.

14 — Stock-Based Compensation - continued

Diagnostics Inc.

2018 Equity Plan – Restricted Stock Awards - continued

September 2021, 169,320

restricted stock awards were granted under the

Lucid Diagnostics Inc 2018 Equity Plan to a member of the board of directors of Lucid Diagnostics Inc., with such restricted

stock award vesting ratably over a two year period with vesting dates of each of September 15, 2022 and 2023, and an

aggregate grant date fair value of approximately $ 2.3

million, measured as discussed below, with such

aggregate estimated fair value recognized as stock-based compensation expense ratably on a straight-line basis over the vesting period,

which is commensurate with the service period.

The restricted stock awards are subject to forfeiture if the requisite service period

is not completed.

On October 14,

restricted stock awards were granted under the Lucid Diagnostics Inc 2018 Equity Plan, to a member of the board of directors

of Lucid Diagnostics Inc., with such restricted stock awards having a single vesting date of October 14, 2023 , and

an aggregate grant date fair value of approximately $ 1.0

million, measured as the grant date closing price of Lucid Diagnostics Inc common stock, with such aggregate estimated

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

with the service period.

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

2018 Equity Plan and those granted outside

such plan generally vest ratably over twelve quarters, with the vesting commencing with the

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

intrinsic value is computed as the difference between the quoted price of the Lucid Diagnostics

common stock on each of December 31, 2022 and December 31, 2021 and the exercise price

of the underlying Lucid Diagnostics Inc.

stock options, to the extent such quoted price is

greater than the exercise price.

outstanding stock options presented in the table above, are inclusive of 423,300 stock options

granted outside the Lucid Diagnostics Inc.

2018 Equity Plan, as of December 31, 2022 and

December 31, 2021.

restricted stock awards were granted outside

of the Lucid Diagnostics Inc 2018 Equity Plan, with such restricted stock award having a single vesting date on December 15,

2023 , and an aggregate grant date fair value of approximately $ 0.3

million, measured as the grant date closing

price of Lucid Diagnostics Inc common stock, with such aggregate estimated fair value recognized as stock-based compensation expense

ratably on a straight-line basis over the vesting period, which is commensurate with the service period.

The restricted stock awards

are subject to forfeiture if the requisite service period is not completed.

Subsequent to December 31, 2021, as of March 29, 2022, additional stock-based equity grants under the Lucid Diagnostics Inc.

2018 Equity Plan included each of:

1.8 million stock options with a weighted average exercise price of approximately $ 4.16 per share and the same vesting and contractual term as discussed above;

and a total of 320,000 restricted stock awards with a weighted average grant date fair value of $ 4.52 per share of Lucid Diagnostics Inc.

common stock, with single vesting date of three years from date of grant.

price per share of Lucid Diagnostics Inc.

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) from October 14, 2021 to December 31, 2021

it is its quoted closing price per share on date of grant;

and (ii) for the period January 1, 2021 to October 13, 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, wherein,

the estimated fair value was based upon an analysis of future values, assuming various outcomes, based upon the probability-weighted

present value of expected future investment returns, considering each of the possible future outcomes available to Lucid Diagnostics

and (iii) as of December 31, 2020, it was estimated

using a discounted cash flow analysis applied to a multi-year forecast of its future cash flows.

PWERM principally involved (i) the identification of scenarios and related probabilities;

(ii) determine the equity value under each

and (iii) determine the common stock shareholders’ return in each scenario.

The two scenarios identified were an initial

public offering (“IPO”) of Lucid Diagnostics Inc.

common stock (“IPO scenario”);

and, to continue on as a private

company (“stay private scenario”).

With respect to the IPO scenario, the valuation of the Lucid Diagnostics Inc.

was computed using assumptions, including dates of the IPO, to calculate an estimated pre-money valuation;

and, with respect to the stay

private scenario, an income approach was used, wherein a risk-adjusted discount rate is applied to projected future cash flows.

awards during 2021, a relative weighting ranged from 75%-97.5% for to the IPO scenario and the relative weighting ranged from 2.5%-25%

for the stay private scenario .

to December 31, 2022, in January and February 2023, the company granted 2,672,500 stock options with a weighted average exercise price

of $ 1.31 for which will generally vest one-third after one year then ratably over the next eight quarters.

15 — Stock-Based Compensation - continued

Diagnostics Inc.

Restricted Stock Awards

Diagnostics Inc.

restricted stock awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan and restricted stock awards granted

outside such plan are summarized as follows:

Schedule of Restricted Stock Award Activity

Number of Restricted Stock Awards

Weighted Average Grant Date Fair Value

Unvested restricted stock awards as of December 31, 2020

Unvested restricted stock awards as of December 31, 2021 (1)

Unvested restricted stock awards as of December 31, 2021

Unvested restricted stock awards as of December 31, 2022 (1)

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

stock awards granted outside the Lucid Diagnostics Inc.

2018 Equity Plan as of December 31,

2022 and December 31, 2021.

January 7, 2022, 320,000 restricted stock awards were granted under the Lucid Diagnostics Inc 2018 Equity Plan, with such restricted

stock awards having a single vesting date on January 7, 2025 , and an aggregate grant date fair value of approximately $ 1.4 million, measured

as the grant date closing price of Lucid Diagnostics Inc.

common stock, with such aggregate estimated fair value recognized as stock-based

compensation expense ratably on a straight-line basis over the vesting period, which is commensurate with the service period.

The restricted

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

Stock-Based Compensation Expense

5 unchanged sentences

for the periods indicated, was as follows:

Schedule of Stock-Based Compensation Awards Granted

Ended December 31,

and marketing expenses

and administrative expenses

and development expenses

stock-based compensation expense

of Stock-Based Compensation Expense

Years Ended December 31,

Cost of revenue

Sales and marketing expenses

General and administrative expenses

Research and development expenses

Total stock-based compensation expense

15 — Stock-Based Compensation - continued

Compensation Expense Recognized by Lucid Diagnostics Inc.

8 unchanged sentences

2018 Equity Plan.

stock-based compensation expense recognized by Lucid Diagnostics Inc.

The stock-based compensation expense recognized by Lucid

Diagnostics Inc.

for both the PAVmed Inc.

2014 Equity Plan and the Lucid Diagnostics

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

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

Ended December 31,

Diagnostics Inc 2018 Equity Plan – sales and marketing expenses

Diagnostics Inc 2018 Equity Plan – general and administrative expenses

Diagnostics Inc 2018 Equity Plan – research and development expenses

Inc 2014 Equity Plan - sales and marketing expenses

Inc 2014 Equity Plan - general and administrative expenses

Inc 2014 Equity Plan - research and development expenses

stock-based compensation expense – recognized by Lucid Diagnostics Inc

2014 Equity Plan and the Lucid Diagnostics Inc.

2018 Equity Plan, with respect to stock options

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

of Stock-Based Compensation Expense Recognized by Lucid Diagnostics

Years Ended December 31,

Lucid Diagnostics Inc 2018 Equity Plan – cost of revenue

Lucid Diagnostics Inc 2018 Equity Plan – sales and marketing expenses

Lucid Diagnostics Inc 2018 Equity Plan – general and administrative expenses

Lucid Diagnostics Inc 2018 Equity Plan – research and development expenses

PAVmed Inc 2014 Equity Plan - cost of revenue

PAVmed Inc 2014 Equity Plan - sales and marketing expenses

PAVmed Inc 2014 Equity Plan - general and administrative expenses

PAVmed Inc 2014 Equity Plan - research and development expenses

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

stock-based compensation expense

consolidated unrecognized stock-based compensation expense and weighted average remaining requisite service period with respect to stock

3 unchanged sentences

Schedule of Unrecognized Compensation Expense

Average Remaining Service Period (Years)

Unrecognized Expense

Weighted Average Remaining Service Period (Years)

2014 Equity Plan

Diagnostics Inc.

Stock Options

Restricted Stock Awards

Lucid Diagnostics Inc.

2018 Equity Plan

Stock Options

Restricted Stock Awards

15 — Stock-Based Compensation - continued

1 unchanged sentence

2014 Equity Plan was based on a weighted

average estimated fair value of such stock options of $ 3.46 per share and $ 1.27 per share during the years ended December 31, 2021 and

2020, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

average estimated fair value of such stock options of $ 1.10 per share and $ 3.46 per share during the periods ended December 31, 2022

and 2021, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

Schedule of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions

Ended December 31,

term of stock options (in years)

stock price volatility

free interest rate

dividend yield

Years Ended December 31,

Expected term of stock options (in years)

Expected stock price volatility

Risk free interest rate

Expected dividend yield

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

2018 Equity Plan was based on

a weighted average estimated fair value of such stock options of $ 5.13 per share during the year ended December 31, 2021.

no stock-based awards granted under the Lucid Diagnostics Inc.

2018 Equity Plan during the year ended December 31, 2020.

The stock-based

compensation was calculated using the following weighted average Black-Scholes valuation model assumptions:

Schedule of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions

Ended December 31,

term of stock options (in years)

stock price volatility

free interest rate

dividend yield

a weighted average estimated fair value of such stock options of $ 2.30 per share and $ 5.13 per share during the periods ended December

31, 2022 and 2021, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions

Years Ended December 31,

Expected term of stock options (in years)

Expected stock price volatility

Risk free interest rate

Expected dividend yield

Employee Stock Purchase Plan (“ESPP”)

Employee Stock Purchase Plan (“PAVmed Inc.

ESPP”), adopted by the Company’s board of directors effective

April 1, 2019, provides eligible employees the opportunity to purchase shares of PAVmed Inc.

common stock through payroll deductions

during six month periods, wherein the purchase price per share of common stock is the lower of 85% of the quoted closing price per share

of PAVmed Inc.

common stock at the beginning or end of each six month share purchase period.

The PAVmed Inc.

ESPP share purchase dates

are March 31 and September 30.

A total of 203,480 shares and 154,266 shares of common stock of the Company were purchased for proceeds

of approximately $ 304 and $ 126 , on the ESPP purchase dates of March 31, 2021 and 2020, respectively.

A total of 31,112 shares and 152,289

shares of common stock of the Company were purchased for proceeds of approximately $ 131 and $ 231 , on the ESPP purchase dates of September

30, 2021 and 2020, respectively.

total of 194,240 shares and 203,480 shares of common stock of the Company were purchased for proceeds of approximately $ 218 and $ 304 ,

on March 31, 2022 and 2021, respectively under the PAVmed Inc Employee Stock Purchase Plan (“PAVmed Inc ESPP”).

191,698 shares and 31,112 shares of common stock of the Company were purchased for proceeds of approximately $ 140 and $ 131 , on September

30, 2022 and 2021, respectively under the PAVmed Inc ESPP.

The September 30, 2022 purchase was settled through the redeployment of treasury

stock, and did not reduce the number of shares available-for-issue under the PAVmed Inc ESPP.

The PAVmed Inc.

ESPP has a total reservation of 1,250,000 shares of common stock of PAVmed Inc.

626,081 shares are available-for-issue remaining as of December 31, 2021.

ESPP has a total reservation

of 1,750,000 shares of common stock of PAVmed Inc.

of which 931,841 shares are available-for-issue as of December 31, 2022.

2023, the number of shares available-for-issue was increased by 250,000 in accordance with the evergreen provisions of the plan.

Diagnostics, Inc Employee Stock Purchase Plan (“ESPP”)

Lucid Diagnostics Inc.

Employee Stock Purchase Plan (“Lucid Diagnostics Inc.

ESPP”), adopted by the Company’s board

of directors effective November 9.

2021, provides eligible employees the opportunity to purchase shares of Lucid Diagnostics Inc.

stock through payroll deductions during six month periods, wherein the purchase price per share of common stock is the lower of 85% of

the quoted closing price per share of Lucid Diagnostics Inc.

common stock at the beginning or end of each six month share purchase period.

Lucid Diagnostics Inc Employee Stock Purchase Plan (“Lucid Diagnostics Inc ESPP”), initial six-month stock purchase period

was April 1, 2022 to September 30, 2022.

A total of 84,030 shares of common stock of Lucid Diagnostics Inc were purchased for proceeds

of approximately $ 109 on September 30, 2022 under the Lucid Diagnostics Inc.

The Lucid Diagnostics Inc.

ESPP share purchase dates are March 31 and September 30.

The initial ESPP purchase date will be September

Lucid Diagnostics Inc.

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

of which 500,000 shares are available-for-issue

remaining as of December 31, 2021.

ESPP has a total reservation

of 500,000 shares of common stock of Lucid Diagnostics Inc.

of which 415,970 shares are available-for-issue as of December 31, 2022.

In January 2023, the number of shares available-for-issue was increased by 500,000 in accordance with the evergreen provisions of the

16 — Preferred Stock

Company is authorized to issue 20 million shares of its Series B Convertible Preferred Stock, par value of $ 0.001 per share, with such

designation, rights, and preferences as may be determined by the Company’s board of directors.

B Convertible Preferred Stock

As of December 31, 2021 and 2020,

there were 1,113,919 and 1,228,075 shares of Series B Convertible Preferred Stock (classified in permanent equity) issued and outstanding,

respectively.

of December 31, 2022 and December 31, 2021, there were 1,205,759 and 1,113,919 shares of Series B Convertible Preferred Stock (classified

in permanent equity) issued and outstanding, respectively.

B Convertible Preferred Stock Dividends

Series B Convertible Preferred Stock is issued pursuant to the PAVmed Inc.

8 unchanged sentences

settle the Series B Convertible Preferred Stock.

Series B Convertible Preferred Stock Certificate of Designation provides for dividends at a rate of 8 % per annum based on the $ 3.00 per

share stated value of the Series B Convertible Preferred Stock, with such dividends compounded quarterly, accumulate, and are payable

in arrears upon being declared by the Company’s board of directors, with the dividends earned from April 1, 2018 through October

1, 2021 payable-in-kind (“PIK”) by the issue of additional shares of Series B Convertible Preferred Stock.

The dividends

may be settled after October 1, 2021, at the option of the Company, through any combination of the issue of shares of Series B Convertible

Preferred Stock, the issue shares of common stock of the Company, and /or cash payment.

Series B Convertible Preferred Stock dividends earned are included in the calculation of basic and diluted net loss attributable to PAVmed

common stockholders for each of the corresponding periods presented.

Notwithstanding, the Series B Convertible Preferred Stock dividends

are recognized as a dividend payable only upon the dividend being declared payable by the Company’s board of directors.

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

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

board of directors, with the dividends earned from April 1, 2018 through October 1, 2021 payable-in-kind (“PIK”) by the issue

of additional shares of Series B Convertible Preferred Stock;

and after October 1, 2021, dividends may be settled, at the election of

the discretion of the board of directors, through any combination of the issue of shares of Series B Convertible Preferred Stock, the

issue shares of common stock of the Company, and /or cash payment.

the year ended December 31, 2022, the Company’s board-of-directors declared an aggregate of approximately $ 276 of Series B Convertible

5 unchanged sentences

to December 31, 2022, in January 2023, the Company’s board-of-directors declared a Series B Convertible Preferred Stock dividend

earned as of December 31, 2021 and payable as of January 1, 2022, of approximately $ 67 , which will be settled by the issue of an additional

22,291 shares of Series B Convertible Preferred Stock (with such dividend not recognized as a dividend payable as of December 31, 2021,

as the Company’s board of directors had not declared such dividends payable as of such date).

the year ended December 31, 2021 and 2020, at the election of the holders, a total of 210,448 and 25,000 shares of Series B Convertible

Preferred Stock, respectively, were converted into the same number of shares of common stock of the Company.

earned as of December 31, 2022 and payable as of January 1, 2023, of approximately $ 72 , to be settled by the issue of an additional 24,128

shares of Series B Convertible Preferred Stock (with such dividend not recognized as a dividend payable as of December 31, 2022, as the

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

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

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 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 million.

17 — Common Stock and Common Stock Purchase Warrants

Company is authorized to issue up to 150 million shares of its common stock, par value of $ 0.001 per share.

There were 86,367,845 and

63,819,935 shares of common stock issued and outstanding as of December 31, 2021 and December 31, 2020, respectively.

Ended December 31, 2021

January 5, 2021, a total of 6,000,000 shares of common stock of the Company were issued 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 .

The 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 the Company were issued

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

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.

333-248709 and File No.

January 2021, 667,668

of the Company’s 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

with approximately $ 7

interest thereon, as discussed in Note 13, Debt .

the year ended December 31, 2021, 210,448

of common stock of the Company 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 common stock of the

Company 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 Warrants.

the year ended December 31, 2021, 621,164

of common stock of the Company were issued upon exercise of stock options for cash of approximately

See Note 14, 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

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 common stock of the Company 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 .

The shares 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 the Company 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 12, Debt .

2020, 306,555

of common stock were purchased by employees through participation in the PAVmed Inc.

Stock Purchase Plan, as discussed in Note 14, Stock-Based Compensation .

16 — Common Stock and Common Stock Purchase Warrants - continued

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

February 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.

the year ended December 31, 2022, 299,999 shares of common stock of the Company were issued upon exercise of stock options for cash of

approximately $ 302 ;

and during the year ended December 31, 2022 a total of 385,938 shares of common stock of the Company were issued

under the PAVmed Inc.

Employee Stock Purchase Plan (“ESPP”).

See Note 15, Stock-Based Compensation , for a discussion

of each of the PAVmed Inc.

2014 Equity Plan and the PAVmed Inc.

the year ended December 31, 2022, 7,189,358 share of the Company’s common stock were issued upon conversion, at the election of

the holder, of the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note, for $ 6,003 face value principal

repayments, along with approximately $ 370 of interest thereon, as discussed in Note 14, Debt .

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 the at-the-market equity

facility for approximately $0.6 million .

Stock Purchase Warrants

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

Schedule of Outstanding Warrants to Purchase Common Stock

Stock Purchase Warrants Issued and Outstanding

Average Exercise Price / Share

- Series Z Warrants

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

Series Z Warrants were exercised for cash at

per share, resulting in the issue of the same

number of shares of common stock of the Company.

the year ended December 31, 2021, a total of 3,945

Series W Warrants were exercised for cash at

per share, resulting in the issue of the same

number of shares of common stock of the Company.

Subsequent to December 31, 2021, the 377,873 Series W Warrants issued

and outstanding as of December 31, 2021, expired unexercised as of January 29, 2022.

Unit Purchase Options (UPO) expired unexercised as of January 29, 2021.

Series Z Warrant is exercisable to purchase one share of common stock of the Company at an exercise price of $ 1.60 per share, and expire

after the close of business on April 30, 2024, if not earlier redeemed by the Company , as discussed below.

The Series Z Warrant exercise

price is not subject-to adjustment, unless by action of the PAVmed Inc.

board of directors, or the effect of stock dividends, stock splits

or similar events affecting the common stock of the Company.

Under no circumstances will the Company be required to net cash settle the

Series Z Warrants, nor to pay any liquidated damages in lieu of delivery of shares of common stock of the Company resulting from a failure

to satisfy any obligations under the Series Z Warrant.

Company may redeem the Series Z Warrants, at the Company’s option, in whole or in part, at a price of $0.01 per Series Z Warrant

at any time while the Series Z Warrants are exercisable, upon a minimum of 30 days’ prior written notice of redemption, if, and

only if, the volume weighted average closing price of the common stock of the Company equals or exceeds $9.00 (subject to adjustment)

for any 20 out of 30 consecutive trading days ending three business days before the Company issues its notice of redemption, and provided

the average daily trading volume in the common stock of the Company during such 30-day period is at least 20,000 shares per day;

if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying such Series

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

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

During the year ended December 31, 2022, a total of 5 Series Z Warrants were exercised for cash at $ 1.60 per share, resulting

in the issue of the same number of shares of common stock of the Company.

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

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

January 29, 2022 .

18 — Noncontrolling Interest

2 unchanged sentences

Schedule of Noncontrolling Interest of Stockholders' Equity

Ended December 31,

– equity (deficit) – beginning of period

in Veris Health Inc.

loss attributable to NCI – Lucid Diagnostics Inc.

loss attributable to NCI – Solys Diagnostics Inc.

loss attributable to NCI – Veris Health Inc.

of subsidiary equity transactions

Diagnostics Inc.

December 31, 2022

December 31, 2021

NCI – equity (deficit) – beginning of period

Investment in Veris Health Inc.

Net loss attributable to NCI

Impact of subsidiary equity transactions

Lucid Diagnostics Inc.

proceeds from Committed Equity Facility, net of deferred financing charges

Lucid Diagnostics Inc.

issuance of common stock for settlement of APA-RDx installment payment

Lucid Diagnostics Inc.

2018 Equity Plan stock option exercise

compensation expense - Lucid Diagnostics Inc.

Lucid Diagnostics Inc.

Employee Stock Purchase Plan Purchase

Stock-based compensation expense - Lucid Diagnostics Inc.

2018 Equity Plan

– equity (deficit) – end of period

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

Diagnostics Inc.

and Solys Diagnostics Inc., as a component of consolidated total stockholders’ equity as of December 31, 2021

and December 31, 2020, and the recognition of a net loss attributable to the NCI in the consolidated statement of operations for the

years ended December 31, 2021 and 2020;

and Veris Health Inc.

as a component of consolidated total stockholders’ equity as of December

31, 2021, and the recognition of a net loss attributable to the NCI in the consolidated statement of operations for the period May 28,

2021 (inception date) to December 31, 2021.

Stock-based compensation expense - Veris Health Inc.

2021 Equity Plan

NCI – equity (deficit) – end of period

consolidated NCI presented above is with respect to the Company’s consolidated majority-owned subsidiaries as a component of consolidated

total stockholders’ equity as of December 31, 2022 and December 31, 2021;

and the recognition of a net loss attributable to the

NCI in the consolidated statement of operations for the periods beginning on the acquisition date of the respective majority-owned subsidiaries.

Diagnostics Inc.

1 unchanged sentence

issued and outstanding, of which, PAVmed

holds 27,927,190 shares, representing a majority ownership equity interest and a controlling financial interest in Lucid Diagnostics

Inc., and accordingly, Lucid Diagnostics Inc.

holds 31,302,420 shares, representing a majority ownership equity interest and PAVmed Inc.

has a controlling financial interest

in Lucid Diagnostics Inc., and accordingly, Lucid Diagnostics Inc.

is a consolidated majority-owned subsidiary of PAVmed Inc.

October 6, 2021, the Lucid Diagnostics Inc.

board of directors declared a 1.411-to-1.0 common stock-split.

The number of shares of common

stock of Lucid Diagnostics Inc.

and the stock options and restricted stock awards granted under the Lucid Diagnostics Inc.

Plan, and the respective exercise and /or conversion price per share, for all periods presented, as applicable, have been adjusted for

such common stock-split.

October 13, 2021, Lucid Diagnostics Inc.

issued 15,803,200 shares of its common stock to PAVmed Inc.

upon the election by PAVmed Inc.

to convert the $ 22.4 million face value principal under the terms of a Senior Unsecured Promissory Note, dated June 1, 2021.

Unsecured Promissory Note was issued by Lucid Diagnostics Inc.

to PAVmed Inc.

with a face value principal of $ 22,400,000 , an annual interest

rate of 7.875 %, and a maturity date of May 18, 2028 .

The Senior Unsecured Promissory Note replaced the $ 22.4 million aggregate outstanding

and payable balance of the intercompany Due To:

as of June 1, 2021.

The Senior Unsecured Promissory Note provided for the

partial or full repayment of the face value principal and accrued but unpaid interest thereon by the issue of shares of Lucid Diagnostics

common stock, at the election of PAVmed Inc., at a conversion price of $ 1.42 per share of Lucid Diagnostics Inc.

common stock (with

such number of such shares and the conversion price adjusted for the Lucid Diagnostics Inc.

1.411-to-1.0 common stock split effective

October 6, 2021 as discussed above).

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

issued to PAVmed Inc., at an IPO offering price

per share, resulting gross proceeds to Lucid

Diagnostics Inc.

million, before underwriting fees of $ 4.9

million, and approximately $ 0.7

million of offering costs incurred by Lucid Diagnostics

17 — Noncontrolling Interest - continued

March 28, 2022, Lucid Diagnostics, Inc.

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

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

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 the Company to raise primary equity capital on a periodic basis

at prices based on the existing market price.

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

of common stock of Lucid Diagnostics Inc.

were issued for proceeds of approximately $ 1,807 .

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.

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.

of December 31, 2022, there were 8,000,000 shares of common stock of Veris Health Inc.

issued and outstanding, of which PAVmed Inc.

an 80.44 % majority-interest ownership and has a controlling financial interest, with the remaining 19.56 % minority-interest ownership

held by an unrelated third-party.

an 80.44 % majority-interest ownership and PAVmed Inc.

has a controlling financial interest, with the remaining 19.56 % minority-interest

ownership held by an unrelated third-party.

Accordingly, Veris Health Inc.

is a consolidated majority-owned subsidiary of the Company, for which

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

consolidated balance sheet as of December 31, 2021 along with the recognition of a net loss attributable to the NCI in the consolidated

is a consolidated majority-owned subsidiary of the Company,

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

in the consolidated balance sheet as of December 31, 2022 along with the recognition of a net loss attributable to the NCI in the consolidated

statement of operations for the period of May 28, 2021 to December 31, 2021, upon its formation and contemporaneous acquisition of Oncodisc

Inc., as such the acquisition is discussed in Note 6, Acquisitions, subsection:

Oncodisc Inc.

Diagnostics Inc.

of each of December 31, 2021 and December 31, 2020, there were 9,189,190 shares of common stock of Solys Diagnostics Inc.

outstanding, of which PAVmed Inc.

holds a 90.3235 % majority-interest ownership and has a controlling financial interest, with the remaining

9.6765 % minority-interest ownership held by unrelated third parties.

Accordingly, Solys Diagnostics Inc.

is a consolidated majority-owned

subsidiary of the Company, for which a provision of a noncontrolling interest (NCI) is included as a separate component of consolidated

stockholders’ equity in the consolidated balance sheet as of December 31, 2021 and December 31, 2020, along with the recognition

of a net loss attributable to the NCI in the consolidated statement of operations for the years ended December 31, 2021 and 2020.

19 — Income Taxes

1 unchanged sentence

Schedule of Income Tax (Benefit) Expense

Ended December 31,

State and Local

Year Ended December 31,

Federal, State and Local

State and Local

Current and Deferred tax (benefit) expense

Valuation allowance reserve

tax expense (Benefit)

Income tax expense (benefit)

reconciliation of the federal statutory income tax rate to the effective income tax rate for the respective period noted is as follows:

of Effective Income Tax Rate Reconciliation

Ended December 31,

Year Ended December 31,

federal statutory rate

state and local income taxes, net of federal benefit

Permanent differences

Revaluation of state deferred taxes

Valuation allowance

Effective tax rate

tax effects of temporary differences which give rise to the net deferred tax assets for the respective period noted is as follows:

of Deferred Tax Assets and Liabilities

Ended December 31,

operating loss

Non-deductible

interest expense

compensation expense

and development tax credit carryforwards

195 deferred start-up costs

Tax Liabilities

Year Ended December 31,

Deferred Tax Assets

Net operating loss

Debt issue costs

Stock-based compensation expense

Lease liabilities

Research and development expenditures

Research and development tax credit carryforwards

Accrued expenses

Section 195 deferred start-up costs

Depreciation & amortization

Deferred tax assets

Deferred Tax Liabilities

Operating lease right-of-use assets

Patent licenses

Tax Liabilities

tax assets, net of deferred tax liabilities

Deferred Tax Liabilities

Deferred tax assets, net of deferred tax liabilities

valuation allowance

tax assets, net after valuation allowance

Deferred tax assets, net after valuation allowance

19 — Income Taxes - continued

15 unchanged sentences

and 2021, the deferred tax asset valuation allowance increased by $ 13,141 and $ 18,937 , respectively.

Company has total estimated federal 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.

Company has total estimated federal net operating loss (“NOL”) carryforward of approximately $ 158.4 million and $ 104.1 million

as of December 31, 2022 and 2021, respectively, which is available to reduce future taxable income, of which approximately $ 13.8 million

have statutory expiration dates commencing in 2037 , and approximately $ 144.6 million which do not have a statutory expiration date.

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).

State and Local NOL carryforwards of approximately $ 157.8 million have statutory expiration dates commencing in 2037.

The Company has

total estimated research and development (“R&D”) tax credit carryforward of approximately $ 1.7 million as of December

31, 2022 which are available to reduce future tax expense and have statutory expiration dates commencing in 2037.

Company files income tax returns in the United States in federal and applicable state and local jurisdictions.

5 unchanged sentences

or interest related to its income tax provision.

In August 2022, the U.S.

passed the Inflation Reduction Act, which included a corporate minimum tax on book earnings of 15%, an excise tax on corporate share repurchases

of 1%, and certain climate change and energy tax credit incentives.

The adoption of a corporate minimum tax of 15% is not expected to

impact PAVmed’s effective tax rate.

The excise tax of 1% on corporate share buybacks will not have an impact on the Company’s

effective tax rate.

20 — Net Loss Per Share

respective “Net loss per share - attributable to PAVmed Inc.

- basic and diluted” and “Net loss per share - attributable

to PAVmed Inc.

common stockholders - basic and diluted” - for the periods indicated - is as follows:

“Net loss per share - attributable to PAVmed Inc.

- basic and diluted” and “Net loss per share - attributable to PAVmed

common stockholders - basic and diluted” - for the respective periods indicated - is as follows:

Schedule of Comparison of Basic and Fully Diluted Net Loss Per Share

Ended December 31,

loss - before noncontrolling interest

loss attributable to noncontrolling interest

loss - as reported, attributable to PAVmed Inc.

B Convertible Preferred Stock dividends – earned (1)

loss attributable to PAVmed Inc.

Years Ended December 31,

Net loss - before noncontrolling interest

$ ( 103,238 )

Net loss attributable to noncontrolling interest

Net loss - as reported, attributable to PAVmed Inc.

Series B Convertible Preferred Stock dividends – earned

Net loss attributable to PAVmed Inc.

common stockholders

average common shares outstanding, basic and diluted (2)

loss - as reported, attributable to PAVmed Inc.

loss attributable to PAVmed Inc.

Weighted average common shares outstanding, basic and diluted

Net loss per share

Basic and diluted

Net loss - as reported, attributable to PAVmed Inc.

Net loss attributable to PAVmed Inc.

common stockholders

1 unchanged sentence

be anti-dilutive, are as follows:

Series B Convertible Preferred Stock dividends earned as of the each of the respective periods noted, are included in the calculation

of basic and diluted net loss attributable to PAVmed Inc.

Series B Convertible Preferred Stock dividends earned as of each of the respective periods noted, are included in the calculation of

basic and diluted net loss attributable to PAVmed Inc.

common stockholders for each respective period presented.

Notwithstanding,

the Series B Convertible Preferred Stock dividends are recognized as a dividend payable only upon the dividend being declared payable

by the Company’s board of directors.

Notwithstanding, the

Series B Convertible Preferred Stock dividends are recognized as a dividend payable only upon the dividend being declared payable by

the Company’s board of directors.

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

Company issued and outstanding during such periods, each on a weighted average basis.

The basic weighted average number of shares common

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

such incremental shares.

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

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

The common stock equivalents excluded

from the computation of diluted weighted average shares outstanding are as follows:

The basic weighted average number of shares of

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

includes such incremental shares.

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

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

The common stock equivalents

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

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

Ended December 31,

2014 Equity Plan stock options and restricted stock awards

purchase options - as to shares of common stock

purchase options - as to shares underlying Series Z Warrants

B Convertible Preferred Stock

Antidilutive securities excluded from computation of diluted weighted shares outstanding

20 - Subsequent Events

Inc - Private Placement - Securities Purchase Agreement

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 $ 50,000,000 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

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.

to certain conditions being met or waived, from time to time after such time that stockholder approval for an increase in our authorized

shares from 150 million to 250 million is obtained, but before March 31, 2024, one or more additional closings for up to the remaining

principal amount of March 2022 Notes may occur, upon five trading days’ notice by us to the investor.

The aggregate principal amount

of March 2022 Notes that may be offered in the additional closings may not be more than $22.5 million.

The investor’s obligation

to purchase the notes at each additional closing is subject to certain conditions set forth in the March 2022 SPA (including minimum

price and volume thresholds, maximum ratio of debt to market capitalization, and minimum market capitalization), which may be waived

by the Required Holders (as defined in the March 2022 SPA).

Under the March 2022 SPA, the investor will be required to purchase March

2022 Notes in the additional closings if such conditions are met or waived.

In addition, from and after March 31, 2023, the investor

may by written notice to us elect to require us to issue up to $ 22.5 million in initial principal amount of March 2022 Notes, so long

as in doing so it would not cause the ratio of (a) the outstanding principal amount of the March 2022 Notes (including the additional

March 2022 Notes), accrued and unpaid interest thereon and accrued and unpaid late charges to (b) our average market capitalization over

the prior ten trading days, to exceed 25%.

If we fail to complete the sale of the additional Notes contemplated by any such written notice,

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

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

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.

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.

20 - Subsequent Events - continued

Diagnostics Inc - Committed Equity Facility

to December 31, 2021, on March 28, 2022, Lucid Diagnostics, Inc.

entered into a committed equity facility with an affiliate of Cantor

Fitzgerald (“Cantor”).

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

$ 50 million of Lucid Diagnostics Inc.

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

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

facility, insofar as it allows Lucid Diagnostics Inc.

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

market price.

In connection with the execution

of the agreement for the committed equity facility, Lucid Diagnostics Inc.

agreed to pay Cantor $ 1.0 million as consideration for its

irrevocable commitment to purchase the shares upon the terms and subject to the satisfaction of the conditions set forth in such agreement.

In addition, pursuant to the agreement, e agreed to reimburse Cantor for certain of its expenses.

Lucid Diagnostics Inc.

into a registration rights agreement with Cantor.

Lucid Diagnostics Inc.

has the right to terminate the agreement at any time after initial

satisfaction of the conditions to Cantor’s obligation to purchase shares under the facility, at no cost or penalty, upon three

trading days’ prior written notice.

Purchase Agreement - ResearchDx Inc.

to December 31, 2021, on February 25, 2022, Lucid Diagnostics, Inc., through its wholly-owned subsidiary

LucidDx Labs, Inc., entered into an asset purchase agreement (“RDx APA”) with ResearchDx, Inc.

an unrelated third-party.

Under the RDx APA, LucidDx Labs Inc.

acquired certain licenses and other related assets

necessary to operate a CLIA-certified, CAP-accredited commercial clinical laboratory.

The RDx APA acquired assets, along

with other LucidDx Labs Inc.

purchased and leased property and equipment, are being used to commence laboratory operations to perform

the EsoGuard® Esophageal DNA assay, inclusive of DNA extraction, next generation sequencing (“NGS”) and specimen

Prior to consummation of the RDx APA, RDx provided such laboratory services at its owned CLIA-certified,

CAP-accredited laboratory.

Under the RDx APA, LucidDx Labs Inc.

will pay RDx an aggregate purchase price of up to $ 6.2

million for the acquired assets.

Concurrent with

the RDx APA, LucidDx Labs Inc.

and RDx also entered into a management services agreement (“RDx MSA”),

with a term of three

years , and a total of approximately $ 1.8

million of quarterly payments.

Stock options and restricted stock awards

Series Z Warrants

Series W Warrants

Series B Convertible Preferred Stock

total stock options and restricted stock awards are inclusive of 500,854 stock options as of December 31, 2022 and 2021;

restricted stock awards as of December 31, 2022 and 2021, granted outside the PAVmed Inc.

2014 Equity Plan.

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

What changed 10-K

Item 9A. Controls and Procedures