What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-15 compared with 2022-11-14 · 390 added, 511 removed, 112 unchanged (89% of the section changed)

1 unchanged sentence

following discussion and analysis of our unaudited condensed consolidated financial condition and results of operations should be read

together with our Annual Report on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”) as filed with the Securities

and Exchange Commission (the “SEC”).

together with our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”), as filed with the

Securities and Exchange Commission (the “SEC”).

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

or “PAVmed” are to PAVmed Inc.

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

(“Lucid Diagnostics” or “LUCID”)

and Veris Health Inc.

and its subsidiaries, including its majority-owned subsidiaries, including Lucid Diagnostics

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

(“Veris Health” or “Veris”).

30 unchanged sentences

joint ventures or investments we may make.

may not actually achieve the plans, intentions, and/or expectations disclosed in our forward-looking statements, and you should not

place undue reliance on our forward-looking statements.

You should read this Form 10-Q and the Form 10-K, and the documents we have filed

as exhibits to this Form 10-Q and the Form 10-K, completely and with the understanding our actual future results may be materially different

from what we expect.

We do not assume any obligation to update any forward-looking statements, whether as a result of new information,

future events or otherwise, except as required by applicable law.

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

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

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

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

management team.

The Company has ongoing operations conducted both through PAVmed Inc.

and its majority-owned subsidiaries.

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

the following lines of business:

Diagnostics, Medical Devices and Digital Health.

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

and in Item 1 of Part I of the Form 10-K under the heading “Business Background and Overview,” are as follows:

● Diagnostics

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

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

EsoCure Esophageal

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

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

data analytics.

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

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

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

believe that the EsoGuard Esophageal DNA Test, performed on samples collected with the EsoCheck Esophageal Cell Collection Device, constitutes

the first and only commercially available diagnostic test capable of serving as a widespread screening tool to prevent esophageal adenocarcinoma

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

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

The Company has advanced the proprietary technologies

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

The Company is presently focused on expanding commercialization across multiple sales channels, including the communication

and education of medical practitioners and clinicians of EsoGuard and the establishment of “Lucid Diagnostics Test Centers”

for the collection of cell samples using EsoCheck.

Previously the collected cell samples were sent to ResearchDx Inc.

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

for the performance of EsoGuard.

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

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

College of American Pathologists (“CAP”) accredited clinical laboratory located in Lake Forest, CA.

RDx was previously responsible

for submitting claims for EsoGuard tests performed and was receiving out-of-network private insurance payments.

As part of the transition

to our own lab, we also contracted with a revenue cycle management (“RCM”) provider to submit claims on our behalf.

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

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

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

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

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

Refer to Note 3 of our Condensed Consolidated Financial

Statements for more information on Revenue from Contracts with Customers.

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

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

(“EAC”) utilizing Lucid Diagnostics’ EsoGuard Esophageal DNA Test on samples collected with our EsoCheck Cell

Collection Device.

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

in at-risk patients with GERD.

In its Recommendation 5, the ACG suggests a single screening endoscopy in patients with chronic GERD

symptoms and 3 or more additional risk factors for BE, including male sex, age greater than 50 years, White race, tobacco smoking,

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

Furthermore, and importantly for the first time, the clinical

guideline also endorses nonendoscopic biomarker screening as an acceptable alternative to costly and invasive endoscopy by stating

in its Recommendation 6 that the ACG suggests that a swallowable, nonendoscopic capsule device combined with a biomarker is an

acceptable alternative to endoscopy for screening for BE.

The clinical guideline specifically mentions EsoCheck, along with our

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

The clinical guideline also mentions

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

The summary of evidence for this recommendation includes a reference to the seminal NIH-funded, multicenter, case-control study published in 2018 in

Science Translational Medicine, which demonstrated that EsoGuard is highly accurate at detecting esophageal precancer and cancer,

including on samples collected with EsoCheck.

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

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

tools like our EsoCheck Cell Collection Device, which is cited in its guideline, as an acceptable alternative to endoscopy to

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

detection of BE.

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

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

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

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

As a result, chronic

symptomatic GERD is no longer a mandatory prerequisite and asymptomatic patients with three of the other six risk factors (e.g.,

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

patients recommended for screening.

2021 the Lucid Diagnostics Inc.

began conducting two concurrent clinical trials, the “EsoGuard screening study” (“BE-1”) and the “EsoGuard

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

and to support a United States Food and Drug Administration (“FDA”) pre-market

approval (“PMA”) application of the use of EsoGuard and EsoCheck as an in-vitro diagnostic

medical device (“IVD”).

However, in light of the recently published proposed

Local Coverage Determination (“LCD”) DL39256, the recently updated AGA guidance,

and the ACG update to its clinical guideline that supports screening to prevent highly lethal

esophageal cancer (“EAC”) utilizing a biomarker test like EsoGuard on samples collected

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

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

reimbursement adoption for EsoGuard and EsoCheck by government and private insurers.

Consequently, we have decided

to delay for the time being the BE-1 trial while continuing to enroll GERD patients with

a previous diagnosis of nondysplastic BE, low grade dysplasia, high grade dysplasia, or EAC

in the BE-2 case-control study through Q2 2023.

is a minimally invasive surgical device for use in the treatment of carpal tunnel syndrome

which received FDA 510(k) marketing clearance in April 2020.

Our limited-release commercialization

efforts through 2022 are focused on engaging key opinion hand surgeons designed to solicit

input for ergonomic improvements to the device, procedure development and surgical-time optimization,

and ease of use.

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

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

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

The design and development

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

May 2021, we formed Veris Health, and concurrently, acquired Oncodisc Inc.

(“Oncodisc”), a digital health company with

ground breaking tools to improve personalized cancer care through remote patient monitoring, which we now refer to as our Veris

Cancer Care Platform.

The core technologies incorporated in the Veris Cancer Care Platform include the first intelligent implantable

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

cost-effective care through remote monitoring and data analytics.

Its vascular access port contains biologic sensors capable of

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

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

will deliver actionable real time data to patients and physicians.

The technologies are the subject of multiple patent applications

and one allowed patent awaiting final issuance.

We plan to seek commercialization of the implantable device through a FDA 510(k)

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

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

enabled connected health care devices.

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

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

We have recently

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

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

vascular access port.

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

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

Overview - continued

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

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

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

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

We have successfully

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

circumferential ablation of the esophageal mucosal lining.

An acute and survival animal study

of EsoCure Esophageal Ablation Device has also been completed, demonstrating successful

direct thermal balloon catheter ablation of esophageal lining through the working channel

of a standard endoscope.

We plan to conduct additional development work and animal testing

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

is an implantable intraosseous vascular access device that is being developed as a means

for infusing fluids, medications, and other substances directly into the bone marrow cavity

and from there into the central venous circulation.

We are pursuing an FDA clearance for

use in patients with a need for longer-term vascular access under de novo classification

of section 513(f)2 of the FDCA.

The broader clearance is being pursued in discussion with

FDA following our previous initial submission to the FDA for a 510(k) premarket notification

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

PortIO completed

its first-in-human clinical study in Colombia, South America, and has earlier this year successfully

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

explant of the device.

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

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

Recruitment of these patients is underway.

Manufacturing Update

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

manufacturing company.

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

Coastline International as the manufacturing process is further optimized.

Cell Collection Device Update

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

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

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

This action by the FDA now expands the targeted US patient

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

Health Update

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

At the same time, we initiated

our HIPAA and SOC2 audits which were completed in October.

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

a clear regulatory pathway for our first intelligent implantable device.

Opportunities - Novosound Agreement

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

of ultrasound sensors using a proprietary thin-film technique.

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

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

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

in intravascular imaging.

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

Effective as of March 31, 2022, we

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

“Lender”, and /or “Holder”), pursuant to which we agreed to sell, and the Investor agreed to purchase an

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

The SPA provided for the sale to the Investor

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

“April 2022 Senior Convertible Note”).

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

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

additional $22.5 million.

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

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

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

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

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

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

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

March 31, 2022 and the senior convertible notes.

may not actually achieve the plans, intentions, and/or expectations disclosed in our forward-looking statements, and you should not place

undue reliance on our forward-looking statements.

You should read this Form 10-Q and the documents we have filed as exhibits to this

Form 10-Q and the Form 10-K completely and with the understanding our actual future results may be materially different from what we

We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events

or otherwise, except as required by applicable law.

is a diversified commercial-stage medical technology operating in the medical device, diagnostics, and digital health sectors, including

through its majority-owned subsidiaries Lucid Diagnostics, a commercial-stage cancer prevention diagnostics company, and Veris Health,

a private digital health company focused on enhanced personalized cancer care.

Our current central focus is on the commercialization

of Lucid Diagnostics’s EsoGuard and Veris Health’s Veris Cancer Care Platform.

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.

See Part I, Item 1, “Business,” in the Form 10-K for 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.

Strategic Business Update

January 2023, PAVmed launched a strategic initiative designed to maximize cash runway and protect long-term shareholder interests through

adjustments in near-term strategic priorities and associated resource allocation.

The Company is currently focusing substantially all

of its resources and near-term efforts on the commercialization of Lucid’s and Veris’ products.

of Lucid Clinical Trials

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

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

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

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

a virtual-patient randomized controlled trial with intended

recruitment of at least 100 physician participants (in respect of which we expect to publish results

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

and a Lucid-sponsored registry

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

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

Both Lucid-sponsored

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

Labs Laboratory Operations Update

February 14, 2023, Lucid and its subsidiary, LucidDx Labs, entered into an agreement (the “MSA Termination Agreement”) with

RDx, pursuant to which the parties mutually agreed to terminate the management service agreement between them (the “MSA-RDx”)

without cause.

The termination was effective as of February 10, 2023.

Until the termination of the MSA-RDx, RDx had provided certain

testing and related services for our laboratory in accordance with the terms of the MSA-RDx.

In anticipation of the termination of the

MSA-RDx, however, Lucid accelerated the development of internal resources necessary to operate its laboratory entirely on its own.

we believe that termination of the MSA-RDx will improve the efficiency of the performance of the EsoGuard assay.

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

and the related asset purchase agreement (the “APA-RDx”) to $0.7 million (from the $3.4 million that would otherwise have

been payable under the MSA-RDx and APA-RDX, if the MSA-RDx had remained in effect through the balance of its stated term), resulting

in a net savings to Lucid of $2.7 million.

The payment was satisfied through the issuance of 553,436 shares of Lucid’s common stock

on February 25, 2023.

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

#CheckYourFoodTube

January 2023, Lucid completed its first #CheckYourFoodTube Precancer Testing Event, with the San Antonio Fire Department (the “SAFD”)

during Firefighter Cancer Awareness Month as designated by the International Association of Fire Fighters (IAFF).

A total of 391 members

who were deemed to be at-risk for esophageal precancer, underwent a brief, on-site, noninvasive cell collection procedure, performed

by our clinical personnel using EsoCheck.

Firefighters with suspected esophageal precancer based on a positive EsoGuard result were identified,

including some less than 40 years of age, and will undergo appropriate monitoring and treatment, as indicated by clinical practice guidelines,

to prevent progression to esophageal cancer.

then, two additional screening events have been hosted with the SAFD, and similar events have been held with fire departments in Athens,

GA, Barnstable, MA, Gainesville, FL, and Orange County, CA.

These events, which Lucid continues to expand across the country, are an

extension of Lucid’s expanding satellite Lucid Test Center (“sLTC”) program, which brings Lucid precancer testing directly

to patients—at their physician’s office and now at large testing day events.

of Direct Contracting Strategic Initiative

March 2023, Lucid launched a Direct Contracting Strategic Initiative (DCSI) to engage directly with large Administrative Services Only

(ASO) self-insured employers, unions and other entities, seeking to replicate the successes of other cancer screening diagnostic companies

that have deployed similar strategies.

Health Commercialization Update

December 2022 Veris Health, PAVmed’s digital health subsidiary, commercially launched its Veris Cancer Care Platform™ by

executing its first commercial contract with New Jersey Cancer Care, PA (“NJCC”), an oncology practice and member of the

prestigious Quality Cancer Care Alliance.

In February 2023, the Veris Cancer Care Platform went live following successful onboarding

of the first cohort of cancer patients and their clinicians at NJCC.

Enrolled patients received a VerisBox™ and began connecting

their Bluetooth-enabled health care devices to transmit real-time physiologic data to the cloud-based Veris Cancer Care Platform clinician

The patients also began reporting symptoms and quality-of-life parameters through the Veris Cancer Care Platform patient smartphone

app, which became available for patients on the Apple App Store and Google Play.

The cloud-based clinician portal was concurrently integrated

into the oncology practice and the cancer care team began using it to review physiologic and clinical data and other remote patient monitoring

(“RPM”) services.

December 29, 2022, the Company received a notice from the Listing Qualifications Department of Nasdaq stating that, for the prior 30

consecutive business days (through December 28, 2022), the closing bid price of the Company’s common stock had been below the minimum

of $1 per share required for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2).

The notification letter

stated that the Company would be afforded 180 calendar days (until June 27, 2023) to regain compliance.

In order to regain compliance,

the closing bid price of the Company’s common stock must be at least $1 for a minimum of ten consecutive business days.

the special meeting (“Special Meeting”) of shareholders held on March 31, 2023, the shareholders approved a proposal to amend

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 Company has not yet determined

the specific ratio of the reverse split or the timing of the reverse split and authorized capital reduction, or whether the Company will

effect the reverse split and authorized capital reduction at all.

However, the Company may effectuate the reverse split, if necessary,

as part of its effort to regain compliance with the Nasdaq minimum bid price requirement.

Diagnostics Inc.

- Committed Equity Facility

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

Fitzgerald (“Cantor”).

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

While there are distinct differences, the facility is

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

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

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

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

- ATM Facility

November 2022, Lucid Diagnostics also entered into an “at-the-market offering” for up to $6.5 million of its common

stock that may be offered and sold under a Controlled Equity Offering Agreement between Lucid Diagnostics and Cantor Fitzgerald

In the three months ended March 31, 2023, Lucid Diagnostics sold 230,068 shares through their

at-the-market equity facility for net proceeds of approximately $0.3 million, after payment of 3% commissions.

Diagnostics - Series A Preferred Stock Offering

March 7, 2023, Lucid issued 13,625 shares of newly designated Lucid Series A Convertible Preferred Stock (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.

Series A Preferred Stock is convertible into shares of Lucid’s common stock at any time at the option of the holder from and after

the six-month anniversary of its issuance, and automatically converts into shares of Lucid’s common stock on the second anniversary

of its issuance.

The terms of the Lucid Series A Preferred Stock also include a 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

each of 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.

Diagnostics - Securities Purchase Agreement - March 13, 2023 - Senior Secured Convertible Note - March 21, 2023

as of March 13, 2023, Lucid Diagnostics entered into a Securities Purchase Agreement (“Lucid SPA”) with an accredited institutional

investor (“Investor”, “Lender”, and /or “Holder”), pursuant to which Lucid Diagnostics agreed to

sell, and the Investor agreed to purchase a Senior Secured Convertible Note with a face value principal of $11.1 million (the “Lucid

March 2023 Senior Convertible Note”).

Lucid Diagnostics issued the Lucid March 2023 Senior Convertible Note on March 21, 2023 pursuant

to the Lucid SPA.

The Lucid March 2023 Senior Convertible Note proceeds were $9.925 million after deducting a $1.186 million lender fee

and offering costs.

Lucid March 2023 Senior Secured Convertible Note has a 7.875% annual stated interest rate, a contractual conversion price of $5.00 per

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

recapitalization or other similar transaction), and a contractual maturity date of the two-year anniversary of the date of issuance.

The principal and interest on the Lucid March 2023 Senior Convertible Note is convertible into or otherwise payable in shares of Lucid

Diagnostics’ common stock (subject to the satisfaction of certain customary equity conditions and except for interest payable prior

to September 21, 2023).

the Lucid March 2023 Senior Convertible Note, Lucid Diagnostics is subject to certain customary affirmative and negative covenants

regarding the incurrence of indebtedness, the existence of liens, the repayment of indebtedness and the making of investments, the

payment of cash in respect of dividends, distributions or redemptions, the transfer of assets, the maturity of other indebtedness,

and transactions with affiliates, among other customary matters.

Under the Lucid March 2023 Senior Convertible Note, Lucid

Diagnostics is also subject to financial covenants requiring that (i) the amount of its available cash equal or exceed $5.0 million

at all times, (ii) the ratio of (a) the outstanding principal amount of the notes issued under the Lucid SPA, accrued and unpaid

interest thereon and accrued and unpaid late charges as of the last day of any fiscal quarter commencing with September 30, 2023 to

(b) Lucid Diagnostics’ average market capitalization over the prior ten trading days, not exceed 30%, and (iii) that Lucid

Diagnostics’ market capitalization shall at no time be less than $30 million.

of Operations

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

was reasonably assured.

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

2021, between the Lucid Diagnostics Inc.

and ResearchDx Inc.

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

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

Additionally, in the three months ended March 31, 2022, revenue

was recognized with respect to the EsoGuard Commercialization Agreement, dated August 1, 2021, between the Lucid Diagnostics Inc.

ResearchDx Inc.

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

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

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

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

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

We incur expenses

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

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

On February 25, 2022, the EsoGuard Commercialization

Agreement was terminated upon the execution of the APA-RDx.

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

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

We incur expenses for tests

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

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

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

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

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

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

fee incurred under the Amended CWRU License Agreement;

employee related costs of employees engaged in the administration to patients

of the EsoCheck cell sample collection procedure (principally at the Lucid Test Centers);

the EsoCheck devices and EsoGuard mailers (cell

sample shipping costs) distributed to medical practitioners locations and the Lucid Test Centers;

and Lucid Test Centers operating expenses,

including rent expense and supplies.

fee incurred under the Amended CWRU License Agreement (as defined in Note 4, Related Party Transactions , to our accompanying unaudited

condensed consolidated financial statements);

the cost of EsoCheck devices and EsoGuard mailers (cell sample shipping costs) distributed

to medical practitioners locations and the Lucid Test Centers;

and Lucid Test Centers operating expenses, including rent expense and

and marketing expenses

1 unchanged sentence

as advertising and promotion expenses.

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

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

business strategy.

We anticipate our sales and marketing expenses will increase in the future, to the extent we expand

our commercial sales and marketing operations as resources permit.

and administrative expenses

2 unchanged sentences

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

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

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

We also anticipate continued expenses related to being a

public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance as a public company,

insurance premiums and investor relations costs.

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

also anticipate continued expenses related to being a public company, including audit, legal, regulatory, and tax-related services associated

with maintaining compliance as a public company, insurance premiums and investor relations costs.

and development expenses

9 unchanged sentences

expense for facilities maintained solely for research and development purposes.

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

well as new innovations.

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

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

our Veris Cancer Care Platform and EsoCure and PortIO products.

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

and Veris Cancer Care Platform commercialization.

We will resume research and development activities with respect to other products

in our pipeline as well as applicable new technologies, as resources permit.

Income and Expense, net

3 unchanged sentences

of Dollar Amounts

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

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

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

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

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

The decrease was offset by revenue for our EsoGuard Esophageal

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

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

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

in millions, except for per share amounts.

months ended March 31, 2023 as compared to three months ended March 31, 2022

the three months ended March 31, 2023, revenue was $0.4 million as compared to $0.2 million for the corresponding period in the

The $0.2 million increase principally relates to the revenue for our EsoGuard Esophageal DNA Test performed in our own CLIA

laboratory, as compared to revenue from the EsoGuard Commercialization Agreement with RDx, in the prior year period, which was terminated

on February 25, 2022 as Lucid Diagnostics transitioned to its own laboratory operations.

the three months ended March 31, 2023, cost of revenue was approximately $1.3 million as compared to $0.4 million for the corresponding

period in the prior year.

1 unchanged sentence

● approximately

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

$0.4 million increase in laboratory facility and operations costs;

● approximately

1 unchanged sentence

● approximately

$0.9 million increase in laboratory operations costs.

and marketing expenses

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

corresponding period in the prior year.

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

● approximately

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

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

corresponding with the increase in headcount;

● approximately

$0.3 million increase in consulting and outside professional services.

and administrative expenses

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

for the corresponding period in the prior year.

The net increase of $4.2 million was principally related to:

● approximately

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

in headcount;

● approximately

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

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

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

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

corresponding with the increase in the number of employees;

● approximately

$1.5 million increase in consulting services related to patents, regulatory compliance, legal

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

and public company expenses;

● approximately

$0.5 million increase in general business expenses.

and development expenses

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

for the corresponding period in the prior year.

The net increase $0.9 million was principally related to:

● approximately

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

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

Care Platform, EsoCure and PortIO;

● approximately

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

engineering staff.

in fair value of convertible debt

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

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

The April 2022

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

at estimated fair value as of the reporting period date.

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

Note issue-date.

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

September 30, 2022.

of Operations - continued

Three months ended September 30, 2022 as

compared to three months ended September 30, 2021 - continued

on Issue and Offering Costs - Senior Secured Convertible Note

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

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

$0.2 million of offering costs paid by us.

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

2022 Senior Convertible Note.

on Debt Extinguishment

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

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

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

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

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

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

stock of the Company).

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

in the three months ended September 30, 2022.

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

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

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

performed in our own CLIA laboratory.

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

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

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

period in the prior year.

The $1.9 million increase principally related to:

● approximately

$0.2 million increase in compensation related costs as a result of an increase in headcount.

● approximately

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

● approximately

$0.9 million increase in laboratory operations costs.

and marketing expenses

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

corresponding period in the prior year.

the three months ended March 31, 2023, sales and marketing costs were approximately $4.5 million as compared to $3.9 million for

the corresponding period in the prior year.

The net increase of $0.6 million was principally related to:

3 unchanged sentences

● approximately

$1.0 million increase in stock based compensation from RSA grants to Lucid and PAVmed employees

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

in the number of employees;

$0.6 million decrease in consulting and outside professional services;

● approximately

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

$0.2 million decrease in stock based compensation from RSA and stock option grants to Lucid

and PAVmed employees and non-employees.

and administrative expenses

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

the three months ended March 31, 2023, general and administrative costs were approximately $10.0 million as compared to $9.5 million

for the corresponding period in the prior year.

1 unchanged sentence

● approximately

$0.9 million increase in third-party professional services related to legal services, accounting

and audit services, outsourced information technology services, investor relations expenses,

and public company expenses;

● approximately

$0.7 million increase in compensation related costs principally as a result of an increase

1 unchanged sentence

● approximately

$1.0 million increase in stock based compensation from RSA grants to Lucid and PAVmed employees

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

in the number of employees;

$0.6 million decrease in general business expenses related to favorable renewal of corporate

insurance policies;

● approximately

$7.7 million increase in consulting services related to patents, regulatory compliance, legal

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

and public company expenses;

$0.4 million decrease in stock based compensation from RSA and stock option grants to Lucid

and PAVmed employees and non-employees;

● approximately

$1.7 million increase in general business expenses.

Results of Operations - continued

Nine months ended September 30, 2022 as

compared to nine months ended September 30, 2021 - continued

$0.1 million decrease in facility related expenses.

and development expenses

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

the three months ended March 31, 2023, research and development costs were approximately $4.4 million as compared to $5.9 million

for the corresponding period in the prior year.

The net increase $6.0 million was principally related to:

The net decrease of $1.5 million was principally related to:

● approximately

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

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

Care Platform, EsoCure and PortIO;

$2.7 million decrease in development costs, particularly in clinical trial activities and

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

● approximately

1 unchanged sentence

engineering staff;

● approximately

$0.4 million increase related to clinical activities performed by CWRU;

● approximately

$0.2 million increase in stock based compensation from RSA and stock option grants to Lucid

and PAVmed employees and non-employees.

mentioned above, above we have paused research and development with respect to CarpX, EsoCure and PortIO.

Until such time as resources

permit, we expect to devote substantially all of our research and development efforts to EsoGuard, EsoCheck and the Veris Cancer Care

of Acquired Intangible Assets

the three months ended March 31, 2023, the amortization of acquired intangible assets was approximately $0.5 million as compared

to $0.1 million for the corresponding period in the prior year.

The net increase was principally related to the purchase of laboratory

licenses and certifications and laboratory information management software in three months ended March 31, 2022.

of Operations - continued

three months ended March 31, 2023 as compared to the three months ended March 31, 2022 - continued

Income and Expense

in fair value of convertible debt

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

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

The April 2022 and September 2022

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

value as of the reporting period date.

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

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

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

notes was approximately $1.7 million of other income.

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

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

under “Loss from Extinguishment of Debt.”

the three months ended March 31, 2023, the non-cash expense recognized for the change in the fair value of our convertible notes

was approximately $1.0 million, related to the April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note, and the

Lucid March 2023 Senior Convertible Note.

The April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note, and the

Lucid March 2023 Senior Convertible Note 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 an aggregate of $4.3 million of fair value

non-cash expense on the issue dates.

This initial recognition was partially offset by an aggregate of $2.0 million of decreases in fair

value upon remeasurements through March 31, 2023.

There were no similar non-cash expenses recognized in the three months ended March

on Issue and Offering Costs - Senior Secured Convertible Note

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

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

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

from Extinguishment of Debt

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

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

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

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

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

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

stock of the Company).

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

in the nine months ended September 30, 2022.

the prior year nine months ended September 30, 2021, a debt extinguishment loss in the aggregate of approximately $3.7 million was recognized

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

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

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

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

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

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

extinguishment of debt of approximately $0.8 million in the nine months ended September 30,

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

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

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

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

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

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

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

2022 Senior Convertible Note.

the three months ended March 31, 2023, in connection with the issue of the Lucid March 2023 Senior Convertible Notes, we recognized

a total of approximately $1.2 million of lender fees and offering costs paid by us.

There were no similar lender fees or offering costs

paid in the three months ended March 31, 2022.

on Debt Extinguishment

the three months ended March 31, 2023, a debt extinguishment loss in the aggregate of approximately $0.5 million was recognized

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

the three months ended March 31, 2023, approximately $1.5 million of principal repayments

along with less than $0.1 million of interest expense thereon, were settled through the issuance

of 4,330,643 shares of common stock of the Company, with such shares having a fair value

of approximately $2.0 million (with such fair value measured as the respective conversion

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

The conversions resulted in

a debt extinguishment loss of $0.5 million in the three months ended March 31, 2023.

were no similar debt extinguishment losses in the three months ended March 31, 2022.

Note 11 , Debt , to the Financial Statements, for additional information with respect to the April 2022 Senior Convertible Note,

the September 2022 Senior Convertible Note, and the Lucid March 2023 Senior Convertible Note.

and Capital Resources

current operational activities are principally focused on the commercialization of EsoGuard and CarpX, and our development activities

are focused on pursuing FDA approval and clearance of other lead products in our product portfolio pipeline.

Our ability to generate

revenue depends upon successfully advancing the commercialization of EsoGuard and CarpX while also completing the development and the

necessary regulatory approvals of its other products and services.

There are no assurances, however, we will be able to obtain

an adequate level of financial resources required for the long-term commercialization and development of its products and services.

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

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

product portfolio pipeline.

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

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

our other products and services.

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

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

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

3 unchanged sentences

and ongoing R&D and clinical trials.

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

our operations with debt and/or equity financing transactions.

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

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

of the issue of our unaudited condensed consolidated financial statements, as included in this Form 10-Q.

We experienced a net loss before noncontrolling interests of approximately $22.2 million and

used approximately $16.3 million of cash in operations for the three months ended March 31, 2023.

Financing activities provided $24.8 million of cash during the three months ended March 31, 2023.

We ended the quarter with cash on-hand

of $49.3 million as of March 31, 2023.

We expect to continue to experience

recurring losses and negative cash flows from operations, and will continue to fund our operations with debt and/or equity financing

transactions.

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

sources of financing described below, we expect to be able to fund our future operations for the one year period from the date of the

issue of the our unaudited condensed consolidated Financial Statements, as included herein this Form 10-Q.

of Shares of Our Common Stock

the nine months ended September 30, 2022

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

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

plan is discussed in Note 12, Stock-Based Compensation , of our unaudited condensed

consolidated financial statements.

the three months ended March 31, 2023

issued 573,229 shares of our common stock for proceeds of approximately $0.2 million under

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

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

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

Note 12, Stock-Based Compensation, to the Financial Statements.

issued 1,081,997 shares of our common stock for net proceeds of approximately $0.6 million, after payment of 3% commissions, from

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

See below for more information.

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

Effective as of March 31, 2022,

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

million face value principal of Senior Secured Convertible Notes.

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

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

The SPA also provided for sales of additional Senior Secured Convertible

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

to an additional $22.5 million.

The April 2022 Senior Secured

Convertible Note has a 7.875% annual stated interest rate, a contractual conversion price of $5.00 per share of the Company’s common

stock (subject to standard adjustments in the event of any stock split, stock dividend, stock combination, recapitalization or other similar

transaction), and a contractual maturity date of April 4, 2024.

The April 2022 Senior Convertible Note may be converted into or otherwise

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

On September 8, 2022, we completed

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

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

The September 2022 Senior Secured

Convertible Note has a 7.875% annual stated interest rate, a contractual conversion price of $5.00 per share of the Company’s common

stock (subject to standard adjustments in the event of any stock split, stock dividend, stock combination, recapitalization or other

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

The September 2022 Senior Convertible Note may be converted

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

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

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

The SPA provided for the sale of the initial

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

2022 Senior Convertible Note”).

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

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

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

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

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

The April 2022 Senior Convertible Note

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

The April 2022 Senior Convertible

1 unchanged sentence

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

The September 2022 Senior Convertible Note proceeds were $10.0 million

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

of placement agent fees.

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

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

The September

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

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

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

The September 2022 Senior Convertible Note may be

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

The September 2022 Senior Convertible Note

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

million, inclusive primarily of placement agent fees.

and Capital Resources - continued

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

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

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

with affiliates, among other customary matters.

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

available cash equal or exceed $8.0 million at all times, (ii) the ratio of (a) the outstanding principal amount of the notes issued

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

the prior ten trading days, not exceed 30% (except that such maximum percentage is 50% for the period from September 8, 2022 through

March 5, 2023) (the “Debt to Market Cap Ratio Test”), and (iii) that our market capitalization shall at no time be less

than $75 million (the “Market Cap Test” and, together with the Debt to Market Cap Ratio Test, the “Financial

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

In addition, the Company presently

is in compliance with the Financial Tests.

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

may convert up to $5.0 million of the principal amount of the April 2022 Senior Convertible Note at the then current conversion price

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

a price per share of common stock equal to the lower of (i) the fixed conversion

price then in effect (currently $5.00) and (ii) 82.5% of the average VWAP of the Company’s common stock for each of the two trading

days with the lowest VWAP of the Company’s common stock during the ten consecutive trading day period ending and including the

trading day immediately prior to the applicable conversion date, but in the case of clause (ii), not less than $0.18 per share.

As contemplated

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

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

See Note 11 , Debt ,

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

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

and negative covenants regarding the incurrence of indebtedness, the existence of liens, the repayment of indebtedness and the making

of investments, the payment of cash in respect of dividends, distributions or redemptions, the transfer of assets, the maturity of other

indebtedness, and transactions with affiliates, among other customary matters.

We also are subject to financial covenants requiring that

(i) the amount of our available cash equal or exceed $8.0 million at all times, (ii) the ratio of (a) the outstanding principal amount

of the notes issued under the SPA, accrued and unpaid interest thereon and accrued and unpaid late charges to (b) our average market

capitalization over the prior ten trading days, not exceed 30% (except that such maximum percentage was 50% for the period from September

8, 2022 through March 5, 2023) (the “Debt to Market Cap Ratio Test”), and (iii) that our market capitalization shall at no

time be less than $75 million (the “Market Cap Test” and, together with the Debt to Market Cap Ratio Test, the “Financial

From time to time from and after September 8, 2022 through March 12, 2023, the Company was not in compliance with the

Financial Tests.

As of March 12, 2023, the Investor agreed to waive any such non-compliance during such time period and thereafter through

May 31, 2023.

Subject to the waiver, as of March 31, 2023, the Company was in compliance with the Financial Tests, and is presently in

compliance with the Financial Tests.

Note 11 , Debt , to the Financial Statements for additional information about the SPA, the April 2022 Senior Convertible Note, and the September 2022 Senior Convertible Note.

Diagnostics - Series A Preferred Stock Offering

March 7, 2023, Lucid entered into subscription agreements for the sale of 13,625 shares of the Lucid Series A Preferred Stock.

of the Lucid Series A Preferred Stock has a stated value of $1,000 and a conversion price of $1.394.

The Lucid Series A Preferred Stock

is convertible into shares of our common stock at any time at the option of the holder from and after the six-month anniversary of its

issuance, and automatically converts into shares of our common stock on the second anniversary of its issuance.

The terms of the Lucid

Series A Preferred Stock also include a 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 each of 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.

Diagnostics - Securities Purchase Agreement - March 13, 2023 - Senior Secured Convertible Note - March 21, 2023

as of March 13, 2023, Lucid Diagnostics entered into a Securities Purchase Agreement the Lucid SPA with the Investor, an accredited institutional

investor, pursuant to which Lucid Diagnostics agreed to sell, and the Investor agreed to purchase the Lucid March 2023 Senior Convertible

Note with a face value principal of $11.1 million.

Lucid Diagnostics issued the Lucid March 2023 Senior Convertible Note on March 21,

2023 pursuant to the Lucid SPA.

The Lucid March 2023 Senior Convertible Note proceeds were $9.925 million after deducting a $1.186 million

lender fee and offering costs.

Lucid March 2023 Senior Convertible Note has a 7.875% annual stated interest rate, a contractual conversion price of $5.00 per

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

recapitalization or other similar transaction), and a contractual maturity date of the two-year anniversary of the date of issuance.

The principal and interest on the Lucid March 2023 Senior Convertible Note is convertible into or otherwise payable in shares of Lucid

Diagnostics’ common stock (subject to the satisfaction of certain customary equity conditions and except for interest payable prior

to September 21, 2023).

the Lucid March 2023 Senior Convertible Note, Lucid Diagnostics is subject to certain customary affirmative and negative covenants regarding

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

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

affiliates, among other customary matters.

Under the Lucid March 2023 Senior Convertible Note, Lucid Diagnostics is also subject to financial

covenants requiring that (i) the amount of its available cash equal or exceed $5.0 million at all times, (ii) the ratio of (a) the outstanding

principal amount of the notes issued under the Lucid SPA, accrued and unpaid interest thereon and accrued and unpaid late charges, as of the last day of any fiscal quarter commencing with September 30, 2023, to

(b) Lucid Diagnostics’ average market capitalization over the prior ten trading days, not exceed 30%, and (iii) that Lucid Diagnostics’

market capitalization shall at no time be less than $30 million (the “Lucid Financial Tests”).

As of March 31, 2023, Lucid Diagnostics was in compliance with the Lucid

Financial Tests.

In addition, Lucid Diagnostics presently is in compliance with the Lucid Financial Tests.

and Capital Resources - continued

December 2021, we entered into an “at-the-market offering” for up to $50 million of our common stock that may be offered

and sold under a Controlled Equity Offering Agreement between us and Cantor.

In the three months ended March 31, 2023, the

Company sold 1,081,997 shares through its at-the-market equity facility for net proceeds of approximately $0.6 million, after payment of 3%

Subsequent to March 31, 2023, through May 11, 2023, we sold 878,634 shares through its at-the-market

equity facility for net proceeds of approximately $0.4 million, after payment of 3% commissions.

Diagnostics Inc.

- Committed Equity Facility

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

Under the terms

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

to time at the request of Lucid Diagnostics.

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

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

based on the existing market price.

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

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

- Committed Equity Facility and ATM Facility

In March 2022, Lucid Diagnostics

entered into a committed equity facility with a Cantor affiliate.

Under the terms of the committed equity facility, the Cantor affiliate

has committed to purchase up to $50 million of Lucid Diagnostics’ common stock from time to time at Lucid Diagnostics’ request.

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

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

Cumulatively a total of 680,263 shares of Lucid Diagnostics’ common stock were issued for net proceeds of approximately $1.8 million,

after payment of 4% commissions, as of March 31, 2023.

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.

In the three months ended March 31, 2023, Lucid Diagnostics

sold 230,068 shares through its at-the-market equity facility for net proceeds of approximately $0.3 million, after payment of 3% commissions.

Accounting Policies and Significant Judgments and Estimates

discussion and analysis of our (unaudited) financial condition and consolidated results of operations is based on our unaudited condensed

consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United

States of America (“U.S.

The preparation of these unaudited condensed consolidated financial statements requires

us to make estimates and assumptions affecting the reported amounts of assets, liabilities, and equity, along with the disclosure of

contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of

expenses during the corresponding periods.

discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial

statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions

that affect the amounts reporting in our unaudited condensed consolidated financial statements and accompanying notes.

On an ongoing

basis, we evaluate our estimates and judgements.

In accordance with U.S.

GAAP, we base our estimates on historical experience and on various

other assumptions we believe are reasonable under the circumstances.

Actual results may differ from these estimates under different assumptions

or conditions.

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

December 31, 2021 as filed with the SEC on April 6, 2022, except as otherwise noted in Note 2, Summary of Significant Accounting Policies

and Recent Accounting Standards Updates , of our unaudited condensed consolidated financial statements included herein in this Form

GAAP, we base our estimates on historical experience and on

various other factors that are believed to be appropriate under the circumstances.

Actual results may differ from these estimates under

different assumptions or conditions.

Our critical accounting policies are as disclosed in the Company’s Annual Report on Form 10-K

for the year ended December 31, 2022 as filed with the SEC on March 14, 2023.

There have been no material changes to our critical accounting policies and estimates in the three months ended March 31, 2023.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis