What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-13 compared with 2023-08-14 · 448 added, 343 removed, 263 unchanged (75% of the section changed)

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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 its subsidiaries, including its majority-owned subsidiary Lucid

Diagnostics Inc.

(“Lucid Diagnostics” or “Lucid”) and its majority-owned subsidiary Veris Health Inc.

(“Veris Health” or “Veris”).

the context otherwise requires, (i) “we”, “us”, and “our”, and the “Company” and “PAVmed”

refer to PAVmed Inc.

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

(“Lucid Diagnostics”

or “Lucid”) and its majority-owned subsidiary Veris Health Inc.

(“Veris Health” or “Veris”), (ii)

“FDA” refers to the Food and Drug Administration, (iii) “510(k)” refers to a premarket notification, submitted

to the FDA by a manufacturer pursuant to § 510(k) of the Food, Drug and Cosmetic Act and 21 CFR § 807 subpart E, (iv) “CLIA”

refers to the Clinical Laboratory Improvement Amendments of 1988 and associated regulations set forth in 42 CFR § 493, and (v) “LDT”

refers to a diagnostic test, defined by the FDA as “an IVD that is intended for clinical use and designed, manufactured and used

within a single laboratory,” which is generally subject only to self-certification of analytical validity under the CMS CLIA program.

FORWARD-LOOKING

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significantly from those expressed or implied in the forward-looking statements.

Factors that might cause such differences include, but are

not limited to, those discussed in Item 1A of Part I of the Form 10-K under the heading “Risk Factors.”

Factors that might cause such differences include, but

are not limited to, those discussed in Item 1A of Part I of the Form 10-K under the heading “Risk Factors.”

factors that may affect our actual results include:

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ability to obtain regulatory approval for the commercialization of our products;

risk that the FDA will cease to exercise enforcement discretion with respect to LDTs, like

ability of our products to achieve market acceptance;

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

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

potential ability to obtain additional financing when and if needed;

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related to the COVID-19 pandemic and other health-related emergencies;

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

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

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

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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 publicly-traded commercial-stage cancer prevention diagnostics company,

and Veris Health, a private digital health company focused on enhanced personalized cancer care through remote patient monitoring using

implantable biologic sensors with wireless communication along with a custom suite of connected external devices.

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

including through its majority-owned subsidiaries Lucid Diagnostics, a publicly-traded commercial-stage cancer prevention diagnostics

company, and Veris Health, a private digital health company focused on enhanced personalized cancer care through remote patient monitoring

using implantable biologic sensors with wireless communication along with a custom suite of connected external devices.

Our current central

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or decelerating the project and reallocating resources.

See Part I, Item 1,

“Business,” in the Form 10-K for a more detailed summary of the medical device, diagnostics, and digital health sectors

and our key products, including in particular EsoGuard and the Veris Cancer Care Platform, which are currently our two leading

Part I, Item 1, “Business,” in the Form 10-K for a more detailed summary of the medical device, diagnostics, and digital

health sectors and our key products, including in particular EsoGuard and the Veris Cancer Care Platform, which are currently our two

leading products.

Strategic Business Update

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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

These efforts include a planned investigator-initiated, retrospective analysis of prospectively collected data on the 391

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

of which we expect to publish results in the second 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 this year);

a Lucid-sponsored

multi-center, prospective, observational study with 500 patients;

and a Lucid-sponsored registry at existing Lucid Test Centers,

whereby all patients undergoing EsoCheck testing will be given the opportunity to provide informed consent and contribute data about

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

Both Lucid-sponsored

observational/registry studies expect to have preliminary results and/or interim analysis submitted for peer review before the end

Labs Laboratory Operations Update

On 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.

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.

The termination of the MSA-RDx and our operating the laboratory on our own has improved

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.

of Lucid Clinical Trials and Publications

continues to accelerate its collection and publication of clinical utility data through a range of trials.

These efforts include an investigator-initiated,

retrospective analysis of prospectively collected data on San Antonio firefighters who underwent testing as part of a community-sponsored

cancer awareness event described below;

a virtual-patient randomized controlled trial with intended recruitment of at least 100 physician

participants;

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

and two Lucid-sponsored registries,

in which Lucid collects real-world clinical utility and clinical validity data on EsoGuard Esophageal DNA testing for the detection of

esophageal precancer in two distinct populations.

regard to the two registries, the Prospective REView of Esophageal Precancer DetectioN in AT-Risk Patients (PREVENT) Registry collects

data on EsoGuard testing in the commercial increased-risk population, while the PREVENT-Fire Fighters (PREVENT-FF) Registry focuses exclusively

on increased-risk firefighters.

Complete data for the San Antonio firefighter study has been accepted for peer review publication in

Journal of Gastrointestinal & Digestive System (ISSN:

Combined early interim results from the PREVENT and PREVENT-FF

registries focusing on provider decision impact has also been accepted for peer review publication in Journal of Gastroenterology &

Digestive Systems (ISSN:

results for the Lucid-sponsored observational study have been posted in preprint on medRxiv and are undergoing journal peer review.

for the Lucid-sponsored observational study is expected to be completed by the end of the year.

Similarly, results for the Lucid-sponsored

virtual-patient study are expected to be ready for analysis before the end of 2023.

#CheckYourFoodTube

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These events are ongoing and are an extension of Lucid’s 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 EsoGuard® #CheckYourFoodTube Mobile Testing Unit

June 2023, Lucid launched its first EsoGuard #CheckYourFoodTube Mobile Test Unit (“mobile testing unit”), with the inaugural

mobile testing unit event being held in Sarasota, Florida.

The mobile testing unit is another channel by which the Company is bringing

EsoGuard testing to at-risk patients.

brings Lucid precancer testing directly to patients—at their physician’s office and now at 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 diagnostic companies that have deployed

similar strategies.

In August 2023, the company announced it had contracted with the Ancira Automotive Group as a result of this initiative,

providing access to esophageal precancer testing for its employees at all 12 San Antonio locations.

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 diagnostic

companies that have deployed similar strategies.

In August 2023, the company announced it had contracted with the Ancira Automotive Group

as a result of this initiative, providing access to esophageal precancer testing for its employees at all 12 San Antonio locations.

Revenue Cycle Management Provider

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in June 2023.

Since completing the transition, the upgrade has demonstrated an improvement in speed of collections, turnaround time to

claim submission, percentage of claims paid, and actionable data for appeals.

Since completing the transition, the upgrade has continued to demonstrate an improvement in speed of collections, turnaround

time to claim submission, percentage of claims paid, and actionable data for appeals.

Personnel Update

on November 6, 2023, the Lucid board of directors appointed Shaun M.

O’Neil as the President of Lucid.

O’Neil, who is

41 years old, also continues to serve as the Chief Operating Officer of PAVmed and as the Chief Operating Officer of Lucid.

For additional

biographical information about Mr.

O’Neil, please refer to PAVmed’s definitive proxy statement on Schedule 14A filed on May

1, 2023, which information is incorporated herein by reference.

Other than in connection with his service as an officer of PAVmed and

O’Neil has not engaged in any transactions with PAVmed that are required to be reported pursuant to Item 404(a) of Regulation

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 is now 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

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 portal.

also began reporting symptoms and quality-of-life parameters through the Veris Cancer Care Platform patient smartphone app, which is

now 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.

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pipeline of prospective customers.

Veris continues to make progress

toward regulatory submission of its implantable monitor which is targeted for commercial launch next year.

The device, which is designed

to be implanted in conjunction with a chemotherapy vascular access port, will further the power of the Veris Cancer Care Platform by better

assuring patient compliance with RPM data reporting requirements.

It recently completed an animal study which demonstrated intended device

performance, consistent with its design and clinical specifications, over an extended implant period.

In April 2023, Gary Manning joined PAVmed to become the President of Veris

Manning has a track record spanning three decades, including leading companies in the medical device, wearable, and digital

health sectors and commercializing products in the global market.

the leadership of its new President, Veris is actively restructuring and expanding its commercial team seeking to accelerate patient

enrollment and subscription revenue, while also launching two strategic initiatives which expand its long-term commercial potential.

These include:

a Biopharma Companion Digital Platform module to extend the Veris Cancer Care Platform as

a companion solution for biopharmaceutical companies developing novel cancer therapeutics.

The module will provide these companies with a long-term patient monitoring solution tightly

linked to their cancer therapeutic—from clinical-stage through full commercialization.

This includes support for clinical trials and post-marketing surveillance to enhance safety

by reducing adverse events, expedite regulatory filings, lower regulatory hurdles, and accelerate

speed to market.

The business model seeks to replicate the widespread success of companion

diagnostics tightly linked to therapeutics.

the Veris Cancer Care Platform from an FDA-designated Medical Device Data System (“MDDS”),

limited to displaying medical data for clinicians without modification, to a Software-as-a-Medical-Device

As a SaMD, the platform will have unlimited potential to grow into

a full-bore clinical decision support tool that includes threshold alarms for faster provider

response, analytical algorithms for effective triage, and digital biomarkers based on artificial

intelligence and machine learning that will provide a risk assessment for cancer patients.

The first step will be to incorporate the key features in the next generation product and

initiate validation testing to support FDA 510(k) submission as a SaMD next year.

also has continued to make progress toward regulatory submission of its implantable cardiac and physiologic monitor, The device, which

is designed to be implanted in conjunction with a vascular access port, is targeted for FDA submission and commercial launch in 2024

and will further the power of the Veris Cancer Care Platform by better assuring patient compliance with RPM data reporting requirements.

Veris recently completed an animal study which demonstrated intended device performance, consistent with its design and clinical specifications,

over an extended implant period and pre-submission meetings seeking feedback on various design features have been ongoing.

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).

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

the Company could be eligible for additional time.

Although the Company did not regain compliance within the initial 180 calendar

day period, Nasdaq determined that the Company was eligible for an additional 180 calendar day period to regain compliance (until

December 26, 2023).

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 during the additional 180 calendar day period.

The Company intends to consider all

available options to regain compliance with the Nasdaq listing standards.

On March 31, 2023, the Company’s stockholders

approved an amendment to its certificate of incorporation, authorizing the Company to effect, at any time prior to March 31, 2024,

(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.

- ATM Facility

November 2022, Lucid Diagnostics commenced an “at-the-market offering” of up to $6.5 million of its common stock pursuant to a Controlled Equity Offering Agreement between Lucid Diagnostics and Cantor Fitzgerald & Co.

In the six months ended June 30, 2023, Lucid Diagnostics sold 230,068 shares in this “at-the-market” offering for net proceeds

of approximately $0.3 million, after payment of 3% commissions.

No shares were sold in this “at-the-market” offering during the

three months ended June 30, 2023.

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, and that the Company could be

eligible for additional time.

Although the Company did not regain compliance within the initial 180 calendar day period, Nasdaq determined

that the Company was eligible for an additional 180 calendar day period to regain compliance (until December 26, 2023).

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

during the additional 180 calendar day period.

The Company intends to consider all available options to regain compliance with the Nasdaq

listing standards.

On March 31, 2023, the Company’s stockholders approved an amendment to its certificate of incorporation, authorizing

the Company to effect, at any time prior to March 31, 2024, (i) a reverse split of the Company’s outstanding shares of common stock

at a specific ratio, ranging from 1-for-5 to 1-for-15, to be determined by the board of directors of the Company in its sole discretion,

and (ii) an associated reduction in the number of shares of common stock the Company is authorized to issue, from 250,000,000 shares

to 50,000,000 shares.

If the Company’s board of directors authorizes the Company to consummate the reverse stock split, the Company

anticipates it will regain compliance with the Nasdaq requirements for continued listing through such transaction.

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 Stock”).

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

The Lucid 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 (or, if later, the effective date of an increase in Lucid

Diagnostics’ authorized share capital or the effective date of a registration statement covering the resale of the underlying

shares), and automatically converts into shares of Lucid’s common stock on the second anniversary of its issuance.

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 sale of the Lucid Series A

Preferred Stock generated $13.625 million in aggregate gross proceeds.

March 7, 2023, Lucid sold 13,625 shares of newly designated Lucid Series A Convertible Preferred Stock (the “Lucid Series A Preferred

Stock”), solely to accredited investors.

Each share 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 Lucid’s common stock at any time at the option

of the holder from and after the six-month anniversary of its issuance (or, if later, the effective date of an increase in Lucid Diagnostics’

authorized share capital or the effective date of a registration statement covering the resale of the underlying shares), 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 sale of the Lucid Series A Preferred Stock generated $13.625 million in aggregate

gross proceeds.

Diagnostics - Series A-1 Preferred Stock Offering

October 17, 2023, Lucid sold 5,000 shares of Lucid Series A-1 Convertible Preferred Stock (the “Lucid Series A-1 Preferred Stock”),

solely to accredited investors.

The terms of the Lucid Series A-1 Preferred Stock are substantially identical to the terms of the Lucid

Series A Preferred Stock, except that the Lucid Series A-1 Preferred Stock has a conversion price of $1.2592.

The sale of the Lucid Series

A-1 Preferred Stock generated $5.0 million in aggregate gross proceeds.

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, 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”).

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

The sale of the Lucid March 2023 Senior Convertible Note generated $9.925 million in proceeds, 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 Lucid Diagnostics’ 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 of the Lucid March 2023 Senior Convertible Note and the interest thereon 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 shall 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, shall not exceed

30%, and (iii) that Lucid Diagnostics’ market capitalization shall at no time be less than $30 million.

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

investor, 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 sale of the Lucid March 2023 Senior Convertible Note

generated $9.925 million in proceeds, 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 Lucid Diagnostics’ 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 of the Lucid March 2023 Senior Convertible Note and accrued interest thereon is convertible at the option of the holder

into Lucid Diagnostics’ common stock at the contractual conversion price.

In addition, the principal of the Lucid March 2023 Senior

Convertible Note amortizes over 18 months commencing six months after its issuance.

The amortization payments and accrued interest on

the Lucid March 2023 Senior Convertible Note are 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), at prices based on the then current

market price.

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 March 2023, the “at-the-market offering”

became subject to General Instruction I.B.6 of Form S-3, which limits sales of our securities under this instruction in any 12-month

period to one-third of the aggregate market value of our public float (unless our public float rises to $75 million or more, in which

case the instruction will cease to apply).

As a result of this limitation and our then-current public float, in May 2023, we amended

our “at-the-market offering” to cover up to an additional $18 million of our common stock.

In the nine months ended September

30, 2023, the Company sold 2,330,747 shares through its at-the-market equity facility for net proceeds of approximately $1.2 million,

after payment of 3% commissions.

No shares were sold through the Company’s at-the-market equity facility during the three months

ended September 30, 2023.

Diagnostics Inc.

- Committed Equity Facility and ATM Facility

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 a 4% discount, as of September 30, 2023.

No shares were sold through this facility

during the three months ended September 30, 2023.

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 nine months ended

September 30, 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.

No shares were sold through Lucid’s at-the-market equity facility during the three

months ended September 30, 2023.

of Operations

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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.

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

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

On February 25, 2022, the EsoGuard Commercialization

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

Agreement was terminated upon Lucid’s acquisition, pursuant to the APA-RDx, of certain assets necessary to operate its own CLIA

certified laboratory.

For a fuller description of the APA-RDx, see Note 5, Asset Purchase Agreement and Management Services Agreement ,

to our accompanying unaudited condensed consolidated financial statements.

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

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and administrative expenses

General and administrative expenses consist primarily of salaries and related

costs for personnel, travel expenses, facility-related costs, professional fees for accounting and legal services, salaries and related

costs for employees involved in third-party payor reimbursement contract negotiations and consulting and other expenses associated

with obtaining and maintaining patents within our intellectual property portfolio.

and administrative expenses consist primarily of salaries and related costs for personnel, travel expenses, facility-related costs, professional

fees for accounting and legal services, salaries and related costs for employees involved in third-party payor reimbursement contract

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

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 fees and expenses for audit, legal, regulatory, and

tax-related services associated with maintaining compliance as a public company, insurance premiums and investor relations

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

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

and development expenses

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for the research and development of our products, including:

consulting costs for engineering design and development;

costs for engineering design and development;

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

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in millions, except for share and per share amounts.

months ended June 30, 2023 as compared to three months ended June 30, 2022

the three months ended June 30, 2023, revenue was $0.2 million as compared to $0.0 million for the corresponding period in the prior

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 when Lucid Diagnostics transitioned to its own laboratory operations.

the three months ended June 30, 2023, cost of revenue was approximately $1.7 million as compared to $0.0 million for the corresponding

three months ended September 30, 2023 as compared to three months ended September 30, 2022

the three months ended September 30, 2023, revenue was $0.8 million as compared to $0.1 million for the corresponding period in the prior

The $0.7 million increase principally relates to the increase in volume of our EsoGuard Esophageal DNA Tests performed in our own

CLIA laboratory for the period and the consideration received for the performance of the EsoGuard Esophageal DNA Tests.

the three months ended September 30, 2023, cost of revenue was approximately $1.8 million as compared to $1.6 million for the corresponding

period in the prior year.

1 unchanged sentence

● approximately

$0.6 million increase in laboratory facility and operations costs;

$0.4 million increase in compensation costs at Lucid and Veris;

● approximately

$0.6 million increase in EsoCheck and EsoGuard supplies costs;

$0.3 million decrease in laboratory facility and operations costs;

● approximately

$0.5 million increase in compensation related costs.

$0.1 million increase in EsoCheck and EsoGuard supplies costs.

and marketing expenses

the three months ended June 30, 2023, sales and marketing costs were approximately $4.3 million as compared to $4.9 million for the corresponding

period in the prior year.

the three months ended September 30, 2023, sales and marketing costs were approximately $4.0 million as compared to $4.7 million for

the corresponding period in the prior year.

The net decrease of $0.7 million was principally related to:

● approximately

$0.7 million decrease related to a reduction of third party marketing expenses;

$0.3 million decrease related to a reduction of third party marketing and corporate information

technology expenses;

● approximately

$0.1 million increase in facility related costs.

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

and PAVmed employees and non-employees;

● approximately

$0.2 million decrease in compensation costs primarily related to a reduction in headcount

in the first quarter of 2023.

This decrease is inclusive of an increase in compensation related

costs at Lucid.

and administrative expenses

the three months ended June 30, 2023, general and administrative costs were approximately $6.7 million as compared to $11.2 million for

the corresponding period in the prior year.

the three months ended September 30, 2023, general and administrative costs were approximately $6.9 million as compared to $10.4 million

for the corresponding period in the prior year.

The net decrease of $3.5 million was principally related to:

● approximately

$2.5 million decrease in stock based compensation from RSA and stock option grants to Lucid and PAVmed employees and non-employees;

approximately $1.6 million decrease in third-party professional fees

and expenses related to legal services, accounting and audit services, consulting fees and professional recruiting services;

approximately $0.4 million decrease related to the termination of the

MSA-RDx and lower general business expenses primarily related to reduced insurance premiums.

$2.4 million decrease in stock based compensation from RSA and stock option grants to Lucid

and PAVmed employees and non-employees;

● approximately

$1.1 million decrease in third-party professional fees and expenses related to legal services

and professional recruiting services.

and development expenses

the three months ended June 30, 2023, research and development costs were approximately $3.5 million as compared to $6.7 million for

the corresponding period in the prior year.

the three months ended September 30, 2023, research and development costs were approximately $3.2 million as compared to $6.2 million

for the corresponding period in the prior year.

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

● approximately

$3.5 million decrease in development costs, particularly in clinical trial activities and outside professional and consulting fees

primarily with respect to CarpX, EsoCure, and NextFlo;

$2.6 million decrease in development costs, particularly in clinical trial activities and

outside professional and consulting fees;

● approximately

$0.3 million increase in compensation related costs, including stock based compensation.

$0.4 million decrease in compensation related costs related to a reduction in headcount in

the first quarter of 2023.

This decrease is inclusive of an increase in compensation related

costs at Lucid.

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

3 unchanged sentences

of Acquired Intangible Assets

amortization of acquired intangible assets remained relatively level in the three months ended June 30, 2023, as compared to the corresponding

period in the prior year.

amortization of acquired intangible assets remained relatively level, at approximately $0.5 million, in the three months ended September

30, 2023, as compared to the corresponding period in the prior year.

of Operations - continued

three months ended June 30, 2023 as compared to the three months ended June 30, 2022 - continued

three months ended September 30, 2023 as compared to the three months ended September 30, 2022 - continued

Income and Expense

in fair value of convertible debt

In the three months ended June 30, 2023, the change in the fair value

of our convertible notes was approximately $0.3 million of expense, related to the April 2022 Senior Convertible Note (as defined in “ Liquidity

and Capital Resources ” below), the September 2022 Senior Convertible Note (as defined in “ Liquidity and Capital Resources ”

below), 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.

the three months ended September 30, 2023, the change in the fair value of our convertible notes was approximately $4.4 million of expense,

related to the April 2022 Senior Convertible Note (as defined in “ Liquidity and Capital Resources ” below), the September

2022 Senior Convertible Note (as defined in “ Liquidity and Capital Resources ” below), 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 each reporting period date.

The Company initially recognized an aggregate of $4.3 million of fair value non-cash expense on the

on Debt Extinguishment

the three months ended June 30, 2023, a debt extinguishment loss in the aggregate of approximately $0.7 million was recognized in connection

with our April 2022 Senior Convertible Note as discussed below.

the three months ended June 30, 2023, approximately $1.7 million of principal repayments, along with less than $0.1 million of interest

expense thereon, were settled through the issuance of 5,192,838 shares of common stock of the Company, with such shares having a

fair value of approximately $2.4 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 $0.7 million in the three months ended

June 30, 2023.

were no similar debt extinguishment losses in the three months ended June 30, 2022.

the three months ended September 30, 2023, a debt extinguishment loss in the aggregate of approximately $1.8 million was recognized in

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

the three months ended September 30, 2023, approximately $2.2 million of principal repayments,

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

of 10,859,964 shares of common stock of the Company, with such shares having a fair value

of approximately $4.0 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 $1.8 million in the three months ended September 30, 2023.

comparison, in 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.

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.

of Operations - continued

months ended June 30, 2023 as compared to six months ended June 30, 2022

the six months ended June 30, 2023, revenue was $0.6 million as compared to $0.2 million for the corresponding period in the prior year.

nine months ended September 30, 2023 as compared to nine months ended September 30, 2022

the nine months ended September 30, 2023, revenue was $1.4 million as compared to $0.3 million for the corresponding period in the prior

The $1.1 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 when Lucid Diagnostics transitioned to its own laboratory operations.

the six months ended June 30, 2023, cost of revenue was approximately $3.0 million as compared to $0.4 million for the corresponding

as compared to revenue from the EsoGuard Commercialization Agreement with RDx, recognized in first two months of the prior year period,

which was terminated on February 25, 2022 when Lucid Diagnostics transitioned to its own laboratory operations.

the nine months ended September 30, 2023, cost of revenue was approximately $4.8 million as compared to $2.0 million for the corresponding

period in the prior year.

1 unchanged sentence

● approximately

$1.0 million increase in laboratory facility and operations costs;

approximately

$1.1 million increase in EsoCheck and EsoGuard supplies costs;

● approximately

$0.7 million increase in compensation related costs.

and marketing expenses

the six months ended June 30, 2023, sales and marketing costs were approximately $8.9 million as compared to $8.8 million for the corresponding

period in the prior year.

The net increase of $0.1 million was principally related to:

$1.0 million increase in compensation related costs, including stock-based compensation at

Lucid and Veris;

● approximately

$1.3 million increase in compensation related costs principally as a result of an increase in headcount;

approximately $0.2 million increase in facility related costs;

$0.7 million increase in laboratory facility and operations costs.

and marketing expenses

the nine months ended September 30, 2023, sales and marketing costs were approximately $12.9 million as compared to $13.6 million for

the corresponding period in the prior year.

The net decrease of $0.7 million was principally related to:

● approximately

1 unchanged sentence

● approximately

$0.3 million decrease in stock based compensation from RSA and stock option grants to Lucid and PAVmed employees.

$0.5 million increase in compensation related costs, including stock-based compensation,

primarily related to an increase in headcount at Lucid.

The increase is inclusive of a decrease

related to a reduction in headcount in first quarter of 2023 at PAVmed and Veris;

● approximately

$0.2 million increase in facility-related costs.

of Operations - continued

nine months ended September 30, 2023 as compared to nine months ended September 30, 2022 - continued

and administrative expenses

the six months ended June 30, 2023, general and administrative costs were approximately $16.7 million as compared to $20.7 million for

the corresponding period in the prior year.

the nine months ended September 30, 2023, general and administrative costs were approximately $23.9 million as compared to $31.3 million

for the corresponding period in the prior year.

The net decrease of $7.3 million was principally related to:

● approximately

$2.9 million decrease in stock based compensation from RSA and stock option grants to Lucid and PAVmed employees and non-employees;

approximately $2.0 million decrease in third-party professional fees and

expenses related to legal services, consulting fees and professional recruiting services;

$5.3 million decrease in stock-based compensation, primarily related to decreases at Lucid,

partially offset by increases at PAVmed;

● approximately

$2.7 million decrease in third-party professional fees and expenses related to legal services,

consulting fees and professional recruiting services;

● approximately

$0.9 million increase in compensation related costs;

● approximately

$0.2 million decrease related to facility related costs, partially offset by an increase

in facility related costs at PAVmed.

and development expenses

the six months ended June 30, 2023, research and development costs were approximately $7.9 million as compared to $12.7 million for the

corresponding period in the prior year.

the nine months ended September 30, 2023, research and development costs were approximately $10.7 million as compared to $18.7 million

for the corresponding period in the prior year.

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

● approximately

$5.5 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

$0.4 million decrease in third-party professional consulting services related to regulatory and development activities;

$8.8 million decrease in development costs, particularly in clinical trial activities and

outside professional and consulting fees;

● approximately

4 unchanged sentences

of Acquired Intangible Assets

amortization of acquired intangible assets remained relatively level in the six months ended June 30, 2023, as compared to the corresponding

period in the prior year.

of Operations - continued

six months ended June 30, 2023 as compared to the six months ended June 30, 2022 - continued

amortization of acquired intangible assets increased to $1.5 million in the nine months ended September 30, 2023, as compared to $1.3

million in the corresponding period in the prior year.

The increase of $0.2 million in the current period was due to the timing

of the acquired intangible assets in 2022.

Income and Expense

in fair value of convertible debt

the six months ended June 30, 2023, the change in the fair value of our convertible notes was approximately $1.4 million of expense,

the nine months ended September 30, 2023, the change in the fair value of our convertible notes was approximately $5.8 million of expense,

related to the April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note, and the Lucid March 2023 Senior Convertible

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

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

reporting period date.

The Company initially recognized an aggregate of $4.3 million of fair value non-cash expense on the issue dates.

on Issue and Offering Costs - Senior Secured Convertible Note

the six months ended June 30, 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.

In the six months ended June 30, 2022, in connection with

the issue of the April 2022 Senior Convertible Notes, we recognized a total of approximately $3.1 million of lender fees and offering

the nine months ended September 30, 2023, in connection with the issue of the Lucid March 2023 Senior Convertible Note, we recognized

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

In the nine months ended September 30, 2022, in connection

with the issue of the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note, we recognized a total of approximately

$4.3 million of lender fees and offering costs.

on Debt Extinguishment

the six months ended June 30, 2023, a debt extinguishment loss in the aggregate of approximately $1.3 million was recognized in connection

with our April 2022 Senior Convertible Note as discussed below.

the six months ended June 30, 2023, approximately $3.2 million of principal repayments along with less than $0.1 million of interest

expense thereon, were settled through the issuance of 9,523,481 shares of common stock of the Company, with such shares having a

fair value of approximately $4.4 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 $1.3 million in the six months ended

June 30, 2023.

were no similar debt extinguishment losses in the six months ended June 30, 2022.

the nine months ended September 30, 2023, a debt extinguishment loss in the aggregate of approximately $3.0 million was recognized in

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

the nine months ended September 30, 2023, approximately $5.1 million of principal repayments

along with $0.3 million of interest expense thereon, were settled through the issuance of

20,383,445 shares of common stock of the Company, with such shares having a fair value of

approximately $8.4 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 $3.0 million in the nine months ended September 30, 2023.

of Operations - continued

nine months ended September 30, 2023 as compared to nine months ended September 30, 2022 - continued

comparison, in 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.

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

15 unchanged sentences

We experienced a net loss before noncontrolling interests of approximately $61.9 million and

used approximately $29.1 million of cash in operations for the six months ended June 30, 2023.

Financing activities provided $25.5 million

of cash during the six months ended June 30, 2023.

We ended the quarter with cash on-hand of $37.2 million as of June 30, 2023.

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.

used approximately $40.2 million of cash in operations for the nine months ended September 30, 2023.

Financing activities provided $25.9

million of cash during the nine months ended September 30, 2023.

We ended the quarter with cash on-hand of $26.4 million as of September

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, including current obligations on the Company’s existing convertible debt which in accordance with management’s

plans may include conversions to equity and refinancing our existing debt obligations to extend the maturity date.

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

the other debt and equity committed sources of financing, described below, and conversion and refinancing of existing convertible notes, 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

of Shares of Our Common Stock

the six months ended June 30, 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, to the Financial Statements.

issued 2,330,747 shares of our common stock for net proceeds of approximately $1.2 million, after payment of 3% commissions, from

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

the nine months ended September 30, 2023

issued 877,230 shares of our common stock for proceeds of approximately $0.3 million under

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

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

issued 2,330,747 shares of our common stock for net proceeds of approximately $1.2 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.

issued 1,500,000 shares of our common stock to a service provider as the consideration for services rendered.

The issued shares

of common stock had a fair value of approximately $0.6 million.

See Note 14, Common Stock and Common Stock Purchase Warrants for additional

On the six-month anniversary of the issuance of the shares, the then-current market value of the shares will be determined

based on the volume weighted average price per share of the common stock during the last ten trading days of such six-month period.

the aggregate market value of the shares as so determined is less than $750,000, the Company shall, at its election, either pay to the service

provider an amount in cash equal to the shortfall or issue to the service provider a number of additional shares equal to the shortfall

divided by the greater of the market value and $0.10.

In no event will the number of shares issued exceed 9.99% of the Company’s

outstanding common stock as of May 31, 2023.

issued 1,500,000 shares of our common stock to a service provider as the consideration for

services rendered.

The issued shares of common stock had a fair value of approximately $0.6

See Note 14, Common Stock and Common Stock Purchase Warrants for additional discussion.

On the six-month anniversary of the issuance of the shares, the then-current market value

of the shares will be determined based on the volume weighted average price per share of

the common stock during the last ten trading days of such six-month period.

If the aggregate

market value of the shares as so determined is less than $750,000, the Company shall, at

its election, either pay to the service provider an amount in cash equal to the shortfall

or issue to the service provider a number of additional shares equal to the shortfall divided

by the greater of the market value and $0.10.

In no event will the number of shares issued

exceed 9.99% of the Company’s outstanding common stock as of May 31, 2023.

issued 20,383,445 shares of our common stock in satisfaction of approximately $5.1 million

of principal repayments along with approximately $0.3 million of interest expense thereon

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

and Capital Resources - continued

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

as of March 31, 2022, we entered into the SPA with an accredited 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

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

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

as of March 31, 2022, we entered into the SPA with an accredited 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.

2022 Senior Convertible Note may be converted into or otherwise paid in shares of our common stock as described in Note 11, Debt.

April 2022 Senior Convertible Note proceeds were $24.4 million after deducting a $2.5 million lender fee and the Company’s offering

costs of approximately $0.6 million, inclusive primarily of $0.5 million placement agent fees.

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

9 unchanged sentences

million, inclusive primarily of placement agent fees.

and Capital Resources - continued

Under 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 Tests”).

From time to time from and after June 1, 2023 through August 14,

2023, the Company was not in compliance with the Financial Tests.

As of August 14, 2023, the investor agreed to waive any such non-compliance

during such time period and thereafter through November 30, 2023.

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 June 1, 2023 through August 14, 2023, the Company was not in compliance with the Financial

As of August 14, 2023, the investor agreed to waive any such non-compliance during such time period and thereafter through November

Based on the waiver, as of September 30, 2023, the Company was in compliance with the Financial Tests.

In addition, based on

the waiver, the Company presently is 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

On March 7, 2023, Lucid Diagnostics entered into subscription agreements

for the sale of 13,625 shares of the Lucid Series A Preferred Stock.

Each share of the Lucid Series A Preferred Stock has a stated value

of $1,000 and a conversion price of $1.394.

The Lucid Series A Preferred Stock is convertible into shares of Lucid Diagnostics’

common stock at any time at the option of the holder from and after the six-month anniversary of its issuance (or, if later, the effective

date of an increase in Lucid Diagnostics’ authorized share capital or the effective date of a registration statement covering the

resale of the underlying shares), and automatically converts into shares of Lucid Diagnostics’ 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 - Series A Preferred Stock and Series A-1 Preferred Stock Offerings

March 7, 2023, Lucid Diagnostics sold 13,625 shares of the Lucid Series A Preferred Stock.

Each share of the Lucid Series A Preferred

Stock has a stated value of $1,000 and a conversion price of $1.394.

The Lucid Series A Preferred Stock is convertible into shares of

Lucid Diagnostics’ common stock at any time at the option of the holder from and after the six-month anniversary of its issuance

(or, if later, the effective date of an increase in Lucid Diagnostics’ authorized share capital or the effective date of a registration

statement covering the resale of the underlying shares), and automatically converts into shares of Lucid Diagnostics’ 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.

October 17, 2023, Lucid Diagnostics sold 5,000 shares of Lucid Series A-1 Convertible Preferred Stock (the “Lucid Series A-1 Preferred

The terms of the Lucid Series A-1 Preferred Stock are substantially identical to the terms of the Lucid Series A Preferred

Stock, except that the Lucid Series A-1 Preferred Stock has a conversion price of $1.2592.

The aggregate gross proceeds from the sale

of shares in such offering were $5.0 million.

and Capital Resources - continued

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

Effective as of March 13, 2023, Lucid Diagnostics entered into the Lucid

SPA with 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.

as of March 13, 2023, Lucid Diagnostics entered into the Lucid SPA with 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,

of Lucid Diagnostics’ 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 principal of the Lucid March 2023 Senior Convertible Note and accrued interest thereon is convertible at the option of the holder

into Lucid Diagnostics’ common stock at the contractual conversion price.

In addition, the principal of the Lucid March 2023 Senior

Convertible Note amortizes over 18 months commencing six months after its issuance.

The amortization payments and accrued interest on

the Lucid March 2023 Senior Convertible Note are 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), at prices based on the then current

market price.

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

8 unchanged sentences

than $30 million (the “Lucid Financial Tests”).

As of June 30, 2023, Lucid Diagnostics was in compliance with the Lucid Financial

As of September 30, 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

6 unchanged sentences

our “at-the-market offering” to cover up to an additional $18 million of our common stock.

In the six months ended June 30,

2023, the Company sold 2,330,747 shares through its at-the-market equity facility for net proceeds of approximately $1.2 million, after

payment of 3% commissions.

In the nine months ended September

30, 2023, the Company sold 2,330,747 shares through its at-the-market equity facility for net proceeds of approximately $1.2 million,

after payment of 3% commissions.

No shares were sold through the Company’s at-the-market equity facility during the three months

ended September 30, 2023.

Diagnostics Inc.

8 unchanged sentences

Cumulatively a total of 680,263 shares of Lucid Diagnostics’ common stock were issued

for net proceeds of approximately $1.8 million, after a 4% discount, as of June 30, 2023.

for net proceeds of approximately $1.8 million, after a 4% discount, as of September 30, 2023.

No shares were sold through this facility

during the three months ended September 30, 2023.

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 six months ended

June 30, 2023, Lucid Diagnostics sold 230,068 shares through its at-the-market equity facility for net proceeds of approximately $0.3

In the nine months ended

September 30, 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.

No shares were sold through Lucid’s at-the-market equity facility during the three months ended June 30, 2023.

No shares were sold through Lucid’s at-the-market equity facility during the three

months ended September 30, 2023.

Accounting Policies and Significant Judgments and Estimates

13 unchanged sentences

There have been no material changes to our critical accounting

policies and estimates in the six months ended June 30, 2023.

policies and estimates in the nine months ended September 30, 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