What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-12 compared with 2025-08-14 · 368 added, 327 removed, 350 unchanged (67% of the section changed)

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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 EsoGuard;

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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● cybersecurity

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

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

related to health-related emergencies;

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,

joint ventures or investments we may make.

may not actually achieve the results, plans, and/or objectives disclosed in our forward-looking statements, and the intended or

expected results, developments and/or other events disclosed in our forward-looking statements may not actually occur, and

accordingly you should not place undue reliance on our forward-looking statements.

You should read this Quarterly Report on 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 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.

may not actually achieve the results, plans, and/or objectives disclosed in our forward-looking statements, and the intended or expected

results, developments and/or other events disclosed in our forward-looking statements may not actually occur, and accordingly you should

not place undue reliance on our forward-looking statements.

You should read this Quarterly Report on 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 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.

is a multi-product life sciences company organized to advance a pipeline of innovative healthcare technologies.

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with the Veris Cancer Care Platform.

In terms of other existing products and technologies, we have adopted an incubator-type platform, PMX,

where we are looking to obtain financing on a product-by-product basis as necessary to advance each asset to a meaningful inflection

In terms of other existing products and technologies, we have adopted an incubator-type platform,

PMX, where we are looking to obtain financing on a product-by-product basis as necessary to advance each asset to a meaningful inflection

point along its path to commercialization.

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Medicare Coverage

November 2024, Lucid submitted to MolDx its complete clinical evidence package in support of a request for reconsideration of the non-coverage

language in the LCD to secure Medicare coverage for EsoGuard.

November 2024, Lucid submitted to MolDx our complete clinical evidence package in support of a request for reconsideration of the non-coverage

language in the local coverage determination, or “LCD,” to secure Medicare coverage for EsoGuard.

The EsoGuard clinical evidence package included six new peer-reviewed publications:

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validation study.

The current LCD provides clear coverage criteria consistent with the American College of Gastroenterology (ACG) guidelines

The current LCD provides clear coverage criteria consistent with the American College of Gastroenterology, or “ACG,” guidelines

for esophageal precancer testing.

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the LCD to secure Medicare coverage for EsoGuard.

As part of the LCD reconsideration process, MolDX-participating Medicare Administrative Contractors are scheduled

to convene a Contractor Advisory Committee (CAC) Meeting regarding the LCD on September 4, 2025.

part of the LCD reconsideration process, MolDx-participating Medicare Administrative Contractors convened a

Contractor Advisory Committee, or “CAC,” Meeting regarding the LCD on September 4, 2025.

At the meeting, eleven experts, including physicians across multiple specialties (GI, primary care, pathology), major

society guideline co-authors (ACG, AGA (as defined below)) and industry leaders (American Foregut Society, American Society for Gastrointestinal

Endoscopy), participated in this extensive discussion of the unmet clinical need with respect to early detection of esophageal precancer

and the strength of the EsoGuard clinical validity and clinical utility data.

2000® and 3000® Indexes

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by FTSE Russell.

Developments - continued

Comprehensive Esophageal Precancer Testing Program Using EsoGuard

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with EsoCheck, as an acceptable alternative to invasive upper endoscopy to detect esophageal precancer.

Developments - continued

Study Publications

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August 1, 2025, the American Journal of Gastroenterology e-published (ahead of printing) the manuscript “Nonendoscopic

Detection of Barrett’s Esophagus in Patients Without GERD Symptoms.” This investigator-initiated pilot study evaluated EsoGuard

in 120 patients without GERD symptoms, but meeting American Gastroenterological Association (AGA) BE screening criteria.

Of 34 EsoGuard-positive

patients, 27 underwent EGD, confirming BE in 9 cases (PPV:

Of 86 EsoGuard-negative patients, 22 volunteered for EGD, with zero

BE cases (NPV:

This is the first study to assess EsoGuard in this expanded risk group and informed the design of a larger, ongoing

NIH R01-funded study.

Detection of Barrett’s Esophagus in Patients Without GERD Symptoms.” This investigator-initiated pilot study evaluated

EsoGuard in 120 patients without GERD symptoms, but meeting American Gastroenterological Association (AGA) BE screening criteria.

34 EsoGuard-positive patients, 27 underwent EGD, confirming BE in 9 cases (PPV:

Of 86 EsoGuard-negative patients, 22 volunteered

for EGD, with zero BE cases (NPV:

This is the first study to assess EsoGuard in this expanded risk group and informed the design

of a larger, ongoing NIH R01-funded study.

Reimbursement Approval

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has issued a positive coverage policy for non-invasive screening of esophageal precancer and cancer in New York state.

The new policy, which became effective as of May 26, 2025,

will cover EsoGuard in patients who meet established criteria for esophageal precancer testing consistent with professional society guidelines.

The new policy,

which became effective as of May 26, 2025, will cover EsoGuard in patients who meet established criteria for esophageal precancer testing

consistent with professional society guidelines.

NIH Grant Related to EsoGuard and EsoCheck

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University Hospitals, University of Colorado, Johns Hopkins University, University of North Carolina, and Cleveland Clinic.

Developments - continued

Health and The Ohio State University Comprehensive Cancer Center Strategic Partnership

October 7, 2025, we announced the launch of the commercial phase of Veris’ strategic partnership with The Ohio State University

Comprehensive Cancer Center – Arthur G.

James Cancer Hospital and Richard J.

Solove Research Institute (“OSUCCC – James”).

Under the partnership, the Veris Cancer Care Platform is being deployed to enhance personalized cancer care for patients undergoing systemic

cancer therapy across OSUCCC – James.

Esophageal Imaging Technology Letter of Intent with Duke University

August 26, 2025, PAVmed announced that it had executed a non-binding letter of intent with Duke University to license (on an exclusive, worldwide basis), through a

newly formed subsidiary, endoscopic imaging technology designed to identify and facilitate treatment of esophageal precancer

(dysplasia) during upper endoscopy.

The multi-modality probe combines angle-resolved low coherence interferometry (a/LCI) with

optical coherence tomography (OCT) and is intended to enable real-time detection and potential immediate treatment of dysplasia

during the same endoscopic procedure.

Financing (June 2025)

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have an exercise price of $1.40 per share, subject to adjustment under certain circumstances.

Developments - continued

Financing (February 2025)

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working capital purposes.

Pre-Funded Warrants became exercisable upon the receipt of the stockholder approval described above on June 18, 2025, and were exercised

Pre-Funded Warrants were exercised

as of June 19, 2025.

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similar terms).

May 30, 2025, Lucid entered into an “at-the-market offering” (“ATM”) for up to $25.0 million of its common stock

that may be offered and sold under a Controlled Equity Offering Agreement between Lucid and Maxim Group LLC.

In the six months ended

June 30, 2025, Lucid sold 215,421 shares through its at-the-market equity facility for net proceeds of approximately $0.3 million,

after payment of 3% commissions.

Diagnostics — Confidentially Marketed Public Offering

April 11, 2025, Lucid closed on the sale of 14,375,000 shares of its common stock, pursuant to its previously announced offering of

shares of common stock at a price of $1.20 per share (the “Lucid CMPO”).

The net proceeds from the Lucid CMPO,

after deducting the underwriting discount and other expenses of the Lucid CMPO, were approximately $16.2 million.

Lucid intends to

use the net proceeds from the Lucid CMPO for working capital and general corporate purposes.

Diagnostics — September 2025 Confidentially Marketed Public Offering

September 11, 2025, Lucid closed on the sale of 28,750,000 shares of its common stock, pursuant to its previously announced offering

of shares of common stock at a price of $1.00 per share (the “Lucid September CMPO”).

The net proceeds from the Lucid September

CMPO, after deducting the underwriting discount and other expenses of the Lucid September CMPO, were approximately $27.0 million.

intends to use the net proceeds from the Lucid September CMPO for working capital and general corporate purposes.

On May 30, 2025, Lucid entered into a Controlled Equity Offering Agreement (also “ATM” or at-the-market”

offering) between Lucid and Maxim Group LLC for up to $25 million

of its common stock that may be offered and sold from time to time.

Diagnostics — April 2025 Confidentially Marketed Public Offering

April 11, 2025, Lucid closed on the sale of 14,375,000 shares of its common stock, pursuant to its previously announced offering of shares

of common stock at a price of $1.20 per share (the “Lucid April CMPO”).

The net proceeds from the Lucid April CMPO, after

deducting the underwriting discount and other expenses of the Lucid April CMPO, were approximately $16.2 million.

Lucid intends to use

the net proceeds from the Lucid April CMPO for working capital and general corporate purposes.

Diagnostics — Registered Direct Offering

March 5, 2025, Lucid closed on the sale of 13,939,330 shares of its common stock, pursuant to its previously announced offering of

shares of common stock at a price of $1.10 per share (the “Lucid RDO”).

The net proceeds of the Lucid RDO, after

deducting the estimated placement agent’s fees and other expenses of the Lucid RDO, were approximately $14.9 million.

intends to use the net proceeds from the Lucid RDO for working capital and other general corporate purposes.

March 5, 2025, Lucid closed on the sale of 13,939,330 shares of its common stock, pursuant to its previously announced offering of shares

of common stock at a price of $1.10 per share (the “Lucid RDO”).

The net proceeds of the Lucid RDO, after deducting the estimated

placement agent’s fees and other expenses of the Lucid RDO, were approximately $14.9 million.

Lucid intends to use the net proceeds

from the Lucid RDO for working capital and other general corporate purposes.

of Operations

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Until September 10,

10, 2024, the date of deconsolidation of Lucid Diagnostics from PAVmed’s consolidated results, the cost of revenues recognized

was primarily from the delivery of patient EsoGuard test results and included 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 have incurred

expenses for tests in the period in which the activities occur, therefore, gross margin as a percentage of revenue has varied from

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

2024, the date of deconsolidation of Lucid Diagnostics from PAVmed’s consolidated results, the cost of revenues recognized was

primarily from the delivery of patient EsoGuard test results and included 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 have incurred expenses for tests in the

period in which the activities occur, therefore, gross margin as a percentage of revenue has varied 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 fluctuate based on the commercialization efforts of our subsidiaries.

and marketing expenses

and marketing expenses consist primarily of salaries and related costs for employees engaged in sales, sales support and marketing

activities, as well as advertising and promotion expenses.

We anticipate our sales and marketing expenses to decrease in the future

compared to historical periods ending on or prior to September 30, 2024 due to the deconsolidation of Lucid as of September 10, 2024, as going forward, the

expenses associated with the sales and marketing operations for the Lucid EsoGuard test will no longer be recorded within the

Company’s operating results.

and marketing expenses consist primarily of salaries and related costs for employees engaged in sales, sales support and marketing activities,

as well as advertising and promotion expenses.

We anticipate our sales and marketing expenses to decrease in the future compared to historical

periods ending on or prior to September 30, 2024 due to the deconsolidation of Lucid as of September 10, 2024, as going forward, the

expenses associated with the sales and marketing operations for the Lucid EsoGuard test will no longer be recorded within the Company’s

operating results.

and administrative expenses

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property portfolio.

anticipate our general and administrative expenses will decrease in the future compared to historical periods ending on or prior to

September 30, 2024 due to the deconsolidation of Lucid as of September 10, 2024, as going forward, the general and administrative expenses, including

anticipate our general and administrative expenses will decrease in the future compared to historical periods ending on or prior to September

30, 2024 due to the deconsolidation of Lucid as of September 10, 2024, as going forward, the general and administrative expenses, including

third-party payor reimbursement costs, incurred by Lucid will no longer be recorded within the Company’s operating results.

the future, general and administrative expenses will include those expenses related to being a public company, including fees and

expenses for audit, legal, regulatory, tax-related services, insurance premiums and investor relations costs associated with

maintaining compliance as a public company for PAVmed and its majority-owned subsidiaries.

the future, general and administrative expenses will include those expenses related to being a public company, including fees and expenses

for audit, legal, regulatory, tax-related services, insurance premiums and investor relations costs associated with maintaining compliance

as a public company for PAVmed and its majority-owned subsidiaries.

and development expenses

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design engineering studies.

expenses of our research and development activities, including our clinical trials, for historical periods ending on or prior to

September 30, 2024 were principally related to EsoGuard and the Veris Cancer Care Platform.

Due to the deconsolidation of Lucid on

September 10, 2024, the expenses in respect of the Company’s research and development activities for subsequent historical

periods and future periods will include those associated with research and development activities related to the Veris Cancer Care

Platform, the PMX incubator program and other products in our pipeline as well as applicable new technologies, as resources

expenses of our research and development activities, including our clinical trials, for historical periods ending on or prior to September

30, 2024 were principally related to EsoGuard and the Veris Cancer Care Platform.

Due to the deconsolidation of Lucid on September 10,

2024, the expenses in respect of the Company’s research and development activities for subsequent historical periods and future

periods will include those associated with research and development activities related to the Veris Cancer Care Platform, the PMX incubator

program and other products in our pipeline as well as applicable new technologies, as resources permit.

Income and Expense, net

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

in millions, except for share and per share amounts.

three months ended June 30, 2025 as compared to three months ended June 30, 2024

the three months ended June 30, 2025, revenue was less than $0.1 million as compared to $1.0 million for the corresponding period in the prior

The $1.0 million decrease principally relates to the revenue from Lucid’s EsoGuard Esophageal DNA Tests not being included

in our operating results for the three months ended June 30, 2025 as compared to the prior year, during which all three months of Lucid’s

operating results were so included.

the three months ended June 30, 2025, cost of revenue costs were less than $0.1 million, as compared to $1.7 million for the

in millions, except for per share amounts.

three months ended September 30, 2025 as compared to three months ended September 30, 2024

the three months ended September 30, 2025, revenue was less than $0.1 million as compared to $1.0 million for the corresponding period

in the prior year.

The $1.0 million decrease principally relates to the revenue from Lucid’s EsoGuard Esophageal DNA Tests not

being included in our operating results for the three months ended September 30, 2025 as compared to the prior year, during which Lucid’s

operating results were included through September 10, 2024.

the three months ended September 30, 2025, cost of revenue costs were approximately $0.1 million, as compared to $1.4 million for the

corresponding period in the prior year.

The net decrease of $1.3 million principally related to Lucid’s results not being included

in our operating results for the three months ended June 30, 2025 as compared to the prior year, during which all three months of Lucid’s

operating results were so included.

in our operating results for the three months ended September 30, 2025 as compared to the prior year, during which Lucid’s operating

results were included through September 10, 2024.

and marketing expenses

the three months ended June 30, 2025, sales and marketing costs were approximately $0.2 million as compared to $4.2 million for the corresponding

period in the prior year.

The net decrease of $4.0 million principally related to Lucid’s results not being included in our operating

results for the three months ended June 30, 2025 as compared to the prior year, during which all three months of Lucid’s operating

results were so included.

and administrative expenses

the three months ended June 30, 2025, general and administrative costs were approximately $3.7 million as compared to $7.0 million for

the three months ended September 30, 2025, sales and marketing costs were approximately $0.2 million as compared to $2.9 million for

the corresponding period in the prior year.

The net decrease of $2.7 million principally related to Lucid’s results not being included

in our operating results for the three months ended June 30, 2025 as compared to the prior year, during which all three months of Lucid’s

operating results were so included.

in our operating results for the three months ended September 30, 2025 as compared to the prior year, during which Lucid’s operating

results were included through September 10, 2024.

and administrative expenses

the three months ended September 30, 2025, general and administrative costs were approximately $3.5 million as compared to $6.6 million

for the corresponding period in the prior year.

The net decrease of $3.1 million principally related to Lucid’s results not being

included in our operating results for the three months ended September 30, 2025 as compared to the prior year, during which Lucid’s

operating results were included through September 10, 2024.

and development expenses

the three months ended June 30, 2025, research and development costs were approximately $0.8 million as compared to $1.6 million for

the corresponding period in the prior year.

The net decrease of $0.8 million principally related to Lucid’s results not being included

in our operating results for the three months ended June 30, 2025 as compared to the prior year, during which all three months of Lucid’s

operating results were so included.

the three months ended September 30, 2025, research and development costs were approximately $1.1 million as compared to $1.5 million

for the corresponding period in the prior year.

The net decrease of $0.4 million principally related to Lucid’s results not being

included in our operating results for the three months ended September 30, 2025 as compared to the prior year, during which Lucid’s

operating results were included through September 10, 2024.

of Acquired Intangible Assets

amortization of acquired intangible assets was zero in the three months ended June 30, 2025, as compared to

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

The decrease of $0.1 million in the current period was due to certain acquired

intangible assets being fully amortized in February 2024.

amortization of acquired intangible assets was zero in the three months ended September 30, 2025, as compared to $0.1 million for the

corresponding period in the prior year.

The decrease of $0.1 million in the current period was principally related to Lucid’s results not

being included in our operating results for the three months ended September 30, 2025 as compared to the prior year, during which Lucid’s

operating results were included through September 10, 2024.

Income and Expense

in fair value of convertible debt

the three months ended June 30, 2025 and 2024, the change in the fair value of our convertible notes was approximately $0.2 million and

$0.6 million of expense, respectively, 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 each reporting period date.

The Company initially recognized an aggregate of $4.3 million of fair value

non-cash expense on the issue dates.

Change in management fee income

In the three months ended June 30,

2025, management fee income was approximately $3.2 million as compared to zero for the corresponding period in the prior year.

The increase of $3.2 million principally related to Lucid’s results ceasing to be consolidated in our operating results as of

September 10, 2024.

the three months ended September 30, 2025 and 2024, the change in the fair value of our convertible notes was approximately $0.1 million

of expense and $0.2 million of income, respectively, related to the April 2022 Senior Convertible Note, the September 2022 Senior Convertible

Note, and (for the period of July 1, 2024 through September 10, 2025, the date of the deconsolidation of Lucid) 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.

in management fee income

the three months ended September 30, 2025, management fee income was approximately $3.2 million as compared to $0.7 million for the

corresponding period in the prior year.

The reported increase of $2.5 million principally related to the fact that all of the fees

payable by Lucid under its management services agreement with the Company during the three months ended September 30, 2025 are

included in the results for such period, whereas only the portion of such fees paid in respect of the period following the September

10, 2024 deconsolidation of Lucid were included in the Company’s results for the three month period ended September

of Operations - continued

three months ended June 30, 2025 as compared to the three months ended June 30, 2024 - continued

three months ended September 30, 2025 as compared to the three months ended September 30, 2024 - continued

Income and Expense - continued

on Debt Extinguishment

The Company did not incur debt extinguishment

loss in the three months ended June 30, 2025.

the three months ended June 30, 2024, a debt extinguishment loss in the aggregate of approximately $0.8 million was recognized in

Company did not incur debt extinguishment loss in the three months ended September 30, 2025.

the three months ended September 30, 2024, a debt extinguishment loss in the aggregate of approximately $1.4 million was recognized in

connection with our April 2022 Senior Convertible Note, September 2022 Senior Convertible Note and the Lucid March 2023 Senior Convertible

Note as discussed below.

the three months ended June 30, 2024, approximately $0.7 million of principal repayments, along with less than $0.1 million of interest

expense thereon, were settled through the issuance of 461,963 shares of common stock of the Company, with such shares having a fair

value of approximately $0.8 million (with such fair value measured as the respective conversion date quoted closing price of the

common stock of the Company).

In addition, the Company agreed to pay $0.2 million in cash related to acceleration floor payments

on these notes related to the conversion price being below the floor, recorded as debt extinguishment loss.

The conversions and floor

acceleration payments resulted in a debt extinguishment loss of $0.3 million in the three months ended June 30, 2024.

the three months ended June 30, 2024, approximately $1.1 million of

principal repayments along with approximately $0.2 million of interest expense thereon, were settled through the issuance of 2,117,883

shares of Lucid common stock, with such shares having a fair value of approximately $1.9 million (with such fair value measured as

the quoted closing price of the common stock of Lucid on the respective conversion date).

The conversions resulted in a debt extinguishment

loss of $0.5 million in the three months ended June 30, 2024.

the three months ended September 30, 2024, approximately $0.5 million of principal repayments,

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

of 509,942 shares of common stock of the Company, with such shares having a fair value of

approximately $0.9 million (with such fair value measured as the respective conversion date

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

In addition, the Company agreed

to pay $0.7 million in cash related to acceleration floor payments on these notes related

to the conversion price being below the floor, recorded as debt extinguishment loss.

conversions and floor acceleration payments resulted in a debt extinguishment loss of $1.1

million in the three months ended September 30, 2024.

the period of July 1, 2024 through September 10, 2024, the date of the deconsolidation of Lucid, approximately $0.8 million of

principal repayments along with approximately $0.1 million of interest expense thereon, related to the Lucid March 2023 Senior

Convertible Note were settled through the issuance of 1,510,821 shares of Lucid common stock, with such shares having a fair value

of approximately $1.3 million (with such fair value measured as the quoted closing price of the common stock of Lucid on the

respective conversion date).

The conversions resulted in a debt extinguishment loss of $0.3 million in the period July 1, 2024

through September 10, 2024.

Note 10 , Debt , to the Financial Statements, for additional information with respect to the April 2022 Senior Convertible Note,

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in fair value of Equity Method Investment

June 30, 2025, the fair value of the Company’s investment in Lucid was $36.0 million, with the company recognizing an

unrealized loss on its investment in Lucid of $10.6 million in the accompanying unaudited condensed consolidated statements of

operations for the three months ended June 30, 2025.

The fair value of common shares of Lucid held by the Company was

determined using the $1.15 closing price per share of Lucid’s common stock as of June 30,

2025, as compared to Lucid’s common stock price per share of $1.49 at March 31, 2025.

September 30, 2025, the fair value of the Company’s investment in Lucid was $31.6 million, with the company recognizing an unrealized

loss on its investment in Lucid of $4.4 million in the accompanying unaudited condensed consolidated statements of operations for the

three months ended September 30, 2025.

The fair value of common shares of Lucid held by the Company was determined using the $1.01 closing

price per share of Lucid’s common stock as of September 30, 2025, as compared to Lucid’s common stock price per share of $1.15

at June 30, 2025.

of Operations - continued

six months ended June 30, 2025 as compared to six months ended June 30, 2024

the six months ended June 30, 2025, revenue was less than $0.1 million as compared to $2.0 million for the corresponding period in

the prior year.

The $2.0 million decrease was principally related to the revenue from Lucid’s EsoGuard Esophageal DNA Tests not

being included in our operating results for the six months ended June 30, 2025 as compared to the prior year, during which all six

months of Lucid’s operating results were so included.

the six months ended June 30, 2025, cost of revenue was less than $0.1 million as compared $3.4 million for the corresponding period

nine months ended September 30, 2025 as compared to nine months ended September 30, 2024

the nine months ended September 30, 2025, revenue was less than $0.1 million as compared to $3.0 million for the corresponding period

in the prior year.

The net decrease of $3.3 million was principally related to Lucid’s results not being included in our operating

results for the six months ended June 30, 2025 as compared to the prior year, during which all six months of Lucid’s operating

results were so included.

and marketing expenses

the six months ended June 30, 2025, sales and marketing costs were approximately $0.5 million as compared to $8.6 million for the corresponding

The $3.0 million decrease was principally related to the revenue from Lucid’s EsoGuard Esophageal DNA Tests

not being included in our operating results for the nine months ended September 30, 2025 as compared to the prior year, during which

Lucid’s operating results were included through September 10, 2024.

the nine months ended September 30, 2025, cost of revenue was approximately $0.1 million as compared $4.8 million for the corresponding

period in the prior year.

The net decrease of $4.7 million was principally related to Lucid’s results not being included in our

operating results for the six months ended June 30, 2025 as compared to the prior year, during which all six months of Lucid’s

operating results were so included.

and administrative expenses

the six months ended June 30, 2025, general and administrative costs were approximately $8.1 million as compared to $13.7 million for

operating results for the nine months ended September 30, 2025 as compared to the prior year, during which Lucid’s operating results

were included through September 10, 2024.

and marketing expenses

the nine months ended September 30, 2025, sales and marketing costs were approximately $0.7 million as compared to $11.5 million for

the corresponding period in the prior year.

The net decrease of $10.8 million was principally related to Lucid’s results not being

included in our operating results for the six months ended June 30, 2025 as compared to the prior year, during which all six months of

Lucid’s operating results were so included.

included in our operating results for the nine months ended September 30, 2025 as compared to the prior year, during which Lucid’s

operating results were included through September 10, 2024.

and administrative expenses

the nine months ended September 30, 2025, general and administrative costs were approximately $11.6 million as compared to $20.3 million

for the corresponding period in the prior year.

The net decrease of $8.7 million was principally related to Lucid’s results not

being included in our operating results for the nine months ended September 30, 2025 as compared to the prior year, during which Lucid’s

operating results were included through September 10, 2024.

of Operations - continued

nine months ended September 30, 2025 as compared to nine months ended September 30, 2024 - continued

and development expenses

the six months ended June 30, 2025, research and development costs were approximately $1.6 million as compared to $3.6 million for the

corresponding period in the prior year.

The net decrease of $2.0 million was principally related to Lucid’s results not being included

in our operating results for the six months ended June 30, 2025 as compared to the prior year, during which all six months of Lucid’s

operating results were so included.

the nine months ended September 30, 2025, research and development costs were approximately $2.7 million as compared to $5.1 million

for the corresponding period in the prior year.

The net decrease of $2.4 million was principally related to Lucid’s results not

being included in our operating results for the nine months ended September 30, 2025 as compared to the prior year, during which Lucid’s

operating results were included through September 10, 2024.

of Acquired Intangible Assets

amortization of acquired intangible assets was zero in the six months ended June 30, 2025, as compared to $0.5 million for the corresponding

period in the prior year.

The decrease of $0.5 million in the current period was due to certain acquired intangible assets being fully

amortized in February 2024.

amortization of acquired intangible assets was zero in the nine months ended September 30, 2025, as compared to $0.6 million for the

corresponding period in the prior year.

The decrease of $0.6 million in the current period was principally related to Lucid’s results

not being included in our operating results for the nine months ended September 30, 2025 as compared to the prior year, during which

Lucid’s operating results were included through September 10, 2024.

Income and Expense

in fair value of convertible debt

the six months ended June 30, 2025 and June 30, 2024, the change in the fair value of our convertible notes was approximately $0.3 million

and $2.7 million of expense, respectively, related to the April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note,

and (for the six months ended June 30, 2024 only) 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 applicable reporting period date.

The Company initially

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

Change in management fee income

In the six months ended June 30,

2025, management fee income was approximately $6.3 million as compared to zero for the corresponding period in the prior year.

The increase of $6.3 million principally related to Lucid’s results ceasing to be consolidated in our operating results as of

September 10, 2024.

of Operations - continued

six months ended June 30, 2025 as compared to six months ended June 30, 2024 - continued

Income and Expense - continued

the nine months ended September 30, 2025 and September 30, 2024, the change in the fair value of our convertible notes was approximately

$0.4 million and $2.5 million of expense, respectively, related to the April 2022 Senior Convertible Note, the September 2022 Senior

Convertible Note, and (for the period of January 1, 2024 through September 10, 2025, the date of the deconsolidation of Lucid) 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 applicable reporting period date.

in management fee income

the nine months ended September 30, 2025, management fee income was approximately $9.5 million as compared to $0.7 million for the corresponding

period in the prior year.

The increase of $8.8 million principally related the fact that all of the fees payable by Lucid under its management services agreement with the Company during the

nine months ended September 30, 2025 are included in the results for such period, whereas only the portion of such fees paid in respect

of the period following the September 10, 2024 deconsolidation of Lucid were included in the Company’s results for the nine month

period ended September 30, 2024.

on Debt Extinguishment

the six months ended June 30, 2025, a debt extinguishment loss in the aggregate of less than $0.1 million was recognized in connection

the nine months ended September 30, 2025, a debt extinguishment loss in the aggregate of less than $0.1 million was recognized in connection

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

the six months ended June 30, 2025, approximately $0.2 million of principal repayments along with less than $0.1 million of interest

expense thereon, were settled through the issuance of 401,303 shares of common stock of the Company, with such shares having a fair

value of approximately $0.3 million (with such fair value measured as the quoted closing price of the common stock of the Company

on the respective conversion date).

The conversions resulted in a debt extinguishment loss of less than $0.1 million in the six months

ended June 30, 2025.

comparison, in the six months ended June 30, 2024, a debt extinguishment loss in the aggregate of approximately $1.1 million was

recognized in connection with our April 2022 Senior Convertible Note, September 2022 Senior Convertible Note and the Lucid

March 2023 Senior Convertible Note as discussed below.

the six months ended June 30, 2024, approximately $1.0 million of principal repayments along with less than $0.1 million of interest

expense thereon, were settled through the issuance of 574,424 shares of common stock of the Company, with such shares having a fair

value of approximately $1.1 million (with such fair value measured as the quoted closing price of the common stock of the Company

on the respective conversion date).

In addition, the Company agreed to pay $0.4 million in cash related to acceleration floor payments

on these notes related to the conversion price being below the conversion floor price specified in the notes, recorded as debt extinguishment

The conversions and cash paid resulted in a debt extinguishment loss of $0.4 million in the six months ended June 30, 2024.

In the six months ended June 30, 2024, approximately $1.2 million of principal repayments along with approximately $0.7 million

of interest expense thereon, were settled through the issuance of 2,661,181 shares of Lucid common stock, with such shares having a fair

value of approximately $2.5 million (with such fair value measured as the quoted closing price of the common stock of Lucid on the respective

conversion date).

The conversions resulted in a debt extinguishment loss of $0.7 million in the six months ended June 30, 2024.

the nine months ended September 30, 2025, approximately $0.2 million of principal repayments

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

of 401,303 shares of common stock of the Company, with such shares having a fair value of

approximately $0.3 million (with such fair value measured as the quoted closing price of

the common stock of the Company on the respective conversion date).

The conversions resulted

in a debt extinguishment loss of less than $0.1 million in the nine months ended September

comparison, in the nine months ended September 30, 2024, a debt extinguishment loss in the aggregate of approximately $2.5 million was

recognized in connection with our April 2022 Senior Convertible Note, September 2022 Senior Convertible Note and the Lucid March 2023

Senior Convertible Note as discussed below.

the nine months ended September 30, 2024, approximately $1.4 million of principal repayments

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

1,084,366 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 quoted closing price of

the common stock of the Company on the respective conversion date).

In addition, the Company

agreed to pay $1.1 million in cash related to acceleration floor payments on these notes

related to the conversion price being below the conversion floor price specified in the notes,

recorded as debt extinguishment loss.

The conversions and cash paid resulted in a debt extinguishment

loss of $1.5 million in the nine months ended September 30, 2024.

the period of January 1, 2024 through September 10, 2024, the date of the deconsolidation of Lucid, approximately $2.0 million of

principal repayments along with approximately $0.8 million of interest expense thereon, related to the Lucid March 2023 Senior

Convertible Note were settled through the issuance of 4,172,002 shares of Lucid common stock, with such shares having a fair value

of approximately $3.8 million (with such fair value measured as the quoted closing price of the common stock of Lucid on the

respective conversion date).

The conversions resulted in a debt extinguishment loss of $1.0 million in the period of January 1, 2024

through September 10, 2024.

Note 10 , 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

nine months ended September 30, 2025 as compared to nine months ended September 30, 2024 - continued

in fair value of Equity Method Investment

June 30, 2025, the fair value of the Company’s investment in Lucid was $36.0 million, with the company recognizing an

unrealized gain on its investment in Lucid of $10.4 million in the accompanying unaudited condensed consolidated statements of

operations for the six months ended June 30, 2025.

The fair value of common shares of Lucid held by the Company was determined using

the $1.15 closing price per share of Lucid’s common stock as of June 30, 2025, as compared to Lucid’s common stock price per share of $0.819 at December 31, 2024.

September 30, 2025, the fair value of the Company’s investment in Lucid was $31.6 million, with the company recognizing an unrealized

gain on its investment in Lucid of $6.0 million in the accompanying unaudited condensed consolidated statements of operations for the

nine months ended September 30, 2025.

The fair value of common shares of Lucid held by the Company was determined using the $1.01 closing

price per share of Lucid’s common stock as of September 30, 2025, as compared to Lucid’s common stock price per share of

$0.819 at December 31, 2024.

Dividend on Lucid Series A and Series A-1 Convertible Preferred Stock Exchange Offer

5 unchanged sentences

Lucid Series B Convertible Preferred Stock Issuance and Lucid Series A/A-1 Exchange Offer ($ in thousands)

March 13, 2024

Nine Months Ended

September 30, 2024

Fair Value - 31,790 shares of Lucid Series B Preferred Stock issued in exchange for Lucid Series A and Lucid Series A-1 Preferred Stock

8 unchanged sentences

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

purchase warrants, and debt, both at the PAVmed level and, in the case of Lucid and Veris, at the subsidiary level, as well as through management fees under our management service contract with Lucid.

We are subject to all of

the risks and uncertainties typically faced by medical device and diagnostic and medical device companies that devote substantially

all of their efforts to the commercialization of their initial products and services and ongoing R&D and clinical trials.

experienced net income before noncontrolling interests of approximately $6.3 million and used approximately $2.8 million of cash in

operations for the six months ended June 30, 2025.

Financing activities provided $5.6 million of cash during the six months ended

June 30, 2025.

We ended the quarter with cash on-hand of $4.0 million as of June 30, 2025.

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.

The Company’s ability to continue operations 12 months beyond the issuance of the financial statements, will

depend upon its ability to control its operating costs within the limits of the amounts collected from its management service

contracts with its non-consolidated subsidiaries, to substantially increase its revenues from the Veris Cancer Care platform, and to

raise additional capital through various potential sources including equity or debt financings or refinancing or restructuring

existing debt obligations.

These factors raise substantial doubt about the Company’s ability to continue as a going concern

within one year after the date the accompanying unaudited condensed consolidated financial statements are issued.

purchase warrants, and debt, both at the PAVmed level and, in the case of Lucid and Veris, at the subsidiary level, as well as through

management fees under our management service contract with Lucid.

We are subject to all of the risks and uncertainties typically faced

by medical device and diagnostic and medical device companies that devote substantially all of their efforts to the commercialization

of their initial products and services and ongoing R&D and clinical trials.

We experienced net income before noncontrolling interests

of approximately $0.3 million and used approximately $3.7 million of cash in operations for the nine months ended September 30, 2025.

Financing activities provided $5.6 million of cash during the nine months ended September 30, 2025.

We ended the quarter with cash on-hand

of $3.1 million as of September 30, 2025.

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.

The Company’s ability to continue operations

12 months beyond the issuance of the financial statements, will depend upon its ability to control its operating costs within the limits

of the amounts collected from its management service contracts with its non-consolidated subsidiaries, to substantially increase its

revenues from the Veris Cancer Care platform, and to raise additional capital through various potential sources including equity or debt

financings or refinancing or restructuring existing debt obligations.

These factors raise substantial doubt about the Company’s

ability to continue as a going concern within one year after the date the accompanying unaudited condensed consolidated financial statements

of Shares of Our Common Stock

the six months ended June 30, 2025

issued 1,216,565 shares of our common stock for net proceeds of approximately $0.8 million, after payment of 3% commissions, through

our at-the-market equity facility with Cantor (which has since been replaced by a similar facility with Maxim Group LLC).

for more information.

issued 401,303 shares of our common stock in satisfaction of approximately $0.2 million of principal repayments along with less than

$0.1 million of interest expense thereon under the September 2022 Senior Convertible Note.

issued 3,840,094 shares of our common stock as a result of conversions of $1.5 million of our Series C Preferred Stock.

issued 2,574,350 shares of our common stock and pre-funded warrants to purchase 756,734 shares of our common stock, in combination

with the issuance of 677,143 shares of Veris, for gross proceeds of approximately $2.37 million.

issued 152,408 shares of our common stock to vendors in exchange for approximately $0.1 million of agreed upon services, which is included

in general and administrative operating expenses on the Company’s unaudited condensed consolidated statement of operations.

the nine months ended September 30, 2025

issued 1,216,565 shares of our common stock for net proceeds of approximately $0.8 million,

after payment of 3% commissions, through our at-the-market equity facility with Cantor (which

has since been replaced by a similar facility with Maxim Group LLC).

See below for more information.

issued 401,303 shares of our common stock in satisfaction of approximately $0.2 million of

principal repayments along with less than $0.1 million of interest expense thereon under

the September 2022 Senior Convertible Note.

issued 6,491,519 shares of our common stock as a result of conversions of $2.6 million of

our Series C Preferred Stock.

issued 2,574,350 shares of our common stock and pre-funded warrants to purchase 756,734 shares

of our common stock (which shares have been subsequently issued upon exercise of such warrants), in combination with the issuance of 677,143 shares of Veris, for gross

proceeds of approximately $2.37 million.

issued 152,408 shares of our common stock to vendors in exchange for approximately $0.1 million

of agreed upon services, which is included in general and administrative operating expenses

on the Company’s unaudited condensed consolidated statement of operations.

Convertible Notes

On April 4, 2022 we sold to an investor a Senior Secured Convertible

Note with a face value principal of $27.5 million (the “April 2022 Senior Convertible Note”).

The April 2022 Senior Secured

Convertible Note had an initial contractual maturity date of April 4, 2024, which maturity date the investor agreed to extend by one

year, to April 4, 2025.

The April 2022 Senior Convertible Note was satisfied in full in connection with the Exchange.

September 8, 2022 we sold to the same 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

Secured Convertible Note had an initial contractual maturity date of September 6, 2024, which maturity date has been now extended to

December 31, 2025.

The September 2022 Senior Convertible Note is more fully

described in Note 10, Debt .

April 4, 2022 we sold to an investor a Senior Secured Convertible Note with a face value principal of $27.5 million (the “April

2022 Senior Convertible Note”).

The April 2022 Senior Secured Convertible Note had an initial contractual maturity date of April

4, 2024, which maturity date the investor agreed to extend by one year, to April 4, 2025.

The April 2022 Senior Convertible Note was

satisfied in full in connection with the Exchange.

September 8, 2022 we sold to the same 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 Secured Convertible Note had an

initial contractual maturity date of September 6, 2024, which maturity date has been now extended to December 31, 2025.

the September 2022 Senior Convertible Note was satisfied in connection with the Exchange.

The September 2022 Senior Convertible Note

is more fully described in Note 10, Debt .

and Capital Resources - continued

Under the 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% (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”).

The holder of the September 2022 Senior Convertible Note agreed to waive any non-compliance

with the Financial Tests through December 31, 2025.

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% (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

The holder of the September 2022 Senior Convertible Note agreed to waive any non-compliance with the Financial Tests through

December 31, 2025.

Note 10 , Debt , to the Financial Statements for additional information about the September 2022 Senior Convertible Note.

See also Note 4, Equity Method Investment , to the Financial Statements for additional

information about the September 2022 Senior Convertible Note as it relates to the MSA.

the six months ended June 30, 2025, the Company sold 1,216,565 shares through its at-the-market equity facility for net proceeds of approximately

$0.8 million, after payment of 3% commissions.

April 17, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with Maxim Group LLC, as sales agent (“Maxim”),

pursuant to which the Company may offer and sell, from time to time through or to Maxim, shares of its common stock.

Under the Sales

Agreement, the Company may not issue or sell through Maxim a dollar amount of shares that would exceed $2,880,000 of shares.

will pay Maxim a commission of 3.0% of the aggregate gross sales prices of the shares.

The Company intends to use the net proceeds from

any such sales for working capital and general corporate purposes.

facility replaces the “at the market” facility PAVmed previously maintained with Cantor (which facility was on substantially

Note 4, Equity Method Investment , to the Financial Statements for additional information about the September 2022 Senior Convertible

Note as it relates to the MSA.

the nine months ended September 30, 2025, the Company sold 1,216,565 shares through its at-the-market equity facility for net proceeds

of approximately $0.8 million, after payment of 3% commissions.

April 17, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with Maxim Group LLC, as sales agent

(“Maxim”), pursuant to which the Company may offer and sell, from time to time through or to Maxim, shares of its common

Under the Sales Agreement, the Company may not issue or sell through Maxim a dollar amount of shares that would exceed $2.88

million of shares.

The Company will pay Maxim a commission of 3.0% of the aggregate gross sales prices of the shares.

intends to use the net proceeds from any such sales for working capital and general corporate purposes.

This facility

replaces the “at the market” facility PAVmed previously maintained with Cantor (which facility was on substantially

similar terms).

7 unchanged sentences

of all conditions to closing, the parties consummated the Exchange.

On November 20, 2024, the Company entered into a Securities Purchase Agreement (the “Series C Securities Purchase

Agreement”) with the Holder.

The Series C Securities Purchase Agreement provided for the purchase of 2,653 shares of Series C Preferred

Stock at a price of $1,000 per share, with the purchase price to be satisfied through the cancellation of $2.6 million of certain unsecured

debt obligations owed by the Company to the Holder (the “Purchase”).

November 20, 2024, the Company entered into a Securities Purchase Agreement (the “Series C Securities Purchase Agreement”)

with the Holder.

The Series C Securities Purchase Agreement provided for the purchase of 2,653 shares of Series C Preferred Stock at

a price of $1,000 per share, with the purchase price to be satisfied through the cancellation of $2.6 million of certain unsecured debt

obligations owed by the Company to the Holder (the “Purchase”).

On January 24, 2025, after satisfaction of all conditions

19 unchanged sentences

and Capital Resources - continued

share of Series C Preferred Stock, plus accrued and unpaid dividends thereon, is convertible at any time, in whole or in part, at the

holder’s option, into shares of the Company’s common stock at an initial fixed conversion price of $1.068 per share, subject

to certain adjustments.

On February 18, 2025, the Company agreed to reduce temporarily, and the holder of the Series C Preferred Stock

consented to reducing temporarily, the contractual conversion price under the Series C Preferred Stock to $0.40, during the period through

March 31, 2025;

provided that the aggregate amount of conversions under the Series C Preferred Stock at such conversion price during

such period does not exceed 1 million shares.

Such reduction was agreed to in connection with certain waivers granted by the holder of

the Series C Preferred Stock, including waivers necessary to permit the Company and Veris to consummate the Offering (as described in

Note 13, Common Stock and Common Stock Purchase Warrants ).

stated value of each share of Series C Preferred Stock, plus accrued and unpaid dividends thereon, is convertible at any time, in

whole or in part, at the holder’s option, into shares of the Company’s common stock at an initial fixed conversion price

of $1.068 per share, subject to certain adjustments.

From time to time since February 18, 2025, the Company has agreed to reduce

temporarily, and the holder of the Series C Preferred Stock has consented to reducing temporarily, the contractual conversion price

under the Series C Preferred Stock to $0.40, subject to certain limitations on the number of shares of our common stock that may be

issued at such reduced conversion price.

Such reductions were agreed to in

connection with certain waivers granted by the holder of the Series C Preferred Stock, including waivers necessary to permit the

Company and Veris to consummate the Offering (the foregoing temporary conversion price reductions (all of which were done as expressly permitted by the terms of

the Series C Preferred Stock) and related conversions of the Series C Preferred Stock being more fully described in Note 12, Preferred

Stock , and Note 13, Common Stock and Common Stock Purchase

any time following the occurrence of a Triggering Event (as defined below), a holder of shares of the Series C Preferred Stock has the

43 unchanged sentences

is subject to a financial covenant requiring that it maintain its cash flow on a break-even basis.

As of September 30, 2025, the Company is in compliance with all such covenants.

Note 12, Preferred Stock , to the Financial Statements for additional information about the Series C Preferred Stock.

1 unchanged sentence

Financing (February 2025)

February 18, 2025, the Company and Veris, entered into subscription agreements (each, a “Subscription Agreement”) with certain

accredited investors (collectively, the “Investors”), pursuant to which the Company agreed to sell and the Investors agreed

to purchase (the “Offering”) 2,574,350 shares of the Company’s common stock and pre-funded warrants to purchase 756,734

shares of the Company’s common stock (the “Pre-Funded Warrants”), at a purchase price of $0.7115 per share or warrant

share (as applicable).

In addition, Veris agreed to issue to each Investor approximately 0.2033 shares of Veris’ common stock for

each share or warrant share (as applicable) purchased by such Investor, for an aggregate of 677,143 shares of Veris’ common stock.

On February 21, 2025, the Company consummated the Offering, generating gross proceeds to the Company of $2.37 million.

The proceeds of

the offering will be used to resume development activities related to Veris’ implantable physiological monitor and for general

working capital purposes.

Subscription Agreement contains customary representations, warranties, covenants and indemnities of the Company and the Investors, as

well as a covenant by the Company to provide the Investors with protection against subsequent equity raises by the Company or Veris at

a lower purchase price (solely to the extent the Investors continue to hold the shares issued in the Offering), with such protection

to be effected through the issuance of additional shares of Veris’ common stock.

In addition, the Company (i) agreed to solicit

the affirmative vote of its stockholders by no later than its next meeting of stockholders, which will be held no later than June 30,

2025, for approval, for the purposes of the rules of The Nasdaq Stock Market LLC, of the issuance of all of the shares underlying the

Pre-Funded Warrants, and to hold additional meetings quarterly thereafter to the extent such approval is not obtained, (ii) granted the

Investors a 100% participation right in future offerings of equity securities of the Company or its majority-owned subsidiaries, subject

to existing participation rights of the Company’s debt holder, and (iii) agreed not to incur, and not to permit its majority-owned

subsidiaries to incur, any indebtedness until August 18, 2026, subject to certain exceptions.

In accordance with the Subscription Agreement,

the Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investors, pursuant

to which the Company agreed to file a registration statement covering the resale of the shares of the Company’s common stock issued

in the Offering, including the shares underlying the Pre-Funded Warrants.

On February 21, 2025, the Company and Veris, pursuant to subscription agreements,

dated as of February 18, 2025 (each, a “Subscription Agreement”) they entered into with certain accredited investors (collectively,

the “Investors”), consummated an offering (the “Offering”) of 2,574,350 shares of the Company’s common stock

and pre-funded warrants to purchase 756,734 shares of the Company’s common stock (the “Pre-Funded Warrants”), at a purchase

price of $0.7115 per share or warrant share (as applicable).

In addition, Veris issued to each Investor approximately 0.2033 shares of

Veris’ common stock for each share or warrant share (as applicable) purchased by such Investor, for an aggregate of 677,143 shares

of Veris’ common stock.

The Offering generated gross proceeds to the Company of $2.37 million.

The Pre-Funded Warrants were classified

(through their date of exercise, on June 19, 2025) as equity as they were indexed to the Company’s own stock and met the criteria

for equity classification.

The proceeds received were recorded in additional paid-in capital with no subsequent remeasurement.

Each Subscription Agreement contains customary representations, warranties, covenants and indemnities of the Company and the

Investors, as well as a covenant by the Company to provide the Investors with protection against subsequent equity raises by the

Company or Veris at a lower purchase price (solely to the extent the Investors continue to hold the shares issued in the Offering),

with such protection to be effected through the issuance of additional shares of Veris’ common stock.

In addition, the Company

(i) granted the Investors a 100% participation right in future offerings of equity securities of the Company or its majority-owned

subsidiaries, subject to existing participation rights of the Company’s debt holder, and (ii) agreed not to incur, and not to

permit its majority-owned subsidiaries to incur, any indebtedness until August 18, 2026, subject to certain exceptions.

accordance with the Subscription Agreement, the Company also entered into a registration rights agreement (the “Registration

Rights Agreement”) with the Investors, pursuant to which the Company agreed to file a registration statement covering the

resale of the shares of the Company’s common stock issued in the Offering, including the shares underlying the Pre-Funded

This registration statement was filed and became effective as of April 15, 2025.

On June 18, 2025, the

Pre-Funded Warrants became exercisable upon the receipt of the stockholder approval described above, and were exercised

as of June 19, 2025.

Financing (June 2025)

40 unchanged sentences

In accordance with U.S.

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 estimates are as disclosed in the Company’s Annual Report on Form

10-K for the year ended December 31, 2024 as filed with the SEC on March 24, 2025.

There have been no material changes to our critical

accounting estimates in the three months ended June 30, 2025.

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 estimates are as disclosed in the Company’s Annual Report on Form 10-K for the

year ended December 31, 2024 as filed with the SEC on March 24, 2025.

There have been no material changes to our critical accounting

estimates in the three months ended September 30, 2025.

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