What changed in this filing

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Item 9A. Controls and Procedures

2025-03-24 compared with 2024-03-25 · 1437 added, 1090 removed, 689 unchanged (79% of the section changed)

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to Internal Controls Over Financial Reporting

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

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

Act) that occurred during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect,

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Other Information

Material Modification to Rights of Security Holders

On December 4, 2023, the Company

announced the extension of the Company’s Series Z Warrants, by 12 months, to April 30, 2025.

Such extension became effective as

of December 31, 2023.

Rule 10b5-1 Trading Plans

During the fiscal quarter ended

December 31, 2023, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted or terminated a “Rule

10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as those terms are defined in Item 408 of Regulation

the fiscal quarter ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted

or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as those terms are

defined in Item 408 of Regulation S-K).

In March 2025, the Company and the lead investor in the February 2025 financing completed by the Company

and Veris entered into an agreement, pursuant to which the lead investor agreed that it would, with respect to the election of the Company’s directors, vote its shares of the Company’s common stock (including those exercisable in respect of their pre-funded warrants) in

accordance with the recommendations of the Company’s board of directors.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Incorporation

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

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

and ResearchDx, Inc.

of Incorporation

of Amendment to Certificate of Incorporation

of Amendment to Certificate of Incorporation, dated October 1, 2018

of Amendment to Certificate of Incorporation, dated June 26, 2019

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

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

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

and Restated Bylaws

Certificate of Incorporation

Certificate of Amendment to Certificate of Incorporation

Certificate of Amendment to Certificate of Incorporation, dated October 1, 2018

Certificate of Amendment to Certificate of Incorporation, dated June 26, 2019

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

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

Certificate of Amendment to Certificate of Incorporation, dated January 15, 2025

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

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

Amended and Restated Bylaws

Description of Registrant’s Securities

Common Stock Certificate

Series Z Warrant Certificate

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

and Continental Stock Transfer &

Trust Company, as Warrant Agent

of PAVmed Inc.

Senior Secured Convertible Note

Form of Lucid Diagnostics Senior Secured Convertible Note

Option Agreement

of Letter Agreement with HCFP Capital Partners III LLC

of Letter Agreement with Pavilion Venture Partners LLC

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

agreement regarding corporate opportunities executed by Michael Glennon

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

and Restated Employment Agreement between PAVmed Inc.

Specimen Common Stock Certificate

Specimen Series Z Warrant Certificate

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

and Continental Stock Transfer & Trust Company, as Warrant Agent

Form of PAVmed Senior Secured Convertible Note

Form of Lucid Diagnostics 2024 Convertible Note

Patent Option Agreement

Form of Letter Agreement with HCFP Capital Partners III LLC

Form of Letter Agreement with Pavilion Venture Partners LLC

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

Letter agreement regarding corporate opportunities executed by Michael Glennon

Amended and Restated Employment Agreement between PAVmed Inc.

and Lishan Aklog, M.D.

and Restated Employment Agreement between PAVmed Inc.

Amended and Restated Employment Agreement between PAVmed Inc.

and Dennis M.

Agreement between PAVmed Inc.

deGuzman, M.D.

Fifth Amended and Restated 2014 Long-Term Incentive Equity Plan

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and Michael A.

Agreement between PAVmed Inc.

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

Employment Agreement between PAVmed Inc.

Incorporation by Reference

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

First Amendment to Amended and Restated License Agreement, dated as of February 15, 2024, by and between Case Western

Reserve University and Lucid Diagnostics Inc.

Second Amendment to Amended and Restated License Agreement, dated as of November 7, 2024, by and between Case Western

Reserve University and Lucid Diagnostics Inc.

Form of Stock Option Agreement

Form of Indemnification Agreement

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

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

and PAVmed Inc.

of Securities Purchase Agreement

of Security Agreement

of Voting Agreement

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

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

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

of Securities Purchase Agreement (Senior Secured Convertible Note)

of Security Agreement (Senior Secured Convertible Note)

Form of Exchange Agreement (Series C Exchange)

Form of Securities Purchase Agreement (Series C Exchange)

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

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

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

and Lucid Diagnostics Inc.

Form of Securities Purchase Agreement (LUCD)

Form of Guaranty (LUCD)

Form of Registration Rights Agreement (LUCD)

Form of Securities Purchase Agreement (Lucid 2024 Convertible Notes)

Form of Registration Rights Agreement (Lucid 2024 Convertible Notes)

Form of Guaranty (Lucid 2024 Convertible Notes)

Form of Security Agreement (Lucid 2024 Convertible Notes)

Management Services Agreement, dated as of May 12, 2018, by and between PAVmed Inc.

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and Lucid Diagnostics Inc.

Ninth Amendment to Management Services Agreement, dated as of August 6, 2024, by and between PAVmed Inc.

and Lucid Diagnostics Inc.

Form of Code of Ethics

Insider Trading Policy

List of Subsidiaries

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Taxonomy Extension Presentation Linkbase

contract or compensatory plan or arrangement.

Diagnostics Inc.

Filed herewith

Management contract or compensatory plan or arrangement.

Certain confidential portions of this exhibit were omitted by means of marking such portions with asterisks because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.

Certain exhibits and schedules have been omitted pursuant to Item 601(b)(10) of Regulation S-K.

The registrant hereby

undertakes to furnish a copy of any omitted exhibit or schedule upon request by the Securities and Exchange Commission.

Lucid Diagnostics Inc.

Form 10-K Summary

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Timothy Baxter

Sundeep Agrawal

TO CONSOLIDATED FINANCIAL STATEMENTS

Financial Statements

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

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

Consolidated Balance Sheets as of December 31, 2024 and 2023

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31, 2024 and 2023, the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows

for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the

“financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of

the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United

States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As more fully described in Note 2, the Company has a significant

working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its

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

Management’s plans in

regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period

ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Paragraph – Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully

described in Note 2, the Company has a significant working capital deficiency, has incurred significant operating losses and needs

to raise additional funds to meet its obligations and sustain its operations.

These conditions raise substantial doubt about the

Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described in

The financial statements do not include any adjustments that might result from the outcome of this

financial statements are the responsibility of the Company’s management.

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provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was

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

(1) relates to accounts or disclosures that are

material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we

are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the

accounts or disclosures to which it relates.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

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

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

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

The communication of critical audit matters

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

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

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Audit Matter Description

As described in Notes 12 and 13 to the

consolidated financial statements, the Company’s aggregate principal balance of the Senior Secured Convertible Notes amounted

to $37.68 million as of December 31, 2023.

The Senior Secured Convertible Notes contain conversion and redemption features.

Company elected to account for the Senior Secured Convertible Notes under the fair value option in accordance with ASC 825.

value of the Senior Secured Convertible Notes was $44.2 million as of December 31, 2023.

We identified the valuation of convertible notes as

a critical audit matter as auditing the Company’s fair value of the Senior Secured Convertible Notes was complex and involved a high degree

of subjectivity because the Company used a complex valuation methodology that incorporated significant management assumptions including

discount rate and expected volatility.

Also, this matter caused us to use increased effort including involvement of professionals with

specialized skill and knowledge.

described in Notes 12 and 13 to the consolidated financial statements, the Company’s aggregate principal balance of the Senior

Secured Convertible Notes amounted to $25.2 million as of December 31, 2024.

The Senior Secured Convertible Notes contain conversion

and redemption features.

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

with ASC 825.

The fair value of the Senior Secured Convertible Notes was $29.1 million as of December 31, 2024.

The Senior Secured Convertible Note of the Company’s subsidiary, Lucid

Diagnostics Inc., was $10.3 million as of September 10, 2024, the date of deconsolidation.

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

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

incorporated significant management assumptions including discount rate, expected volatility, installment payment conversion price, and probability weighting of the company optional redemption

and hold to maturity scenarios.

Also, this matter caused us to use increased

effort including involvement of professionals with specialized skill and knowledge.

the Critical Audit Matter Was Addressed in the Audit

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

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

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

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

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

obtained an understanding of the design of the Company’s controls over the valuation

of the convertible notes, including controls over management’s review of the valuation

model and the significant assumptions used in determining the fair value of the convertible

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

Convertible Notes, valuation methodology and key assumptions used in determining the fair

value of the Senior Secured Convertible Notes by:

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

whether significant valuation assumption inputs, including discount rate and expected volatility are consistent with those that

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

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

Recalculating

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

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

whether significant valuation assumption inputs, including discount rate and expected volatility

are consistent with those that would be used by market participants through the testing of

source information, checking the mathematical accuracy of the calculation, and developing

independent estimates for certain inputs and comparing to those selected by management, where applicable;

assessing the reasonableness of the installment payment conversion price and probability weighting of the company

optional redemption and hold to maturity scenarios by assessing the historical practice and reviewing subsequent events;

Recalculating fair value of the convertible notes for reasonableness.

tested the completeness and accuracy of the underlying data supporting the significant assumptions

and estimates.

have served as the Company’s auditor since 2019.

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thousands except number of shares and per share data)

expenses, deposits, and other current assets

December 31, 2024

December 31, 2023

Current assets:

lease right-of-use assets

Preferred Stock and Stockholders’ Equity

expenses and other current liabilities

lease liabilities, current portion

Secured Convertible Notes - at fair value

Accounts receivable

Prepaid expenses, deposits, and other current assets

Total current assets

Fixed assets, net

Operating lease right-of-use assets

Intangible assets, net

Equity method investment - at fair value

Liabilities, Preferred Stock and Stockholders’ Equity

Current liabilities:

lease liabilities, less current portion

and contingencies (Note 11)

Stockholders’

stock, $ 0.001 par value.

Authorized, 20,000,000 shares;

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

1,305,213 at December 31, 2023 and 1,205,759 shares at December 31, 2022

stock, $ 0.001 par value.

Accounts payable

Accrued expenses and other current liabilities

Operating lease liabilities, current portion

Senior Secured Convertible Notes - at fair value

Total current liabilities

Operating lease liabilities, less current portion

Total liabilities

Commitments and contingencies (Note 11)

Stockholders’ Equity:

Preferred stock, $ 0.001 par value.

Authorized, 20,000,000 shares;

8,578,505 and 6,300,703 shares outstanding as of December 31, 2023 and December

31, 2022, respectively

paid-in capital

Stockholders’ Equity (Deficit)

Noncontrolling

Series B Convertible Preferred Stock, par value $ 0.001 , issued and outstanding 1,412,865 at December 31, 2024 and 1,305,213 shares at December 31, 2023

Common stock, $ 0.001

Authorized, 250,000,000

shares (Note 16);

and 8,578,505

shares outstanding as of December 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

Accumulated deficit

Total PAVmed Inc.

Stockholders’ Equity (Deficit)

Liabilities and Stockholders’ Equity (Deficit)

Noncontrolling interests

Total Stockholders’ Equity (Deficit)

Total Liabilities and Stockholders’ Equity (Deficit)

accompanying notes to the consolidated financial statements.

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thousands except number of shares and per share data)

Ended December 31,

and marketing

and administrative

of acquired intangible assets

and development

Operating expenses:

income (expense):

in fair value - Senior Secured Convertible Notes

on issue and offering costs - Senior Secured Convertible Note

extinguishments loss - Senior Secured Convertible Notes

in fair value - derivative liability

on sale of intellectual property

income (expense), net

before provision for income tax

for income taxes

loss before noncontrolling interests

loss attributable to the noncontrolling interests

loss attributable to PAVmed Inc.

Cost of revenue

Sales and marketing

General and administrative

Amortization of acquired intangible assets

Research and development

Total operating expenses

Operating loss

Other income (expense):

Interest income

Interest expense

Gain on deconsolidation of subsidiary

Change in fair value - equity method investment

Change in fair value - Senior Secured Convertible Notes

Loss on issue and offering costs - Senior Secured Convertible Note

Debt extinguishments loss - Senior Secured Convertible Notes

Debt modification expense

Change in fair value - derivative liability

Management fee income

Gain on sale of intellectual property

Other income (expense), net

Income (loss) before provision for income tax

Provision for income taxes

Net income (loss) before noncontrolling interests

Net loss attributable to the noncontrolling interests

Net income (loss) attributable to PAVmed Inc.

Deemed dividend on Series Z warrant modification

Series B Convertible Preferred Stock dividends earned

loss attributable to PAVmed Inc.

Deemed dividend on Subsidiary Preferred Stock attributable to the noncontrolling interests

Net income (loss) attributable to PAVmed Inc.

common stockholders

share information (1) :

loss per share attributable to PAVmed Inc.

common stockholders – basic and diluted

average common shares outstanding, basic and diluted

the Company’s 1-for-15 reverse stock split that became effective December 7, 2023.

Refer to Note 3 - Summary of Significant Accounting

Policies for further information.

Per share information:

Net income (loss) per share attributable to PAVmed Inc.

common stockholders – basic

Net income (loss) per share attributable to PAVmed Inc.

common stockholders – diluted

Weighted average common shares outstanding, basic

Weighted average common shares outstanding, diluted

accompanying notes to the consolidated financial statements.

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Stockholders’ Equity (Deficit)

B Convertible Preferred Stock

Preferred Stock

- December 31, 2023

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- Senior Secured Convertible Note

- majority-owned subsidiary common stock - Senior Secured Convertible Note

- subsidiary common stock - Senior Secured Convertible Note

- stock options of subsidiary

- Employee Stock Purchase Plan

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

- majority-owned subsidiary common stock - At-The-Market Facility, net of financing charges

- subsidiary common stock - Employee Stock Purchase Plan

of subsidiary equity transactions

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

- vendor service agreement

- majority-owned subsidiary preferred stock

of shares related to reverse stock split

value from Z Warrant modification

- subsidiary preferred stock (Series A-1)

- subsidiary preferred stock (Series A and Series A-1)

through exchange - subsidiary preferred stock (Series B and Series B-1)

through sale - subsidiary preferred stock (Series B and Series B-1)

deemed dividends on preferred stock attributable to noncontrolling interests

compensation - PAVmed Inc.

compensation - majority-owned subsidiaries

compensation - subsidiaries

of intellectual property to Lucid Diagnostics Inc

Deconsolidation

of subsidiary

income (loss)

- December 31, 2024

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Stockholders’ Equity (Deficit)

B Convertible Preferred Stock

Preferred Stock

- December 31, 2022

$ ( 228,169 )

Beginning balance

$ ( 228,169 )

declared - Series B Convertible Preferred Stock

- Series B Convertible Preferred Stock

common stock - PAVM ATM Facility

- restricted stock awards

- Series Z warrants

- Senior Secured Convertible Note

- stock options

- stock options of majority-owned subsidiary

- subsidiary common stock - Senior Secured Convertible Note

- Employee Stock Purchase Plan

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

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

- subsidiary common stock - Employee Stock Purchase Plan

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

of subsidiary equity transactions

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

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

- vendor service agreement

- subsidiary preferred stock (Series A)

of shares related to reverse stock split

value from Z Warrant modification

compensation - PAVmed Inc.

compensation - majority-owned subsidiaries

compensation - subsidiaries

income (loss)

- December 31, 2023

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thousands, except number of shares and per share data)

Ended December 31,

flows from operating activities

loss - before noncontrolling interest (“NCI”)

$ ( 103,238 )

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

and amortization expense

on sale of intellectual property

Issue common stock of majority-owned subsidiary - termination payment

common stock - vendor service agreement

Change in fair value - Senior Secured

Convertible Notes

on issue - Senior Secured Convertible Note

extinguishment loss - Senior Secured Convertible Note

lease expense

in operating assets and liabilities:

expenses, deposits and current and other assets

expenses and other current liabilities

cash flows used in operating activities

flows from investing activities

from sale of intellectual property

cash flows provided by (used in) investing activities

flows from financing activities

– issue of preferred stock - majority-owned subsidiary

– issue of Senior Secured Convertible Note

– Senior Secured Convertible Note – acceleration floor payments

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

– majority-owned subsidiary common stock - Committed Equity Facility and At-The-Market Facility

– exercise of stock options

– issue common stock – Employee Stock Purchase Plan

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

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

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

cash flows provided by financing activities

increase (decrease) in cash

beginning of period

end of period

Years Ended December 31,

Cash flows from operating activities

Net income (loss) - before noncontrolling interest (“NCI”)

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

Depreciation and amortization expense

Stock-based compensation

Gain on sale of intellectual property

Gain on deconsolidation of subsidiary

Change in fair value - equity method investment

Issue common stock of subsidiary - termination payment

Amortization of common stock payment for vendor service agreement

Change in fair value - Senior Secured Convertible Notes

Loss on issue - Senior Secured Convertible Note

Debt extinguishment loss - Senior Secured Convertible Note

Non-cash lease expense

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses, deposits and current and other assets

Accounts payable

Accrued expenses and other current liabilities

Net cash flows used in operating activities

Cash flows from investing activities

Purchase of equipment

Decrease in cash due to deconsolidation of subsidiary

Proceeds from sale of intellectual property to Lucid Diagnostics Inc.

Proceeds from sale of intellectual property

Net cash flows provided by (used in) investing activities

Cash flows from financing activities

Proceeds – issue of preferred stock - subsidiary

Proceeds – issue of Senior Secured Convertible Note

Payment – Senior Secured Convertible Note – acceleration floor payments

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

Proceeds – subsidiary common stock - Committed Equity Facility and At-The-Market Facility

Proceeds – issue common stock – Employee Stock Purchase Plan

Proceeds – subsidiary common stock – Employee Stock Purchase Plan

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

Net cash flows provided by financing activities

Net increase (decrease) in cash

Cash, beginning of period

Cash, end of period

accompanying notes to the consolidated financial statements.

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of the Business

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

by a team of highly skilled personnel with a track record of bringing innovative products to market, PAVmed is focused on innovating,

developing, acquiring, and commercializing novel products that target unmet needs with large addressable market opportunities.

our corporate structure—a parent company that will establish distinct subsidiaries for each financed asset—we have the flexibility

to raise capital at the PAVmed level to fund product development, or to structure financing directly into each subsidiary in a manner

tailored to the applicable product, the latter of which is our current strategy given prevailing market conditions.

(“PAVmed” or the “Company”) is structured to be a multi-product life sciences company organized to

advance a pipeline of innovative healthcare technologies.

Led by a team of highly skilled personnel with a track record of bringing

innovative products to market, PAVmed is focused on innovating, developing, acquiring, and commercializing novel products that

target unmet medical needs with large addressable market opportunities.

Leveraging our corporate structure—a parent company

that will establish distinct subsidiaries for each financed asset—we have the flexibility to raise capital at the PAVmed level

to fund product development, or to structure financing directly into each subsidiary in a manner tailored to the applicable product,

the latter of which is our current strategy given prevailing market conditions.

current focus is multi-fold.

We continue to pursue commercial expansion and execution of EsoGuard, which is the flagship product of our

majority-owned subsidiary Lucid Diagnostics Inc.

LUCD) (“Lucid”).

In addition, through a separate majority-owned

subsidiary, Veris Health (“Veris”), we are focused on entering into strategic partnership opportunities with leading academic

oncology systems to expand access to the Veris Platform.

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

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

We continue to support the commercial expansion and execution of EsoGuard, which is the flagship

product of our subsidiary Lucid Diagnostics Inc.

LUCD) (“Lucid” or “Lucid Diagnostics”), of which

we remain the shareholder with the largest voting interest.

In addition, through a separate majority-owned subsidiary, Veris Health

(“Veris” or “Veris Health”), we are focused in the immediate term on entering into strategic partnership

opportunities with leading academic oncology systems to expand access to the Veris Cancer Care Platform, while concurrently

developing an implantable physiological monitor, designed to be implanted alongside a chemotherapy port, which will interface with

the Veris Cancer Care Platform.

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

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.

Finally, as resources permit, we will continue to explore external innovations that fulfill

our project selection criteria without limiting ourselves to any target sector, specialty or condition.

Note 2 — Liquidity and Going Concern

The Company’s management is

required to assess the Company’s ability to continue as a going concern for the one year period following the date of the financial

statements being issued.

In each reporting period, including interim periods, an entity is required to assess conditions known and reasonably

knowable as of the financial statement issuance date to determine whether it is probable an entity will not meet its financial obligations

within one year from the financial statement issuance date.

Substantial doubt about an entity’s ability to continue as a going concern

exists when conditions and events, considered in the aggregate, indicate it is probable the entity will be unable to meet its financial

obligations as they become due within one year after the date the financial statements are issued.

The Company has financed its operations

principally through public and private issuances of its common stock, preferred stock, common stock purchase warrants, and debt.

is subject to all of the risks and uncertainties typically faced by medical device and diagnostic companies that devote substantially

all of their efforts to the commercialization of their initial product and services and ongoing research and development activities and

conducting clinical trials.

The Company generated $ 2.5 million of revenues for the year ended December 31, 2023, however the Company

does not expect to generate positive cash flows from operating activities in the near future.

The Company incurred a net loss

attributable to PAVmed Inc.

common stockholders of approximately $ 66.3 million and had net cash flows used in operating activities of

approximately $ 52.0 million for the year ended December 31, 2023.

As of December 31, 2023, the Company had negative working

capital of approximately $ 29.7 million, with such working capital inclusive of the Senior Secured Convertible Notes classified as a current

liability of an aggregate of approximately $ 44.2 million and approximately $ 19.6 million of cash.

The Company’s ability

to continue operations beyond March 2025, will depend upon generating substantial revenue that is conditioned upon obtaining positive

third-party reimbursement coverage for its EsoGuard Esophageal DNA Test from both government and private health insurance providers, increasing

revenue through contracting directly with self-insured employers, and on its ability to raise additional capital through various potential

sources including equity and/or debt financings or refinancing 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 consolidated financial statements

Finally, as resources permit, we will continue to explore external innovations that

fulfill our project selection criteria without limiting ourselves to any target sector, specialty or condition.

2 — Liquidity and Going Concern

Company’s management is required to assess the Company’s ability to continue as a going concern for the one year period following

the date of the financial statements being issued.

In each reporting period, including interim periods, an entity is required to assess

conditions known and reasonably knowable as of the financial statement issuance date to determine whether it is probable an entity will

not meet its financial obligations within one year from the financial statement issuance date.

Substantial doubt about an entity’s

ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate it is probable the entity

will be unable to meet its financial obligations as they become due within one year after the date the financial statements are issued.

Company has financed its operations principally through public and private issuances of its common stock, preferred stock, common stock

purchase warrants, and debt.

The Company is subject to all of the risks and uncertainties typically faced by medical device and diagnostic

companies that devote substantially all of their efforts to the commercialization of their initial product and services and ongoing research

and development activities and conducting clinical trials.

The Company generated $ 3.0 million of revenue for the year ended December

31, 2024, however the Company expects to continue to experience recurring losses and to generate negative cash flows from operating activities

in the near future.

Company incurred a net income attributable to PAVmed Inc.

common stockholders of approximately $ 32.0 million and had net cash flows used

in operating activities of approximately $ 33.6 million for the year ended December 31, 2024.

As of December 31, 2024, the Company had

negative working capital of approximately $ 33.3 million, with such working capital inclusive of the Senior Secured Convertible Notes

classified as a current liability of an aggregate of approximately $ 29.1 million and approximately $ 1.2 million of cash.

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 consolidated financial statements are issued.

3 — Summary of Significant Accounting Policies

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intercompany transactions and balances have been eliminated in consolidation.

The Company holds a majority-ownership interest and has

controlling financial interest in each of:

Lucid Diagnostics Inc.

and Veris Health Inc., with the corresponding noncontrolling interest

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

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

of each majority-owned subsidiary.

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

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

The Company has a controlling financial interest in Veris

Health Inc., with the corresponding noncontrolling interest included as a separate component of consolidated stockholders’ equity

(deficit), including the recognition in the consolidated statement of operations of a net loss attributable to the noncontrolling interest

based on the respective minority-interest equity ownership of each subsidiary.

As of September 10, 2024, PAVmed ceased to have a controlling

financial interest in Lucid Diagnostics and therefore PAVmed’s consolidated results of operations include Lucid Diagnostics’

results of operations only through that date.

The deconsolidation of Lucid Diagnostics has resulted in a gain recognized in PAVmed’s

statement of operations for the period ended December 31, 2024.

From September 10, 2024, PAVmed has elected the fair value option to

account for its equity method investment in Lucid Diagnostics.

See below and Note 4, Equity Method Investment for a discussion

on the impact of the deconsolidation of Lucid Diagnostics.

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

subsidiaries noted above.

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

and making operating decisions.

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

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

Note 3 — Summary of Significant Accounting

Policies - continued

February 2023, the Company distributed a proxy statement for a special meeting of shareholders that was held on March 31, 2023 (the “Special

Meeting”), at which the Company sought approval of an amendment to the Company’s Certificate of Incorporation, to effect,

(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.

On March 31, 2023, the shareholders

approved the above proposal to amend the Company’s Certificate of Incorporation, to effect, at any time prior to the one-year anniversary

date of the Special Meeting.

On November 28, 2023 the Company’s board of directors, unanimously authorized management to effect

the reverse split at the ratio of 1-for-15.

February 2023, the Company distributed a proxy statement for a special meeting of shareholders that was held on March 31, 2023 (the

“Special Meeting”), at which the Company sought approval of an amendment to the Company’s Certificate of

Incorporation, to effect, (i) a reverse split of the Company’s outstanding shares of common stock at a specific ratio, ranging

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

On March 31, 2023, the shareholders approved the above proposal to amend the Company’s Certificate of Incorporation,

to effect, at any time prior to the one-year anniversary date of the Special Meeting.

On November 28, 2023 the Company’s board

of directors, unanimously authorized management to effect the reverse split at the ratio of 1-for-15 .

The reverse stock split became effective on December 7, 2023.

At the effective date, every

15 shares of the Company’s common stock that were issued and outstanding were automatically combined into one issued and outstanding

share, without any change in par value of such shares.

At the effective date, every 15 shares of the Company’s common stock that were issued and outstanding were automatically combined into one issued and outstanding share, without any change in par value of such shares .

No fractional shares were issued in connection with the reverse stock split.

each fractional share remaining after completion of the reverse stock split that was less than a whole share was rounded up to one whole

The reverse stock split also correspondingly affected all outstanding PAVmed equity awards and outstanding convertible securities.

Instead, each fractional share remaining after completion of the reverse stock split that was less than a whole share

was rounded up to one whole share.

The reverse stock split also correspondingly affected all outstanding PAVmed equity awards and

outstanding convertible securities.

authorized, issued and outstanding stock and per share amounts contained in the accompanying consolidated financial statements have been

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GAAP, management is required to make estimates and assumptions

that affect the reported amounts of assets, inclusive of acquired intangible assets and the determination of corresponding carrying value

reserve, if any, and liabilities and the disclosure of contingent losses, as of the date of the consolidated financial statements, as

well as the reported amounts of revenue and expenses during the reporting period.

Significant estimates in these consolidated financial

statements include those related to the estimated fair value of stock-based equity awards, intangible assets, estimated fair value of debt obligations, and common stock purchase warrants.

Other significant estimates include the estimated incremental borrowing

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

Additionally, management’s

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

inflows and outflows.

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

The Company bases its estimates on historical

experience and on various other assumptions believed to be reasonable.

Due to inherent uncertainty involved in making estimates, actual

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

that affect the reported amounts of assets and the determination of corresponding carrying value reserve, if any, and liabilities and

the disclosure of contingent losses, as of the date of the consolidated financial statements, as well as the reported amounts of revenue

and expenses during the reporting period.

Significant estimates in these consolidated financial statements include those related to the

estimated fair value of debt obligations, stock-based equity awards, intangible assets, and common stock purchase warrants.

Other significant

estimates include the estimated incremental borrowing rate, the provision or benefit for income taxes and the corresponding valuation

allowance on deferred tax assets.

Additionally, management’s assessment of the Company’s ability to continue as a going concern

involves the estimation of the amount and timing of future cash inflows and outflows.

On an ongoing basis, the Company evaluates its

estimates and assumptions.

The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable.

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

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

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which exceed federally insured limits.

in the Company’s cash as of December 31, 2024 and December 31, 2023 is $ 299 related to a restricted deposit account for a standby

letter of credit associated with our corporate headquarters which has a lease maturity date in 2030.

3 — Summary of Significant Accounting Policies - continued

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to collect in exchange for those services.

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

its EsoGuard Esophageal DNA tests.

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

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

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

legal entity.

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

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

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

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

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

key aspects considered by the Company include the following:

The Company’s revenue through the date of Lucid’s deconsolidation from

PAVmed’s results of operations as of September 10, 2024, was primarily generated by Lucid’s

laboratory testing services utilizing its EsoGuard Esophageal DNA tests.

(As a result of the deconsolidation, however, such revenue will

no longer be included in the Company’s consolidated revenue.) The services are completed upon release of a patient’s test

result to the ordering healthcare provider.

Revenue recognized is inclusive of both variable consideration in connection with an individual

patient’s third-party insurance coverage policy and fixed consideration in connection with a contracted services arrangement with

an unrelated third party legal entity.

To determine revenue recognition for the arrangements that the Company determines are within the

scope of ASC 606, Revenue from Contracts with Customers , the Company performs the following five steps:

(1) identify the contract(s)

with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction

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

key aspects considered by the Company in determining recognized revenue during the period covered by the financial statements herein

(during which revenue generated by Lucid during the pre-deconsolidation period that met this criteria is included in our results of operations)

include the following:

Contracts —The

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PAVmed 2014 Equity Plan and the Lucid Diagnostics 2018 Equity Plan.

The Company accounts for stock-based compensation in accordance

with the provisions of FASB ASC Topic 718, Stock Compensation (“ASC 718”).

The grant date estimated fair value

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

of the respective stock-based award, with such straight-line recognition adjusted, as applicable, so the cumulative expense recognized

is at least equal to or greater than the estimated fair value of the vested portion of the respective stock-based award as of the reporting

The Company uses the Black-Scholes

valuation model to estimate the fair value of stock options granted under both the PAVmed 2014 Equity Plan and the Lucid Diagnostics 2018

Equity Plan, which requires the Company to make certain weighted average valuation estimates and assumptions for stock-based awards, principally

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

of PAVmed Inc.

common stock over the period commensurate with the expected term with respect to stock options granted to the board

of directors and employees in the years ended December 31, 2023 and 2022;

respect to stock options granted under the Lucid Diagnostics 2018 Equity Plan, the expected stock price volatility is based on

the historical stock price volatility of Lucid Diagnostics common stock and the volatilities of similar entities within the medical

device industry over the period commensurate with the expected term with respect to stock options granted to employees in the years

ended December 31, 2023 and 2022;

The Company accounts for stock-based compensation in accordance with

the provisions of FASB ASC Topic 718, Stock Compensation (“ASC 718”).

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

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

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

stock-based award as of the reporting date.

Company uses the Black-Scholes valuation model to estimate the fair value of stock options granted under both the PAVmed 2014 Equity

Plan and the Lucid Diagnostics 2018 Equity Plan, which requires the Company to make certain weighted average valuation estimates and

assumptions for stock-based awards, principally as follows:

respect to the PAVmed 2014 Equity Plan, the expected stock price volatility is based on the

historical stock price volatility of PAVmed Inc.

common stock over the period commensurate

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

employees in the years ended December 31, 2024 and 2023;

respect to stock options granted under the Lucid Diagnostics 2018 Equity Plan, the expected

stock price volatility is based on the historical stock price volatility of Lucid Diagnostics

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

over the period commensurate with the expected term with respect to stock options granted

to employees in the years ended December 31, 2024 and 2023;

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

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

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

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

pay dividends for the foreseeable future.

Treasury securities

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

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

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

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

price per share of PAVmed Inc.

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granted under the PAVmed 2014 Equity Plan is its quoted closing price per share.

price per share of Lucid Diagnostics common stock used in the computation of estimated fair value of stock options and restricted

stock awards granted under the Lucid Diagnostics 2018 Equity Plan is its quoted closing price per share.

price per share of Lucid Diagnostics common stock used in the computation of estimated fair value of stock options and restricted stock

awards granted under the Lucid Diagnostics 2018 Equity Plan is its quoted closing price per share.

Instruments Fair Value Measurements

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

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

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

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

or can be corroborated by observable market data.

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

by other market participants.

These valuations require significant judgment.

Valuations based on quoted prices for identical assets and

liabilities in active markets.

Valuations based on observable inputs other than quoted prices

included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar

assets and liabilities in markets which are not active, or other inputs observable or can be corroborated by observable market data.

Valuations based on unobservable inputs reflecting the Company’s

own assumptions, consistent with reasonably available assumptions made by other market participants.

These valuations require significant

3 — Summary of Significant Accounting Policies - continued

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

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

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

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

required or potential full or partial cash settlement.

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

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

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

If upon the occurrence

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

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

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

at such date-of-occurrence fair value.

qualify as derivatives required to be separately accounted for in accordance with FASB ASC Topic 815, D erivatives and Hedging

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

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

agreement provides required or potential full or partial cash settlement.

A warrant classified as a derivative liability, or a bifurcated

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

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

If upon the occurrence of an event resulting in the warrant liability or the embedded derivative liability being subsequently

classified as equity, or the exercise of the warrant or the conversion option, the fair value of the derivative liability will be adjusted

on such date-of-occurrence, with such date-of-occurrence fair value adjustment recognized as other income or expense, and then the derivative

liability will be derecognized at such date-of-occurrence fair value.

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

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materially affect the estimated fair values.

of December 31, 2023 and 2022, the carrying values of cash, and accounts payable, approximate their respective fair value

due to the short-term nature of these financial instruments.

of December 31, 2024 and 2023, the carrying values of cash, and accounts payable, approximate their respective fair value due to the

short-term nature of these financial instruments.

Method Investments

that are not consolidated, but over which PAVmed exercises significant influence, are accounted for under the equity method of accounting.

The determination as to whether or not PAVmed exercises significant influence with respect to a company depends on an evaluation of several

factors, including, among others, representation on the company’s board of directors and equity ownership level, which is generally

between a 20 % and a 50 % interest in the voting securities of an equity method business, as well as voting rights associated with PAVmed’s

holdings in common stock in that company.

PAVmed has elected the fair value option to account for its equity method investment, Lucid

Diagnostics, beginning on September 10, 2024 through the period ended December 31, 2024.

Value Option (“FVO”) Election

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referred to herein as the “Lucid March 2023 Senior Convertible Note”, which is accounted under the “fair value option

election” as discussed below.

election”, through September 10, 2024, the date of Lucid’s deconsolidation from PAVmed’s results of operations, as

discussed below.

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

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The estimated fair value adjustment of the

April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note and the Lucid March 2023 Senior Convertible Note are presented

in a single line item within other income (expense) in the accompanying consolidated statement of operations (as provided for by ASC

825-10-50-30(b)).

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

in the instrument-specific credit risk, such portion would be recognized as a component of other comprehensive income (“OCI”)

(for which there was no such adjustment with respect to the April 2022 Senior Convertible Note, the September 2022 Senior Convertible

Note or the Lucid March 2023 Senior Convertible Note).

April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note and (through September 10, 2024, Lucid’s deconsolidation

date) the Lucid March 2023 Senior Convertible Note are presented in a single line item within other income (expense) in the accompanying

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

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

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

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

Senior Convertible Note, the September 2022 Senior Convertible Note or (through September 10, 2024, Lucid’s deconsolidation date)

the Lucid March 2023 Senior Convertible Note).

3 — Summary of Significant Accounting Policies - continued

Note 12, Financial Instruments Fair Value Measurements , with respect to the FVO election;

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

and after September 10, 2024, the date of Lucid’s deconsolidation from PAVmed’s results of operation, the Company’s

investment in Lucid is treated as an equity method investment accounted for using the fair value option.

Shares of Lucid Diagnostics

common stock have a readily determinable fair value classified as Level 1, in which the fair value is determined based upon quoted market

prices in an active market.

Instruments - Derivatives

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and then the derivative liability will be derecognized at such date-of-occurrence fair value.

3 — Summary of Significant Accounting Policies - continued

and Development Expenses

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Patent fee reimbursement expense incurred under the patent license agreement agreements are included in the line item

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

captioned “general and administrative” expenses in the accompanying consolidated statements of operations.

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

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Additionally, the Company may be obligated to make future royalty payments in the event the Company commercializes the technology and

achieves a certain sales volume.

achieves a certain sales volume, which is included in cost of revenues in the accompanying consolidated statements of operations.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification

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as a charge to income tax expense as of December 31, 2024 and 2023.

3 — Summary of Significant Accounting Policies - continued

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

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deviations from its position.

3 — Summary of Significant Accounting Policies - continued

Loss Per Share

net loss per share is computed by dividing each of the respective net loss by the number of “basic weighted average common shares

outstanding” and diluted weighted average shares outstanding” for the reporting period indicated.

The basic weighted-average

shares common shares outstanding are computed on a weighted average based on the number of days the shares of common stock of the Company

are issued and outstanding during the respective reporting period indicated.

The diluted weighted average common shares outstanding are

the sum of the basic weighted-average common shares outstanding plus the number of common stock equivalents’ incremental shares

on an if-converted basis, computed using the treasury stock method, computed on a weighted average based on the number of days the incremental

shares would potentially be issued and outstanding during the periods indicated, if dilutive.

The Company’s common stock equivalents

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

per share is computed by dividing each respective net income or net loss by the number of “basic weighted average common

shares outstanding” and “diluted weighted average shares outstanding” for the reporting period indicated.

basic weighted-average shares common shares outstanding are computed on a weighted average based on the number of days the shares of

common stock of the Company are issued and outstanding during the respective reporting period indicated.

The diluted weighted

average common shares outstanding are the sum of the basic weighted-average common shares outstanding plus the number of common

stock equivalents’ incremental shares on an if-converted basis, computed using the treasury stock method, computed on a

weighted average based on the number of days the incremental shares would potentially be issued and outstanding during the periods

indicated, if dilutive.

The Company’s common stock equivalents include convertible preferred stock, convertible debt, common

stock purchase warrants, and stock options and unvested restricted stock awards granted under the PAVmed Inc.

2024 Long-Term Incentive Equity Plan.

Notwithstanding,

as the Company has a net loss for each reporting period presented, only the basic weighted average common shares outstanding are used

to compute the basic and diluted net loss per share attributable to PAVmed Inc.

and the basic and diluted net loss per share attributable

to PAVmed Inc.

common stockholders, for each reporting period presented.

as the Company has a net loss for the reporting period ended December 31, 2023, only the basic weighted average common shares outstanding

are used to compute the basic and diluted net loss per share attributable to PAVmed Inc.

common stockholders, for the reporting period

ended December 31, 2023.

Series B Convertible Preferred Stock dividends earned as of the each of the respective periods are included in the calculation of basic

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be considered participating securities under the two-class method of calculating net loss per share.

However, the Company has incurred

net losses to-date, and as such holders are not contractually obligated to share in the losses, there is no impact on the Company’s

net loss per share calculation for the periods presented.

Reclassifications

Certain prior-year amounts have

been reclassified to conform to the current year presentation, which includes presenting interest income and classification of certain general and administrative expenses and research and development expenses within operating expenses on the statements of operations, in

the consolidated financial statements and accompanying notes to the consolidated financial statements.

The impact of the reclassifications

made to prior year amounts is not material and did not affect net loss.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued Accounting

Standards Update No.

2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

The updated guidance requires companies to measure all expected credit losses for financial instruments held at the reporting date based

on historical experience, current conditions, and reasonable supportable forecasts.

This replaces the existing incurred loss model and

is applicable to the measurement of credit losses on financial assets, including trade receivables.

The guidance was adopted by the Company

on January 1, 2023.

The adoption of the ASU did not have an impact on the Company’s consolidated financial statements.

Recent Accounting Standards Updates Not Yet Adopted

In December 2023, the FASB issued

2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”), which is intended to

enhance the transparency and decision usefulness of income tax disclosures.

The amendments in ASU 2023-09 provide for enhanced income

tax information primarily through changes to the rate reconciliation and income taxes paid information.

ASU 2023-09 is effective for the

Company prospectively to all annual periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating

the impact this update will have on our consolidated financial statements and disclosures.

In November 2023, the

FASB issued ASU No.

Adopted Accounting Pronouncements

November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures (“ASU

2023-07”), which require public companies disclose significant segment expenses and other segment items on an annual and

interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that

are currently required annually.

The guidance is effective for public entities for fiscal years beginning after December 15, 2023,

and interim periods within fiscal years beginning after December 15, 2024.

2023-07”), which require public companies disclose significant segment expenses and other segment items on an annual and interim

basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently

required annually.

The guidance is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods

within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The guidance is applied

retrospectively to all periods presented in the financial statements, unless it is impracticable.

The Company is currently

evaluating the impact this update will have on our consolidated financial statements and disclosures.

In October 2023, the FASB issued

The guidance was adopted by the Company effective

December 31, 2024, on a retrospective basis.

The adoption of the ASU did not change the way that

the Company identifies its reportable segments and, as a result, did not have a material impact on the Company’s segment-related

Refer to Note 20, Segment Information for further information on the Company’s reportable segment.

Accounting Standards Updates Not Yet Adopted

In November 2024, the FASB issued ASU No.

2024-03, Income Statement – Reporting Comprehensive Income –

Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

This update enhances financial statement

disclosures by requiring public business entities to disclose specified information about certain costs and expenses including the amounts

of (a) purchases of inventory, (b) employee compensation, (c) depreciation, and (d) intangible asset amortization included in each relevant

expense caption.

The update also requires disclosure of certain amounts that are already required to be disclosed under current GAAP,

disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively,

and disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The amendments in this update may be applied either prospectively or retrospectively and are effective for annual reporting periods beginning

after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is

currently evaluating the potential impact of this guidance on its consolidated financial statements.

December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”),

which is intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments in ASU 2023-09 provide

for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

is effective for the Company prospectively to all annual periods beginning after December 15, 2024.

Early adoption is permitted.

Company does not expect the standard to have a significant impact on its consolidated financial statements.

October 2023, the FASB issued ASU No.

2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification

This update modifies the disclosure or presentation requirements of a variety of topics in the Accounting Standards Codification

to conform with certain SEC amendments in Release No.

Codification Amendments in Response to the SEC’s Disclosure

Update and Simplification Initiative.

This update modifies the disclosure or presentation requirements of a variety of topics in the

Accounting Standards Codification to conform with certain SEC amendments in Release No.

33-10532, Disclosure Update and Simplification.

The amendments in this update should

be applied prospectively, and the effective date for each amendment will be the date on which the SEC’s removal of that related

disclosure from Regulation S-X or S-K becomes effective.

However, if the SEC has not removed the related disclosure from its regulations

by June 30, 2027, the amendments will be removed from the Codification and not become effective.

The amendments in this update should be applied prospectively, and the effective date for each amendment will be the date on which the

SEC’s removal of that related disclosure from Regulation S-X or S-K becomes effective.

However, if the SEC has not removed the

related disclosure from its regulations by June 30, 2027, the amendments will be removed from the Codification and not become effective.

Early adoption is prohibited.

is currently evaluating the impact this update will have on its consolidated financial statements and disclosures.

The Company is currently evaluating the impact this update will have on its consolidated financial statements

and disclosures.

4 — Equity Method Investment

September 10, 2024, following preferred equity transactions completed by Lucid earlier in 2024 and the termination of voting proxies

entered into between PAVmed and certain shareholders of Lucid, PAVmed’s voting interest in the Company was reduced to less than

50.0 %, resulting in the loss of a controlling financial interest.

However, PAVmed retains the ability to exercise significant influence

As a result, the Company deconsolidated Lucid.

The following table reflects the net assets of Lucid at the time of deconsolidation:

of Deconsolidation of Net Assets

Current assets:

Prepaid expenses, deposits, and other current assets

Total current assets

Fixed assets, net

Operating lease right-of-use assets

Intangible assets, net

Current liabilities:

Accounts payable

Accrued expenses and other current liabilities

Operating lease liabilities, current portion

Senior Secured Convertible Notes - at fair value

Total current liabilities

Operating lease liabilities, less current portion

Total liabilities

Net Assets of Lucid Diagnostics at September 10, 2024

deconsolidation, the Company owned 31,302,444 shares of Lucid Diagnostics common stock, which were valued at $ 25.1 million, resulting

in a gain on deconsolidation of $ 72.3 million in the accompanying consolidated statements of operations for the year ended December 31,

The Company recorded the following:

Gain on Deconsolidation

Investment in former Consolidated Subsidiary (Fair Value of Lucid common stock)

Noncontrolling interest - Lucid

Net Assets of Former Consolidated Subsidiary - Lucid

Gain on Deconsolidation of Lucid

the Company’s deconsolidation of Lucid, the Company accounts for its investment in Lucid as an equity method investment with the

election of the fair value option.

Due to the Company’s continuing involvement and significant influence over operating and financial

policies, Lucid is considered a related party of the Company.

4 — Equity Method Investment - continued

following presents summarized financial information related to Lucid accounted for under the equity method as of December 31, 2024.

aggregate information has been compiled from the financial statements of Lucid.

of Aggregate Information From the Financial Statements

December 31, 2024

Other current assets

Non-current assets

Current liabilities

Non-current liabilities

Shareholders’ deficit

Total liabilities and stockholders’ deficit

December 31, 2024

January 1, 2024 -

September 10, 2024

September 11, 2024 - December 31, 2024

Net income (loss)

was consolidated and included in PAVmed’s consolidated results for the period of January 1, 2024 through September 10, 2024.

amounts from September 11, 2024 through December 31, 2024 were not included in PAVmed’s consolidated results.

September 10, 2024 and December 31, 2024, the fair value of the Company’s investment in Lucid was $ 25.1 million and $ 25.6 million,

respectively, with the company recognizing an unrealized gain on its investment in Lucid of $ 0.5 million in the accompanying consolidated

statements of operations for the year ended December 31, 2024.

The fair value of shares of Lucid’s common stock held by the Company

was determined using the closing price of Lucid’s common stock per share on September 10, 2024 and December 31, 2024 of $ 0.802

and $ 0.819 , respectively.

At September 10, 2024 and December 31, 2024, PAVmed held approximately 40 % of Lucid’s common stock voting

- Management Services Agreement

daily operations are also managed in part by personnel employed by the Company, for which the Company records management fee income,

referred to as the “MSA Fee”, according to the provisions of a Management Services Agreement (“MSA”) with Lucid.

The MSA does not have a termination date, but may be terminated by Lucid.

The MSA Fee is charged on a monthly basis and is subject-to

periodic adjustment corresponding with changes in the services provided by the Company’s personnel to Lucid, with any such change

in the MSA Fee being subject to approval of the boards of directors of each of the Company and Lucid.

The respective companies’

boards of directors approved an amendment to the MSA to increase the MSA Fee to $ 833 per month, effective January 1, 2024.

2024, the respective companies’ boards of directors approved the Company to enter into a ninth amendment to the MSA.

amendment, the monthly fee due to the Company from Lucid was increased from $ 833 to $ 1,050 , effective July 1, 2024.

During the period

following the deconsolidation of Lucid from the Company’s results of operations, i.e., from September 11, 2024 through December

31, 2024, MSA fee income was $ 3,850 .

of Intellectual Property to Lucid

September 27, 2024, the Company entered into an Assignment of Patent Rights with PAVmed, pursuant to which PAVmed assigned certain patent

rights to the Company related to the EsoCheck device.

In consideration of the assignment the Company agreed to pay PAVmed a $ 350 assignment

5 — Revenue from Contracts with Customers

Commercialization Agreement

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

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

(“RDx”), an unrelated third-party.

Commercialization Agreement was on a month-to-month basis, and was terminated on February 25, 2022 upon the execution of an asset purchase

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

(a wholly-owned subsidiary of Lucid Diagnostics) and

RDx, with such agreement further discussed in Note 5 , Asset Purchase Agreement and Management Services Agreement.

the year ended December 31, 2024, the Company recognized total revenue of $ 2,995 , primarily resulting from the delivery of patient EsoGuard

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The Company’s revenue for the year ended December 31, 2023 was $ 2,452 , primarily

resulting from the delivery of patient EsoGuard test results, along with the revenue recognized under the EsoGuard Commercialization

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

date as discussed above.

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

resulting from the delivery of patient EsoGuard test results.

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

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The Company’s cost of revenue for the year ended December 31, 2023 was $ 6,420 , primarily related to costs for

our laboratory operations and EsoCheck device supplies, along with the costs attributable to delivering the services under the EsoGuard

Commercialization Agreement for the period January 1, 2022 thru its termination on February 25, 2022.

5 — Asset Purchase Agreement and Management Services Agreement

Purchase Agreement and Management Services Agreement - ResearchDx Inc.

Labs, a wholly-owned subsidiary of Lucid Diagnostics, entered into an asset purchase agreement (“APA”) dated February 25,

2022, with ResearchDx, Inc.

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

Under the APA-RDx, LucidDx Labs acquired

certain assets from RDx which were combined with LucidDx Labs purchased and leased property and equipment to establish a Company-owned

Commercial Lab Improvements Act (“CLIA”) certified, College of American Pathologists (“CAP”) accredited commercial

clinical laboratory capable of performing the EsoGuard® Esophageal DNA assay, inclusive of DNA extraction, next generation sequencing

(“NGS”) and specimen storage.

Prior to February 25, 2022, RDx provided such laboratory services at its owned CLIA-certified,

CAP-accredited clinical laboratory.

In connection with the execution and delivery of the APA-RDx, LucidDx Labs and RDx entered into a

separate management services agreement (“MSA-RDx”), dated and effective February 25, 2022, pursuant to which RDx provided

certain testing and related services for the Laboratory.

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

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

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

9, Intangible Assets, net.

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

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

pursuant to which the parties mutually agreed to terminate the MSA-RDx without cause.

The termination was effective as February 10, 2023.

Until the termination of the management service agreement with RDx, RDx had continued to provide certain testing and related services

for the Laboratory in accordance with the terms of the MSA-RDx.

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

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

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

our laboratory operations and EsoCheck device supplies.

6 — Prepaid Expenses, Deposits, and Other Current Assets

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of Prepaid Expenses and Other Current Assets

payments to service providers and suppliers

prepaid expenses, deposits and other current assets

December 31, 2024

December 31, 2023

Advanced payments to service providers and suppliers

Prepaid insurance

Veris Box supplies

Total prepaid expenses, deposits and other current assets

7 — Fixed Assets

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of Fixed Assets

and office equipment

under construction

Accumulated Depreciation

Fixed Assets, net

of remaining lease term or estimated useful life.

Estimated Useful Life

December 31, 2024

December 31, 2023

Computer and office equipment

Laboratory equipment

Furniture and fixtures

Leasehold improvements

Assets under construction

Total Fixed Assets

Less Accumulated Depreciation

Total Fixed Assets, net

Lesser of remaining lease term or estimated useful life.

expense of $ 639 and $ 911 for the years ended December 31, 2024 and 2023, respectively, is included in general and administrative expenses

in the accompanying consolidated statements of operations.

the year ended December 31, 2023, the Company entered into additional lease agreements that have commenced and are classified as operating

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

principal corporate offices and additional Lucid Test Centers.

components of lease expense were as follows:

Schedule of Lease Expense

Ended December 31,

Years Ended December 31,

Operating lease cost

Short-term lease cost

Variable lease cost

Total lease cost

Company’s future lease payments as of December 31, 2024, which are presented as operating lease liabilities, current portion and

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of Future Minimum Lease Payments for Operating Leases

lease payments

Total lease payments

imputed interest

value of lease liabilities

Present value of lease liabilities

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

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

Ended December 31,

paid for amounts included in the measurement of lease liabilities

cash flows from operating leases

investing and financing activities

assets obtained in exchange for new operating lease liabilities

Weighted-average

remaining lease term - operating leases (in years)

Weighted-average

discount rate - operating leases

of December 31, 2023 and 2022, the Company’s right-of-use assets from operating leases were $ 4,267 and $ 3,037 , respectively,

Years Ended December 31,

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

Non-cash investing and financing activities

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

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

Weighted-average discount rate - operating leases

of December 31, 2024 and December 31, 2023, the Company’s right-of-use assets from operating leases were $ 2,500 and $ 4,267 , respectively,

which are reported in operating lease right-of-use assets in the consolidated balance sheets.

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lease terms, used to discount future lease payments, as a function of the financing terms the Company would likely receive on the open

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

The lease agreement

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

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

The lease commenced on February 1, 2023.

The aggregate (undiscounted)

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

Following the deconsolidation of Lucid, the Company had removed right-of-use assets and operating lease liabilities related to

See Note 4, Equity Method Investment , for additional information on the Lucid deconsolidation.

9 — Intangible Assets, net

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of Intangible Assets, Less Accumulated Amortization

licenses and certifications and laboratory information management software

Intangible assets

Accumulated Amortization

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

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

The CapNostics transaction was accounted

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

The defensive technology intangible

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

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

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

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

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

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

expense of the intangible assets discussed above was $ 2,021 and $ 1,784 for the years ended December 31, 2023 and 2022, respectively,

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

As of December

31, 2023, the estimated future amortization expense associated with the Company’s finite-lived intangible assets for each of the

five succeeding fiscal years is as follows:

Schedule of Estimated Amortization Expense for Intangible Assets

Estimated Useful Life

December 31, 2024

December 31, 2023

Defensive asset

Laboratory licenses and certifications and laboratory information management software

Total Intangible assets

Less Accumulated Amortization

Intangible Assets, net

expense of the intangible assets discussed above was $ 559 and $ 2,021 for the years ended December 31, 2024 and 2023, respectively, and

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

Following the deconsolidation

of Lucid, the Company had a net balance of $ 0 of intangible assets with no future amortization expense.

See Note 4, Equity Method

Investment , for additional information on the Lucid deconsolidation.

10 — Accrued Expenses and Other Current Liabilities

1 unchanged sentence

Schedule of Accrued Expenses and Other Current Liabilities

and Employee Benefits

Amended License Agreement - Royalty fee

current liabilities

accrued expenses and other current liabilities

December 31, 2024

December 31, 2023

Compensation and Employee Benefits

CWRU Amended License Agreement - Royalty fee

Operating expenses

Debt modification fee and payments to debt holder

Other current liabilities

Total accrued expenses and other current liabilities

“Compensation and Employee Benefits” includes:

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fair value hierarchy table for the periods indicated is as follows:

of Financial Liabilities Measured at Fair Value on Recurring Basis

Value Measurement on a Recurring Basis at Reporting Date Using 1

Secured Convertible Note - April 2022

Secured Convertible Note - September 2022

Senior Secured Convertible Note - March 2023

Secured Convertible Note - April 2022

Secured Convertible Note - September 2022

There were no transfers between the respective Levels during

the year ended December 31, 2023.

of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

Fair Value Measurement on a Recurring Basis at Reporting Date Using 1

Level-1 Inputs

Level-2 Inputs

Level-3 Inputs

December 31, 2024

Investment in Lucid Diagnostics, Inc common stock

Total assets at fair value

Senior Secured Convertible Note - April 2022

Senior Secured Convertible Note - September 2022

Total liabilities at fair value

Level-1 Inputs

Level-2 Inputs

Level-3 Inputs

December 31, 2023

Senior Secured Convertible Note - April 2022

Senior Secured Convertible Note - September 2022

Lucid Senior Secured Convertible Note - March 2023

Total liabilities at fair value

1 There were no transfers

between the respective Levels during the year ended December 31, 2024.

discussed in Note 13, Debt , the Company issued Senior Secured Convertible Notes dated April 4, 2022 and September 8, 2022, with

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million face value principal (“Lucid March 2023 Senior Convertible Note”).

This convertible note is also accounted for under

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

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

after September 10, 2024, the date of Lucid’s deconsolidation from PAVmed’s result of operation, the Company’s investment

in Lucid has been accounted for as an equity method investment.

For the periods prior to the deconsolidation, Lucid’s convertible

note is presented in PAVmed’s balance sheets and is also accounted for under the ASC 825-10-15-4 fair value option (“FVO”)

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

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

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

3 unchanged sentences

dated volatilities) inputs.

estimated fair value of the Lucid March 2023 Senior Convertible Note as of each of March 21, 2023 and December 31, 2023, and the estimated

fair value of the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note as of December 31, 2023, were computed

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

using the following assumptions:

Schedule of Fair Value Assumption Used

2022 Senior Convertible Note:

12 — Financial Instruments Fair Value Measurements - continued

estimated fair value of the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note as of December 31, 2024,

the Lucid March 2023 Senior Convertible Note as of September 10, 2024 (the date of deconsolidation), and the estimated fair value of

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

of December 31, 2023, were computed using a Monte Carlo simulation of the present value of its cash flows using a synthetic credit rating

analysis and a required rate-of-return, using the following assumptions:

of Fair Value Assumption Used

April 2022 Senior

Convertible Note:

December 31, 2024

2022 Senior Convertible Note:

September 2022 Senior

Convertible Note:

December 31, 2024

March 2023 Senior Convertible Note:

March 21, 2023

March 2023 Senior Convertible Note:

Lucid March 2023 Senior

Convertible Note:

September 10, 2024

Face value principal payable

Required rate of return

Conversion Price

Value of common stock

Expected term (years)

Risk free rate

4.27 % - 4.31 %

Dividend yield

April 2022 Senior

Convertible Note:

December 31, 2023

value principal payable

rate of return

of common stock

The estimated fair values recognized

utilized PAVmed and Lucid’s common stock prices, along with certain Level 3 inputs (as presented in the respective tables above),

in the development of Monte Carlo simulation models, discounted cash flow analyses, and /or Black-Scholes valuation models.

The estimated

fair values are subjective and are affected by changes in inputs to the valuation models and analyses, including the respective common

stock prices, the dividend yields, the risk-free rates based on U.S.

Treasury security yields, and certain other Level-3 inputs including,

September 2022 Senior

Convertible Note:

December 31, 2023

Lucid March 2023 Senior

Convertible Note:

December 31, 2023

Face value principal payable

Required rate of return

10.00 % - 10.50 %

10.00 % - 10.20 %

Conversion Price

Value of common stock

Expected term (years)

Risk free rate

4.54 % - 5.25 %

4.31 % - 4.96 %

Dividend yield

estimated fair values recognized utilized PAVmed’s and Lucid’s common stock prices, along with certain Level 3 inputs

(as presented in the respective tables above), in the development of Monte Carlo simulation models, discounted cash flow analyses,

and /or Black-Scholes valuation models.

The estimated fair values are subjective and are affected by changes in inputs to the

valuation models and analyses, including the respective common stock prices, as compared to the floor price on conversions, the

dividend yields, the risk-free rates based on U.S.

Treasury security yields, and certain other Level-3 inputs including, probability

weighting on the likelihood as of December 31, 2024 of shareholder approval of then-pending exchange of the April 2022 Senior

Convertible Note and a portion of the September 2022 Senior Convertible Note in exchange for shares of the Company’s Series C

Preferred Stock (which exchange was approved and consummated in January 2025), probability weighting on the likelihood as of

September 10, 2024 of the Lucid March 2023 Senior Convertible Note of Lucid exercising the Company’s optional redemption

clause and a hold to maturity scenario (which Lucid elected to exercise the Company’s redemption option in November 2024),

assumptions regarding the estimated volatility in the value of the respective common stock prices.

Changes in these assumptions can materially

affect the recognized estimated fair values.

Changes in these assumptions can

materially affect the recognized estimated fair values.

fair value and face value principal outstanding of the Senior Convertible Notes as of the dates indicated are as follows:

Summary of Outstanding Debt

of Outstanding Debt

Maturity Date

1 unchanged sentence

Price per Share

Value Principal Outstanding

2022 Senior Convertible Note

March 2023 Senior Convertible Note

as of December 31, 2023

Principal Outstanding

April 2022 Senior Convertible Note

April 4, 2025

September 2022 Senior Convertible Note

September 8, 2025

Balance as of December 31, 2024

Maturity Date

1 unchanged sentence

Price per Share

Value Principal Outstanding

2022 Senior Convertible Note

as of December 31, 2022

Principal Outstanding

April 2022 Senior Convertible Note

April 4, 2025

September 2022 Senior Convertible Note

September 8, 2025

Lucid March 2023 Senior Convertible Note

March 21, 2025

Balance as of December 31, 2023

changes in the fair value of debt during the year ended December 31, 2024 is as follows:

Schedule of Changes in Fair Value of Debt

2022 Senior Convertible Note

March 2023 Senior Convertible Note

of Balance Sheet Fair Value Components

Income (expense)

Value - December 31, 2022

value principal – issue date

value adjustment – issue date

repayments – common stock

Non-installment

payments – common stock

in fair value

Value at December 31, 2023

Income (Expense) - Change in fair value – year ended December 31, 2023

of Changes in Fair Value of Debt

April 2022 Senior Convertible Note

September 2022 Senior Convertible Note

Lucid March 2023 Senior Convertible Note

Sum of Balance Sheet Fair Value Components

Other Income (expense)

Fair Value - December 31, 2023

Face value principal – issue date

Fair value adjustment – issue date

Installment repayments – common stock

Non-installment payments – common stock

Deconsolidation of Lucid Diagnostics

Change in fair value

Fair Value at December 31, 2024

Other Income (Expense) - Change in fair value – year ended December 31, 2024

changes in the fair value of debt during the year ended December 31, 2023 is as follows:

2022 Senior Convertible Note

of Balance Sheet Fair Value Components

Income (expense)

Value - December 31, 2021

Value - Beginning

value principal – issue date

value adjustment – issue date

repayments – common stock

Non-installment

payments – common stock

in fair value

Value at December 31, 2022

Value - Ending

Income (Expense) - Change in fair value – year ended December 31, 2022

April 2022 Senior Convertible Note

September 2022 Senior Convertible Note

Lucid March 2023 Senior Convertible Note

Sum of Balance Sheet Fair Value Components

Other Income (expense)

Fair Value - December 31, 2022

Fair Value - Beginning of Period

Face value principal – issue date

Fair value adjustment – issue date

Installment repayments – common stock

Non-installment payments – common stock

Change in fair value

Fair Value at December 31, 2023

Fair Value - Ending of Period

Other Income (Expense) - Change in fair value – year ended December 31, 2023

13 — Debt - continued

7 unchanged sentences

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

Convertible Note”, with such note having a $ 27.5

million face value principal, a 7.875 %

annual stated interest rate, a contractual conversion price of $ 75.00

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

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

conversion price of $ 75.00 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 ,

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

The April 2022 Senior Convertible Note may

be converted into shares of common stock of the Company at the Holder’s election.

The April 2022 Senior Convertible Note may be converted

into shares of common stock of the Company at the Holder’s election.

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

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of September 6, 2024 , which maturity date the investor agreed to extend by one year, to September 8, 2025.

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

The September 2022 Senior

Convertible Note may be converted into shares of common stock of the Company at the Holder’s election.

Company is subject to financial covenants requiring:

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(ii) the ratio of

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

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

exceed 30% (the “Debt to Market Cap Ratio Test”);

and (iii) the Company’s market capitalization to 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 December 1, 2023 through March 12, 2024, the Company was not in

compliance with the Financial Tests.

As of March 12, 2024, the Investor agreed to waive any such non-compliance during such time

period and thereafter through August 31, 2024.

In consideration of the covenant

waiver and maturity extensions discussed above, the Company agreed to pay the holder of the notes $ 2,000,000 in cash (or in such other

form as may be mutually agreed in writing) by April 25, 2024.

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

and unpaid late charges to (b) the Company’s average market capitalization over the prior ten trading days, to not exceed 30% (the

“Debt to Market Cap Ratio Test”);

and (iii) the Company’s market capitalization to 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”).

to time from and after September 1, 2024 through November 11, 2024, the Company was not in compliance with the Financial Tests.

November 11, 2024, the Investor agreed to waive any such non-compliance during such time period and thereafter through December 31, 2024.

consideration of a prior covenant waiver and maturity extension agreed to in March 2024, the Company agreed to pay the holder of the

notes $ 2,000 in cash (or in such other form as may be mutually agreed in writing).

The covenant waiver and maturity extension fee was

recognized as debt modification expense on the Company’s consolidated statement of operations, and is currently included in accrued

expenses and other current liabilities on the Company’s consolidated balance sheets as of December 31, 2024.

April 2022 Senior Convertible Note and September 2022 Senior Convertible Note installment payments may be made in shares of PAVmed common

6 unchanged sentences

$ 2,020 , (with such fair value measured as the respective conversion date quoted closing price of the common stock of the Company).

addition the Company paid $ 202 in cash related to acceleration floor payments on these notes related to the conversion price being below

$ 2.70 , which is included in debt extinguishment loss on the Company’s consolidated statements of operations.

addition, during the year ended December 31, 2024, the Company agreed to pay $ 1,059 , in cash related to acceleration floor payments on

these notes related to the conversion price being below the floor price, which is included in debt extinguishment loss on the Company’s

consolidated statements of operations.

As of December 31, 2024, approximately $ 652 of acceleration floor payments owed to the holder

are included in accrued expenses and other current liabilities on the Company’s consolidated balance sheets.

The conversions and

cash paid resulted in a debt extinguishment loss of $ 3,756 in the year ended December 31, 2023.

Diagnostics - Senior Secured Convertible Note

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

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

agreed to purchase an aggregate of $ 11.1 million face value principal of debt.

The debt was issued in a registered direct offering under Lucid’s effective shelf registration statement.

the SPA dated March 13, 2023, Lucid issued a Senior Secured Convertible Note dated March 21, 2023, referred to herein as the “Lucid

March 2023 Senior Convertible Note”, with such note having a $ 11.1 million face value principal, a 7.875 % annual stated interest

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

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

March 21, 2025 .

The Lucid March 2023 Senior Convertible Note may be converted into shares of common stock of Lucid at the Holder’s

Lucid March 2023 Senior Convertible Note proceeds were $ 9.925 million after deducting a $ 1.186 million lender fee and offering costs.

The lender fee and offering costs were recognized as of the March 21, 2023 issue date as a current period expense in other income (expense)

in the Company’s consolidated statement of operations.

the period from March 21, 2023 to September 20, 2023, Lucid was required to pay interest expense only (on the $ 11.1 million face value

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

Lucid paid in cash interest expense of $ 391 for the year ended December

September 21, 2023, and then on each of the successive first and tenth trading day of each month thereafter through to and including

March 14, 2025 (each referred to as an “Installment Date”);

and on the March 21, 2025 maturity date, Lucid will be required

to make a principal repayment of $ 292 together with accrued interest thereon, with such 38 payments referred to herein as the “Installment

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

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

floor acceleration payments resulted in debt extinguishment losses of $ 1,501 in the year ended December 31, 2024.

December 31, 2024, the Company agreed to reduce temporarily, and the Investor consented to reducing temporarily, the contractual conversion

price under the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note to equal to 82.5 % of the two lowest

VWAPs during the last 10 trading days preceding the date of conversion, subject to a conversion floor price of $ 0.40 , during the period

from December 31, 2024 through January 15, 2025;

provided that the aggregate amount of conversions under the April 2022 Senior Convertible

Note and the September 2022 Senior Convertible Note during such period may not exceed 3 million shares.

13 — Debt - continued

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

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

Date conversion price.

payment of all amounts due and payable under this senior convertible note is guaranteed by Lucid’s subsidiaries;

and the obligations

under this senior convertible note are secured by all of the assets of Lucid and its subsidiaries.

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

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

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

among other customary matters.

is subject to financial covenants requiring:

(i) a minimum of $5.0 million of available cash at all times;

(ii) the ratio of (a) the

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

late charges to (b) Lucid’s average market capitalization over the prior ten trading days, as of the last day of any fiscal quarter

commencing with September 30, 2023, to not exceed 30%;

and (iii) Lucid’s market capitalization to at no time be less than $30 million.

As of December 31, 2023, the Company was in compliance, and as of the date hereof, the Company is in compliance, with these financial covenants.

Lucid March 2023 Senior Convertible Note installment payments may be made in shares of Lucid Diagnostics common stock at a conversion

price that is the lower of the contractual conversion price and 82.5 % of the two lowest VWAPs during the last 10 trading days preceding

the date of conversion, subject to a conversion price floor of $ 0.30 .

The notes are also subject to certain provisions that may require

redemption upon the occurrence of an event of default, a change of control, or certain equity issuances.

the year ended December 31, 2023, approximately $ 92 of principal repayments along with approximately $ 48 of interest expense thereon,

were settled through the issuance of 115,388 shares of common stock of Lucid, with such shares having a fair value of approximately $ 166

(with such fair value measured as the respective conversion date quoted closing price of the common stock of Lucid).

The conversions

resulted in a debt extinguishment loss of $ 26 in the year ended December 31, 2023.

Subsequent to December 31, 2023, as of March 21,

2024, approximately $ 260 of interest expense thereon, was settled

through the issuance of 242,390 shares of common stock of the Lucid, with such shares having a fair value of approximately $ 359

(with such fair value measured as the respective conversion date quoted closing price of the common stock of Lucid).

the years ended December 31, 2023 and 2022, the Company recognized debt extinguishment losses in total of approximately $ 3,782 and $ 5,434 ,

respectively, in connection with issuing common stock for principal repayments on convertible debt mentioned above.

to December 31, 2024, prior to the consummation of the exchange transaction contemplated by the Debt Exchange Agreement (as defined below)

on January 17, 2025 as more fully discussed below, approximately $ 176 of principal repayments along with approximately $ 26 of interest

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

of approximately $ 259 (with such fair value measured as the respective conversion date quoted closing price of the common stock of the

November 15, 2024, the Company entered into an Exchange Agreement (the “Debt Exchange Agreement”) with the holder (the “Holder”)

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

The Debt Exchange Agreement provided for the

exchange of $ 22.3 million in principal amount of the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note

and interest thereon for 22,347 shares of Series C Convertible Preferred Stock, par value $ 0.001 per share (the “Series C Preferred

Stock”), of the Company (the “Exchange”).

The key terms of the Series C Convertible Preferred Stock can be found on

Exhibit 4.1 to this Form 10-K.

January 17, 2025, after satisfaction of all conditions to closing the Exchange, the parties consummated the transaction on the terms

described above.

Following consummation of the Exchange, the April 2022 Senior Convertible Note was satisfied in full, and the outstanding

principal balance of the remaining September 2022 Senior Convertible Note was approximately $ 6.6 million In connection with the consummation

of the Exchange, the conversion price under the remaining September 2022 Convertible Note was reset to $ 1.068 , the maturity date of such

note was extended to December 31, 2025 and the holder of such note waived compliance with the Financial Tests through December 31, 2025.

Diagnostics - Senior Secured Convertible Note

the deconsolidation of Lucid, the Lucid March 2023 Senior Convertible Note is no longer reflected in the Company’s consolidated

balance sheets.

See Note 4, Equity Method Investment , for additional information on the deconsolidation of Lucid.

the period of January 1, 2024 through September 10, 2024, the date of Lucid’s deconsolidation, approximately $ 2,005 of principal

repayments along with approximately $ 787 of interest expense thereon, were settled through the issuance of 4,172,002 shares of common

stock of Lucid, with such shares having a fair value of approximately $ 3,801 (with such fair value measured as the respective conversion

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

The conversions resulted in debt extinguishment losses of $ 1,009 in the period

of January 1, 2024 through September 10, 2024.

the year ended December 31, 2024, the Company recognized debt extinguishment losses in total of approximately $ 2,535 , in connection with

the Company or Lucid (as applicable) issuing shares of its common stock for principal repayments on convertible debt mentioned above.

During the year ended December 31, 2023, the Company recognized debt extinguishment losses in total of approximately $ 3,782 .

Note 12, Financial Instruments Fair Value Measurements , for a further discussion of fair value assumptions.

7 unchanged sentences

All awards are subject to approval by the PAVmed compensation committee.

total of 1,403,518 shares of common stock of PAVmed are reserved for issuance under the PAVmed 2014 Equity Plan, with 77,518 shares available

for grant as of December 31, 2023.

The share reservation is not diminished by a total of 66,723 PAVmed Inc.

stock options and restricted

total of 1,835,970 shares of common stock of PAVmed are reserved for issuance under the PAVmed 2014 Equity Plan, with 247,109 shares

available for grant as of December 31, 2024.

The share reservation is not diminished by a total of 66,720 PAVmed stock options and restricted

stock awards granted outside the PAVmed 2014 Equity Plan as of December 31, 2024.

1 unchanged sentence

grant was increased by 576,170 in accordance with the evergreen provisions of the plan.

14 — Stock-Based Compensation - continued

Stock Options

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

Schedule of Summarizes Information About Stock Options

of Stock Options

Average Exercise Price

Contractual Term (Years)

stock options at December 31, 2021 (4)

stock options at December 31, 2022 (4)

stock options at December 31, 2023 (3)

and exercisable stock options at December 31, 2023

options granted under the PAVmed 2014 Equity Plan and those granted outside such plan generally vest one-third in one year then ratably

over the next eight quarters, and have a ten-year contractual term from date-of-grant.

intrinsic value is computed as the difference between the quoted price of the PAVmed common stock on each of December 31, 2023 and

December 31, 2022 and the exercise price of the underlying PAVmed stock options, to the extent such quoted price is greater than the

exercise price.

outstanding stock options presented in the table above, are inclusive of 60,057 and 33,391 , stock options granted outside the PAVmed

2014 Equity Plan, as of December 31, 2023 and December 31, 2022, respectively.

activity and weighted average grant date fair values include immaterial rounding due to the Company’s 1-for-15 reverse stock

to December 31, 2023, on February 22, 2024, the Company granted 59,500 stock options under the PAVmed Inc 2014 Equity Plan with a weighted

average exercise price of $ 1.85 for which will generally vest one-third after one year then ratably over the next eight quarters.

addition, on February 22, 2024, a total of 390,000 restricted stock awards were granted to the Board of Directors under the PAVmed 2014 Equity Plan, with such restricted stock awards having an aggregate fair value of approximately $ 0.7 million, which was measured

using the respective grant date quoted closing price per share of PAVmed Inc.

common stock, with the fair value recognized as stock-based

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

of the restricted stock awards vest ratably on an annual basis over a three year period with the initial annual vesting date

of November 30, 2024.

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

of Summarizes Information About Stock Options

Number of Stock Options

Weighted Average Exercise Price

Remaining Contractual Term (Years)

Intrinsic Value (2)

Outstanding stock options at December 31, 2022 (4)

Outstanding stock options at December 31, 2023

Outstanding stock options at December 31, 2024 (3)

Vested and exercisable stock options at December 31, 2024

options granted under the PAVmed 2014 Equity Plan and those granted outside such plan generally

vest one-third in one year then ratably over the next eight quarters, and have a ten-year

contractual term from date-of-grant.

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

stock on each of December 31, 2024 and December 31, 2023 and the exercise price of the underlying

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

outstanding stock options presented in the table above are inclusive of 60,054 stock options

granted outside the PAVmed 2014 Equity Plan, as of December 31, 2024 and December 31, 2023.

February 22, 2024, the Company granted 59,500 stock options under the PAVmed Inc 2014 Equity Plan with a weighted average exercise price

Each such option will vest one-third after one year then ratably over the next eight quarters.

In addition, on February 22,

2024, a total of 390,000 restricted stock awards were granted to the Board of Directors under the PAVmed 2014 Equity Plan, with such

restricted stock awards having an aggregate fair value of approximately $ 0.7 million, which was measured using the respective grant date

quoted closing price per share of PAVmed common stock, with the fair value recognized as stock-based compensation expense ratably on

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

The vesting of the restricted stock awards

vest ratably on an annual basis over a three year period with the initial annual vesting date of November 30, 2024.

The restricted stock

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

January 2025, the Company accepted from employees the voluntary forfeiture of approximately 494,202 of previously granted PAVmed stock

options, each with an exercise price greater than $ 4.00 per share and collectively with a weighted average exercise price of $ 23.38 per

None of the forfeitures were from officers or board members.

14 — Stock-Based Compensation - continued

Restricted Stock Awards

restricted stock awards granted under the PAVmed 2014 Equity Plan and restricted stock awards granted outside such plan are summarized

Schedule of Restricted Stock Award Activity

of Restricted Stock Awards

Average Grant Date Fair Value

restricted stock awards as of December 31, 2021 (2)

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

restricted stock awards as of December 31, 2023

unvested restricted stock awards presented in the table above, are inclusive of 6,666 restricted stock awards granted outside the PAVmed

2014 Equity Plan as of December 31, 2022.

These 6,666 restricted stock awards were fully vested during the period ended December 31,

activity and weighted average grant date fair values include immaterial rounding due to the Company’s 1-for-15 reverse stock

14 — Stock-Based Compensation - continued

of Restricted Stock Award Activity

Number of Restricted Stock Awards

Weighted Average Grant Date Fair Value

Outstanding restricted stock awards as of December 31, 2022

Unvested restricted stock awards as of December 31, 2023

Unvested restricted stock awards as of December 31, 2024

Diagnostics Inc.

9 unchanged sentences

compensation committee.

total of 11,644,000 shares of common stock of Lucid Diagnostics are reserved for issuance under the Lucid Diagnostics 2018 Equity Plan,

with 2,832,133 shares available for grant as of December 31, 2023.

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

options and 50,000 restricted stock awards granted outside the Lucid Diagnostics 2018 Equity Plan, as of December 31, 2023.

2024, the number of shares available for grant was increased by 2,680,038 in accordance with the evergreen provisions of the plan.

the deconsolidation of Lucid, the Lucid Diagnostics 2018 Long-Term Equity Plan is no longer reflected in the Company’s

consolidated statements of operations.

Lucid continues to be responsible for administering its equity plan.

See Note 4, Equity

Method Investment , for additional information on the deconsolidation of Lucid Diagnostics.

Diagnostics Stock Options

Diagnostics stock options granted under the Lucid Diagnostics 2018 Equity Plan and stock options granted outside such plan are summarized

Schedule of Summarizes Information About Stock Options

of Stock Options

Contractual Term (Years)

stock options at December 31, 2021

stock options at December 31, 2022

stock options at December 31, 2023 (3)

and exercisable stock options at December 31, 2023

options granted under the Lucid Diagnostics 2018 Equity Plan and those granted outside such plan generally vest one-third in one year

then ratably over the next eight quarters, and have a ten-year contractual term from date-of-grant.

intrinsic value is computed as the difference between the quoted price of the Lucid Diagnostics common stock on each of December 31,

2023 and December 31, 2022 and the exercise price of the underlying Lucid Diagnostics stock options, to the extent such quoted price

is greater than the exercise price.

outstanding stock options presented in the table above, are inclusive of 423,300 stock options granted outside the Lucid Diagnostics

2018 Equity Plan, as of December 31, 2023 and December 31, 2022.

to December 31, 2023, on February 22, 2024, Lucid granted 2,895,000 stock options under the Lucid Diagnostics Inc 2018 Equity Plan with

a weighted average exercise price of $ 1.25 for which will generally vest one-third after one year then ratably over the next eight quarters.

of Summarizes Information About Stock Options

Number of Stock Options

Weighted Average Exercise Price

Remaining Contractual Term (Years)

Intrinsic Value (2)

Outstanding stock options at December 31, 2022

Outstanding stock options at December 31, 2023

Outstanding stock options at September 10, 2024 (3)

Vested and exercisable stock options at September 10, 2024

options granted under the Lucid Diagnostics 2018 Equity Plan and those granted outside such

plan generally vest one-third in one year then ratably over the next eight quarters, and

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

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

common stock on each of September 10, 2024 and December 31, 2023 and the exercise price of

the underlying Lucid Diagnostics stock options, to the extent such quoted price is greater

than the exercise price.

outstanding stock options presented in the table above are inclusive of 523,300 stock options

granted outside the Lucid Diagnostics 2018 Equity Plan, as of September 10, 2024 and December

February 22, 2024 ,

Lucid granted 2,895,000 stock options under the Lucid Diagnostics 2018 Equity Plan

with a weighted average exercise price of $ 1.25 .

Each option will vest

one-third after one year then ratably over the next eight quarters.

14 — Stock-Based Compensation - continued

2 unchanged sentences

such plan are summarized as follows:

Schedule of Restricted Stock Award Activity

of Restricted Stock Awards

Average Grant Date Fair Value

restricted stock awards as of December 31, 2021

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

restricted stock awards as of December 31, 2023

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

Lucid Diagnostics 2018 Equity Plan as of December 31, 2022.

These 50,000 restricted stock awards were fully vested during the period

ended December 31, 2023.

of Restricted Stock Award Activity

Number of Restricted Stock Awards

Weighted Average Grant Date Fair Value

Unvested restricted stock awards as of December 31, 2022

Unvested restricted stock awards as of December 31, 2023

Unvested restricted stock awards as of September 10, 2024

May 2024, a total of 1,600,000 restricted stock awards were granted to management under the Lucid Diagnostics 2018 Equity Plan, with

such restricted stock awards having an aggregate fair value of approximately $ 1.5 million, which was measured using the respective grant

date quoted closing price per share of Lucid Diagnostics common stock, with the fair value recognized as stock-based compensation expense

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

The vesting of the restricted

stock awards vest on a single vest date of May 20, 2026.

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

period is not completed.

Stock-Based Compensation Expense

consolidated stock-based compensation expense recognized by each of PAVmed and Lucid Diagnostics for both the PAVmed 2014 Equity Plan

and the Lucid Diagnostics 2018 Equity Plan, with respect to stock options and restricted stock awards as discussed above, for the periods

indicated, was as follows:

consolidated stock-based compensation expense recognized by each of PAVmed and (through September 10, 2024, the date of PAVmed’s

deconsolidation of Lucid) Lucid Diagnostics for both the PAVmed 2014 Equity Plan and the Lucid Diagnostics 2018 Equity Plan, with respect

to stock options and restricted stock awards as discussed above, for the periods indicated, was as follows:

of Stock-Based Compensation Expense

and marketing expenses

and administrative expenses

and development expenses

stock-based compensation expense

Cost of revenue

Sales and marketing expenses

General and administrative expenses

Research and development expenses

Total stock-based compensation expense

14 — Stock-Based Compensation - continued

1 unchanged sentence

noted, the consolidated stock-based compensation expense presented above is inclusive of stock-based compensation expense recognized

by Lucid Diagnostics, inclusive of each of:

stock options granted under the PAVmed 2014 Equity Plan to the three physician inventors

of the intellectual property underlying the Amended CWRU License Agreement;

and stock options and restricted stock awards granted to

employees of PAVmed and non-employee consultants under the Lucid Diagnostics 2018 Equity Plan.

The stock-based compensation expense

recognized by Lucid Diagnostics for both the PAVmed 2014 Equity Plan and the Lucid Diagnostics 2018 Equity Plan, with respect to

stock options and restricted stock awards as discussed above, for the periods indicated, was as follows:

of Stock-Based Compensation Expense Recognized by Lucid Diagnostics

Ended December 31,

Diagnostics 2018 Equity Plan – cost of revenue

Diagnostics 2018 Equity Plan – sales and marketing

Diagnostics 2018 Equity Plan – general and administrative

Diagnostics 2018 Equity Plan – research and development

2014 Equity Plan - cost of revenue

2014 Equity Plan - sales and marketing

2014 Equity Plan - general and administrative

2014 Equity Plan - research and development

stock-based compensation expense – recognized by Lucid Diagnostics

by Lucid Diagnostics (through September 10, 2024, the date of PAVmed’s deconsolidation of Lucid) inclusive of each of:

stock options

granted under the PAVmed 2014 Equity Plan to the three physician inventors of the intellectual property underlying the Amended CWRU License

and stock options and restricted stock awards granted to employees of PAVmed and non-employee consultants under the Lucid

Diagnostics 2018 Equity Plan.

The stock-based compensation expense recognized by Lucid Diagnostics (through September 10, 2024, the date

of PAVmed’s deconsolidation of Lucid) for both the PAVmed 2014 Equity Plan and the Lucid Diagnostics 2018 Equity Plan, with respect

to stock options and restricted stock awards as discussed above, for the periods indicated, was as follows:

of Stock-Based Compensation Expense

Lucid Diagnostics 2018 Equity Plan – cost of revenue

Lucid Diagnostics 2018 Equity Plan – sales and marketing

Lucid Diagnostics 2018 Equity Plan – general and administrative

Lucid Diagnostics 2018 Equity Plan – research and development

PAVmed 2014 Equity Plan - cost of revenue

PAVmed 2014 Equity Plan - sales and marketing

PAVmed 2014 Equity Plan - general and administrative

PAVmed 2014 Equity Plan - research and development

Total stock-based compensation expense – recognized by Lucid Diagnostics

stock-based compensation expense

consolidated unrecognized stock-based compensation expense and weighted average remaining requisite service period with respect to stock

options and restricted stock awards issued under each of the PAVmed 2014 Equity Plan and the Lucid Diagnostics 2018 Equity Plan, as discussed

above, is as follows:

Schedule of Unrecognized Compensation Expense

Average Remaining Service Period (Years)

2014 Equity Plan

Diagnostics 2018 Equity Plan

14 — Stock-Based Compensation - continued

options and restricted stock awards issued under the PAVmed 2014 Equity Plan, as discussed above, is as follows:

of Unrecognized Compensation Expense

Unrecognized Expense

Weighted Average Remaining Service Period (Years)

PAVmed 2014 Equity Plan

Stock Options

Restricted Stock Awards

compensation expense recognized with respect to stock options granted under the PAVmed 2014 Equity Plan was based on a weighted average

2 unchanged sentences

of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions

Ended December 31,

term of stock options (in years)

stock price volatility

free interest rate

dividend yield

Year Ended December 31,

Expected term of stock options (in years)

Expected stock price volatility

Risk free interest rate

Expected dividend yield

14 — Stock-Based Compensation - continued

compensation expense recognized with respect to stock options granted under the Lucid Diagnostics 2018 Equity Plan was based on a weighted

average estimated fair value of such stock options of $ 0.88 per share and $ 2.30 per share during the years ended December 31, 2023

and 2022, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

average estimated fair value of such stock options of $ 0.79 per share and $ 0.88 per share during the years ended December 31, 2024 (through

September 10, 2024, the date of PAVmed’s deconsolidation of Lucid) and 2023, respectively, calculated using the following weighted

average Black-Scholes valuation model assumptions:

of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions

Ended December 31,

term of stock options (in years)

stock price volatility

free interest rate

dividend yield

Year Ended December 31,

Expected term of stock options (in years)

Expected stock price volatility

Risk free interest rate

Expected dividend yield

Employee Stock Purchase Plan (“PAVmed ESPP”)

1 unchanged sentence

March 31, 2024 and 2023, respectively, under the PAVmed ESPP.

A total of 20,267 shares and 12,780 shares of common stock of the Company

were purchased for proceeds of approximately $ 76 and $ 140 , on September 30, 2023 and 2022, respectively, under the PAVmed ESPP.

31, 2023 purchase was partially settled through the redeployment of 12,590 shares of treasury stock.

The September 30, 2022 purchase

was settled through the redeployment of treasury stock.

A total of 20,267 shares of common stock of the Company were purchased

for proceeds of approximately $ 76 on September 30, 2023 under the PAVmed ESPP.

The March 31, 2023 purchase was partially settled through

the redeployment of 12,590 shares of treasury stock.

The PAVmed ESPP has a total reserve of 300,001 shares of common stock of PAVmed

2 unchanged sentences

increased by 166,667 in accordance with the evergreen provisions of the plan.

September 18, 2024, PAVmed’s compensation committee temporarily suspended any participation in the PAVmed ESPP.

Accordingly, no

shares of common stock of the Company have been purchased under the PAVmed ESPP since March 31, 2024.

Diagnostics Inc.

Employee Stock Purchase Plan (“Lucid ESPP”)

total of 231,987

shares of common stock of Lucid Diagnostics were purchased for proceeds of approximately $ 276

on March 31, 2023 under the Lucid ESPP.

A total of 276,213

shares of common stock of Lucid Diagnostics were purchased for proceeds of approximately $ 275

on September 30, 2023 and 2022, respectively, under the Lucid ESPP.The Lucid ESPP has a total reserve of 1,000,000

shares of common stock of Lucid Diagnostics of which 407,770

shares are available for issue as of December 31, 2023.

In January 2024, the Lucid board authorized an increase in the number of

shares available for issue by 500,000 .

15 — Preferred Stock

of December 31, 2023 and December 31, 2022, there were 1,305,213 and 1,205,759 shares of PAVmed Series B Convertible Preferred Stock,

classified in permanent equity, issued and outstanding, respectively.

Series B Convertible Preferred Stock Dividends

Series B Convertible Preferred Stock is issued pursuant to the PAVmed Inc.

Certificate of Designation of Preferences, Rights, and

Limitations of Series B Convertible Preferred Stock (“Series B Convertible Preferred Stock Certificate of Designation”),

has a par value of $ 0.001

per share, no voting rights, a stated value of $ 3.00

per share, and was immediately convertible upon its issuance.

At the holders’ election, fifteen shares of Series B Convertible

Preferred Stock are currently convertible into one share of common stock of the Company, subject to further adjustment for the

effect of future stock dividends, stock splits or similar events affecting the Company’s common stock.

Convertible Preferred Stock shall not be redeemed for cash and under no circumstances shall the Company be required to net cash

settle the Series B Convertible Preferred Stock.

Series B Convertible Preferred Stock dividends are 8.0 % per annum based on the $ 3.00 per share stated value of the Series

B Convertible Preferred Stock, with such dividends compounded quarterly, accumulate, and are payable in arrears upon being declared by

the Company’s board of directors.

Such dividends may be settled, at the discretion of the board of directors, through any combination

of the issue of additional shares of Series B Convertible Preferred Stock, the issue shares of common stock of the Company, and /or cash

Series B Convertible Preferred Stock Dividends Earned

Series B Convertible Preferred Stock dividends earned are included in the calculation of basic and diluted net loss attributable to PAVmed

common stockholders for each of the respective corresponding periods presented in the accompanying consolidated statement of operations,

inclusive of $ 304 of such dividends earned in the year ended December 31, 2023;

total of 511,884 shares and 231,987 shares of common stock of Lucid Diagnostics were purchased for proceeds of approximately $ 353 and

$ 276 on March 31, 2024 and 2023, respectively, under the Lucid ESPP.

A total 276,213 shares of common stock of Lucid Diagnostics were

purchased for proceeds of approximately $ 275 on September 30, 2023 under the Lucid ESPP.

Note 15 — Preferred Stock

As of December 31, 2024 and

December 31, 2023, there were 1,412,865 and 1,305,213 shares of PAVmed Series B Convertible Preferred Stock, classified in permanent

equity, issued and outstanding, respectively.

PAVmed Series B Convertible Preferred Stock Dividends

The Series B Convertible Preferred

Stock is issued pursuant to the PAVmed Inc.

Certificate of Designation of Preferences, Rights, and Limitations of Series B Convertible

Preferred Stock (“Series B Convertible Preferred Stock Certificate of Designation”), has a par value of $ 0.001 per share,

no voting rights, a stated value of $ 3.00 per share, and was immediately convertible upon its issuance.

At the holders’ election,

fifteen shares of Series B Convertible Preferred Stock are currently convertible into one share of common stock of the Company, subject

to further adjustment for the effect of future stock dividends, stock splits or similar events affecting the Company’s common stock.

The Series B Convertible Preferred Stock shall not be redeemed for cash and under no circumstances shall the Company be required to net

cash settle the Series B Convertible Preferred Stock.

The PAVmed Inc.

Series B Convertible

Preferred Stock dividends are 8.0 % per annum based on the $ 3.00 per share stated value of the Series B Convertible Preferred Stock, with

such dividends compounded quarterly, accumulate, and are payable in arrears upon being declared by the Company’s board of directors.

Such dividends may be settled, at the discretion of the board of directors, through any combination of the issue of additional shares

of Series B Convertible Preferred Stock, the issue shares of common stock of the Company, and /or cash payment.

PAVmed Series B Convertible Preferred Stock Dividends

The Series B Convertible Preferred

Stock dividends earned are included in the calculation of basic and diluted net loss attributable to PAVmed common stockholders for each

of the respective corresponding periods presented in the accompanying consolidated statement of operations, inclusive of $ 329 of such

dividends earned in the year ended December 31, 2024;

and $ 304 of such dividends earned in the year ended December 31, 2023.

Series B Convertible Preferred Stock Dividends Declared

the year ended December 31, 2023, the Company’s board of directors declared an aggregate of approximately $ 298 of Series B Convertible

Preferred Stock dividends, earned as of December 31, 2022;

PAVmed Series B Convertible Preferred Stock Dividends

During the year ended December 31,

2024, the Company’s board of directors declared an aggregate of approximately $ 323 of Series B Convertible Preferred Stock dividends,

earned as of December 31, 2023;

March 31, 2024;

June 30, 2024;

and September 30, 2023, which have been settled

by the issue of an additional aggregate 99,454 shares of Series B Convertible Preferred Stock.

the year ended December 31, 2022, the Company’s board of directors declared an aggregate of approximately $ 276 of Series B Convertible

Preferred Stock dividends, earned as of December 31, 2021;

and September 30, 2024, which have been settled by the issue of an additional

aggregate 107,652 shares of Series B Convertible Preferred Stock.

During the year ended December 31,

2023, the Company’s board of directors declared an aggregate of approximately $ 298 of Series B Convertible Preferred Stock dividends,

earned as of December 31, 2022;

March 31, 2023;

June 30, 2023;

and September 30, 2022, which have been settled

by the issue of an additional aggregate 91,885 shares of Series B Convertible Preferred Stock.

to December 31, 2023, in January 2024, the Company’s board of directors declared a PAVmed Series B Convertible Preferred

Stock dividend, earned as of December 31, 2023, of $ 78 , to be settled by the issue of 26,123 additional shares of Series B Convertible

Preferred Stock.

PAVmed Series B Convertible Preferred Stock dividends are recognized as a dividend payable liability only upon the dividend being declared

payable by the Company’s board of directors.

Accordingly, the dividends declared payable subsequent to the date of the accompanying

consolidated balance sheet were not recognized as a dividend payable liability as the Company’s board of directors had not declared

the dividends payable as of each such date.

16 — Common Stock and Common Stock Purchase Warrants

February 2023, the Company distributed a proxy statement for a special meeting of shareholders that was held on March 31, 2023 (the “Special

Meeting”), at which the Company sought approval of an amendment to the Company’s Certificate of Incorporation, to effect,

(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.

On March 31, 2023, the shareholders

approved the above proposal to amend the Company’s Certificate of Incorporation, to effect, at any time prior to the one-year anniversary

date of the Special Meeting.

On November 28, 2023 the Company’s board of directors, unanimously authorized management to effect

the reverse split at the ratio of 1-for-15.

and September 30, 2023, which have been settled by the issue of an additional

aggregate 99,454 shares of Series B Convertible Preferred Stock.

Subsequent to December 31,

2024, in January 2025, the Company’s board of directors declared a PAVmed Series B Convertible Preferred Stock dividend, earned

as of December 31, 2024, of $ 85 , to be settled by the issue of 28,270 additional shares of Series B Convertible Preferred Stock.

The PAVmed Series B Convertible

Preferred Stock dividends are recognized as a dividend payable liability only upon the dividend being declared payable by the Company’s

board of directors.

Accordingly, the dividends declared payable subsequent to the date of the accompanying consolidated balance sheet

were not recognized as a dividend payable liability as the Company’s board of directors had not declared the dividends payable as

of each such date.

PAVmed Series C Convertible Preferred Stock

Subsequent to December 31, 2024, on January 17,

2025, the Company issued 25,000

of Series C Convertible Preferred Stock.

Each share of Series C Convertible Preferred Stock has a stated value of $ 1,000 ,

and entitles the holder thereof to a preferred dividend at a rate of 7.875 %

per annum, payable quarterly in arrears.

Dividends on each share of Series C Convertible Preferred Stock may be settled in shares of

the Company’s common stock (subject to satisfaction of certain equity-related conditions) or by capitalizing the dividend by

increasing the stated value of such share.

Subsequent to December 31, 2024, the Company has issued 1,000,000 shares of our common stock in connection with

the conversion of 400 shares of PAVmed Series C Convertible Preferred Stock.

Note 16 — Common Stock and Common Stock Purchase

In February 2023, the

Company distributed a proxy statement for a special meeting of shareholders that was held on March 31, 2023 (the “Special

Meeting”), at which the Company sought approval of an amendment to the Company’s Certificate of Incorporation, to

effect, (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

On March 31, 2023, the shareholders approved the above proposal to amend the Company’s Certificate of Incorporation,

to effect, at any time prior to the one-year anniversary date of the Special Meeting.

On November 28, 2023 the Company’s board

of directors, unanimously authorized management to effect the reverse split at the ratio of 1-for-15 .

The reverse stock split became effective on December 7, 2023.

At the effective date, every

15 shares of the Company’s common stock that were issued and outstanding were automatically combined into one issued and outstanding

share, without any change in par value of such shares.

No fractional shares were issued in connection with the reverse stock split.

each fractional share remaining after completion of the reverse stock split that was less than a whole share was rounded up to one whole

The reverse stock split also correspondingly affected all outstanding PAVmed equity awards and outstanding convertible securities.

total of 100,000

shares of PAVmed common stock were issued to

an unrelated service provider as the consideration for the services rendered under a research and development agreement dated May 31, 2023 (“May 31, 2023 R&D Agreement”).

The shares were issued as consideration

for a contractual minimum fair market value of $ 750 , with such derived fair market value computed using a contractual formula based on

the PAVmed Inc.

common stock volume weighted average price per share (“VWAP”) during the last ten days of the six month

anniversary of the May 31, 2023 R&D Agreement.

If the such fair market value was less than $ 750 , then, the Company would incur an additional contractual consideration

obligation in amount equal to the difference between the required minimum fair market value of $ 750 and the contractual formula

based computed fair market value.

On the six month anniversary, November 30, 2023, the contingent reconciliation payment was calculated to be $ 390 , based on the prior 10 day VWAP calculation, with the change in the estimated fair value recognized as other

income (expense).

the year ended December 31, 2023 a total of 58,483 shares of common stock of the Company were issued under the PAVmed ESPP.

14, Stock-Based Compensation , for a discussion of each of the PAVmed 2014 Equity Plan and the PAVmed ESPP.

the year ended December 31, 2023, 1,745,824 shares of the Company’s common stock were issued upon conversion, at the election of

the holder, of the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note, for $ 6,083 face value principal

repayments, as discussed in Note 13, Debt .

the year ended December 31, 2023, the Company sold 321,288

shares through their at-the-market equity facility

for net proceeds of approximately $ 1,823 ,

after payment of 3 %

As of December 31, 2023, the Company had $ 291

of net proceeds due from broker.

Subsequent to

December 31, 2023, as of March 21, 2024, the Company sold 133,299

shares through their at-market equity facility

for net proceeds of approximately $ 495 ,

after payment of 3 %

No fractional shares were issued in connection with the reverse

Instead, each fractional share remaining after completion of the reverse stock split that was less than a whole share

was rounded up to one whole share.

The reverse stock split also correspondingly affected all outstanding PAVmed equity awards and

outstanding convertible securities.

On March 7, 2024, the Company

received a notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) stating that, for the prior

30 consecutive business days (through March 6, 2024), the market value of the Company’s listed securities had been below the minimum

of $35 million required for continued inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2).

The Company was provided

180 calendar days, or until September 3, 2024, to regain compliance with the rule.

The Company did not regain compliance with the rule

during the allotted time period.

Accordingly, on September 10, 2024, the Company received a staff determination letter from the Nasdaq

Listing Qualifications Department, stating that unless the Company timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”)

to appeal the staff determination, the Company’s securities would be subject to suspension and delisting.

The Company timely requested

a hearing before the Panel, which was held on October 29, 2024.

On November 8, 2024, the Panel granted

the Company an extension, until January 31, 2025, to regain compliance with the Nasdaq continued listing standards.

On February 14, 2025, the Company

received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”), stating

that the Company had regained compliance with the Nasdaq continued listing standard under Nasdaq Listing Rule 5550(b)(1), which requires,

among other things, that the Company maintain at least $2.5 million in stockholders’ equity.

The Company achieved compliance through

(1) the Exchange, which was consummated on January 17, 2025, (2) the issuance of shares of Series C Preferred Stock for an aggregate purchase

price of $2.653 million, which was consummated on January 24, 2025, and (3) a reduction in operating expenses as a result of the Company’s

completed deconsolidation of Lucid from its balance sheet, each of which transactions was previously disclosed.

As a result, the Company

met the terms of the Panel’s decision.

Separately, on January 23, 2025,

the Company received a notice from the Listing Qualifications Department of Nasdaq stating that, for the prior 30 consecutive business

days (through January 22, 2025), 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 July 22, 2025) to regain compliance.

In order to regain compliance, the closing

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

The notification letter

also stated that, in the event the Company does not regain compliance within the initial 180-day period, the Company may be eligible for

an additional 180-day period.

If the Company is not eligible for the additional 180-day period, or if it appears to the Nasdaq staff that

the Company will not be able to cure the deficiency, the Nasdaq Listing Qualifications Department will provide notice after the end of

the initial 180-day period that the Company’s securities will be subject to delisting.

The Nasdaq notification has no effect at

this time on the listing of the Company’s common stock or Series Z warrants, and the common stock and Series Z warrants will continue

to trade uninterrupted under the symbol “PAVM” and “PAVMZ,” respectively.

During the year ended December 31,

2024 a total of 34,332 shares of common stock of the Company were issued under the PAVmed ESPP.

See Note 14, Stock-Based Compensation ,

for a discussion of each of the PAVmed 2014 Equity Plan and the PAVmed ESPP.

In the year ended December 31,

2024, 1,084,366 shares of the Company’s common stock were issued upon conversion, at the election of the holder, of the April 2022

Senior Convertible Note and the September 2022 Senior Convertible Note, for $ 1,435 face value principal repayments, as discussed in Note

Subsequent to December 31, 2024, as of March 20, 2025, the Company issued 401,303 shares of common stock upon

conversion of these notes, with such shares having a fair value of approximately $ 259 .

Note 16 — Common Stock and Common Stock

Purchase Warrants - continued

In the year ended December 31,

2024, the Company sold 1,032,298

shares through their at-the-market equity facility for net proceeds of approximately $ 1,308 ,

after payment of 3 % commissions.

Subsequent to December 31, 2024, as of March 20, 2025, the Company sold 1,210,704

shares through its at-market equity facility for net proceeds of approximately $ 837 ,

after payment of 3 % commissions.

In the year ended December 31,

2024, the Company issued 333,380 shares of common stock to vendors in exchange for $ 350 of agreed upon services, which is included in

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

Subsequent to December 31,

2024, as of March 20, 2025, the Company issued 77,408 shares of common stock to vendors in exchange for $ 50 of agreed upon services.

Subsequent to December 31, 2024,

on 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

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

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

working capital purposes.

The 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.

The Pre-Funded Warrants become exercisable

upon the receipt of the stockholder approval described above, expire on February 18, 2030, and have an exercise price of $ 0.001 per share,

subject to adjustment as described below.

The Pre-Funded Warrants may be exercised for cash, or on a cashless basis.

In the event the

Pre-Funded Warrants are exercised on a cashless basis, the holder will be entitled to receive a number of shares of the Company’s

common stock equal to (x) the excess of the market value of the Company’s common stock over the exercise price, multiplied by (y)

the number of shares as to which the Pre-Funded Warrant is being exercised, divided by (z) the market value of the Company’s common

The exercise price and number and type of securities or other property issuable on exercise of the Pre-Funded Warrants may be adjusted

in certain circumstances, including in the event of a stock split or combination, stock dividend, or a recapitalization, reorganization,

merger or similar transaction.

In addition, a holder of the Pre-Funded Warrants will be entitled to participate in rights offerings or

pro rata distributions by the Company.

However, there will be no adjustment for issuances of shares of common stock at a price below the

exercise price.

Subsequent to December 31, 2024,

in January 2025, the Company received shareholder approval to amend its certificate of incorporation, as amended, to increase the total

number of shares of common stock the Company is authorized to issue by 200 million shares from 50 million shares to 250 million shares.

An amendment effecting such change was filed with the Secretary of State of Delaware on January 15, 2025.

Note 16 — Common Stock and Common Stock Purchase

Warrants - continued

PAVmed Distribution of Lucid Diagnostics Common

Stock to Shareholders

On February 15, 2024, the Company distributed by special dividend to the

Company stockholders 3,331,747 shares of Lucid Diagnostics common stock held by the Company.

On such date, each PAVmed shareholder as

of the January 15, 2024 record date received a stock dividend of approximately 38 shares of Lucid common stock for every 100 shares of

PAVmed common stock they held as of such date.

The shares distributed were approximately equal to the number of shares of common stock

that Lucid issued to PAVmed on or about January 26, 2024 in satisfaction of certain intercompany obligations due to Lucid from PAVmed.

Stock Purchase Warrants

of December 31, 2023 and December 31, 2022, Series Z Warrants outstanding totaled 11,937,450

representing the right to purchase 795,830 shares of the Company’s common stock.

The Series Z Warrants are now exercisable to

purchase one whole share of common stock of the Company at an exercise price of $ 23.48 ($ 24.00

post reverse-split, decreased by $ 0.52 due to distribution of Lucid common stock to PAVmed stockholders, discussed

further below).

On December 4, 2023, the Company announced the extension of the Company’s Series Z Warrants, by 12 months, to April

The Company recognized the incremental value associated with the Z Warrants modification for the term

extension as a deemed dividend charge of $ 1,791

and as an increase of net loss available to common stockholders on the consolidated statements of operations in 2023.

incremental value associated with the Z Warrants modification was determined using a Black-Scholes pricing model using the modified

terms of the Z Warrants with the following assumptions:

expected term of 1.41

years, dividend yield of 0 %,

volatility of 233 %,

and a risk-free rate of 4.79 %,

compared to the publicly traded closing price of PAVMZ on the date immediately preceding the modification.

There were no

Series Z Warrants exercised during the year ended December 31, 2023.

The Company’s distribution of Lucid common stock to PAVmed stockholders, described above, constituted an “Extraordinary Dividend” as defined in the Warrant Agreement.

Accordingly, as a result of the distribution,

pursuant to Section 4.3 of the Warrant Agreement, the Warrant Price has been decreased by $ 0.52 (the fair market value of 0.37709668

of a share of Lucid Diagnostics’ common stock) to $ 23.48 per share.

17 — Noncontrolling Interest

noncontrolling interest (“NCI”) included as a component of consolidated total stockholders’ equity is summarized for

the periods indicated as follows:

Schedule of Noncontrolling Interest of Stockholders' Equity

loss attributable to NCI

of subsidiary equity transactions

Diagnostics proceeds from issuance of preferred stock

Diagnostics proceeds from At-The-Market Facilities, net of deferred financing charges

Diagnostics issuance of common stock for settlement of APA-RDx installment and termination payment

Diagnostics issuance of common stock for settlement of vendor service agreement

Diagnostics 2018 Equity Plan stock option exercise

Diagnostics Employee Stock Purchase Plan Purchase

of Lucid Diagnostics common stock for Senior Secured Convertible Debt

compensation expense - Lucid Diagnostics 2018 Equity Plan

compensation expense - Veris Health 2021 Equity Plan

consolidated NCI presented above is with respect to the Company’s consolidated majority-owned subsidiaries as a component of consolidated

total stockholders’ equity as of December 31, 2023 and December 31, 2022;

and the recognition of a net loss attributable to the

NCI in the consolidated statement of operations for the periods beginning on the acquisition date of the respective majority-owned subsidiaries.

of December 31, 2023, there were 42,329,864 shares of common stock of Lucid Diagnostics issued and outstanding, of which, PAVmed held

31,302,420 shares, representing a majority ownership equity interest and PAVmed has a controlling financial interest in Lucid Diagnostics,

and accordingly, Lucid Diagnostics is a consolidated majority-owned subsidiary of PAVmed.

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

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

Series A Preferred Stock is convertible into shares of Lucid Diagnostics’ common stock at any time at the option of the holder

from and after the six-month anniversary of its issuance, and automatically converts into shares of Lucid Diagnostics’ common stock

on the second anniversary of its issuance.

The terms of the Lucid Series A Preferred Stock also include a one times preference on liquidation

and a right to receive dividends equal to 20 % of the number of shares of Lucid common stock into which such Lucid Series A Preferred

Stock is convertible, payable on the one-year and two-year anniversary of the issuance date.

The Lucid Series A Preferred Stock is a

non-voting security, other than with respect to limited matters related to changes in terms of the Lucid Series A Preferred Stock.

aggregate gross proceeds from the sale of shares in such offering were $ 13.625 million.

October 17, 2023, Lucid issued 5,000 shares of newly designated Lucid Series A-1 Convertible Preferred Stock (the “Lucid Series

A-1 Preferred Stock”).

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.

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

may be offered and sold under a Controlled Equity Offering Agreement between Lucid Diagnostics and Cantor Fitzgerald & Co.

year ended December 31, 2023, Lucid Diagnostics sold 230,068 shares through their at-the-market equity facility for net proceeds of approximately

$ 0.3 million, after payment of 3 % commissions.

17 — Noncontrolling Interest - continued

to December 31, 2023, on January 26, 2024 PAVmed elected to receive payment of $ 4,675 of fees and reimbursements due from Lucid, through

the issuance of 3,331,771 shares of Lucid Diagnostics common stock.

On February 15, 2024, the Company distributed by special dividend to the Company stockholders, as of

the record date noted above, 3,331,747 shares of Lucid Diagnostics common stock held by the Company.

On February 15, 2024, the Company

distributed by special dividend to the Company stockholders 3,331,747 shares of Lucid Diagnostics common stock held by the Company.

such date, each PAVmed shareholder as of the January 15, 2024 record date received a stock dividend of approximately 38 shares of Lucid

common stock for every 100 shares of PAVmed common stock they held as of such date.

The shares distributed were approximately equal to

the number of shares of common stock that Lucid issued to PAVmed on or about January 26, 2024 in satisfaction of certain intercompany

obligations due to Lucid from PAVmed.

The Company’s distribution

of Lucid common stock to PAVmed stockholders, constituted an “Extraordinary Dividend” as defined in the Warrant Agreement.

Accordingly, as a result of the distribution, pursuant to Section 4.3 of the Warrant Agreement, the Warrant Price has been decreased by

$ 0.52 (the fair market value of 0.37709668 of a share of Lucid Diagnostics’ common stock on the distribution date) to $ 23.48 per

Common Stock Purchase Warrants

As of December 31, 2024 and

December 31, 2023, Series Z Warrants outstanding totaled 11,937,450 representing the right to purchase 795,830 shares of the Company’s

common stock.

The Series Z Warrants are now exercisable to purchase one whole share of common stock of the Company at an exercise price

of $ 23.48 (previously $ 24.00 post reverse-split, decreased by $ 0.52 in connection with the special dividend distribution of Lucid common

stock to PAVmed stockholders, discussed above).

There were no Series Z Warrants exercised during the year ended December 31, 2024.

Note 17 — Noncontrolling Interest

The noncontrolling interest (“NCI”)

included as a component of consolidated total stockholders’ equity is summarized for the periods indicated as follows:

of Noncontrolling Interest of Stockholders' Equity

December 31, 2024

December 31, 2023

Net loss attributable to NCI

Impact of subsidiary equity transactions

Lucid Diagnostics proceeds from issuance of preferred stock Series A and A-1

Lucid Diagnostics exchange of preferred stock Series A and Series A-1

Lucid Diagnostics issuance through exchange - Series B and Series B-1

Lucid Diagnostics issuance through sale - Series B and Series B-1

Lucid Diagnostics deemed dividend on preferred stock

Lucid Diagnostics proceeds from At-The-Market Facilities, net of deferred financing charges

Lucid Diagnostics issuance of common stock for settlement of APA-RDx installment and termination payment

Lucid Diagnostics issuance of common stock for settlement of vendor service agreement

Lucid Diagnostics 2018 Equity Plan stock option exercise

Lucid Diagnostics Employee Stock Purchase Plan Purchase

Conversion of Lucid Diagnostics common stock for Senior Secured Convertible Debt

Stock-based compensation expense - Lucid Diagnostics 2018 Equity Plan

Stock-based compensation expense - Veris Health 2021 Equity Plan

Deconsolidation of Lucid

The consolidated NCI presented above

is with respect to the Company’s consolidated subsidiaries as a component of consolidated total stockholders’ equity as of

December 31, 2024 and December 31, 2023;

and the recognition of a net loss attributable to the NCI in the consolidated statement

of operations for the periods beginning on the acquisition date of the respective subsidiaries.

Note 17 — Noncontrolling Interest - continued

Lucid Diagnostics — Deconsolidation

As of December 31, 2024, there

were 63,071,950 shares of common stock of Lucid Diagnostics issued and outstanding, of which, PAVmed held 31,302,444 shares.

10, 2024, following preferred equity transactions completed by Lucid earlier in 2024 and the termination of voting proxies entered into

between PAVmed and certain shareholders of Lucid, PAVmed’s voting interest in the Company was reduced to less than 50.0%, resulting

in the loss of a controlling financial interest.

However, PAVmed retains the ability to exercise significant influence over Lucid.

deconsolidation, the Company’s ownership of 31,302,444 shares of Lucid Diagnostics common stock was valued at $25.1 million, which

resulted in a gain on deconsolidation of $72.3 million in the accompanying consolidated statements of operations for the year ended December 31,

Lucid Diagnostics — Intercompany Obligation

Special Distribution

On January 26, 2024 PAVmed elected

to receive payment of $ 4,675 of fees and reimbursements due from Lucid, through the issuance of 3,331,771 shares of Lucid Diagnostics

common stock.

On February 15, 2024, the Company distributed by special dividend to the Company stockholders, as of the record date noted

above, 3,331,747 shares of Lucid Diagnostics common stock held by the Company.

Lucid Diagnostics — Convertible Preferred

Stock Offerings

On 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 $ 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, 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 one times preference on liquidation and a right to receive

dividends equal to 20 % of the number of shares of Lucid common stock into which such Lucid Series A Preferred Stock is convertible, payable

on the one-year and two-year anniversary of the issuance date.

The Lucid Series A Preferred Stock is a non-voting security, other than

with respect to limited matters related to changes in terms of the Lucid Series A Preferred Stock.

The aggregate gross proceeds from the

sale of shares in such offering were $ 13.625 million.

On March 13, 2024, Lucid issued

an additional 5,670 shares of Lucid Series A-1 Preferred Stock, for aggregate gross proceeds of $ 5.67 million.

6 unchanged sentences

Lucid issued an additional 5,670 shares of Lucid Series A-1 Preferred Stock, for aggregate gross proceeds of $ 5.67 million (all of which

shares were immediately exchange for shares of Lucid Series B Preferred Stock).

The aggregate gross proceeds from the sale of shares in

such offering were $ 18.1 million.

As a result of 100 % of the

then-outstanding shares of Lucid Series A Preferred Stock and Lucid Series A-1 Preferred Stock being exchanged for shares of Lucid

Series B Preferred Stock in the Lucid Series B Offering and Exchange, no shares of Lucid Series A Preferred Stock or Lucid Series

A-1 Preferred Stock remain outstanding.

of December 31, 2023, there were 8,000,000 shares of common stock of Veris Health issued and outstanding, of which PAVmed holds an 80.44 %

majority-interest ownership and PAVmed has a controlling financial interest, with the remaining 19.56 % minority-interest ownership held

by an unrelated third-party.

Accordingly, Veris Health is a consolidated majority-owned subsidiary of the Company, for which a provision

of a noncontrolling interest (NCI) is included as a separate component of consolidated stockholders’ equity in the accompanying

consolidated balance sheets.

18 — Income Taxes

tax (benefit) expense for respective periods noted is as follows:

shares were immediately exchanged for shares of Lucid Series B Preferred Stock).

The aggregate gross proceeds from the sale of shares

in such offering were $ 18.1 million.

As a result of 100 % of the then-outstanding

shares of Lucid Series A Preferred Stock and Lucid Series A-1 Preferred Stock being exchanged for shares of Lucid Series B Preferred Stock

in the Lucid Series B Offering and Exchange, no shares of Lucid Series A Preferred Stock or Lucid Series A-1 Preferred Stock remain outstanding.

On May 6, 2024, Lucid issued approximately

11,634 shares of newly designated Lucid Series B-1 Convertible Preferred Stock (the “Lucid Series B-1 Preferred Stock”).

terms of the Lucid Series B-1 Preferred Stock are substantially identical to the terms of the Lucid Series B Preferred Stock, except that

the Lucid Series B-1 Preferred Stock has a conversion price of $ 0.7228 .

The aggregate gross proceeds from the sale of shares in such offering

were $ 11.6 million.

Note 17 — Noncontrolling Interest - continued

Lucid Diagnostics — Deemed Dividend on Series

A and Series A-1 Convertible Preferred Stock Exchange Offer

The fair value of the consideration

given in the form of the issue of 31,790 shares of Lucid Series B Convertible Preferred Stock, with such fair value recognized as the

carrying value of such issued shares of Lucid Series B Convertible Preferred Stock, as compared to the carrying value of the extinguished

Lucid Series A and Lucid Series A-1 Convertible Preferred Stock (carrying value of $ 24,294 ), resulting in an excess of fair value of $ 7.5

million recognized as a deemed dividend charged to accumulated deficit in the consolidated balance sheet on March 13, 2024, with such

deemed dividend included as a component of net loss attributable to common stockholders, summarized as follows:

of Net Loss Attributable to Common Stockholders

Lucid Series B Convertible Preferred Stock Issuance and Series A/A-1 Exchange Offer

March 13, 2024

Fair Value - 31,790

shares of Lucid Series B Preferred Stock issued

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

Carrying value related to Lucid Series A and Lucid Series A-1 Preferred Stock Exchanged for Lucid Series B Preferred Stock (of 24,295 shares)

Deemed Dividend Charged to Accumulated Deficit

As of December 31, 2024, there

were 8,000,000 shares of common stock of Veris Health issued and outstanding, of which PAVmed holds an 80.44 % majority-interest ownership

and PAVmed has a controlling financial interest, with the remaining 19.56 % minority-interest ownership held by an unrelated third-party.

Accordingly, Veris Health is a consolidated majority-owned subsidiary of the Company, for which a provision of a noncontrolling interest

(NCI) is included as a separate component of consolidated stockholders’ equity in the accompanying consolidated balance sheets.

Note 18 — Income Taxes

Income tax (benefit) expense for respective periods noted

is as follows:

Schedule of Income Tax (Benefit) Expense

Ended December 31,

Years Ended December 31,

Federal, State and Local

State and Local

and Deferred tax (benefit) expense

Current and Deferred tax (benefit) expense

Valuation allowance reserve

tax expense (benefit)

reconciliation of the federal statutory income tax rate to the effective income tax rate for the respective period noted is as follows:

Income tax expense (benefit)

The reconciliation of the federal statutory income tax

rate to the effective income tax rate for the respective period noted is as follows:

of Effective Income Tax Rate Reconciliation

Ended December 31,

Years Ended December 31,

federal statutory rate

state and local income taxes, net of federal benefit

of state deferred taxes

Permanent differences

Gain on deconsolidation of subsidiary

Revaluation of state deferred taxes

Federal deferred true-up

State deferred true-up

18 — Income Taxes - continued

tax effects of temporary differences which give rise to the net deferred tax assets for the respective period noted is as follows:

Valuation allowance

Effective tax rate

Note 18 — Income Taxes - continued

The tax effects of temporary differences which give rise

to the net deferred tax assets for the respective period noted is as follows:

of Deferred Tax Assets and Liabilities

Ended December 31,

operating loss

compensation expense

and development expenditures

and development tax credit carryforwards

195 deferred start-up costs

& amortization

Tax Liabilities

lease right-of-use assets

Tax Liabilities

tax assets, net of deferred tax liabilities

Years Ended December 31,

Deferred Tax Assets

Net operating loss

Debt issue costs

Stock-based compensation expense

Lease liabilities

Research and development expenditures

Research and development tax credit carryforwards

Accrued expenses

Section 195 deferred start-up costs

Depreciation & amortization

Deferred tax assets

Deferred Tax Liabilities

Operating lease right-of-use assets

Unrealized Gains on Equity Method Investments

Deferred Tax Liabilities

Deferred tax assets, net of deferred tax liabilities

valuation allowance

tax assets, net after valuation allowance

Deferred tax assets, net after valuation allowance

Deferred tax assets and deferred

tax liabilities resulting from temporary differences are measured using enacted tax rates expected to apply to taxable income in the years

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

The effect of the change in the tax rate is recognized as

income or expense in the period the change in tax rate is enacted.

As mentioned in Note 4, Equity Method Investment , on September 10, 2024, PAVmed ceased to have a controlling

financial interest in Lucid Diagnostics and therefore PAVmed’s consolidated results of operations include Lucid Diagnostics’

results of operations only through that date.

Pursuant to ASC

810-10-40-5, the tax effects of the deconsolidation of Lucid Diagnostics’ are included in the gain on deconsolidation resulting

in deferred tax expense of $ 62.3 million offset by a full valuation allowance of ($ 62.3 ) million, netting to zero.

Lucid Diagnostics no

longer qualifies to be included in PAVmed’s combined unitary state tax returns.

As required by FASB ASC Topic

740, Income Taxes, (ASC 740), a “more-likely-than-not” criterion is applied when assessing the estimated realization of deferred

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

to reduce future tax expense.

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

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

not be realized.

Accordingly, the Company evaluated the positive and negative evidence bearing upon the estimated realizability of the

net deferred tax assets, and based on the Company’s history of operating losses, concluded it is more-likely-than-not the deferred

tax assets will not be realized, and therefore recognized a valuation allowance reserve equal to the full amount of the deferred tax

assets, net of deferred tax liabilities, as of December 31, 2024 and 2023.

As of December 31, 2024 and 2023, the deferred tax

asset valuation allowance decreased by $ 51.6 million and increased by $ 36.1 million, respectively.

For the year ended December 31, 2024,

due to the deconsolidation of Lucid on September 10, 2024, changes to the valuation allowance reported a decrease of $ 62.3 million in

the gain on deconsolidation of Lucid and an increase of ($ 10.7 ) million through current year operations, netting to a total change of

$ 51.6 million.

The Company has total estimated

federal net operating loss (“NOL”) carryforward of approximately $ 144.9 million and $ 236.3 million as of December 31,

2024 and 2023, respectively, which is available to reduce future taxable income, of which approximately $ 13.8 million have statutory expiration

dates commencing in 2037 , and approximately $ 131.1 million which do not have a statutory expiration date.

The Company has not yet conducted

a formal analysis and the NOL carryforward and general business credits may be subject-to limitation under U.S.

Internal Revenue Code

(“IRC”) Section 382 (provided there was a greater than 50% ownership change, as computed under such IRC Section 382).

State and Local NOL carryforwards of approximately $ 213.6 million have statutory expiration dates commencing in 2037.

The Company has

total estimated research and development (“R&D”) tax credit carryforward of approximately $ 2.9 million as of December 31,

2024 which are available to reduce future tax expense and have statutory expiration dates commencing in 2037.

Note 18 — Income Taxes - continued

tax assets and deferred tax liabilities resulting from temporary differences are measured using enacted tax rates expected to apply to

taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect of the change in

the tax rate is recognized as income or expense in the period the change in tax rate is enacted.

required by FASB ASC Topic 740, Income Taxes, (“ASC 740), a “more-likely-than-not” criterion is applied when assessing

the estimated realization of deferred tax assets through their utilization to reduce future taxable income, or with respect to a deferred

tax asset for tax credit carryforward, to reduce future tax expense.

A valuation allowance is established, when necessary, to reduce

deferred tax assets, net of deferred tax liabilities, when the assessment indicates it is more-likely-than-not, the full or partial amount

of the net deferred tax asset will not be realized.

Accordingly, the Company evaluated the positive and negative evidence bearing upon

the estimated realizability of the net deferred tax assets, and based on the Company’s history of operating losses, concluded it

is more-likely-than-not the deferred tax assets will not be realized, and therefore recognized a valuation allowance reserve equal to

the full amount of the deferred tax assets, net of deferred tax liabilities, as of December 31, 2023 and 2022.

As of December 31, 2023

and 2022, the deferred tax asset valuation allowance increased by $ 36,112 and $ 13,141 , respectively.

Company has total estimated federal net operating loss (“NOL”) carryforward of approximately $ 236.3 million and $ 158.4 million

as of December 31, 2023 and 2022, respectively, which is available to reduce future taxable income, of which approximately $ 13.8 million

have statutory expiration dates commencing in 2037 , and approximately $ 222.5 million which do not have a statutory expiration date.

Company has not yet conducted a formal analysis and the NOL carryforward and general business credits may be subject-to limitation under

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

such IRC Section 382).

The State and Local NOL carryforwards of approximately $ 260.0 million have statutory expiration dates commencing

The Company has total estimated research and development (“R&D”) tax credit carryforward of approximately $ 3.4

million as of December 31, 2023 which are available to reduce future tax expense and have statutory expiration dates commencing in 2037.

Company files income tax returns in the United States in federal and applicable state and local jurisdictions.

The Company’s tax

filings for the years 2017 and thereafter each remain subject to examination by taxing authorities.

The Company’s policy is to

record interest and penalties related to income taxes as part of its income tax provision.

The Company has not recognized any penalties

or interest related to its income tax provision.

August 2022, the U.S.

Congress passed the Inflation Reduction Act, which included a corporate minimum tax on book earnings of 15%, an

excise tax on corporate share repurchases of 1%, and certain climate change and energy tax credit incentives.

The adoption of a corporate

minimum tax of 15% is not expected to impact PAVmed’s effective tax rate.

The excise tax of 1% on corporate share buybacks will

not have an impact on the Company’s effective tax rate.

19 — Net Loss Per Share

Net loss per share - attributable to PAVmed Inc.

- basic and diluted and Net loss per share - attributable to PAVmed Inc.

The Company files income tax returns

in the United States in federal and applicable state and local jurisdictions.

The Company’s tax filings for the years 2017 and thereafter

each remain subject to examination by taxing authorities.

The Company’s policy is to record interest and penalties related to income

taxes as part of its income tax provision.

The Company has not recognized any penalties or interest related to its income tax provision.

Note 19 — Net Income (Loss) Per Share

The Net income (loss) per share

- attributable to PAVmed Inc.

- basic and diluted and Net income (loss) per share - attributable to PAVmed Inc.

common stockholders -

basic and diluted - for the respective periods indicated - is as follows:

Schedule of Comparison of Basic and Fully Diluted Net Loss Per Share

Ended December 31,

loss - before noncontrolling interest

$ ( 103,238 )

loss attributable to noncontrolling interest

loss - as reported, attributable to PAVmed Inc.

of Comparison of Basic and Fully Diluted Net Loss Per Share

Net income (loss) - before noncontrolling interest

Net income (loss) attributable to noncontrolling interest

Net income (loss) - as reported, attributable to PAVmed Inc.

Deemed dividend on Series Z warrant modification

B Convertible Preferred Stock dividends – earned

loss attributable to PAVmed Inc.

common stockholders

average common shares outstanding, basic and diluted

loss per share (1)

loss attributable to PAVmed Inc.

common stockholders

(1) - Convertible Preferred

Stock would potentially be considered a participating security under the two-class method of calculating net loss per share.

the Company has incurred net losses to-date, and as such holders are not contractually obligated to share in the losses, there is no

impact on the Company’s net loss per share calculation for the periods indicated.

common stock equivalents have been excluded from the computation of diluted weighted average shares outstanding as their inclusion would

be anti-dilutive, are as follows:

Series B Convertible Preferred Stock dividends earned as of each of the respective years noted, are included in the calculation of

basic and diluted net loss attributable to PAVmed common stockholders for each respective period presented.

Notwithstanding, the Series

B Convertible Preferred Stock dividends are recognized as a dividend payable only upon the dividend being declared payable by the Company’s

board of directors.

weighted-average number of shares of common stock outstanding for the years ended December 31, 2023 and 2022 include the shares of

the Company issued and outstanding during such periods, each on a weighted average basis.

The basic weighted average number of shares

of common stock outstanding excludes common stock equivalent incremental shares, while diluted weighted average number of shares outstanding

includes such incremental shares.

However, as the Company was in a loss position for all years presented, basic and diluted weighted

average shares outstanding are the same, as the inclusion of the incremental shares would be anti-dilutive.

The common stock equivalents

excluded from the computation of diluted weighted average shares outstanding are as follows:

Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share

options and restricted stock awards

B Convertible Preferred Stock

total stock options and restricted stock awards are inclusive of 60,057 and 33,391 stock options as of December 31, 2023 and 2022, respectively;

and 6,666 restricted stock awards as of December 31, 2022 granted outside the PAVmed 2014 Equity Plan.

These 6,666 restricted stock

awards were fully vested during the year ended December 31, 2023.

Series B Convertible Preferred Stock dividends – earned

Deemed dividend on Subsidiary Preferred Stock attributable to the noncontrolling interests

Net income (loss) attributable to PAVmed Inc.

common stockholders used in basic EPS calculation

Fair Value Adjustment for diluted EPS calculation

Net income (loss) attributable to PAVmed Inc.

common stockholders used in dilutive EPS calculation

Weighted average common shares outstanding, basic

Weighted average common shares outstanding, diluted

Net income (loss) per share (1)

Net income (loss) per share attributable to PAVmed Inc.

stockholders, basic (1)

Net income (loss) per share attributable to PAVmed Inc.

stockholders, diluted (1)

(1) - Convertible preferred stock and restricted stock awards would potentially be considered

a participating security under the two-class method of calculating net income (loss) per share.

For periods where losses are presented,

such holders are not contractually obligated to share in the losses, there is no impact on the Company’s net income (loss) per

share calculation for the periods indicated.

The common stock equivalents have

been excluded from the computation of diluted weighted average shares outstanding as their inclusion would be anti-dilutive, are as follows:

The Series B Convertible Preferred

Stock dividends earned as of each of the respective years noted, are included in the calculation of basic and diluted net loss attributable

to PAVmed common stockholders for each respective period presented.

Notwithstanding, the Series B Convertible Preferred Stock dividends

are recognized as a dividend payable only upon the dividend being declared payable by the Company’s board of directors.

Note 19 — Net Income (Loss) Per Share -

Basic weighted-average number of

shares of common stock outstanding for the years ended December 31, 2024 and 2023 include the shares of the Company issued and outstanding

during such periods, each on a weighted average basis.

The basic weighted average number of shares of common stock outstanding excludes

common stock equivalent incremental shares, while diluted weighted average number of shares outstanding includes such incremental shares.

However, as the Company was in a loss position for the year ended December 31, 2023, basic and diluted weighted average shares outstanding

are the same, as the inclusion of the incremental shares would be anti-dilutive.

The common stock equivalents excluded from the computation

of diluted weighted average shares outstanding are as follows:

of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share

Stock options

Restricted stock awards

Series Z Warrants

Series B Convertible Preferred Stock

The total stock options are inclusive

of 60,054 stock options as of both December 31, 2024 and 2023, granted outside the PAVmed 2014 Equity Plan.

Note 20 — Segment Information

PAVmed is structured to be a multi-product

life sciences company organized to advance a pipeline of innovative healthcare technologies.

PAVmed is focused on innovating, developing,

acquiring, and commercializing novel products that target unmet medical needs with large addressable market opportunities.

our corporate structure—a parent company that will establish distinct subsidiaries for each financed asset—we have the flexibility

to raise capital at the PAVmed level to fund product development, or to structure financing directly into each subsidiary in a manner

tailored to the applicable product, the latter of which is our current strategy given prevailing market conditions.

Our current focus is

We continue to support the commercial expansion and execution of EsoGuard, which is the flagship product of our

subsidiary Lucid, of which we remain the shareholder with the largest voting interest.

In addition, through a separate

majority-owned subsidiary, Veris Health we are focused in the immediate term on entering into strategic partnership opportunities

with leading academic oncology systems to expand access to the Veris Cancer Care Platform, while concurrently developing an

implantable physiological monitor, designed to be implanted alongside a chemotherapy port, which will interface with the Veris

Cancer Care Platform.

The Company manages the business activities on a consolidated basis and operates in one

reportable segment.

PAVmed’s Chief Executive Officer

is the Chief Operating Decision Maker (“CODM”).

The CODM uses consolidated net income(loss) to assess segment profit or loss,

allocate resources and assess performance.

Further, the CODM reviews and utilizes functional expenses (cost of revenues, sales and marketing,

research and development, and general and administrative) at the consolidated level to manage the Company’s operations.

The Company’s

significant segment expenses and other segment items align with the financial statements line items presented in its the consolidated

statements of operations.

During the years ended December 31, 2024 and 2023 revenues resulting from the delivery of patient EsoGuard test results

was concentrated in the United States.

The measure of segment assets is reported on the balance sheet as total consolidated assets, and

concentrated in the United States.

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

What changed 10-K

Item 9A. Controls and Procedures