What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 1124 added, 1034 removed, 332 unchanged (87% of the section changed)

Financial Statements

CONSOLIDATED BALANCE SHEETS

thousands except number of shares and per share data - unaudited)

September 30, 2024

and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands except number of shares and per share

data - unaudited)

March 31, 2025

December 31, 2024

5 unchanged sentences

Operating lease right-of-use assets

Intangible assets, net

Equity method investment - at fair value

Liabilities, Preferred Stock and Stockholders’ Equity

Liabilities, Mezzanine Equity and Stockholders’ Equity (Deficit)

Current liabilities:

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Commitments and contingencies (Note 8)

Stockholders’ Equity:

Mezzanine Equity

Preferred stock, $ 0.001 par value.

Authorized, 20,000,000 shares;

Series B Convertible Preferred Stock, par value $ 0.001 , issued and outstanding 1,385,149 at September 30, 2024 and 1,305,213 shares at December 31, 2023

Common stock, $ 0.001 par value.

Series C Convertible Preferred Stock,

stated value $ 1,016 at March 31, 2025, and issued and outstanding of 1,969 shares at March 31, 2025 and no shares

issued and outstanding as of December 31, 2024

Stockholders’ Equity (Deficit):

Preferred stock, $ 0.001

Authorized, 20,000,000

Series B Convertible Preferred Stock, par value $ 0.001 ,

issued and outstanding of 1,441,135

shares at March 31, 2025 and 1,412,865

shares at December 31, 2024

Preferred stock, $ 0.001

Authorized, 20,000,000 shares;

10,660,394 and 8,578,505 shares outstanding as of September 30, 2024 and December 31, 2023, respectively

Series C Convertible Preferred Stock, stated value $ 1,016

at March 31, 2025, and issued and outstanding of 22,511 shares

at March 31, 2025 and no

shares issued and outstanding as of December 31, 2024

Preferred stock, value

Common stock, $ 0.001 par value.

Authorized, 250,000,000 shares (Note 13);

16,769,619 and 11,198,977 shares outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

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Total Stockholders’ Equity (Deficit)

Total Liabilities and Stockholders’ Equity (Deficit)

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS

thousands except number of shares and per share data - unaudited)

Total Liabilities, Mezzanine Equity and Stockholders’ Equity (Deficit)

See accompanying notes to

the unaudited condensed consolidated financial statements.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except number of shares and per share

data - unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses:

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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

5 unchanged sentences

Series B Convertible Preferred Stock dividends earned

Series C Convertible Preferred Stock dividends earned

Deemed dividend on Series C Convertible Preferred Stock

Deemed dividend on Subsidiary Preferred Stock attributable to the noncontrolling interests

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Weighted average common shares outstanding, diluted

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

the THREE MONTHS ENDED September 30, 2024

thousands except number of shares and per share data - unaudited)

See accompanying notes to the unaudited condensed consolidated

financial statements.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’

EQUITY (DEFICIT)

for the THREE MONTHS ENDED March 31, 2025

(in thousands, except number of shares and per share

data - unaudited)

Mezzanine Equity

Stockholders’ Equity (Deficit)

Series C Convertible Preferred Stock

Series B Convertible Preferred Stock

Additional Paid-

Series C Convertible Preferred Stock

Additional Paid-In

Non controlling

Balance - June 30, 2024

Balance - December 31, 2024

$ ( 254,965 )

3 unchanged sentences

Conversions - Senior Secured Convertible Note

Conversions - subsidiary common stock - Senior Secured Convertible Note

Impact of subsidiary equity transactions

Issuance - vendor service agreement

Issuance - common stock private placement offering with pre-funded warrants and Veris Health common stock issuance, net of issuance costs

Issuance through debt exchange - Series C Convertible Preferred Stock, net of financing fees

Issuance through unsecured debt obligation cancellation - Series C Convertible Preferred Stock

Conversions - Series C Convertible Preferred Stock

Initial reclassification of Series C Convertible Preferred Stock from permanent equity to Mezzanine Equity due to

partial redemption feature

Reclassification of Series C Convertible Preferred Stock to permanent equity from Mezzanine Equity due to increase

in stated value due to dividend capitalization

Dividends earned - Series C Convertible Preferred Stock

Deemed dividend on Series C Convertible Preferred Stock

Stock-based compensation - PAVmed Inc.

Stock-based compensation - subsidiary

Transfer of intellectual property to Lucid Diagnostics Inc

Stock-based compensation - subsidiaries

Deconsolidation of subsidiary

Net income (loss)

Balance - September 30, 2024

Balance - March 31, 2025

$ ( 237,268 )

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

the NINE MONTHS ENDED September 30, 2024

thousands, except number of shares and per share data - unaudited)

See accompanying notes to the unaudited condensed consolidated

financial statements.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’

EQUITY (DEFICIT)

for the THREE MONTHS ENDED March 31, 2024

(in thousands, except number of shares and per share

data - unaudited)

Stockholders’ Equity (Deficit)

Series B Convertible Preferred Stock

Additional Paid-

Additional Paid-In

Non controlling

1 unchanged sentence

$ ( 294,433 )

Dividends declared - Series B Convertible Preferred Stock

Issue common stock - PAVM ATM Facility

Vest - restricted stock awards

Conversions - Senior Secured Convertible Note

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Impact of subsidiary equity transactions

Issuance - vendor service agreement

Issuance - subsidiary preferred stock (Series A-1)

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Stock-based compensation - subsidiaries

Transfer of intellectual property to Lucid Diagnostics Inc

Deconsolidation of subsidiary

Net income (loss)

Balance - September 30, 2024

$ ( 256,312 ) -

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

the THREE MONTHS ENDED September 30, 2023

thousands, except number of shares and per share data - unaudited)

Stockholders’ Equity (Deficit)

Series B Convertible Preferred Stock

Additional Paid-

Non controlling

Balance - June 30, 2023

$ ( 260,783 )

Dividends declared - Series B Convertible Preferred Stock

Conversions - Senior Secured Convertible Note

Conversions - subsidiary common stock - Senior Secured Convertible Note

Purchase - Employee Stock Purchase Plan

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

Impact of subsidiary equity transactions

Stock-based compensation - PAVmed Inc.

Stock-based compensation - subsidiary

Balance - September 30, 2023

$ ( 278,529 )

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

the NINE MONTHS ENDED September 30, 2023

thousands, except number of shares and per share data - unaudited)

Stockholders’ Equity (Deficit)

Series B Convertible Preferred Stock

Additional Paid-

Non controlling

Balance - December 31, 2022

$ ( 228,169 )

Dividends declared - Series B Convertible Preferred Stock

Issue common stock - PAVM ATM Facility

Vest - restricted stock awards

Conversions - Senior Secured Convertible Note

Conversions - subsidiary common stock - Senior Secured Convertible Note

Purchase - Employee Stock Purchase Plan

Purchase - subsidiary common stock - Employee Stock Purchase Plan

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

Impact of subsidiary equity transactions

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

Issuance - vendor service agreement

Issuance - subsidiary preferred stock (Series A)

Stock-based compensation - PAVmed Inc.

Stock-based compensation - subsidiaries

Treasury stock

Balance - September 30, 2023

Balance - March 31, 2024

$ ( 309,723 )

accompanying notes to the unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

thousands, except number of shares and per share data - unaudited)

Nine Months Ended September 30,

See accompanying notes to the unaudited condensed consolidated

financial statements.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except number of shares and per share

data - unaudited)

Three Months Ended March 31,

Cash flows from operating activities

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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

Change in fair value - derivative liability

Non-cash lease expense

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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

Net cash flows used in investing activities

Cash flows from financing activities

Proceeds – issue of preferred stock - subsidiary

Proceeds – issue of Senior Secured Convertible Note

Proceeds – issue of common stock and pre-funded warrants

Payment – financing costs – debt exchange

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

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Cash, end of period

accompanying notes to the unaudited condensed consolidated financial statements.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

in these accompanying notes are presented in thousands, except number of shares and per-share amounts.)

1 — The Company

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 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 subsidiary, Lucid Diagnostics Inc.

LUCD) (“Lucid”).

In addition, through a

separate majority-owned subsidiary, Veris Health (“Veris”), we are focused in the immediate term on entering into

strategic partnership opportunities with leading academic oncology systems to expand access to the Veris Platform, while concurrently developing an implantable physiological monitor, designed to be implanted alongside a chemotherapy

port, which will interface with 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 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.

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 $ 1.0

million and $ 3.0 million of

revenues for the three and nine month periods ended September 30, 2024, respectively, 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 $ 30.6 million and had net cash flows used

in operating activities of approximately $ 33.6 million for the nine month period ended September 30, 2024.

As of September 30, 2024,

the Company had negative working capital of approximately $ 35.4 million, with such working capital inclusive of the Senior Secured Convertible

Notes classified as a current liability of an aggregate of approximately $ 32.1 million and approximately $ 0.8 million of cash.

See accompanying notes to the unaudited condensed consolidated

financial statements.

and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in these accompanying notes are presented

in thousands, except number of shares and per-share amounts.)

Note 1 — The Company

Description of the Business

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

Our current focus is multi-fold.

We continue to support the commercial expansion and execution of EsoGuard, which is the flagship product of our subsidiary Lucid Diagnostics

LUCD) (“Lucid” or “Lucid Diagnostics”), of which we remain the shareholder with the largest voting

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 less than $ 0.1 million of revenue for the three months ended March 31, 2025, and

the Company expects to continue to experience recurring losses and to generate negative cash flows from operating activities in the near

The Company realized net income

attributable to PAVmed common stockholders of approximately $ 17.7 million and had net cash flows used in operating activities of

approximately $ 1.6 million for the three months ended March 31, 2025.

As of March 31, 2025, the Company had negative working capital of

approximately $ 6.1 million, with such working capital inclusive of the Senior Secured Convertible Notes classified as a current liability

of an aggregate of approximately $ 6.6 million and approximately $ 2.7 million of cash.

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

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

3 — Summary of Significant Accounting Policies

Accounting Policies

Company’s significant accounting policies are as disclosed in the Company’s Annual Report on Form 10-K for the year ended

December 31, 2023 as filed with the SEC on March 25, 2024, except as otherwise noted herein below.

of Presentation

accompanying unaudited condensed consolidated financial statements of PAVmed and those of its wholly owned subsidiaries and variable

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

GAAP”), and applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”).

All intercompany

transactions and balances have been eliminated in consolidation.

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 unaudited condensed 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 periods ended September 30, 2024.

Moving forward, PAVmed will account for its investment in Lucid Diagnostics using the equity method and the fair value option.

See below and Note 4, Equity Method Investment

for a discussion on the impact of the deconsolidation of Lucid Diagnostics.

See Note 15, 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.

permitted under SEC rules, certain footnotes or other financial information normally required by U.S.

Note 3 — Summary of Significant Accounting

Significant Accounting Policies

The Company’s significant

accounting policies are as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with

the SEC on March 24, 2025, except as otherwise noted herein below.

Basis of Presentation

The accompanying unaudited condensed

consolidated financial statements of PAVmed and those of its wholly owned subsidiaries and majority-owned subsidiaries entities have been prepared

in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”), and applicable

rules and regulations of the United States Securities and Exchange Commission (“SEC”).

All intercompany transactions and balances

have been eliminated in consolidation.

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 unaudited

condensed 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

PAVmed accounts for its investment in Lucid Diagnostics using the equity method and the fair

value option.

See below and Note 4, Equity Method Investment for a discussion on the impact of the deconsolidation of Lucid Diagnostics.

See Note 14, 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.

As permitted under SEC rules, certain

footnotes or other financial information normally required by U.S.

GAAP have been condensed or omitted.

The balance sheet as of December 31, 2023 has been derived from audited consolidated financial statements at such date.

The accompanying

unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated

financial statements, and in the opinion of management, include all adjustments, consisting only of routine recurring adjustments, necessary

for a fair statement of the Company’s unaudited condensed consolidated financial information.

unaudited condensed consolidated results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative

of the consolidated results to be expected for the year ending December 31, 2024 or for any other interim period or for any other future

The accompanying unaudited condensed consolidated financial statements and related unaudited condensed consolidated financial

information should be read in conjunction with the Company’s audited consolidated financial statements and related notes thereto

as of and for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K as filed with the SEC on March

amounts in the accompanying unaudited condensed consolidated financial statements and the 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.

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

At times, the balance of its cash deposits may

exceed federally insured limits.

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

which exceed federally insured limits.

in the Company’s cash as of September 30, 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.

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

GAAP, management is required to make estimates

and assumptions 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 unaudited condensed consolidated financial statements, as

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

Significant estimates in these unaudited condensed

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 estimates.

3 — Summary of Significant Accounting Policies - continued

The balance sheet as of December

31, 2024 has been derived from audited consolidated financial statements at such date.

The accompanying unaudited condensed consolidated

financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements, and in the

opinion of management, include all adjustments, consisting only of routine recurring adjustments, necessary for a fair statement of the

Company’s unaudited condensed consolidated financial information.

The unaudited condensed consolidated

results of operations for the three months ended March 31, 2025 are not necessarily indicative of the consolidated results to be expected

for the year ending December 31, 2025 or for any other interim period or for any other future periods.

The accompanying unaudited condensed

consolidated financial statements and related unaudited condensed consolidated financial information should be read in conjunction with

the Company’s audited consolidated financial statements and related notes thereto as of and for the year ended December 31, 2024

included in the Company’s Annual Report on Form 10-K as filed with the SEC on March 24, 2025.

All amounts in the accompanying

unaudited condensed consolidated financial statements and the 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.

The Company maintains its cash at

a major financial institution with high credit quality.

At times, the balance of its cash deposits may exceed federally insured limits.

The Company has not experienced losses on deposits with commercial banks and financial institutions which exceed federally insured limits.

Included in the Company’s

cash as of March 31, 2025 and December 31, 2024 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.

Use of Estimates

In preparing the unaudited condensed

consolidated financial statements in conformity with U.S.

GAAP, management is required to make estimates and assumptions 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 unaudited condensed consolidated financial statements, as well as the reported amounts of revenue

and expenses during the reporting period.

Significant estimates in these unaudited condensed consolidated financial statements include

those related to the estimated fair value of debt obligations, stock-based equity awards, and common stock purchase

Other significant estimates include the estimated incremental borrowing rate, the provision or benefit for income taxes and

the corresponding valuation allowance on deferred tax assets.

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

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

On an ongoing basis,

the Company evaluates its estimates and assumptions.

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

believed to be reasonable.

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

affected by changes in these estimates.

Note 3 — Summary of Significant Accounting

Policies - continued

Revenue Recognition

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

to collect in exchange for those services.

The Company’s revenue was primarily generated by Lucid’s laboratory testing services utilizing

its EsoGuard Esophageal DNA tests.

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

Until September 10, 2024, the date of deconsolidation of Lucid Diagnostics’ operations from the Company’s, the Company’s revenue was primarily generated by Lucid’s laboratory testing services

utilizing its EsoGuard Esophageal DNA tests.

The services were 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.

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

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.

Presently, the Company’s revenue is primarily derived from the Veris Cancer Care Platform and contracts with

hospitals and cancer care centers.

Similarly, ASC 606 five-step principles are equally applicable in determining recognized revenues for

key aspects considered by the Company include the following:

Contracts —The

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

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

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

Payment terms are a function

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

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

However, when a patient

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

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

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

Company’s customer is primarily the patient, a hospital, or cancer care center, but the Company does not enter into a formal

reimbursement contract with a patient.

The Company establishes a contract with a patient in accordance with other customary business

practices, which is the point in time an order is received from a provider and a patient specimen has been returned to the

laboratory for testing.

Patient payment terms are a function of a patient’s existing insurance benefits, including the impact of

coverage decisions with Center for Medicare & Medicaid Services (“CMS”) and applicable reimbursement contracts

established between the Company and payers.

However, when a patient is considered self-pay, the Company requires payment from the

patient prior to the commencement of the Company’s performance obligations.

The Company’s consideration can be deemed

variable or fixed depending on the structure of specific payer contracts, and the Company considers collection of such consideration

to be probable to the extent that it is unconstrained.

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

8 unchanged sentences

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

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

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

The Company limits the amount of variable consideration included in

the transaction price to the unconstrained portion of such consideration.

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

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

with the additional payments or refunds is subsequently resolved.

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

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

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

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

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

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

With respect to a contracted service

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

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

If the consideration derived from

the contracts is deemed to be variable, the Company estimates the amount of consideration to which it will be entitled in exchange for

the promised goods or services.

The Company limits the amount of variable consideration included in the transaction price to the unconstrained

portion of such consideration.

In other words, the Company recognizes revenue up to the amount of variable consideration that is not subject

to a significant reversal until additional information is obtained or the uncertainty associated with the additional payments or refunds

is subsequently resolved.

When the Company does not have significant

historical experience or that experience has limited predictive value, the constraint over estimates of variable consideration may result

in no revenue being recognized upon delivery of patient EsoGuard test results to the ordering healthcare provider.

As such, the Company

recognizes revenue up to the amount of variable consideration not subject to a significant reversal until additional information is obtained

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

Differences between original estimates

and subsequent revisions, including final settlements, represent changes in estimated expected variable consideration, with the change

in estimate recognized in the period of such revised estimate.

With respect to a contracted service arrangement, the fixed consideration

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

probable based upon actual historical experience.

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

2 unchanged sentences

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

3 — Summary of Significant Accounting Policies - continued

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.

Note 3 — Summary of Significant Accounting

Policies - continued

Equity Method Investments

Businesses 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 accounts for Lucid Diagnostics as an equity method investment beginning on September 10, 2024,

10, 2024, and the period ended September 30, 2024.

Value Option (“FVO”) Election

a Securities Purchase Agreement dated March 31, 2022, the Company issued a Senior Secured Convertible Note dated April 4, 2022, referred

to herein as the “April 2022 Senior Convertible Note”, and a Senior Secured Convertible Note dated September 8, 2022, referred

to herein as the “September 2022 Senior Convertible Note”, which are accounted under the “fair value option election”

as discussed below.

a Securities Purchase Agreement dated March 13, 2023, Lucid Diagnostics issued a Senior Secured Convertible Note dated March 21, 2023,

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

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

and Hedging , (“ASC 815”), a financial instrument containing embedded features and/or options may be required to be bifurcated

from the financial instrument host and recognized as separate derivative asset or liability, with the bifurcated derivative asset or

liability initially measured at estimated fair value as of the transaction issue date and then subsequently remeasured at estimated fair

value as of each reporting period balance sheet date.

Alternatively,

FASB ASC Topic 825, Financial Instruments , (“ASC 825”) provides for the “fair value option” (“FVO”)

In this regard, ASC 825-10-15-4 provides for the FVO election (to the extent not otherwise prohibited by ASC 825-10-15-5) to

be afforded to financial instruments, wherein the financial instrument is initially measured at estimated fair value as of the transaction

issue date and then subsequently remeasured at estimated fair value as of each reporting period balance sheet date, with changes in the

estimated fair value recognized as other income (expense) in the statement of operations.

The estimated fair value adjustment of the

April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note and (through

September 10, 2024, Lucid’s deconsolidation date) the Lucid March 2023 Senior Convertible Note, including the component related to accrued interest, is presented in a single

line item within other income (expense) in the accompanying unaudited condensed 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).

Note 10, Financial Instruments Fair Value Measurements , with respect to the FVO election;

and Note 11, Debt , for a discussion

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.

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.

Accounting Standards Updates Not Yet Adopted

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.

and through the period ended March 31, 2025.

Fair Value Option (“FVO”) Election

Under a Securities Purchase Agreement

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

2022 Senior Convertible Note”, and a Senior Secured Convertible Note dated September 8, 2022, referred to herein as the “September

2022 Senior Convertible Note”, which are accounted under the “fair value option election” as discussed below.

Under a Securities Purchase Agreement

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

March 2023 Senior Convertible Note”, which is accounted under the “fair value option election”, through September 10,

2024, the date of Lucid’s deconsolidation from PAVmed’s results of operations, as discussed below.

Under Financial Accounting Standards

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

815”), a financial instrument containing embedded features and/or options may be required to be bifurcated from the financial instrument

host and recognized as separate derivative asset or liability, with the bifurcated derivative asset or liability initially measured at

estimated fair value as of the transaction issue date and then subsequently remeasured at estimated fair value as of each reporting period

balance sheet date.

Alternatively, FASB ASC Topic 825,

Financial Instruments , (“ASC 825”) provides for the “fair value option” (“FVO”) election.

this regard, ASC 825-10-15-4 provides for the FVO election (to the extent not otherwise prohibited by ASC 825-10-15-5) to be afforded

to financial instruments, wherein the financial instrument is initially measured at estimated fair value as of the transaction issue date

and then subsequently remeasured at estimated fair value as of each reporting period balance sheet date, with changes in the estimated

fair value recognized as other income (expense) in the statement of operations.

The estimated fair value adjustment of the April 2022

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

the Lucid March 2023 Senior Convertible Note, including the component related to accrued interest, is presented in a single line item

within other income (expense) in the accompanying unaudited condensed 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).

See Note 9, Financial Instruments

Fair Value Measurements , with respect to the FVO election;

and Note 10, Debt , for a discussion of the April 2022 Senior Convertible

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

From 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.

Recently Adopted Accounting Pronouncements

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.

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

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.

The guidance was adopted by

the Company effective January 1, 2025, on a prospective basis.

The Company does not expect the standard

to have a significant impact on its consolidated financial statements in the 2025 Annual Report on Form 10-K.

Recent Accounting Standards Updates

Not Yet Adopted

In November 2024, the FASB issued

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,

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 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 its unaudited condensed consolidated financial statements and disclosures, however the Company does not expect the standard to have a significant impact.

3 — Summary of Significant Accounting Policies - continued

The Company is currently evaluating the potential impact

of this guidance on its unaudited condensed consolidated financial statements.

October 2023, the FASB issued ASU No.

2 unchanged sentences

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.

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.

The Company is currently evaluating the impact this update will have on its unaudited condensed 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 was valued at $ 25.1 million,

resulting in a gain on deconsolidation of $ 72.3 million in the accompanying unaudited condensed consolidated statements of operations

for the three and nine months ended September 30, 2024.

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 unaudited summarized financial information related to Lucid accounted for under the equity method of accounting as of September

This aggregate information has been compiled from the financial statements of those business.

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

Note 4 — Equity Method Investment

After 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.

The following presents summarized

financial information related to Lucid accounted for under the equity method as of March 31, 2025.

This aggregate information has been

compiled from the financial statements of Lucid.

of Aggregate Information From the Financial Statements

September 30, 2024

March 31, 2025

Other current assets

4 unchanged sentences

Total liabilities and stockholders’ deficit

Three months ended September 30, 2024

July 1, 2024 -

September 10, 2024

September 11, 2024 - September 30, 2024

Net income (loss)

Nine months ended September 30, 2024

January 1, 2024 -

September 10, 2024

September 11, 2024 - September 30, 2024

Three Months ended

March 31, 2025

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 September 30, 2024 were not included in PAVmed’s consolidated results.

September 10, 2024 and September 30, 2024, the fair value of the Company’s investment in Lucid was $ 25.1

Lucid was consolidated and included

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

The amounts from September 11, 2024

through December 31, 2024 were not included in PAVmed’s consolidated results.

March 31, 2025 and December 31, 2024, the fair value of the Company’s investment in Lucid was $ 46.6

million and $ 25.6

million, respectively, with the Company recognizing an unrealized gain on its investment in Lucid of $ 21.0

million in the accompanying condensed consolidated statements of operations for three and nine month periods ended September 30,

The fair value of common shares held by the Company was determined using the closing price of Lucid’s common stock per

share on September 10, 2024 and September 30, 2024 of $ 0.802

million in the accompanying unaudited condensed consolidated statements of operations for the three months ended March 31, 2025.

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 March 31, 2025 and December 31, 2024 of $ 1.49

and $ 0.819 ,

respectively.

At September 10, 2024 and September 30, 2024, PAVmed held approximately 40 % of Lucid’s common stock voting

- Management Services Agreement

At March 31, 2025 and December 31, 2024, PAVmed held approximately 31 %

respectively of Lucid’s common stock voting interest.

Lucid - 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.

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

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.

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

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

During the period of September 11, 2024 through September 30, 2024, MSA fee income was $ 700 .

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

the three and nine month periods ended September 30, 2024, the Company recognized total revenue of $ 996 and $ 2,985 , respectively, primarily

resulting from the delivery of patient EsoGuard test results.

Revenue recognized from customer contracts deemed to include a variable

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

The Company’s revenue for

the three and nine month periods ended September 30, 2023 was $ 791 and $ 1,403 , respectively, primarily 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

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

the three and nine month periods ended September 30, 2024, the cost of revenue was $ 1,381 and $ 4,792 , respectively, primarily related

to costs for our laboratory operations and EsoCheck device supplies.

The Company’s cost of revenue for the three and nine month

periods ended September 30, 2023 was $ 1,779 and $ 4,809 , respectively, primarily related to costs for our laboratory operations and EsoCheck

device supplies.

6 — Prepaid Expenses, Deposits, and Other Current Assets

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

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.

In August 2024, the respective companies’ boards of directors approved the Company to

enter into a ninth amendment to the MSA.

Under this amendment, the monthly fee due to the Company from Lucid was increased from

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 .

During the three months ended March 31, 2025, the MSA fee income was $ 3,150 .

In connection with the Exchange, the September 2022

Senior Convertible Note was amended to provide that MSA Fees will be paid in cash, and that the Company will be required to set aside

50% of such payments received after January 31, 2025, unless certain conditions are met (the “MSA Reserve Requirement”).

of February 18, 2025, the Company and the holder entered into a waiver, pursuant to which, among other things, the holder agreed to waive

the MSA Reserve Requirement through March 31, 2025.

Note 5 — Revenue from Contracts with Customers

Revenue Recognized

Company recognized less than $ 0.1

million in each of the three months ended March 31, 2025 and 2024, in each case from subscription revenue derived from its Veris

Health Cancer Care Platform.

In addition, the Company’s revenue for the three months ended March 31, 2024 was $ 1,010 ,

primarily resulting from the delivery of patient EsoGuard test results.

Revenue recognized from customer contracts deemed to include

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

Cost of Revenue

Until September 10, 2024, the date of deconsolidation of Lucid Diagnostics from PAVmed’s consolidated results,

the cost of revenues principally

includes the costs related to the Company’s laboratory operations (excluding estimated costs associated with research activities),

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

Presently, cost of revenues of $ 36 are principally from amounts incurred

in the delivery of patient services including web hosting costs, patient devices, and compensation costs.

Company recognized less than $ 0.1 million in each of the three months ended March 31, 2025 and 2024, in each case from costs associated

subscription revenue.

The Company’s cost of revenue for the three months ended March 31, 2024 was $ 1,744 ,

primarily related to costs for our laboratory operations and EsoCheck device supplies.

Note 6 — Prepaid Expenses, Deposits, and Other Current Assets

Prepaid expenses and other current assets consisted of

the following as of:

of Prepaid Expenses and Other Current Assets

September 30, 2024

March 31, 2025

December 31, 2024

3 unchanged sentences

Total prepaid expenses, deposits and other current assets

Company’s future lease payments as of September 30, 2024, which are presented as operating lease liabilities, current portion and

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

of Future Minimum Lease Payments for Operating Leases

Note 7 — Leases

The Company’s future lease

payments as of March 31, 2025, which are presented as operating lease liabilities, current portion and operating lease liabilities, less

current portion on the Company’s unaudited condensed consolidated balance sheets are as follows:

Schedule of Future Minimum Lease Payments for Operating Leases

2025 (remainder of year)

2 unchanged sentences

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:

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

Nine Months Ended September 30,

Note 7 — Leases - continued

Supplemental 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

Three Months Ended March 31,

Cash paid for amounts included in the measurement of lease liabilities

4 unchanged sentences

Weighted-average discount rate - operating leases

of September 30, 2024 and December 31, 2023, the Company’s right-of-use assets from operating leases were $ 2,618 and $ 4,267 , respectively,

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

As of September 30,

2024 and December 31, 2023, the Company had outstanding operating lease obligations of $ 2,879 and $ 4,525 , respectively, of which $ 499

and $ 1,565 , respectively, are reported in operating lease liabilities, current portion and $ 2,380 and $ 2,960 , respectively, are reported

of March 31, 2025 and December 31, 2024, the Company’s right-of-use assets from operating leases were $ 2,379

and $ 2,500 , respectively, which are

reported in operating lease right-of-use assets in the unaudited condensed consolidated balance sheets.

As of March 31, 2025 and December

31, 2024, the Company had outstanding operating lease obligations of $ 2,638

and $ 2,760 , respectively, of which $ 528

and $ 513 , respectively, are reported

in operating lease liabilities, current portion and $ 2,110

and $ 2,247 , respectively, are reported

in operating lease liabilities less current portion in the Company’s unaudited condensed consolidated balance sheets.

1 unchanged sentence

terms the Company would likely receive on the open market.

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

related to Lucid.

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

8 — Intangible Assets, net

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

of Intangible Assets, Less Accumulated Amortization

Estimated Useful Life

September 30, 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 $ 82 and $ 505 for the three month periods ended September 30, 2024 and 2023, respectively,

and $ 559 and $ 1,516 for the nine month periods ended September 30, 2024 and 2023, respectively, and is included in amortization of acquired

intangible assets in the accompanying unaudited condensed consolidated statements of operations.

Following the deconsolidation of Lucid,

the Company had an intangible assets, net balance of $ 0 , and no estimated future amortization expense.

See Note 4, Equity Method Investment ,

for additional information on the Lucid deconsolidation.

9 — Commitment and Contingencies

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

other legal actions and claims, including product liability, consumer, commercial, tax and governmental matters, which may arise from

time to time.

The Company is not aware of any such pending legal or other proceedings that are reasonably likely to have a material impact

on the Company.

Notwithstanding, legal proceedings are subject-to inherent uncertainties, and an unfavorable outcome could include monetary

damages, and excessive verdicts can result from litigation, and as such, could result in a material adverse impact on the Company’s

Note 8 — Commitment and Contingencies

Other Matters

In the ordinary course of PAVmed

business, particularly as it begins commercialization of its products, the Company may be subject to certain other legal actions and claims,

including product liability, consumer, commercial, tax and governmental matters, which may arise from time to time.

The Company is not

aware of any such pending legal or other proceedings that are reasonably likely to have a material impact on the Company.

Notwithstanding,

legal proceedings are subject-to inherent uncertainties, and an unfavorable outcome could include monetary damages, and excessive verdicts

can result from litigation, and as such, could result in a material adverse impact on the Company’s business, financial position,

results of operations, and /or cash flows.

Additionally, although the Company has specific insurance for certain potential risks, the

Company may in the future incur judgments or enter into settlements of claims which may have a material adverse impact on the Company’s

business, financial position, results of operations, and /or cash flows.

Additionally, although the Company has specific insurance for

certain potential risks, the Company may in the future incur judgments or enter into settlements of claims which may have a material

adverse impact on the Company’s business, financial position, results of operations, and /or cash flows.

10 — Financial Instruments Fair Value Measurements

Fair Value Measurements

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

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

Note 9 — Financial Instruments Fair Value

Recurring Fair Value Measurements

The fair value hierarchy table for

the periods indicated is as follows:

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

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

2 unchanged sentences

Level-3 Inputs

September 30, 2024

March 31, 2025

Investment in Lucid Diagnostics, Inc common stock

Total assets at fair value

Senior Secured Convertible Note - April 2022

Senior Secured Convertible Note - September 2022

4 unchanged sentences

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

Lucid Senior Secured Convertible Note - March 2023

Total liabilities at fair value

1 There were no transfers

between the respective Levels during the nine months ended September 30, 2024.

discussed in Note 11, Debt , the Company issued Senior Secured Convertible Notes dated April 4, 2022 and September 8, 2022, with

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

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

Both convertible notes are accounted for under the ASC

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

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

discussed in Note 11, Debt, Lucid Diagnostics issued a Senior Secured Convertible Note dated March 21, 2023, with an initial

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

From and 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

1 There were no transfers between the respective Levels during the period ended March 31, 2025.

As discussed in Note 10, Debt ,

the Company issued Senior Secured Convertible Notes dated April 4, 2022 and September 8, 2022, with an initial $ 27.5 million face value

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

Senior Convertible Note”), respectively.

Both convertible notes are accounted for under the ASC 825-10-15-4 fair value option (“FVO”)

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

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

As discussed in Note 10, Debt,

Lucid Diagnostics issued a Senior Secured Convertible Note dated March 21, 2023, with an initial $ 11.1 million face value principal

(“Lucid March 2023 Senior Convertible Note”).

From and after September 10, 2024, the

date of Lucid’s deconsolidation from PAVmed’s results 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

and unobservable inputs.

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

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

dated volatilities) inputs.

10 — 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 September 30, 2024

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:

September 30, 2024

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.

The estimated fair value of the

financial instruments classified within the Level 3 category was determined using both observable inputs and unobservable inputs.

gains and losses associated with liabilities within the Level 3 category include changes in fair value attributable to both observable

(e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs.

Note 9 — Financial Instruments Fair Value

Measurements - continued

The estimated fair value of the

September 2022 Senior Convertible Note as of March 31, 2025 and the estimated fair value of the April 2022 Senior Convertible Note and

the September 2022 Senior Convertible Note as of December 31, 2024, 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

September 2022 Senior

Convertible Note:

September 30, 2024

March 31, 2025

Face value principal payable

8 unchanged sentences

December 31, 2024

September 2022

Convertible Note:

December 31, 2023

Lucid March 2023

September 2022 Senior

Convertible Note:

2 unchanged sentences

Required rate of return

10.00 % - 10.50 %

10.00 % - 10.20 %

Conversion Price

3 unchanged sentences

4.27 % - 4.31 %

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, 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

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

of Outstanding Debt

Contractual Maturity Date

estimated fair values recognized utilized PAVmed’s common stock price, 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 the then-pending exchange of the April 2022 Senior Convertible Note

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

(which exchange was approved and consummated in January 2025), 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.

Note 10 — Debt

The fair value and face value principal

outstanding of the Senior Convertible Notes as of the dates indicated are as follows:

Summary of Outstanding Debt

Maturity Date

Stated Interest Rate

Price per Share

Conversion Price

Principal Outstanding

April 2022 Senior Convertible Note

April 4, 2025

September 2022 Senior Convertible Note

September 8, 2025

Balance as of September 30, 2024

Contractual Maturity Date

Balance as of March 31, 2025

Maturity Date

Stated Interest Rate

Conversion Price per Share

Face Value Principal Outstanding

Conversion Price

Principal Outstanding

April 2022 Senior Convertible Note

2 unchanged sentences

September 8, 2025

Lucid March 2023 Senior Convertible Note

March 21, 2025

Balance as of December 31, 2024

changes in the fair value of debt during the three and nine month periods ended September 30, 2024 is as follows:

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 - June 30, 2024

The changes in the fair value of debt during the three

months ended March 31, 2025 is as follows:

Schedule of Changes in Fair Value of Debt

Convertible Note

September 2022

Convertible Note

Sum of Balance

Sheet Fair Value

Fair Value - December 31, 2024

Face value principal – issue date

2 unchanged sentences

Non-installment payments – common stock

Deconsolidation of Lucid Diagnostics

Change in fair value

Fair Value at September 30, 2024

Other Income (Expense) - Change in fair value – three month period ended September 30, 2024

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

Installment repayments – common stock

Non-installment payments – common stock

Deconsolidation of Lucid Diagnostics

Change in fair value

Fair Value at September 30, 2024

Other Income (Expense) - Change in fair value – nine month period ended September 30, 2024

11 — Debt - continued

changes in the fair value of debt during the three and nine month periods ended September 30, 2023 is as follows:

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 - June 30, 2023

Installment repayments – common stock

Non-installment payments – common stock

Principal paydown through exchange

Non-installment payment through exchange

Change in fair value

Fair Value at September 30, 2023

Other Income (Expense) - Change in fair value – three month period ended September 30, 2023

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 at March 31, 2025

Other Income (Expense) - Change in fair value – three months ended March 31, 2025

The changes in the fair value of debt during the three

months ended March 31, 2024 is as follows:

Convertible Note

September 2022

Convertible Note

Lucid March 2023

Convertible Note

Balance Sheet

Fair Value - December 31, 2023

Fair Value - Beginning of Period

Face value principal – issue date

Fair value adjustment – issue date

Installment repayments – common stock

1 unchanged sentence

Change in fair value

Fair Value at September 30, 2023

Fair Value at March 31, 2024

Fair Value - Ending of Period

Other Income (Expense) - Change in fair value – nine month period ended September 30, 2023

- Senior Secured Convertible Notes

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

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

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

an initial issuance of $ 27.5 million face value

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

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

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

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

a contractual conversion price of $ 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 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 election.

11 — Debt - continued

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 June

30, 2024 through September 3, 2024;

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 1 million shares.

Company is subject to financial covenants requiring:

Other Income (Expense) - Change in fair value – three months ended March 31, 2024

Note 10 — Debt - continued

PAVmed - Senior Secured Convertible Notes

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

4, 2024 , which maturity

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

On November 15, 2024, the Company entered into an Exchange

Agreement (the “Debt Exchange Agreement”) with the holder of the April 2022 Senior Convertible Note and the September

2022 Senior Convertible Note (as defined below).

As described below, the April 2022 Senior Convertible Note was satisfied in full in

connection with the consummation in January 2025 of the transactions contemplated by the Debt Exchange Agreement.

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

2022 Senior Convertible Note”, with such note having a $ 11.25

million face value principal, a 7.875 %

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

per share (which conversion price, in connection with the Exchange, was reduced to $ 1.068 per share as of January 17, 2025) of the

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

recapitalization or other similar transaction), and a contractual maturity date of September

6, 2024 , which maturity

date has been extended to December 31, 2025.

The September 2022 Senior Convertible Note may be

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

The Company is subject to financial

covenants requiring:

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

(ii) the ratio of

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

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

As of 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 unaudited condensed consolidated statement of operations, and is currently

included in accrued expenses and other current liabilities on the Company’s unaudited condensed consolidated balance sheets as

of September 30, 2024.

April 2022 Senior Convertible Note and September 2022 Senior Convertible Note installment payments may be made in shares of PAVmed 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 $ 2.70 .

The notes are also subject to certain provisions

that may require redemption upon the occurrence of certain events, including an event of default, a change of control, or certain equity

the three and nine month periods ended September 30, 2024, approximately $ 455 and $ 1,435 , respectively, of principal repayments along

with approximately $ 55 and $ 143 , respectively, of interest expense thereon, were settled through the issuance of 509,942 and 1,084,366 ,

respectively, shares of common stock of the Company, with such shares having a fair value of approximately $ 907 and $ 2,002 , respectively,

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

during the three and nine month periods ended September 30, 2024, the Company agreed to pay $ 652 and $ 1,059 , respectively, 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 unaudited condensed consolidated statements of operations.

As of September 30, 2024, approximately

$ 652 of acceleration floor payments owed to the holder are included in accrued expenses and other current liabilities on the Company’s

unaudited condensed consolidated balance sheets.

The conversions and floor acceleration payments resulted in debt extinguishment losses

of $ 1,050 and $ 1,501 in the three and nine month periods ended September 30, 2024, respectively.

Diagnostics - Senior Secured Convertible Note

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

condensed 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 $ 328 in the period

July 1, 2024 through September 10, 2024.

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

2024 through September 10, 2024.

the three and nine month periods ended September 30, 2024, the Company recognized debt extinguishment losses in total of

approximately $ 1,403

and $ 2,535 ,

respectively, 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 three and nine month periods ended September 30, 2023, the Company recognized debt

extinguishment losses in total of approximately $ 1,764

and $ 3,032 ,

respectively.

Note 10, Financial Instruments Fair Value Measurements , for a further discussion of fair value assumptions.

12 — Stock-Based Compensation

(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

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 September 1,

2024 through November 11, 2024, the Company was not in compliance with the Financial Tests.

As of November 1, 2024, the Investor agreed

to waive any such non-compliance during such time period and thereafter through December 31, 2024, which period the Investor agreed to extend, as of January 17, 2025 in connection with

the consummation of the Exchange, through December 31, 2025.

April 2022 Senior Convertible Note (until its satisfaction in full in connection with the Exchange) and September 2022 Senior

Convertible Note installment payments may be made in shares of PAVmed 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

(which floor price, in connection with the Exchange, was reduced to $ 0.2136 per share as of January 17, 2025).

The notes are also subject to certain provisions that may require redemption upon the occurrence of certain events, including an

event of default, a change of control, or certain equity issuances.

As of March 31, 2025, there were no further installment payments due under the September 2022 Convertible Note.

In the three months ended March

31, 2025, approximately $ 176 , of principal repayments along with approximately $ 26 of interest expense thereon, were settled through the

issuance of 401,303 , shares of common stock of the Company, with such shares having a fair value of approximately $ 260 , (with such fair

value measured as the respective conversion date quoted closing price of the common stock of the Company).

The conversions resulted in

debt extinguishment losses of $ 58 in the three months ended March 31, 2025.

On 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 at such price could not exceed 3 million shares.

Note 10 — Debt - continued

Debt Exchange Agreement

On November 15, 2024, the Company

entered into the Debt Exchange Agreement with 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.

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

with the Holder.

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

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

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

On January 24, 2025, after satisfaction of all conditions

to closing, the parties consummated the Purchase.

January 17, 2025, the parties consummated the transactions contemplated by the Debt Exchange Agreement.

Following consummation of

the transactions contemplated by the Debt Exchange Agreement, 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.

Under the Debt Exchange Agreement discussed above, effective as of consummation on the Exchange as of January 17,

2025, the Company also agreed to certain amendments and modifications to the September 2022 Convertible Note, including, without limitation,

that the conversion price thereunder was reset to $ 1.068 ;

that the maturity date was extended to December 31, 2025;

that any change of

control or disposition by the Company of its shares of Lucid common stock would require the prior written consent of the Required Holders

(as defined in the September 2022 Convertible Note);

certain other terms and conditions regarding payments under the MSA and the application

of the same (including that all MSA payments from Lucid must be made in cash);

that the Company waives its right to redeem the September

2022 Convertible Note so long as any shares of Series C Preferred Stock are outstanding;

that the Holder waives, until December 31, 2025,

the financial covenants under the September 2022 Convertible Note requiring that (i) the amount of the Company’s available cash

equal or exceed $ 8.0 million at all times, (ii) the ratio of (a) the outstanding principal amount of the September 2022 Convertible Note,

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, not exceed 30%, and (iii) that the Company’s market capitalization shall at no time be less than $ 75

and that so long as any shares of Series C Preferred Stock remain outstanding, the Holder will be entitled to exchange all, or

any portion, of the September 2022 Convertible Note (including any interest that would accrue thereon through the maturity date thereof)

into shares of Lucid common stock held by the Company, at an exchange price per share of Lucid common stock equal to $ 0.85 per share (as

adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events), subject to certain beneficial ownership

Lucid Diagnostics - Senior Secured Convertible

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

balance sheets.

During the three months ended March

31, 2025, the Company recognized debt extinguishment losses in total of approximately $ 58 , in connection with the Company issuing shares

of its common stock for principal repayments on convertible debt mentioned above.

During the three months ended March 31, 2024, the Company

recognized debt extinguishment losses in total of approximately $ 369 , in connection with the Company or Lucid (as applicable) issuing

shares of its common stock for principal repayments on convertible debt mentioned above.

See Note 9, Financial Instruments

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

Note 11 — Stock-Based Compensation

2014 Long-Term Incentive Equity Plan

2014 Long-Term Incentive Equity Plan (the “PAVmed 2014 Equity Plan”) is designed to enable PAVmed to offer employees,

officers, directors, and consultants, as defined, an opportunity to acquire shares of common stock of PAVmed.

The types of awards that

may be granted under the PAVmed 2014 Equity Plan include stock options, stock appreciation rights, restricted stock, and other stock-based

awards subject to limitations under applicable law.

The PAVmed Inc.

2014 Long-Term Incentive

Equity Plan (the “PAVmed 2014 Equity Plan”) is designed to enable PAVmed to offer employees, officers, directors, and consultants,

as defined, an opportunity to acquire shares of common stock of PAVmed.

The types of awards that may be granted under the PAVmed 2014

Equity Plan include stock options, stock appreciation rights, restricted stock, and other stock-based awards subject to limitations under

applicable law.

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

total of 1,835,970 shares of common stock of PAVmed are reserved for issuance under the PAVmed 2014 Equity Plan, with 79,321 shares available

for grant as of September 30, 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 September 30, 2024.

In January 2024, the number of shares available for

grant was increased by 432,452 in accordance with the evergreen provisions of the plan.

Stock Options

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

A total of 2,412,140 shares of common

stock of PAVmed are reserved for issuance under the PAVmed 2014 Equity Plan, with 1,314,633 shares available for grant as of March 31,

The share reservation is not diminished by a total of 61,146 PAVmed stock options and restricted stock awards granted outside the

PAVmed 2014 Equity Plan as of March 31, 2025.

In January 2025, the number of shares available for grant was increased by 576,170 in accordance

with the evergreen provisions of the plan.

PAVmed Stock Options

PAVmed stock options granted under

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

of Summarizes Information About Stock Options

Number of Stock Options

Weighted Average Exercise Price

Remaining Contractual Term (Years)

Weighted Average

Exercise Price

Remaining Contractual

Intrinsic Value (2)

Outstanding stock options at December 31, 2024

Outstanding stock options at September 30, 2024 (3)

Vested and exercisable stock options at September 30, 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 September 30, 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 September 30, 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.

Restricted Stock Awards

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

Outstanding stock options at March 31, 2025 (3)

Vested and exercisable stock options at March 31, 2025

Stock 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.

The intrinsic value is computed as the difference between the quoted price of the PAVmed common stock on each of March 31, 2025 and December 31, 2024 and the exercise price of the underlying PAVmed stock options, to the extent such quoted price is greater than the exercise price.

The outstanding stock options presented in the table above are inclusive of 54,480 and 60,054 stock options granted outside the PAVmed 2014 Equity Plan, as of March 31, 2025 and December 31, 2024, respectively.

In 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 share.

None of the forfeitures were

from officers or board members.

Note 11 — Stock-Based Compensation - continued

PAVmed Restricted Stock Awards

PAVmed restricted stock awards granted under the PAVmed

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

of Restricted Stock Award Activity

Number of Restricted Stock Awards

Weighted Average Grant Date Fair Value

Number of Restricted

Weighted Average

Grant Date Fair Value

Unvested restricted stock awards as of December 31, 2024

Unvested restricted stock awards as of September 30, 2024

12 — Stock-Based Compensation - continued

Diagnostics Inc.

2018 Long-Term Incentive Equity Plan

Unvested restricted stock awards as of March 31, 2025

Lucid Diagnostics Inc.

2018 Long-Term Incentive Equity Plan (“Lucid Diagnostics 2018 Equity Plan”) is separate and apart

from the PAVmed 2014 Equity Plan discussed above.

The Lucid Diagnostics 2018 Equity Plan is designed to enable Lucid Diagnostics to offer

employees, officers, directors, and consultants, an opportunity to acquire shares of common stock of Lucid Diagnostics.

awards that may be granted under the Lucid Diagnostics 2018 Equity Plan include stock options, stock appreciation rights, restricted

stock, and other stock-based awards subject to limitations under applicable law.

All awards are subject to approval by the Lucid Diagnostics

compensation committee.

Please note that following the deconsolidation

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

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, 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.

Diagnostics Restricted Stock Awards

Diagnostics restricted stock awards granted under the Lucid Diagnostics 2018 Equity Plan and restricted stock awards granted outside

such plan are summarized as follows:

of Restricted Stock Award Activity

Number of Restricted Stock Awards

Weighted Average Grant Date Fair Value

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.

12 — Stock-Based Compensation - continued

Stock-Based Compensation Expense

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

2018 Long-Term Incentive Equity Plan

The Lucid Diagnostics Inc.

Long-Term Incentive Equity Plan (“Lucid Diagnostics 2018 Equity Plan”) is separate and apart from the PAVmed 2014 Equity Plan

discussed above.

The Lucid Diagnostics 2018 Equity Plan is designed to enable Lucid Diagnostics to offer employees, officers, directors,

and consultants, an opportunity to acquire shares of common stock of Lucid Diagnostics.

The types of awards that may be granted under

the Lucid Diagnostics 2018 Equity Plan include stock options, stock appreciation rights, restricted stock, and other stock-based awards

subject to limitations under applicable law.

All awards are subject to approval by the Lucid Diagnostics compensation committee.

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

unaudited condensed consolidated statements of operations.

Lucid continues to be responsible for administering its equity plan.

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

Consolidated Stock-Based Compensation Expense

The 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

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of revenue

3 unchanged sentences

Total stock-based compensation expense

Compensation Expense Recognized by Lucid Diagnostics

noted, the consolidated stock-based compensation expense presented above is inclusive of stock-based compensation expense recognized

by Lucid Diagnostics (through September 10, 2024, the date of PAVmed’s deconsolidation of Lucid) inclusive of each of:

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 (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 Recognized by Lucid Diagnostics

Note 11 — Stock-Based Compensation -

Stock-Based Compensation Expense Recognized by Lucid Diagnostics

As noted, the consolidated stock-based

compensation expense presented above is inclusive of stock-based compensation expense recognized 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 Agreement;

and stock options and

restricted stock awards granted to employees of PAVmed and non-employee consultants under the Lucid Diagnostics 2018 Equity Plan.

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

Lucid Diagnostics 2018 Equity Plan – cost of revenue

8 unchanged sentences

Total 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 the PAVmed 2014 Equity Plan, as discussed above, is as follows:

The consolidated unrecognized stock-based

compensation expense and weighted average remaining requisite service period with respect to stock 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)

Weighted Average

Remaining Service

Period (Years)

PAVmed 2014 Equity Plan

1 unchanged sentence

Restricted Stock Awards

12 — Stock-Based Compensation - continued

compensation expense recognized with respect to stock options granted under the PAVmed 2014 Equity Plan was based on a weighted average

estimated fair value of such stock options of $ 1.47 per share and $ 5.25 per share during the nine month periods ended September 30, 2024

and 2023, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

estimated fair value of such stock options of $ 1.46

per share during the three months ended March 31, 2024 calculated using the following weighted average Black-Scholes

valuation model assumptions below.

The Company did not grant any stock options under the PAVmed 2014 Equity Plan during the three months ended

March 31, 2025.

of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions

Nine Months Ended September 30,

Three Months Ended March 31,

Expected term of stock options (in years)

2 unchanged sentences

Expected dividend yield

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 $ 0.79

per share and $ 0.88

per share during the nine month periods ended September 30, 2024 (through September 10, 2024, the date of PAVmed’s

consolidation of Lucid) and 2023, respectively, calculated using the following weighted average Black-Scholes valuation model

Note 11 — Stock-Based Compensation -

Stock-based 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 $ 0.84 per share during the three months ended March 31, 2024 (through September 10, 2024, the date

of PAVmed’s deconsolidation of Lucid), calculated using the following weighted average Black-Scholes valuation model assumptions:

of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions

Nine Months Ended September 30,

Three Months Ended March 31,

Expected term of stock options (in years)

3 unchanged sentences

Employee Stock Purchase Plan (“PAVmed ESPP”)

total of 34,332 shares and 38,216 shares of common stock of the Company were purchased for proceeds of approximately $ 62 and $ 182 , on

March 31, 2024 and 2023, respectively, under the PAVmed ESPP.

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

of which 139,863 shares are available for issue as of September 30, 2024.

In January 2024, the number of shares available-for-issue was

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 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.

Effective 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.

A total of 34,332 shares of common

stock of the Company were purchased for proceeds of approximately $ 62 on March 31, 2024, under the PAVmed ESPP.

The PAVmed ESPP has a

total reserve of 466,668 shares of common stock of PAVmed of which 306,530 shares are available for issue as of March 31, 2025.

2025, the number of shares available-for-issue was increased by 166,667 in accordance with the evergreen provisions of the plan.

Note 12 — Preferred Stock

As of March 31, 2025 and December

31, 2024, there were 1,441,135 and 1,412,865 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 $ 86 of such dividends

earned in the three months ended March 31, 2025;

and $ 79 of such dividends earned in the three months ended March 31, 2024.

PAVmed Series B Convertible Preferred Stock Dividends

During the three months ended March

31, 2025, the Company’s board of directors declared an aggregate of approximately $ 85 of Series B Convertible Preferred Stock dividends,

earned as of December 31, 2024, with such dividends settled by the issue of an additional aggregate 28,270 shares of Series B Convertible

Preferred Stock.

of September 30, 2024 and December 31, 2023, there were 1,385,149 and 1,305,213 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.

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.

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 unaudited condensed consolidated statement

of operations, inclusive of $ 83 and $ 244 of such dividends earned in the three and nine month periods ended September 30, 2024, respectively;

and $ 77 and $ 226 of such dividends earned in the three and nine month periods ended September 30, 2023, respectively.

Series B Convertible Preferred Stock Dividends Declared

the nine months ended September 30, 2024, the Company’s board of directors declared an aggregate of approximately $ 239 of Series

B Convertible Preferred Stock dividends, inclusive of $ 78 earned as of December 31, 2023;

and $ 80 earned as of March 31, 2024;

earned as of June 30, 2024, with such dividends settled by the issue of an aggregate 79,936 additional shares of Series B Convertible

Preferred Stock, inclusive of 26,123 shares issued with respect to the dividends earned as of December 31, 2023;

and 26,640 shares issued

with respect to the dividends earned as of March 31, 2024;

and 27,173 shares issued with respect to the dividends earned as of June 30,

the nine months ended September 30, 2023, the Company’s board of directors declared an aggregate of approximately $ 221 of Series

B Convertible Preferred Stock dividends, inclusive of $ 72 earned as of December 31, 2022;

and $ 74 earned as of March 31, 2023;

earned as of June 30, 2023, with such dividends settled by the issue of an aggregate 73,842 additional shares of Series B Convertible

Preferred Stock, inclusive of 24,128 shares issued with respect to the dividends earned as of December 31, 2022;

and 24,610 shares issued

with respect to the dividends earned as of March 31, 2023;

and 25,104 shares issued with respect to the dividends earned as of June 30,

to September 30, 2024, in November 2024, the Company’s board of directors declared a PAVmed Series B Convertible Preferred Stock

dividend, earned as of September 30, 2024, of $ 83 , to be settled by the issue of 27,716 additional shares of Series B Convertible Preferred

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

unaudited condensed 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.

14 — 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 .

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.

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.

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.

November 8, 2024, the Panel granted the Company an extension, until January 31, 2025, to regain compliance with the Nasdaq continued

listing standards.

During the extension granted by the Panel, the Company’s

common stock and Series Z warrants will continue to trade uninterrupted under the symbol “PAVM” and “PAVMZ”, respectively.

the nine months ended September 30, 2024 a total of 34,332 shares of common stock of the Company were issued under the PAVmed ESPP.

Note 12, Stock-Based Compensation , for a discussion of each of the PAVmed 2014 Equity Plan and the PAVmed ESPP.

the nine months ended September 30, 2024, 574,424 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 $ 980 face value principal

repayments, as discussed in Note 11, Debt .

the nine months ended September 30, 2024, the Company sold 627,302

shares through their at-the-market equity facility

for net proceeds of approximately $ 977 ,

after payment of 3 %

the nine months ended September 30, 2024, the Company issued 200,809 shares of common stock to vendors in exchange for $ 200 of agreed

upon services, which is included in general and administrative operating expenses on the Company’s unaudited condensed consolidated

statement of operations.

Distribution of Lucid Diagnostics Common Stock to Shareholders

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.

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 share.

Stock Purchase Warrants

of September 30, 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 ($ 24.00 post reverse-split, decreased by $ 0.52 due to distribution of Lucid common stock to

PAVmed stockholders, discussed further above).

There were no Series Z Warrants exercised during the nine months ended September 30, 2024.

15 — Noncontrolling Interest

noncontrolling interest (“NCI”) included as a component of consolidated total stockholders’ equity is summarized for

the periods indicated as follows:

During the three months ended March

31, 2024, the Company’s board of directors declared an aggregate of approximately $ 78 of Series B Convertible Preferred Stock dividends,

earned as of December 31, 2023, with such dividends settled by the issue of an additional aggregate 26,123 shares of Series B Convertible

Preferred Stock.

to March 31, 2025, on May 5, 2025, the Company’s board of directors declared a PAVmed Series B Convertible Preferred Stock

dividend, earned as of March 31, 2025, of $ 86 ,

to be settled by the issue of

28,834 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

Series C Preferred Stock is issued pursuant to the PAVmed Inc.

Certificate of Designation of Preferences, Rights, and Limitations of

Series C Convertible Preferred Stock (“Series C Convertible Preferred Stock Certificate of Designation”) and has a par value

of $ 0.001 per share.

Each share of Series C Preferred Stock has a stated value of $ 1,000

(plus the amount of any dividends thereon that are capitalized), and entitles the holder thereof to a preferred dividend at a rate of

per annum, payable quarterly in arrears.

The Series C Preferred Stock is entitled to vote with the holders of shares of Common Stock,

voting together as one class, on all matters in which the holders of the preferred shares are permitted to vote with the class of shares

of Common Stock pursuant to applicable law, on an as-converted basis (subject to certain limitations, including the beneficial ownership limitation described below).

Series C Preferred Stock is pari passu with the Series B Convertible Preferred Stock, and is senior to all of the Company’s

other equity securities.

12 — Preferred Stock - continued

liquidation, a holder of Series C Preferred Stock will be entitled to receive in cash out of the assets of the Company, before any amount

would be paid to the holders of any of shares of the Company’s common stock, but pari passu with the holders of any Series B Preferred

Stock then outstanding, an amount per share equal to the greater of (A) the sum of (i) 110% of the stated value (plus any accrued and

unpaid dividends or other amounts then payable thereon) of such share of Series C Preferred Stock then outstanding and (ii) a ratable

portion of 100% of the stated value (plus any accrued and unpaid dividends or other amounts then payable thereon) of the Series B Preferred

Stock then outstanding and (B) the amount per share such holder would receive if such holder converted such share of Series C Preferred

Stock into the Company’s common stock immediately prior to the date of such payment.

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

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

per share, subject to certain adjustments.

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

the right to elect to convert shares of Series C Preferred Stock into the Company’s common stock at an alternate conversion

price equal to the lower of:

(i) the fixed conversion price then in effect, and (ii) the lowest of (A) 80% of the VWAP of the

Company’s common stock as of the trading day immediately preceding the delivery or deemed delivery of the applicable notice of

conversion, (B) 80% of the VWAP of the Company’s common stock as of the trading day of the delivery or deemed delivery of the

applicable notice of conversion, and (C) 80% of the average VWAP of the Company’s common stock for each of the two trading

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

trading day immediately prior to the delivery or deemed delivery of the applicable notice of conversion, but in the case of clause

(ii), not less than $0.2136 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar

events) (such price, the “Alternate Conversion Price”).

The term “Triggering Event” includes events that would constitute

an event of default under the September 2022 Senior Convertible Note, in addition to the failure of the Company to complete a

Qualified Company Optional Redemption (as defined below) by March 31, 2025 (the “QCOR Triggering Event”).

The principal

consequence of a Triggering Event (other than a bankruptcy-related Triggering Event) is to give the holder the right to elect an

alternate conversion as described above.

In addition, the occurrence of a Triggering Event (other than a QCOR Triggering Event) will

result in an increase to the dividend rate and limit the Company’s right to redeem the Series C Preferred Stock.

Event (other than a bankruptcy-related Triggering Event) will not otherwise accelerate any financial or other obligation on the part

of the Company in respect of the Series C Preferred Stock.

the Company grants, issues or sells (or enters into any agreement to grant, issue or sell) or is deemed to have granted, issued or sold,

any shares of common stock, for consideration per share less than the fixed conversion price then in effect, then immediately after such

issuance, the fixed conversion price shall be reduced to an amount equal to such lower price.

Company has the right to redeem all, but not less than all, of the shares of Series C Preferred Stock at a redemption price equal

to 132.5 % of the aggregate stated value of the Series C Preferred Stock plus all accrued and unpaid dividends and other amounts then

payable thereon.

The Company also has an additional one-time right to redeem a portion of the shares of Series C Preferred Stock

with an aggregate stated value of at least $ 5 million at the same redemption price (a “Qualified Company Optional Redemption”).

12 — Preferred Stock - continued

a Change of Control (as defined in the Series C Convertible Preferred Stock Certificate of Designation), a holder of the Series C

Preferred Stock has the right to require the Company to redeem all, or any portion, of the holder’s shares of Series C

Preferred Stock at a price equal to 132.5 %

of the stated value of the Series C Preferred Stock (plus any accrued and unpaid dividends or other amounts then payable thereon)

or, if greater, an amount determined pursuant to the Series C Convertible Preferred Stock Certificate of Designation based on the

then-current market price or the consideration payable in the Change of Control transaction, whichever is higher.

holder may not convert any of the shares of Series C Preferred Stock, to the extent that, after giving effect to such

conversion, such holder (together with certain of its affiliates and other related parties) would beneficially own in excess of 9.99 %

of the shares of the Company’s common stock outstanding immediately after giving effect to such conversion (the “Maximum

Percentage”).

The Holder may from time to time increase or decrease the Maximum Percentage;

provided that in no event could the

Maximum Percentage exceed 9.99 %, provided, further, that any such increase would not be effective until the 61st day after delivery of

a notice to the Company of such increase.

Company and its subsidiaries (other than Lucid) are subject to certain customary affirmative and negative covenants regarding the

rank of the Series C Preferred Stock, the incurrence of indebtedness, the existence of liens, the repayment of indebtedness and the making

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

indebtedness, transactions with affiliates and the ability to complete stock splits, among other customary matters.

The Company also

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

February 18, 2025, the Company and the holder of the Series C Preferred Stock entered into a waiver agreement (the “Q1 2025

Waiver”), pursuant to which, among other things, the holder granted certain waivers related to the Series C Preferred Stock,

including waivers necessary to permit the Company and Veris to consummate the Offering (as described in Note 13, Common Stock and

Common Stock Purchase Warrants ).

In consideration of such waivers, the Company agreed to reduce temporarily, and the holder of

the Series C Preferred Stock consented to reducing temporarily, the contractual conversion price under the Series C Preferred Stock

during the period through March 31, 2025;

provided that the aggregate amount of conversions under the Series C Preferred Stock at

such conversion price during such period did not exceed 1 million

shares (the “Q1 2025 Conversion Price Reduction”).

In addition, pursuant to the Q1 2025 Waiver, the Company granted the

holder of the Series C Preferred Stock the right, exercisable through March 31, 2025, to elect to exchange up to $ 2.0 million of Series C Preferred Stock for an equivalent increase in the principal amount of the September

2022 Senior Convertible Note (although no exchanges elections were made under this provision during the waiver period) (the

“Q1 2025 Exchange Right”).

March 18, 2025, the Company and the holder of the Series C Preferred Stock agreed to modify the terms of the Q1 2025 Conversion Price Reduction by increasing the maximum number of shares that could

be converted at the reduced conversion price of $ 0.40 through March 31, 2025 from 1 million to 2 million (the

“Q1 2025 Conversion Price Reduction Adjustment”).

Company recognized the incremental value associated with the Q1 2025 Conversion Price Reduction as a deemed dividend charge of

as an increase of net loss available to common stockholders on the unaudited condensed consolidated statements of operations for the

three months ended March 31, 2025.

The incremental value associated with the Series C Preferred Stock modification was determined

using Monte Carlo simulation models based on the adjusted conversion price of $ 0.40 for

the value of 1 million

shares of the Company’s common stock when converted from the Series C Preferred Stock with the following assumptions:

rate of return of 14.5 %,

dividend yield of 0 %,

volatility of 40 %,

and a risk-free rate of 4.30 %, compared to the fair value of the 1 million

shares converted of the Company’s common stock on the date immediately preceding the modification with a $ 1.068 conversion

price, utilizing the following assumptions:

required rate of return of 14.5 %,

dividend yield of 0 %,

volatility of 40 %,

and a risk-free rate of 4.30 %.

Company also recognized incremental value associated with the Q1 2025 Conversion Price Reduction Adjustment as an additional deemed

dividend charge of $ 355 and

as an increase of net loss available to common stockholders on the unaudited condensed consolidated statements of operations in the

three months ended March 31, 2025.

The incremental value associated with this adjustment was determined using Monte Carlo simulation

models using the adjusted conversion price of $ 0.40 for

the value of the additional 1 million

shares of the Company’s common stock when converted from the Series C Preferred Stock with the following assumptions:

rate of return of 14.5 %,

dividend yield of 0 %,

volatility of 40 %,

and a risk-free rate of 3.98 %, compared to the fair value of the additional 1 million

shares converted of the Company’s common stock on the date immediately preceding the modification with a $ 1.068 conversion

price, utilizing the following assumptions:

required rate of return of 14.5 %,

dividend yield of 0 %,

volatility of 40 %,

and a risk-free rate of 3.98 %.

The Q1 2025 Exchange Right granted pursuant to the Q1 2025 Waiver provided the holder with a substantive redemption

feature outside of the Company’s control during the waiver period.

As a result, the affected Series C Preferred Stock no longer

met the criteria for classification as permanent equity.

Accordingly, the Company reclassified $ 2.0 million of Series C Preferred Stock

from permanent equity to mezzanine equity on the unaudited condensed consolidated balance sheet as of March 31, 2025.

March 31, 2025, the Company elected to capitalize the Series C Preferred Stock dividend earned as of March 31, 2025 of $ 398 ,

and as a result, the stated value of the Series C Preferred Stock was adjusted from $ 1,000

the three months ended March 31, 2025, the Company has issued 1,300,000

shares of our common stock in connection with the conversion of 520

shares of Series C Preferred Stock.

Subsequent to March 31, 2025 ,

as of May 12 , 2025, the Company has issued 450,000

shares of our common stock in connection with the conversion of 180

shares of Series C Preferred Stock.

Subsequent to March 31, 2025, on

April 21, 2025, the Company and the holder of the Series C Preferred Stock entered into another waiver agreement (the “Q2 2025 Waiver”),

pursuant to which the holder granted certain waivers related to the Series C Preferred Stock, including the waiver of any QCOR Triggering

Event through the earlier of June 30, 2025 and the date on which the holder can no longer convert the Series C Preferred Stock at $ 0.40 .

In consideration of such waivers, the Company agreed to reduce temporarily, and the holder of the Series C Preferred Stock consented to

reducing temporarily, the contractual conversion price under the Series C Preferred Stock to $ 0.40 , during the period through June 30,

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

did not exceed 1 million shares (the “Q2 2025 Conversion Price Reduction”).

In addition, pursuant to the Q2 2025 Waiver, the

Company granted the holder of the Series C Preferred Stock the right, exercisable through June 30, 2025, to elect to exchange up to $2.0

million of Series C Preferred Stock for an equivalent increase in the principal amount of the September 2022 Senior Convertible Note (although

no exchanges elections were made under this provision during through the date hereof).

On May 14, 2025, the Company and the holder of the Series C Preferred Stock agreed to increase the maximum number

of shares that could be converted at the reduced conversion price of $0.40 through June 30, 2025 from 1 million to 2 million.

Note 13 — Common Stock and Common Stock Purchase

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.

In the three months ended March

31, 2025, 401,303 shares of the Company’s common stock were issued upon conversion, at the election of the holder, of the September

2022 Senior Convertible Note, for $ 176 face value principal repayments, as discussed in Note 10, Debt .

In the three months ended March

31, 2025, the Company sold 1,216,565 shares through their at-the-market equity facility for net proceeds of approximately $ 841 , after

payment of 3 % commissions.

Note 13 — Common Stock and Common Stock Purchase

Warrants - continued

In the three months ended March

31, 2025, the Company issued 77,408 shares of common stock to vendors in exchange for $ 50 of agreed upon services, which is included in

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

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

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

to purchase (the “Offering”) 2,574,350

shares of the Company’s common stock and pre-funded warrants to purchase 756,734

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

per share or warrant share (as applicable).

In addition, Veris agreed to issue to each Investor approximately 0.2033

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

shares of Veris’ common stock.

On February 21, 2025, the Company consummated the Offering, generating gross proceeds to the Company

of $ 2.37 million.

The Pre-Funded Warrants are classified as equity in accordance as they are indexed to the Company’s own stock and meet the criteria

for equity classification.

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

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.

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.

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 a share 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 a share of the Company’s common stock.

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.

Common Stock Purchase Warrants

As of March 31, 2025 and December

31, 2024, Series Z Warrants outstanding totaled 11,937,450 representing the right to purchase 795,830 shares of the Company’s common

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 three months ended March 31, 2025.

30, 2025, the Series Z Warrants contractually expired without further exercised amounts.

Note 14 — 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

September 30, 2024

March 31, 2025

NCI – equity - December 31, 2024

1 unchanged sentence

Impact of subsidiary equity transactions

Lucid Diagnostics proceeds from issuance of preferred stock Series 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 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

Veris Offering

Stock-based compensation expense - Veris Health 2021 Equity Plan

Deconsolidation of Lucid

NCI – equity - September 30, 2024

consolidated NCI presented above is with respect to the Company’s consolidated subsidiaries as a component of consolidated total

stockholders’ equity as of September 30, 2024 and December 31, 2023;

and the recognition of a net loss attributable to the NCI

in the unaudited condensed consolidated statement of operations for the periods beginning on the acquisition date of the respective subsidiaries.

Diagnostics — Deconsolidation

of September 30, 2024, there were 51,597,718 shares

of common stock of Lucid Diagnostics issued and outstanding, of which, PAVmed held 31,302,444

NCI – equity – March 31, 2025

The consolidated NCI presented above

is with respect to the Company’s consolidated subsidiaries as a component of consolidated total stockholders’ equity as of

March 31, 2025 and December 31, 2024;

and the recognition of a net loss attributable to the NCI in the unaudited condensed consolidated

statement of operations for the periods beginning on the acquisition date of the respective subsidiaries.

Lucid Diagnostics — Deconsolidation

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 over Lucid.

Upon 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 unaudited

condensed consolidated statements of operations for the three and nine months ended September 30, 2024.

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 of March 31, 2025, continues to hold 31,302,444

of common stock of Lucid Diagnostics.

Lucid Diagnostics — Intercompany Obligation

Special Distribution

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

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.

15 — Noncontrolling Interest - continued

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.

March 13, 2024, Lucid issued 44,285 shares of newly designated Lucid Series B Convertible Preferred Stock (the “Lucid Series B

Preferred Stock”).

The terms of the Lucid Series B Preferred Stock are substantially identical to the terms of the Lucid Series

A Preferred Stock and the Lucid Series A-1 Preferred Stock, except that the Lucid Series B Preferred Stock has a conversion price of

$ 1.2444 , and the holders of the Lucid Series B Preferred Stock vote with the common stock on an as-converted basis (subject to any applicable

ownership limitations).

On the same day, 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 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.

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.

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”).

The 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.

Diagnostics — Deemed Dividend on Series A and Series

A-1 Convertible Preferred Stock Exchange Offer

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

resulting in an excess of fair value of $ 7.5

million recognized as a deemed dividend charged

to accumulated deficit in the unaudited condensed 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

Deemed Dividend Charged to Accumulated Deficit

16 — Net Income (Loss) Per Share

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

- basic and diluted and Net income (loss) per share - attributable to PAVmed

common stockholders - basic and diluted - for the respective periods indicated - is as follows:

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.

As of March 31, 2025, there were

8,677,143 shares of common stock of Veris Health issued and outstanding, of which PAVmed holds an 73.69 % majority-interest ownership and

PAVmed has a controlling financial interest, with the remaining 26.31 % minority-interest ownership held by an unrelated third-party.

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 unaudited condensed consolidated balance sheets.

Note 15 — 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:

of Comparison of Basic and Fully Diluted Net Loss Per Share

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net income (loss) - before noncontrolling interest

2 unchanged sentences

Series B Convertible Preferred Stock dividends – earned

Series C Convertible Preferred Stock dividends - earned

Deemed dividend on Series C Convertible Preferred Stock

Deemed dividend on Subsidiary Preferred Stock attributable to the noncontrolling interests

5 unchanged sentences

Weighted average common shares outstanding, basic

Restricted stock awards

PAVM Pre-Funded Warrants

Senior Convertible Note

Series B Convertible Preferred Stock

Series C Convertible Preferred Stock

Weighted average common shares outstanding, diluted

Net income (loss) per

Net income (loss) per share (1)

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

2 unchanged sentences

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.

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 nine month periods ended September 30, 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 three and nine month periods ended September 30, 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:

(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 periods 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 15 — Net Income (Loss) Per Share - continued

Basic weighted-average number of

shares of common stock outstanding for the three months ended March 31, 2025 and 2024 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 three months ended March 31, 2024, 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

September 30,

Stock options

2 unchanged sentences

Series B Convertible Preferred Stock

total stock options and restricted stock awards are inclusive of 60,054 and 33,391 stock options as of September 30, 2024 and 2023, respectively,

granted outside the PAVmed 2014 Equity Plan.

The total stock options are inclusive

of 54,480 and 60,054 stock options as of March 31, 2025 and 2024, respectively, granted outside the PAVmed 2014 Equity Plan.

Note 16 — 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 multi-fold.

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 three months ended March

31, 2025 and 2024 revenues resulting from subscription revenue or patient laboratory test results was concentrated in the United States.

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-Q

Item 1. Financial Statements