What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2024-11-14 · 575 added, 699 removed, 15 unchanged (99% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

together with our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”), as filed with the Securities

and Exchange Commission (the “SEC”).

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

refer to PAVmed Inc.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

The following discussion and analysis

of our unaudited condensed consolidated financial condition and results of operations should be read together with our Annual Report on

Form 10-K for the year ended December 31, 2024 (the “Form 10-K”), as filed with the Securities and Exchange Commission (the

Unless the context otherwise requires,

(i) “we”, “us”, and “our”, and the “Company” and “PAVmed” refer to PAVmed

and its subsidiaries, including its subsidiary Lucid Diagnostics Inc.

(“Lucid Diagnostics” or “Lucid”)

and its majority-owned subsidiary Veris Health Inc.

(“Veris Health” or “Veris”), (ii) “FDA” refers

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

(“Lucid Diagnostics” or “Lucid”) and

its majority-owned subsidiary Veris Health Inc.

(“Veris Health” or “Veris”), (ii) “FDA” refers to

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

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

2 unchanged sentences

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

FORWARD-LOOKING

Quarterly Report on Form 10-Q (this “Form 10-Q”), including the following discussion and analysis of our unaudited condensed

consolidated financial condition and results of operations, contains forward-looking statements that involve substantial risks and uncertainties.

All statements, other than statements of historical facts, contained in this Form 10-Q, including statements regarding our future results

of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking

The words “may,” “will,” “should,” “expects,” “plans,” “anticipates,”

“could,” “intends,” “target,” “projects,” “contemplates,” “believes,”

“estimates,” “predicts,” “potential” or “continue” or the negative of these terms or

other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these

identifying words.

Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ

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

Factors that might cause such differences include, but

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

factors that may affect our actual results include:

limited operating history;

financial performance, including our ability to generate revenue;

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

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

ability of our products to achieve market acceptance;

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

potential ability to obtain additional financing when and if needed;

ability to protect our intellectual property;

ability to complete strategic acquisitions;

ability to manage growth and integrate acquired operations;

potential liquidity and trading of our securities;

regulatory and operational risks;

cybersecurity

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

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

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

joint ventures or investments we may make.

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

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

undue reliance on our forward-looking statements.

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

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

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

or otherwise, except as required by applicable law.

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

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

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

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

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

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

current focus is multi-fold.

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

our of our subsidiaries, Lucid Diagnostics (Nasdaq:

We also are continuing to advance the commercialization of the Veris

Cancer Care Platform, which is the lead product of another of our subsidiaries, 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 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 created 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.

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

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

Changes to PAVmed Board Composition

Effective as of September 10, 2024,

Cox, M.D., and Joan B.

Harvey resigned from the Company’s board of directors.

Cox’s nor Ms.

resignation was due to any disagreement with the Company on any matter relating to its operations, policies or practices.

Also effective as of September 10,

2024, the Company’s board of directors appointed Sundeep Agrawal, M.D.

as a Class B director.

Prior to being appointed to the Company’s

board of directors, Dr.

Agrawal had entered into a strategic advisory agreement with the Company to provide certain M&A advisory services.

Such agreement will remain in effect upon Dr.

Agrawal joining the board.

Pursuant to the agreement, Dr.

Agrawal will receive a monthly

consulting fee of $3,333.

The agreement is terminable by the Company on 10 days’ written notice.

Except for the foregoing, Dr.

has not engaged in any transactions with the Company that are required to be reported pursuant to Item 404(a) of Regulation S-K.

Lucid American Journal of Gastroenterology Publication

On November 7, 2024, Lucid announced

that its manuscript for its multi-center ESOGUARD BE-1 study has been accepted for publication in The American Journal of Gastroenterology,

the official journal of the American College of Gastroenterology (ACG).

This is the fourth publication presenting clinical validation

data for Lucid’s EsoGuard® Esophageal DNA Test, and the second to demonstrate its performance in an intended-use screening population.

Consistent with previous studies, EsoGuard showed high sensitivity and negative predictive value in detecting esophageal precancer (Barrett’s

Esophagus or BE).

With the acceptance for publication of Lucid believes it now has a complete clinical evidence package to submit its

data to the MolDX program and formally seek Medicare coverage.

The prospective, multi-center study

presented data from a cohort of patients who met ACG guideline criteria for esophageal precancer screening and underwent non-endoscopic

EsoGuard testing followed by traditional upper endoscopy.

EsoGuard sensitivity and negative predictive value for detecting BE were approximately

88% and 99%, respectively.

Specificity and positive predictive value were approximately 81% and 30%, respectively.

No serious adverse

events were reported.

Lucid IP Matters

On October 15, 2024, the Company

announced that Lucid received a Notice of Allowance from the United States Patent and Trademark Office (USPTO) for a patent application

covering its proprietary method of using methylation of the cyclin-A1 (CCNA1) gene to help detect esophageal precancer and cancer, a key

component of its EsoGuard® Esophageal DNA Test.

EsoGuard utilizes next-generation

sequencing (NGS) to assess DNA methylation at 31 sites on two genes, vimentin (VIM) and cyclin-A1 (CCNA1).

Such methylation has been shown

to be strongly associated with conditions along the spectrum from early esophageal precancer (non-dysplastic Barrett’s Esophagus

or BE), to late precancer (dysplastic BE), to cancer (esophageal adenocarcinoma).

Although VIM methylation had been previously associated

with gastrointestinal neoplasias, the association of CCNA1 methylation with esophageal neoplasia is novel and appears to be more specific.

Veris NIH Grant

On October 10, 2024, the Company

announced that Veris had been awarded a $1.8 million grant from the National Institute on Minority Health and Health Disparities (NIMHD),

an institute of the National Institutes of Health (NIH).

The two-year grant will fund research to optimize and validate the Veris Cancer

Care Platform for the needs of medically underserved cancer patients, in partnership with an academic cancer center.

The research project,

“Bridging the Gap:

Enhancing Cancer Care for Underserved Populations with the Veris Health Cancer Care Platform,” will focus

on patients facing language barriers, limited access to technology, and socioeconomic disparities.

Veris Cancer Care Platform

On June 13, 2024, we announced that Veris and a National Cancer Institute-Designated

Comprehensive Cancer Center launched a pilot program and has enrolled the first patients from such center in such program on the Veris

Cancer Care Platform.

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, as discussed above.

distribution constituted an “Extraordinary Dividend” as defined in the warrant agreement that governs the Company’s

Series Z Warrants.

As a result, pursuant to the warrant agreement, the exercise price under the Series Z Warrants per full share of PAVmed

common stock was automatically decreased by $0.52 (the fair market value of 0.37709668 of a share of Lucid Diagnostics’ common

stock as of the date of the distribution) to $23.48 per share.

Services Agreement/Payroll Benefits and Expense Reimbursement Agreement with Lucid Diagnostics

August 6, 2024, PAVmed and Lucid entered into a ninth amendment to the management services agreement between PAVmed and Lucid (“MSA”)

to increase the monthly fee thereunder from $0.83 million per month to $1.05 million per month, effective as of July 1, 2024.

March 22, 2024, PAVmed and Lucid entered into an eighth amendment to MSA to increase the monthly fee thereunder from $0.75 million per

month to $0.83 million per month, effective as of January 1, 2024.

The amendment also reset the maximum number of shares issuable under

the agreement to 19.99% of the shares outstanding as of the date of the amendment.

January 26, 2024, in accordance with the MSA and the payroll, benefits and expense reimbursement agreement between PAVmed and Lucid (“PBERA”),

PAVmed elected to receive payment of approximately $4.7 million of fees and reimbursements accrued under the MSA and the PBERA through

the issuance of 3,331,771 shares of Lucid’s common stock.

March 21, 2024, the Company announced that it has launched a wholly owned incubator, PMX, to complete development and commercialization

of existing portfolio technologies, including PortIO, EsoCure and CarpX.

PMX and Hatch Medical, L.L.C.

(“Hatch Medical”),

a medical device incubator and technology brokerage firm, have executed a joint venture agreement to advance the technologies.

to the joint venture agreement, PAVmed will assign PortIO, EsoCure and CarpX to its wholly owned incubator, PMX.

Starting with PortIO,

the Company will seek to independently finance a separate subsidiary of the incubator to develop and commercialize each technology.

Medical will provide strategic advisory and brokerage services to the subsidiary to advance the technology through key milestones and,

subsequently, seek to engage a strategic partner to acquire, license or distribute the commercial product.

The Company has an agreed upon term sheet for PortIO with a network of angel investors that is based on a pre-money

valuation of PortIO of $42 million, and due diligence by the investors is ongoing, although there can be no assurance that such transaction

will be consummated.

Enforcement Discretion

April 2024, FDA published the final rule under which FDA intends to phase out its general enforcement discretion approach for LDTs

so that IVDs manufactured by a laboratory would generally fall under the same enforcement approach as other IVDs (the proposed rule

was published in October 2023).

In the final rule, FDA has expanded the categories of LDTs that will be eligible for continued

enforcement discretion, which include LDTs first marketed prior to May 6, 2024 and LDTs approved by New York State’s Clinical

Laboratory Evaluation Program (NYS CLEP).

As EsoGuard was marketed prior to the May 6, 2024, and is also NYS CLEP-approved, EsoGuard

remains under continued enforcement discretion from FDA’s premarket review requirements and quality systems requirements

(except for record-keeping).

As such, there is no immediate impact from the final rule on EsoGuard’s regulatory

Extension to Regain Compliance with Nasdaq Listing

Rules to January 31, 2025

On November 8, 2024, a Nasdaq Hearings Panel (the “Panel”) granted the Company an extension, until January 31, 2025, to regain

compliance with the Nasdaq continued listing standards.

As previously disclosed, 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 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.

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.

of Senior Convertible Notes;

as of March 12, 2024, the Company entered into an amendment and waiver (the “Note Amendment and Waiver”) with the holder

of the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note (each as defined in “ Liquidity and

Capital Resources ” below).

Pursuant to the Note Amendment and Waiver, the maturity date of the April 2022 Senior

Convertible Note was extended to April 4, 2025 and the maturity date of the September 2022 Senior Convertible Note was extended to

September 8, 2025, in each case subject to further extension in certain circumstances.

The holder of the such note also waived, for

the period commencing on December 1, 2023 and ending on August 31, 2024, the financial covenant contained in such notes requiring

that the ratio of (a) the outstanding principal amount of the notes, 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 that the

Company’s market capitalization not be less than $75 million (the “Financial Tests”).

In consideration of the Note

Amendment and Waiver, the Company agreed to pay the holder of the notes $2.0 million in cash (or in such other form as may be

mutually agreed in writing), which currently is included in accrued expenses and other current liabilities on the Company’s

unaudited condensed consolidated balance sheets as of September 30, 2024.

In addition, 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

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

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

Lucid March 2023 Senior Convertible Note Refinancing

On November 8, 2024, Lucid gave

notice to the holder of the Lucid March 2023 Senior Convertible Note that it was exercising its right pursuant to such note to redeem

the same for the redemption price specified in such note (the “Optional Redemption Price”).

Pursuant to the terms of the Lucid

March 2023 Senior Convertible Note, Lucid has not less than ten business days, and not more than twenty business days, from the date of

the notice (the “Optional Redemption Notice Period”) to pay the Optional Redemption Price.

To finance the payment of the Optional

Redemption Price, Lucid has entered into a securities purchase agreement with certain accredited investors (the “Lucid 2024 Note Investors”).

Under the agreement, subject to customary closing conditions, Lucid has agreed to issue, and each 2024 Note Investor has agreed to purchase,

12.0% senior secured convertible notes due 2029 (collectively, the “Lucid November 2024 Senior Convertible Notes”).

the date hereof, the aggregate commitments of the Lucid 2024 Note Investors exceed the Optional Redemption Price.

In connection with the purchase

and sale of the Lucid 2024 Convertible Notes, Lucid will agree not to sell, transfer or dispose of, directly or indirectly, any

shares of Lucid common stock for six months from the consummation of the offering, subject to certain limited exceptions, including in

the event of a fundamental transaction involving Lucid.

Lucid expects to complete the issuance

of the Lucid November 2024 Senior Convertible Notes and the redemption of the Lucid March 2023 Senior Convertible Note on or prior to

the end of the Optional Redemption Notice Period, although there can be no assurance that such issuance and redemption will be completed

during such period, if at all.

Diagnostics - Preferred Stock Offerings

March 13, 2024, Lucid entered into subscription agreements (each, a “Lucid Series B Subscription Agreement”) and

exchange agreements (each, a “Lucid Series B Exchange Agreement”) with certain accredited investors (collectively, the

“Lucid Series B Investors”), which agreements provided for (i) the sale to the Lucid Series B Investors of 12,495 shares

of Lucid’s newly designated Series B Convertible Preferred Stock, par value $0.001 per share (the “Lucid Series B

Preferred Stock”), at a purchase price of $1,000 per share, and (ii) the exchange by the Lucid Series B Investors of 13,625

shares of Lucid’s Series A Convertible Preferred Stock, par value $0.001 per share (the “Lucid Series A Preferred

Stock”), and 10,670 shares of Lucid’s Series A-1 Convertible Preferred Stock, par value $0.001 per share (the

“Lucid Series A-1 Preferred Stock”), held by them for 31,790 shares of Lucid Series B Preferred Stock (collectively, the

“Lucid Series B Offering and Exchange”).

Prior to the execution of the Lucid Series B Subscription Agreements and the

Lucid Series B Exchange Agreements, Lucid entered into subscription agreements with certain of the Lucid Series B Investors

providing for the sale to such investors of 5,670 shares of Lucid Series A-1 Preferred Stock, at a purchase price of $1,000 per

share, which shares the investors immediately agreed to exchange for shares of Lucid Series B Preferred Stock pursuant to the Lucid

Series B Exchange Agreements (and are included in the 10,670 shares of Lucid Series A-1 Preferred Stock set forth above).

of the Lucid Series B Preferred Stock has a stated value of $1,000 and a conversion price of $1.2444.

The terms of the Lucid Series

B 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 B Preferred Stock is convertible, payable on the one-year and two-year

anniversary of the issuance date.

The holders of the Lucid Series B Preferred Stock also will be entitled to dividends equal, on an

as-if-converted to shares of Lucid common stock basis, to and in the same form as dividends actually paid on shares of Lucid common

stock when, as, and if such dividends are paid on shares of Lucid common stock.

The Lucid Series B Preferred Stock is a voting

The aggregate gross proceeds to Lucid of these transactions was $18.16 million (inclusive of $5.67 million of aggregate

gross proceeds from the sale of the Lucid Series A-1 Preferred Stock that was immediately exchanged for Lucid Series B Preferred

Stock in the transactions).

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.

- ATM Facility

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

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

In March 2023,

the “at-the-market offering” became subject to General Instruction I.B.6 of Form S-3, which limits sales of our securities

under this instruction in any 12-month period to one-third of the aggregate market value of our public float (unless our public float

rises to $75 million or more, in which case the instruction will cease to apply).

As a result of this limitation and our then-current

public float, in May 2023, we amended our “at-the-market offering” to cover up to $18 million of our common stock.

nine month period ended September 30, 2024, the Company sold 627,302 shares through its at-the-market equity facility for net proceeds

of approximately $1.0 million, after payment of 3% commissions.

As of September 30, 2024, the Company had approximately $15.1 million

remaining under the PAVmed ATM Facility.

of Operations

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

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

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

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

We have incurred

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

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

expect that gross margin for our services will fluctuate based on the commercialization efforts of our majority-owned subsidiaries.

and marketing expenses

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

activities, as well as advertising and promotion expenses.

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

compared to historical periods due to the deconsolidation of Lucid, as the sales and marketing operations for the Lucid EsoGuard test is no longer recorded within the Company’s operating results.

and administrative expenses

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

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

contract negotiations and consulting fees and other expenses associated with obtaining and maintaining patents within our intellectual

property portfolio.

anticipate our general and administrative expenses will decrease in the future compared to historical periods due to the deconsolidation of Lucid as the general and administrative

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

In the future, general and administrative expenses will include those expenses related to being a public company, including fees and expenses for audit, legal, regulatory, tax-related

services, insurance premiums and investor relations costs associated with maintaining compliance as a public company for PAVmed and its majority-owned subsidiaries.

and development expenses

and development expenses are recognized in the period they are incurred and consist principally of internal and external expenses incurred

for the development of our products, including:

costs for engineering design and development;

and benefit costs associated with our medical research personnel and engineering personnel;

associated with regulatory filings;

license fees;

of laboratory supplies and acquiring, developing, and manufacturing preclinical prototypes;

design engineering studies;

for facilities maintained solely for research and development purposes.

The reported research and development activities, including our clinical trials, were focused principally on the acceleration of EsoGuard and

Veris Cancer Care Platform commercialization.

In the future, the research and development activities will focus on the Veris Cancer Care Platform, the PMX incubator program and other products in our

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

Income and Expense, net

income and expense, net, consists principally of changes in fair value of our convertible notes and losses on extinguishment of debt

upon repayment of such convertible notes.

of Dollar Amounts

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

in millions, except for share and per share amounts.

three months ended September 30, 2024 as compared to three months ended September 30, 2023

the three months ended September 30, 2024, revenue was $1.0 million as compared to $0.8 million for the corresponding period in the prior

The $0.2 million increase principally relates to the increase in volume of our EsoGuard Esophageal DNA Tests performed in our own

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

the three months ended September 30, 2024, cost of revenue costs were approximately $1.4 million, as compared to $1.8 million for the

corresponding period in the prior year.

The net decrease of $0.4 million was primarily related to:

approximately

$0.4 million decrease in manufacturing costs associated with the EsoCheck devices and EsoGuard Esophageal DNA Tests.

and marketing expenses

the three months ended September 30, 2024, sales and marketing costs were approximately $2.9 million as compared to $4.0 million for

the corresponding period in the prior year.

The net decrease of $1.1 million was principally related to:

approximately

$1.0 million decrease in compensation related costs;

approximately

$0.1 million decrease in stock based compensation costs.

and administrative expenses

the three months ended September 30, 2024, general and administrative costs were approximately $6.6 million as compared to $6.9 million

for the corresponding period in the prior year.

The net decrease of $0.3 million was principally related to:

approximately

$0.2 million decrease in third-party professional fees and legal expenses;

approximately

$0.1 million decrease in stock based compensation costs.

and development expenses

the three months ended September 30, 2024, research and development costs were approximately $1.5 million as compared to $3.2 million

for the corresponding period in the prior year.

The net decrease of $1.7 million was principally related to:

approximately

$1.1 million decrease in development costs, particularly in clinical trial activities and outside professional and consulting fees;

approximately

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

and non-employees;

approximately

$0.2 million decrease in third party consulting costs related to research and development activities;

approximately

$0.1 million decrease in developmental milestones paid to third parties.

of Acquired Intangible Assets

amortization of acquired intangible assets was approximately $0.1 million in the three months ended September 30, 2024, as compared to

$0.5 million for the corresponding period in the prior year.

The decrease of $0.4 million in the current period was due to certain acquired

intangible assets being fully amortized in February 2024.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q

(this “Form 10-Q”), including the discussion and analysis of our unaudited condensed consolidated financial condition and

results of operations, contains forward-looking statements that involve substantial risks and

uncertainties.

All statements, other than statements of historical facts, contained in this Form 10-Q, including statements regarding

our future results of operations and financial position, business strategy and plans and objectives of management for future operations,

are forward-looking statements.

The words “may,” “will,” “should,” “expects,” “plans,”

“anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,”

“believes,” “estimates,” “predicts,” “potential” or “continue” or the negative

of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements

contain these identifying words.

Forward-looking statements are not guarantees of future performance and the Company’s actual results

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

Factors that might cause such differences

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

Important factors that may affect our actual results

our limited operating history;

our financial performance, including our ability to generate revenue;

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

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

the ability of our products to achieve market acceptance;

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

our potential ability to obtain additional financing when and if needed;

our ability to protect our intellectual property;

our ability to complete strategic acquisitions;

our ability to manage growth and integrate acquired operations;

the potential liquidity and trading of our securities;

our regulatory and operational risks;

cybersecurity risks;

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

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

In addition, our forward-looking

statements do not reflect the potential impact of any future financings, acquisitions, mergers, dispositions, joint ventures or investments

We may not actually

achieve the results, plans, and/or objectives disclosed in our forward-looking statements, and the intended or expected developments

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

reliance on our forward-looking statements.

You should read this Quarterly Report on Form 10-Q and the documents we have filed as

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

different from what we expect.

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

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

PAVmed is 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 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.

Our current focus is multi-fold.

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

of which we remain the shareholder with the largest voting interest.

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

Health, we offer the Veris Cancer Care Platform.

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.

Recent Developments

EsoGuard Medicare Coverage

In November 2024, Lucid submitted

to MolDx its complete clinical evidence package in support of a request for reconsideration of the non-coverage language in the LCD to

secure Medicare coverage for EsoGuard.

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

three clinical

validation studies (two in the intended use population, one case control), two clinical utility studies, and one analytical validation

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

esophageal precancer testing.

The package was submitted as part of a request for reconsideration of the non-coverage language in the LCD

to secure Medicare coverage for EsoGuard.

NCCN Clinical Practice Guidelines Update

In March 2025, Lucid announced that

a recent update to the National Comprehensive Cancer Network® (NCCN) Clinical Practice Guidelines in Oncology (NCCN Guidelines®)

focused on Esophageal and Esophagogastric Junction Cancers (Version 1.2025) has added a new section on BE screening.

The NCCN Guidelines®

now reference professional society guidelines on BE screening, including the most recent ACG clinical guideline discussed above, which

recommends non-endoscopic biomarker testing, such as EsoGuard performed on samples collected with EsoCheck, as an acceptable alternative

to invasive upper endoscopy to detect esophageal precancer.

Recent Developments - continued

Business - continued

Clinical Study Publications

On March 18, 2025, Lucid announced

that its ENVET-BE clinical utility study has been accepted for publication in Gastroenterology & Hepatology—the fifth peer-reviewed

publication of clinical utility data for Lucid’s EsoGuard® Esophageal DNA Test, and the second to present findings from a real-world

screening population.

The manuscript, entitled “Enhancing the Diagnostic Yield of EGD for Diagnosis of Barrett’s Esophagus

Through Methylated DNA Biomarker Triage,” demonstrates that confirmatory upper endoscopy (EGD) performed in EsoGuard-positive patients

had a substantially higher diagnostic yield for detecting esophageal precancer (Barrett’s Esophagus or BE) than the expected yield

of screening EGD alone in at-risk patients.

The ENVET-BE study reviewed real-world data from a cohort of 199 EsoGuard-positive patients

who completed confirmatory EGD.

The overall positive diagnostic yield for BE was 2.4-fold higher than the expected yield of screening

EGD alone, based on disease prevalence within an at-risk population.

The yield was nearly three-fold higher in patients meeting American

College of Gastroenterology (ACG) screening criteria.

Highmark Reimbursement Approval

On March 13, 2025, Lucid announced that Highmark Blue

Cross Blue Shield, an independent licensee of the Blue Cross and Blue Shield Association, has issued a positive coverage policy for non-invasive

screening of esophageal precancer and cancer in New York state.

The new policy will cover EsoGuard in patients who meet established criteria

for esophageal precancer testing consistent with professional society guidelines.

CWRU NIH Grant Related to EsoGuard and EsoCheck

On February 27, 2025, Lucid announced that principal

investigators from CWRU and University Hospitals (“UH”), were awarded an $8 million National Institutes of Health (NIH) R01

grant to conduct a five-year clinical study designed to evaluate esophageal precancer detection using EsoCheck and EsoGuard among at-risk

individuals without symptoms of chronic gastroesophageal reflux disease (“GERD”).

The study, “A Clinical Trial of Cancer

Prevention by Biomarker Based Detections of Barrett’s Esophagus and Its Progression,” aims to evaluate the effectiveness of

EsoCheck and EsoGuard in detecting esophageal precancer (Barrett’s Esophagus or BE) to prevent esophageal cancer (EAC) within a

non-GERD at-risk population.

To accomplish this aim, 800 patients without GERD symptoms who meet the American Gastroenterological Association’s

(AGA) risk criteria for screening will be recruited across five participating research centers:

University Hospitals, University of Colorado,

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

On April 17, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with Maxim Group

LLC, as sales agent (“Maxim”), pursuant to which the Company may offer and sell, from time to time through or to Maxim, shares

of its common stock.

Under the Sales Agreement, the Company may not

issue or sell through Maxim a dollar amount of shares that would exceed $2,880,000 of shares.

The Company will pay Maxim a commission

of 3.0% of the aggregate gross sales prices of the shares.

The Company intends to use the net proceeds from any such sales for working

capital and general corporate purposes.

This facility replaces the “at the market”

facility PAVmed previously maintained with Cantor (which facility was on substantially similar terms).

PAVmed/Veris Common Stock Offering

On February 18, 2025, the Company

and Veris entered into subscription agreements (each, a “Subscription Agreement”) with certain accredited investors (collectively,

the “Investors”), pursuant to which the Company agreed to sell and the Investors agreed to purchase (the “Offering”)

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

stock (the “Pre-Funded Warrants”), at a purchase price of $0.7115 per share or warrant share (as applicable).

Veris agreed to issue to each Investor approximately 0.2033 shares of Veris’ common stock for each share or warrant share (as applicable)

purchased by such Investor, for an aggregate of 677,143 shares of Veris’ common stock.

On February 21, 2025, the Company consummated

the Offering, generating gross proceeds to the Company of $2.37 million.

The proceeds of the offering will be used to resume development

activities related to Veris’ implantable physiological monitor and for general working capital purposes.

Recent Developments - continued

Financing - continued

Lucid Diagnostics — Confidentially Marketed

Public Offering

On April 11, 2025, Lucid closed on the sale of 14,375,000

shares of its common stock, pursuant to its previously announced offering of shares of common stock at a price of $1.20 per share (the

“Lucid CMPO”)

The net proceeds from the Lucid CMPO, after deducting

the underwriting discount and other expenses of the Lucid CMPO, were approximately $16.1 million.

Lucid intends to use the net proceeds

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

Lucid Diagnostics — Registered Direct Offering

On March 5, 2025, Lucid closed on

the sale of 13,939,331 shares of its common stock, pursuant to its previously announced offering of shares of common stock at a price

of $1.10 per share (the “Lucid RDO”).

The net proceeds of the Lucid RDO,

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

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

In connection with the Lucid RDO,

Lucid suspended its “at the market offering” program.

In November 2022, Lucid entered into a Controlled Equity Offering℠

Sales Agreement (the “Lucid Sales Agreement”) with Cantor Fitzgerald & Co.

Pursuant to the Sales

Agreement, from time to time, Lucid may offer and sell shares of its common stock to or through Cantor, acting as sales agent or principal.

Sales of Lucid’s common stock by Cantor, if any, under the Sales Agreement may be made by any method permitted by law and deemed

to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act (the “Lucid ATM

Lucid filed a prospectus supplement dated December 6, 2022 (the “Lucid ATM Prospectus Supplement”), for

the offer and sale of shares of its common stock having an aggregate offering price of up to $6.5 million in the Lucid ATM Offering.

as of March 4, 2025, Lucid terminated the Lucid ATM Prospectus Supplement.

Lucid will not make any sales of common stock in the Lucid

ATM Offering unless and until a new prospectus or prospectus supplement is filed.

Other than the termination of the Lucid ATM Prospectus

Supplement, the Lucid Sales Agreement remains in full force and effect.

Lucid Diagnostics — Debt Refinancing

On November 22, 2024,

Lucid closed on the sale of $21.975 million in principal amount of 12.0% Senior Secured Convertible Notes due 2029 (collectively,

the “Lucid 2024 Convertible Notes”), in a private placement, to certain accredited investors.

Lucid realized gross

proceeds of $21.95 million and, after giving effect to the repayment in full of the Lucid March 2023 Senior Convertible Note, net proceeds of $18.3 million from the sale of the Lucid 2024 Convertible Notes.

Results of Operations

The Company recognized revenue from subscription revenue derived from its Veris Health Cancer Care Platform.

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

t he Company recognized revenue primarily

resulting from the delivery of patient EsoGuard test results when the Company considered the collection of such consideration to be probable

to the extent that it is unconstrained.

Cost of revenue

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

the cost of revenues recognized primarily

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

royalties and the cost of services to process tests and provide results to physicians.

We have incurred expenses for tests in the period

in which the activities occur, therefore, gross margin as a percentage of revenue has varied from quarter to quarter due to costs being

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

We expect that gross margin for

our services will fluctuate based on the commercialization efforts of our subsidiaries.

Sales and marketing expenses

Sales and marketing

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

well as advertising and promotion expenses.

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

historical periods due to the deconsolidation of Lucid, as going forward, the expenses associated with the sales and marketing

operations for the Lucid EsoGuard test will no longer be recorded within the Company’s operating results.

General and administrative expenses

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

tax, audit and legal services, salaries and related costs for employees involved in third-party payor reimbursement contract negotiations

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

We anticipate our general

and administrative expenses will decrease in the future compared to historical periods due to the deconsolidation of Lucid, as going

forward, the general and administrative expenses, including third-party payor reimbursement costs, incurred by Lucid will no longer

be recorded within the Company’s operating results.

In the future, general and administrative expenses will include those

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

insurance premiums and investor relations costs associated with maintaining compliance as a public company for PAVmed and its

majority-owned subsidiaries.

Research and development expenses

are recognized in the period they are incurred and consist principally of internal and external expenses incurred for the development

of our products, including:

consulting costs for engineering design and development;

salary and benefit costs associated with our medical research personnel and engineering personnel;

costs associated with submission of regulatory filings;

cost of laboratory supplies and acquiring, developing, and manufacturing preclinical prototypes;

product design engineering studies.

The reported research and

development activities, including our clinical trials, were focused principally on the acceleration of EsoGuard and Veris Cancer

Care Platform commercialization.

Due to the deconsolidation of Lucid, going forward, the expenses in respect of the Company’s

research and development activities will include those associated with research and development activities related to the Veris Cancer Care Platform, the PMX incubator program and other products in

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

Other Income and Expense, net

Other income and expense, net, consists

principally of changes in fair value of our convertible notes and losses on extinguishment of debt upon repayment of such convertible

Presentation of Dollar Amounts

All dollar amounts in this Management’s

Discussion and Analysis of Financial Condition and Results of Operations are presented as dollars in millions, except for share and per

share amounts.

Results of Operations - continued

The three months ended March 31, 2025 as compared

to three months ended March 31, 2024

In the three months ended March

31, 2025, revenue was less than $0.1 million as compared to $1.0 million for the corresponding period in the prior year.

The $1.0 million

decrease principally relates to the revenue from Lucid’s EsoGuard Esophageal DNA Tests not being included in our operating results

for the three months ended March 31, 2025 as compared to the prior year, during which all three months of Lucid’s operating results

were so included.

Cost of revenue

In the three months ended March

31, 2025, cost of revenue was less than $0.1 million as compared $1.7 million for the corresponding period in the prior year.

decrease of $1.7 million was principally related to Lucid’s results not being included in our operating results for the three months

ended March 31, 2025 as compared to the prior year, during which all three months of Lucid’s operating results were so included.

Sales and marketing expenses

In the three months ended March

31, 2025, sales and marketing costs were approximately $0.2 million as compared to $4.3 million for the corresponding period in the prior

The net decrease of $4.1 million was principally related to Lucid’s results not being included in our operating results for

the three months ended March 31, 2025 as compared to the prior year, during which all three months of Lucid’s operating results

were so included.

General and administrative expenses

In the three months ended March

31, 2025, general and administrative costs were approximately $4.4 million as compared to $6.7 million for the corresponding period in

the prior year.

The net decrease of $2.3 million was principally related to Lucid’s results not being included in our operating

results for the three months ended March 31, 2025 as compared to the prior year, during which all three months of Lucid’s operating

results were so included.

Research and development expenses

In the three months ended March

31, 2025, research and development costs were approximately $0.8 million as compared to $1.9 million for the corresponding period in the

The net decrease of $1.1 million was principally related to Lucid’s results not being included in our operating results

for the three months ended March 31, 2025 as compared to the prior year, during which all three months of Lucid’s operating results

were so included.

Amortization of Acquired Intangible Assets

The amortization of acquired intangible

assets was zero in the three months ended March 31, 2025, as compared to $0.4 million for the corresponding period in the prior year.

The decrease of $0.4 million in the current period was due to certain acquired intangible assets being fully amortized in February 2024.

Other Income and Expense

of Operations - continued

three months ended September 30, 2024 as compared to the three months ended September 30, 2023 - continued

Income and Expense

in fair value of convertible debt

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

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

2022 Senior Convertible Note (as defined in “ Liquidity and Capital Resources ” below), and the Lucid March 2023 Senior

Convertible Note (as defined in “ Liquidity and Capital Resources ” below).

Change in fair value of convertible debt

In the three months ended

March 31, 2025 and March 31, 2024, the change in the fair value of our convertible notes was less than $0.1 million and $2.2 million

of expense, respectively, related to the April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note, and (for

the three months ended March 31, 2024 only) the Lucid March 2023 Senior Convertible Note.

The April 2022 Senior Convertible Note,

the September 2022 Senior Convertible Note, and the Lucid March 2023 Senior Convertible Note were initially measured at their issue-date

estimated fair value and subsequently remeasured at estimated fair value as of each reporting period date.

The Company initially recognized

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

on Debt Extinguishment

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

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

Note as discussed below.

the three months ended September 30, 2024, approximately $0.5 million of principal repayments, along with less than $0.1 million

of interest expense thereon, were settled through the issuance of 509,942 shares of common stock of the Company, with such shares

having a fair value of approximately $0.9 million (with such fair value measured as the respective conversion date quoted closing

price of the common stock of the Company).

In addition, the Company agreed to pay $0.7 million in cash related to acceleration floor

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

The conversions

and floor acceleration payments resulted in a debt extinguishment loss of $1.1 million in the three months ended September 30, 2024.

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

principal repayments along with approximately $0.1 million of interest expense thereon, were settled through the issuance of 1,510,821

shares of Lucid common stock, with such shares having a fair value of approximately $1.3 million (with such fair value measured as

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

The conversions resulted in a debt extinguishment

loss of $0.3 million in the period July 1, 2024 through September 10, 2024.

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

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

the three months ended September 30, 2023, approximately $2.2 million of principal repayments, along with less than $0.1 million

of interest expense thereon, were settled through the issuance of 723,998 shares of common stock of the Company, with such shares

having a fair value of approximately $4.0 million (with such fair value measured as the respective conversion date quoted closing

price of the common stock of the Company).

The conversions resulted in a debt extinguishment loss of $1.8 million in the three months

ended September 30, 2023.

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

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

on Deconsolidation of Lucid

of September 30, 2024, there were 51,597,718 shares of common stock of Lucid Diagnostics issued and outstanding, of which, the

Company held 31,302,444 shares.

On September 10, 2024, as a result of certain changes in the composition of the Company’s

board of directors as described above, in combination with the Company ceasing to have control over a majority of the voting power

of Lucid, the Company was considered to cease to have control over Lucid for the purposes of U.S.

GAAP, even though it continues to

own, and has not disposed any of its, 31,302,444 shares of common stock of Lucid.

However, PAVmed retained the ability to exercise

significant influence over Lucid.

Upon deconsolidation, the Company’s ownership of 31,302,444 shares of Lucid Diagnostics, Inc

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 months ended September 30, 2024.

in fair value of Equity Method Investment

At September 10, 2024 and September

30, 2024, the fair value of the Company’s investment in Lucid was $25.1 million and $25.5 million, respectively, with the company

recognizing an unrealized gain on its investment in Lucid of $0.4 million in the accompanying condensed consolidated statements of operations

for three month period ended September 30, 2024.

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 and $0.815, respectively.

of Operations - continued

nine months ended September 30, 2024 as compared to nine months ended September 30, 2023

the nine months ended September 30, 2024, revenue was $3.0 million as compared to $1.4 million for the corresponding period in the prior

The $1.6 million increase principally relates to the revenue for our EsoGuard Esophageal DNA Test performed in our own CLIA laboratory

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

the nine months ended September 30, 2024, cost of revenue remained relatively level, at approximately $4.8 million, as compared to the

corresponding period in the prior year.

and marketing expenses

the nine months ended September 30, 2024, sales and marketing costs were approximately $11.5 million as compared to $12.9 million for

the corresponding period in the prior year.

The net decrease of $1.4 million was principally related to:

approximately

$1.2 million decrease in compensation related costs, including stock-based compensation;

approximately

$0.2 million decrease in third party sales and marketing costs.

and administrative expenses

the nine months ended September 30, 2024, general and administrative costs were approximately $20.3 million as compared to $23.9 million

for the corresponding period in the prior year.

The net decrease of $3.6 million was principally related to:

approximately

$3.1 million decrease in stock-based compensation, related to decreases at both PAVmed and Lucid;

approximately

$0.5 million decrease in third-party professional fees, expenses related to related to the termination of the management services agreement with our former laboratory provider, and expenses for finance and

legal services.

and development expenses

the nine months ended September 30, 2024, research and development costs were approximately $5.1 million as compared to $10.7 million

for the corresponding period in the prior year.

The net decrease of $5.6 million was principally related to:

approximately

$4.4 million decrease in development costs, particularly in clinical trials activities and outside professional and consulting fees;

approximately

$1.2 million decrease in compensation related costs and stock-based compensation.

of Acquired Intangible Assets

amortization of acquired intangible assets was approximately $0.6 million in the nine months ended September 30, 2024, as compared to

$1.5 million for the corresponding period in the prior year.

The decrease of $1.1 million in the current period was due to certain acquired

intangible assets being fully amortized in February 2024.

Income and Expense

in fair value of convertible debt

the nine months ended September 30, 2024 and September 30, 2023, the change in the fair value of our convertible notes was approximately

$2.5 million and $5.8 million of expense, respectively, related to the April 2022 Senior Convertible Note, the September 2022 Senior

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

The April 2022 Senior Convertible Note, the September 2022 Senior

Convertible Note, and the Lucid March 2023 Senior Convertible Note were initially measured at their issue-date estimated fair value and

subsequently remeasured at estimated fair value as of each reporting period date.

The Company initially recognized an aggregate of $4.3

million of fair value non-cash expense on the issue dates.

on Issue and Offering Costs - Senior Secured Convertible Note

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

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

The Company did not incur lender fees and offering costs in

the nine months ended September 30, 2024.

of Operations - continued

nine months ended September 30, 2024 as compared to nine months ended September 30, 2023 - continued

Income and Expense - continued

on Debt Extinguishment

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

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

the nine months ended September 30, 2024, approximately $1.4 million of principal repayments along with $0.1 million of interest

expense thereon, were settled through the issuance of 1,084,366 shares of common stock of the Company, with such shares having a

fair value of approximately $2.0 million (with such fair value measured as the quoted closing price of the common stock of the Company

on the respective conversion date).

In addition, the Company agreed to pay $1.1 million in cash related to acceleration floor payments

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

The conversions and cash

paid resulted in a debt extinguishment loss of $1.5 million in the nine months ended September 30, 2024.

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

million of principal repayments along with approximately $0.8 million of interest expense thereon, were settled through the issuance

of 4,172,002 shares of Lucid common stock, with such shares having a fair value of approximately $3.8 million (with such fair value

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

The conversions resulted in

a debt extinguishment loss of $1.0 million in the period of January 1, 2024 through September 10, 2024.

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

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

the nine months ended September 30, 2023, approximately $5.1 million of principal repayments along with $0.3 million of interest

expense thereon, were settled through the issuance of 1,358,896 shares of common stock of the Company, with such shares having a

fair value of approximately $8.4 million (with such fair value measured as the quoted closing price of the common stock of the Company

on the respective conversion date).

The conversions resulted in a debt extinguishment loss of $3.0 million in the nine months ended

September 30, 2023.

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

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

on Deconsolidation of Lucid

of September 30, 2024, there were 51,597,718 shares of common stock of Lucid Diagnostics issued and outstanding, of which, the

Company held 31,302,444 shares.

On September 10, 2024, as a result of changes in the composition of the Company’s board of

directors described above, in combination with the Company ceasing to have control over a majority of the voting power of Lucid, the

Company was considered to cease to have control over Lucid for the purposes of U.S.

GAAP, even though it continues to own, and has

not disposed any of its, 31,302,444 shares of common stock of Lucid .

However, PAVmed retained the ability to exercise significant influence over Lucid.

As a result, the Company deconsolidated 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 nine months ended September 30, 2024.

in fair value of Equity Method Investment

September 10, 2024 and September 30, 2024, the fair value of the Company’s investment in Lucid was $25.1 million and $25.5 million,

respectively, with the company recognizing an unrealized gain on its investment in Lucid of $0.4 million in the accompanying condensed

consolidated statements of operations for nine month period ended September 30, 2024.

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

and $0.815, respectively.

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 Preferred Stock, with such fair value

recognized as the carrying value of such issued shares of Lucid Series B Preferred Stock, as compared to the carrying value of the extinguished Lucid Series A and Series A-1 Preferred

Stock (carrying value of $24.3 million), 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:

Series B Convertible Preferred Stock Issuance and Series A/A-1 Exchange Offer

the September 2022 Senior Convertible Note, and the Lucid March 2023 Senior Convertible Note were initially measured at their

issue-date estimated fair value and subsequently remeasured at estimated fair value as of each applicable reporting period date.

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

Results of Operations - continued

The three months ended March 31, 2025 as compared

to three months ended March 31, 2024 - continued

Other Income and Expense - continued

Loss on Debt Extinguishment

In the three months ended March

31, 2025, a debt extinguishment loss in the aggregate of less than $0.1 million was recognized in connection with our April 2022 Senior

Convertible Note and September 2022 Senior Convertible Note as discussed below.

In the three months ended March 31, 2025, approximately $0.2 million of principal repayments along with less than $0.1 million of interest expense thereon, were settled through the issuance of 401,303 shares of common stock of the Company, with such shares having a fair value of approximately $0.3 million (with such fair value measured as the quoted closing price of the common stock of the Company on the respective conversion date).

The conversions resulted in a debt extinguishment loss of less than $0.1 million in the three months ended March 31, 2025.

In comparison, in the three months

ended March 31, 2024, a debt extinguishment loss in the aggregate of approximately $0.4 million was recognized in connection with our

April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note as discussed below.

In the three months ended March 31, 2024, approximately $0.3 million of principal repayments along with less than $0.1 million of interest expense thereon, were settled through the issuance of 112,461 shares of common stock of the Company, with such shares having a fair value of approximately $0.3 million (with such fair value measured as the quoted closing price of the common stock of the Company on the respective conversion date).

In addition, the Company agreed to pay $0.2 million in cash related to acceleration floor payments on these notes related to the conversion price being below the conversion floor price specified in the notes, recorded as debt extinguishment loss.

The conversions and cash paid resulted in a debt extinguishment loss of $0.2 million in the three months ended March 31, 2024.

See Note 10 , Debt , to the

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

Note, and the Lucid March 2023 Senior Convertible Note.

Change in fair value of Equity Method Investment

At March 31, 2025, the

fair value of the Company’s investment in Lucid was $46.6 million, with the company recognizing an unrealized gain on its

investment in Lucid of $21.0 million in the accompanying unaudited condensed consolidated statements of operations for the three

months ended March 31, 2025.

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

Lucid’s common stock per share on March 31, 2025 of $1.49.

Deemed Dividend on Lucid Series A and

Series A-1 Convertible Preferred Stock Exchange Offer

The fair value of the consideration

given in the form of the issue of 31,790 shares of Lucid Series B Preferred Stock, with such fair value recognized as the carrying value

of such issued shares of Lucid Series B Preferred Stock, as compared to the carrying value of the extinguished Lucid Series A and Series

A-1 Preferred Stock (carrying value of $24.3 million), 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:

Lucid Series B Convertible Preferred Stock Issuance and Lucid Series A/A-1 Exchange Offer

March 13, 2024

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

Carrying value related to Series A and Series A-1 Preferred Stock Exchanged for Series B Preferred Stock (of 24,295 shares)

Carrying value related to Lucid Series A and Series A-1 Preferred Stock

Exchanged for Lucid Series B Preferred Stock (of 24,295 shares)

Deemed Dividend Charged to Accumulated Deficit

and Capital Resources

current financing strategy is to obtain capital directly into Lucid, Veris and other subsidiaries to fund any product development or

other related activities, although we retain the flexibility to raise capital at the PAVmed level.

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

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

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

purchase warrants, and debt, both at the PAVmed level and, in the case of Lucid, at the subsidiary level.

We are subject to all of the risks and uncertainties typically faced by medical device and diagnostic and

medical device companies that devote substantially all of their efforts to the commercialization of their initial product and services

and ongoing R&D and clinical trials.

We experienced net income before noncontrolling interests of approximately $27.3 million and

used approximately $33.6 million of cash in operations for the nine months ended September 30, 2024.

Financing activities provided $31.0

million of cash during the nine months ended September 30, 2024.

We ended the quarter with cash on-hand of $0.8 million as of September

We expect to continue to experience recurring losses and negative cash flows from operations, and will continue to fund our

operations with debt and/or equity financing transactions, including current obligations on the Company’s existing convertible

debt which in accordance with management’s plans may include conversions to equity and refinancing our existing debt obligations

to extend the maturity date.

Liquidity and Capital Resources

Our current financing strategy is

to obtain capital directly into Lucid, Veris and other subsidiaries to fund any product development or other related activities, although

we retain the flexibility to raise capital at the PAVmed level.

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

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

We have financed our operations

principally through the public and private issuances of our common stock, preferred stock, common stock purchase warrants, and debt, both

at the PAVmed level and, in the case of Lucid, at the subsidiary level.

We are subject to all of the risks and uncertainties typically

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

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

We experienced net income before noncontrolling interests

of approximately $18.6 million and used approximately $1.6 million of cash in operations for the three months ended March 31, 2025.

activities provided $3.1 million of cash during the three months ended March 31, 2025.

We ended the quarter with cash on-hand of $2.7 million

as of March 31, 2025.

We expect to continue to experience recurring losses and negative cash flows from operations, and will continue

to fund our operations with debt and/or equity financing transactions.

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

will depend upon generating substantial revenue that is conditioned on obtaining positive third-party reimbursement coverage for its

EsoGuard Esophageal DNA Test from both government and private health insurance providers, increasing revenue through contracting directly

with self-insured employers, and on its ability to raise additional capital through various potential sources including equity and/or

debt financings or refinancing existing debt obligations.

These factors raise substantial doubt about the Company’s ability to

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

of Shares of Our Common Stock

the nine months ended September 30, 2024

issued 34,332 shares of our common stock for proceeds of approximately $0.1 million under the PAVmed Employee Stock Purchase Plan

For more information about the ESPP, see Note 12, Stock-Based Compensation, to the Financial Statements.

issued 627,302 shares of our common stock for net proceeds of approximately $1.0 million, after payment of 3% commissions, through our at-the-market equity facility with Cantor.

See below for more information.

issued 1,084,366 shares of our common stock in satisfaction of approximately $1.4 million of principal repayments along with $0.1

million of interest expense thereon under the April 2022 Senior Convertible Note and September 2022 Senior Convertible Note.

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

as of March 31, 2022, we entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor, pursuant

to which we agreed to sell, and the investor agreed to purchase an aggregate of $50.0 million face value principal of Senior Secured

Convertible Notes.

On April 4, 2022, we completed an initial closing under the SPA, in which we sold to the investor a Senior

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

April 2022 Senior Secured Convertible Note had an initial contractual maturity date of April 4, 2024, which maturity date the

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

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

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

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

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

The September

2022 Senior Secured Convertible Note had an initial 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 or otherwise paid

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

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

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

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

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

We also are subject to financial covenants requiring that

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

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

capitalization over the prior ten trading days, not exceed 30% (the “Debt to Market Cap Ratio Test”), and (iii) that our

market capitalization shall at no time be less than $75 million (the “Market Cap Test” and, together with the Debt to Market

Cap Ratio Test, the “Financial Tests”).

From time to time from and after 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.

Based on the waiver, as of September 30, 2024, the Company was in compliance with

the Financial Tests.

In addition, based on the waiver, the Company presently is in compliance with the Financial Tests.

and Capital Resources - continued

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

the September 2022 Senior Convertible Note.

Diagnostics - Preferred Stock Offerings

March 13, 2024, Lucid entered into Lucid Series B Subscription Agreements and Lucid Series B Exchange Agreements with the Lucid Series

B Investors, which agreements provided for (i) the sale to the Lucid Series B Investors of 12,495 shares of newly designated Lucid Series

B Preferred Stock, at a purchase price of $1,000 per share, and (ii) the exchange by the Lucid Series B Investors of 13,625 shares of

Lucid Series A Preferred Stock, and 10,670 shares of Lucid Series A-1 Preferred Stock held by them for 31,790 shares of Lucid Series

B Preferred Stock.

Prior to the execution of the Lucid Series B Subscription Agreements and the Lucid Series B Exchange Agreements, Lucid

entered into subscription agreements with certain of the Lucid Series B Investors providing for the sale to such investors of 5,670 shares

of Lucid Series A-1 Preferred Stock, at a purchase price of $1,000 per share, which shares the investors immediately agreed to exchange

for shares of Lucid Series B Preferred Stock pursuant to the Lucid Series B Exchange Agreements (and are included in the 10,670 shares

of Lucid Series A-1 Preferred Stock set forth above).

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

a conversion price of $1.2444.

The terms of the Lucid Series B 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 B Preferred Stock

is convertible, payable on the one-year and two-year anniversary of the issuance date.

The holders of the Lucid Series B Preferred Stock

also will be entitled to dividends equal, on an as-if-converted to shares of Lucid common stock basis, to and in the same form as dividends

actually paid on shares of the Lucid common stock when, as, and if such dividends are paid on shares of the Lucid common stock.

Series B Preferred Stock is a voting security.

The aggregate gross proceeds to Lucid of these transactions was $18.16 million (inclusive

of $5.67 million of aggregate gross proceeds from the sale of the Lucid Series A-1 Preferred Stock that was immediately exchanged for

Lucid Series B Preferred Stock in the transactions).

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

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

an accredited institutional investor, pursuant to which Lucid Diagnostics agreed to sell, and the investor agreed to purchase a Senior

Convertible Note (the “Lucid March 2023 Senior Convertible Note”) with a face value principal of $11.1 million.

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

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

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

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

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

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

capital through various potential sources including equity or debt financings or refinancing or restructuring existing debt obligations.

These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date

the accompanying unaudited condensed consolidated financial statements are issued.

Issue of Shares of Our Common Stock

During the three months ended March 31, 2025

We issued 1,216,565 shares

of our common stock for net proceeds of approximately $0.8 million, after payment of 3% commissions, through our at-the-market

equity facility with Cantor.

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

See below for more

We issued 401,303 shares of our common stock in satisfaction of approximately $0.2 million of principal repayments along with less than $0.1 million of interest expense thereon under the September 2022 Senior Convertible Note.

We issued 1,300,000 shares

of our common stock as a result of conversions of $0.5 million of shares of our Series C Preferred Stock.

We issued 2,574,350 shares of our common stock and pre-funded warrants to purchase 756,734 shares of our common stock, in combination with the issuance of 677,143 shares of Veris, for gross proceeds of approximately $2.37 million.

We issued 77,408 shares of our common stock to vendors in exchange for less than $0.1 million of agreed upon services, which is included in general and administrative operating expenses on the Company’s unaudited condensed consolidated statement of operations.

Senior Convertible Notes

Effective as of March 31,

2022, we entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor, pursuant to which we agreed

to sell, and the investor agreed to purchase an aggregate of $50.0 million face value principal of Senior Secured Convertible Notes.

On April 4, 2022, we completed an initial closing under the SPA, in which we sold to the investor a Senior Secured Convertible Note with

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

The April 2022 Senior Secured Convertible

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

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

On September 8, 2022, we completed

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

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

The September 2022 Senior Secured Convertible

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

September 2022 Senior Convertible Note may be converted into or otherwise paid in shares of our common stock as described in Note 10,

Liquidity and Capital Resources - continued

Under the April 2022

Senior Convertible Note (until it was satisfied in full on January 17, 2025 upon consummation of the Exchange), the September 2022

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

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

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

affiliates, among other customary matters.

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

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

principal amount of the notes issued under the Lucid SPA, accrued and unpaid interest thereon and accrued and unpaid late charges, as

of the last day of any fiscal quarter commencing with September 30, 2023, to (b) Lucid Diagnostics’ average market capitalization

over the prior ten trading days, not exceed 30%, and (iii) that Lucid Diagnostics’ market capitalization shall at no time be less

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

As of September 30, 2024, Lucid Diagnostics was in compliance with the Lucid

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

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

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

ten trading days, not exceed 30% (the “Debt to Market Cap Ratio Test”), and (iii) that our market capitalization shall

at no time be less than $75 million (the “Market Cap Test” and, together with the Debt to Market Cap Ratio Test, the

“Financial Tests”).

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

The holder of the September 2022 Senior Convertible Note agreed, effective as of the consummation of

the Exchange, to waive any non-compliance with the Financial Tests through December 31, 2025.

Based on that separate waiver, as of March 31,

2025, the Company was in compliance with the Financial Tests.

See Note 10 , Debt , to

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

Convertible Note.

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

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

In the three months ended March 31, 2025, the Company sold 1,216,565 shares through its at-the-market

equity facility for net proceeds of approximately $0.8 million, after payment of 3% commissions.

On April 17, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with Maxim Group

LLC, as sales agent (“Maxim”), pursuant to which the Company may offer and sell, from time to time through or to Maxim, shares

of its common stock.

Under the Sales Agreement, the Company may not

issue or sell through Maxim a dollar amount of shares that would exceed $2,880,000 of shares.

The Company will pay Maxim a commission

of 3.0% of the aggregate gross sales prices of the shares.

The Company intends to use the net proceeds from any such sales for working

capital and general corporate purposes.

This facility replaces the “at the market”

facility PAVmed previously maintained with Cantor (which facility was on substantially similar terms).

Series C Convertible Preferred Stock

On November 15, 2024, the Company

entered into an Exchange Agreement (the “Debt Exchange Agreement”) with the holder (the “Holder”) of the April

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

The Debt Exchange Agreement provided for the exchange (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 Preferred Stock.

On January 17, 2025, after satisfaction of all conditions to

closing, the parties consummated the Exchange.

On November 20, 2024, the Company

entered into a Securities Purchase Agreement (the “Series C Securities Purchase Agreement”) with the Holder.

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.

Liquidity and Capital Resources - continued

November 8, 2024, Lucid gave notice to the holder of the March 2023 Senior Convertible Note that it was exercising its right

pursuant to such note to redeem the same for the Optional Redemption Price specified in such note.

To finance the payment of the

Optional Redemption Price, Lucid has entered into a securities purchase agreement with the 2024 Note Investors.

agreement, subject to customary closing conditions, Lucid has agreed to issue, and each 2024 Note Investor has agreed to purchase he

November 2024 Senior Convertible Notes, which are 12.0% senior secured convertible notes due 2029.

As of the date hereof, the aggregate commitments of the 2024 Note Investors exceed the Lucid

Optional Redemption Price.

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

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

In the nine months ended September 30, 2024, the Company

sold 627,302 shares through its at-the-market equity facility for net proceeds of approximately $1.0 million, after payment of 3% commissions.

and Capital Resources - continued

Diagnostics Inc.

- Committed Equity Facility and ATM Facility

March 2022, Lucid Diagnostics entered into a committed equity facility with a Cantor affiliate.

Cumulatively, a total of 680,263 shares

of Lucid Diagnostics’ common stock were issued for net proceeds of approximately $1.8 million, after a 4% discount, as of September

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

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

Cumulatively, a total

of 230,068 shares of Lucid Diagnostics’ common stock were issued through its at-the-market equity facility for net proceeds of

approximately $0.3 million, after payment of 3% commissions, as of September 30, 2024.

Accounting Estimates

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

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

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

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

On an ongoing

basis, we evaluate our estimates and judgements.

The Series C Preferred Stock was

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.

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 7.875% 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).

The 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.

Upon 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.

Each share of Series C Preferred

Stock, plus accrued and unpaid dividends thereon, is convertible at any time, in whole or in part, at the holder’s option, into

shares of the Company’s common stock at an initial fixed conversion price of $1.068 per share, subject to certain adjustments.

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

the contractual conversion price under the Series C Preferred Stock to $0.40, during the period through March 31, 2025;

provided that

the aggregate amount of conversions under the Series C Preferred Stock at such conversion price during such period does not exceed 1 million

Such reduction was agreed to in connection with certain waivers granted by the holder of the Series C Preferred Stock, including

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

Purchase Warrants ).

At 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

(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.

A Triggering 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.

If 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.

The 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”).

Liquidity and Capital Resources - continued

Upon 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.

A 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.

The 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.

See Note 12, Preferred Stock ,

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

PAVmed/Veris Common Stock Offering

On February 18, 2025, the Company

and Veris, entered into subscription agreements (each, a “Subscription Agreement”) with certain accredited investors (collectively,

the “Investors”), pursuant to which the Company agreed to sell and the Investors agreed to purchase (the “Offering”)

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

stock (the “Pre-Funded Warrants”), at a purchase price of $0.7115 per share or warrant share (as applicable).

Veris agreed to issue to each Investor approximately 0.2033 shares of Veris’ common stock for each share or warrant share (as applicable)

purchased by such Investor, for an aggregate of 677,143 shares of Veris’ common stock.

On February 21, 2025, the Company consummated

the Offering, generating gross proceeds to the Company of $2.37 million.

The proceeds of the offering will be used to resume development

activities related to Veris’ implantable physiological monitor and for general working capital purposes.

The Subscription Agreement contains

customary representations, warranties, covenants and indemnities of the Company and the Investors, as well as a covenant by the Company

to provide the Investors with protection against subsequent equity raises by the Company or Veris at a lower purchase price (solely to

the extent the Investors continue to hold the shares issued in the Offering), with such protection to be effected through the issuance

of additional shares of Veris’ common stock.

In addition, the Company (i) agreed to solicit the affirmative vote of its stockholders

by no later than its next meeting of stockholders, which will be held no later than June 30, 2025, for approval, for the purposes of the

rules of The Nasdaq Stock Market LLC, of the issuance of all of the shares underlying the Pre-Funded Warrants, and to hold additional

meetings quarterly thereafter to the extent such approval is not obtained, (ii) granted the Investors a 100% participation right in future

offerings of equity securities of the Company or its majority-owned subsidiaries, subject to existing participation rights of the Company’s

debt holder, and (iii) agreed not to incur, and not to permit its majority-owned subsidiaries to incur, any indebtedness until August

18, 2026, subject to certain exceptions.

In accordance with the Subscription Agreement, the Company also entered into a registration rights

agreement (the “Registration Rights Agreement”) with the Investors, pursuant to which the Company agreed to file a registration

statement covering the resale of the shares of the Company’s common stock issued in the Offering, including the shares underlying

the Pre-Funded Warrants.

The Pre-Funded Warrants

become exercisable upon the receipt of the stockholder approval described above, expire on February 18, 2030, and have an exercise

price of $0.001 per share, subject to adjustment as described below.

The Pre-Funded Warrants may be exercised for cash, or on a

cashless basis.

In the event the Pre-Funded Warrants are exercised on a cashless basis, the holder will be entitled to receive a

number of shares of the Company’s common stock equal to (x) the excess of the market value of 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.

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.

Critical Accounting Estimates

The discussion and analysis of our

financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared

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

The preparation

of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reporting

in our unaudited condensed consolidated financial statements and accompanying notes.

On an ongoing basis, we evaluate our estimates and

In accordance with U.S.

GAAP, we base our estimates on historical experience and on

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

Actual results may differ from these estimates under

different assumptions or conditions.

Our critical accounting 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.

There have been no material changes to our critical accounting

policies and estimates in the nine months ended September 30, 2024.

GAAP, we base our estimates on historical experience and on various other factors that are believed

to be appropriate under the circumstances.

Actual results may differ from these estimates under different assumptions or conditions.

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

filed with the SEC on March 24, 2025.

There have been no material changes to our critical accounting estimates in the three

months ended March 31, 2025.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis