PAVM US Equity☆

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

DC 20549

FORM

10-K

(Mark

One)

For

the fiscal year ended December 31, 2023

OR

For

the transition period from _____ to _____

Commission

File Number: 001-37685

PAVMED

INC.

(Exact

Name of Registrant as Specified in Its Charter)

(State or Other Jurisdiction of (IRS Employer

Incorporation or Organization) Identification No.)

360 Madison Avenue

(Address of Principal Executive Offices) (Zip Code)

(917)813-1828

(Registrant’s

Telephone Number, Including Area Code)

Securities

registered pursuant to Section 12(b) of the Exchange Act:

Title of each Class Trading Symbol(s) Name of each Exchange on which Registered

Common Stock, $0.001 par value per share PAVM The NASDAQ Stock Market LLC

Securities

registered under Section 12(g) of the Exchange Act:

None.

Indicate

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No

☒

Indicate

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐

No ☒

Indicate

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange

Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)

has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate

by check mark whether the registrant has submitted electronically Interactive Data File required to be submitted pursuant to Rule 405

of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was

required to submit such files). Yes ☒ No ☐

Indicate

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”

, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer ☐ Accelerated filed ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☐

If

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying

with any new or revised financial accounting standards provided pursuant to section 13(c) of the Exchange Act ☐

Indicate

by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness

of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered

public accounting firm that prepared or issued its audit report. ☐

If

securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant

included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation

received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As

of June 30, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market

value of the registrant’s voting stock held by non-affiliates was approximately $38.6million, based on 6,312,137 shares of common

stock held by non-affiliates and a last reported sales price per share of the registrant’s common stock of $6.12 on such date.

As of March 21, 2024, there were 9,172,331 shares of the registrant’s Common Stock, par value $0.001 per share, issued and outstanding (with such number of shares inclusive of shares of common stock underlying unvested restricted stock awards granted under the PAVmed Inc. 2014 Long-Term Incentive Equity Plan as of such date).

DOCUMENTS

INCORPORATED BY REFERENCE

Portions

of the registrant’s definitive proxy statement for its 2024 annual meeting of stockholders are incorporated by reference into Part

III of this Form 10-K where indicated. Such definitive proxy statement will be filed with the U.S. Securities and Exchange Commission

within 120 days after the year ended December 31, 2023.

TABLE

OF CONTENTS

PART I

Item 1. Business 1

Item 1A Risk Factors 16

Item 1B. Unresolved Staff Comments 34

Item 1C. Cybersecurity 35

Item 2. Property 35

Item 3. Legal Proceedings 35

Item 4. Mine Safety Disclosures 35

PART II

Item 6. [Reserved] 36

Item 7A. Quantitative and Qualitative Disclosure About Market Risk 47

Item 8. Financial Statements and Supplementary Data 48

Item 9A. Controls and Procedures 48

Item 9B. Other Information 48

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 48

PART III

Item 10. Directors, Executive Officers, and Corporate Governance 49

Item 11. Executive Compensation 49

Item 14. Principal Accountant Fees and Services 49

PART IV

Item 15. Exhibits and Financial Statement Schedules 50

i

FORWARD-LOOKING

STATEMENTS

This

Annual Report on Form 10-K (this “Form 10-K”), including the discussion and analysis of our consolidated

financial condition and results of operations set forth under Item 7 of this Form 10-K, contains forward-looking statements that involve substantial risks and

uncertainties. All statements, other than statements of historical facts, contained in this Form 10-K, 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 include:

● our limited operating history;

● our financial performance, including our ability to generate revenue;

● the ability of our products to achieve market acceptance;

● 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;

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 make.

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 Annual Report on Form 10-K and the documents

we have filed as exhibits to this 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.

ii

Part

I

Item

1. Business

Background

and Overview

PAVmed

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

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

developing, acquiring, and commercializing novel products that target unmet 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 pursue commercial expansion and execution of EsoGuard, which is the flagship product of

our majority-owned subsidiary Lucid Diagnostics Inc. (Nasdaq: LUCD) (“Lucid” or “Lucid Diagnostics”). In

addition, through a separate majority-owned subsidiary, Veris Health Inc. (“Veris” or “Veris Health”), we are focused on entering into

strategic partnership opportunities with leading academic oncology systems to expand access to the Veris Platform. In terms of other

existing products and technologies, we have 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.

EsoGuard

and EsoCheck

We

believe that the flagship product of our majority-owned subsidiary Lucid, the EsoGuard Esophageal DNA Test, performed on samples collected

with the EsoCheck Esophageal Cell Collection Device, constitutes the first and only commercially available diagnostic test capable of

serving as a widespread testing tool with the goal of preventing esophageal adenocarcinoma (“EAC”) deaths, through early

detection of esophageal precancer in at-risk gastroesophageal reflux disease (“GERD,” also commonly known as chronic heartburn,

acid reflux or simply reflux) patients.

EsoGuard

is a bisulfite-converted next-generation sequencing (NGS) DNA assay performed on surface esophageal cells collected with EsoCheck. It

quantifies methylation at 31 sites on two genes, Vimentin (VIM) and Cyclin A1 (CCNA1). The assay was evaluated in a 408-patient multicenter

case-control study published in Science Translational Medicine and showed greater than 90% sensitivity and specificity at detecting esophageal

precancer and all conditions along the BE-EAC spectrum, including on samples collected with EsoCheck (Moinova, et al. Sci Transl Med.

2018 Jan 17;10(424): eaao5848). EsoGuard is commercially available in the U.S. as a Laboratory Developed Test (LDT) performed at our

CLIA-certified laboratory. Cell samples, including those collected with EsoCheck, as discussed below, are sent to our laboratory for

testing and analyses using our proprietary EsoGuard NGS DNA assay.

EsoCheck

is an FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells

in a less than five-minute office procedure. It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone catheter

from which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells. When vacuum suction is applied,

the balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted

region during device withdrawal. We believe this proprietary Collect+ProtectTM technology makes EsoCheck the only noninvasive esophageal

cell collection device capable of such anatomically targeted and protected sampling.

EsoGuard

and EsoCheck are based on patented technology licensed by Lucid from Case Western Reserve University (“CWRU”). EsoGuard and

EsoCheck have been developed to provide accurate, non-invasive, patient-friendly testing for the early detection of EAC and Barrett’s

Esophagus (“BE”), including dysplastic BE and related pre-cursors to EAC in patients with chronic GERD.

Market

Opportunity

In

2023, approximately 20,000 U.S. GERD patients are projected to be diagnosed with EAC and approximately 16,000 will die from it. Over

80% of EAC patients will die within five years of diagnosis, making it the second most lethal cancer in the U.S. The U.S. incidence of

EAC has increased 500% over the past four decades, while the incidences of other common cancers have declined or remained flat. In nearly

all cases, EAC silently progresses until it manifests itself with new symptoms of advanced disease. EAC is nearly always invasive at

diagnosis, and, unlike other common cancers, mortality rates are high even in its earlier stages.

As

discussed below under the heading “Clinical Guidelines for At-Risk Population”, in July 2022, the American Gastroenterology

Association (“AGA”) significantly expanded the target population for esophageal precancer screening, recommending screening

in at-risk patients without symptoms of GERD. Based on this revision, we believe the cohort recommended for screening consists of an

estimated 30 million U.S. individuals with at least 3 established risk factors for BE. Accordingly, we believe EsoGuard’s total

addressable U.S. market opportunity approximates $60 billion based on an effective Medicare payment of $1,938 and the estimated 30 million

U.S. patients recommended for screening by clinical practice guidelines. (In December 2019, we secured “gapfill” determination

for EsoGuard’s PLA code 0114U through the CMS CLFS process. This allowed us to engage directly with Medicare contractor Palmetto

GBA and its MolDx Program on CMS payment and coverage. As discussed below under the heading “Reimbursement and Market Access”,

in October 2020, CMS granted EsoGuard final Medicare payment determination of $1,938.01, effective January 1, 2021.)

Unfortunately,

for a variety of reasons, less than 10% of at-risk patients who are recommended for screening undergo traditional invasive upper gastrointestinal

endoscopy (EGD). We believe that the profound tragedy of an EAC diagnosis is that likely death could have been prevented if the at-risk

patient had been screened and then undergone surveillance and curative endoscopic esophageal ablation of dysplastic BE.

Since

mortality rates are high even in early stage EAC, preventing EAC deaths requires detection and intervention at the precancer stage. Most

of the necessary elements for such an early detection program are already well established—an at-risk population (at-risk GERD

patients), a precancer (BE), and an intervention which can halt progression to EAC (endoscopic esophageal ablation). Until recently,

the only missing element for such an early detection program is a widespread screening tool that can detect BE prior to EAC.

We

believe EsoGuard, used with EsoCheck, constitutes that missing element—the first and only commercially available diagnostic test

capable of serving as a widespread testing tool with the goal of preventing EAC deaths through early detection of esophageal precancer

and cancer in patients with 3 or more risk factors.

Clinical

Guidelines for At-Risk Population

The

subgroup of long-standing or severe GERD patients at-risk for BE and progression to EAC is well defined in clinical practice guidelines,

including the American College of Gastroenterology (“ACG”) BE Guidelines. In its Recommendation 5, the ACG suggests a single screening

endoscopy in patients with chronic GERD symptoms and 3 or more additional risk factors for BE, including male sex, age greater than 50

years, White race, tobacco smoking, obesity, and family history of BE or EAC in a first-degree relative.

An

ACG clinical guideline entitled “Diagnosis and Management of Barrett’s Esophagus: An Updated ACG Guideline,”

the first such update since 2016, was published online in April 2022 in the American Journal of Gastroenterology. The clinical guideline

reiterates the ACG’s long-standing recommendation for esophageal precancer screening in at-risk patients with GERD. For the first

time, however, the clinical guideline also endorses nonendoscopic biomarker screening as an acceptable alternative to costly and invasive

endoscopy stating that “a swallowable nonendoscopic capsule device combined with a biomarker is an acceptable alternative to endoscopy

for BE.” The clinical guideline specifically mentions EsoCheck, along with Lucid’s EsophaCap® device, as such swallowable,

nonendoscopic esophageal cell collection devices, as well as methylated DNA biomarkers such as EsoGuard. The summary of evidence for

this recommendation includes a reference to the seminal NIH-funded, multicenter, case-control study published in 2018 in Science Translational

Medicine, which demonstrated that EsoGuard is highly accurate at detecting esophageal precancer and cancer, including on samples

collected with EsoCheck.

In

July 2022, the American Gastroenterology Association (“AGA”) published in their “Clinical Practice Update on New Technology

and Innovation for Surveillance and Screening in Barrett’s Esophagus” updated clinical guidance that mirrors the same furnished

by the ACG as described above, endorsing the use of non-endoscopic cell collection tools to screen for BE like our EsoCheck Cell Collection

Device, which is cited in the update, as an acceptable alternative to endoscopy to directly address the need for noninvasive screening

tools that are easy to administer, patient friendly, and cost-effective for the detection of BE. The clinical practice update by the

AGA also significantly expands the target population for esophageal precancer screening, including for EsoGuard and EsoCheck, by recommending,

for the first time, screening in at-risk patients without symptoms of GERD. The AGA does so by adding a history of chronic GERD as merely

an additional, seventh risk factor to the six risk factors for BE and EAC that have traditionally identified at-risk symptomatic patients

recommended for screening.

Commercialization

Our

EsoGuard commercialization efforts span multiple channels including targeting primary care and GI physicians, who have generally embraced

our message that EsoGuard has the potential to expand the funnel of BE-EAC patients who will need long term EGD surveillance and, potentially,

treatment with endoscopic esophageal ablation.

To

assure sufficient testing capacity and geographic coverage, we have undertaken multiple ways for patients have access to our test. Initially,

we built a limited network of our own physical Lucid Test Centers, staffed by Lucid-employed clinical personnel, where patients can undergo

the EsoCheck procedure and have the sample sent for EsoGuard testing at Lucid’s CLIA-certified laboratory. Our current test center

network currently includes locations in metropolitan areas in Arizona, California, Colorado, Florida, Idaho, Illinois, Nevada, Ohio,

Oregon, Texas and Utah.

In

addition to our own test center locations, we have broadened patient access to our test by establishing a satellite test center program,

whereby we are making our personnel available to perform cell collection services inside physician offices or in certain geographies,

closely nearby physician offices (in Florida, for the time being) by way of our Lucid Mobile Testing Unit.

Also,

in January 2023, we completed our first #CheckYourFoodTube Precancer Testing Event, with the San Antonio Fire Department (the

“SAFD”) during Firefighter Cancer Awareness Month as designated by the International Association of Fire Fighters

(IAFF). A total of 391 members who were deemed to be at-risk for esophageal precancer, underwent a brief, on-site, noninvasive cell

collection procedure, performed by our clinical personnel using EsoCheck. Since then, additional testing events have been hosted

with the SAFD, and many similar events have been held with fire departments throughout the country. These events are ongoing and are

an extension of Lucid’s satellite test center program, which brings our precancer testing directly to patients—at their

physician’s office and now at testing day events.

In

March 2023, we launched a Direct Contracting Strategic Initiative (“DCSI”) to engage directly with large Administrative Services

Only (“ASO”) self-insured employers, unions and other entities, seeking to replicate the successes of other cancer screening

diagnostic companies that have deployed similar strategies. In August 2023, we contracted with the Ancira Automotive

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

We

have also established an EsoGuard Telemedicine Program, in partnership with UpScript, LLC, an independent third-party telemedicine provider,

that accommodates EsoGuard self-referrals from direct-to-consumer marketing.

Reimbursement

and Market Access

As

noted above, in December 2019, we secured “gapfill” determination for EsoGuard’s PLA code 0114U through the CMS CLFS

process. This allowed us to engage directly with Medicare contractor Palmetto GBA and its MolDx Program on CMS payment and coverage.

In October 2020, CMS granted EsoGuard final Medicare payment determination of $1,938.01, effective January 1, 2021.

A

final Local Coverage Determination (“LCD”) L39256, entitled “Molecular Testing for Detection of Upper Gastrointestinal

Metaplasia, Dysplasia, and Neoplasia” became effective in May 2023 on the Center for Medicare and Medicaid Services (“CMS”)

website by MAC Palmetto GBA. (A substantially identical LCD was published by Noridian Healthcare Solutions, the MAC whose geographic

jurisdiction covers our CLIA laboratory in Lake Forest, CA.) The LCD outlines criteria for future coverage that MolDX expects upper gastrointestinal

precancer and cancer molecular diagnostic tests to meet. These criteria include active GERD with at least two risk factors, as well as

evidence of analytic validity, clinical validity, and clinical utility. Although the LCD indicated that it found that no currently existing

test has fulfilled all these criteria, it indicated that it will “monitor the evidence and may revise this determination based

on the pertinent literature and society recommendations.” We expect to submit EsoGuard for Technical Assessment under this foundational

LCD later this year.

In

parallel with preparing to submit EsoGuard for Technical Assessment with MolDX, Lucid is aggressively pursuing EsoGuard commercial insurer

payment and coverage. Although the claim adjudication cycle can be prolonged during the early commercialization of a new test, Lucid

has received and continues to receive out-of-network commercial insurance payments for the EsoGuard test, which accounts for the vast

majority of our revenue to date.

Additionally, the legislatures in

a number of states have passed laws mandating coverage of comprehensive biomarker testing over the past several years. We believe that

EsoGuard falls within the definition of a biomarker test and thus we are reviewing how to leverage legislation in those states to expand

access to EsoGuard.

Clinical

Utility and Clinical Trials

Demonstrating

EsoGuard’s clinical utility, which requires providing evidence that the test has a meaningful impact on clinical practice, is very

important for a variety of purposes, including, importantly, for Medicare and private payor payment and coverage. It has been established

that one of the most important factors to private payors in deciding whether to grant payment and coverage will be demonstration that

the EsoGuard test, when ordered by physicians, provides information that can be used to identify or exclude patients who would benefit

from additional management and/or treatment. Clinical utility studies are also important for general EsoGuard commercialization by facilitating

physician understanding of test indications and potential benefit to the patients.

Lucid

continues to expand the EsoGuard and EsoCheck evidence portfolio with additional clinical utility, clinical validity, and analytical

validity data from a range of ongoing studies and those that have recently completed or will be completed in the upcoming year. These

efforts include planned publication of the results from the previously discussed “Multi-center, Single-arm EsoGuard clinical validation

study” (“BE-1”) which will also be presented at Digestive Disease Week (DDW) 2024; this third clinical validation study

evaluated EsoGuard performance in the intended-use population. Publication of real-world experience of EsoCheck as a nonendoscopic cell

collection device is also planned (previously presented as a poster at DDW 2023), in addition to results from EsoGuard analytical validation

studies performed by LucidDx Labs, and a summary of real-world outcomes from several hundred patients who tested positive with EsoGuard

and underwent confirmatory endoscopic evaluation. These four manuscripts will be submitted for peer review in the first half of 2024.

The

Lucid-sponsored multi-center, prospective, observational CLinical Utility of EsoGuard study (CLUE) with >500

subjects completed enrollment in late 2023, and full results are expected to be published in mid-2024; results from an additional data

snapshot of the Lucid-sponsored PREVENT and PREVENT-Firefighter (FF) registries with a combined enrollment

of >1,000 subjects are expected to be published in a similar timeframe. Both studies capture information on the diagnostic and/or

therapeutic journey of subjects following EsoGuard testing, and in addition to provider decision impact, will contribute differing levels

of clinical outcomes data to the Lucid evidence portfolio.

Similarly,

results for the Lucid-sponsored virtual-patient study are expected to be ready for analysis in mid-2024.

Finally,

the “EsoGuard case-control study” (“BE-2”), a Lucid-sponsored clinical validation study, resumed enrollment in

2023 and is expected to continue through 2024. This data will further supplement what has previously been produced by the two NCI-funded

studies (Moinova, et al. Sci Transl Med. 2018; BETRNet).

Manufacturing

EsoCheck

is currently manufactured for us by our partners Coastline International (“Coastline”), a high-volume device manufacturer,

and Sage Product Development. Our current line at Coastline can produce up to 25,000 units per year. With Coastline’s improvement

and expansion, there is capacity to scale exponentially. Our EsoGuard Specimen Kits are currently manufactured for us by our partner

Path-Tec. The warehousing, logistics, fulfillment and customer support of our products is managed for us by our partners HealthLink International

(a leading third-party logistics company) and Path-Tec.

License

Agreement

Under

the terms of Lucid’s license agreement with CWRU (as amended to date, the “Amended CWRU License Agreement”), Lucid

acquired an exclusive worldwide right to use the intellectual property rights to the EsoGuard and EsoCheck technology for the

detection of changes in the esophagus and on sample preservation. Lucid is required to pay CWRU royalties on net sales of licensed

products as follows: 5% of net sales of less than $100 million per year; and 8% of net sales greater than $100 million per year.

Lucid is also required to pay CWRU minimum annual royalty payments as follows: $50,000 per year, beginning January 1 following the

first anniversary of a commercial sale of a licensed product; $150,000 per year, if net sales of a licensed product exceed $25

million in a year; $300,000 per year, if net sales of a licensed product exceed $50 million in a year; and $600,000 per year, if net

sales of a licensed product exceed $100 million in a year. Minimum yearly royalty amounts are subject to increase based on the

percentage change in the CPI-W Consumer Price Index and are credited against the royalties otherwise due. The license agreement was

subject to four regulatory and commercialization milestones, of which one remains unachieved and unpaid. The remaining milestone is

the FDA PMA submission of a licensed product, upon the achievement of which we will pay CWRU a milestone payment of $200,000. The

license agreement terminates upon the expiration of the last-to-expire licensed patent, or on May 12, 2038, in countries where no

such patents exist, or upon expiration of any exclusive marketing rights for a licensed product that have been granted by FDA or

other U.S. government agency, whichever comes later.

Regulatory

In

June 2019, we received FDA 510(k) clearance to market EsoCheck in the U.S. as a device indicated for use in the collection and retrieval

of surface cells of the esophagus in adults followed by FDA 510(k) clearance in 2022, expanding the use of EsoCheck in adults and pediatric

populations in the U.S. In December 2019, our CLIA-certified then-laboratory partner, completed documentation of EsoGuard analytical

validity allowing us to commercialize it as a LDT.

In

February 2020, we received FDA “Breakthrough Device Designation” for EsoGuard as an in-vitro diagnostic (“IVD”)

medical device. The FDA Breakthrough Device Program was created to offer patients more timely access to breakthrough technologies which

provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions by expediting

their development, assessment and review through enhanced communications and more efficient and flexible clinical study design, including

more favorable pre/post market data collection balance. The Centers for Medicare and Medicaid Services and the United States Congress

continue to work to provide an expedited coverage pathway for emerging technologies.

In

May 2021, we received CE Mark certification for EsoCheck (under the Medical Devices Directive 93/42/EEC), and in June 2021, we completed

CE Mark self-certification for EsoGuard (under the European In-Vitro Diagnostic Devices Directive (IVDD 98/79/EC)), indicating both may

be marketed in CE Mark European countries.

In

October 2023, FDA proposed a policy 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. If finalized, FDA believes

that this phaseout may also foster the manufacturing of innovative IVDs for which FDA has determined there is a reasonable assurance

of safety and effectiveness. As such, FDA has structured the proposed phaseout policy to contain five key stages:

It

is currently anticipated that FDA will finalize the proposed policy by April 2024. Once the final policy is released, we will implement

the QS requirements in the recommended staged approach and conduct pre-submission meetings with FDA to seek agreement on regulatory pathway

for EsoGuard premarket submission. As required by the final policy, we will submit the regulatory premarket submission to the FDA as

per the timeframe defined in the final policy. We are confident that the proposed policy will not have a commercial impact as the Company

already has a robust QS management platform for medical devices and EsoGuard will be able to transition to the platform to fulfill the

QS requirements, if and when required by the FDA.

Our

longer-term strategy is to secure a specific indication, based on published guidelines, for BE testing in certain at-risk populations

using EsoGuard on samples collected with EsoCheck. This use of EsoGuard together with EsoCheck as a testing system must be cleared or

approved by the FDA as an IVD device.

Laboratory

Operations

On

February 25, 2022, our new, wholly owned subsidiary, LucidDx Labs Inc. (“LucidDx Labs”), acquired from ResearchDx Inc.

(“RDx”), certain licenses and other related assets necessary for LucidDx Labs to operate its own new CLIA-certified,

CAP-accredited clinical laboratory located in Lake Forest, CA. Since March 2022, we have conducted EsoGuard testing at our own

laboratory with, until February 10, 2023, the assistance of RDx, which had continued to provide certain testing and related services

for the laboratory in accordance with the terms of a management services agreement (“MSA RDx”). LucidDx Labs and RDx

agreed to terminate the MSA RDx effective as of February 10, 2023, such that LucidDx Labs now operates the laboratory itself, which

the Company believes has improved the efficiency of the performance of the EsoGuard assay.

In

November 2023, LucidDx Labs launched EsoGuard 2.0, which uses multiplexing thereby allowing both genes to be interrogated on a single

DNA sample. The next-generation assay underwent rigorous analytical and clinical validation studies, including head-to-head comparisons

of multiplexed triplicate consensus versus singleplex techniques, consistent with CLIA standards. Clinical validation analysis demonstrated

improved sensitivity and specificity for the detection of esophageal precancer, having demonstrated enhanced assay performance and lower

costs in extensive validation studies.

Competition

The

U.S. market for esophageal cancer (i.e., EAC) and pre-cancer (i.e., BE, with or without dysplasia) testing is large, consisting of more

than 30 million at-risk individuals over the age of 50. Given the large market for pre-cancer testing, we likely will face numerous competitors,

some of which possess significantly greater financial and other resources and development capabilities than us. Our EsoGuard test faces

competition from procedure-based detection technologies such as upper endoscopy, and other testing technologies such as multi-cancer

early detection products. Our EsoCheck device faces competition from other manufactures with devices designed to collect cell samples

from targeted regions of the esophagus. For example, EndoSign, commercialized by Cyted, and much like Cytosponge and our own EsophaCap

before it, is a small mesh sponge within a soluble gelatin capsule that needs to reside in the stomach and then is pulled thru the targeted

region brushing the lining of the esophagus and then later retrieved, although, unlike EsoCheck, it is unprotected from sample contamination

as the brush later passes regions of the upper esophagus and mouth. Our competitors may also be developing additional methods of detecting

esophageal cancer and pre-cancer that have not yet been announced.

Most

of our existing and potential competitors have substantially greater financial, marketing, sales, distribution, manufacturing and technological

resources. We may be unable to compete effectively against our competitors either because their products and services are superior or

more cost efficient, or because they have access to greater resources than us. These competitors may have greater name recognition

than we do. Many of these competitors have obtained all desirable FDA or other regulatory approvals, and superior patent protection,

for their products. Certain of our competitors have already commercialized their products, and others may commercialize their products

in advance of our products. In addition, our competitors may make technical advances that render our products obsolete. We may be unable

to respond to such technical advances.

Veris

Platform

Overview

In

May 2021, we formed Veris Health, a majority-owned subsidiary, focused on digital health technology. In connection with its formation,

Veris Health acquired Oncodisc, a digital health company with groundbreaking tools to improve personalized cancer care through remote

patient monitoring. Oncodisc’s core technologies include designs and patents that would be the foundation for the first intelligent

implantable vascular access port with biologic sensors and wireless communication, combined with an oncologist-designed remote digital

healthcare platform that provides patients and physicians with new tools to improve outcomes and optimize the delivery of cost-effective

care through remote monitoring and data analytics.

Oncodisc

was founded in 2018 by experienced physician entrepreneurs, James Mitchell, M.D., who joined Veris Health as its full-time Chief Medical

Officer, and Andrew Thoreson, M.D., who serves as a Veris Health consultant. They previously co-founded Redsmith, Inc., an interventional

catheter company whose technology was acquired by C.R. Bard Inc., now BD Inc. (NYSE: BDX). Oncodisc received a National Science Foundation

(“NSF”) Small Business Innovation Research (“SBIR”) grant award to support its early work and completed both

the MedTech Innovator Accelerator and UCSF Rosenman Institute Accelerator programs.

The

Veris Platform is a digital cancer care platform with physiologic data collection, symptom reporting and telehealth functions, designed

to improve personalized cancer care through remote patient monitoring. Cancer patients enrolled in the Veris Platform receive a VerisBoxTM

with Veris-branded Bluetooth enabled connected health care devices. The devices transmit clinical data to cancer care teams to detect

early signs of common cancer-related complications, provide longitudinal trends of physiologic and clinical data, and offer data-driven

risk management tools for precision oncology. The Veris Platform integrates directly with practices’ and systems’ Electronic

Health Record (“EHR”) systems, allowing care teams to easily view and interact with this data. We have also been developing

a groundbreaking implantable physiologic monitor containing biologic sensors capable of generating continuous data on key physiologic

parameters known to predict adverse outcomes in cancer patients undergoing treatment and as resources permit, we will resume further

development activities for the implantable to bring it to market. The implantable will seamlessly interact with the Veris Platform. These

technologies are the subject of multiple patent applications and one issued patent.

Market

Opportunity

In

2023, approximately 1.9 million people in the U.S. were newly diagnosed with cancer, and cancer incidence in the U.S. is expected to

continue to increase. Cancer patients face high rates of complications during the courses of their treatment which drive poor patient

outcomes and healthcare costs. One driver of these issues is avoidable hospitalizations. We believe Veris Health’s offerings can

help drive costs down and improve outcomes through providing care teams with better, more continuous data.

Based

on the aforementioned cancer prevalence in the U.S. and our current business model, we believe Veris Health’s total addressable

U.S. market opportunity exceeds $2 billion. In the future, we believe this opportunity will only expand through the implantable physiologic

monitor, data commercialization, and the expansion into other markets aside from oncology.

Commercialization/Sales

We

are currently pursuing strategic partnerships with leading academic oncology systems, whereby we would become the exclusive digital health

solution for these institutions’ oncology departments. More broadly, in terms of our commercialization strategy, we have a software-as-a-service

recurring-revenue business model where we seek to generate recurring revenue through oncology practice and hospital-based subscriptions.

These entities pay monthly fees for each patient on the platform, through which they are able to derive revenues from remote physiologic

monitoring (and, in the future, device implantation) under existing CPT codes. Veris also plans to build a commercialization model around

the oncology data it is collecting, as resources permit. We have identified multiple potential use cases across a number of verticals,

including clinical trials, commercial use cases, and as a means to improve patient care.

Manufacturing

The

components comprising the Veris Platform are currently supplied to us by our partners TransTek and their U.S.-based subsidiary, Mio Labs.

Each has passed a SOC-2 audit by an outside auditor. The final packaging of the overall box and order fulfillment is managed by PAVmed

at its Foxborough, MA location. Customer support is currently managed internally, while partnering with Zendesk for customer service

management.

Regulatory

The

Veris Platform software is considered a non-device Medical Device Data System (“MDDS”) that is excluded from the statutory

definition of a medical device under the FDC Act and as confirmed in the FDA’s MDDS Guidance: Medical Device Data Systems, Medical

Image Storage Devices, and Medical Image Communications Devices. Therefore, the Veris Platform is not subject to the FDA’s regulatory

requirements for devices.

Veris

Health is also developing an implantable cardiac monitor and is currently interacting with the FDA via pre-submission process, seeking

agreement on regulatory strategy and required testing to seek clearance of the monitor. We plan to make our 510(k) submission for the

implantable monitor, which could happen as early as late 2024, if and to the extent resources permit us to do so.

Competition

The

U.S. market for cancer patient care is large. There are many existing competitors in the remote physiological monitoring space, some

of which possess significantly greater financial and other resources and development capabilities than us. Our Veris Platform faces competition

from other digital care platforms providing many of the same features, including EHR integration and remote patient monitoring capabilities.

While we are not aware of other implantable physiologic monitors containing biologic sensors, our competitors may also be developing

similar devices that have not yet been announced.

Incubator

Program

On 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.

Pursuant 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. Hatch 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.

Although the incubator, PMX, may seek to expand its portfolio

with internal or externally sourced technologies in the future, its initial assets, as noted, will include the following products:

PortIO

Our

PortIO implantable intraosseous vascular access device is being developed as a means for infusing fluids, medications and other substances

directly into the bone marrow cavity and from there into the central venous circulation. The intraosseous route provides a means for

infusing fluids, medications and other substances directly into the bone marrow cavity which communicates with the central venous circulation

via nutrient and emissary veins. This route is well established, having been used for decades in a variety of settings including trauma,

especially military trauma, and pediatric emergencies. It has been shown to be bioequivalent to the intravenous route. Complication rates

are low and there are few contraindications. Currently available intraosseous devices pass through the skin into the bone and are therefore

limited to short term use. PortIO is a novel, implantable intraosseous vascular access device which does not require accessing the central

venous system and does not have an indwelling intravascular component. It is designed to be highly resistant to occlusion and, we believe,

may not require regular flushing. It features simplified, near-percutaneous insertion and removal, without the need for surgical dissection

or radiographic confirmation.

Esocure

In

connection with our efforts to expand our presence in the EAC diagnostic market, we were developing the EsoCure Esophageal Ablation

Device, with the intent to allow a clinician to treat dysplastic BE before it can progress to EAC, a highly lethal esophageal cancer,

and to do so without the need for complex and expensive capital equipment. We have successfully completed a pre-clinical feasibility

animal study of EsoCure demonstrating excellent, controlled circumferential ablation of the esophageal mucosal lining. An acute and survival

animal study of EsoCure Esophageal Ablation Device has also been completed, demonstrating successful direct thermal balloon catheter

ablation of esophageal lining through the working channel of a standard endoscope. When resources permit, we plan to conduct additional

development work and animal testing of EsoCure to support a future FDA 510(k) submission.

CarpX

CarpX

is a patented, single-use, disposable, minimally invasive surgical device for use in the treatment of carpal tunnel syndrome. We believe

CarpX is designed to allow the physician to relieve the compression on the median nerve without an open incision or the need for endoscopic

or other imaging equipment, and therefore will be significantly less invasive than existing treatments. To use CarpX, the operator first

advances a guidewire through the carpal tunnel under the ligament, and then advanced over the wire and positioned in the carpal tunnel

under ultrasonic and/or fluoroscopic guidance. When the CarpX balloon is inflated it creates tension in the ligament positioning the

cutting electrodes underneath it and creates space within the tunnel, providing anatomic separation between the target ligament and critical

structures such as the median nerve. Radiofrequency energy is briefly delivered to the electrodes, rapidly cutting the ligament, and

relieving the pressure on the nerve. We believe CarpX will be significantly less invasive than existing treatments.

CarpX

received FDA 510(k) marketing clearance in April 2020, with the first commercial procedure successfully performed in December 2020. In

May 2021 European CE Mark Certification was received for CarpX. Our limited-release commercialization efforts through 2022 were focused

on engaging key opinion hand surgeons designed to solicit input for ergonomic improvements to the device, procedure development and surgical-time

optimization, and ease of use. As a result of this clinical input, we have initiated a product development project to incorporate intraluminal

ultrasound into the device to include real time imaging of the ligament to be cut together with critical anatomic structures, and will

continue to pursue that project, as resources permit.

Recent

Developments

Business

Series

Z Warrant Modification

On

December 4, 2023, the Company announced the extension of the Company’s Series Z Warrants, by 12 months, to April 30, 2025.

In addition, as a

result of the reverse stock split, described below, the Series Z Warrants became exercisable to purchase one whole share of common

stock of the Company at an exercise price of $24.00, which exercise price per whole share was further reduced to $23.48 as described

below under the heading “PAVmed Distribution of Lucid Diagnostics Common Stock to Shareholders”. The Company

recognized the incremental value associated with the Series Z Warrants modification for the term extension as a deemed dividend

charge of $1.8 million and as an increase of net loss available to common stockholders on the consolidated statements of operations

in 2023.

Reverse

Stock Split

On

December 7, 2023, the Company implemented a 1-for-15 reverse stock split of its common stock and reduced its authorized shares from 250,000,000

to 50,000,000, each in accordance with shareholder approval granted at a March 31, 2023 special meeting of the Company’s stockholders.

The Company filed an amended Certificate of Incorporation reflecting the reduction in authorized shares.

The

purpose of the reverse stock split was to regain compliance with the $1 minimum bid price requirement for continued listing on the Nasdaq

Capital Market. Indeed, on January 7, 2024, the Company received a letter from the Listing Qualifications Department of Nasdaq, stating

the Company had regained compliance with such requirement.

Management

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

On March 22, 2024, PAVmed and Lucid

entered into an eighth amendment to the management services agreement between PAVmed and Lucid (“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.

On

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.

PAVmed

Distribution of Lucid Diagnostics Common Stock to Shareholders

On

February 15, 2024, the Company distributed by special dividend to the Company stockholders 3,331,747 shares of Lucid Diagnostics common

stock held by the Company. On such date, each PAVmed shareholder as of the January 15,

2024 record date received a stock dividend of approximately 38 shares of Lucid common stock for every 100 shares of PAVmed common stock

they held as of such date. The shares distributed were approximately equal to the number of shares of common stock that Lucid issued

to PAVmed on or about January 26, 2024 in satisfaction of certain intercompany obligations due to Lucid from PAVmed, as discussed above.

This

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) to $23.48 per share.