Part I [Business](index=5&type=section&id=Item%201.%20Business) PAVmed Inc. commercializes healthcare technologies through subsidiaries, focusing on EsoGuard, Veris Health, and other products via an incubator [Background and Overview](index=5&type=section&id=Background%20and%20Overview) PAVmed is a multi-product life sciences company, leveraging a subsidiary structure for tailored financing and advancing EsoGuard, Veris Health, and incubator products - **PAVmed's corporate structure** allows for flexible financing, favoring **subsidiary-specific financing**[16](index=16&type=chunk) - The company's multi-fold focus includes **commercializing Lucid Diagnostics' EsoGuard**, seeking **partnerships for the Veris Health platform**, and advancing other products through an **incubator model**[17](index=17&type=chunk) [EsoGuard and EsoCheck](index=5&type=section&id=EsoGuard%20and%20EsoCheck) Lucid Diagnostics' EsoGuard and EsoCheck are noninvasive tests for early esophageal precancer detection, focusing on commercialization, reimbursement, and regulatory compliance EsoGuard Market Opportunity | Metric | Value | | :--- | :--- | | Target Patient Population (U.S.) | **30 million individuals** | | Total Addressable Market (U.S.) | **~$60 billion** | | Basis of Calculation | **30M patients** at **Medicare payment** of **$1,938** | - **Commercialization efforts** for **EsoGuard** are pursued through multiple channels: - A network of physical **Lucid Test Centers** - A satellite test center program, including a Mobile Testing Unit, to perform procedures in physician offices - On-site testing events with organizations like the San Antonio Fire Department - A Direct Contracting Strategic Initiative (DCSI) targeting self-insured employers and unions - An **EsoGuard Telemedicine Program** for direct-to-consumer marketing[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - **CMS** granted **EsoGuard** a final **Medicare payment determination** of **$1,938.01**, effective January **1**, **2021**. However, a final Local Coverage Determination (LCD) for **reimbursement** is still pending, with the company planning to submit for a Technical Assessment[24](index=24&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - The **FDA** has proposed a policy to phase out its general enforcement discretion for **Laboratory Developed Tests (LDTs)** like **EsoGuard**. The company anticipates finalizing its response by April **2024** and believes it can meet the new requirements without a **material commercial impact**[51](index=51&type=chunk)[52](index=52&type=chunk) [Veris Platform](index=13&type=section&id=Veris%20Platform) Veris Health's digital cancer care platform facilitates remote patient monitoring, pursuing strategic partnerships and a recurring-revenue SaaS model - The **Veris Platform** is a digital cancer care solution for **remote patient monitoring**, designed to detect early signs of complications and improve outcomes for cancer patients[61](index=61&type=chunk) - The **total addressable U.S. market** for the **Veris Platform** is estimated to exceed **$2 billion**, based on cancer prevalence and the current SaaS business model[63](index=63&type=chunk) - The **commercialization strategy** focuses on **strategic partnerships** with leading academic oncology systems and a **recurring-revenue SaaS model** where institutions pay monthly fees per patient[64](index=64&type=chunk) [Incubator Program](index=14&type=section&id=Incubator%20Program) PAVmed launched PMX, a wholly-owned incubator, to develop and commercialize PortIO, EsoCure, and CarpX through independent subsidiary financing - **PAVmed** launched a **wholly-owned incubator**, **PMX**, in a joint venture with Hatch Medical to advance development and **commercialization** of its PortIO, EsoCure, and CarpX technologies[69](index=69&type=chunk)[87](index=87&type=chunk) - The strategy involves assigning the technologies to **PMX** and then seeking independent financing for separate subsidiaries to develop each product with the goal of engaging a **strategic partner** for acquisition or distribution[70](index=70&type=chunk)[88](index=88&type=chunk) - **CarpX**, a device for treating carpal tunnel syndrome, has already received **FDA 510(k) marketing clearance** in April **2020** and European CE Mark Certification in May **2021**[76](index=76&type=chunk) [Recent Developments](index=16&type=section&id=Recent%20Developments) Recent corporate activities include a reverse stock split, special dividend of Lucid shares, Nasdaq compliance issues, and a significant Series B preferred stock offering by Lucid - On December **7**, **2023**, the company implemented a **1-for-15 reverse stock split** to regain **compliance** with **Nasdaq's $1 minimum bid price requirement**[79](index=79&type=chunk)[80](index=80&type=chunk) - On February **15**, **2024**, **PAVmed** distributed approximately **3.3 million shares** of **Lucid Diagnostics common stock** to its shareholders as a **special dividend**[83](index=83&type=chunk) - On March **7**, **2024**, the company received a notice from **Nasdaq** for its **market value** of listed securities (MVLS) falling below the **$35 million minimum**, with **180 days** (until September **3**, **2024**) to regain **compliance**[86](index=86&type=chunk) - On March **13**, **2024**, subsidiary **Lucid Diagnostics** raised aggregate gross proceeds of **$18.16 million** through a **Series B Convertible Preferred Stock offering** and exchange[91](index=91&type=chunk)[92](index=92&type=chunk) [Risk Factors](index=31&type=page&id=Item%201A.%20Risk%20Factors) The company faces substantial risks including financial instability, going concern doubts, Nasdaq delisting risk, intense competition, and regulatory hurdles for product reimbursement [Risks Related to Financial Position and Capital Resources](index=34&type=section&id=Risks%20Related%20to%20Financial%20Position%20and%20Capital%20Resources) Critical financial risks include recurring operating losses, substantial doubt about going concern, high dependency on subsidiary capital, and Nasdaq delisting risk - The company has concluded there is **substantial doubt** about its ability to continue as a **going concern**, and its **independent registered public accounting firm's report** contains an explanatory paragraph expressing the same concern[162](index=162&type=chunk) - Due to difficulties raising **capital** directly, **PAVmed** is highly **dependent** on its subsidiaries, particularly **Lucid Diagnostics**, to raise funds for their own operations and to fund **PAVmed's operations** through intercompany agreements[163](index=163&type=chunk)[164](index=164&type=chunk) - On March **7**, **2024**, the company received a notice from **Nasdaq** for its **market value** falling below the **$35 million minimum requirement**, giving it until September **3**, **2024**, to regain **compliance** or face **delisting**[166](index=166&type=chunk) [Risks Associated with Our Business](index=36&type=section&id=Risks%20Associated%20with%20Our%20Business) Operational risks include intense competition, market acceptance uncertainty, reliance on third-party manufacturers, and challenges in protecting intellectual property - The company faces **intense competition** from established medical device companies that have substantially greater financial, technical, marketing, and manufacturing resources[181](index=181&type=chunk) - The company relies on a **single laboratory facility** in Lake Forest, CA, for its **EsoGuard test**. Any damage, disruption, or capacity constraints at this facility could materially harm the business[194](index=194&type=chunk)[195](index=195&type=chunk) - The success of the new **incubator financing structure** is not guaranteed and may result in substantial direct costs without insulating the liabilities of its subsidiaries from each other or from **PAVmed**[198](index=198&type=chunk)[199](index=199&type=chunk) [Risks Associated with Healthcare Regulation, Billing and Reimbursement, and Product Safety and Effectiveness](index=49&type=section&id=Risks%20Associated%20with%20Healthcare%20Regulation%2C%20Billing%20and%20Reimbursement%2C%20and%20Product%20Safety%20and%20Effectiveness) Significant regulatory and reimbursement risks include securing adequate payment for EsoGuard and potential increased FDA oversight of Laboratory Developed Tests (LDTs) - The **commercial success of EsoGuard** is highly **dependent** on securing adequate **reimbursement** from third-party payors. While **CMS** has set a **payment rate**, a final **Medicare Local Coverage Determination (LCD)** has not yet been granted, creating uncertainty[227](index=227&type=chunk)[228](index=228&type=chunk) - The **FDA** has proposed a policy to phase out its general enforcement discretion for **LDTs**, which would subject **EsoGuard** to the same **regulatory approach** as other in-vitro diagnostics (IVDs). While the company is confident it can comply, failure to do so could materially impact its business[235](index=235&type=chunk)[236](index=236&type=chunk) - The company's ability to commercialize future products depends on obtaining **regulatory approvals** (e.g., **FDA 510(k)** or PMA), which requires expensive and time-consuming clinical trials with uncertain outcomes[237](index=237&type=chunk)[240](index=240&type=chunk) [Risks Associated with Ownership of Our Common Stock](index=57&type=section&id=Risks%20Associated%20with%20Ownership%20of%20Our%20Common%20Stock) Common stock ownership risks include significant dilution from outstanding securities, stock price volatility, no cash dividends, and high public company compliance costs - As of December **31**, **2023**, a significant number of **shares** are issuable upon the exercise or conversion of outstanding warrants, stock options, preferred stock, and convertible notes, which could lead to **substantial dilution** for existing stockholders[263](index=263&type=chunk)[264](index=264&type=chunk) - The company does not intend to pay any **cash dividends** in the foreseeable future, meaning any investment gains will rely solely on stock price appreciation[266](index=266&type=chunk) - The company and its subsidiary **Lucid Diagnostics** incur significant legal, accounting, and other **expenses** as **public companies**, requiring substantial management time for **compliance** with SEC and **Nasdaq regulations**[269](index=269&type=chunk) [Unresolved Staff Comments](index=63&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - Not applicable[280](index=280&type=chunk) [Cybersecurity](index=64&type=section&id=Item%201C.%20Cybersecurity) The board's audit committee oversees cybersecurity risk, managed by a third-party vendor, with no material incidents reported to date - **Cybersecurity risk oversight** is administered by the **audit committee** of the board[281](index=281&type=chunk) - The company utilizes a **third-party vendor**, **CyberTeam**, to manage its **cybersecurity program**, which includes identifying, assessing, and mitigating risks[282](index=282&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - The company is not currently aware of any **cybersecurity threats** or incidents that have had or are reasonably likely to have a **material effect** on the company[287](index=287&type=chunk) [Properties](index=64&type=section&id=Item%202.%20Properties) The company leases corporate headquarters, an R&D facility, a CLIA lab, an office, and multiple Lucid Test Centers across several U.S. states - The company leases its **corporate offices** in New York, an **R&D facility** in Massachusetts, a **CLIA lab** in California, an office in Pennsylvania, and multiple **Lucid Test Centers** across the U.S[288](index=288&type=chunk) [Legal Proceedings](index=64&type=section&id=Item%203.%20Legal%20Proceedings) The company is not aware of any pending legal proceedings likely to have a material impact on its business or financial position - The company is not aware of any pending **legal proceedings** that are reasonably likely to have a **material impact** on the company[289](index=289&type=chunk) [Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[291](index=291&type=chunk) Part II [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=66&type=section&id=Item%205.%20Market%20for%20Registrant%E2%80%99s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock and Series Z Warrants trade on Nasdaq, facing delisting risk, with no cash dividends planned but a recent Lucid stock special dividend - The company's **common stock** and **Series Z Warrants** trade on the **Nasdaq Capital Market**, but on March **7**, **2024**, the company received a notice of non-compliance for failing to meet the **minimum market value** of **$35 million**[292](index=292&type=chunk) - The company has not paid **cash dividends** and does not plan to in the foreseeable future. However, on February **15**, **2024**, it paid a **special dividend** of **Lucid Diagnostics common stock** to its shareholders[294](index=294&type=chunk)[297](index=297&type=chunk) - The **Series B Convertible Preferred Stock accrues dividends** at a rate of **8% per annum**, which are cumulative and payable at the company's election in cash, **common stock**, or additional preferred stock[299](index=299&type=chunk) [Reserved](index=67&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management’s Discussion and Analysis of Financial Condition and Results of Operations](index=68&type=section&id=Item%207.%20Management%E2%80%99s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses increased revenue from EsoGuard sales, reduced operating losses, critical liquidity concerns, and recent financing activities at the subsidiary level [Results of Operations](index=73&type=section&id=Results%20of%20Operations) Revenue increased significantly to $2.5 million in 2023, improving operating loss to $68.8 million due to decreased general and administrative and R&D expenses Comparison of Operations (2023 vs. 2022) | Financial Metric (in millions) | 2023 | 2022 | | :--- | :--- | :--- | | **Revenue** | **$2.5** | **$0.4** | | Cost of **revenue** | **$6.4** | **$3.6** | | Sales and marketing | **$17.6** | **$19.3** | | General and administrative | **$30.9** | **$41.4** | | Research and development | **$14.3** | **$25.3** | | **Operating loss** | **($68.8)** | **($91.1)** | - The **$10.5 million decrease** in general and administrative **expenses** was principally related to an **$8.1 million decrease** in **stock-based compensation** and a **$3.5 million decrease** in third-party professional fees[343](index=343&type=chunk) - The **$11.0 million decrease** in research and development **expenses** was primarily due to a **$10.1 million decrease** in development costs, particularly in clinical trial activities[344](index=344&type=chunk) [Liquidity and Capital Resources](index=76&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces substantial doubt about going concern, with $19.6 million cash at year-end, relying on subsidiary capital raises and recent debt amendments for operations - The company's **recurring losses** and negative **cash flows** raise **substantial doubt** about its ability to continue as a **going concern** beyond March **2025**[349](index=349&type=chunk)[350](index=350&type=chunk) Cash Position and Burn Rate | Metric (in millions) | 2023 | 2022 | | :--- | :--- | :--- | | **Cash at year-end** | **$19.6** | **$39.7** | | **Net cash used in operations** | **($52.0)** | **($71.0)** | | **Net cash from financing** | **$31.2** | **$38.2** | - The company amended its **Senior Secured Convertible Notes** to extend maturity dates to **2025** and obtained a waiver for non-compliance with financial covenants through August **31**, **2024**, in exchange for a **$2.0 million fee**[323](index=323&type=chunk)[353](index=353&type=chunk)[354](index=354&type=chunk) - In **2023**, **PAVmed** raised approximately **$1.8 million** through its at-the-market (ATM) facility. Its subsidiary, Lucid, raised funds through its own committed equity and ATM facilities[328](index=328&type=chunk)[329](index=329&type=chunk)[330](index=330&type=chunk) [Critical Accounting Policies and Estimates](index=81&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting policies include Revenue Recognition (estimating variable consideration), Fair Value Option for convertible notes (complex valuation), and Stock-Based Compensation (Black-Scholes model estimates) - For **revenue recognition**, the company estimates variable consideration from insurance payers and constrains **revenue** until collection is probable, which may result in no **revenue** being recognized upon test delivery if historical experience is limited[368](index=368&type=chunk)[369](index=369&type=chunk) - The company has elected the **Fair Value Option (FVO)** for its **Senior Secured Convertible Notes**. This requires remeasuring the debt at **fair value** each period using complex models like Monte Carlo simulations, with changes in value reported in the statement of operations[371](index=371&type=chunk)[374](index=374&type=chunk) - **Stock-based compensation** is valued using the **Black-Scholes model**, which requires significant estimates for inputs such as expected stock price volatility and the expected term of the options[378](index=378&type=chunk)[380](index=380&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=85&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company - Not applicable[389](index=389&type=chunk) [Financial Statements and Supplementary Data](index=86&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's consolidated financial statements and independent auditor's report are included in the Annual Report starting on page F-1 - The company's **consolidated financial statements** and the **independent auditor's report** are included in the report[391](index=391&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=86&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[392](index=392&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes - Management concluded that the company's **disclosure controls and procedures** were effective as of December **31**, **2023**[393](index=393&type=chunk) - Based on an evaluation using the COSO framework, management concluded that the company's **internal control over financial reporting** was effective as of December **31**, **2023**[396](index=396&type=chunk) [Other Information](index=86&type=section&id=Item%209B.%20Other%20Information) Material modifications include a 12-month extension of Series Z Warrants; no Rule 10b5-1 trading plans were adopted or terminated by directors or officers - The company extended the expiration date of its **Series Z Warrants** by **12 months** to April **30**, **2025**[401](index=401&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=87&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[403](index=403&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=88&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item will be incorporated by reference from the company's 2024 definitive proxy statement - Information is incorporated by reference from the **2024 Proxy Statement**[406](index=406&type=chunk) [Executive Compensation](index=88&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item will be incorporated by reference from the company's 2024 definitive proxy statement - Information is incorporated by reference from the **2024 Proxy Statement**[407](index=407&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=88&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item will be incorporated by reference from the company's 2024 definitive proxy statement - Information is incorporated by reference from the **2024 Proxy Statement**[408](index=408&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=88&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item will be incorporated by reference from the company's 2024 definitive proxy statement - Information is incorporated by reference from the **2024 Proxy Statement**[409](index=409&type=chunk) [Principal Accountant Fees and Services](index=88&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information for this item will be incorporated by reference from the company's 2024 definitive proxy statement - Information is incorporated by reference from the **2024 Proxy Statement**[410](index=410&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=89&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including those incorporated by reference - This section lists all **financial statements** and exhibits filed with the Form **10-K**[413](index=413&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk) [Form 10-K Summary](index=90&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form 10-K summary - None[417](index=417&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=94&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor's report expresses a fair opinion but includes substantial doubt about the company's going concern and identifies convertible notes valuation as a critical audit matter - The **auditor's report** includes an explanatory paragraph highlighting **substantial doubt** about the Company's ability to continue as a **going concern**[428](index=428&type=chunk) - The **valuation** of the company's **Senior Secured Convertible Notes** was identified as a **Critical Audit Matter** due to the complexity and high degree of subjectivity in the **valuation methodology**[433](index=433&type=chunk)[434](index=434&type=chunk) [Consolidated Financial Statements](index=96&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show decreased cash, increased liabilities, and an improved net loss for 2023, with cash used in operations offset by financing activities Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Cash** | **$19,639** | **$39,744** | | Total Assets | **$33,119** | **$53,980** | | **Senior Secured Convertible Notes** - at **fair value** | **$44,200** | **$33,650** | | Total Liabilities | **$57,137** | **$43,046** | | Total Stockholders' Equity (Deficit) | **($24,018)** | **$10,934** | Consolidated Statement of Operations Highlights (in thousands) | Account | 2023 | 2022 | | :--- | :--- | :--- | | **Revenue** | **$2,452** | **$377** | | **Operating loss** | **($68,795)** | **($91,087)** | | **Net loss attributable to PAVmed Inc.** | **($64,175)** | **($88,983)** | | **Net loss per share** | **($9.16)** | **($15.03)** | Consolidated Cash Flow Highlights (in thousands) | Account | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash used in operating activities** | **($52,036)** | **($70,985)** | | Net cash provided by (used in) investing activities | **$758** | **($4,740)** | | **Net cash provided by financing activities** | **$31,173** | **$38,211** | [Notes to Consolidated Financial Statements](index=103&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail liquidity issues, going concern uncertainty, the 1-for-15 reverse stock split, federal NOL carryforwards, and a recent special dividend of Lucid Diagnostics stock - Note **2** confirms that factors such as **recurring losses**, negative **cash flow**, and the need to raise additional **capital** raise **substantial doubt** about the company's ability to continue as a **going concern** beyond March **2025**[452](index=452&type=chunk)[455](index=455&type=chunk) - A **1-for-15 reverse stock split** became effective on December **7**, **2023**. All share and per-share amounts in the **financial statements** have been retroactively adjusted to reflect this split[459](index=459&type=chunk)[460](index=460&type=chunk) - As of December **31**, **2023**, the company had approximately **$236.3 million** in federal **net operating loss (NOL) carryforwards** available to reduce future taxable income, though a full **valuation allowance** has been recorded against the resulting deferred tax assets[611](index=611&type=chunk) - Subsequent to year-end, on February **15**, **2024**, the company distributed **3,331,747 shares** of **Lucid Diagnostics common stock** to its shareholders as a **special dividend**[594](index=594&type=chunk)[602](index=602&type=chunk)

PAVmed Inc. (NASDAQ:PAVM) Q3 2023 Earnings Call Transcript November 15, 2023 8:30 AM ET Company Participants Michael Parks - Vice President of Investor Relations Lishan Aklog - Chairman and Chief Executive Officer Dennis McGrath - Executive Vice President and Chief Financial Officer Conference Call Participants Frank Takkinen - Lake Street Capital Markets Ed Woo - Ascendiant Capital Anthony Vendetti - Maxim Group Operator Good day, and welcome to the PAVmed Third Quarter 2023 Business Update Conference Call ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 Emp ...

PAVmed Inc. (NASDAQ:PAVM) Q2 2023 Earnings Conference Call August 16, 2023 8:30 AM ET Company Participants Michael Parks - Vice President of Investor Relations Lishan Aklog - Chairman and Chief Executive Officer Dennis McGrath - Executive Vice President and Chief Financial Officer Conference Call Participants Frank Takkinen - Lake Street Capital Markets Ed Woo - Ascendiant Capital Ross Osborn - Cantor Fitzgerald Anthony Vendetti - Maxim Group Operator Good day, and welcome to the PAVmed Second Quarter 2023 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-37685 (Registrant's Telephone Number, Including Area Code) Securities registered under Section 12(b) of the Exchange A ...

PAVmed Inc. (NASDAQ:PAVM) Q1 2023 Earnings Conference Call May 17, 2023 8:30 AM ET Company Participants Lishan Aklog - Chairman, Chief Executive Officer Dennis McGrath - Executive Vice President, Chief Financial Officer Michael Parks - Vice President, Investor Relations Conference Call Participants Ross Osborn - Cantor Fitzgerald Anthony Vendetti - Maxim Group Ed Woo - Ascendiant Capital Operator Welcome to the PAVmed business update and first quarter 2023 financial results conference call. At this time, a ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 Employe ...

PAVmed Inc. (NASDAQ:PAVM) Q4 2022 Earnings Conference Call March 15, 2023 8:30 AM ET Company Participants Michael Parks – Vice President, Investor Relations Lishan Aklog – Chairman and CEO Dennis McGrath – Chief Financial Officer Conference Call Participants Ross Osborn – Cantor Fitzgerald Frank Takkinen – Lake Street Capital Anthony Vendetti – Maxim Group Ed Woo – Ascendiant Capital Operator Welcome to the PAVmed's Business Update and Fourth Quarter 2022 Financial Results Conference Call. At this time all ...

| --- | --- | --- | --- | |----------------------------------|-------|--------|--------| | Accounts Payable | 3,299 | 2,704 | 595 | | Senior Secured Convertible Notes | 0 | 33,650 | 33,650 | | Other Current Liabilities | 4,259 | 4,846 | 587 | | Long-Term Liabilities | 0 | 1,846 | 1,846 | | Shares Outstanding | 86.4M | 94.5M | 8.1M | Nasdaq: PAVM, PAVMZ Disclaimer § Actual results and events may differ significantly from results and events discussed in forwardlooking statements. /med § Adjustments in near-te ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) PAVmed is a commercial-stage medical technology company focused on Diagnostics, Medical Devices, and Digital Health, prioritizing EsoGuard and Veris commercialization [Background and Overview](index=5&type=section&id=Item%201.%20Business-Overview) - PAVmed is a multi-product, commercial-stage medical technology company focused on capital efficiency and speed to market[17](index=17&type=chunk) - The company's current primary focus is on the commercial expansion of its leading products, EsoGuard and the Veris Cancer Care Platform[18](index=18&type=chunk) - PAVmed operates in three main business lines: Diagnostics, Medical Devices, and Digital Health[19](index=19&type=chunk) [EsoGuard and EsoCheck](index=5&type=section&id=Item%201.%20Business-EsoGuard%20and%20EsoCheck) EsoGuard is a diagnostic DNA test for early esophageal precancer detection, targeting a **$60 billion** U.S. market with a **$1,938.01** Medicare payment - EsoGuard is the first and only commercially available diagnostic test for widespread screening of esophageal precancer in at-risk GERD patients, using samples from the FDA-cleared EsoCheck device[20](index=20&type=chunk) - The target market for EsoGuard screening is estimated at **30 million** U.S. individuals, representing a total addressable market opportunity exceeding **$60 billion**[25](index=25&type=chunk)[26](index=26&type=chunk) - CMS granted EsoGuard a final Medicare payment determination of **$1,938.01**, effective January 1, 2021[37](index=37&type=chunk) - Commercialization efforts include a network of Lucid Test Centers, a satellite program for physician offices, community testing events, and a telemedicine program for self-referrals[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - The company has delayed its BE-1 and BE-2 clinical trials to prioritize studies that more efficiently generate clinical utility data to drive commercialization[42](index=42&type=chunk) [Veris Cancer Care Platform](index=13&type=section&id=Item%201.%20Business-Veris%20Cancer%20Care%20Platform) The Veris Cancer Care Platform is a digital health solution for remote patient monitoring in oncology, operating on a SaaS model with a U.S. market exceeding **$2 billion** - Veris Health is a majority-owned subsidiary focused on digital health, built upon the acquisition of Oncodisc's remote patient monitoring technology for cancer care[55](index=55&type=chunk) - The Veris Cancer Care Platform uses connected devices to collect physiologic data and patient-reported symptoms, integrating with Electronic Health Records (EHR) to help care teams detect complications early[57](index=57&type=chunk) - The business model is a B2B, software-as-a-service (SaaS) recurring-revenue model targeting oncology practices and hospitals[58](index=58&type=chunk) - The total addressable U.S. market opportunity is estimated to exceed **$2 billion**, with future expansion planned for cardiovascular diseases, renal disease, and COPD[61](index=61&type=chunk)[59](index=59&type=chunk) [Product Pipeline](index=15&type=section&id=Item%201.%20Business-Product%20Pipeline) PAVmed's product pipeline, including EsoCure, CarpX, and PortIO, is secondary to EsoGuard and Veris commercialization, with CarpX having FDA 510(k) clearance - The company is deprioritizing its development pipeline, including EsoCure, CarpX, and NextFlo, to focus resources on the commercialization of EsoGuard and the Veris Cancer Care Platform[69](index=69&type=chunk) - CarpX, a minimally invasive device for carpal tunnel syndrome, received **FDA 510(k) marketing clearance** in April 2020 and **European CE Mark Certification** in May 2021[72](index=72&type=chunk) [Recent Developments](index=17&type=section&id=Item%201.%20Business-Recent%20Developments) Recent developments include terminating the RDx agreement for **$2.7 million** savings, Veris Health signing first customers, securing **$34.4 million** from convertible notes, and addressing NASDAQ compliance - Lucid terminated its Management Services Agreement with RDx, bringing lab operations fully in-house, which is expected to improve efficiency and result in a net savings of **$2.725 million**[77](index=77&type=chunk)[78](index=78&type=chunk) - Veris Health signed its first customer, New Jersey Cancer Care, in December 2022 and has since signed two additional cancer centers[80](index=80&type=chunk) - The company received a NASDAQ notice on December 29, 2022, for its stock price being below the **$1.00** minimum. It is seeking shareholder approval for a reverse stock split to regain compliance[81](index=81&type=chunk) - PAVmed raised a total of **$34.4 million** in net proceeds from the sale of Senior Secured Convertible Notes in April and September 2022[84](index=84&type=chunk)[85](index=85&type=chunk) - Lucid Diagnostics raised **$13.625 million** in gross proceeds from a Series A Preferred Stock offering on March 7, 2023[89](index=89&type=chunk) [Intellectual Property](index=21&type=section&id=Item%201.%20Business-Intellectual%20Property) The company protects its proprietary technologies through patents, trademarks, and trade secrets, owning or licensing **55** domestic and foreign patents across **11** product families - The company owns or has rights to **55** domestic and foreign patents across **11** product families[95](index=95&type=chunk) Patent Expiration Timeline for Key Technologies | Technology | First Expiration Year | | :--- | :--- | | EsoCheck | May 2034 | | EsoGuard | August 2024 | | Veris Health | November 2038 | | EsoCure | March 2036 | | CarpX | November 2037 | | PortIO | November 2035 | [Government Regulation](index=24&type=section&id=Item%201.%20Business-Government%20Regulation) PAVmed's products are subject to extensive FDA regulation, including device classification, 510(k) or PMA clearance, post-market compliance, CLIA certification, and adherence to healthcare laws like HIPAA - Products are subject to extensive FDA regulation, with medical devices classified into three classes (I, II, III) requiring different levels of control, from general controls to pre-market notification (510(k)) or pre-market approval (PMA)[110](index=110&type=chunk)[111](index=111&type=chunk)[117](index=117&type=chunk) - EsoGuard received FDA "Breakthrough Device Designation" in February 2020, which may expedite its development, assessment, and review as an in-vitro diagnostic (IVD) device[47](index=47&type=chunk) - Lucid's clinical laboratory is subject to U.S. and state laws, including CLIA (Clinical Laboratory Improvement Amendments), which imposes certification and quality standards[123](index=123&type=chunk) - The company is subject to other key U.S. regulations including the Federal Anti-Kickback Statute, False Claims Act, Physician Payment Sunshine Act, and HIPAA for data privacy[127](index=127&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant financial risks including operating losses and funding needs, business risks like competition and market acceptance, regulatory hurdles, and stock-related risks such as potential NASDAQ delisting and dilution - The company has a history of operating losses and expects them to continue, requiring substantial additional funding to support business growth and commercialization[163](index=163&type=chunk)[164](index=164&type=chunk)[174](index=174&type=chunk) - Servicing debt requires significant cash, and restrictive covenants, including minimum cash and market capitalization requirements, could adversely affect operations. The company has previously been out of compliance with certain financial covenants[165](index=165&type=chunk)[167](index=167&type=chunk) - The company's products, particularly EsoGuard and Veris, face intense competition and may never achieve market acceptance, which is dependent on factors like regulatory approval, physician adoption, and third-party reimbursement[175](index=175&type=chunk)[183](index=183&type=chunk) - The company received a notice from Nasdaq on December 29, 2022, for its stock price falling below the **$1.00** minimum requirement, posing a risk of delisting if compliance is not regained[246](index=246&type=chunk) - Significant dilution risk exists due to a large number of outstanding warrants, stock options, and convertible securities, including Senior Convertible Notes that can be converted into a substantial number of shares[251](index=251&type=chunk)[252](index=252&type=chunk) [Property](index=63&type=section&id=Item%202.%20Properties) The company leases its corporate headquarters in New York, an R&D facility in Massachusetts, a CLIA lab in California, and multiple Lucid Test Centers across **11** states totaling **11,429 square feet** - The company's corporate headquarters are at 360 Madison Avenue, New York, NY, under a lease that commenced on February 1, 2023[268](index=268&type=chunk) - Key leased facilities include a **7,375 sq. ft.** R&D facility in Massachusetts, a **21,019 sq. ft.** CLIA laboratory in California, and approximately **11,429 sq. ft.** across various Lucid Test Centers in **11 states**[268](index=268&type=chunk) [Legal Proceedings](index=65&type=section&id=Item%203.%20Legal%20Proceedings) The company resolved two legal matters, settling a stockholder complaint for **$450,000** and a Benchmark Investments complaint for **$450,000** - A stockholder complaint in Delaware Court of Chancery regarding the 2020 Annual Meeting was settled, with a court-approved plaintiff's fee award of **$450,000** paid by the company in December 2022[272](index=272&type=chunk) - A complaint from Benchmark Investments, Inc. regarding alleged violations of an engagement letter was settled in February 2023 for a payment of **$450,000**[273](index=273&type=chunk) Part II [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=66&type=section&id=Item%205.%20Market%20for%20Registrant%E2%80%99s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) PAVmed's common stock and Series Z Warrants trade on Nasdaq, with the company addressing a **$1.00** minimum bid price notice, and no cash dividends paid on common stock - The company's common stock (PAVM) and Series Z Warrants (PAVMZ) are traded on the Nasdaq Capital Market[277](index=277&type=chunk) - On December 29, 2022, the company received a Nasdaq notice for its closing bid price being below the **$1.00** minimum for 30 consecutive business days and has until June 27, 2023, to regain compliance[277](index=277&type=chunk) - As of March 9, 2023, there were **98,419,795 shares** of common stock outstanding held by an estimated 214 holders of record[278](index=278&type=chunk) - The company has not paid cash dividends on common stock and does not intend to in the foreseeable future. Dividends on Series B Convertible Preferred Stock accrue at **8%** annually and are paid in-kind[279](index=279&type=chunk)[282](index=282&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=68&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) PAVmed's 2022 financial results show **$0.4 million** revenue and a widened net loss of **$89.0 million**, driven by increased operating expenses, with **$34.4 million** raised from convertible notes [Results of Operations](index=72&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations-Results%20of%20Operations) In 2022, revenue decreased to **$0.4 million**, while total operating expenses surged to **$91.3 million**, resulting in a net loss from operations of **$90.9 million** Comparison of Operations (in millions) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Revenue | $0.4 | $0.5 | | Cost of Revenue | $3.6 | $0.6 | | Sales and Marketing | $19.3 | $8.9 | | General and Administrative | $41.0 | $25.4 | | Research and Development | $25.5 | $19.8 | | **Total Operating Expenses** | **$91.3** | **$54.9** | | **Net Loss from Operations** | **($90.9)** | **($54.4)** | | **Net Loss Attributable to PAVmed Inc.** | **($89.0)** | **($50.3)** | - Sales and marketing expenses increased by **$10.4 million**, primarily due to a **$7.4 million** increase in compensation costs from higher headcount to support commercial activities[326](index=326&type=chunk) - General and administrative expenses rose by **$15.6 million**, driven by a **$9.2 million** increase in consulting services (patents, legal, regulatory) and a **$3.5 million** increase in compensation costs[326](index=326&type=chunk) - Research and development expenses grew by **$5.7 million**, mainly due to a **$3.2 million** increase in development and clinical trial costs for key products and a **$2.5 million** increase in compensation for clinical and engineering staff[327](index=327&type=chunk) [Liquidity and Capital Resources](index=77&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations-Liquidity%20and%20Capital%20Resources) The company finances operations through equity and debt, raising **$34.4 million** from convertible notes in 2022, and asserts sufficient liquidity for one year despite debt covenants and past non-compliance - The company believes its cash on-hand and committed debt and equity financing sources are sufficient to fund operations for one year from the date of the financial statements[336](index=336&type=chunk)[434](index=434&type=chunk) - In 2022, the company issued Senior Secured Convertible Notes with a total face value of **$38.75 million**, receiving net proceeds of **$34.4 million**[338](index=338&type=chunk)[339](index=339&type=chunk) - The convertible notes contain financial covenants requiring a minimum cash balance of **$8.0 million**, a maximum debt-to-market cap ratio, and a minimum market capitalization of **$75 million**. The company was not in compliance with certain tests at times, including as of December 31, 2022, but received a waiver from the investor[341](index=341&type=chunk)[547](index=547&type=chunk) - Subsidiary Lucid Diagnostics raised approximately **$1.8 million** through a committed equity facility in 2022 and an additional **$13.625 million** from a Series A Preferred Stock offering in March 2023[348](index=348&type=chunk)[343](index=343&type=chunk) [Controls and Procedures](index=84&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no material changes in Q4 2022 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[373](index=373&type=chunk) - Based on an evaluation using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2022[376](index=376&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Accountant Fees](index=85&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for Items 10-14, covering governance, compensation, and ownership, is incorporated by reference from the company's 2023 proxy statement, to be filed within 120 days - Information regarding Directors, Executive Officers, Corporate Governance (Item 10), Executive Compensation (Item 11), Security Ownership (Item 12), Certain Relationships and Related Transactions (Item 13), and Principal Accountant Fees (Item 14) is incorporated by reference from the company's 2023 proxy statement[382](index=382&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=86&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section presents the consolidated financial statements for 2022 and 2021, including balance sheets and statements of operations, with the auditor's report highlighting convertible notes valuation as a critical audit matter Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash | $39,744 | $77,258 | | Total Current Assets | $43,926 | $82,637 | | **Total Assets** | **$53,980** | **$86,976** | | Senior Secured Convertible Notes - at fair value | $33,650 | $0 | | Total Current Liabilities | $41,200 | $7,558 | | **Total Liabilities** | **$43,046** | **$7,558** | | **Total Stockholders' Equity** | **$10,934** | **$79,418** | Consolidated Statement of Operations Data (in thousands, except per share data) | Account | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Revenue | $377 | $500 | | Total operating expenses | $91,304 | $54,893 | | Net loss from operations | ($90,927) | ($54,393) | | **Net loss attributable to PAVmed Inc.** | **($88,983)** | **($50,347)** | | **Net loss per share attributable to PAVmed Inc. - basic and diluted** | **($1.00)** | **($0.65)** | - The independent auditor, Marcum LLP, identified the valuation of the Senior Secured Convertible Notes as a critical audit matter due to the complex methodology and significant management assumptions involved, such as debt yield and implied volatility[407](index=407&type=chunk)[408](index=408&type=chunk)